ASML Wins Over TSMC, Samsung for New EUV Machines as AI Demand Surges

ASML Holding NV has secured commitments from Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co. to adopt its High NA EUV lithography equipment, with Samsung planning high-volume manufacturing by 2028 and TSMC from 2030, joining Intel Corp. in using machines that cost up to $400 million each. The companies also agreed to shift from 6-inch to 12-inch photomasks, a move that could increase throughput by 40% and reduce costs as AI demand surges. TSMC, which accounts for about 16% of ASML's revenue, will begin using High NA systems in 2030 and aims to build a test line for 12-inch masks by 2031, with production use by 2033.

Bloomberg -- ASML Holding NV has won commitments from top chipmakers to use its latest semiconductor production gear, while embarking on a broader agreement to meet surging demand for more powerful artificial intelligence technology. Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co. plan to begin adopting the Dutch company's High NA EUV lithography equipment for high volume manufacturing by 2028 and from 2030 respectively, joining Intel Corp. in using machines that can run $400 million each. Samsung is the leading maker of memory chips, while TSMC is the leader in producing custom chips for the likes of Nvidia Corp. and Apple Inc. The four companies also agreed to an esoteric — yet critical — shift in the technology format for what are known as photomasks, a key component for producing semiconductors. The group plans to move from the current standard of 6-inch photomasks to 12-inch versions, with the goal of boosting productivity and reducing costs as the industry races to keep up with soaring AI demand. Photomasks are akin to the carved woodblocks used to print the same images again and again, except they're printing with light on silicon wafers. While a shift to larger masks has long been considered complicated and expensive, the coordinated push offers the possibility of substantial benefits in chip production. The new technology could increase throughput from High NA machines by 40% while simplifying the design process, said Marco Pieters, chief technology officer at ASML. "That's a huge opportunity, and of course that means a significant step in productivity," Pieters said in an interview. ASML is the only company in the world that can make extreme ultraviolet, or EUV, lithography equipment, the machines necessary for manufacturing the world's most advanced AI accelerators and similar chips. It debuted low NA EUV in 2019, and has been working with customers to adopt the more sophisticated High NA machines. TSMC, whose factories handle production for customers from Nvidia and Advanced Micro Devices Inc. to Qualcomm Inc., has been deliberately cautious in adopting the more expensive machinery, arguing the cost wasn't yet justified by the productivity gains. Now however, TSMC will adopt High NA systems, based on current 6-inch masks, beginning in 2030. The two companies aim to build a test line to produce 12-inch masks by 2031 as part of the process of having that technique begin use in production with High NA tools by 2033, according to a statement on Tuesday. "TSMC has always believed in the power of collaboration to overcome technical barriers before they become economic barriers for the semiconductor industry," Chief Executive Officer C.C. Wei said in the statement. Samsung, which also provides contract logic chip production and is one of the world's largest manufacturers of memory chips, plans to start using ASML's High NA machines for computer memory by 2028. It will "work closely with industry partners to develop the required mask technologies and supporting infrastructure," the South Korean company said in a separate statement. A global shortage of memory chips, triggered by massive demand from operators of AI data centers, is currently driving up prices across the electronics business. Intel, which has already taken delivery of High NA machines as it tries to make the transition from only making its own chips to being an outsourced provider of production, said it is already able to offer the benefits of the technology to prospective customers. The company has been contributing to the push to shift to larger masks for more three years. TSMC's renewed embrace of the cutting-edge chipmaking tools is crucial to ASML's growth. The Taiwanese company accounts for about 16% of revenue, according to data compiled by Bloomberg. Increasing commitments from Samsung and Intel means that the Dutch company's three largest customers are onboard with the switch. "This is a big step forward for the adoption of High NA in high-volume manufacturing," said ASML's Pieters. "This is a significant point where customers recognize the benefit of those systems compared to multi-patterning strategies." Customers expect that the number of layers that will require High NA technology will rise as they advance to next generations of chip manufacturing, Pieters said, because of which "they also recognize the opportunity to increase the mask size." Lithography is the process of using light to burn patterns into materials deposited on disks of silicon. Those patterns are then filled with other materials to form the transistors and connections that give the devices their capabilities — primarily the processing and storage of data. The industry's push to make those features smaller has forced equipment makers to explore ever more exotic techniques. ASML's most advanced machinery uses extreme ultraviolet as the light source, a type of light that doesn't occur naturally on earth. The limit imposed by 6-inch masks, which have been used for decades, has contributed to compromises that have slowed improvements in key parts of AI data center computers. Unable to make the individual chips larger, companies have turned to stacking them vertically and complicated interface arrangements that add complexity and cost to the process of making and deploying chips.