ASML and Chip Stocks Slide as China Advances Domestic Lithography Production

Key Facts

In a move reflecting the escalating geopolitical challenges in the tech sector, semiconductor companies faced sharp selling pressure. ASML shares dropped over 7% following reports that a state-backed Chinese firm has commenced mass production of domestic Deep Ultraviolet (DUV) lithography machines. According to reports, this breakthrough poses a direct threat to the Dutch company's long-term sales of older-generation tools in the Chinese market, which remains a primary revenue source.

The decline extended to other industry leaders, with Advanced Micro Devices (AMD) falling 7.3% and Micron Technology (MU) dropping nearly 5% by midday, per market data. This shift comes amid rising concerns over the ability of Chinese firms to bypass Western export restrictions by developing independent domestic supply chains, thereby reducing reliance on foreign equipment where ASML has historically maintained dominance.

At the close of July 27, 2026, the ASML share price stood at 1,647.17 USD, having touched a day low of 1,613.38 USD. Investors are now monitoring how these developments will impact the company's long-term profit margins, especially with few major manufacturing-specific catalysts in the upcoming calendar, aside from the CBI Industrial Trends Orders expected later this week.