SemiAccruate: Intel buys stake @ ASML

[MisterMac]

http://semiaccurate.com/2012/07/09/intel-buys-a-large-chunk-of-asml/

Intel is buying a large chunk of ASML, $3.1 billion to be exact, and giving them more money too. On top of this, there is another $1 billion to speed up EUV and 450nm technology.

Well....doing mighty fine solo in the lithography department in supplying samsung & intel.

Now chipzilla has teeth in it and is BANKROLLING the advancement.


....Sup monopoly on all computing semiconducter chips?
(Not that i can't help smile at intel for this ).

 

[Bill Brasky]

Makes sense for Intel. They need EUV more than anyone.

 

[Lonyo]

This article is terrible.

The ACTUAL nature of the relationship is that ASML offered up a share in their business to Samsung, Intel and TSMC. Intel were the first ones to agree terms.
The terms offered to all three are equal (AFAIK), up to a maximum of 25% or something.

There is zero risk for consumers in terms of Intel gaining any kind of monopoly. ASML get a cash injection for further R&D. The current big three get continued access to new tech. Everyone wins. Except maybe IBM/etc.

http://www.ft.com/intl/cms/s/0/3855c168-caa4-11e1-89be-00144feabdc0.html
If you lack access:

TSMC and Samsung are in talks with ASML over taking an up to 10 per cent stake in the Dutch semiconductor equipment maker, following a $4.1bn investment in the company by rival Intel.

ASML said it had offered all three companies the same terms to buy up to 25 per cent of equity as well as contributing to a crucial research programme focused on making the next generation of smaller computer chips.

http://www.eetimes.com/electronics-news/4389932/ASML-in-talks-with-Samsung-TSMC-on-equity

The three companies have been offered first refusal on the deal involving a 25 percent equity stake in ASML. "This is being done as a way to secure Moore's Law," said Eric Meurice, CEO of ASML, speaking on a conference call with analysts on Tuesday (July 10).

 

[ShintaiDK]

Awww, you took the drama and conspiracy out

 

[MisterMac]

15% out of 25%.

Still a hefty chunk.
And if you think intel isn't doing this to eventually drop Nikon and try get prototypes for EUV for the 14 nodes...well.

I geuss your right that intel just decided to splash cash for no other apparent reason than.... why not we have near unlimited supply anyway!

 

[Lonyo]

15% out of 25%.

Still a hefty chunk.
And if you think intel isn't doing this to eventually drop Nikon and try get prototypes for EUV for the 14 nodes...well.

I geuss your right that intel just decided to splash cash for no other apparent reason than.... why not we have near unlimited supply anyway!

http://www.eetimes.com/electronics-blogs/other/4390109/ASML--We-won-t-get-fooled-again?pageNumber=0
This seems to be a decent, well thought out writeup which explains the issues surrounding the whole development and why any of this is happening.
Rathe rthan the idiotic sensationalism of S|A.

In summary:
ASML (and other R&D houses) got bitten on 300mm litography tool R&D, and didn't get the benefits they were expecting due to slow adoption.
In order to fund the R&D and ensure they get returns, they are "encouraging" the major players who are likely to adopt 450mm wafers to invest in them and put funding towards the R&D for 450mm tools in order to safeguard their own company against potential issues should the 450mm rollout not advance swiftly.

It's got nothing to do with Intel taking advantage or wanting to splash cash, it's all about the EUV maker covering their own ass and getting the users of their tools to pay for the R&D on those tools.

 

[khon]

The reason for this is mainly 450mm.

In simple terms larger wafers mean lower costs per chip, however if you only look at the lithography part, there are actually no cost saving for larger wafers.

Also, while EUV is something where you can "mix and match", meaning you can use EUV for some layers, and all your existing equipment for other layers, this is not the case for 450mm. If you want to do anything 450mm, you have to do everything 450mm.

If you combine these two, you end up with the following problem: Chipmanufacturers like Intel want 450mm, but litho suppliers like ASML have no financial incentive to actually develop 450mm (which would cost billions in R&D).

So what ASML is doing is telling the main customers that they can have 450mm, but only if they pay for it up front. And that's what Intel has just done.

 

[carop]

450mm development cost for equipment industry (Applied Materials):

ASML road map for 450mm and EUV:

The slides are from the following URL:

http://www.electroiq.com/blogs/chip...lephant-has-left-the-room-450-mm-is-a-go.html

 

[MisterMac]

http://www.eetimes.com/electronics-blogs/other/4390109/ASML--We-won-t-get-fooled-again?pageNumber=0
This seems to be a decent, well thought out writeup which explains the issues surrounding the whole development and why any of this is happening.
Rathe rthan the idiotic sensationalism of S|A.

In summary:
ASML (and other R&D houses) got bitten on 300mm litography tool R&D, and didn't get the benefits they were expecting due to slow adoption.
In order to fund the R&D and ensure they get returns, they are "encouraging" the major players who are likely to adopt 450mm wafers to invest in them and put funding towards the R&D for 450mm tools in order to safeguard their own company against potential issues should the 450mm rollout not advance swiftly.

It's got nothing to do with Intel taking advantage or wanting to splash cash, it's all about the EUV maker covering their own ass and getting the users of their tools to pay for the R&D on those tools.

Obviously yes.

But which company wouldn't also in the future use EVERY advantage they get out of said investment to advance the chosen supplier they invested in?

SemiAccurate is drama - but some of the points can't be completely dismissed.

It gives intel with a future perspective the ability to more... "legimately" push their agenda with a supplier while artificially making sure they're at the top of the chain in said market.

Which can't really do anything but cement Intel's position further.
And probably won't make it any easier for ARM\ARM vendors to make an impact.

 

[Idontcare]

Obviously yes.

But which company wouldn't also in the future use EVERY advantage they get out of said investment to advance the chosen supplier they invested in?

SemiAccurate is drama - but some of the points can't be completely dismissed.

It gives intel with a future perspective the ability to more... "legimately" push their agenda with a supplier while artificially making sure they're at the top of the chain in said market.

Which can't really do anything but cement Intel's position further.
And probably won't make it any easier for ARM\ARM vendors to make an impact.

The thing is Intel doesn't really operate this way on the process-development/tool-development domain.

It is a great work of fiction, a fantastic read at that, but it lacks merit from a facts-on-the-ground perspective. (edit: I am referring to the S/A piece, not you, MisterMac, just to be clear on this)

If you didn't work in the industry, hands-on with this equipment and the business models themselves, I can see where fantasy and reality are difficult to parse and deconvolve, but that is what is going on here.

You have reality happening every day, and then you have fantastically imaginative individuals spinning works of fiction at the same time.

If the works of fiction had any chance of actually disrupting the real work that the industry needs to get done then there would be more of an effort to set the record straight and pop that bubble, but it is harmless entertainment (except perhaps to those who take it as gospel truth) so why bother investing any time in setting the record straight?

 

[MisterMac]

The thing is Intel doesn't really operate this way on the process-development/tool-development domain.

It is a great work of fiction, a fantastic read at that, but it lacks merit from a facts-on-the-ground perspective. (edit: I am referring to the S/A piece, not you, MisterMac, just to be clear on this)

If you didn't work in the industry, hands-on with this equipment and the business models themselves, I can see where fantasy and reality are difficult to parse and deconvolve, but that is what is going on here.

You have reality happening every day, and then you have fantastically imaginative individuals spinning works of fiction at the same time.

If the works of fiction had any chance of actually disrupting the real work that the industry needs to get done then there would be more of an effort to set the record straight and pop that bubble, but it is harmless entertainment (except perhaps to those who take it as gospel truth) so why bother investing any time in setting the record straight?

...because we cannot timetravel or predict fate\future?

None of your points, imho, argue what this can possibly lead to given if Intel's position and dominance (in nearly all markets they enter) is somehow threatened. (I know that' looks like a farshot atm, but who knows if IBM will decide to wake up one day!).

Then ASML like so many other companies will just be seen as a requirement of running a competitive FAB and therefor eaten up by chipzilla eventually.
(Seing as how they already own a large stake anyhow).

Secondly how in good faith, do we not know the "Customer Investment" program wasn't invented because Intel came knocking saying speed things up !.
To which ASML replied "Show us the money" - and so they did.


PS:
I love alot of your posts, but this one gets me off somehow.
Your doing the same as Charlie - spinning your version of an event to fit your view.
I don't really see how working within the industry has anything to do with this.

This is ever increasing integral part of Intel's production machine - one that will start determining how much they profit in the future.
Hence they begin to exercise control with their dominant position - and in the future open up choices which can setback competition on several fronts severely.

 

[Lonyo]

Secondly how in good faith, do we not know the "Customer Investment" program wasn't invented because Intel came knocking saying speed things up !.
To which ASML replied "Show us the money" - and so they did.

That's what the EETimes article I linked above says happened... only they say that in general ASLM was seem as dragging its feet. And your conspiracy rant about Intel doing X or Y sounds ludicrous when the two other major fabs have also been offered the same chance to invest.

How do you eat up a company your competitors can own some of? Force them to sell to you? Why would they do that?

Also, your posts "get me off". You seem to be obsessed with Intel being a big baddie who's going to eat up everything. Nothing about this development suggests that at all... you seem to just want some mega conspiracy to be happening.

 

[MisterMac]

That's what the EETimes article I linked above says happened... only they say that in general ASLM was seem as dragging its feet. And your conspiracy rant about Intel doing X or Y sounds ludicrous when the two other major fabs have also been offered the same chance to invest.

How do you eat up a company your competitors can own some of? Force them to sell to you? Why would they do that?

Also, your posts "get me off". You seem to be obsessed with Intel being a big baddie who's going to eat up everything. Nothing about this development suggests that at all... you seem to just want some mega conspiracy to be happening.

No, you and the rest are on your feet because your afraid it'll turn into a drama.

So you puff up, to try toughen down the Big Baddie Intel routine (or AMD MOAR COREZ SUCK, if it would have been the other way).
If you can't discuss theory of the future without turning it into a internet crapfest - there's better things to do that post anywhere.


It was a given scenario - we cannot know wether the initiation was from either side. The program and intel's investment was made in one press release.
Not X releasing program - Biggie Y has now joined a few days later.

Which leads back to looking at this was "pro-intel" eyes that they could legimately swoop up ASML on a later date - whenever the scenario is deemed more doable without any sideffects from all areas. And this is of course after they've bankrolled them far above competitors.

PS:
Let's check back in a month or two - and see if ANYONE else joins the program.

 

[Lonyo]

No, you and the rest are on your feet because your afraid it'll turn into a drama.

So you puff up, to try toughen down the Big Baddie Intel routine (or AMD MOAR COREZ SUCK, if it would have been the other way).
If you can't discuss theory of the future without turning it into a internet crapfest - there's better things to do that post anywhere.


It was a given scenario - we cannot know wether the initiation was from either side. The program and intel's investment was made in one press release.
Not X releasing program - Biggie Y has now joined a few days later.
Which leads back to looking at this was "pro-intel" eyes that they could legimately swoop up ASML on a later date - whenever the scenario is deemed more doable without any sideffects from all areas. And this is of course after they've bankrolled them far above competitors.

PS:
Let's check back in a month or two - and see if ANYONE else joins the program.

Meurice told analysts in the conference call that ASML had gone to its three biggest customers — Intel, Samsung and TSMC – with the idea of tying research funding to a minority equity opportunity and had been negotiating to sell a 25 percent stake in the company for the last six to nine months.

Meurice 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."

They chose to not announce their negotiations until they had completed at least one element of it. When they completed an agreement with Intel, the first company to sign, they then announced the programme and mentioned negotiations were still ongoing.