The pending $1.6 billion acquisition has been stalled since early March by U.S. government reviews, and now a decision is expected from President Bush by May 8 (see April 24 story).

"The possibility of selling Tinsley or parts of the operation to a U.S. company have been discussed during the last 45-day review," said Rob van Vliet, investor relations manager at ASML's headquarters in Veldhoven, the Netherlands. "All types of options have been reviewed, including keeping Tinsley inside after the acquisition but providing certain guarantees to the U.S. government about protecting the lens technology," he told SBN in a phone interview today.

But no such requests have been made by any one in the U.S. government, said van Vliet. "You cannot respond to the issue if no one has asked the question," he added.

Both ASML and San Jose-based SVG officials are growing frustrated over the lack of a decision by the U.S. government in the planned merger. ASML announced its agreement to buy SVG for $1.6 billion in stock last fall to become the world's largest supplier of lithography tools for chip manufacturing. Both ASML and SVG thought the deal had cleared most of the regulatory hurdles in February, but the U.S. Committee on Foreign Investment initiated a 45-day review of the transaction because of concerns about defense-related technologies. A lobby effort also was mounted by a group, called the U.S. Business and Industry Council, which began circulating a video tape showing lithography experts against the ASML-SVG merger (see April 13 story).

The U.S. Committee on Foreign Investment was unable to reach a consensus on ASML's takeover of SVG by the end of the 45-day review, which concluded on Monday. The decision was then passed on to President Bush, who has an additional 15 days to decide if the merger goes ahead as planned.

While ASML officials won't predict which way the decision will go, they are concerned about the delays and the impact on SVG's workforce.

"The sooner we move ahead the better for the people at SVG," said Dave Chavoustie, executive vice president of sales at ASML. "We are concerned about how they are having to deal with the uncertainty. We just have to wait like everyone else," said Chavoustie in an interview at the Semicon Europa trade show in Munich.

At the heart of U.S. defense concerns about the ASML-SVG merger is Tinsley's ability to produce highly accurate lenses, which have been used in U.S. spy satellites during the 1990s.

Last month, Doug Marsh, ASML's vice president of business integration based in Arizona, said his company was looking into the possibility of selling off some parts of Tinsley Laboratories, if it made sense (see March 20 story), but he added that the lens technology is a crucial part of SVG's overall capabilities in advanced lithography systems.

According to Marsh, only 5% of Tinsley's business now serves government-related applications, and with no current contracts considered to be classified. The lens-polishing requirements for the defense satellite project--which was completed seven years ago--were a fraction of what is now used in deep-ultraviolet scanners, he told financial analysts during the SEMInvest conference in New York last month.