Tech shares are in for a rough day, with Nasdaq futures down nearly 0.8%.

Behind some of the bearish outlook: fears that the West could lose its stranglehold on a crucial component of the chip supply chain.

Chip stocks sank yesterday after a report in the Information said an unnamed Chinese-state backed company had begun making deep ultraviolet lithography machines, which use UV light to print microscopic patterns on the silicon wafers that go into chips.

The giant machines are the bread and butter of ASML, the Dutch company that has a monopoly on the most-advanced versions of the technology.

The report, which hasn't been verified by WSJ, said the Chinese company plans to deliver a handful of the machines this year, then ramp up production next year.

ASML shares are down another 1% in Amsterdam trading, after tumbling 8% yesterday.

Chinese companies are restricted from buying the cutting-edge machines-one of the reasons the country has stayed a step behind the U.S. in advanced chipmaking. But in another sign of growing unease that China may now be catching up, Elon Musk said in a recent interview with the Economist that the country is "closer than most people realize to solving the lithography problem."