Huawei is taking a central coordinating role in China’s effort to develop domestic deep ultraviolet (DUV) photolithography equipment, the machines used to transfer circuit patterns onto silicon wafers. Shanghai Yuliangsheng aims to produce 12 advanced DUV systems by the end of 2026, with units already undergoing tests at Semiconductor Manufacturing International Corporation (SMIC) and Huawei facilities. The systems are initially intended for simpler chip designs, although the longer-term goal is to support advanced artificial intelligence applications. Huawei has invested in Qiqi Photon and Keyihongyuan to strengthen domestic capabilities in projection lenses and high-power light sources, but German-made Zeiss lenses remain in use. The effort reflects tighter U.S. restrictions on advanced chipmaking equipment, including ASML’s extreme ultraviolet systems, which have been unavailable to Chinese buyers for years. Huawei is also increasing Ascend AI chip production, targeting about 600,000 Ascend 910C units by 2026, and pursuing LogicFolding to raise chip density without relying on the most advanced lithography nodes. Analysts at Bernstein have described Huawei’s role as a project manager for China’s DUV initiatives. The 12-machine target is small by global standards, but reliable operation at SMIC and Huawei could make wider scaling more plausible. Continued dependence on Zeiss optics remains a vulnerability until China develops comparable domestic projection lenses.