ASML NASDAQ:ASML, the Dutch company leading the global market for semiconductor lithography equipment, fell approximately 11% on Tuesday after reports that a state-backed Chinese business had started producing domestic deep-ultraviolet lithography machines. The decline reduced ASML's market value by approximately 60 billion and left its shares trading near 1,400 during the European session. China's Shanghai Aishengna Electronic Technology Group is leading the domestic equipment effort, according to a separate Reuters report citing a person familiar with the matter.
China generated approximately 9.5 billion, or 29%, of ASML's 2025 net sales. That revenue came from DUV equipment and services because export restrictions prevent the company from supplying its more advanced extreme-ultraviolet machines to China. The Information reported that five Chinese DUV machines were planned for production this year, followed by approximately 20 in 2027, although questions remain about their performance, reliability and chip-processing speed.
Reuters Breakingviews argued that the market reaction may overstate the immediate commercial threat because ASML retains a substantial technical lead. Using ASML's approximately 10-times enterprise-value-to-2027-sales multiple, Breakingviews calculated that the market-value decline could imply 6 billion of annual revenue at risk, equal to half the 12 billion generated from 279 DUV systems last year. ASML also plans to increase manufacturing capacity for its most advanced immersion DUV tools by 30% in 2027. Investors may continue assessing whether China can move from initial production to reliable commercial deployment quickly enough to challenge ASML's current position.