TSMC Invests in ASML, Envisions Further Advancement in Chip Making Technology

9 Aug

Following Intel’s footsteps, TSMC, Taiwan’s largest semiconductor manufacturing company, recently put a 5% equity stake in Dutch chip equipment maker ASML, investing an estimated total of 1.4 Billion USD.

The goal, as has been suggested in an earlier article, is to help boost ASML’s R&D department and to facilitate the development of technologies related to 450mm wafers and EUV lithography. At the moment, effectively controlling wafer manufacturing costs using existing plant equipments and technology remains an issue for both Intel and TSMC. For the latter company, in particular, rising expenses is amongst the concerns that have lingered in spite of the recent partnership with ARM and the switch from 40nm to 28nm processes.

In the event that the ASML investment does yield successful results, the two aforementioned technologies will not just help the company’s investors, but also benefit the industry as a whole. Chips, for one, will be manufactured in a much more efficient rate and at a significantly lower cost. The size of the circuits etched onto wafers is also expected to decrease, meaning that larger quantities of chips can be manufactured in a single run, saving both time and money. With more efficient technologies at hand, and with the EUV potentially becoming mainstream, some analysts, as reported by Reuter, predict that consumers will one day see tablet PCs that costs as little as $50 USD.

All these are certainly good news for TSMC, which recently reported an estimated 16% net profit growth for the second quarter of this year. In the long run, the Taiwanese company’s invested faith in ASML and EUV technology gives it the potential to keep up with Intel in terms of chip-making technology, and allows it to maintain its already dominant stature in the industry. The ability to produce chips at a faster, less expensive rate will also help protect the “economic viability of Moore’s Law,” according to TSMC executive vice president Chiang Shang-Yi.

Looking at these recent set of developments, along with the promising prospects of the technologies being invested in, one can argue that the path to future chip manufacturing advancements, along with potential wave of cheap PCs, smartphones, and tablets, is closer to us than it seems.

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