Taiwan Semiconductor Manufacturing Invests In ASML
August 6, 2012

Chip Maker TSMC Invests In Tool Maker ASML For Faster Silicon

Michael Harper for redOrbit.com — Your Universe Online

In order to speed up the pace of production of faster and more power efficient computer chips, Taiwan Semiconductor Manufacturing Co. (TSMC) has announced they are investing 838 million (US $1 billion) in ASML, a tool maker from the Netherlands.

Already one of the world´s largest tool makers, ASML currently provides equipment and tools to some of the heavy weights in chipmaking, namely Intel and Samsung.

For their investment, TSMC will get a 5% stake in ASML. The company also plans to further invest towards research and development of new technologies, such as larger, thinner chip wafers –  somewhere around 450-mm – to boost the speed of these chips as well as boost the speed of production. ASML is also working on an extreme ultraviolet lithography (EUV) technology. This EUV technology would be used to allow chip makers to cram more transistors on the silicon boards. TSMC announced a similar investment last month, saying they´d invest 1.7 billion for a 10% stake in ASML. They also promised they´d continue their investments with today´s 5%. Intel has also invested in the tool maker´s research and development of their thin chip wafers.

“It is a long-term positive for TSMC to join ASML´s co-customer investment program since it highlights the availability of extreme ultraviolet technology and equipment,” said Patrick Liao and Jason Ho, two technology analysts with Nomura Holdings Inc., in a note today, according to Bloomberg. According to these analysts, TSMC´s investment implies they will have “joint intellectual property rights of the critical lithography R&D in the future.”

ASML has said this move is all a part of their Customer Co-Investment program, which allows the company to sell up to 25% of their stake to their customers. Through this program, ASML hopes to increase the speed of production and further their research and development into new technologies. With today´s announcement of TSMC´s investment, ASML has now sold 20% of their stake to Intel and TSMC.

As it stands, Intel has the most advanced manufacturing process in to the chipmaking industry. The company is pushing out chips based on a 22-nanometer process for desktop and mobile computers alike. Recently, TSMC has switched to a 28 nanometer process from their 40 nanometer process, but this move hasn´t come without its set of issues. As a result of these issues, some chip supply companies, like Qualcomm, have seen shortages in their offerings, such as the Snapdragon S4 chips used in HTC´s One X Android phone. Qualcomm hopes the issues will be resolved as soon as they find other chip makers to rely on and TSMC resolves their manufacturing process.

TSMC hopes their investment in ASML will help them resolve these issues as they struggle to keep up the pace of demand on these faster, thinner chips.

The move to faster and thinner hasn´t been a cheap one so far, as billions of dollars has already been invested in factories and tools towards this venture. By combining the extra fine detail of EUV and the larger surface area of a 450-mm chip, companies like TSMC hope they´ll be able to squeeze more power from their silicon with less waste, a welcome move for an already struggling economy.

According to TSMC, these new style chips could begin making their way into our devices in the second half of this decade.