Intel Corporation today announced it has entered into a series of agreements with ASML Holding N.V. intended to accelerate the development of 450-millimeter (mm) wafer technology and extreme ultra-violet (EUV) lithography totaling 3.3 billion (approximately $4.1 billion). The objective is to shorten the schedule for deploying the lithography equipment supporting these technologies by as much as two years, resulting in significant cost savings and other productivity improvements for semiconductor manufacturers.
To achieve this, Intel is participating in a multi-party development program that includes a cash contribution by Intel to fund relevant ASML research and development (R&D) efforts as well as equity investments in ASML. The first phase of this program consists of Intel committing to R&D funding of 553 million (approximately $680 million) to assist ASML in accelerating the development and delivery of 450-mm manufacturing tools, as well as an equity investment of 1.7 billion (approximately $2.1 billion) for approximately 10 percent of ASML's pre-transaction issued shares. Intel will record the R&D investment as a combination of R&D expense and pre-payments on future tool deliveries.
The second phase of the program is conditioned upon ASML shareholder approval. It includes an additional commitment by Intel of R&D funding of 276 million (approximately $340 million) in ASML focused on accelerating EUV, as well as an equity investment of 838 million (approximately $1.0 billion) for an additional 5 percent of ASML post-transaction issued shares.
Intel will then hold a total of 15 percent of ASML's issued shares. The total equity investment will be 2.5 billion (approximately $3.1 billion). As part of these agreements, Intel is also committing to advanced purchase orders for 450-mm and EUV development and production tools from ASML.
Both phases of the program are subject to standard closing conditions, including customary regulatory approvals. The companies expect both phases of the transaction to close after the shareholder vote in the third quarter.
"Productivity improvements driven by enhanced wafer manufacturing technologies, especially larger silicon wafers and enhanced lithography technologies with EUV are direct enablers of Moore's Law, which delivers significant economic benefits to consumers," said Brian Krzanich, Intel senior vice president and chief operating officer. "The transition from one wafer size to the next has historically delivered a 30 to 40 percent reduction in die cost and we expect the shift from today's standard 300-mm wafers to larger 450-mm wafers to offer similar benefits. The faster we do this, the sooner we can gain the benefit of productivity improvements, which creates tremendous value for customers and shareholders."
ASML has stated its intention to sell up to a 25 percent aggregate stake in the company (on a post-transaction basis) to Intel and other semiconductor manufacturers in this program. ASML is currently in discussions with other customers and has publicly indicated it expects others in the industry to participate in the R&D and equity program. Regardless of the outcome of ASML's discussions with other customers and upon completion of this two-phase program, Intel's ownership stake in ASML will not exceed 15 percent of ASML's post-transaction issued shares and will be subject to lock-up and voting restrictions.
Intel intends to fund its R&D and equity investments in ASML from cash on hand at its offshore subsidiaries.
"We are extremely encouraged that Intel has made these investments, which will benefit every semiconductor manufacturer in the industry," said Eric Meurice, president and chief executive officer of ASML. "We hope to be able to announce additional investments by our other customers in the coming weeks."
A critically important aspect of this transaction is the additional funding it provides for ASML's industry-leading EUV development program. When deployed in conjunction with 450-mm wafer production, the productivity and cost benefits of EUV will be substantial for Intel and other semiconductor manufacturers. Intel was involved in the formation of the first EUV consortium in 1997. With these additional R&D investments for EUV, ASML and Intel hope to help lead the semiconductor industry in the transition to this critical technology.
Latest News Posts
- Intel hits record $14.8 billion second quarter earnings
- Battlegrounds on Xbox One X: 30-40FPS with 100 in server
- Full PC with AMD Ryzen ThreadRipper starts at just $1699
- AMD Ryzen 5 2500U spotted, new APU rocks Vega GPU tech
- AMD Radeon RX Vega could be priced at up to $850
- Fnatic Gear RUSH G1 Mechanical Gaming Keyboard Review
- Asrock A88M-G/3.1 + A10-7860K = freezes in the idle state
- ASUS GeForce GTX 1060 Dual 3G: Mid-Range On The Cheap
- AMD Ryzen 3 1300X and Ryzen 3 1200 CPU Review
- Lian-Li PC-O5SW...Watercooling and dimensions
- Toshiba introduces TR200 SATA retail SSD series with 64-layer 3D flash memory
- Need for Speed Payback takes cars from scrap to stock to supercar in new trailer
- Visbit releases Unity SDK and web VR player for its all-in-one VR streaming service, bringing high quality VR streaming to the masses
- GWENT Gamescom 2017 tournament announced
- Toshiba NVMe SSDs now available with Lenovo's new ThinkSystem and ThinkAgile servers