ASML’s €1.4 Billion Exposure: How Wall Street Is Dismissing the Chinese Rival Threat
Published on 07/29/2026 at 12:41 | Redaktion boerse-global.de
The math is straightforward, and for ASML’s most vocal defenders on Wall Street, it’s also reassuring. Even if a state-backed Chinese manufacturer manages to deliver 20 immersion DUV lithography machines next year, the revenue at risk for the Dutch chip-equipment giant amounts to just €1.4 billion — a sliver of the €43 billion to €45 billion in sales the company now expects for 2027.
That calculation, laid out by Bank of America analyst Didier Scemama, has become the central argument for why last week’s sell-off was overdone. ASML shares lost roughly 12 percent over two sessions after The Information reported that a Chinese company had begun limited series production of immersion DUV tools. The machines reportedly lag in performance and reliability, with output initially pegged at around five units this year and roughly 20 next year. Still, the market reacted sharply: the stock fell 4.91 percent on Tuesday alone, closing at €1,390.40, before rebounding 1.86 percent on Wednesday to €1,416.20.
Scemama, who reiterated his buy rating and $2,845 price target on ASML’s US-listed shares — implying more than 70 percent upside from Monday’s close — called the Chinese threat “only moderate.” The country remains a vital market, accounting for roughly 20 percent of ASML’s total revenue and 44 percent of its DUV sales in 2026. JPMorgan’s Sandeep Deshpande agreed, describing the price reaction as “disproportionate” to the underlying news. He stressed the gulf between building a handful of immersion DUV tools and producing them at scale with the yield, overlay accuracy, throughput, and reliability required for high-volume wafer fabrication.
Not everyone on the Street is brushing the development aside. Bloomberg columnist Lionel Laurent noted that ASML commands roughly 90 percent of the global lithography market and holds a complete monopoly in the ultra-complex EUV segment. Any credible Chinese alternative, even in an early stage, is noteworthy — a signal of long-term technological drift rather than an immediate threat. Analyst Jakob Bluestone called the news a “minor disadvantage” but pointed to a structural reality: China’s DRAM capacity is expected to grow by more than 500,000 wafer starts per month by 2030, making local lithography capability more of a necessity than a substitute for ASML’s technology.
Should investors sell immediately? Or is it worth buying Asml?
The bullish camp, however, dominates. Of 44 analysts tracked by Koyfin, 40 rate ASML a buy or strong buy. Their confidence rests on the company’s impregnable position in high-NA EUV systems, the cutting-edge technology essential for AI chip manufacturing. Intel Foundry recently announced it had become the first company globally to produce logic chips using high-NA EUV in series production — a milestone that promises high-margin revenue streams Chinese competitors cannot currently replicate. ASML plans to expand EUV production capacity by 30 percent in 2027 and is considering a further 30 percent increase in 2028, driven by relentless AI demand.
The numbers from ASML’s latest quarterly report, released July 15, reinforce the optimism. Second-quarter net sales hit €9.3 billion with a gross margin of 54.0 percent, prompting management to raise its 2026 revenue forecast sharply from €36–40 billion to €43–45 billion. On a 12-month basis, the stock is still up 53.68 percent, though it trades 18.98 percent below its 52-week high of €1,748.00 reached on June 30.
Yet the bear case has gained some traction. Export restrictions may have inadvertently accelerated China’s push for semiconductor self-sufficiency. Reports suggest the new Chinese DUV machines, despite their current limitations, are already targeting deliveries to major customers like SMIC and Hua Hong, potentially as early as 2026. China’s share of ASML’s revenue is projected to fall to around 20 percent in 2026, down from 33 percent the prior year — a market that once fueled growth is now shrinking as a sales destination.
Asml at a turning point? This analysis reveals what investors need to know now.
Technically, the stock is in a fragile spot. The relative strength index sits at 39.4, indicating that the oversold condition following the sharp decline has not fully corrected. The share price is 9.43 percent below its 50-day moving average of €1,535.12, a sign that short-term momentum has turned decisively negative. Annualized 30-day volatility has jumped to 55.80 percent. Still, the stock remains 16.43 percent above its 200-day average of €1,194.15, suggesting the long-term uptrend — supported by a 123.18 percent gain over 12 months — is not yet broken.
The next major test will come in October with the third-quarter earnings report. Until then, the market will watch closely how quickly and at what scale China’s DUV production actually ramps up. For now, the majority view on Wall Street holds that the sell-off was an overreaction. But Beijing’s push toward technological independence remains a theme that investors will keep firmly in their sights — especially as ASML’s 2027 roadmap becomes the proving ground for whether high-NA EUV growth can more than offset any erosion in legacy DUV sales to China.
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Asml Stock: New Analysis - 29 July
Fresh Asml information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
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