Shanghai Micro Electronics Wins ¥110 Million RMB ($15.4 Million USD) Lithography Machine Contract: What This Means for China’s Semiconductor Independence

• Self-Sufficiency: Direct progress in reducing reliance on ASML, Canon, and Nikon.
• Fiscal Commitment: Move from R&D subsidies to direct procurement of production-ready hardware.
• Market Validation: High-volume legacy nodes (0.18μm-0.25μm) prioritized for industrial and automotive security.
• Cluster Effect: Strengthening the Zhangjiang Hi-Tech Park semiconductor ecosystem.

China just made another strategic move toward semiconductor self-sufficiency.

Shanghai Micro Electronics Equipment (Group) Co., Ltd. (Shanghai Weidianzi Zhuangbei (Jituan) Gufen Youxian Gongsi 上海微电子装备（集团）股份有限公司), commonly known as SMEE, officially secured a major government procurement contract.

Here’s what went down and why it matters.

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The Deal: ¥110 Million RMB ($15.4 Million USD) Lithography Equipment Order

According to the official announcement on the China Government Procurement Network, SMEE landed a significant win for domestic semiconductor manufacturing.

The contract details:

• Project ID: zycgr22011903
• Equipment Type: One step-and-scan lithography machine (model: SSC800/10)
• Contract Value: ¥110 million RMB ($15.4 million USD)
• Supplier Location: No. 1525 Zhangdong Road, Zhangjiang Hi-Tech Park (Zhangjiang Gaoke 张江高科张东路), Shanghai
• Client: Ministry of Science and Technology (Kexue Jishu Bu 科学技术部), People’s Republic of China

This is not just another equipment order.

This represents a direct government investment in building China’s domestic semiconductor equipment capabilities—a critical piece of the country’s broader push for technological independence.

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Market Reaction: Stock Surge Signals Investor Confidence

The market responded immediately.

Zhangjiang Hi-Tech (Zhangjiang Gaoke 张江高科), a major shareholder in SMEE, saw its stock jump following the announcement.

The numbers:

• Stock Movement: Rose over 7.8%
• Share Price: Reached ¥43.7 RMB ($6.12 USD) per share
• Timing: Rapid vertical surge immediately after the procurement news

Investors clearly view this as a bullish signal for domestic semiconductor equipment manufacturers.

The broader implication?

The Chinese government is putting real money behind homegrown semiconductor solutions, and market players are taking notice.

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Who Is SMEE? Understanding China’s Semiconductor Equipment Champion

SMEE isn’t a new player—but it’s becoming an increasingly important one.

Company Fundamentals:

• Founded: 2002
• Core Business: Development, design, manufacturing, and sale of semiconductor (Ban Daoti 半导体) equipment and high-end intelligent systems
• Strategic Focus: Advanced lithography and manufacturing equipment for integrated circuit fabrication

Ownership Structure:

SMEE’s shareholder base reveals a strategic alignment of state and local interests:

• Shanghai Electric Holding Group Co., Ltd. (Shanghai Dianqi Konggu Jituan Youxian Gongsi 上海电气控股集团有限公司) — a major state-owned industrial enterprise
• Shanghai Zhangjiang Haocheng Venture Capital (Shanghai Zhangjiang Haocheng Chuangye Touzi Youxian Gongsi 上海张江浩成创业投资有限公司) — a wholly-owned subsidiary of Zhangjiang Hi-Tech

This ownership structure shows how government entities and regional tech parks collaborate to build semiconductor infrastructure.

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What Is Step-and-Scan Lithography? The Technology Behind the Deal

If you’re not deep in semiconductor manufacturing, the term “step-and-scan lithography” might sound like technical jargon.

It’s actually crucial to understanding why this deal matters.

The Basics: How Step-and-Scan Works

Step-and-scan lithography is a hybrid technology that combines the best of two worlds:

• Scanning projection — for precision and detail
• Step-and-repeat lithography — for efficiency and throughput

Here’s the key innovation:

The mask and wafer move in synchronized motion through a dynamic scanning method.

This synchronization allows the system to:

• Maintain real-time focus adjustment throughout the scanning process
• Work with a standard exposure size of 26 mm × 33 mm
• Expose multiple chips simultaneously, improving manufacturing speed and reducing per-unit costs
• Achieve higher precision than traditional step-and-repeat systems

Manufacturing Capabilities: Where This Technology Fits

The SSC800/10 model SMEE just sold is ideal for specific manufacturing nodes:

• Primary Use: Semiconductor manufacturing at the 0.25μm node
• Also Used For: 0.18μm nodes and more advanced integrated circuit fabrication
• Application Range: Memory chips, microprocessors, analog circuits, and other semiconductor components

While these nodes might sound dated to observers used to following cutting-edge 5nm and 3nm processes, they remain critically important for a massive range of commercial applications.

Think automotive chips, industrial electronics, IoT devices, and consumer products—not just high-end smartphones and data center processors.

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Why This Deal Matters: The Bigger Picture

This ¥110 million RMB ($15.4 million USD) contract is more than just revenue for SMEE.

It signals something important about China’s semiconductor strategy:

1. Government Backing for Domestic Equipment Manufacturers

The Ministry of Science and Technology’s direct procurement shows that China is actively investing in its homegrown semiconductor equipment industry.

This is strategic.

By buying from domestic suppliers, China reduces its dependence on foreign equipment manufacturers and builds institutional knowledge and manufacturing capability at home.

2. Practical Self-Sufficiency, Not Just Aspirational

SMEE isn’t working on theoretical technology.

The SSC800/10 is production-ready equipment being deployed into active government use.

This is concrete progress toward semiconductor self-sufficiency—not just research papers and prototypes.

3. Regional Tech Hub Development

The deal reinforces the importance of Zhangjiang Hi-Tech Park as a strategic hub for semiconductor innovation and manufacturing.

By concentrating equipment manufacturers, fab operators, and research institutions in one location, China is replicating the ecosystem dynamics that made places like Silicon Valley and Taiwan’s Hsinchu Science Park so productive.

4. Investor Confidence in the Sector

The 7.8% stock jump for Zhangjiang Hi-Tech shows that investors believe in the long-term viability of China’s domestic semiconductor equipment sector.

This kind of market confidence can attract more capital and talent to the space.

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The Context: Where China Stands in Semiconductor Equipment

To appreciate what this deal represents, it’s worth understanding where China currently stands.

The semiconductor equipment industry is dominated by foreign players:

• Most advanced lithography equipment comes from ASML (Netherlands), Canon (Japan), and Nikon (Japan)
• Foreign suppliers also dominate etching, deposition, and inspection equipment categories
• U.S. and European export controls restrict what China can legally purchase for advanced nodes

In this context, every domestic Chinese equipment manufacturer that successfully deploys production systems is a step toward reducing that dependency.

SMEE’s step-and-scan lithography systems won’t compete with ASML’s most advanced extreme ultraviolet (EUV) equipment—but they don’t need to.

They just need to handle the vast market of mid-range semiconductor manufacturing that doesn’t require cutting-edge technology.

And that market is huge.

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Looking Forward: What This Means for Tech Investors and Builders

If you’re tracking China’s tech sector or evaluating semiconductor investments, this deal is a data point worth noting.

Key takeaways:

• Government procurement is real and growing: The Ministry of Science and Technology isn’t just talking about supporting domestic equipment—they’re writing checks.
• Regional consolidation works: Zhangjiang Hi-Tech Park companies are benefiting from concentrated investment and policy support.
• Market-ready solutions matter more than theoretical breakthroughs: SMEE’s success comes from delivering production equipment that works, not just impressive R&D results.
• Mid-range manufacturing nodes are undervalued: The market tends to focus on cutting-edge nodes, but there’s enormous economic value in the 0.18μm-0.25μm range.
• Shareholder value creation happens through state support: Investors in Zhangjiang Hi-Tech benefited directly from government procurement decisions. This dynamic will likely continue.

For founders and operators building in the semiconductor space, the message is clear: China is systematically building out its domestic equipment manufacturing capabilities, and government procurement is a real business opportunity—not just a nice-to-have.

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Key References

• Shanghai Micro Electronics Wins 110 Million Yuan Lithography Project – Shanghai Securities News
• Official Website – Shanghai Micro Electronics Equipment (Group) Co., Ltd. (SMEE)
• Company Profile and Operations – Zhangjiang Hi-Tech
• Technical Standards for High-End Manufacturing – Ministry of Science and Technology

China’s push for semiconductor equipment independence is accelerating—and the deal flow proves it.