Intel Deploys ASML's Advanced EUV Machines, Aims to Challenge Taiwan Semiconductor's Lead

On Monday, Intel Corp INTC announced that the first two advanced extreme ultraviolet (EUV) lithography machines from ASML Holding ASML are “in production” at its factories.

According to Reuters, Intel took seven years to put those earlier machines into full production, which contributed to losing its edge to Taiwan Semiconductor Manufacturing Co TSM.

In 2024, Intel procured the machines to produce smaller and faster computing chips than earlier ASML machines.

Also Read: Intel Unveils Xeon 6 Chips, Doubling AI Performance and Powering Next-Gen Data Centers

At a conference, Intel senior principal engineer Steve Carson told Reuters Intel produced 30,000 wafers in a quarter with ASML’s lithography machines. In initial testing, ASML’s new high NA machines are about twice as reliable as the earlier generation, he added.

Intel told Reuters it plans to use the high NA machines to help develop its 18A manufacturing technology. The company looks to commercialize the technology with a new generation of PC chips in 2025.

Intel told Reuters it plans to put the high NA machines into commercialization with its next generation of manufacturing technology, 14A.

Recently, Needham’s Charles Shi highlighted how Taiwan Semiconductor’s potential Intel Foundry takeover could harm companies like ASML by canceling or scaling back Intel’s high-NA EUV program, given Taiwan Semiconductor’s lack of interest in high-NA and the technical limitations of high-NA EUV in printing large dies essential for AI chips.

Meanwhile, ASML depends more on the pricing of high NA EUV to generate top-line growth. Shi noted Taiwan Semiconductor will fail to backfill Intel Foundry’s old fabs with its volume due to significant process and toolset differences.

Also, Taiwan Semiconductor’s reuse of Intel’s existing lithography and process control equipment fleet could pose a negative catalyst for ASML.

Intel stock plunged 44% in the last 12 months. Taiwan Semiconductor is up 47% as a key contract chipmaker for Nvidia Corp NVDA GPUs and Apple Inc AAPL smartphones.

Price Actions: INTC stock is down 0.25% at $24.21 in the premarket session at the last check on Tuesday. ASML is down 0.65%.

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