This story is about change and growth. A company that came out of nowhere and is now number one in the field of wafer steppers. This is the so-called backside of semiconductor device manufacturing. This phase is dominated by a lithographic process in which the circuit is projected onto the silicon sheets. In the adjacent phase, the front-end, transistors and other components are placed on the chip. ASML produces the back-end machines.
It all started in 1984 as a “spin-out” of Philips and ASM International. In 1990, ASMI divested the operation into a separate company due to loss of money from the lithographic business at the time.
“In hindsight, it may have been the biggest mistake in ASMI’s corporate history. ASML, after a slump in the early 1990s, began to find favor with US and Taiwanese chipmakers outside of its traditional base in Europe. ” (1)
The company went public in 1995 and acquired SVG in the US in 2001. The lithographic market started in the US, but soon Japanese producers Nikon and Canon dominated the market until the late 20th century. In 2003 that image was completely changed:
“While ASML and No. 2 player Nikon are embroiled in bitter legal battles over intellectual property issues in the United States and Japan in 2003, Canon, the No. 3 litho player, has publicly stated that their goal is to unseat ASML from its first position in five years. ” (two)
In this market, innovation is the way to keep up with stiff competition.
In this sense, the type of technological change does matter. There are basically two types of technological innovations: one that has a focus on improvements, they are called sustainable technologies, and the other is disruptive. The latter are based on a new paradigm that completely changes the idea of the process.
A famous example of disruptive technology is the digital camera that replaced the analog camera that required film. To be successful, disruptive technology must add more value to the customer. At first, the lenses and pixel count were of lower quality than traditional cameras, but the ease of use and other features (print at home) made up for the new technology. After years, digital cameras get the same quality as the previous cameras offered.
In the lithographic business, sustainable development continues with lithographic projections and the use of masks through which light is filtered. Shrinking the size of the nodes (now as small as 45 nanometers) is the ultimate goal. The question is whether with the same technology this miniaturization process is still possible …
A new disruptive technology is being developed in which the mask is no longer needed by “writing the circuits on silicon wafers with electron beams. Mapping uses a multiple aperture pixel-by-pixel resolution enhancement (MAPPER) technology that It is based on deep ultraviolet (DUV) technology. It was founded in 2000 and is based in Delft, the Netherlands. ” (www.mapperlithography.com)
“John Cossins, ASML Product Manager … said in an interview that” for next generation lithography, ASML has narrowed the focus to extreme ultraviolet solutions, while Canon and Nikon are looking for more electron beam related solutions. “.
As for Mapper’s technology, he said, “the alternative they are working on, while promising, is not yet far from a real product and therefore not serious competition anytime soon.” – March 2003 “
Where change and growth go together is often visible in the company’s dividend policy. After twelve years in business, the company pays its first dividends to shareholders and intends to continue this new pattern. For the investor, this may be a sign that the company’s high growth is now turning into more stable growth. But what about the market entry of new parties?
The other parties may also feel the pressure of the market. If ASML was able to beat the competition once, why wouldn’t it be possible for another (new) party to do so too in the near future?
On the ASML site we read about a collaborative intent:
“… December 21, 2007 – ASML Holding NV (ASML) and Carl Zeiss SMT (Zeiss) announce today that they have each signed an agreement with Canon Inc. (Canon) for the global cross-licensing of patents in their respective fields of lithography of semiconductors and optical components, used to make integrated circuits, or chips … “
“ASML and Zeiss, with their current extensive research and development efforts and the resulting knowledge, welcome this agreement with Canon, with its significant portfolio of patents. There will be no technology transfer, which means that ASML and Zeiss will continue to compete. with all the players in the market based on their ability to bring leading technologies to market. “
“Cross-licensing helps the three companies compete more freely in the area relevant to their customers, which is technology expertise and implementation, rather than intellectual property (IP) rights. ASML and Zeiss are firmly committed to investing in research and development and will continue to accumulate technical knowledge and intellectual property. “
Growth is also done through acquisitions. In addition to the large CVG acquisition in 2001, the company continues to acquire other parts that add value to its process, such as “Brion Technologies … a leading provider of semiconductor design and wafer fabrication optimization solutions for advanced lithography. Brion Computational Lithography The technology enables semiconductor manufacturers to simulate the realized pattern of integrated circuits and correct the mask pattern to optimize the manufacturing process and performance. “
“This combination significantly expands ASML’s capabilities to support the semiconductor industry, as our complementary technologies can further improve the efficiency of chip manufacturing,” said Eric Meurice, ASML president and CEO. “Brion’s simulation technology combined with ASML’s lithography systems will deliver value for customers through faster time to market, better image quality and higher throughput in wafer making.”
(1) – http://findarticles.com/p/articles/mi_m0EKF/is_n2206_v44/ai_20323849/pg_1
(two) – [http://www.allbusiness.com/marketing-advertising/marketing-advertising-measures/6344072-1.html]
HJB
