ASML Lost €60 Billion in Two Days — Here's Why Analysts Say the Panic Was Overblown

The selloff capped a broader weak month for semiconductor stocks. Through July, chip stocks had already been pressured by sector-wide profit-taking, Samsung's underwhelming earnings, and concerns about customers delaying capital-intensive technology upgrades . The China DUV report was the catalyst that broke the week of consolidation.

Why Analysts Called It an Overreaction

Multiple top-tier analysts and banks described the selloff as disproportionate to the actual news:

• Bank of America explicitly called the selloff an "overreaction" and maintained a price target implying over 70% upside from the July 29 trading level .
• JPMorgan told investors the selloff "seems disproportionate to what has been indicated in the report," stressing that producing a limited number of immersion DUV tools "does not equate to delivering reliable high-volume manufacturing systems" .
• Reuters Breakingviews noted the "copycat kit is not as technically advanced" and that ASML's crown "looks safe — for now" .

The core argument: China's plan to deliver about 5 DUV machines in 2026 and roughly 20 in 2027 is trivial compared to the hundreds of systems ASML ships each year — and ASML's order book is already sold out through 2027 .

Details of China's Domestic Lithography Efforts

The DUV Breakthrough

A Chinese state-backed consortium (including Huawei and SiCarrier) has begun mass-producing immersion deep ultraviolet (DUV) lithography machines . The machines are being delivered to local chipmakers including SMIC, Hua Hong, and CXMT . Production targets are modest: about 5 DUV systems in 2026, about 20 in 2027 . However, Reuters reported on July 27 that the systems still "lag on performance and reliability" and need further testing before they can match ASML's output quality .

EUV Progress

On the more advanced extreme ultraviolet (EUV) front — ASML's crown jewel — China remains far behind. In December 2025, Reuters reported that a team of former ASML engineers in Shenzhen had completed a prototype EUV machine and were testing it at a high-security lab . But the prototype has not yet created any working chips . Chinese chip industry leaders are advocating for a unified national initiative to create full lithography systems between 2026 and 2030, though they acknowledge major gaps remain in EDA software, fundamental materials, and EUV technology .

Estimated Revenue Impact on ASML

The near-term revenue impact is minimal. China currently contributes about 20% of ASML's net sales in 2026, according to ASML CFO Roger Dassen — down from 44% in 2024 and 42% in 2025 . DUV sales as a percentage of ASML's overall sales have already decreased from 44% in 2024 to 29% in the most recent quarter .

ASML's high-end EUV machines — which are the most profitable and technologically critical — remain completely out of China's reach for the foreseeable future . Bank of America estimated that even if China sourced 20 argon fluoride immersion tools locally, it would impact ASML's next-year sales by only about €1.4 billion (2.4%) .

Broader Geopolitical Pressures

The situation highlights ASML's precarious position caught between U.S.-led export controls and China's self-sufficiency push. U.S. export controls already prevent ASML from shipping its most advanced EUV machines to China, and further restrictions have been tightening on older DUV equipment as well .

China is pursuing a multi-front strategy to circumvent U.S. chip bans: developing its own lithography machines, stacking AI chips to boost performance, and potentially acquiring ASML equipment through unauthorized channels . There have even been reports that U.S. Commerce Secretary Howard Lutnick has questioned ASML's senior executives over concerns that one of the company's EUV systems may have ended up in China in breach of export restrictions .

ASML cannot control where former employees go, and the Shenzhen EUV prototype team reportedly includes ex-ASML engineers — though ASML has said they are bound by confidentiality agreements and in some cases the company has successfully taken legal action in response to theft of trade secrets . The Dutch government faces continuous pressure from Washington to tighten export restrictions further, putting ASML in the middle of a geopolitical squeeze between its largest market (China, historically) and its key ally (the U.S.) .

The Bottom Line

While China's DUV breakthrough is a meaningful milestone for Beijing's semiconductor self-sufficiency push and a symbolic challenge to ASML's dominance, the numbers tell a clear story: 5 machines this year versus hundreds from ASML, an order book sold out through 2027, and EUV technology where China is still years behind. The market's €60 billion panic appears to have priced in a threat that is real — but still years away from materially impacting ASML's revenue or competitive position.