Intel purchases ASML shares to dev't 450mm wafer

Intel Corp. has agreed to acquire a 15 percent stake in 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.

The $4.1 billion agreement included an estimated $2.1 billion in equity investment in ASML, good for 10 percent of ASML's shares. Intel has also made commitments to buy another 5 percent of ASML's shares for about $1 billion in the relatively near future.

The company has also committed to provide more than $1 billion to ASML's R&D programs for EUV and 450mm. The chip giant stated it hopes that its investment would speed up the deployment of these technologies by as much as two years. As part of the deal, the company also committed to advanced purchase orders for 450mm and EUV development and production tools from ASML.

The first phase of the agreement calls for Intel to invest approximately $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, which has been seen as the successor to optical immersion lithography, was to have been put in production prior to now. However, it 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 collaborating with suppliers to develop better power sources. that it expects to make EUV production tools available in 2013 or 2014.

Intel targets the deployment of EUV lithography at the 10nm node during the second half of 2015. However, the company also stated that it would be prepared to extend optical immersion lithography to that node in the event that EUV is not ready. Many industry observers believe that the technology will not be available at that time. Since Intel designs chips about two years ahead of production, the chip maker must make a decision soon on which type of lithography it plans to utilize at the 10nm node.

Other than Intel, chipmakers such as Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) and Samsung Electronics desire a transition to 450mm wafers from 300mm wafers to increase die and profitability per wafer. Despite several development programs being currently conducted, there is no knowing when all the necessary tools would be available to support 450mm wafers. It seems unlikely that 450mm will see widespread development before 2019 or 2020.

Intel aims to transition from one wafer size to the next, since this action has historically delivered a 30 to 40 percent reduction in die cost. The company expects that a shift from today's standard 300mm wafers to the larger 450mm wafers will offer similar benefits. The faster the transition, the sooner they can gain the benefit of productivity improvements. This in turn will create a tremendous advantage for Intel's customers and shareholders.

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锟絉&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.

- Dylan McGrath
??EETimes U.S.