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Intel Seeks To Accelerate R&D with $4.1 Billion Investment in ASML
Intel Seeks To Accelerate R&D with $4.1 Billion Investment in ASML

By Jennifer LeClaire
July 10, 2012 1:57PM

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The first phase of the program will see Intel commit to R&D funding of about $680 million to help ASML accelerate the development and delivery of 450-mm manufacturing tools, as well as an equity investment by Intel of about $2.1 billion for approximately 10 percent of ASML's shares.

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Moore's Law

In a move to accelerate the development of 450-millimeter wafer technology and extreme ultraviolet (EUV) lithography, Intel on Tuesday announced a multibillion-dollar investment in ASML Holding. Intel entered into a series of agreements worth $4.1 billion with its supplier.

With the investment, Intel hopes to shorten the schedule for deploying the lithography equipment supporting these technologies by as much as two years. That, Intel says, would result in significant cost savings and productivity improvements. And that's an important development with the explosion of mobile technologies.

"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."

Intel To Take 15 Percent Stake

The first phase of the program will see Intel commit to R&D funding of about $680 million to help ASML accelerate the development and delivery of 450-mm manufacturing tools, as well as an equity investment of about $2.1 billion for approximately 10 percent of ASML's shares.

If the second phase of the program is approved, Intel will make an additional R&D investment of about $340 million in ASML focused on accelerating EUV, as well as an equity investment of about $1 billion for an additional 5 percent of ASML shares.

That would ultimately give Intel a 15 percent stake in the Netherlands-based company, the world's largest supplier of photolithography systems for making semiconductors, with a total equity investment of about $3.1 billion along with the $1 billion investment in R&D.

ASML has agreed to sell up to 25 percent of its shares to outside companies. Intel has also agreed to commit to advanced purchase orders for 450-mm and EUV development and production tools from ASML.

"We are extremely encouraged that Intel has made these investments, which will benefit every semiconductor manufacturer in the industry," said Eric Meurice, president and CEO of ASML. "We hope to be able to announce additional investments by our other customers in the coming weeks."

Faster, Smaller, Less Energy

Zeus Kerravala, principal analyst at ZK Research, said pushing Moore's Law becomes increasingly important in the mobile space because the footprint of what you have to work with is a lot smaller than traditional servers and PCs.

"Moore's Law is also about creating things that are more power efficient," Kerravala told us. "The faster these processors get in mobile phones the shorter the battery life needs to be. There's a direct correlation between the two.

"It's really in everyone's best interest in the mobile ecosystem to find a way to create faster processors with less battery life, with longer reach networking technology to make these things people's primary devices."

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