ASML shares tumble following reports of Chinese breakthrough in chip machines
China has begun producing advanced chip machines, the same equipment that helped ASML grow. Reporting from the tech site The Information had immediate consequences on the stock market: the Dutch chip machine maker took a heavy hit.
The ASML building in Veldhoven. Source: ANP This article was written by Jasper Daams, news reporter for de Volkskrant. Published on 27 July 2026, 21:59
Sources told The Information that an unnamed Chinese state-owned enterprise will deliver so-called DUV immersion machines to leading Chinese chipmakers later this year. This type of machine is the second most advanced in ASML’s catalogue. Due to Western export restrictions, ASML is only permitted to export a portion of these machines to China; a total ban applies to the most advanced equipment.
If China succeeds in producing DUV machines itself, it could cost ASML billions of euros in the long term. In the past quarter, 14 per cent of the machines sold by ASML went to China. The Veldhoven-based manufacturer expects to earn 20 per cent of its turnover from China this year. Should the revenue forecast, which was recently revised upwards from 43 to 45 billion euros, be met this year, it would amount to a figure in the region of 9 billion euros.
Further testing ASML does not seem to have cause for concern for the time being. Chinese technology is not yet as advanced or reliable as that of the Dutch company. Before mass production can begin in China, the machines must undergo further testing. China is reportedly starting production of five machines this year, with that number expected to reach twenty in a year’s time.
Although ASML seems to be maintaining its lead for now, investors were startled on Monday. ASML shares ended 8.5 per cent lower, the lowest level since early June. Other Dutch industry peers, Besi and ASM, also fell sharply; those companies lost nearly 10 per cent and just over 7 per cent respectively.
Monopoly under pressure It is possible that China will eventually get its hands on the most advanced ASML technology. At the end of last year, Reuters reported that China had built a working prototype of an EUV machine, the flagship technology in which ASML holds a monopoly. Thanks in part to former employees of the Dutch chip machine maker, China could be able to produce functional chips with the prototype in 2028.
It is primarily the Americans who want to prevent China from gaining access to the machines at all costs, thereby preventing it from accelerating its technological advancement. A bill was introduced in the US Congress this year to prohibit ASML from supplying and maintaining even more machines.
US Commerce Secretary Howard Lutnick expressed his concerns to ASML last month regarding EUV machines, as one had allegedly ended up in China. According to Bloomberg News, the Secretary was told by ASML that this was not the case.