ASML Acquiring Cymer for $2.5B to Boost Chip Tech

Semiconductor lithography systems provider ASML Holding NV will acquire its light source supplier, Cymer Inc., for 1.95 billion euros (about $2.5 billion) in stock. ASML said the deal, announced Wednesday, will accelerate the development of extreme ultraviolet (EUV) semiconductor lithography technology.

ASML and Cymer have collaborated closely for more than a year on the development of EUV technology, the companies say, and the acquisition evolved from that partnership.

"Cymer will operate as an independent division and the DUV [deep-ultraviolet] and EUV light source center of ASML," Cymer Chairman and CEO Bob Akins said in a memo Wednesday to the company's more than 1200 employees.

The deal, which would give Cymer shareholders $20 in cash and 1.15 ASML shares for each Cymer share, was unanimously approved by the boards of both companies. Shares of San Diego-based Cymer surged more than 58 percent Wednesday morning as news of the deal broke.

As consumers demand more sophisticated electronic devices with ever-increasing functions, the complexity of chip manufacturing has increased dramatically. Moore's law, named for Intel Corp. co-founder Gordon Moore for his observation that the number of transistors on an integrated circuit doubles roughly every two years, has proved true for more than four decades. But each new generation of chips requires more and more transistors to be packed onto them, without increasing chip size. Smaller transistors mean that semiconductor lithography machines must print finer features with every new generation of chips. Photolithography, which uses light to pattern chips, is allowing this process to continue, but will reach its limit unless technologies with much shorter light wavelengths, such as EUV and DUV, become widely available.

"We expect the merger to make EUV technology development significantly more efficient and simplify the supply chain and integration flow of the EUV modules," said ASML President and CEO Eric Meurice. "We are also very much encouraged by the opportunities that we expect to create around Cymer's growing advanced immersion systems and dry deep-ultraviolet installed base products (IBP) business."

The transaction is expected to close in the first half of 2013 and is subject to customary closing conditions, including regulatory review and shareholder approval.

For more information, visit: www.asml.com