A New Era for Equipment Suppliers
By Pete Singer
The semiconductor equipment industry received quite a jolt recently. In July, lithography equipment supplier ASML announced a customer co-investment program that enabled minority equity investments in ASML (up to 25% total) by its largest customers. Customers could also make commitments to fund ASML’s research and development (R&D) spending for future programs.
Intel was the first investor, acquiring 15% equity ownership interest in ASML. R&D funding and equity investment agreements totaled approximately $4.1 billion. Part of the deal was a contractual commitment from Intel for advance purchase orders for 450 mm and EUV development and production tools from ASML. ASML has said the results of the technology investments will be available to every semiconductor manufacturer with no restrictions.
In August, TSMC joined in, taking a 5% stake in ASML, worth about $1.04 billion. TSMC also committed about $341 million, spread over 5 years, to ASML’s R&D programs.
The Intel announcement made instant believers out of many that both EUV and 450mm would actually happen. Both technologies have been significantly delayed beyond initial target dates, and the thinking was that some massive investment would be required to get them production-ready in a reasonable timeframe (i.e,. 2015-2020). $5+ billion is a pretty good start!
Not only does it seem to ensure that EUV will succeed, but it removed one of the most significant barriers to 450mm development. Even if 450mm solutions were developed for all the other types of process equipment — deposition, etch, ion implant, CMP, cleaning, etc. — it would be going nowhere without EUV. Now, seemingly overnight, 450mm seems inevitable.
It is a new era for semiconductor manufacturing equipment suppliers, for they must now seriously tackle the 450mm challenge, but don’t expect a blossoming new model based on customer co-investments anytime soon. There are at least two competitors in other markets, and developments will likely be funded the way they always have been — though good old-fashioned capitalism.