ASML Holding NV (Veldhoven, The Netherlands) is the dominant player in lithography equipment and was the first to offer immersion systems for increased resolution. A total of 69 immersion lithography tools were sold in 2008 of which ASML sold 54 or 78 percent and Nikon sold 15 or 22 percent, the researcher said.

But the situation could change. The NXT and S620 immersion tools from ASML and Nikon, respectively, will be running off against each other at multiple key customer sites around the world over the next 6 to 8 months, the Information Network pointed out. After that time, the market share for the lithography market will be set for the next several years as semiconductor manufacturers design-in DUV immersion processes in their future chips.

"Once customers make a decision they will use that immersion tool for the next three or four years before EUVL [extreme ultra violet lithography] comes along. Customers don't want to change after they optimize their immersion process," said Castellano.

By mid 2010 the market will be set. Either ASML will continue to be the dominant immersion company or Nikon will make progress with its S620 and split the market. If the former happens ASML is likely to increase the price of its equipment, Castellano said.