China Chip Firms Soar on Report of Advance in Fabrication Tech - Yahoo Finance

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(Bloomberg) -- Chinese chipmaking machine suppliers surged on Wednesday following a media report that a state-backed firm made a significant technological breakthrough, spurring hopes the country can lessen its reliance on US semiconductor techniques.

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Shanghai Micro Electronics Equipment Group, the Chinese leader in so-called lithography gear that’s been blacklisted by the US, is working to deliver its first system based on 28-nanometer technology later this year, local newspaper Securities Daily reported on Monday, citing an unnamed source. Optical components maker Mloptic Corp. gained as much as 15%, while peers Kingsemi Co. and Castech Inc. each advanced around 5% on Wednesday morning.

Beijing has pushed its firms for years to develop local technologies in sectors it deems of strategic importance, particularly those that Washington is targeting to contain its rival. Chipmaking gear is regarded as among the weakest links in China’s semiconductor supply chain, an area currently dominated by firms including ASML Holding NV and Tokyo Electron Ltd. The country’s top chipmakers, including Semiconductor Manufacturing International Corp. and Hua Hong Semiconductor Ltd., all rely on foreign-made equipment.

ASML is the global leader in lithography machines, and gear that can support 28 nm chips is essential to making silicon for a spectrum of products from electric cars to missiles. The Netherlands, home to ASML, has joined a US-led effort to curb Beijing’s chip ambitions by banning the Dutch supplier from selling advanced chipmaking machines to China.

It’s unclear whether the Shanghai firm can deliver such machines in bulk. The original article about its breakthrough wasn’t accessible on Wednesday but had since been widely reposted by other outlets including the official Xinhua News Agency.

Read more: How US and Allies Are Trying to Rein In China Tech: QuickTake