US clears way for semiconductor merger

Advanced semiconductor equipment makers ASM Lithography and Silicon Valley Group ease fears over military secrets

Dutch semiconductor manufacturing equipment maker ASM Lithography said on Thursday it had received approval from the US government to buy California-based Silicon Valley Group (SVG). The deal will create the largest semiconductor equipment provider.

The two companies are among the largest makers of the advanced equipment used for manufacturing computer chips, and consolidation is considered necessary if chips are to continue to double in power every 18 months -- the so-called "Moore's Law". Both companies make equipment crucial to the development of next-generation chips by the likes of Intel and AMD.

In a statement, ASML said that as part of an agreement reached with the government it will try to sell SVG's optical unit, which was the source of concerns voiced by US military officials. They feared the technology, used for making spy satellites, could fall into hands of anti-US countries.

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