neo_englishneo_english ・ Nov. 3, 2023
ASML Has Installed 1,400 Lithography and Metrology Machines in China
ASML’s products that cannot be shipped to China next year due to export controls will account for approximately 10%-15% of the company's 2023 business sales in China.

BEIJING, November 3 (TMTPost) – The China president of ASML, the world’s dominant advanced chip machine maker, told TMTPost that the company aimed for a capacity of 500 to 600 deep ultraviolet (DUV) machines annually by the end of 2025 or the beginning of 2026.

Shen Bo, ASML's Global Vice President and China President, revealed it prior to the 6th China International Import Expo (CIIE) to be held from November 5 to November 10 solely offline in Shanghai.

ASML will participate in CIIE for the fifth time, showcasing lithography machines, computational lithography, measurement and testing, and various technologies under the theme "Illuminating the Future Together." ASML will appear at the Shanghai National Exhibition and Convention Center's Integrated Circuit Zone within the Technology and Equipment Zone.

The expo is expected to welcome guests from 154 countries, regions, and international organizations. Over 3,400 exhibitors and 394,000 professional visitors have registered, with an exhibition area of approximately 367,000 square meters.

In an in-depth talk with TMTPost App, Shen also shared his industry insights and the company’s business developments.

Shen said that ASML's global net sales reached 21.2 billion euros last year. For the 2023 fiscal year, the company projected a 30% year-on-year increase in global sales to surpass 27 billion euros. According to ASML's latest quarterly report, the coming years will witness a stabilized global semiconductor industry. By 2025, existing wafer fab capacity will increaseand there will be new wafer fabs, leading to significant growth in the semiconductor equipment industry and an anticipated peak in demand. 

ASML's lithography equipment is in high demand, and the number of installed ASML machines in China is almost 1,400 units.

Lithography involves placing a wafer into a lithography machine, where light is projected through a mask onto the wafer. The optical system of the lithography machine reduces and focuses the circuit pattern designed on the mask onto the photoresist layer on the wafer. When light shines on the photoresist layer, it induces a chemical change, transferring the pattern from the mask onto the photoresist coating.

Lithography is thus crucial in the semiconductor manufacturing process. The lithography machine is often referred to as the "crown jewel" of the semiconductor industry.

 As a leading global innovator in the semiconductor industry since its founding in 1984, Netherlands-based ASML provides comprehensive lithography solutions encompassing hardware, software, and services, assisting chip manufacturers in large-scale image etching on silicon wafers. Meanwhile, ASML is currently the only manufacturer in the world using Extreme Ultraviolet (EUV) light for lithography machines.

The lithography process is intricate and challenging.

Shen said: "Each lithography machine can process over 300 wafers per hour. Exposing each wafer might take just over ten seconds, in which time the machine needs to complete all exposures. Depending on the product and design, around 100 different light beams are needed for each wafer and they require real-time adjustment." He noted that lithography is the most critical process among over a thousand steps. Mass-produced chip factories maintain a product yield of over 90%. Controlling precision in each step among these over a thousand processes is critical. Any deviation in any step could result in a significant cost for the chip factory. 

Shen joined ASML in January 2018 and is responsible for the overall business development and operations of ASML in China. Prior to joining the company, Shen worked at companies including General Electric (GE) and Fortum.

ASML's development in China is notable. Since the delivery of its first stepper lithography machine in 1988, ASML has been a major player in the Chinese market for over 30 years, supporting the development of the Chinese semiconductor industry by providing comprehensive lithography solutions, including lithography machines, computational lithography, as well as optical and electron beam measurements. It helps customers increase efficiency and reduce costs.

Currently, ASML has 16 offices, 12 warehousing and logistics centers, three development centers, one training center, and one maintenance and repairs center in China, with over 1,600 employees across the Chinese mainland.

Indeed, China has become one of ASML's most important markets.

According to ASML's latest financial report released on October 18 this year, the global net sales of ASML reached 20.321 billion euros for the first three quarters ending on September 30, with the revenue from China accounting for approximately 5.267 billion euros, around 25.91%. ASML forecasts that the net sales for the fourth quarter of 2023 will be between 6.7 to 7.1 billion euros, with a gross margin of 50% to 51%. 

“Overall, we are still somewhat capacity-constrained, considering the market demand. Despite the global industry currently being in the trough, ASML has approximately 35 billion euros in outstanding orders yet to be completed. Overall (for photolithography equipment), demand still outpaces supply,” said Shen. In the 2022 fiscal year, ASML's global net sales reached 21.2 billion euros, with a year-on-year 30% increase in the company's sales this year, expected to exceed 27 billion euros.

Regarding the Chinese market, Shen told the TMTPost App, “There are various rumors online about us not selling machines to China, which are attention-grabbing. However, in reality, we've been delivering machines to China since the first delivery in 1988, and by the end of 2023, ASML will have installed nearly 1,400 lithography and metrology machines in China. So, our growth in China over these years has actually been very considerable. We've been participating in the Chinese market.”

“We continuously invest in line with the growth of the semiconductor industry in China, withour team, spare parts, and product development. We've consistently put in efforts in China to reach this stage . Our starting point is to better support the production of our Chinese customers and their future development,” Shen said. He further commented that ASML will continue to support the development of its customers, especially in local customer service.

During the 6th CIIE, ASML will showcase the 'Iron Triangle' panoramic lithography solution: lithography machines, computational lithography, and optical and electron beam measurements equipped with advanced process control capability.

One of the technologies that might need some explanation is computational lithography.

Developed for over 30 years, computational lithography is primarily used in chip development and manufacturing to achieve more precise image and better chip production yield by optimizing imaging light sources and mask designs. Currently, ASML possesses leading global computational lithography technologies such as Optical Proximity Correction (OPC) and Source-Mask Optimization (SMO).

In March this year, Nvidia announced its collaboration with TSMC, ASML, and Synopsys.With cuLitho, the computational lithography software library of Nvidia, they will accelerate computational lithography by over 40 times, laying the foundation for 2nm and more advanced processes, which drew widespread attention.

So far, numerous chip manufacturers worldwide have adopted ASML's computational lithography technology, speeding up chip development cycles and production. This year, ASML's computational lithography team in China has developed and released a new version of computational lithography products.

Within the “Iron Triangle”, the ASML China team has been involved in the development of computational lithography and electron beam measurement services.

The research and development centers in Shenzhen and Wuhan contribute to computational lithography development as part of the global system. The Beijing research center plays a significant role in ASML's electron beam detection product line, participating in the development of multiple electron beam detection modules.

According to Shen, as a part of the company's global R&D system, ASML's technical teams in China work closely with teams in the rest of the world. Many projects involve collaborative efforts among technical personnel from different regions. “The semiconductor industry has been based on global collaboration since its inception, and ASML is no different," Shen stated.

Shen emphasized that in early 2018, the ASML China team consisted of around 500 people, and by the end of this year, it will grow to over 1,600 individuals. Suchsustainable team growth is going to be continue into 2024.

U.S. ban to impact 10%-15% of China business in 2024

Shen said that ASML, since its inception, has upheld the “3C culture”: Challenge, Collaborate and Care, since its inception

“We always stress the importance of collaboration within our team, with colleagues, and with clients. Our relationship with our clients as important partners is based on collaboration, and this concept is consistently applied within our company,” Shen said. ASML will continue to support the growth of global semiconductor fabs and chip enterprises.

Shen said: “Our work is quite strenuous. Employees often receive calls from customers at two or three in the morning and must promptly assist in resolving problems. Our efficiency in every minute is related to the client's interests, and restoring the machine even one minute earlier is beneficial for the client. Thus, we need to promptly respond to customer needs. We endeavor to care for our employees and, at a higher level, hold a deep respect and sense of responsibility for the industry. We believe that focusing on the industry's future is more important than merely pursuing commercial interests.”

“What concerns us is the long-term, healthy development of the industry. Our commercial interests are not our top priority. As evident from our financial situation, ASML's profit is only at the industry average. We are not striving to make more money but rather are more focused on solving technological challenges. If we don't take action, the entire industry may be affected. We feel a significant responsibility and are working hard to advance technology to support the development of the entire semiconductor industry, even if the process is challenging,” Shen stated.

Over the past five years, the global semiconductor industry has experienced chip shortages, equipment shortages, geopolitical tensions, economic downturns, and weakened consumer electronics demand. ASML remains at the center of the chip industry, continually facing challenges and opportunities.

The U.S. Department of Commerce unveiled rules for controls on semiconductors exports to China on October 17, tightening restrictions on the export of AI-related chips and semiconductor manufacturing equipment to the world’s second largest economy.

In response to the questions, Shen said: “We are still trying to understand the new export control policy. Overall,10% to 15% of our business in China will be affected. China's market demand will be still quite strong next year. In the short term, we think that there shouldn't be a significant impact on the overall business volume. From the company's perspective, until 2030, the overall trend of the industry has been one of fluctuating growth, so there won't be a significant change in the company's sales trend.” Specifically, products that cannot be shipped to China next year due to export controls will account for approximately 10%-15% of ASML's business sales in China.

'Only a portion of our immersion products will be subject to next year's export control. Despite that, we still have a significant part of our immersion business in China,” Shen added.

“From the invention of integrated circuits, the development of the chip industry has spanned over 60 years, steadily advancing in its own pattern. We can see the most influential aspects within China's industry from different terminal markets.” Currently, China is rapidly developing in terminal areas such as home appliances and consumer electronics, new energy vehicles, power storage, polycrystalline silicon, solar cells, and components.

“From our perspective, advanced process chips are relatively small in quantity, with the vast majority being mature process chips. I believe that, for China, with such significant demand in terminal markets, developing highly competitive mature process chips is the most efficient for the semiconductor industry. This can yield a multiplier effect, helping to improve the input-output ratio,” Shen commented. He said that to enhance the global competitiveness of mature process chips in China, long-term efforts and collaboration with various segments of the industry chain will be required in the future. “Enhancing global competitiveness is a direction that is worth pondering and striving for.”

'The Chinese market is like a miniature global market, which is highly diverse and with various customers and products,” Shen emphasized. According to him, ASML's service extends beyond machine maintenance and repair. Instead, it involves helping customers fully utilize equipment,and optimize process in line with the requirements. For all clients, a significant added value is enabling them to make the best use of their machines.

In recent years, ASML's annual capacity for supplying DUV equipment has reached around 200 units. Shen revealed that by 2023, their DUV equipment manufacturing capacity should reach over 300 units, but the supply gap remains significant. In recent years, the company has actively communicated with suppliers to ensure, through coordination and collaboration, that ASML can meet the target capacity of 600 units of equipment by the end of 2025.

“If everything aligns perfectly, by the end of 2025 or the beginning of 2026, we should have the capacity to manufacture between 500 and 600 DUV units annually,” said Shen. If some unforeseen difficulties arise in between, this might be delayed.

Shen emphasized that if the industry's demand grows rapidly by 2025, it will be a year for the company to work even harder.

(This article is first published on TMTPost App. Reporting by Lin Zhijia)

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