Shares of ASML and major US chip stocks fell after a report indicated that China had begun mass production of its own deep ultraviolet (DUV) lithography tools, reigniting concerns over competition from Chinese chipmaking equipment.
According to The Information, China has started making homegrown DUV chipmaking tools, a development that could reduce its dependence on foreign suppliers like ASML.
The broader semiconductor sector also suffered. The US Philadelphia Semiconductor Index (SOX) closed at 11,394.40, down 3.59%, as the news stoked fears of increased competition from Chinese manufacturers.
Among individual companies, Intel's second-quarter financials showed operating cash flow positive, but adjusted free cash flow was negative $8.4 billion. The company also spent $14.2 billion buying out its Ireland fab partner on 40-year paper at over 6%.
Key levels for the SOX. The invalidation level for a bullish call is a monthly reclaim of 14,246.96. Overhead resistance stands at 13,291.75 and 13,876.77, while projected downside targets are 9,839.79 and 9,755, with further potential to 7,095 into year-end.
Investors are also looking ahead to earnings reports from major tech companies. Microsoft and Meta are set to report after the close on July 29, followed by Amazon on July 30.