China’s chip tool push intensifies pressure on ASML amid US-China tensions

China just started building the one machine the US really didn’t want it to build. On July 27, a state-backed Chinese firm began manufacturing domestically developed immersion deep ultraviolet lithography machines, the critical tool used to etch patterns onto silicon wafers that become the chips powering everything from smartphones to Bitcoin mining rigs. The numbers tell the story China’s initial production run is modest: roughly five machines expected in 2026, scaling to twenty in 2027. For context, ASML is projected to produce approximately 130 DUV immersion units in 2026 alone. So we’re talking about China operating at less than 4% of ASML’s output right now. The first shipments are earmarked for China’s biggest chipmakers. SMIC, Hua Hong Semiconductor, and ChangXin Memory Technologies are all slated to receive units. ASML’s exposure to this shift is significant. China accounted for 33% of ASML’s total revenue in 2025. That figure was already expected to decline to around 20% in 2026, even before this latest development. The MATCH Act and the squeeze on ASML Making things worse for ASML is the MATCH Act, a piece of US legislation designed to further restrict the company’s abili...