Intel Corp will spend more than $4 billion to buy up to 15% of ASML and bankroll the Dutch company’s research into costly next generation chipmaking technology.
Intel hopes to speed the adoption of the next generation of chip manufacturing processes from ASML by as much as two years, which will require intensive capital investment, but would also deliver billions of future savings by cutting chip production costs, analysts said.
ASML, the world’s largest supplier to chipmakers of machines that etch circuits onto silicon wafers, may want to spread the risk of developing cutting-edge chipmaking equipment, based on 450 millimeter wafer sizes and “extreme-ultraviolet” or EUV lithography.
Intel will acquire an initial 10% stake in its European supplier and tack on another 5% if it wins shareholder approval, for a total of about $3.1 billion. It also benefits by being able to move on to larger wafer sizes.
Apart from the savings that will bring, the chipmaker may also be moving to safeguard its current technology lead.
“By accelerating the introduction of 450mm fabs, Intel will increase barriers to entry and make it harder for small players to keep going,” said Pierre Ferragu, a senior analyst for Sanford C. Bernstein.
“By supporting EUV, Intel probably anticipates continued accelerated shrink plans beyond 15 nm..., and also a world in which cost efficiency matters more for them.”