Intel pours $4.1bn into semiconductor kit vendor

To produce 450-mm wafers.

Intel yesterday revealed a new partnership with semiconductor equipment manufacturer ASML intended to fuel the development of next-generation 450-mm wafers.

Intel will offer Netherlands-based ASML a total of $US4.1 billion dollars, including $US1bn toward research and development of new 450-mm technologies; $US2.1bn as an equity investment for 10 percent of ASML’s pre-transaction issued shares; and $US1bn for an additional equity investment for 5 percent of ASML’s post-transaction issued shares.

Intel’s investments will be paid in two phases, both of which are expected to be complete by the time ASML’s shareholder vote takes place in the third quarter. If the deal closes as expected, the chip maker will own a total of 15 percent of ASML's shares.

ASML specifically produces lithography equipment, or equipment that uses extreme ultraviolet technologies, to pack more and more transistors onto chips.

As transistor counts climb, the processing power and memory capacities of chips become greater -- a fact that gave way to Intel’s Moore’s Law initiative, through which it strives to double the number of transistors, or the wafer size, of its chips approximately every two years.

According to Brian Krzanich, Intel senior vice president and chief operating officer, the company’s new alliance with ASML, and dedication to Moore’s Law, will also save end customer’s money, as each new wafer size has historically delivered a 30 to 40 percent reduction in overall chip cost.

"Productivity improvements driven by enhanced wafer manufacturing technologies, especially larger silicon wafers and enhanced lithography technologies with EUV, are direct enablers of Moore’s Law, which delivers significant economic benefits to consumers," Krzanich said in a statement.

ASML said the objective of its new partnership with Intel is to deliver next-generation lithography technologies that can produce 450-mm wafers within the next eight years.

Its alliance with Intel is the first of what it hopes to be many partnerships with customers who can co-invest and help fund its research and development initiatives.

"We welcome Intel as the first customer to agree to contribute to these investments, the results of which will be available to every semiconductor manufacturer with no restrictions," said Eric Meurice, chief executive officer of ASML, in a statement.

"We hope to be able to announce additional investments by our other customers in the coming weeks."

This article originally appeared at crn.com