ASML shares fall 7%+ after a report that a Chinese state-backed company has begun manufacturing DUV machines; Applied Materials fell 6.5%+ and Lam Research 7%+
The report lands after China became ASML's largest market for four consecutive quarters, with China sales rising to nearly half of ASML's revenue mix in early 2024. That exposure made export restrictions and China demand a central variable in ASML's valuation.
ASML had already faced investor concern over China-related constraints, including a year-long share decline tied to export rules and tariffs. A report of domestic DUV production turns that concern from access to foreign tools into potential local substitution.
First-order effects
ASML, Applied Materials, and Lam Research face an immediate investor reassessment of their China-linked equipment revenue and competitive exposure; their shares fell sharply following the report.
The reported Chinese manufacturer gains a credibility boost as a domestic DUV supplier, although the report alone does not establish its production scale, performance, or commercial adoption.
Second-order effects
Chinese chipmakers could gain an additional domestic sourcing option for DUV equipment, potentially increasing price and procurement pressure on foreign equipment vendors serving that market.
Equipment investors are likely to scrutinize China sales disclosures and order outlooks more closely, especially given ASML's prior heavy reliance on China for system sales.
Third-order effects
If domestic DUV production proves scalable and usable by fabs, China’s semiconductor-tool supply chain could become less dependent on imported mature-node lithography equipment.
The episode points to a more regionally segmented equipment market, where export controls and local industrial policy shape vendor addressable markets alongside chip-capex cycles.
The trend: Semiconductor equipment markets are moving toward localized supply chains as geopolitical restrictions create incentives for domestic alternatives to imported tools.
whilst EUV is all the rage at the moment, and it is whats needed to get leading edge chips and fabs, people dont realise how many things are still made on legacy nodes with DUV tools, if china genuinely has gotten its own DUV machines? damn [embedded post]
China developing domestic DUV machinery was a near term certainty, not sure why the market is throwing a fit. We are clearly going into a multipolar world when it comes into litho.
DUV was ready last year if you follow closely in China. But this does not mean they will be able to build a great fab with great yield. However, this may be a bad news for all ARM-based chips, especially the GPUs, because they no longer need to reply on TSMC. $INTC will soon volu…
These Korean citrini guys are bad for the markets. They are making 5 DUV (Not EUV) machines this year. Thats the goal not a guarantee. ASML is shipping 130+. ASML made its first DUV in 1998, only took China 25 years to steal the tech and make it themselves.
For the millionth time: There are a few types of DUV machines *having* a machine doesn't mean it can match the defect rate, throughput etc. of other tools. Canon and Nikon have a DUV tool, ask me again how they're doing. Ask me how Canons NIL tool is doing too.
'A Chinese state-backed company has begun manufacturing one of the key pieces of equipment used in chip manufacturing for the first time, a key development in Beijing's drive to reduce its reliance on foreign technology to make chips.' www.theinformation.com/articles/ chi...
China begins mass production of homegrown immersion chipmaking machines in major breakthrough, report claims — first DUV lithography units will be delivered this year to SMIC, Hua Hong, and CXMT
China begins mass production of homegrown immersion chipmaking machines in major breakthrough, report claims — first DUV lithography units will be delivered this year to SMIC, Hua Hong, and CXMT