A team of Chinese scientists this year successfully built a prototype of the ultra‑advanced machine needed for making AI chips, according to Reuters.
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Although still a very early version, the prototype’s emergence is earlier than analysts anticipated. It also comes as President Donald Trump’s administration continues to limit the export of high-end chips by American AI chip leader Nvidia (NVDA) to control China’s access to such technology and maintain AI dominance by the U.S.
How Did China Make the Prototype?
Sources told the outlet that the prototype machine — which is still extremely large and only in test mode — was made by a team of former engineers from Dutch semiconductor heavyweight ASML Holding (ASML). They achieved this by procuring ASML’s older extreme ultraviolet lithography machines in secondary markets and taking them apart.
These machines are also called ‘EUVs’ and use extremely short-wavelength light to “print” the tiniest wiring patterns onto silicon wafers. These wafers are used to produce the advanced chips that power complex AI workloads in data centers, defense systems, smartphones, and self-driving vehicles, among other applications.
The Chinese government has been seeking to develop the country’s own domestic AI chip sector and wean itself off dependence on technology from the U.S. and the West.
Chinese Rivals to Nvidia Continue to Emerge
On Wednesday, shares in Chinese chipmaker MetaX Integrated Circuits, which is seen as a strong rival to Nvidia (NVDA) in China, debuted with strong momentum on the Shanghai Stock Exchange. Similarly, Chinese chipmaker Moore Threads’ initial public offering earlier this month was met with wide applause on the Chinese stock market.
However, technology-wise, analysts have observed that China still has a long way to go to catch up with the capacity of advanced AI chips produced in the U.S. and the West.
Is NVDA a Good Stock to Buy Now?
On Wall Street, Nvidia’s shares continue to carry a Strong Buy consensus rating based on 39 Buys, one Hold, and one Sell issued by 41 analysts over the past three months.
Moreover, the average NVDA price target of $258.97 implies more than 51% growth potential from current trading levels.
