[COX] China's DUV Wipes Out KRW 8 Trillion in ASML Market Value, Yet A…

News that China will produce just five DUV lithography machines annually erased nearly KRW 8 trillion from ASML's market capitalization in a single day. / Photo generated by COXNEWS using Gemini (AI)

ASML's market capitalization lost nearly KRW 8 trillion in just one day. The trigger was a single report that a Chinese state-backed company had begun mass production of immersion deep ultraviolet (DUV) lithography equipment. Judging solely by the stock decline, it appeared as though China had crossed the final hurdle toward semiconductor equipment self-sufficiency. However, a closer look at the actual production plan suggests it is still too early to call it a genuine threat. In other words, there remains a considerable gap between market fears and the real technological divide.

According to industry sources, ASML shares plunged more than 7% on the New York Stock Exchange on July 27 (local time), falling to their lowest level since June. In Amsterdam, the stock's decline widened to as much as 8.5%. Other European semiconductor equipment companies also traded lower.

BE Semiconductor Industries (BESI) fell between 8.5% and 10%, posting a steeper decline than ASML. Soitec dropped 5%, while Infineon fell about 3%. Semiconductor equipment stocks listed in the U.S., including Applied Materials, Lam Research, and KLA, also declined by 4% to 7%.

The selloff was sparked by reports that a Shanghai-based Chinese state-backed company had begun mass production of immersion DUV lithography equipment. The company, reportedly linked to Huawei and SiCarrier, is said to be considering SMIC (China's largest foundry), Hua Hong Semiconductor, and ChangXin Memory Technologies (CXMT) as its initial customers. SMIC has reportedly been evaluating the equipment since September 2025.

However, the production scale remains at an early stage. The company aims to produce just five units this year and only around 20 units by 2027. By comparison, ASML sold 131 immersion DUV systems in 2025 alone. Industry experts say there is still a significant gap, and that the equipment cannot be deployed directly into mass production lines until its performance and reliability are fully verified. JPMorgan described the recent selloff as "overdone."

Notably, the decline was not driven by weak earnings. ASML reported second-quarter 2026 revenue of €9.33 billion and net profit of €2.92 billion, exceeding market expectations, and had already raised its full-year revenue guidance to between €43 billion and €45 billion. The sharp decline, which came just 12 days after the earnings announcement, demonstrates that geopolitical risks unrelated to business performance can still significantly impact the company's share price.

ASML's dominant position in the EUV lithography market is unlikely to be challenged anytime soon. Due to export restrictions to China, sales of EUV and the latest DUV equipment have already been blocked. As a result, ASML's remaining China-related revenue has effectively depended on legacy DUV systems and services.

Still, the significance of this development lies not in scale but in direction. It signals that China is beginning to establish domestic procurement capabilities even in the legacy DUV segment, once considered irreplaceable. Considering the need to validate performance and yield, any material threat remains a distant prospect. Nevertheless, the market was willing to wager KRW 8 trillion on the possibility that even ASML's remaining China revenue could eventually be eroded over the long term.