According to the website The Information, Chinese company Shanghai Yuliangsheng has begun mass production of extreme ultraviolet (EUV) lithography machines, a technology previously mastered only by the Dutch firm ASML.
The process uses ultraviolet light to etch microscopic circuits onto silicon. It makes it possible to pack tens of billions of transistors onto a chip the size of a fingernail, yielding highly powerful processors.
Contacted by AFP, Yuliangsheng did not immediately respond, nor did SiCarrier or Huawei, two companies with ties to the group.
Producing EUV machines would allow China to free itself from its dependence on ASML, which is subject to export restrictions outside the European Union.
China's chip industry could thereby speed up the development and production of processors, narrowing the gap with the most advanced US players, which are currently seen as superior.
That progress would let China's leading artificial intelligence firms close the gap a little further between their models and those of the most cutting-edge US groups.
Shares in AMD were down as much as eight percent, Nvidia nearly five percent, Micron five percent and Intel 3.7 percent.
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