SANTA CLARA, Calif.—Intel Corp. has agreed to invest $4.1 billion, including direct cash and equity investments, in semiconductor machinery maker ASML Holding N.V.
The investment is part of a major deal to advance the Netherlands-based company’s R&D efforts in 450-millimeter wafer technology and the new extreme ultra-violet (EUV) lithography production method.
With the investments, Intel hopes to reduce the time-to-market for these technologies by two years. The tech firm says it plans fund the deal from cash on hand at its offshore subsidiaries.
The first phase of this program consists of Intel committing to $680 million in R&D funding to accelerate the development and delivery of 450-mm wafer-manufacturing tools.
Intel will also purchase 10 per cent of ASML’s pre-transaction issued shares for about $2.1 billion.
Upon ASML shareholder approval, Intel will embark on phase two of the agreement, providing an additional $340 million in R&D funding to accelerate EUV, as well as another $1-billion equity purchase for an additional five per cent of ASML shares issued after the phase-one transactions.
Ultimately, Intel will hold a total of 15 per cent of ASML’s issued shares with a total equity investment of approximately $3.1 billion.
Intel is also committing to advanced purchase orders for 450-mm and EUV development and production tools from ASML.
Both phases of the program are subject to standard closing conditions, including customary regulatory approvals. The companies expect both phases of the transaction to close after the shareholder vote in the third quarter.
“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,” said Brian Krzanich, Intel senior vice-president and COO.
“The transition from one wafer size to the next has historically delivered a 30 to 40 per cent reduction in die cost and we expect the shift from today’s standard 300-mm wafers to larger 450-mm wafers to offer similar benefits.”
ASML aims to sell 25 per cent stake in the company semiconductor manufacturers, though Intel’s stake in ASML will not exceed 15 per cent and will be subject to lock-up and voting restrictions.