Technological wonder: The world only 1 company can make this device, China and the US are also 'hands-on'

Photolithography comes from the Latin word for optical printing technique. In the past, people printed with inscriptions on stone. The sheets will be compressed onto the petroglyph. Later printing plants used lead plates instead. Whereas photolithography creates prints using light.

Old fashioned printing with stone engraving.

That device is: The EUV ultraviolet lithography machine is a technological wonder. A device that spits out 50,000 tiny drops of molten tin every second. A high-powered laser will explode each drop twice. The first time gave the correct shape and the second time it was possible to vaporize it into plasma.

The plasma emits ultraviolet (EUV) radiation that is focused in a beam and bounced through a series of mirrors. The mirrors are so smooth that if enlarged to the size of Germany, they would not have a bulge more than a millimeter tall.

Finally, the EUV beam hits a silicon wafer which in itself is a wonder of materials science. The accuracy is equivalent to shooting an arrow from the Earth to hit an apple placed on the Moon.

This allows the EUV machine to shape semiconductor devices into the wafer with dimensions of just five nanometers. Approximately the length of your fingernail growing out in five seconds. This wafer with billions or trillions of semiconductor components is eventually made into a computer chip.

Illustrate the lens system inside an engraver.

One EUV machine is made of more than 100,000 parts, costs about 120 million USD and is shipped in 40 cargo containers.

Only one company can produce EUV

It seems puzzling that demand for a $120 million tool far outstrips supply but only one company can produce them. It's a Dutch company called ASML, which has a near monopoly on making photolithography machines for the production of chips. ASML has a market capitalization of over $150 billion, much higher than IBM and only slightly less than Tesla.

EUV lithography has been in development since the 1980s but has only entered mass production in the last few years. EUV technology allows chipmakers to further scale up chips because the shorter wavelengths of EUV light have the ability to print components at the nanometer scale.

Other companies that manufacture older generations of photolithography do not use EUV and can only make older generations of chips. These chips can only serve a few simple applications. These companies include companies like Nikon and Canon. They have decades of experience, expertise and market share generating profits in a competitive industry with extreme technology demands.

Ultraviolet lithography machine.

China, like many other countries, has almost no experience or industry in lithography. Any company trying to develop EUV lithography will have to start from scratch.

It will have to bridge the gap with billions of dollars, decades of ASML experience, accumulated experience and knowledge of tens of thousands of employees. ASML estimates their most cutting-edge technology is so complex that it takes at least 15 years for other companies to replicate.

ASML is a company specializing in the construction of semiconductor chip manufacturing machines near the border with Belgium. At the end of 2021, it was named Europe's largest public technology company by market capitalization and was driven by demand for the device and global chip shortages. ASML was spun off from Dutch electronics giant Philips in 1984.

Experts describe ASML as a bottleneck: The company claims it has between 80 and 85% share of the total market for photolithography systems. When it comes to the most advanced chip-making lithography, known as ultraviolet lithography (EUV), that market share has grown to 100%.

Chris Miller, an associate professor of international history at Tufts University, who is writing a book on the geopolitical history of computer chips shows that ASML's valuation has grown to more than $300 billion and its stock price it has more than doubled since the beginning of 2020.

There is growing speculation that it could become the first European company to be valued at over $1 trillion.

The transition to EUV is lengthy and expensive. The company had to convince its customers - including Intel, Samsung and TSMC (Taiwanese semiconductor manufacturing company) to buy shares of the company in order to have enough money to fund research.

By the time it was able to launch its first commercial EUV machines in 2017, the process had already cost $9 billion. But the rewards are great. It is currently the only company that can supply EUV machines for the production of the most advanced chips in phones and computers to the industry giants.

As of September 2021, the company has sold 125 EUV machines. It doesn't sound like much, but there aren't many companies capable of producing the most advanced chips using these machines.

Illustration inside an EUV lithography machine.

In April 2021, a report by the semiconductor industry association and the Boston Consulting Group warned that export rules had encouraged China to develop its own alternative chip machinery manufacturers. me. Shanghai Microelectronics is a company that is determined to replace ASML in China.

This is a concern for ASML, according to CEO Peter Wenninck, who in an interview with Politico said, "in 15 years' time they'll be able to do it all on their own." But Dassen claims that if the company is locked down in one part of the world, the rest of the world will still need the chip. "At ASML, we don't really care how the chips are being made, as long as they're being made," he said.

Due to trade tensions between Washington and Beijing, the company has been blocked from selling its most advanced machines to China. Although the country currently sells only 7.6% of the world's chips, the number is growing fast, according to the Semiconductor Industry Association, and chips are one of seven technologies Beijing aims to develop. . Efforts to keep China out of the global supply chain have raised concerns that the country will rush to develop its own version of ASML.

The ultraviolet lithography (EUV) market is expected to grow at a CAGR of 15% during the forecast period from 2021 to 2026. EUV ultraviolet lithography uses light with a wavelength of only 13, 5 nm, which is nearly 14 times less than the wavelength of other photolithography techniques using 193 nm light. EUV allows for more precise and efficient manufacturing of semiconductor devices on a small scale around 7nm or even 5nm in size.