The paramount climacteric company in the Semiconductor Industry
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Any long drawn technical conversation will eventually see “Big Tech” making its name into conversation. The likes of Silicon Valley poster firms like Google, Facebook, Intel, AMD or Seattle’s Amazon, Microsoft..maybe even even the likes of Shenzhen’s DJI, Huawei or Tencent tag along in the talk. Little would anyone think of a mundane Dutch town named Veldhoven, home of ASML, the linchpin of the multi-trillion-dollar tech industry! Quite possibly, it is the most important tech company you might have never heard of!
Starting off as a joint venture with ASM International and Ducth consumer electronics giant Philips, ASML initially started out in a few wooden huts on Philips Eindhoven campus back in 1984. A company already worth more than Airbus, Siemens and Volkswagen. It faced a lot of initial struggles with most of its early semiconductor products failing and being bailed out by Philips and the Dutch government. It went public in 1995 with listings in NYSE and Amsterdam betting big on Extreme Ultraviolet Lithography (EUVL), a technology that has taken 30 years of science and mathematics to perfect.
For the uninitiated, photolithography (a.k.a., optical lithography, UltraViolet Lithography) is the process used to build microchips by using highly refined and concentrated beams of light of a single wavelength to ‘etch’ a geometric print (‘layout’) onto a thin very film of silicon. (‘wafer’). This process is very much comparable to old school photographic film development in that the layout is etched by concentrating the light to form a projected image using a photomask or exposing the wafer without any mask and etching it directly.
Because EUV light is absorbed by almost anything, including air, the process must take place in a vacuum. Shorter the wavelength generated, more transistors can be etched per area of the chip, working with reflective optic technologies. Very clever engineering goes into getting all of this to work. A tiny puddle of water is contained between the bottom lens element and the wafer going back and forth at 700 millimeters a second. The wafer stage in itself is a couple hundred kilograms in weight and is handled at accelerating speeds faster than that of a fighter jet when scaled.
It takes 40 freight containers spread over 20 trucks and 3 cargo planes to complete one order of ASML’s EUVL machine. It is about the size of a school bus, weighs 180,000 kilograms, has over 100,000 parts and 3,000 interlocking cables. Margin for any error assembling all this is to be 0.0%. The machine in itself contains a complex mechanism of generating LASER of 13.5 nm which is used to etch the silicon wafers to create patterns. 53 such machines exist as of today, turning sand into fortune. This in itself is a testament to the electronics industry’s tangled supply chains! Carl Zeiss, the well known optoelectronics company supplies their lenses. Cymer, largest supplier of deep ultraviolet light sources used by chipmakers to pattern advanced semiconductor chips or integrated circuits, was taken over by ASML in 2013. Once a wafer goes into the machine, everything inside operates in complete vacuum and the whole process until the etched wafer comes out of the machine, is controlled by robotic arms supplied by VDL. The circuitry is not as complex as a human mind, but certainly more complex than a human mind could fathom a few years ago, stamping out layouts which are a handful of atoms wide and just nanoseconds later, it does it all over again.
What does EVUL bring to the table?
The premise behind the famed Moore’s Law (which actually is an expectation and not a natural law) can be largely attributed to the transistor density and processing power in each chip produced over generations of fabricating technology though there are a dozen other scaling factors which go into evaluating the individual chip performance that drives the demand for the overall semiconductor industry. Power, Performance, Area, and Cost are critical requirements for scaling – Lithography is at the Heart.
Plainly put, producing a tiny transistor is insanely hard and a single EUVL machine costs more than double the price of a SpaceX Falcon 9 rocket launch. Back in 2014 when obituaries for CMOS production was still pouring in and many were forecasting the year when it would fall out of the ‘exponential performance’ curve, IBM announced the “7 nanometer and beyond” silicon technology to address the scaling techniques. Fast forward 6 years and IMCE is developing a 2nm technology node at the point of time of this writing. 7nm has achieved volume production status at TSMC (the world’s most valuable semiconductor company and the world’s largest pure-play semiconductor foundry). These would have never seen the light of day in volume production foundries without ASML’s industrial light and magic. Quite literally, the machine is dealing with the width of half a dozen atoms here!
Switching back to 2015, IBM announced its first 7nm chip fabricated with EUVL equipment provided by ASML. The planes have tilted since then and only the richest fabs are able to afford the EUVL device. Enter TSMC, Samsung, Intel and maybe, even SK Hynix. But this is a net revenue gap on a per-wafer basis and EUVL will form the epicenter of all chips down the line. This is how one Taiwanese firm (ahem, TSMC) dominates the chip-making process using unparalleled technology from the most crucial company in fabricating next generation chips.
Major trends in semiconductor-enabled computing require new devices. Here is a broad look at what ASML’s EUVL is powering in this modern world, sourced directly from ASML’s website!
The People’s Republic of China(PRC) for obvious reasons of technosphere divide between the Asian – North American companies and given the current trade situation between the US of A and the PRC,is pushing the R&D, design and manufacture of homegrown chips wanting to eradicate the dependency on the US of A companies’ software licenses which are much involved in the chip design process. (for context, Zhaoxin KaiXian x86 CPU was recently released at the time of publishing this). Most of these Chinese foundries are a couple of generations behind the state of the art industry standard. ASML received an order from a PRC firm for an EUVL machine. Given the American pressure, the Dutch Government is yet to grant ASML an export license. Shamelessly however, six employees, including some Chinese nationals, were involved in pilfering trade secrets from ASML’s American office in 2015 .
Right now, PRC needs ASML much more than ASML would like to do business with PRC. With the sort of facilities that the Chinese government wants to set up, “asml’s technology is the most difficult to replicate”, says Pierre Ferragu, a technology analyst at New Street Research. Malcolm Penn of Future Horizons, another consultancy, thinks that it would take a Chinese rival a decade or more to catch up and by then the cutting edge would have moved on again. Balancing on a few nanometers of technology, there could as well be a ground zero being shaped for a possible tech cold war. With neither Nikon or Canon stating they are pursuing this technology with the scale that ASML is foreseeing, it might so happen that ASML monopolizes the market. Most certainly, this technology will impact every single one of us in due future. ASML is already working on machines that can process more silicon wafers per hour with more yield, hopefully to be shipped out to buyers by 2023.
ASML operates in an industry value chain that has considerable means with strong incentives to compete and drive innovation. Nevertheless, EUVL is truly “transforming the world, one nanometer at a time”!