KEY POINTS China's Shanghai Aishengna Electronic Technology Group has begun producing domestic immersion DUV lithography machines for major Chinese chipmakers, pressuring semiconductor stocks. The selloff reflected concerns that ASML's near-monopoly on advanced lithography machines has been undermined by China's state-backed Shanghai Aishengna Electronic Technology Group. Immersion DUV tools produce semiconductors that are less advanced than the cutting-edge chips made by companies such as Nvidia to power frontier AI models. By contrast, ASML said it plans to produce around 130 DUV immersion machines in 2026 and is planning to add 30% in 2027. China's step toward domestic lithography manufacturing takes place against a long history of industrial espionage allegations targeting ASML.