ASML Wins Over TSMC, Samsung for New EUV Machines as AI Demand Surges

(Bloomberg) -- ASML Holding NV has won commitments from top chipmakers to use its latest semiconductor production gear, while embarking on a broader agreement to meet surging demand for more powerful artificial intelligence technology.

Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co. plan to begin adopting the Dutch company's High NA EUV lithography equipment for high volume manufacturing by 2028 and from 2030 respectively, joining Intel Corp. in using machines that can run $400 million each. Samsung is the leading maker of memory chips, while TSMC is the leader in producing custom chips for the likes of Nvidia Corp. and Apple Inc.

The four companies also agreed to an esoteric — yet critical — shift in the technology format for what are known as photomasks, a key component for producing semiconductors. The group plans to move from the current standard of 6-inch photomasks to 12-inch versions, with the goal of boosting productivity and reducing costs as the industry races to keep up with soaring AI demand. Photomasks are akin to the carved woodblocks used to print the same images again and again, except they're printing with light on silicon wafers.

While a shift to larger masks has long been considered complicated and expensive, the coordinated push offers the possibility of substantial benefits in chip production. The new technology could increase throughput from High NA machines by 40% while simplifying the design process, said Marco Pieters, chief technology officer at ASML.

"That's a huge opportunity, and of course that means a significant step in productivity," Pieters said in an interview.

ASML is the only company in the world that can make extreme ultraviolet, or EUV, lithography equipment, the machines necessary for manufacturing the world's most advanced AI accelerators and similar chips. It debuted low NA EUV in 2019, and has been working with customers to adopt the more sophisticated High NA machines.

TSMC, whose factories handle production for customers from Nvidia and Advanced Micro Devices Inc. to Qualcomm Inc., has been deliberately cautious in adopting the more expensive machinery, arguing the cost wasn't yet justified by the productivity gains.