China has achieved a breakthrough in technology crucial to the AI boom, overcoming US efforts to limit Beijing’s access. Chinese chip giant Shanghai Yuliangsheng has started production of deep ultraviolet lithography machines, according to tech publication The Information. These machines — which can reach the size of a double-decker bus — use high-powered lasers to imprint designs onto silicon wafers used to make chips. Until recently, only Western companies and US allies (notably Dutch giant ASML and Japan’s Nikon) had the capability, and US export controls had cut them off from China.
Semiconductor stocks plunged on the report. Trading was briefly halted on South Korea’s Kospi after it collapsed nearly 11% overnight. Nvidia plunged 5% on Monday, wiping $250bn (£188bn) off its valuation, while Sandisk fell 11% and AMD 5%. ASML fell more than 8%, ASM International more than 7%, and BE Semiconductor nearly 10%. Japan’s Nikkei and Taiwan’s Taiex both sank more than 4% on Tuesday. The downturn helped Apple retake its crown as the world’s largest company, surpassing $5tn in market value for the first time. Samsung and SK Hynix each plunged more than 12%, leaving South Korea’s Kospi on track for its worst month since 1997.
Morningstar analyst Jing Jie Yu said China’s breakthrough sparked investor concern over the competitive position of global chipmaking leaders. Stephen Innes of SPI Asset Management said the downturn did not signal collapsing semiconductor demand, but rather a change in the market’s willingness to keep capitalising AI promises at almost any price.
