China Starts Mass Producing Homegrown DUV Chip Tools, ASML Shares Slide | the deep dive
A previously obscure, state-backed Chinese firm has started mass-producing immersion deep-ultraviolet lithography machines, and the news alone was enough to wipe billions offASML Holding (AMS: ASML)and drag. . .
A previously obscure, state-backed Chinese firm has started mass-producing immersion deep-ultraviolet lithography machines, and the news alone was enough to wipe billions offASML Holding (AMS: ASML)and drag equipment stocks lower worldwide. Reuterswas first to identify the company behind the effort as Aishengna, which assembled its lithography program by pulling in engineering teams from two other Chinese developers,Shanghai Yuliangsheng TechnologyandShanghai Micro Electronics Equipment. Yuliangsheng, founded in 2022, countsHuawei-backed equipment makerSiCarrieramong its shareholders. Exclusive: China has begun mass producing domestically developed immersion deep-ultraviolet lithography machines, a technology crucial to advanced chipmaking, marking a key step forward in Beijing's drive to reduce its reliance on foreign technologieshttps://t. co/jFIWhQvLXE— Reuters (@Reuters)July 29, 2026ASML still draws roughly 16% of its revenue from China this year, though that share has fallen sharply in recent quarters. Sponsored · PTX Metals Inc. Aishengna plans to ship about five machines this year and roughly 20 in 2027 to three of China’s largest chipmakers,Semiconductor Manufacturing International Corp,Hua Hong SemiconductorandChangXin Memory Technologies, which debuted on Shanghai’s STAR Market this week and briefly became the most valuable company listed in mainland China. That output is a fraction of ASML’s own plans, roughly 130 immersion DUV systems this year, growing another 30% in 2027. ASML shares sank as much as 10% over two trading days,their lowest levels since early June, and pulled equipment peers down with them. US toolmakersApplied Materials,Lam ResearchandKLA Corpeach lost between 5% and 7%, and Dutch supplierBE Semiconductor Industriesshed 8. 5% while France’s Soitec gave up 5%. The market reaction outpaced the technology itself. Aishengna’s tool handles 28-nanometer chips in a single pass. Through multiple exposures, it couldreach 7-nanometer or even 5-nanometer production, the same workaround SMIC already uses on older ASML machines to build the chip inside Huawei’s Mate 60 Pro. Analysts say ASML’s real edge is decades of manufacturing know-how, not raw specs. ASML’s access to China keeps shrinking. The US already bars ASML from selling its most advanced extreme ultraviolet systems to China. Dutch rules limit some DUV sales too. And Congress is now weighing legislation that could cut off ASML’s remaining DUV shipments to China. Beijing has responded to those curbs bypushing domestic chipmakers toward locally made equipment, including a rule tying subsidies to Chinese-built tools. Sanne van der Lugt, a researcher at Leiden Asia Center, said “US export controls successfully created a business case for Chinese lithography. ”Reutersseparately reportedthat Chinese engineers also built a working EUV prototype late last year, though commercial-scale production of that far more advanced technology remains years away. Most analysts expect the DUV news to leave ASML’s medium-term earnings outlook largely intact despite the stock swoon. Information for this briefing was found via the sources and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.