Samsung gets into ASML bed with Intel and TSMC

Still smarting from having to pay Apple over $1 Billion because it stole design ideas, Samsung has agreed to outlay around half that amount again to pick up 3% of Dutch photolithography firm ASML. It's nice to get something tangible for your money. KitGuru does a quick check on who else bought into the Dutchmen's concern.

Every kid knows that the crayons you start writing with, will only take you so far. After a while, you start to get the hang of writing and drawing and felt tip pens seem like a great idea. At the same time, you move into pencils and things get even more detailed. Sometimes your pencil is blunt, which is great for shading large areas, but if you want detail – then you need to pull out the sharpener. The world's biggest chip companies face almost exactly the same issues when it comes to creating processors.

You always want a sharper pencil and bigger sheet of paper.

ASML's area of expertise is high-tech pencils and paper. More specifically, it's the world's largest supplier of photolithography equipment for the semiconductor industry – with revenues in the $6 Billion range generated by nearly 10,000 staff using assets and machinery valued at nearly $10 Billion. In short, it's a real company with real products, revenue and value. Nice.

To put the importance of ASML in perspective, almost 2/3 of the world's lithography is done on its machines.

So what's changing down at ASML?  Well, it wants to invest a huge amount of money into increasing production for the machines that scribe 450mm wafers, as well as improving and developing extreme ultraviolet (EUV) technology. The closer you move to that end of the wavelength spectrum, the smaller the wavelength and the more narrow you can ‘cut', thereby ‘shrinking' the final product. Going back to our original analogy, Infra Red is crayons and EUV is a needle sharp pencil.

So, ASML needs big investment and customers like Intel, TSMC and Samsung need those machines. It's a marriage made in heaven. So how much of a dowry will the prospective brides be asked to part with?

• Intel $3.1 Billion for 15%
• TSMC $1.04 Billion for 5%
• Samsung $630 Million for 3%

According to an ASML spokeman, no other companies will be invited to invest.

KitGuru says: We're left wondering if Samsung would have bought the same share as TSMC if Apple had not nabbed the extra $1 Billion first. Probably not, but it's interesting to speculate.

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