Samsung Electronics is said to heavily invest many semiconductor manufacturing equipment from Dutch ASML, as the company is trying to gain a competitive edge in the advanced technology of micro-processing lower than the 7-nanometer (nm).
Business Korea reports that Samsung is considering a plan to purchase 10 extreme ultraviolet (EUV) lithography tools from the ASML, the biggest semiconductor equipment maker in the world. Each EUV unit costs 200 billion won (US$176.52 million).
ASML believes that it can produce about 12 EUV lithography tools this year, so Samsung's order almost covers ASML's production per year.
ASML did not confirm Samsung's order.
Samsung Electronics denied rumors during an earnings conference call in the first quarter this year, saying that "the System LSI division aims to start production using the 7nm process in early 2018 and will use EUV lithography tools in the process."
EUV lithography tools draws the pattern of semiconductor circuits on wafers using a light source. It uses the lithography technology using a 13.4 nm wavelength which is shorter than visible light. A EUV lithography tool is considered an essential equipment to realize the micro semiconductor process of lower than 10nm and to increase the supply of semiconductors.
If Samsung Electronics buy one year's output of lithography tools from ASML, the company can preemptively prohibit TSMC, GlobalFoundries and Intel from entering the next-generation semiconductor production process.
Samsung has followed a a similar strategy before. The company exclusively bought most of "organism evaporation equipment" that is used in the core process of mobile organic light-emitting diode (OLED) display panel production from CanonTokki for years. CanonTokki, the world's largest OLED evaporation equipment producer, can only sell a single digit of equipment units per year. This was why LG Display had trouble starting mobile OLED display business, while Chinese companies had difficulties in receiving the supply of evaporation equipment from CanonTokki.
Meanwhile, Samsung Electronics sold a 1.5 percent stake, half of its 3 percent stake, in ASML last year.
ASML has announced net sales of EUR 2.45 billion (US$2.89 billion) for the third quarter of 2017, up 16.5% from EUR2.1 billion in the prior quarter. The Dutch fab tool vendor now expects its net sales for all of 2017 to grow at least 25% on year.
"ASML today reports third-quarter net sales that exceed our guidance, partially due to the revenue recognition of an additional EUV system," said ASML president and CEO Peter Wennink in a statement.
ASML disclosed it shipped three NXE:3400B systems in the third quarter bringing the total thus far for 2017 to six. NXE:3400B is ASML's latest extreme ultraviolet (EUV) production tool supporting production at the 7nm and 5nm nodes.
ASML revealed it now has a backlog of 23 EUV systems, down from 27 units as of the end of the second quarter. The company also said it had conducted a power capability test with its EUV pellicle, which protects the mask from particles during exposure, and showed that the current design can withstand 250 watts of EUV power.
For the fourth quarter, ASML expects to post net sales of EUR2.1 billion, with gross margin reaching 44% compared to 42.9% a quarter earlier.
"With our fourth-quarter guidance, we are confirming our view that 2017 net sales will be at least 25% higher than 2016 net sales," Wennink noted. "Our current view is that the positive business environment that we are seeing today will continue in 2018, supported by our strong backlog of EUR5.7 billion, which is driven by all product categories."