TSMC has taken a 5% stake in lithography equipment vendor ASML for €838 million and committed to contribute €276 million over five years to help it fund the development of EUV lithography and 450mm wafer equipment.
The deal follows on from a recent investment in ASML by Intel, in which the microprocessor maker committed to buy up to 15% of ASML at €39.91 per share, and to contribute €829 million to help fund the development of EUV and 450m wafer equipment.
Intel has also contracted to buy 450mm and EUV development and production tools from ASML to support technology and infrastructure development.
ASML shares stand at €46.68 on the Amsterdam Euronext exchange as of 6 August.
TSMC and Intel are both taking advantage of a recent decision by ASML to sell off up to 25% of its equity and create a ‘customer co-investment program’ to share the costs and risks of developing both EUV lithography and lithography systems that can handle 450mm wafers.
Both technology shifts are problematic. Current EUV sources are too weak and unreliable to enable the kinds of wafer throughput that IC makers need to deliver the expected cost savings. At the same time, although a shift to larger wafer sizes should bring cost savings of 30 to 40% to IC makers, the equipment vendors have been reluctant to invest in making the shift after having taken much longer than expected to recoup the costs of the transition from 200mm to 300mm wafers.
The fact that Intel and TSMC now own a stake in TSMC and are also contributing to the R&D pot should help align equipment user and equipment vendor interests more closely.
Although it is not clear how large a stake Intel will take, the structure of the Intel and TSMC deals could leave just 5% of ASML’s available equity up for grabs by companies such as Samsung, which can’t afford to find itself in future with an uncompetitive manufacturing process and limited access to the equipment that could help it redress that situation.
Can the extra R&D funds injected by TSNC and Intel accelerate the availability of EUV and 450mm wafers? Despite companies such as nVidia already factoring cost savings from a shift to 450mm into their short-term forecasts, according to Mike Bryant of industry analysts Future Horizons, ASML doesn’t expect to have finished work on a 450mm wafer stage until 2016, while development of reliable, high power EUV sources is proving so troublesome that speakers at a VLSI Symposium panel in June were clearly looking for ways to limit their dependence on the EUV for as long as possible.
Equity stakes and an expanded R&D budget should give ASML greater confidence and resources with which to explore their options for EUV and 450mm. However, neither will make the laws of physics any more biddable.