On Tuesday, Substrate, a small US-based startup, made an announcement that it has successfully crafted chipmaking equipment capable of rivaling ASML's cutting-edge photolithography gear. This development represents the inaugural stride in the company's strategy to set up a domestic contract chip manufacturing venture in the US and go head-to-head with TSMC in the realm of advanced artificial intelligence chip production. The objective is to slash chip manufacturing costs by employing low-cost production equipment. Substrate has managed to amass a total of $100 million in investments from various institutions, pushing the company's valuation past the $1 billion mark.

However, realizing this ambition is an uphill battle. Photolithography technology necessitates ultra-high precision, and at present, ASML stands as the sole company worldwide capable of mass-producing intricate extreme ultraviolet (EUV) photolithography equipment. Substrate has disclosed that it is in the process of developing photolithography technology utilizing X-rays and has already carried out technical demonstrations, though Reuters has not independently confirmed this information.

Should Substrate succeed in substantially cutting costs, it could set off a domino effect within the industry. Nevertheless, to attain this objective, the company still has a multitude of hurdles to clear. The development of advanced chip manufacturing processes demands a hefty investment. Company founder Proud divulged that Substrate has yet to receive direct financial backing from the US government, but US officials have been keeping a watchful eye on the situation.