China’s state-backed push into lithography machines triggers a 10% drop in ASML shares, erasing €60 billion in market capitalization.
ASML, Europe’s most valuable listed company, saw its shares plunge 10% over two days after reports emerged of China’s state-backed effort to produce immersion deep ultraviolet lithography tools. The decline wiped €60 billion from its market value, reversing part of a 50% gain in 2026 that had fueled speculation of a trillion-euro valuation.
The Dutch firm dominates the global market for lithography machines, including mid-range DUV devices and advanced EUV systems critical for AI chip production. While ASML’s leadership in high-end tools remains unchallenged, China’s push for self-sufficiency in chipmaking tools poses a long-term threat to its dominance in mid-tier equipment.
The immediate market reaction underscores investor concerns over geopolitical risks, as U.S. export controls limit ASML’s access to China while Beijing accelerates domestic alternatives. Analysts suggest the damage may be contained for now, given ASML’s entrenched position in cutting-edge technology.