Why was ASML founded?

I suggest you also read the companion article to this one:”ASML, who dominate TSMC’s fate

Table of Contents

Company bio

Origin of the company

ASML’s light source comes from Cymer, the optical module comes from Zeiss, Germany, and the metering equipment comes from the United States, but it belongs to German technology, and its conveyor belt comes from the Dutch VDL Group. 90% of the parts of a lithography machine are sourced globally, involving more than a dozen companies in 4 countries, and the interests of downstream customers are firmly tied to ASML. The CEO of ASML once explained that if the area of the mirror in the lithography machine is as large as that of Germany, the highest protrusion cannot be higher than one centimeter! It can be seen how precise the lithography machine is.

Fundamental technology

The “immersive lithography” scheme invented by Benjian Lin, former deputy general manager of TSMC’s R&D, adopted by ASML has broken the technical bottleneck encountered by Japanese manufacturers in the previous generation of lithography, and established a higher-level lithography technology. advantages, from now on monopolizing this industry.

Shareholders

Shareholders of ASML

In 2012, Intel (ticker: INTC), Samsung (ticker: SSNLF) and TSMC, the three companies invested a total of 5.229 billion euros, thereby obtaining priority supply rights and forming a close community of interests. In 2015, the first mass-produced extreme ultraviolet lithography machine prototype was officially released, which means that in advanced manufacturing processes below 7nm, ASML has no rivals ever since!

The relationship between ASML and TSMC

Funding when TSMC was established: The Taiwan government contributed 48%, and Philips invested US$58 million and transferred semiconductor manufacturing technology authorization to obtain 27.5% of the shares. Since Philips is the major shareholder of TSMC, in 1984 Philips spun off its lithography department and became ASML, which made the relationship between the two companies very close.

A fire at TSMC’s factory in 1989 forced TSMC to purchase 19 new lithography equipment. The relationship between ASML and TSMC, the claims from fire insurance companies, and the 19 new lithography equipment purchased by TSMC greatly helped the revenue of ASML, which was still a small start-up at the time. With this money, ASML has the money to invest in the research of newer generations of machines, until today’s monopoly.

EUV history in the United States

Intel’s role

In 1992, during the Grove era, Intel invested a large sum of US$200 million in the research and development of lithography machines and targeted the research and development of EUV machines. In the end, Intel invested billions of dollars in this case. In addition, Intel has invested billions of dollars in learning how to use EUV machines to etch wafers.

But the problem is that Intel has never planned to build its own EUV machine, but Intel has always hoped that a company can build this EUV machine, otherwise Intel will not be able to etch chips with smaller and smaller lines.

EUV companies that have existed in U.S.

GCA lithography company had gone bankrupt at this time, and GCA’s EUV lithography machine peer SVG was far behind Japan’s Nikon and Canon. The real rival of Japan’s Nikon and Canon was the Netherlands’ ASML, which was much smaller than them at the time.

Investment in EUV by U.S. official institutions

In 1996, several U.S. Department of Energy laboratories, including Lawrence Livermore National Laboratory and Sandia National Laboratories, which have considerable experience in manufacturing EUV, established a partnership to conduct research in optics and EUV-related fields. Intel came forward to convene six other semiconductor companies to join this officially led alliance, and Intel paid most of the costs.

The problem is: The focus of these labs, the Department of Defense’s DARPA, and Intel is on scientific research, not on building an EUV machine. But what Intel and the U.S. chip industry need immediately is EUV to build an EUV machine. At this time, the best SVG in the field in the United States is far behind Japan and the Netherlands in technology.

ASML was forced to set up

US shares EUV with foreign countries

Forced by reality, the U.S. government finally decided to share the U.S. EUV research results with foreign countries, but since it was worried about Japan, the only option was ASML.

According to later recollections of relevant personnel in the U.S. military and political circles, Congress and the three senators were worried about the risks of sharing such sensitive scientific and technological achievements with foreign countries, and ultimately having to rely on foreign EUV. The decision-making process at that time was indeed unanimously agreed by the US President, the US Department of Defense, and relevant national security agencies in Washington.

As Intel CEO Barrett, who succeeded Grove, said in 2001: “If ASML and SVG do not merge, the development of new machines in the United States will be delayed.”

ASML is a hybrid company

In 2001, Acemore acquired SVG, the last EUV lithography machine manufacturer in the United States at that time. ASML itself produces only 15% of its parts. Parts suppliers are located all over the world, including the United States, the Netherlands, Slovenia, Greece, Japan, etc. It is mainly assembled outside the United States, but some parts are still made in the United States in Connecticut.

What is very special is that there is only one supplier for the main parts of ASML’s EUV lithography machine, the most critical of which are Zeiss of Germany, Cymer of the United States, and Trumpf of Germany.

In short, ASML’s EUV lithography machine is currently a monopoly and there is no substitute.

Dutch company regulated by U.S.

U.S.’s bottom line

Due to backward technology, the EUV lithography machine that Intel has developed for many years has not yet been launched, and it has been decided not to have an EUV lithography machine made by an American company.
In order to prevent Japan’s semiconductor industry from getting bigger again and threatening the interests of the United States, the Japanese companies Canon and Nikon were abandoned; the U.S. government decided to cooperate with the Dutch company ASML, which was trusted by the United States.
United States asked ASML to purchase American compoents and set up factory in the United States.
ASML needs to give priority to supply products to American companies.

Why does ASML take orders from the U.S.?

With nearly two decades of painful experience in the Japanese semiconductor field that has overwhelmed the United States in the 1980s and 1990s, the US government regards extreme ultraviolet technology as the core technology to promote the development of the domestic semiconductor industry, and does not hope foreign companies can participate in it.

Later, ASML agreed to establish a factory and a research and development center in the United States to meet all domestic production needs. It also guarantees that 55% of the components are purchased from American suppliers and are subject to regular review. This is also the fundamental reason why the United States can ban the export of Dutch lithography machines to China.

Another very reasonable reason: ASML pointed out that among the company’s most cutting-edge lithography machines, more than 55% of the company’s parts suppliers come from the United States.

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