Date: 20/08/2012

ASML gets investment from Intel and TSMC to insure its innovation

To save itself from the investment risk of researching development of high-end semiconductor manufacturing equipment for mass production, ASM Lithography gets supports from its two leading customers, they are Intel and TSMC. ASML invited world's leading semiconductor fabs to pool a 1.4 billion euro fund to finance extreme ultraviolet (EUV) and 450mm size silicon-wafer R&Ds. Also, it would offer up to 25% of its stocks to investors of the program.

Intel has pledged to contribute 60% of the investment fund. Intel said in its release, in the first phase, Intel is committing R&D funding of €553 million and an equity investment of €1.7 billion for approximately 10 percent of ASML's pre-transaction issued shares. In the second phase, Intel to commit R&D funding of €276 million in ASML focused on accelerating EUV and an equity investment of €838 million for an additional 5 percent of ASML post-transaction issued shares.

Intel said it is also committing to advanced purchase orders for 450-mm and EUV development and production tools from ASML.

ASM is researching technologies to make less than 20nm chips using EUV. EUV is already tested for good results but the issue is the cost of manufacturing. The 450mm is purely cost reducing solution where the semiconductor equipment can produce more chips/second. Intel decided to invest in ASM in 450mm and EUV to make the chips in 14nm nodes and below without rising the costs exponentially.

ASML has invited remaining 40% investment from Taiwan Semiconductor Manufacturing Co. (TSMC), Samsung and GlobalFoundries. In this effort ASM Lithography got TSMC to join ASM's customer co-investment program to develop EUV lithography technology and 450-millimeter lithography tools.

The investment from TSMC includes expenditure of 838 million euro (US$1 billion at 1euro:US$1.2) for a 5% stake in ASML and pledge to put 276 million euro (US$331 million) into ASML over the next five years to finance the ASML's R&D programs.

This business/investment innovation for the sake technology innovation is a way of getting the customer to share the risk and benefit and is a kind of insuring the innovation.