Unlike the case in magnification mode, it is found that hyperlens employed in demagnification and lithography manner encounters great degradation of imaging quality especially for high-resolution image features. This problem mainly arises from the transversal magnetic polarization feature of light which delivers reduced contrast of electronic components intensity profile at the imaging region. Hyperlens with plasmonic reflector layer is designed for subwavelength demagnification imaging and photolithography. Analytical equations and numerical simulations show amplification of reflected evanescent waves in photoresist sandwiched by hyperlens and plasmonic reflectors in cylindrical geometry. The image quality features including resolution, contrast, and intensity can be improved significantly. Also presented are the dependence and influence of geometry parameters on imaging quality. Numerical demonstrations are given with about 15 nm half-pitch resolution imaging at illuminating wavelength of 365 nm.