Intel invests in ASML EUV lithography

Intel Corporation has entered into a series of agreements with ASML Holding N.V. intended to accelerate the development of 450 mm wafer technology and (extreme ultra-violet) EUV lithography totaling €3.3 bn (approximately $4.1 bn). The aim is to shorten the schedule for deploying lithography equipment supporting the technologies by as much as two years, resulting in significant cost savings and other productivity improvements for semiconductor manufacturers. To achieve this, Intel is participating in a multi-party development program that includes a cash contribution by Intel to fund relevant ASML R&D efforts as well as equity investments in ASML. The first phase of this program consists of Intel committing to R&D funding of €553M (approximately $680M) to assist ASML in accelerating the development and delivery of 450-mm manufacturing tools, as well as an equity investment of €1.7 bn (approximately $2.1 bn) for approximately 10% of ASML's pre-transaction issued shares. Intel will record the R&D investment as a combination of R&D expense and pre-payments on future tool deliveries. The phase 2 of the program is conditional upon ASML shareholder approval. It includes an additional commitment by Intel of R&D funding of €276M (approximately $340M) in ASML focused on accelerating EUV, as well as an equity investment of €838M (approximately $1 bn) for an additional 5% of ASML post-transaction issued shares. Intel will then hold a total of 15% of ASML's issued shares. The total equity investment will be €2.5bn (approximately $3.1 bn). As part of these agreements, Intel is also committing to advanced purchase orders for 450 mm and EUV development and production tools from ASML. Subject customary regulatory approvals, the companies expect both phases of the transaction to close after the shareholder vote in the third quarter. www.intel.com