Intel orders ASML for advanced chipmaking machine

Intel orders ASML for advanced chipmaking machine

The Intel Corporation logo is seen on a display in a store in Manhattan, New York City, November 24, 2021. AMSTERDAM, Jan 19, Reuters -- Intel has placed a first order with ASML ASML.AS for a new, advanced chipmaking tool that will cost over $340 million, as semiconductor manufacturers look to get ahead in a booming industry.

Alongside better-than-expected fourth-quarter earnings, ASML said on Wednesday it had received orders for five of its next generation lithography machines, plus an order for an even newer model that is still being designed. In a separate joint statement, the companies said Intel was the buyer.

The most advanced machines in current commercial production, known as EUV lithography systems, are as big as a bus and cost around $150 million each, because of the Extreme Ultraviolet light waves they use to map out the circuitry of computer chips.

A cutting-edge chip plant needs 9 -- 18 of these machines, which are one of the biggest capital costs for chipmakers.

ASML is the only maker of such machines, and its EUV customers include the world's biggest chipmakers, TSMC of Taiwan and Samsung 005930. KS of South Korea and Intel, amongst others.

ASML has received orders for five prototypes of the next iteration of the system, known as High NA EUV machines, which will have a different optical system with a higher numerical aperture, will be even larger and cost around $300 million each.

CFO Roger Dassen said at a post-earnings press conference that the first prototypes will be shipped to customers in 2023.

Intel, which is trying to win back its position as the maker of the smallest and fastest chips from the current leader TSMC, previously identified itself as the first buyer of a prototype High NA machine, ASML's EXE: 5000.

Intel is expected to buy the first EXE: 5200, the first model intended for commercial production, by the end of 2024, which it hopes to receive by the end of 2024.

Dassen said that the cost of EXE: 5200 systems would be well over $340 million.