TAIPEI, May 20, 2024
/PRNewswire/ -- Moore's Law is not advancing as fast as it used to
be under 2nm and even into the Angstrom level, and competitors are
trying to catch up. Can ASML, the Dutch semiconductor
equipment maker, continue its monopolistic leadership in the
extreme ultraviolet (EUV) lithography equipment market?
Will the world's most advanced high-NA EUV machines be the
ultimate weapon for a technological leapfrog for its customers? And
how would the geopolitical uncertainties change ASML's strategy in
the future?
G. Dan Hutcheson, vice chair of
TechInsights, who has covered ASML since the 1970s, when it was
still a subsidiary of Philips, and Marc Hijink, the author of Focus
– the ASML Way and a reporter at Dutch newspaper NRC, joined
DIGITIMES Asia for an insightful talk to address
these questions.
Navigating geopolitical uncertainties
Although ASML and other semiconductor equipment providers
benefit from the demand driven by export controls imposed by
the United States to China, geopolitics may have long-lasting
implications on the industry as extra capacities and ecosystems are
built.
Hutcheson and Hijink see ASML following their customers'
footsteps to decentralize their productions from the Western
Pacific corridor to the United
States and Europe. Still,
the efficiency of its customers' fab operations may be a
concern.
"We're in a new world where the utilization of the tools is
lower," said Hutcheson, "The problem is, if you can't find the
workers to run the tools or to repair them, keep them running, your
wafer fab is useless."
Hijink observed that Asia will
remain an important center for chip production in the future
despite the onshoring efforts of various countries and the talent
shortage issue since South Korea
and Taiwan remain an important
part of ASML's expansion.
ASML's monopoly status unlikely to be challenged
Yet, Hijink cautioned, "ASML's biggest fear is that the current
restrictions on Chinese technology might even stimulate it in the
long term and create an even bigger problem." He pointed out that
the less China gets access to
these Western lithography tools, the more the Chinese companies are
inclined to build their own. "Even though they might not be able to
compete with ASML and Nikon now, you see more room for growth and
R&D money in the long term."
Yet, Hutcheson believes no company can challenge ASML
lithography monopoly without massive government subsidies. "Five
decades ago, I developed this maxim that the number of unsubsidized
competitors a market can sustain is equal to 1/5 the total market
size divided by the cost to develop a new generation of technology,
and then you subtract 1.5 times that cost," said Hutcheson. "To
attract another competitor in the market, the risk bar must be low
enough that there's enough available R&D to support the
development of at least 1.5 more tools than what exists in the
market at that time."
Over those five decades, that maximum is held across 100, or
there have been more sub-markets of semiconductor equipment, and
that explains the market consolidation of the market from more than
20 semiconductor equipment makers in the 1980s to just a handful
right now for lithography, explained Hutcheson.
As a semiconductor industry veteran, Hutcheson witnessed how
ASML survived over the past four decades of vicissitudes through
better management and technological development. Hijink added that
ASML survived because it out-invested in R&D during the low
cycles despite being on the brink of bankruptcy several times and
cleverly invited its customers TSMC, Intel, and Samsung to invest
in it and co-develop the EUV machine.
By getting the investments, ASML managed to get the money to
acquire Cymer, the light source company based in San Diego, and establish a strategic alliance
with Zeiss, the German lens maker. Those key components and e-beam
technology created ASML's secret sauce of success that competitors
cannot copy.
However, repeating such success is getting harder. "No single
company can afford to do it alone, as R&D becomes more and more
expensive," Hutcheson quoted John
Chen of Nvidia, who was the first R&D president at TSMC,
that," IC no longer means integrated circuit going forward, IC
means industry collaboration."
Hutcheson estimates that the cost of developing a new EUV tool
from scratch would require multiple trillions of dollars, which is
equal to the Gross Domestic Product for some countries, and that's
assuming that one gets around all the IP barriers in place. "To
some extent, it levels the geopolitical playing field. So maybe EUV
should receive the Nobel Peace Prize because no country can attack
any other country unless they have the EUV," quipped Hutcheson.
Can high-NA machines help technology leapfrog?
As Intel, Samsung, and TSMC are aiming to mass produce 2nm chips
in the next few years and advance towards 1.4-1.6 nm, the ASML's
high-NA EUVs are making the headlines of semiconductor industry
newspapers.
As always, ASML ships the US$300
million High-NA machines to customers according to the
timetable agreed with customers and does the laborious adjusting
and error corrections with customers. The media has been describing
high-NA EUVs as the key for technology catch-uppers to leapfrog the
incumbent. However, Hutcheson delved deeply into the intricacies
involved in the complex processes of semiconductor manufacturing
beyond lithography.
"There's a lot of technology issues in the 2nm and 1.4nm era.
And we will have to see if they can pull it off and turn it into an
advantage," Hutcheson explained that lithography is not the only
factor at stake, there are also issues with the gate-all-around
(GAA) structures, due to the leakage problems with that. "There's
also reliability problems, and the epitaxial layer is pretty poor.
So really, there are more material and systems engineering problems
than lithography problems."
Though Intel has seemingly bought up all available high-NA
machines for the year, TSMC is not in a hurry to apply it to its
1.4-1.6nm process. However, ASML said all of their customers who
have bought EUVs are going to upgrade to High-NA EUVs.
"I think that Intel has to do more, try to leapfrog TSMC, which
is a daring move, but that's just one part of Intel's challenge,"
said Hijink. "Their biggest challenge is not the technology, but
the fact that they want to do foundry business because they have to
create enough wafer footprint or enough scale to be economically
viable with huge competitors like Samsung and TSMC. So that adds to
the problem of adopting a new technology where they're not as
experienced."
Hutcheson cautioned that it is too early to judge the outcome of
technology competitions. Yet seeing from the history of the
semiconductors industry, decades of research, blood, sweat, and
tears, and fixing tons of errors, plus making the right decisions
at the right timing and building deep trust with customers made
ASML and TSMC what they are today.
ASML, a blend of European, Asian, and American cultures as the
result of acquisitions, can be a great teacher for TSMC, which is
just starting to expand its footprints to the US and Europe. With such a close bond between the
two, with AI being the main driving force for semiconductor's
future growth, one can be sure there will not be short of
fascinating stories in the future.
Editor's note: For more insights and analysis from
Hutcheson and Hijink on the industry, watch DIGITIMES Asia's new
GeoWatch video, 'Decoding Excellence: ASML's Evolution Towards
Leadership and Beyond.' Click the link here to access this
informative video: https://dgt.ms/geowatch0516
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SOURCE DIGITIMES ASIA