ASML Holding NV shares tumbled 5.08% over the 24-hour trading period, marking a sharp downturn for the Dutch semiconductor equipment giant in overnight and extended trading on Tuesday. The decline extends a broader selloff that rattled chip equipment stocks throughout the prior regular session.

The plunge was triggered by reports that a Chinese state-backed enterprise has commenced mass production of immersion deep ultraviolet lithography systems—the core workhorse equipment for mature-node chip manufacturing and a cornerstone of ASML's business. The company reportedly plans to produce approximately five units this year and scale up to 20 units by 2027, with deliveries expected to reach major Chinese chipmakers including SMIC, Hua Hong Semiconductor, and the newly listed ChangXin Memory Technologies. While these initial volumes pale in comparison to ASML's delivery of 131 immersion DUV systems last year, the breakthrough signals a meaningful step toward China's semiconductor supply chain self-sufficiency, raising concerns about long-term demand erosion for ASML in one of its key markets.

Some analysts, however, view the selloff as overdone. J.P. Morgan analyst Sandeep Deshpande described the market reaction as "disproportionate," noting that China has manufactured lower-end lithography equipment for several years without any impact on ASML's market share in front-end production. Deshpande characterized the drop as "sentiment-driven," though he acknowledged that the development raises the long-term risk to ASML's China revenue, which already declined from 19% in the first quarter to 14% in the second quarter.