SAN FRANCISCO—Intel Corp. agreed to acquire a 15 percent stake in leading lithography tool vendor ASML Holding NV as part of a $4.1 billion deal to accelerate the development of extreme ultraviolet (EUV) lithography and technology needed for the looming transition to 450-mm wafers, Intel said Monday (July 9).
The $4.1 billion includes about $2.1 billion in equity investment in ASML, good for 10 percent of ASML's shares, Intel said. The company said it also committed to buy another 5 percent of ASML's shares for about $1 billion in the relatively near future.
Intel also committed to provide more than $1 billion to ASML's R&D programs for EUV and 450-mm. The chip giant said the investment would accelerate the deployment of these technologies by as much as two years. As part of the deal, Intel also committed to advanced purchase orders for 450-mm and EUV development and production tools from ASML, the company said.
The first phase of the agreement calls for Intel to invest about $680 million to help ASML develop 450-mm lithography tools. The second phase of the deal, which requires ASML shareholder approval, includes about $340 million in R&D funding for ASML's EUV lithography development and the $1 billion equity purchase of the additional 5 percent of ASML's outstanding shares, Intel said.
EUV lithography—long seen as the inevitable successor to optical immersion lithography, the current state of the art—was to have been put in production prior to now, but has been delayed several times by development hiccups. ASML has six pre-production EUV development tools currently in the field, but these tools lack the throughput required for economical chip production in high volume. ASML has said it is working with suppliers to develop better power sources and that it expects to make EUV production tools available in 2013 or 2014.
Intel wants to deploy EUV lithography at the 10-nm node in the second half of 2015. But the company has also said it would be prepared to extend optical immersion lithography to that node in the event that EUV is not ready. Many chip industry observers believe the technology will not be commercially viable by that time. Because Intel designs chips about two years ahead of production, the company must make a decision relatively soon on the type of lithography it plans to use at the 10-nm node.
Intel as well as other leading edge chip makers like Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) and Samsung Electronics Co. Ltd. want to transition to 450-mm wafers from 300-mm wafers to increase die and profitability per wafer. Though several development programs are underway, it is uncertain when all of the necessary tools would be ready to support 450-mm wafers. Bob Johnson, research vice president for semiconductor manufacturing at Gartner Inc., said Monday that it was unlikely that 450-mm will see widespread deployment before 2019 or 2020.
"The transition from one wafer size to the next has historically delivered a 30 to 40 percent reduction in die cost and we expect the shift from today’s standard 300-mm wafers to larger 450-mm wafers to offer similar benefits," said Brian Krzanich, Intel senior vice president and chief operating officer, in a statement. "The faster we do this, the sooner we can gain the benefit of productivity improvements, which creates tremendous value for customers and shareholders."
Asked about the deal during a presentation at the Semicon West fab tool tradeshow here Monday, Mark Bohr, an Intel Senior Fellow who is in charge of the company's process technology development, declined to discuss specifics. But Bohr said that 450-mm wafers and EUV are two very important technologies that Intel needs to continue scaling and keep on pace with Moore's Law.
ASML said it is willing to sell up to 25 percent of the company to Intel and other chip vendors that wish to participate in its EUV and 450-mm development programs. With Intel taking 15 percent of ASML, the company is still willing to sell another 10 percent of the company to participants. A spokesman for ASML said the company is currently in discussions with other customers and expects others to participate in the R&D and equity program.
Regardless of the outcome of ASML’s discussions with other customers, Intel's ownership stake in ASML will not exceed 15 percent of ASML's shares and will be subject to lock-up and voting restrictions, according to Intel's statement.
Intel said it would fund its R&D and equity investments in ASML from cash on hand at its offshore subsidiaries.
But will that be enough?
I must say I was quite surprised by this news. It's interesting to me that the first phase of the project involves 450-mm, while the second is EUV. EUV is already running late, why not start with that? Gartner analyst Bob Johnson just said widespread deployment of 450-mm is unlikely to occur before 2019 or 2020.