ASML wins funds for chip technology from Intel

Tue Jul 10, 2012 3:11pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Edwin Chan and Sara Webb

SAN FRANCISCO/AMSTERDAM (Reuters) - ASML, the world's top chip equipment maker, signed up Intel Corp to bankroll its research into costly next-generation chipmaking technology, and aims to reach similar deals with TSMC and Samsung Electronics.

ASML's chief executive said on Tuesday the Dutch firm had asked its three biggest customers - Intel, TSMC, and Samsung Electronics - to help fund its R&D in exchange for up to 25 percent of its shares. Following Intel's decision, it expects to announce more customer investments in the coming weeks.

ASML shares rose 10 percent on the news. Intel fell about 1 percent after hours.

Fast-tracking the development of such technology not only cements ASML's position as the market leader ahead of Nikon, but could also slash production costs for hot consumer gadgets such as smartphones and tablet computers.

"We're talking about $50 tablets" said Richard Windsor, Nomura's global technology specialist.

"This brings into the realms of possibility a technology that we thought wasn't feasible and opens up the possibility for greater cost reductions".

Intel said on Monday it would spend more than $4 billion to buy up to 15 percent of ASML and fund its research. TSMC said it was considering a similar deal.

Intel hopes to speed up the adoption of the next generation of chip manufacturing processes from ASML by as much as two years. That will require huge capital investment, but would deliver billions of savings by cutting chip production costs.   Continued...

 
An Intel logo is seen at the company's offices in Petah Tikva, near Tel Aviv October 24, 2011. REUTERS/Nir Elias