the price of China starting to manufacture its own lithography

ASML has suffered a hard blow. Just a few hours after The Information revealed that a state-backed Chinese company had begun mass manufacturing its own immersion deep ultraviolet (UVP) lithography machines, ASML shares plummeted. They fell until 6.5% in Amsterdamits lowest level since the beginning of June, while on Wall Street they reached fall 6.3%.

However, when ASML sneezes other companies catch a cold. And Applied Materials, Lam Research and KLA Corp, the other large Western suppliers of equipment for manufacturing integrated circuits, were left between 4% and 7% in the same stock market session, dragged by the same underlying fear: that China, after years of trying, will finally begin to solve the link of the semiconductor chain that most resisted him.

International media have not yet confirmed the name of this company, although several of them claim that it resides in Shanghai (China), so it is probably Shanghai Yuliangsheng Technology, an emerging company linked to Huawei and YesCarrier. This simply means that the ecosystem of suppliers that China has been weaving around Huawei in recent years is also beginning to bear fruit in photolithography. Be that as it may, the market has already decided that the threat, although incipient, is real.

ASML’s China business suffers

This setback in the stock markets comes at a bad time for ASML’s business in China. Its sales in this Asian country represented 19% of your income during the first quarter of this year, and fell to 14% in the second. Even so, this Dutch company presented some solid quarterly results: net sales of 9,326 million euros in the second quarter, 21% more than a year ago, and a net profit of 2,918 million, 27% more with a gross margin of 54%, slightly above the 53.7% of the previous year.

Its CEO, Christophe Fouquet, even raised its net income forecast for 2026 in mid-July to a range of between 43,000 and 45,000 million euros relying on a demand for chips artificial intelligence (AI) that is still triggered. This simply means that ASML comes to this setback with the wind in your core businessEUV lithography, a segment in which China neither manufactures nor can buy its most advanced machines. The immersion UVP, on the other hand, can manufacture it, which has precisely caused this Monday’s scare.

On the other hand, we must not overlook that ASML still plans to deliver some 130 immersion systems worldwide during 2026, a volume that the Chinese company cannot even remotely match with its five units planned for this year. Even so, the simple possibility that China will no longer need ASML to produce the less advanced chips, the ones needed by cars, household appliances and much of the world’s industry, is enough for the market to begin to foresee the arrival of a different future.

Image | ASML

More information | Bloomberg | Blockonomi

In Xataka | TSMC raises its bet in the US: there are already 265,000 million dollars for 2 nm