A new round of EUV lithography machine competition begins

Latest update time：2022-01-20

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As the only supplier of EUV lithography machines worldwide, ASML has received increasing attention in the industry. Especially at the moment when advanced processes represented by TSMC are developing rapidly, ASML's importance is increasing day by day.

This week, ASML released its fourth quarter and full-year financial report for 2021, and the content is as impressive as ever. The company's revenue in the fourth quarter of 2021 was 5 billion euros, net profit was 1.8 billion euros, gross profit margin was 54.2%, and new orders amounted to 7.1 billion euros, of which 2.6 billion euros came from orders for 0.33 NA (numerical aperture) and 0.55 NA EUV systems; the full-year revenue in 2021 reached 18.6 billion euros, of which 6.3 billion euros came from 42 EUV systems, full-year net profit was 5.9 billion euros, and gross profit margin was 52.7%.

ASML also released its financial forecast for the first quarter of 2022, with estimated net revenue of approximately 3.3 billion to 3.5 billion euros, and estimated net revenue for the full year of 2022 to increase by approximately 20% compared to 2021.

EUV lithography becomes increasingly important

The wavelength of EUV lithography is 1/14 shorter than that of existing argon fluoride (ArF) exposure, which is conducive to the realization of the most advanced semiconductor processes. In recent years, the demand for advanced processes below 10nm has continued to grow, which has also increased the supply of EUV exposure equipment. Due to the complex processing of EUV equipment, ASML's annual output is also small. Recently, ASML is focusing on increasing its production capacity and supply.

Due to the increasing market demand for the most advanced process technology and the expansion of the customer base, the supply of EUV lithography machines will continue to grow. It is expected that the cumulative supply will more than double within two years.

According to statistics, in the four quarters from the third quarter of 2020 to the second quarter of 2021, ASML shipped a total of 40 EUV equipment to the market, an increase of 66% from 24 units in the previous four quarters (the third quarter of 2019 to the second quarter of 2020).

Specifically, 7nm~5nm logic chips (calculated at 45,000 wafers per month) require one EUV device to draw one EUV layer. DRAM below 16nm (calculated at 100,000 wafers per month) requires 1.5~2 EUV devices per layer. As the world's largest memory chip supplier, Samsung Electronics plans to increase the number of EUV application layers for 14nm DDR5 DRAM from 1 to 5, and SK Hynix also plans to increase the number of EUV application layers, which will drive the growth of demand for EUV equipment.

In addition, after Samsung Electronics first introduced EUV equipment for 7nm process in 2018, TSMC and SK Hynix also entered the EUV competition, and the market size has been expanding as Micron and Intel in the United States are also promoting the introduction of EUV equipment.

In response to such market demand, ASML CEO Peter Wennink said, "We plan to increase the production of EUV equipment to 55 units in 2022 and to 60 units in 2023." Two years later, more than 240 EUV equipment will be put on the market, exceeding the cumulative supply to date.

New version of EUV lithography machine is about to come out

Currently, each EUV tool has more than 100,000 components, requiring 40 shipping containers or four jumbo jets to transport, each costing about $140 million.

In order to meet the ever-evolving advanced processes, ASML is developing more advanced EUV lithography machines, which are mainly reflected in high NA.

Compared with current EUV equipment, higher NA means larger, more expensive and more complex. High NA equipment has higher resolution, which will shrink chip features by 1.7 times and increase chip density by 2.9 times. This can enable customers to reduce the number of process steps and significantly reduce defects, costs and chip production cycles.

The NA value of the new EUV equipment will be increased from 0.33 to 0.55 to achieve higher resolution patterning.

It is reported that the first high-NA equipment is still under development and is expected to provide early access in 2023 so that chip manufacturers can start experimenting and learn how to use it. Customers can use them for their own research and development in 2024, and starting in 2025, these high-NA EUV equipment are expected to be used in chip mass production.

Higher NA values allow for a wider EUV beam to be generated inside the machine before illuminating the wafer. The wider the beam, the greater the intensity when it hits the wafer, which improves the accuracy of the printed lines. This in turn enables smaller geometries and smaller pitches, which increases density.

ASML's new equipment will allow chipmakers to manufacture chips at 2nm and below.

However, high NA equipment means a high price. It is reported that each EUV equipment with an NA value of 0.55 will cost US$300 million, which is twice the price of existing EUV equipment. In addition, it also requires complex new lens technology.

Currently, manufacturers of advanced process chips (such as 5nm, 3nm) have to rely on double or triple patterning technology, which is time-consuming. Using high-NA EUV equipment, they can print these features in a single layer, thereby shortening turnaround time and increasing process flexibility.

The battle for advanced EUV begins

The customers of EUV lithography machines, especially the latest equipment, are TSMC, Samsung, Intel, SK Hynix and Micron. At present, the competition for ASML's production capacity among the top three is intensifying.

Last week, TSMC announced that its capital expenditure was as high as 40 billion to 44 billion US dollars, and for the first time disclosed the investment in 2nm advanced process, which also means that TSMC has made a major breakthrough in 2nm and has placed an order to purchase high-NA EUV to invest in 2nm R&D and trial production. TSMC's supply chain revealed that TSMC's internal 2nm trial production team will be officially established in the fourth quarter of this year.

It is reported that TSMC has obtained half of the EUV equipment currently supplied on the market. TSMC has about 50 EUV equipment. Given the exclusive supply system of EUV equipment, quickly ensuring the safety of equipment will become a challenge for semiconductor manufacturers such as Samsung and SK Hynix.

It is reported that Samsung is also urgently purchasing a high-NA EUV and wants ASML to directly pull it to the Samsung factory for testing. This is the first case in which ASML directly ships to the customer's factory for testing. This shows the fierceness of the competition between TSMC and Samsung in advanced processes.

Samsung said that the company will launch the 3nm process in the first half of 2022. After Lee Jae-yong, vice chairman of Samsung Electronics, was released on parole, he immediately announced an investment of 240 trillion won (about 205 billion US dollars) in the next three years to consolidate the company's dominant position in the technology industry in the post-epidemic era. He said that the company's next-generation process node 3nm process will use GAA (Gate-All-Around) technology and will not lose to its competitor TSMC.

Samsung emphasized that compared with the 5nm process, its first 3nm GAA process chip area will be reduced by 35%, performance will be improved by 30% or power consumption will be reduced by 50%. Samsung said that its 3nm process yield is approaching that of the 4nm process, and it is expected to launch the first generation of 3nm 3GAE technology in 2022, the next generation of 3nm 3GAP technology in 2023, and the 2nm 2GAP process in 2025. The demand for advanced EUV equipment will continue to increase.

Currently, Samsung is snapping up more EUV lithography machines to narrow the gap with TSMC. According to statistics, as of 2020, TSMC has about 40 EUV lithography machines, while Samsung has about 18, less than half of TSMC. It is expected that Samsung will purchase about 18 EUV lithography machines in 2022, narrowing the gap with TSMC, and the total number will reach about 60% of TSMC.

According to TSMC's annual report, 3nm based on EUV technology demonstrates excellent optical capabilities and expected chip yield to reduce exposure machine mask defects and process stack errors and reduce overall costs. The 2nm and more advanced processes will focus on improving the quality and cost of extreme ultraviolet technology.

TSMC actively cooperates closely with ASML, not only gaining an advantage in the number of EUV equipment, but also the development of its equipment technology is crucial, which is one of the key reasons why it can surpass Samsung and Intel.

Intel is also increasing its investment in advanced EUV equipment.

In 2021, Intel announced its return to the foundry market, and in July of the same year officially announced the launch of an advanced process technology blueprint, planning to launch five new-generation chip process technologies in the next four years, and announced that the original 10 nm Enhanced SuperFin will be renamed Intel 7, and the original 7nm will be renamed Intel 4, followed by Intel 3, Intel 20A, Intel 18A, etc., which means that it will reach the 2nm process field in 2025, with the goal of surpassing TSMC.

To achieve this goal, Intel has spared no effort in competing for ASML's most advanced EUV lithography machines.

This week, Intel announced that it had ordered ASML's TWINSCAN EXE:5200 lithography machine ahead of TSMC and Samsung. This is a high-NA EUV lithography machine that ASML is developing, and the price of a single unit will reach US$300 million. It is reported that its throughput exceeds 220 wafers per hour. According to ASML's plan, TWINSCAN EXE:5200 will be put into use as early as the end of 2024 for verification, and will be used for chip mass production in 2025.

Four years ago, Intel was also the first company to place an order for ASML's first-generation 0.55 NA lithography machine EXE:5000.

Compared with the 0.33NA lithography machine, the resolution of the 0.55NA has been upgraded from 13nm to 8nm, which can expose more complex integrated circuit patterns faster and better, breaking the 0.33NA single-shot patterning limit of 32nm to 30nm spacing. EXE:5000 is expected to be used first in the 3nm process, and EXE:5200 is likely to be used in Intel's future 20A or 18A process.

Conclusion

In 2022, with the mass production of 3nm process, the market demand for advanced EUV lithography machines will further increase. The future 2nm, 1nm, and more advanced processes will continue to iterate, providing impetus for the research and development of more advanced EUV equipment. At the same time, the difficulty is also increasing. The output may become increasingly tight, and the corresponding equipment competition will become more intense.

*Disclaimer: This article is originally written by the author. The content of the article is the author's personal opinion. Semiconductor Industry Observer reprints it only to convey a different point of view. It does not mean that Semiconductor Industry Observer agrees or supports this point of view. If you have any objections, please contact Semiconductor Industry Observer.

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