Will China's Mass Production of DUV Lithography Machines Severely Impact ASML? Expert Cites 'Four False Alarms' in Market History: Major Players to Accumulate on Dips

Recently, foreign media reported that China has started mass-producing its self-developed immersion deep ultraviolet (DUV) lithography machines, sparking investor concerns over ASML's long-term growth prospects in the Chinese market. ASML's stock plunged on the 27th, dragging down semiconductor stocks across the board. In response, financial writer Di Xiang posted on Facebook, stating that during weak market periods, 'ghost stories' tend to multiply. Di Xiang noted that news about China producing DUV equipment surfaces periodically, and this instance is not fundamentally different. He believes major players will take advantage of the negative sentiment to accumulate shares at lower prices, and related stocks will continue to rise gradually based on fundamentals.

The foreign media report claims China has begun mass-producing DUV machines, aiming to produce about five units this year and increase to 20 by 2027, with the goal of gradually replacing ASML's equipment. This news shocked the market, causing ASML's stock to plummet and dragging down related semiconductor stocks.

History repeats itself? Di Xiang reviewed four past instances of market rumors regarding China's DUV development:

At the end of 2020, reports indicated that Shanghai-based SMEE might deliver 28-nanometer DUV equipment by the end of 2021, marking a significant step toward reducing reliance on U.S. technology.

In October 2023, Huawei launched its 7-nanometer 'Kirin 9000S' chip, suggesting China had broken through U.S. technological restrictions, leading the market to speculate that China was secretly developing DUV machines to produce advanced chips.

In September 2024, China's Ministry of Industry and Information Technology promoted domestically produced DUV machines. The market was initially shocked by the perceived technological breakthrough, but it was later discovered that this DUV machine was significantly behind ASML's offerings.

In September 2025, reports stated that SMIC was testing 28-nanometer DUV machines produced by a startup, aiming to reduce dependence on Western technology.

Di Xiang emphasized that being able to manufacture equipment does not equate to high yield. He stated that China still heavily relies on Western technology. The reason is simple: producing equipment does not guarantee high chip production yields. If yields cannot be improved, chip production becomes significantly more difficult and costly. This may explain why China has repeatedly announced DUV production over the years while still relying on Western imports.

Di Xiang stressed that, in summary, he believes this case is no different from past instances. Major players will use the negative news to accumulate shares at lower prices, and related stocks will continue to rise gradually based on fundamentals. However, until then, it will be a test of investors' position management and discipline.

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