World's largest contract chipmaker Taiwan Semiconductor Manufacturing Co. has agreed to invest 1.11 billion euros (US$1.4 billion) in chip equipment maker ASML in return for a 5 percent stake, and to bankroll research and development of future technology.
In a press release Sunday, TSMC announced it joined ASML's customer co-investment program, aimed at "accelerating the development and industrialization of key next-generation semiconductor manufacturing technologies".
The company added that this included extreme ultraviolet (EUV) lithography technology and 450-millimeter lithography tools. ASML's machines perform a key step in the process of making computer chips called lithography, and fast-tracking the development of such technology could ultimately help slash production costs.
"One of the biggest challenges facing [integrated circuit] scaling today is how to effectively control the escalating wafer manufacturing cost," said Shang-yi Chiang, TSMC’s executive vice president and co-chief operating officer, in the statement.
Chiang added that TSMC was confident its investments would help the industry control wafer cost, and therefore "protect the economic viability of Moore’s Law". Moore's Law refers to the observation that the number of transistors on integrated circults doubles about every two years, based on the history of computing hardware.
In ASML's own press statement, the company's CEO Eric Meurice welcomed TSMC to its co-investment program and emphasized that the technologies being invested in would "benefit the entire industry and are not restricted to our co-investment partners".
ASML had announced its first deal under the program in July with Intel, which pledged 3.3 billion euros (US$4.1 billion) to accelerate the development of 450-millimeter wafer technology and EUV lithography.
News of TMSC's investment comes about two weeks after it announced its highest profit in one and a half years at NT$41.8 billion (US$1.4 billion)--up 16.3 percent from the previous year, lifted by demand for chips used in smartphones.