ASML to buy 24.9% in Carl Zeiss's SMT subsidiary for $1.1 bn

Dutch chip-equipment maker ASML Holding NV (ASML) today struck a deal to buy a 24.9-per cent stake in German optics company Carl Zeiss's SMT subsidiary for €1 billion ($1.1 billion) in cash in order to strengthen their partnership in the semiconductor lithography business.

The deal also includes a collaboration under which ASML will invest €760 million to help Zeiss SMT research and develop new parts to be integrated into ASML's lithography systems.

ASML said that the main aim of the deal is to facilitate the development of the future generation of Extreme Ultraviolet (EUV) lithography systems due in the first few years of the next decade. This technology will enable the semiconductor industry to produce much higher performance microchips at lower costs.

Zeiss SMT, a supplier to ASML for 30 years, makes lenses and other equipment needed to focus the energy beams. ASML uses these to help companies such as Intel and Samsung create the circuitry of semiconductor chips.

In addition to the agreement of the minority stake, ASML will support Carl Zeiss SMT`s research and development (R&D) with an investment of €220 million as well as capital expenditures and other supply chain investments of €540 million over the next 6 years.

These investments will be allocated at Carl Zeiss SMT's main location in Oberkochen, Germany, and will primarily be used for capacity and resource expansions.

''We see a long and successful future for EUV lithography in advanced chip manufacturing and with this agreement we set the right conditions for development of the next generation of EUV by ASML and Carl Zeiss SMT, so that our customers can reap the rewards of their EUV investments up to the end of the next decade,'' said Peter Wennink, president and CEO of ASML.

''With this agreement we clear the road for advanced lithography to support the new concepts and designs for future generations of advanced chips. After the many years of fruitful partnership, we see this agreement as a further strong endorsement of our long term cooperation which allows us to further expand our joint leadership that we have already accomplished together'', says Michael Kaschke, President and CEO of Zeiss.

Veldhoven, the Netherlands-based ASML is the world's largest supplier of photolithography systems for the semiconductor industry. The company manufactures machines for the production of integrated circuits such as DRAM memory, flash memory, and CPUs.