How China Is Building a Secret ‘Manhattan Project’ to Break Western Control of AI Chips

A major breakthrough in the development of the artificial-intelligence chips program is underway in the heart of one of the most fortified laboratories in China, Shenzhen. 

In early 2025, about the same size as the Dutch industry leader, engineers, several having previously worked at ASML, announced a prototype of a large-scale extreme-ultraviolet (EUV) lithography, also capable of the same process. 

Its prototype, which consumes a large area of the factory floor, can produce EUV radiation but has not so far been used to manufacture semiconductor devices. 

This will be a direct response of China to export sanctions by the United States that has been hindering its semiconductor goals.

The Manhattan Project of Stealth

The campaign is a long-term process that has been carried out among the inner circle of the President, Xi Jinping and Huawei has helped to recruit thousands of engineers across the country. 

The salaries given to the selected individuals are between $420,000 and $700,000 and fake identification papers are given to them to maintain secrecy. 

The program obtained the components in the secondary markets, such as part of the Alibaba auctions of the old ASML equipment in October 2025 and performs reverse engineering of deep-ultraviolet (DUV) and EUV components. 

Whereas machines produced by ASML cost around $250 million each, the relatively primitive machine produced by China has been made functional thanks to the efforts of phenomena like Changchun Optics, which made a breakthrough in the field of integration in EUV light during the present year. 

However, the optical infrastructure is still not sufficient because Zeiss-produced precision mirrors still dominate the Western market. 

In April, SML CEO Christophe Fouquet said that

China would need “many, many years” to develop such technology. But the existence of this prototype, reported by Reuters for the first time, suggests China may be years closer to achieving semiconductor independence than analysts anticipated.

Basing a Chip Race Stats Analysis

China’s semiconductor industry investment totaled 455 billion yuan ($63.3 billion) in the first half of 2025, a decline of 9.8% from a year earlier, according to a report from chip market research firm Cinno, an annual growth rate that drives its quest towards technological independence against the American controls, which were put in place in 2018. 

The people described it as China’s version of the Manhattan Project, the US wartime effort to develop the atomic bomb. 

“The aim is for China to eventually be able to make advanced chips on machines that are entirely China-made,”

one of the people said

” China wants the United States 100 percent kicked out of its supply chains.”

Road Ahead

Estimated projections are the dispensing of functional chips by the year 2028, and a more realistic timeframe by 2030, which is still seen as a breakdown of the analyst projections that expected lag of ten years to be witnessed. 

In case the optical subsystems are refined, China would expel the U.S. enterprises out of its supply chains, hence hastening its technology conquest of artificial intelligence. 

However, Western allies are encouraged to work smarter to get regulatory loopholes closed within a short time otherwise, the geopolitical tussle over technology will continue to get tilted towards the Eastern powers.