China DUV Lithography Mass Production Report Triggers Global Chip Equipment Sell-off; Japan, Korea Markets
A US tech media report that a Shanghai company has begun production of domestic DUV lithography machines, with plans to produce about 5 units by 2026 and 20 by 2027, sent shockwaves through global semiconductor equipment stocks. ASML shares fell as much as 8.3% on July 27, while Japanese and Korean markets tumbled on July 28, with Nikkei down 4% and Kospi down 7.6%. The company, Aisena, founded in 2023 with registered capital over RMB 7 billion, leads the effort. Sources say the machines need further testing and lag behind ASML models, but the development threatens ASML's market position in China.
A US tech media outlet reported that a Shanghai-based company has commenced production and assembled an R&D team by drawing personnel from lithography startups such as Yuliang Sheng Technology. The plan is to produce about five DUV lithography machines in 2026 and target around 20 units in 2027.
Immersion DUV lithography machines, used to print circuit patterns on silicon wafers, are the most advanced lithography equipment currently available to Chinese chipmakers. The Netherlands’ ASML is banned from exporting the most advanced extreme ultraviolet (EUV) machines to China. China is also developing its own EUV technology, but it remains in the prototype stage. Reuters, citing sources, confirmed that China has started producing domestic DUV machines and noted that the three-year-old Shanghai Aisena Electronic Technology Group is leading the production effort. Tianyancha data shows that Aisena was established in August 2023 with registered capital exceeding RMB 7 billion, held by two state-owned enterprises: Shanghai Electric Holdings and a subsidiary of Shanghai International Trust.
Sources said that Aisena’s DUV machine still requires further testing and there is a performance gap compared to ASML models, meaning it does not pose an immediate commercial threat. However, market concerns that the equipment could challenge ASML's position in China caused ASML shares to plunge as much as 8.3% on July 27, touching the lowest level since early June. In the Netherlands, ASM International fell 7.3%, and Besi Semiconductor dropped 9.9%. In the US, Applied Materials slid 6.7%, and Lam Research fell 7.9%.
The semiconductor-led sell-off triggered sharp declines in Japanese and South Korean stock markets on July 28. Japan’s Nikkei 225 fell as much as 4%, its lowest since May 22. South Korea’s Kospi plunged as much as 7.6%, the lowest since April 20. Semiconductor equipment stocks, including Tokyo Electron, Kioxia, Samsung Electronics, and SK Hynix, led the losses. SK Hynix fell as much as 30%, a record decline; Kioxia dropped as much as 18%, the biggest fall since November 2025.
DUV lithography involves cutting-edge technologies such as high-precision laser sources, ultra-precise optical systems, nanometer-level motion control, and real-time aberration compensation. Key metrics include throughput (wafers per hour) and lithography accuracy.