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ASML buys 24.9% of ZEISS subsidiary Carl Zeiss
SMT for EUR 1 billion in cash
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Start of development of entirely new High NA
optical system for the future generation of EUV
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ASML supports Carl Zeiss SMT`s R&D and capex
for approximately EUR 760 million over the next 6 years
VELDHOVEN, the Netherlands/OBERKOCHEN, Germany - 3 November 2016 -
Netherlands-based ASML Holding NV, one of the world's leading chip
industry equipment providers, and Germany-based Carl Zeiss SMT, a
business group of Carl Zeiss AG (ZEISS), have agreed to strengthen
their long-standing and successful 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. ASML and Carl Zeiss SMT
have been in close partnership for more than 30 years. Both firms
have grown strongly over the last decades benefiting from each
other`s strengths.
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, has triggered the partners to take a
further step in the collaboration.
"In 2018 the first chips made on current technology EUV scanners
are expected to roll off the production lines of our customers. A
lot of work is still being done to ensure the introduction of EUV
in volume manufacturing, in tight conjunction with our highly
successful immersion scanners which we continue to improve. Yet
ASML and ZEISS are looking beyond this important milestone. We see
a long and successful future for EUV lithography in advanced chip
manufacturing and with this agreement we set the right conditions
for development of the next generation of EUV by ASML and Carl
Zeiss SMT, so that our customers can reap the rewards of their EUV
investments up to the end of the next decade," said Peter Wennink,
President and Chief Executive Officer of ASML.
"With this agreement we clear the road for advanced lithography to
support the new concepts and designs for future generations of
advanced chips. After the many years of fruitful partnership, we
see this agreement as a further strong endorsement of our long term
cooperation which allows us to further expand our joint leadership
that we have already accomplished together", says Michael Kaschke,
President and CEO of ZEISS.
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, with positive effects on
long-term employment at this location. 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.
Carl Zeiss SMT will pay an annual dividend to its shareholders Carl
Zeiss AG and ASML. ASML expects that the minority share transaction
will be accretive to its earnings before adjustments related to
purchase price accounting and differences in accounting standards.
Furthermore, ASML`s contribution to Carl Zeiss SMT`s R&D and
capital expenditures will be taken into account in the future
pricing of SMT`s next generation EUV optics to ASML.
The transaction has been approved by both companies' supervisory
boards. ASML will fund the transaction from available cash,
potentially supplemented by new debt. The transaction is subject to
regulatory clearance and is expected to be closed in the second
quarter of 2017.
Update ASML Share Buyback
Program
In light of the investments by ASML announced today, ASML will
prolong the pause of its share buy back program for the time being.
As a result, the 2016-2017 program may not be completed for the
full amount. Otherwise, the current program will remain in place,
yet it may be further suspended, modified or discontinued at any
time.
As part of ASML's financial policy to return excess cash to
shareholders through dividends and regularly timed share buyback
programs, ASML in January 2016 announced its intention to purchase
up to EUR 1.5 billion of shares to be executed within the 2016-2017
time frame.
About Moore`s law
The phenomenal growth of the semiconductor industry has been driven
by Moore's Law, named after Intel co-founder Gordon Moore. In 1965,
Moore observed that the number of components on a chip that could
be manufactured at optimum cost had doubled every year. He
predicted that this trend would continue. It was an empirical
observation, not a law of nature. In the five decades that
followed, the "law" has been rewritten several times, but the
principle continues: chip makers cram more transistors on ICs with
every new generation, making computing power and storage capacity
cheaper year after year. Today's consumers carry more computing
power in their pockets than a multi-million-dollar supercomputer
could deliver in the 1970s. Moore's Law has inspired generations of
engineers to push technology forward.
About ASML
ASML is one of the world's leading manufacturers of chip-making
equipment. Our vision is to enable affordable microelectronics that
improve the quality of life. To achieve this, our mission is to
invent, develop, manufacture and service advanced technology for
high-tech lithography, metrology and software solutions for the
semiconductor industry. ASML's guiding principle is continuing
Moore's Law towards ever smaller, cheaper, more powerful and
energy-efficient semiconductors. This results in increasingly
powerful and capable electronics that enable the world to progress
within a multitude of fields, including healthcare, technology,
communications, energy, mobility, and entertainment. We are a
multinational company with over 70 locations in 16 countries,
headquartered in Veldhoven, the Netherlands. We employ more than
15,500 people on payroll and flexible contracts (expressed in full
time equivalents). ASML is traded on Euronext Amsterdam and NASDAQ
under the symbol ASML. More information about ASML, our products
and technology, and career opportunities is available on
www.ASML.com.
About ZEISS and Carl Zeiss SMT
ZEISS is an internationally leading technology enterprise operating
in the optics and optoelectronics industries. The ZEISS Group
develops and distributes semiconductor manufacturing equipment,
measuring technology, microscopes, medical technology, eyeglass
lenses, camera and cine lenses, binoculars and planetarium
technology. With its solutions, the company constantly advances the
world of optics and helps shape technological progress. ZEISS is
divided up into the four segments Semiconductor Manufacturing
Technology, Research & Quality Technology, Medical Technology,
and Vision Care/Consumer Optics. ZEISS is represented in over 40
countries and operates more than 30 production sites, over 50 sales
and service locations and about 25 research and development
facilities.
In fiscal year 2015/16 the company generated revenue of over EUR
4.8 billion with around 25,000 employees. Founded in 1846 in Jena,
the company is headquartered in Oberkochen, Germany. Carl Zeiss AG
is the strategic management holding company that manages the ZEISS
Group. The company is wholly owned by the Carl Zeiss Stiftung (Carl
Zeiss Foundation).
Further information at www.zeiss.com
Regulated Information
This press release contains inside information within the meaning
of Article 7(1) of the EU Market Abuse Regulation.
Forward Looking Statements
This document contains statements relating to certain projections
and business trends that are forward-looking, including statements
with respect to our outlook, including statements about the
partnership between ASML and Carl Zeiss SMT, the transactions
between ASML and ZEISS discussed herein, including the
expected capex and R&Dother investments by ASML, and expected
benefits of these transactions, statements with respect to the
planned investments by ASML in Carl Zeiss SMT including allocation
and use of these investments and expected benefits,, statements
about EUV including expected development of EUV and the expected
timing of the next generation of EUV systems, new investments
required in optical systems to continue EUV development, expected
timing for the first chips to be produced by ASML's customers using
EUV, and expected volume manufacturing using EUV and expected
timing thereof and expected long and successful future of EUV
lithography and expected future investments in EUV, that customers
can reap the rewards of these EUV investments up to the end of the
next decade and that the agreement discussed in this release will
clear the road for advanced lithography to support new concepts and
designs for future generations of advanced ships, the expected NA
and other features of next generation EUV products, statements with
respect to Moore's law and the expectation that this transaction
will help fuel the development of Moore's law, statements with
respect to Carl Zeiss SMT, including expected dividends and that
the transaction will be accretive to earnings, statements with
respect to the relationship between ASML and Carl Zeiss SMT and
expected benefits thereof, expected closing of the transaction [and
expected funding of the transaction by ASML], and other
non-historic statements. You can generally identify these
statements by the use of words like "may", "will", "could",
"should", "project", "believe", "anticipate", "expect", "plan",
"estimate", "forecast", "potential", "intend", "continue" and
variations of these words or comparable words. These statements are
not historical facts, but rather are based on current expectations,
estimates, assumptions and projections about the business and our
future financial results and readers should not place undue
reliance on them. Forward-looking statements do not guarantee
future performance and involve risks and uncertainties. These risks
and uncertainties include, without limitation, economic conditions,
product demand and semiconductor equipment industry capacity,
worldwide demand and manufacturing capacity utilization for
semiconductors (the principal product of our customer base),
including the impact of general economic conditions on consumer
confidence and demand for our customers' products, competitive
products and pricing, the impact of any manufacturing efficiencies
and capacity constraints, performance of our systems, the
continuing success of technology advances and the related pace of
new product development and customer acceptance of EUV, delays in
EUV systems production and development, our ability to enforce
patents and protect intellectual property rights, the risk of
intellectual property litigation, availability of raw materials and
critical manufacturing equipment, trade environment, changes in
exchange rates, the completion of the acquisition by ASML of the
24.9% stake in Carl Zeiss SMT and the performance of Carl Zeiss SMT
including dividends paid in the future by Carl Zeiss SMT, the
amount of investments and capex required by Carl Zeiss SMT under
the arrangements described herein and the performance of the
products produced by Carl Zeiss SMT and other risks indicated
in the risk factors included in ASML's Annual Report on Form 20-F
and other filings with the US Securities and Exchange Commission.
These forward-looking statements are made only as of the date of
this document. We do not undertake to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise.
Link to press release
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The issuer of this announcement warrants that they are solely
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information contained therein.
Source: ASML Holding via Globenewswire
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