China’s DUV lithography milestone shakes chip market

China’s DUV lithography breakthrough triggers global chip stock declines, threatens ASML’s China revenue, and marks a key step toward semiconductor self-sufficiency.

China has initiated limited production of domestically developed immersion deep ultraviolet (DUV) lithography machines, marking a pivotal step toward semiconductor self-sufficiency. These machines, crucial for etching circuit patterns onto silicon wafers, have long been dominated by Western firms such as ASML. Semiconductor Manufacturing International Corporation (SMIC) began testing a DUV lithography tool from Shanghai Yuliangsheng Technology in September 2025, targeting 28 nm-class chips and potentially finer nodes with advanced techniques. SMIC aims to achieve mass production as early as 2027. Meanwhile, SMEE, another Chinese equipment maker, has sold about ten units of its SSA800 series. News of China’s DUV progress led to sharp declines in global chip stocks, with ASML dropping over 7% and U.S. chip equipment stocks also falling. This breakthrough threatens ASML’s last major revenue stream in China, as domestic alternatives could compress its order book and pricing power. The development is a major milestone for China’s chip supply chain autonomy and could reshape global technology investment.