A new round of EUV lithography machine scramble begins

Source: Content by Semiconductor Industry Watch (ID: icbank) original, author: Chang Qiu, thank you.

Globally, as the sole supplier of EUV lithography machines, ASML has received more and more attention in the industry, especially at the moment when the advanced process represented by TSMC is developing, the importance of ASML is increasing day by day.

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

ASML also announced its financial forecast for the first quarter of 2022, with an estimated net revenue of approximately €3.3 billion to €3.5 billion, with net revenue for the full year 2022 expected to increase by about 20% compared to 2021.

The importance of EUV lithography machines is becoming more and more prominent

The wavelength of the EUV lithography machine is 1/14 shorter than the existing argon fluoride (ArF) exposure, which facilitates the realization of the semiconductor's first-in-class program. In recent years, the growing demand for advanced processes below 10nm has also increased the supply of EUV exposure equipment. Due to the complexity of EUV equipment processing, the annual output of ASML is also very small. Recently, ASML has focused on increasing its capacity and supply.

Due to the increasing demand for the first-in-class process and the expansion of the customer base, the supply of EUV lithography machines will continue to grow. The cumulative supply is expected to 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 devices to the market, an increase of 66% over the 24 units in the previous four quarters (the third quarter of 2019 to the second quarter of 2020).

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

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

Regarding such market demand, Peter Wennink, CEO of ASML, 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 devices will be on the market, exceeding the cumulative supply to date.

A new version of the EUV lithography machine is about to come out

Currently, each EUV device has more than 100,000 components, which require 40 cargo containers or four large jets to transport, each worth about $140 million.

In order to meet the evolving advanced process, ASML is developing more advanced EUV lithography machines, mainly reflected in high NA.

Higher NA means bigger, more expensive and more complex than current EUV devices. High NA devices have higher resolution, which will reduce chip characteristics by a factor of 1.7 and chip density by 2.9 times. This allows customers to reduce the number of process steps and can also significantly reduce defects, costs, and chip production cycles.

The new EUV device will have a NA value increased from 0.33 to 0.55 for higher resolution patterning.

The first high-NA device is still in development and is expected to start offering early access in 2023 so chipmakers can start experimenting and learn how to use it. Customers can use them for their own R&D in 2024, and from 2025 onwards, these high-NA EUV devices are expected to be used for chip production.

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

ASML's new device will allow chipmakers to manufacture chips with a process of 2nm and below.

However, high NA devices mean high prices, and it is reported that each EUV device with a NA value of 0.55 will cost $300 million, twice that of existing EUV equipment, and it will also require sophisticated new lens technology.

Currently, manufacturers of advanced process (e.g., 5nm, 3nm) chips have to rely on double or triple pattern technology, which is time-consuming, while using high-NA EUV equipment, they are able to print these features in a single layer, thereby reducing turnaround time and increasing process flexibility.

The battle for advanced UV begins

EUV lithography machines, especially the latest equipment customers are TSMC, Samsung, Intel, SK Hynix and Micron, at present, the first three companies for ASML production capacity competition is intensifying.

Last week, TSMC announced that its capital expenditure was as high as $40 billion to $44 billion, and for the first time, it was disclosed that it was used for 2nm advanced process investment, which also meant that TSMC had a major breakthrough in 2nm and ordered the purchase of high-NA EUV to invest in 2nm research and development and trial production. TSMC Supply Chain revealed that TSMC's internal planning 2nm trial production force will be officially launched in the fourth quarter of this year.

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

There is news that Samsung is also urgently snapping up a high-NA EUV, and asking ASML to be directly pulled to the Samsung factory for testing, setting a precedent for ASML direct shipment to the customer's factory for retesting, which shows the fierceness of the advanced process competition between TSMC and Samsung.

Samsung said that the company will launch a 3nm process in the first half of 2022, and Samsung Electronics Vice President Lee Announced that he will invest 240 trillion won (about $205 billion) in the next three years after his release from prison on parole, consolidating the company's dominant position in the post-epidemic technology industry, saying that the company's next-generation process node 3nm process will not lose to rival TSMC when it adopts GAA (Gate-All-Around) technology.

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

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

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

TSMC actively cooperates closely with ASML, not only to achieve the advantage of the number of EUV devices, but also to develop its device technology is crucial, which is one of the key reasons why it can surpass Samsung and Intel.

Intel is also ramping up investment in advanced EUV equipment.

In 2021, Intel announced its return to the wafer foundry market, and officially announced the launch of the advanced process technology blueprint in July of the same year, planning to launch 5 new generation chip process technologies in the next 4 years, and announced that the original 10 nm Enhanced SuperFin was named Intel 7, the original 7nm was named Intel 4, and then Intel 3, Intel 20A, Intel 18A, etc. That is to say, in 2025, it will reach the field of 2nm process, and the goal is to catch up with TSMC.

To achieve this, Intel has spared no effort in competing for asML's most advanced EUV lithography machine.

This week, Intel announced that it had ordered ASML's TWINSCAN EXE:5200 lithography machine ahead of TSMC and Samsung. This is the high-NA EUV lithography machine that ASML is developing, and the price of a single unit will reach $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 soon as the end of 2024 for verification and for chip mass production in 2025.

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

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

epilogue

In 2022, with the mass production of the 3nm process, the market demand for advanced EUV lithography machines will be further enhanced, and the future 2nm, 1nm, and more advanced processes will continue to iterate, providing impetus for the research and development of more advanced EUV equipment, while the difficulty is also increasing, the output is afraid that it will become more and more intense, and the corresponding equipment competition will be more intense.