--ASML launches partnership program with customers
--Intel to take a 15% stake in ASML for EUR2.5 billion and fund
R&D to the tune of EUR830 million
--ASML also in talks with Samsung and TSMC to take part in
program
--ASML will use funding to develop new technologies
--ASML shares soar by 9% as investors welcome the move
AMSTERDAM--Dutch semiconductor maker ASML Holding NV (ASML.AE)
remains in talks with two of its biggest customers Samsung
Electronics Co. Ltd. (005930.SE) of South Korea and Taiwan
Semiconductor Manufacturing Co. Ltd (2230.TW,TSM) over securing
investment to speed up the development of new technologies to
produce cheaper and more energy-efficient chips, ASML's Chief
Executive Eric Meurice said Tuesday.
The company, one of the world's largest makers of photo
lithography systems that map out electronic circuits on silicon
wafers, said late Monday it has already secured a partnership deal
with its largest customer Intel Corp. (INTC) to develop
technologies which will help provide chips needed for smartphones
and tablet PCs and to produce them at lower cost.
Under the deal, Intel will take up to a 15% stake in ASML for
EUR2.5 billion and will provide EUR830 million in research and
development funding.
The Intel deal sent ASML shares soaring 10% in early trade in
Amsterdam. At 1347 GMT the shares were up 8.3% at EUR43.03.
ASML needs to invest heavily to develop next generation
technologies like extreme ultraviolet lithography or EUV, that can
etch more transistors on to each chip, increasing its power.
ASML also wants to invest in machinery that can manufacture
450mm diameter wafers rather than the standard 300 mm. This would
increase the number of chips that can be made from each wafer,
potentially reducing costs by 30% to 40%.
Intel, the world's biggest semiconductor maker, was the first
ASML customer to sign up to the partnership, because it has the
most obvious reason to sponsor the new 450 millimeter technology,
CEO Mr. Meurice said. The technology will allow it to produce more
chips in existing facilities, avoiding the need for new
manufacturing plants.
"450mm offers great cost savings but the cost to redesign the
entire semiconductor production chain has always been seen by ASML
as prohibitively expensive for the equipment industry," brokerage
Nomura said in a note.
The investment program with its biggest customers "offers an
economic way for the technology to be developed and yet maintain
the independence of ASML," it added. Nomura rates ASML a buy with a
EUR42 target price.
Under the partnership scheme, ASML is making a 25% stake in the
company available for its customers. If Samsung and Taiwan
Semiconductor sign up alongside Intel, it would deliver EUR4.19
billion ($5.15 billion) on top of EUR1.38 billion of R&D
funding to 2017.
The shares offered in the program, however, won't have any
voting rights to avoid conflict with ASML's existing shareholders
and each customer's stake is capped at just under 20%.
The co-investment program is subject to approval of an
extraordinary general meeting planned in September.
Write to Archibald Preuschat;
archibald.preuschat@dowjones.com