Chip industry equipment providers ASML Holding NV, and Germany-based Carl Zeiss SMT, a business group of Carl Zeiss AG (ZEISS), have agreed to strengthen their partnership in the semiconductor lithography business. The main objective of this agreement 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 and ASML jointly announce today, that they have agreed on a 24.9% minority stake of ASML in ZEISS’s subsidiary Carl Zeiss SMT, for which ASML will pay ZEISS EUR 1 billion in cash. The companies stated that no further exchange of shares is planned or agreed.

ASML is a key supplier of semiconductor patterning products and services used by the world`s top producers of microchips. With its high-performance optics Carl Zeiss SMT supplies an essential subsystem of ASML´s semiconductor lithography scanners and is ASML`s most important strategic partner.

Lithography machines made by ASML use concentrated light rays to burn lines into layers of materials deposited on silicon, a crucial step in creating transistors. So-called EUV machines promise to enable chipmakers to produce smaller semiconductors while increasing the capacity and speed for devices such as handsets and tablets.

A new cycle of investments required for the development of an entirely new optical system for the future generation of EUV, expected to be provided to the chip making industry in the first few years of the next decade.

The next generation of EUV optics will offer a higher numerical aperture (NA), making it possible to further reduce critical dimensions in the lithography process. The current EUV systems have an optical system with NA of 0.33 whereas the new optics will have NA larger than 0.5, enabling several generations of geometric chip scaling.

In addition to the agreement of the minority interest, the two companies have also agreed that ASML will support Carl Zeiss SMT`s research and development (R&D) for approximately EUR 220 million as well as capital expenditures and other supply chain investments for approximately EUR 540 million over the next 6 years.

These investments will predominantly be allocated at Carl Zeiss SMT’s main location in Oberkochen, Germany, and will primarily be used for capacity and resource expansions. Carl Zeiss SMT will remain fully integrated into the structure of the ZEISS Group as one of the major and important business groups.

"High-NA is the logical next step for EUV, as it circumvents complex and expensive 0.33 NA EUV multiple patterning. High-NA EUV is a robust way for chips to scale all the way down to the sub-3 nanometer logic node in a single exposure with high productivity and reduced cost per feature. That is several generations from where we are today and underlines our commitment to propel Moore’s law," said Martin van den Brink, President and Chief Technology Officer at ASML.

The transaction has been approved by both companies’ supervisory boards and subject to regulatory clearance, it is expected to be closed in the second quarter of 2017.