In a technology park in Eindhoven, Netherlands, sits one of the most critical companies on the planet, Advanced Semiconductor Materials Lithography (ASML). Since the mid-1980s their devices have been the workhorses behind nearly all microchip fabs worldwide. And, they are the only company capable of manufacturing extreme ultraviolet (EUV) lithography machines. EUV is required for the mass production of cutting-edge 5-7nm ASICs.
In this article we delve into the basics of lithography and microchip production, followed by the geopolitics surrounding this technology. We explain why ASML’s machines are a root cause behind the current global chip shortage.
Lithography and Chip Making
For context, lithography is a bit like photographic development. Where in a darkroom film patterns are printed onto a surface through light exposure. Then a series of chemical baths remove excess substances from the paper, and set the photo’s image.
In the case of a microprocessor chip, ultraviolet lithography prints layers of microscopic transistor patterns onto a purified silicon wafer base. Chemical baths remove excess particles and set the images. Layers of metal wire are also added to the wafer, to connect the 10 billion transistors per chip. In total, a single wafer has between 100-150 layers built upon it.
After fabrication the chips are separated from the wafer and their quality is tested. Flawless dies are sent off to be packaged into housing, and then tested a final time. The style of housing is unique for each end product.
DUV and EUV
Advances in lithography help to achieve Moore’s Law. As the wave length of the light inside of a lithography machine gets narrower, microchip size and features are able to get smaller, and the chip’s power consumption becomes more efficient.
Previous generation deep ultraviolet (DUV) lithography devices are close to visible light, whereas EUV machines are nearer to X-ray level. DUV lithography machines are produced by several companies including ASML, Nikon, and Canon. EUV lithography machines, on the other hand, are exclusively made by ASML for mass fabrication of 7nm dies or smaller.
Ultraviolet light is so narrow that it can be absorbed by all natural substances, even air. Therefore lithography machines must operate in an airtight vacuum, or immersion liquid. The environment must also be sterile to prevent dust particles. Just a tiny speck of dust landing on a wafer can destroy the functionality of entire chips.
ASML’s EUV Lithography Machine
See ASML’s TWINSCAN NXE:3400 in slow motion in the short clip below. It weighs 180 tons and is the size of a city bus. The EUV light, shown in purple, bounces off of a series of mirrors and stencils to print images onto a wafer.
But, in order to create this powerful light, tin must be vaporised into plasma. See in the next clip how tin streams through a nozzle at 50,000 droplets per second. Then a 30kW carbon dioxide laser zaps each droplet twice, causing it to explode into EUV light.
One EUV machine produces ~300 wafers per day, or over 100,000 chips. To roughly compare, one new bitcoin miner contains about 300 chips. So, an EUV machine can produce enough chips for several hundred bitcoin miners in a day.
Unfortunately the energy conversion efficiency of an EUV lithography machine is only 0.02%. One unit consumes 30,000 kWh of electricity per day, with an output of only 250 W. Chip fabs must also power huge cooling systems, which use up to 5 million gallons of water per day. As well as maintain air filtration systems that are thousands of times stronger than those found in hospital operating theatres.
In Taiwan TSMC operate around 40 EUV lithography machines at 1 GW per day, plus a couple hundred DUV machines. All in all, TSMC consumes ~5% of Taiwan’s total energy. Thus, newer semiconductor plants like those in Arizona are planning to compensate by building renewable power plants near to their fabs, and installing water recycling facilities.
Acquiring an EUV
Once ordered, an EUV lithography machine takes over a year to manufacture, and costs $200 million. Each unit includes around 100,000 parts from 800+ suppliers. For instance, specialized mirrors are from Germany, photomasks from Japan, optics from USA, and ball bearings from Sweden.
Further, the machines are so large that once completed they must be disassembled and shipped via three Boeing 737s and twenty trucks. Only to be reassembled at its destination under sterile conditions.
Needless to say, EUV lithography machines are one of the most complicated devices ever made by man. So it is no surprise that ASML have a monopoly on the market, and that it is difficult for chip fabs to acquire them.
ASML and Fabs
Since 2017 ASML have produced about 140 EUV lithography machines, yet only five semiconductor fabrication plants have been able to obtain them due to the high price. These include: Micron, SK Hynix, Intel, Samsung, and TSMC. And of course, TSMC own the majority share. TSMC manufacture 92% of all 5nm chips, Samsung manufacture the remaining 8%. As a result, TSMC’s top-tier customers like Apple, Nvidia, AMD, and Bitmain have also risen to be industry leaders in their own fields.
In contrast, Intel received their first EUV machine in 2021, which is part of the reason they fell behind the competition. What’s more is that Intel turned down a deal to make chips for the Apple iPhone back in 2013, living by their ill-fated motto “real men have fabs”. However, as of 2021 Intel announced that they are eager to make a comeback. They will double down on their microchip production, and begin manufacturing for fabless businesses.
For the future, Intel invested $300 million in one of ASML’s new High NA (numeric aperture) machines, expected between 2023-2025. The High NA can produce 2nm chips. TSMC and Samsung are preparing for 3nm manufacturing within the next year, using EUV machine adaptions.
In order to ensure the continued evolution of microchip technology, ASML sold 25% of its shares to customers: TSMC, Samsung, and Intel in 2004. ASML have also bought many of the companies that produce parts for their machines, cutting down margins and strengthening their supply chain. Ironically though, module suppliers to ASML are often delayed because they are waiting on chip supplies for their own equipment. In other words, chips need to be made, to make the machines to make more chips. It’s a catch 22. And in turn, companies like Apple have been forced to cut back production, and chips fabs have raised prices by up to 20% the past year.
To put an end to the global chip shortage, ASML are trying to double their production. Top semiconductor companies are also building new fabs. In particular, the United States pledges to help boost production of advanced logic semiconductors to catapult the next-generation of technologies. TSMC’s new 5nm fab is opening in Arizona in 2024, Intel is constructing two fabs in Arizona, and Samsung is building a 3-5nm fab in Texas.
To achieve such milestones, chip specialist engineers will be brought over to the States from Asia to train staff. Large national and regional subsidies, and tax credits are also available thanks to the Chip Act. In the 1990s America manufactured nearly half of the world’s chips, yet today they only make around one-tenth because chips are cheaper abroad. Thus the US aims to reach 30% of the world’s chip market within the next 5 years, thereby reducing manufacturing costs and enhancing national digital security and innovation.
Microprocessor chips are a strategic commodity. The EU, Korea, and China, among others, have also penned Chip Acts to boost their domestic production and self-sufficiency. New fabs are being built in Europe and in Asia. Experts believe that by the end of 2023 the global chip shortage will start to improve.
In China, Shanghai Micro Electronics Equipment (SMEE 上海微电子装备) are competing with ASML. Although, their tech is estimated to be two decades behind, hampered by restrictions on products such as optics from Germany. In 2018 several nations decided to ban China from purchasing ASML’s EUV machines, for fear that they will reverse engineer it. At the moment though ASML sell older and refurbished machines to China like their DUV, yet this may also be restricted in the future.
The argument against technology restrictions on China is that all hands are needed on deck right now with the global chip shortage. Also, ASML need all the income they can get, to continue to sell their machines and conduct R&D.
Another potentially critical issue that is not often talked about is that Ukraine makes between 50-90% of the high-grade neon in gas-phase lasers which is used to make semiconductors. The gas is a bi-product of Russian steel manufacturing, and purified in Ukraine. During the previous conflict between Russia and Ukraine in 2014, neon prices soared sixteen times their value within a year.
In conclusion, ASML, as well as the world’s top chip manufacturers are doubling down on production in the coming years. Together with the help of government subsidies and tax credits they hope to put an end to the global chip shortage. However, EUV machines are expensive and difficult to manufacture, so not all chip fabs can obtain them. There is also a dilemma because ASML’s own production is affected by chip shortages, and potentially by the war in Ukraine. Moreover, Chinese competitors are restricted from getting their hands on critical elements needed to manufacture EUVs. All the while, nearly all electronics contain microchips, and with digitalization the world will continue to need more and more chips.