The Taiwanese foundry chip maker also will invest EUR838 million for a 5% stake in the Veldhoven, Netherlands-based lithography tool maker.
The investment commitment marked the second of its kind ever after microprocessor chip giant Intel Corp agreed to invest US$3.1 billion for a stake of as much as 15% in ASML on July 9 . Intel also made its US$1 billion investment commitment for the joint R&D Customer Co-Investment Program.
The multi-billion dollar investment commitments by the two chip giants are to accelerate ASML's development of EUV technology beyond this current generation and ASML's development of future 450 mm silicon wafer lithography technology, both due in the second half of this decade.
"One of the biggest challenges facing IC scaling today is how to effectively control the escalating wafer manufacturing cost," said Shang-yi Chiang, TSMC executive vice president and co-chief operating officer.
"We are confident that the additional funding for ASML's research and development programs will help secure and accelerate EUV development activities, in parallel with the necessary focus on improved performance of existing optical lithography tools and speed up the deployment of new technologies for 450 millimeter wafers. This effort will help the industry control wafer cost, and therefore protect the economic viability of Moore's Law," added he.
"We welcome TSMC to our Customer Co-Investment Program. The objective of the Co-Investment program is to secure and accelerate key lithography technologies. These technologies will benefit the entire industry and are not restricted to our Co-Investment partners," said Eric Meurice, Chief Executive Officer of ASML.
As part of ASML's Customer Co-Investment Program, ASML may issue up to an aggregate 25 percent minority equity stake to customers. T
The entire cash proceeds from the share issuance will be returned to ASML shareholders (not including participating customers) through a synthetic buy-back.
With Intel and TSMC now committing to the Co-Investment Program, 20% equity has been committed. The remaining 5% equity holding potential is being discussed with other customers. The shares to be issued to TSMC, Intel and any other customers that participate in the Co-Investment Program will be non-voting except in exceptional circumstances.
As announced on 9 July 2012, ASML can issue new shares equivalent to 9.99% of ASML's issued share capital to Intel as per the decisions made at ASML's 2012 Annual General Meeting of shareholders. The issuance of further shares in the Co-Investment Program to both Intel and TSMC (and any additional customers who may participate in the Co-Investment Program) as well as the synthetic buyback are subject to shareholder approval at the extraordinary meeting of shareholders scheduled for September 7, 2012.
The EUV lithography technology is instrumental in etching a fine pitch of below 20 nanometer circuitry on a silicon wafer, giving the semiconductor chip industry’s axiom Moore’s Law an extended life.
Called after the width of a gate of a transistor, the nanometer geometry technology depends on the wavelength of the light source of the lithography equipment. The wavelength of the EUV is short enough to draw a fine pitch of below 20 nanometers and beyond. The wave length of the EUV is just 13.5 nanometers.