10.ASML vs. Nikon: Battle of the lithography titans
The pressure in the semiconductor equipment and materials industry is intense and intense pressure sometimes causes people, and companies, to react strongly.
The industry's role at the base of an inverted pyramid, supporting trillions of dollars of electronic equipment and semiconductor component sales each year portrays some of that pressure. And nowhere is it more intense than in lithography, an area dominated by three companies in a market suffering the prolonged downturn that has ravaged the semi equipment market.
And, as if mirroring the commercial battle, 2002 has seen a series of legal moves between two of the companies: ASML Holding NV of the Netherlands and Japan's Nikon Corp.
The stakes are huge. Any legal setback could make or break a litho supplier--and their customers. For example, ASML and Nikon are the main lithography vendors at Intel Corp. Nikon is strong in Japan, while ASML has a major foothold within AMD, IBM, Micron, Philips, TSMC, and other accounts.
The legal wrangling dates back almost exactly a year to December 21, 2001, when Nikon and its U.S. subsidiary announced it has filed a compliant with the U.S. International Trade Commission (ITC) against ASML, claiming that ASML is infringing upon Nikon's lithography-tool patents. Nikon asked the ITC to investigate ASML's importation of lithography tools in the United States.
In a separate move, Nikon and its U.S. subsidiary, Nikon Precision Inc. of Belmont, simultaneously filed a patent infringement suit against ASML in a California court (see December 21, 2001, story).
During the first half of 2002 ASML filed several suits against Nikon culminating in August with a suit filed in Tokyo, Nikon's home territory (see April 8 story and August 20 story).
In October Nikon upped the pressure by filing against ASML in Tokyo and in Seoul, Korea. Then, along with its U.S. subsidiary, Nikon Precision Inc., it filed a new suit in California alleging that ASML infringed upon eight of Nikon patents relating "to primary structures in stepper and scanner machines," (see October 18 story).
Now we wait to see if ASML will be cowed into submission or will raise the ante yet again.
According to a Dow Jones Business News report that came towards end of the year ASML is soon to extend legal action to include the third largest maker of lithography equipment Canon Inc. to the European Court. That story surfaced on December 9 story.
Certainly the commercial pressure has taken its toll of ASML during 2002. At the very end of the year the company announced it would cut 1450 jobs or about 22% of its workforce December 18 story.
But meanwhile Doug Dunn, president and chief executive officer of ASML, must be wondering how many lawyers are being employed between Nikon, ASML and Canon.
(Return to 2002 Top 10 list or go to No. 10).