Dutch lithography giant ASML saw its stock drop to its lowest level since June after a state-backed Chinese consortium began mass producing immersion DUV lithography machines. The consortium involving Shanghai Yiliangsheng, SiCarrier, and Huawei plans to deliver approximately 5 machines in 2026 and 20 in 2027 to Chinese chipmakers including SMIC, Hua Hong Semiconductor, and ChangXin Memory Technologies, while ASML normally ships hundreds of systems per year. Analysts are particularly concerned that sales to China are projected to account for around 20% of ASML’s 2026 revenue, directly threatened by potential US restrictions on DUV exports. Credible Chinese competition in advanced lithography is unlikely to materialize before 2030 at the earliest, with near-term risk remaining regulatory in nature.
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