'Super Eul' ASML Appears in K-Semiconductor Strategy... Expectations for Domestic Investment

(Photo by ASML Twitter)

[Asia Economy Reporter Jeong Hyunjin] The world's largest semiconductor lithography equipment company, the Netherlands-based ASML, recently appeared in the government's announced 'K-Semiconductor Strategy.' ASML has decided to invest approximately 240 billion KRW and hire 300 employees to establish an advanced Extreme Ultraviolet (EUV) cluster in Hwaseong, Gyeonggi Province, with the government and local authorities actively cooperating to support permits and approvals for this purpose. What significance does ASML's investment hold in this policy announced to support the domestic semiconductor industry?

According to industry sources on the 16th, ASML is the sole supplier of EUV lithography equipment necessary for ultra-fine processes. The annual production capacity of EUV equipment is limited to 30-40 units, leading semiconductor companies to fiercely compete to secure them. ASML's three major customers are Samsung Electronics, TSMC, and Intel, with Samsung Electronics and TSMC, which are accelerating advanced process development, particularly fighting hard to secure equipment. Last year, Samsung Electronics Vice Chairman Lee Jae-yong personally visited the Netherlands to meet with ASML CEO Peter Wennink.

ASML currently employs 1,500 people in South Korea. It established an office in Korea in 1996 and opened a training center in Hwaseong last year. Currently, it has offices in four locations: Hwaseong, Icheon, Cheongju, and Pyeongtaek. The industry expects that ASML's expanded investment in Korea will facilitate maintenance and upgrades of EUV equipment operated domestically. It is also anticipated that relationships with domestic companies such as Samsung Electronics and SK Hynix will become closer.

Last October, Lee Jae-yong, Vice Chairman of Samsung Electronics (second from the left), visited the ASML headquarters located in Eindhoven, Netherlands, and examined the EUV equipment with Kim Ki-nam, Vice Chairman and Head of Samsung Electronics' DS Division (third from the left).
[Image source=Yonhap News]

In particular, Kim Yangpaeng, a senior researcher at the Korea Institute for Industrial Economics & Trade, said, "As ASML builds closer relationships with our companies in Korea, it will be possible to consider the equipment technologies our companies need more deeply," adding, "In the long term, factory establishment could also be expected." Given the domestic semiconductor industry's vulnerability in materials, parts, and equipment, ASML?often called a 'super subcontractor'?expanding its investment in Korea is interpreted as not only complementing the supply chain but also aiding the development of technologies desired by domestic semiconductor companies.

ASML is generally expanding its investments in Asia. Last year, alongside Hwaseong, it opened a training center in Tainan, Taiwan. Regarding this, ASML explained, "Asia is at the forefront of EUV system adoption," and added, "Increasing the understanding speed of service engineers about this technology is crucial not only for providing services in the rapidly changing semiconductor region of Asia but also for the overall industrialization of EUV."

It takes more than a year for EUV engineers to acquire the skills needed to work independently. With travel restrictions due to COVID-19, having training centers in Asia and actively communicating with local semiconductor companies is advantageous not only for educating these engineers but also for obtaining relevant information from the places where EUV equipment is most needed, ASML noted.

ASML is reported to be hiring about 600 engineers in Taiwan this year. Currently, ASML employs approximately 2,800 people in Taiwan, and local foreign media reported that with expanded hiring this year, the number will exceed 3,000. Cooperation with TSMC in Taiwan is also being strengthened.

Meanwhile, besides ASML, Lam Research, the world's third-largest semiconductor equipment company based in the United States, is also expanding its investment in the Korean market. Lam Research has decided to invest in a research and development (R&D) center in Yongin, Gyeonggi Province, and is preparing to move into the Yongin Jigok General Industrial Complex in the first half of 2023. Lam Research will establish an atomic-level etching technology R&D center there and build manufacturing facilities to double production capacity.