🚨ASML shares plunged today – by more than 8%. The reason? Reports say China has started manufacturing its own DUV lithography machines (chip-making equipment). 🇨🇳📉

What's this about? Lithography machines are the heart of chip production – they etch microscopic circuits onto silicon wafers. ASML is the global leader in this field and the sole manufacturer of the most advanced EUV machines.

Since the US and the Netherlands banned ASML from selling the most advanced EUV machines to China, Chinese firms (SMIC, Hua Hong, ChangXin) had been buying at least the older DUV machines. This was a major revenue source for ASML.

Now China has reportedly started making these DUV machines itself – the first units are said to be going to Chinese chipmakers this year. If confirmed, ASML could gradually lose this business.

Other industry players also fell – Applied Materials, Lam Research, KLA – as investors fear China will eventually domesticate the entire chip supply chain, not just lithography.

An important detail: Chinese machines still lag behind ASML in reliability and performance. They plan to deliver only about 5 units this year, around 20 in 2027. So for now it's more of a symbolic milestone than an immediate threat.

The timing is no coincidence – the US is currently preparing another law (the MATCH Act) to tighten exports of chip technologies to China. If China can produce substitutes domestically, these sanctions will eventually lose their purpose. $KLAC $ASML $LRCX