ASML sell-out: Dreams and rumors will not break the monopoly

Shares of ASML, the largest and, according to many, the most important company in Europe, fell as much as 8% during Monday’s session. The situation was so dramatic that the Amsterdam exchange had to halt trading in the instrument. The downward catalyst was the news that China is supposedly about to begin mass production of “DUV” systems, meaning lithography machines based on “deep ultraviolet.” But what does this really mean for the market and for ASML?

Questions without answers

A seemingly simple message contains a large number of implications, doubts, and questions, but almost no specifics.

• Phantom companies The best primary source is a Reuters article. It points to an anonymous informant from within China’s semiconductor industry, who said that a small state-owned company in Shanghai is expected to attempt production of DUV machines. The amount of information about this entity online is close to nonexistent. At the moment, it is difficult to determine whether the companies involved in the initiative even exist.
• The best primary source is a Reuters article. It points to an anonymous informant from within China’s semiconductor industry, who said that a small state-owned company in Shanghai is expected to attempt production of DUV machines. The amount of information about this entity online is close to nonexistent. At the moment, it is difficult to determine whether the companies involved in the initiative even exist.
• Not much “mass” in production “Mass production,” as some sources describe it, means a plan for 5 machines in 2026 and 20 machines in 2027. Is that mass production? ASML produces 130 such machines per year.
• “Mass production,” as some sources describe it, means a plan for 5 machines in 2026 and 20 machines in 2027. Is that mass production? ASML produces 130 such machines per year.
• A race from decade ago For ASML, DUV is a segment the company is moving away from, because it is an outdated standard compared with ASML’s core business, EUV (Extreme Ultraviolet). The current leaders in the DUV market are Nikon and Canon, both of which produce hundreds of such machines annually. So China’s “mass production” would represent not a percent, but more like a per-mille share of the market.
• For ASML, DUV is a segment the company is moving away from, because it is an outdated standard compared with ASML’s core business, EUV (Extreme Ultraviolet). The current leaders in the DUV market are Nikon and Canon, both of which produce hundreds of such machines annually. So China’s “mass production” would represent not a percent, but more like a per-mille share of the market.
• Not all DUV’s are made equal If Chinese DUV machines exist, nothing is known about their resolution, reliability, throughput, or yield. Even small changes in these parameters can worsen profitability by orders of magnitude.
• If Chinese DUV machines exist, nothing is known about their resolution, reliability, throughput, or yield. Even small changes in these parameters can worsen profitability by orders of magnitude.

ASML results by country and segment [2026]

Source: ASML In summary, the DUV segment, while still important (just under 30% of sales), is one ASML is clearly withdrawing from, because the breakthrough EUV offers much better margins and growth potential, which more than compensates for the Chinese market, assuming it were to disappear quickly for the company.

An indestructible monopoly?

A much more important question can be asked: if China currently has DUV production technology, or at least anonymous sources claim so without providing any evidence, is it only a matter of time before China also acquires EUV technology, which is ASML’s main competitive advantage? Absolutely and under any circumstances – not . If China has gained the ability to produce DUV machines at the dizzying volume of a few units, that represents plugging a huge, gaping hole in the capabilities of China’s lithography industry, which even in light of this hypothetical revelation remains decades behind Europe’s ASML. It must be understood that ASML’s products are not consumer solutions, like consumer electronics, that can be copied. The jump from DUV to EUV is not a step or a march, but a flight, and not to the Moon bur rather – to Mars. To get where it is today, ASML had to build a network of ultra-specialized companies that, over decades, perfected every component of ASML’s machines. Even obtaining a complete ASML EUV machine, which is protected in a manner comparable to how, for example, nuclear weapons are safeguarded, would only be the beginning of building an entire production chain from scratch, and in the best case would take many years. Trying to replicate ASML’s success by any other entity through classic R&D would take, at best, 10 years and more likely around 20 years.

ASML earnings [2018–2026]

The current sell-off in ASML is a price move based on unconfirmed information that the market has heavily overinterpreted. The fundamentals and outlook for ASML remain unchanged.

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