Huge overreaction to the news that China has started mass producing DUV lithography machines.
The Information reported that these Chinese-made DUV machines are expected to be delivered this year to Chinese chipmakers such as: SMIC, Hua Hong Semiconductor, and CXMT.But is this really new information?Export controls on $ASML(ASML.US)'s EUV and DUV made indigenization inevitable, especially when you consider that SMIC has been trialling domestic immersion tools since Q3'25, and Reuters reporting on Chinese EUV prototype machines back in Dec'25.Plus, we already know that ASML's China sales have been declining recently: ~50% in 2024, 33% in 2025, ~20% guided for 2026.So the sell-off essentially double counts ASML's own guidance of falling Chinese sales.Overall, I am left scratching my head at this market reaction.
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