By Stu Woo and Maarten van Tartwijk
VELDHOVEN, the Netherlands -- ASML Holding NV, a little-known
company based next to corn fields here, may hold the answer to a
question hanging over the global semiconductor industry: how to
make chips do more while keeping them the same, compact size.
The industry's past prowess has been codified into what's been
called Moore's Law, named after an observation Intel Corp.
co-founder Gordon Moore first made in 1965. He postulated that chip
makers could double the number of transistors in -- and boost the
performance of -- a typical microprocessor every two years.
Last year, though, Intel Chief Executive Brian Krzanich warned
that after decades of incredible leaps, that timeline was slipping
closer to every 2.5 years. Some in the industry feared the eventual
death of Moore's Law, a rule of thumb underpinning modern
computing.
ASML believes its breakthrough technology can postpone the
demise. "I'm not concerned yet about the next 10-plus years," said
Hans Meiling, who oversees ASML's effort trying to solve this
problem.
Many in the industry, including big backers like Intel itself
and Samsung Electronics Co., are hoping ASML can quicken the pace
of innovation once again. With around 15,000 employees and EUR6.3
billion ($7.05 billion) in revenue last year, the company
manufactures equipment that makes chips -- specializing in a field
called photolithography. Specifically, ASML uses light rays to
essentially lay out billions of transistors -- the brain cells of a
chip -- in a microprocessor.
Optical experts such as Canon Inc. and Nikon Corp. are also
active in this market, but ASML dominates it. For the past decade,
ASML has been focused on making more sophisticated light rays,
which it uses to create smaller transistors that can be packed more
tightly onto silicon wafers.
"It is hugely important for the [semiconductor industry's]
ability to continue Moore's Law," said Greg McIntyre of Imec, a
Belgium-based chip-research institute. ASML's latest chip-making
machines could be a big commercial leap forward in this pursuit, he
said.
To get an idea of the scale of the challenge: A strand of human
hair is about 75,000 nanometers in width. The current
industry-standard chip-making machine produces a light ray that
draws 38-nanometer-wide lines. ASML's technology, called extreme
ultraviolet lithography, or EUV, draws lines that have a width of
16 nanometers.
Here's how the process works: Manufacturers first melt silicon,
an abundant material found in beach sand and prized for its
semi-conductive properties, allowing for a controlled flow of
electricity. The melted silicon is cooled into a sausage-like
structure, which is then sliced into thin wafers that look like an
LP record and given a photosensitive coating. Then chip makers,
using thin light rays, draw a grid of lines.
Imagine those grids of lines as streets in a city. Chemicals
etch away the "streets," and the remaining "buildings" essentially
become transistors. Compared with conventional machines, ASML's EUV
tools make those streets narrower, and thus the buildings smaller.
That means more transistors, and more computing power.
By packing more transistors on chips, manufacturers could
increase their computing speed or memory-storage capacity, among
other things. ASML's new technology may keep Moore's Law in
play.
Four years ago, ASML's EUV technology was considered so
promising that Intel, Samsung and Taiwanese Semiconductor
Manufacturing Co. pledged to invest a combined $6 billion in ASML.
Samsung in September sold half of its ASML shares to raise cash,
but said its EUV partnership with the company wouldn't change.
ASML started in the early 1980s as a joint venture co-founded by
electronics giant Royal Philips NV. In the 1990s, it spun off from
Philips and made rudimentary versions of the chip-making equipment
it sells today. Now, all major chip makers use its machines.
ASML, Canon and Nikon all produce conventional machines, which
sell for between about $55 million and $60 million apiece. They can
make the smaller grids as the EUV machines do, but only after a
number of time-consuming workarounds.
The newest machines from ASML, which cost about EUR95 million
each, aren't yet perfect. The company has sold 12 and is currently
working with those buyers to optimize the machines at the chip
makers' sites. ASML said it expects companies to start using the
machines for high-volume production by 2018 or 2019.
"It's a combination of physics, chemistry and mechanics that is
pretty complex," said Mr. Meiling, who has a doctorate in physics
and oversees ASML's EUV program. "It has taken us a long time to
get where we are."
No rival has the research-and-development budget to attempt to
compete with ASML's EUV business, but the Dutch company still faces
a challenge in getting new orders, said Bernstein Research analyst
Pierre Ferragu. Chip makers "will all hesitate until the last
minute about the best approach to introduce EUV in their production
lines," said Mr. Ferragu, especially given the "uncertainties" with
the "extremely complex technology."
Intel isn't yet convinced. The company has been testing ASML's
EUV systems and published positive results, but is also prepared to
continue using the time-consuming trick.
One of ASML's many challenges is keeping the machine running 24
hours a day -- the sort of efficiency chip-making customers prize.
The machines use specks of liquid tin, which when properly
stimulated emits the EUV light. Sometimes, though, that tin
contaminates the mirrors used to project the light rays, requiring
maintenance.
ASML acknowledges it still has some way to go. It says its EUV
machines can make about 1,500 wafers a day and can be relied on to
be operational more than 80% of the time. Its conventional machines
produce more than 5,000 wafers a day -- but with thicker lines, at
least before the tedious workarounds -- and are available 95% of
the time. Customers demand that the EUV machines run at least 90%
of the time.
"We're not there yet," said ASML's Mr. Meiling.
Write to Stu Woo at Stu.Woo@wsj.com and Maarten van Tartwijk at
maarten.vantartwijk@wsj.com
(END) Dow Jones Newswires
October 02, 2016 15:30 ET (19:30 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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