Samsung invests $976 million in ASML for tech to build smaller chips

Samsung will buy a three percent equity stake in ASML for €503 million and invest in research

Following Intel and contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC), Samsung Electronics will invest ¬779 million (US$976 million) in the Dutch chip manufacturing equipment maker ASML to further development of next-generation lithography technology that should enable faster and more power-efficient chips.

Samsung is investing ¬276 million in ASML's research and development program and will also take a three percent equity stake in the company for ¬503 million, ASML said in a news release.

ASML is one of the world's largest providers of tools used for chip manufacturing and provides equipment to Samsung as well as Intel, TSMC and GlobalFoundries. 

Intel was the first company to join ASML's Customer Co-Investment Program for Innovation, investing ¬1.7 billion for a 10 percent stake in ASML in July. It also committed ¬838 million to advance the use of 450-millimeter wafer and extreme ultra-violet (EUV) lithography, which will help semiconductor companies scale down chip sizes and reduce production costs.

Developing EUV lithography will eventually enable smarter, more powerful, more energy-efficient and cheaper electronic devices for consumers, said ASML.

TSMC followed Intel at the beginning of August, taking a 5 percent equity stake in the company for ¬838 million and investing ¬276 million in ASML's EUV research. Samsung's commitment brings the funding of ASML's research and development program to its target of ¬1.38 billion. ASML does not plan to solicit the participation of additional customers, it said.

Samsung's investment in ASML "makes perfect sense," said Patrick Moorhead, president and principal analyst at Moor Insights & Strategy. "Samsung cannot afford to lag behind Intel and TSMC," he said.

"This is also very good for ASML," he added, as the investments will prompt other chip manufacturers' interest in the company's technology.

The way ASML decided to attract investors and sell a minority stake in the company is a novel approach in the industry, said Moorhead, who added that he couldn't remember the last time that "three-quarter" of the semiconductor industry bought stakes in the same company. "It shows that even companies like Intel cannot invent everything on their own," he said.

Intel is the biggest chip manufacturer in the world.

There are rumors floating around that Apple, which buys chips from Samsung, is looking for a new provider, said Moorhead. But he did not expect that Samsung's investments in ASML would speed up any decisions from the iPhone maker. "It is probably good for Apple in the long term if they stick with Samsung," he said, adding that sticking with Samsung would allow Apple to benefit from the new technology.

It would also be hard for Apple to change chip providers, said Moorhead. TSMC would be the most logical choice, but that might not be a good decision at the moment because the company has recently had problems meeting demand, he said.

Samsung did not immediately respond to a request for comment.

Loek covers all things tech for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to loek_essers@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Loek Essers

IDG News Service
Show Comments

Brand Post

Bitdefender 2019

Taking cybersecurity to the highest level and order now for a special discount on the world’s most awarded and trusted cybersecurity. Be aware without a care!

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?