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Japanese companies fight for share of EUV chip technology sector
- clcuc 6y agoThat article is from 2020. Link to article in Japanese: [0]: https://www.nikkei.com/article/DGXMZO61125800T00C20A7TJ2000 https://www.nikkei.com/article/DGXMZO61125800T00C20A7TJ2000
- hinkley 6y agoAs much as the US sits around hand wringing about manufacturing being outsourced, does anyone have a good perspective on how this has played out in Japan? From our perspective, they're one 'generation' of outsourcing from us, two if you count Taiwan, and we've had at least South Korea and Mainland China since then. I got a little taste of their recession in the 1990's, but not much information since then. Are they as worried now as we were when Toyota ate everybody's lunch?
- Scheherazade 6y agoAlthough your question has merit for this case specifically as ASML is a Dutch company there is very little hand wringing about outsourcing. For the forseeable future the Dutch are going to toe Washington’s line. In fact in some ways it’s desirable to throw middle powers a bone every now and then as it gives Washington an additional geopolitical bargaining chip that can be more easily called.
- trynumber9 6y agoASML's EUV light sources are made in San Diego (ex Cymer) and many of their EUV twin scan machines are made in Wilton, CT. So oddly it seems they outsource to the US.
- detaro 6y agoafaik they bought Cymer specifically for the light sources, so it makes some sense.
- calaphos 6y agoCymer seems to only do DUV light sources, the EUV stuff is developed by Trumpf and Zeis in Germany.
- trynumber9 6y ago"ASML San Diego is responsible for the R&D and manufacturing of EUV light sources for lithography systems. Cymer focuses on DUV light sources." From ASML's website. ASML San Diego was part of their joint research before acquisition.
- bazooka_penguin 6y agoApplied Materials is a key player in semicom fabrication and it's American. There are also a handful of Japanese companies that hold virtual monopolies over key resources like fluorinated polyimide film, photoresists, and hydrogen fluoride and it became a big international issue when Japan revoked korea's free trade access to those materials. It seems like there's been a deliberate push, like propaganda, to play up ASML's importance over everyone else in the past year or so. I've been seeing ASML brought up everywhere and often seemingly for no reason.
- totalZero 6y agoAgreed that ASML isn't the only important company, but they are clearly very important. EUV is the core technology for the leading-edge nodes of Intel, Samsung, and TSMC. ASML is the only company in the world that makes those machines. They sold 6 of them this past quarter and delivered 9, despite limitations on their ability to do business with Chinese foundries. They're approximately four-fifths of the lithography market in general, and basically five-fifths of the EUV market. So while their machines are not the only component of a foundry's toolkit, it's quite clear that ASML is a critically important business.
- joelbluminator 6y agoI don't understand enough about chip making but ASML seems to be an important part of the supply chain; it has a 80% market share over the litho machines it produces.
- twic 6y agoNot sure it's propaganda - i think that on HN at least, it's just the one company like this that everyone has heard of. Could you name these companies in Japan, so we know a few more?
- bazooka_penguin 6y agoShin-etsu chemical. You might have heard of them before, they're one of the largest chemical manufacturers in the world. Showa Denko KK, Kanto Denko Kogyo. There are more of course just some examples.
- totalZero 6y agoI have been thinking about this a lot recently, and I think Canon and Nikon, both of whom produce Deep UV machinery (ie, equipment that uses a laser wavelength about an order of magnitude wider than EUV's 13.5nm), have an opportunity due to demand for legacy foundry processes. They are a tiny part of the photolithography equipment sub-sector, but the present moment is marked by overwhelming demand for semiconductors for automotive applications, and those chips aren't running on leading-edge nodes like TSMC 5nm or Intel 10nm (there's no reason for them to). If I were the CEO of a global automaker, I'd be buying legacy (22nm and older) foundry equipment in order to make chips in-house because the eventual product mix transition (ICE vs EV) means I'm going to need more custom semiconductors than ever before. The semiconductor industry is so complex that it depends upon companies in many nations, including Japan. No one nation owns the semiconductor lifecycle, but each part of the process is dominated (but not entirely owned) by one nation. Japan dominates wafer production. One company in the Netherlands dominates photolithography equipment. The United States dominates processor design. China dominates device assembly. Korea dominates NAND. Taiwan dominates foundry. Companies in all of these places are laying out a bunch of CapEx so clearly there's an anticipation of a rising tide that lifts all boats, rather than a rejiggering of market share that hurts one economy (forgetting China for a second) while helping another.
- stefan_ 6y agoThose chips are also low margin and the shortage is only because of a failure of forecasting. It's like building mask factories, now there is a glut.
- totalZero 6y agoVery smart comment, and that's the question: is the present spike in semiconductor demand a temporary situation, or a new reality? If this demand environment is a new reality, then prices will go up and it will take several years of CapEx to get them back down. If it's just a spike, then the pure-play foundries may still invest in those legacy production lines, but there will be less of a long-term presence. I am personally of the opinion that this is a permanent market shift; WFH is here to stay, so there has been real and lasting demand creation for cars. Plus, the transition to EV is undeniable, and will perhaps see an inflection point in this self-reflective moment where automakers have to shut down production lines and reassess their plans anyway.
- homero 6y agoI recently watched this incredible documentary about Japan and semiconductors https://youtu.be/ihkRwArnc1k https://youtu.be/ihkRwArnc1k
- MangoCoffee 6y agoUS = equipment/eda software (Applied Materials, LAM...) Japan = materials(chemical) as we can see from Japan-SK trade dispute when Japan cut off chemical to SK. Taiwan = manufacturing overall, semiconductor industry is too complex and rely on too many players.
- doomlaser 6y ago> ASML Holding of the Netherlands dominates the market for the equipment. Major semiconductor makers began full use of it in 2019 and ASML is the sole company capable of mass-producing it. They supply the whole industry, from Samsung to TSMC to Intel.
- Roritharr 6y agoThey are also the only thing giving the EUs bid for Semiconductor independence any credibility.
- Tade0 6y agoApparently there's a use for tax havens in the EU after all.
- MrBuddyCasino 6y agoWhich is why it is so odd that the differences between them are as large as they are. If they all buy the same ingredients, why is TSMC's secret sauce so much better?
- tormeh 6y agoI hear ASML works like an extremely high-tech consultancy. The tech developed for contract a is not available for contract b, so you can't just call ASML and ask for the same machine they sold to TSMC. That's what I've heard, anyway.
- MrBuddyCasino 6y agoWeird, one would think they'd try to productize and scale as much as possible, but if there are just single-digit amount of buyers, maybe not?
- nomercy400 6y agoASML only provides part of the chain to produce a chip, mostly focussed on the lithography step. There are a dozen steps in the production chain around it.
- systemvoltage 6y agoI see a lot of HN chatter about semiconductors, however, nothing along the lines of any startups in semicon from Silicon Valley? Is there anything going on in SV in terms of new ways to do litho, or new fab technology or any new ventures out there trying to improve this critical industry? Would be curious to run this by PG and a bunch of Y-combinator folks - While your voice might drown in Adtech noise, it would be crucial for the west to maintain semiconductor manufacturing expertise. What does AH think about it?
- liaukovv 6y agoPrinting infinite money with a glorified crud app is far better business
- systemvoltage 6y agoIt runs on semiconductors.
- username90 6y agoUntil they figure out how to make semiconductors only available as a service most of the market value will be captured by software.
- yowlingcat 6y agoSir, we call that cloud computing.
- LatteLazy 6y agoI think you need crazy money and a lot of expertise to get into this game. Intel and others would love to master this and absorb this part of the market. But so far no one has with any expertise is willing to get into the ring so...
- avs733 6y agoLook at the number of successful hardware vs software startups in VC funding and then look at the ratio of hardware to software billion dollar startups the last ten years. Anything with effectively zero incremental costs will seem a better investment in the short term
- newbie789 6y agoI apologize for my ignorance here. I know pretty much nothing about chip fabrication. My question is: How long is it expected that ASML will be the sole provider _on the planet_ for these lithography machines? Is their secret sauce literally impossible to replicate? It’s fascinating how one of the most important pieces of tech regarding the future is held by one entity.
- baybal2 6y agoCanon, and Nikon definitely have money to catch up. What I believe made them to start to fall behind around the time of first immersion tools is unwillingness to work with academia, and general closednes. Too much NIH in other words. Latest litho equipment is a multidomain know how which is not humanly possible to internalise inside a single company these days. Japanese were fine when they were able to just ride on their superior optics expertise alone, and just put more, and more monstrous optics on the tool to achieve higher resolution. But that model definitely broke when optics alone became insufficient to achieve a shrink. Now, a node shrink is an industry-wide effort no company alone can sell as a single package. EUV is not only about a light source: Godly level of mechanical engineering to articulate wafer stages, and the reticle. Work with deep vacuum systems, and materials. New lithography chemistry, photoresists in particular. Mirrors manufacturing. Alignment tech. EUV Mask tech. EUV inspection, defectoscopy and metrology. EDAs, and cell design.
- smartbit 6y agoThom Hogan for a few decades reports on Nikon product strategy & financials. From most recent article with comment on Nikons financial situation: > That said, if I were one of those financial rating companies, I'd be downgrading Nikon's rating at the moment. You know, from something like A to BBB (using Standard & Poor's rating board). (Nikon publishes their Japan Credit Rating Agency value, which is currently A+/Negative for long-term debt. That would be the third highest rating, or "a high level of certainty to honor the financial obligations," though the outlook [Negative] is that the rating might be lowered.) https://bythom.com/newsviews/archives/12-2020.html https://bythom.com/newsviews/archives/12-2020.html
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- throwaway4good 6y agoWill it be possible for the Japanese EUV equipment makers to export to China? (The US has effectively prevented European exporters of chip making equipment to sell EUV equipment to Chinese companies as the equipment contains "American IP". Getting around this would be a massive oppurtunity for a Japanese (or an European) equipment maker.)
- jhvkjhk 6y agoI wonder whether it's possible to make an EUV equipment without American IP. If Japanese companies can do that, the most advanced ASML can do that too, then there will be no market opportunity to Japanese at all.