ASML stock falls as China begins mass-producing a critical semiconductor tool previously dominated by the Dutch tech giant.
ASML shares fell on Tuesday following reports that an unnamed Chinese company has begun mass-producing immersion deep ultraviolet (DUV) lithography machines. For years, the Dutch tech giant ASML has held a monopoly over these tools, which are essential for etching circuit patterns into silicon wafers. Analysts suggest that while China's entry into the market is significant, it is unlikely to disrupt ASML's global dominance in the near term. The Chinese machines are currently aimed at less-advanced chips, whereas ASML's extreme ultraviolet (EUV) machines are used for the most leading-edge chips. Furthermore, the Chinese firm is currently producing a small number of units, while ASML plans to produce significantly higher capacity. Experts note that because of existing export restrictions, the DUV tools China produces will likely displace revenue ASML has already lost to the Chinese market. Therefore, the production of these homegrown tools is expected to have a minimal impact on ASML's overall order book and global market share.