ASML Stock Tests $1,600 Support as China Chip Tool Production Raises New Competitive Concerns

ASML stock plunged 8% as reports of China producing domestically developed DUV lithography machines raised fresh concerns over the Dutch chip-equipment maker’s long-term competitive position and exposed a weakening technical setup.

ASML Stock Slides 8% as China’s Domestic DUV Push Raises New Concerns

ASML Holding shares came under heavy selling pressure on Monday, falling more than 8% and heading toward their steepest single-day decline since early July as investors reacted to reports that China has begun manufacturing its own immersion deep ultraviolet lithography machines.

The news has raised concerns about China’s accelerating efforts to reduce its reliance on foreign semiconductor technology and could create a more challenging environment for ASML over the longer term.

China Develops Domestic DUV Lithography Technology

According to media reports, a Chinese manufacturer operating with state backing has entered production of domestically developed immersion DUV lithography systems.

The company’s identity was reportedly withheld because of the sensitivity surrounding the technology.

Reuters reported that deliveries of the machines could reach some of China’s leading semiconductor manufacturers before the end of the year.

The development is significant because immersion DUV systems represent the most advanced lithography equipment Chinese chipmakers can legally obtain following restrictions on ASML’s more sophisticated extreme ultraviolet, or EUV, technology.

A domestically produced alternative could therefore give Chinese semiconductor manufacturers another option that does not rely entirely on foreign suppliers.

China’s Semiconductor Ambitions Raise Questions

The reported progress does not necessarily mean Chinese equipment can immediately match ASML’s technology.

ASML remains the global leader in advanced lithography, while domestic Chinese systems may still face challenges related to production consistency, throughput, precision and commercial scalability.

However, the strategic implications are important.

Even if Chinese equipment initially performs below ASML’s standards, continued development could gradually reduce China’s dependence on imported semiconductor machinery.

That possibility could become increasingly relevant if Washington introduces tighter restrictions on semiconductor equipment sales and servicing in China.

For ASML, the long-term risk is therefore not necessarily an immediate loss of global market leadership, but the gradual erosion of its position in one of the world’s most important semiconductor markets.

ASML Stock Breaks Below Key Technical Support

The technical picture has also deteriorated sharply.

ASML shares fell around 8.5%, breaking below the 50-day simple moving average, which had previously acted as an important support level.

The stock is now testing the 100-day SMA near $1,600, making this a critical area for investors watching the broader trend.

If buyers successfully defend the 100-day average, ASML could attempt to stabilize and recover some of the latest losses.

ASML’s Chart Daily – Can the 100 SMA Hold as Support Again?

However, a sustained break below this level could expose the stock to deeper downside pressure, with the 200-day SMA around $1,380 emerging as the next major technical support zone.

Such a move would represent a significant deterioration in momentum and could encourage additional selling from technically focused investors.

Long-Term Demand Remains a Key Support

Despite the latest concerns, ASML continues to benefit from the structural growth of the global semiconductor industry.

Advanced chips used in AI infrastructure, data centers, smartphones, automobiles and high-performance computing require increasingly sophisticated manufacturing technology.

This should continue supporting long-term demand for ASML’s equipment.

However, investors may become more cautious if geopolitical tensions and China’s push toward technological self-sufficiency begin to threaten the company’s growth expectations.

For now, the combination of China’s emerging domestic DUV capabilities and ASML’s deteriorating technical structure has created a more uncertain backdrop.

The $1,600 area is likely to remain a key level to watch. Holding above the 100-day SMA could help limit further damage, while a decisive break below it could open the way toward the $1,380 region and signal that the latest selloff has developed into a deeper technical correction.

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.