China's DUV lithography progress not ASML's biggest threat, analysts say
Analysts downplay the threat of China's home-grown DUV lithography machines to Dutch chipmaking equipment leader ASML. Shares of ASML fell over 8% in US trading on Monday after a report claimed China had begun producing immersion DUV machines via a state-backed Shanghai company, with plans for five units this year and 20 by 2027, destined for SMIC, Hua Hong Semiconductor, and CXMT. While the news boosted Chinese lithography stocks like Zhangjiang Hi-Tech, Yongxin Optics, Highly Group, and Wavelength Opto-Electronic, experts caution that producing a machine is not the same as qualifying it for continuous commercial production. Paul Triolo of DGA-Albright Stonebridge Group noted that commercially viable DUV immersion lithography running 24/7 for a year is extremely difficult. The real risk to ASML may come from US intervention rather than Chinese domestic machines.
Key facts
- ASML shares fell over 8% in US trading on Monday, closing down 5.8%.
- The Information reported China began manufacturing home-grown immersion DUV lithography machines via a state-backed Shanghai company.
- China plans to produce about five DUV units this year and around 20 in 2027.
- First systems expected to go to SMIC, Hua Hong Semiconductor, and CXMT.
- Chinese lithography stocks surged on Tuesday: Zhangjiang Hi-Tech, Yongxin Optics, Highly Group, Wavelength Opto-Electronic hit daily limits.
- Paul Triolo, partner at DGA-Albright Stonebridge Group, said producing commercially viable DUV immersion lithography running 24/7 for a year is very difficult.
- Analysts say home-grown machines are not the greatest threat to ASML; US intervention may be a bigger risk.
- The Dutch firm remains dominant in chipmaking gear despite China's lithography push.
Entities
Institutions
- ASML
- Semiconductor Manufacturing International Corporation (SMIC)
- Hua Hong Semiconductor
- ChangXin Memory Technologies (CXMT)
- DGA-Albright Stonebridge Group
- The Information
- Zhangjiang Hi-Tech
- Yongxin Optics
- Highly Group
- Wavelength Opto-Electronic
Locations
- China
- Shanghai
- Netherlands
- United States