The main reason is that domestic DUV directly hits the market. The market is worried that China’s memory capacity (especially CXMT) will be released faster, exacerbating global supply and pushing chip prices down. The report clearly mentions that the equipment will be delivered first to memory manufacturers such as CXMT.

CXMT (Changxin Technology) simultaneously listed on the A-share market and the STAR Market on the same day. It surged more than 470% at the open, with its market cap breaking 3 trillion RMB, setting multiple records. This has been interpreted as a signal of China’s DRAM strength rising, which triggered concerns in the US stock market about a “change in the global supply landscape” (the A-share memory sector, however, rebounded instead).

Put simply: breakthroughs in domestic lithography equipment made the market see that China’s “equipment + capacity” loop is accelerating. Combined with the capital impact from CXMT’s listing, it directly sparked worries about Micron, SK hynix, and other storage giants’ future pricing power and market share. Near-term sentiment dominates.

This year, domestic DUV is expected to produce about 5 units, and in 2027 the production volume is about 20 units. Compared with ASML’s output of more than 100 units per year, it still doesn’t look significant. The US stock drop is purely a news-driven washout, and the earlier view still holds: memory is too hot and the market needs to cool off. After big funds exit, the AI bubble can still last for a while, but it will come back—and it will drop hard. I currently don’t hold any storage stocks.

When retail investors finally can’t stand it anymore, that’s the best time to buy.