Intel will take an initial 10% stake in the Netherlands-based semiconductor tools maker ASML and invest in its R&D efforts, to advance manufacturing technologies that will help Intel produce smaller and more power efficient chips. ASML has partnerships with Intel, Samsung, GlobalFoundries and TSMC. Intel will initially invest about £1.35bn ($2.1bn) for a roughly 10% stake, and later invest £664m for an additional 5% stake, depending on shareholder approval. Intel will also invest £657m in ASML’s R&D efforts, particularly to advance the use of 450-millimeter wafer and extreme ultraviolet (EUV) lithography, which will help semiconductor companies make chips at a lower cost while scaling down chip sizes. An Intel spokesman said the move to EUV and 450mm wafers would help reduce chip production costs by up to 40%. Intel and its rivals have been talking about 450mm wafers for many years, but the tool makers have had problems supporting that.
ASMLis also reported to be in talks with Samsung and TSMC about taking stakes, and said it is willing to sell up to 25% of the company to chipmakers that wish to participate in its EUV and 450mm development programs, with the three giants being offered the right of first refusal. Regardless of the outcome of ASML’s discussions with other customers, Intel’s stake will not exceed 15% of ASML.
‘This is being done as a way to secure Moore’s Law,’ said Eric Meurice, CEO of ASML, on an analyst call. He said ASML had gone to its three biggest customers with the idea of tying research funding to a minority equity opportunity and had been negotiating for the past 6-9 months. The shares issued under the program are being held in a foundation and do not have voting rights except in certain limited circumstances.
The program, if fully executed, will raise about $1.7bn for funding the R&D as well as raising about $5.16bn through the sale of shares. ‘Intel has been the first to shoot. They jumped quickly, before the other two,’ said Meurice. ‘TSMC and Samsung are still in negotiations.’ He added: ‘We do not know if the other two will cover the full 25%. TSMC and Samsung may participate to a smaller level leaving room for others to come in.’ He concluded: ‘We hope to have the three companies. Maybe we will have more. Or maybe we will stop at Intel if we cannot persuade the others.’