China’s demand that the public sector step up use of domestic semiconductors can best be seen within Huawei’s Qingyun L540 laptop.
The “safe and reliable” device features a self-designed processor and a Chinese-made operating system, having stripped out foreign-made components and software as much as possible.
The computer, which is being snapped up by governments and state groups across the country, has become the signature model of China’s localization campaign known as Xinchuang, or “IT application innovation.”
There's no reason why they can't make it work, and as the article explains it's simpler to make it work than ASML machines. The main complexity there comes from the fact that they need to be compact so ASML can ship them around the world. It's also always easier to do somethings that's been done before because you know which path to take. A lot of the difficulty of doing something for the firs time is that you inevitably have a lot of false starts while settling on a workable approach.
This is simply a matter of China allocating resources to the project till it works, and they have a lot of incentive to make it work. The only question is how long it will take, and given how rapidly China has been advancing in tech, I would bet it'll be much faster than people in the west anticipate.
Let's see, it'll certainly be an interesting development in any scenario.