'Golden Egg' EUV Equipment... Samsung-TSMC Competition

Intense Battle to Secure Core EUV Lithography Equipment for Next-Generation Semiconductor Manufacturing
Leading Semiconductor Companies Samsung Electronics, TSMC Strive to Acquire Equipment

On the 13th (local time), Lee Jae-yong, Vice Chairman of Samsung Electronics, and Kim Ki-nam, Head of Samsung Electronics' DS Division, visited the headquarters of ASML in the Netherlands to inspect EUV equipment. (Photo by Samsung Electronics)

[Asia Economy Reporter Changhwan Lee] Competition in the industry to secure extreme ultraviolet (EUV) lithography equipment, considered the core of next-generation semiconductor manufacturing, is becoming increasingly fierce. Although Samsung Electronics was the first to adopt the EUV process, currently Taiwan's TSMC holds more equipment. With limited supply and rapidly increasing demand, it is expected that the battle among semiconductor companies for EUV equipment will intensify further.

According to the semiconductor industry on the 19th, Taiwan's TSMC recently requested ASML to purchase 40 EUV machines by next year. TSMC is estimated to currently possess around 30 to 35 EUV machines. They plan to secure more EUV equipment next year than they currently hold.

EUV lithography uses extreme ultraviolet light sources to engrave fine circuits on semiconductor wafers. EUV has a wavelength of 13.5 nm (nanometers), which is more than ten times shorter than the conventional argon fluoride (ArF) light, enabling the implementation of finer circuits.

The ability to implement fine circuits that overcome the limitations of existing technology means semiconductors can be made smaller while improving power efficiency and performance. Enhancing semiconductor performance is also key to the advancement of Fourth Industrial Revolution technologies such as artificial intelligence (AI), 5G mobile communications, and autonomous driving.

Currently, EUV equipment is manufactured and sold exclusively by ASML in the Netherlands. Samsung Electronics is also reported to have expressed intent to purchase more than 10 EUV machines from ASML next year. Samsung Electronics was the first in the industry to introduce the EUV process in 2018, but currently holds around 15 EUV machines, fewer than TSMC.

◆ Concentrated Deployment of EUV Equipment in Samsung Electronics' Foundry Business

Samsung Electronics is focusing EUV equipment deployment on its expanding semiconductor foundry business and is preparing to introduce EUV in memory semiconductor manufacturing as well. For Samsung Electronics, which is competing technologically with Taiwan's TSMC, the world's number one foundry, securing high-performance EUV equipment is very important.

According to ASML's disclosed sales distribution by country for the third quarter of this year, Taiwan accounts for 47% and South Korea about 26%. ASML stated that Taiwan's sales increased significantly this year due to TSMC's concentrated purchase of EUV equipment.

The problem is that ASML's production capacity for EUV equipment next year is only about 40 to 50 units. Even this is uncertain. According to ASML, the production target for EUV this year was 35 units, but the actual production is known to be just over 20 units. There are concerns that next year’s production may also fall short of the target.

Besides Samsung Electronics and TSMC, many semiconductor companies such as Intel and SK Hynix are contacting ASML to purchase EUV equipment, making next year's competition for equipment acquisition inevitably more intense.

Last week, despite the resurgence of COVID-19 in Europe, Vice Chairman Lee Jae-yong of Samsung Electronics made a hurried visit to the Netherlands, which analysts interpret as an effort to secure EUV equipment.

On the 13th, Lee visited ASML headquarters located in Eindhoven, the Netherlands, and met with ASML CEO Peter Wennink. According to Samsung Electronics, Vice Chairman Lee and CEO Wennink discussed plans for supplying EUV equipment essential for producing cutting-edge semiconductors below 7 nanometers and ways to advance operational technologies.

Jihye Moon, a researcher at Shin Young Securities, explained, "Recently, semiconductor manufacturers have been competitively adopting EUV. Vice Chairman Lee’s visit to ASML headquarters in the Netherlands to secure EUV equipment in a timely manner shows how fierce the competition for equipment acquisition is."