A chip-making machine worth $150 million made by a Dutch company has turned into an instrument in the U.S.-Chinese battle. It also shows how ingrained the supply chain in the world is.
President Biden and several members of Congress in Washington are concerned about computers and China’s plans to use the technology that is at the core of development.
A massive machine made by a Dutch company has become an important lever for policymakers and shows that the dreams of any country of creating an entirely self-sufficient supply chain using semiconductor technology are naive.
The machine is manufactured by ASML Holding, which is based in Veldhoven. The system employs a different type of light source to create ultra-small circuits on chips, putting more power in the tiny slices of silicon. This tool was a long time to create and then was launched to manufacture high-volume production in 2017, has a price of over $150 million. The process of shipping it to customers will require 40 shipping containers as well as 20 trucks as well as three Boeing 747s.
The machine is widely recognized as being essential for the production of the most advanced chips and this has geopolitical implications. In the past, the Trump administration successfully engaged the Dutch authorities to stop the shipping of this kind of device to China in the year 2019. it appears that the Biden administration has not shown any evidence of changing its position.
Manufacturers aren’t able to produce top-of-the-line chips without the technology and “it is only made by the Dutch firm ASML,” stated Will Hunt, a research analyst at Georgetown University’s Center for Security and Emerging Technology that has found that it will require China about ten years before it could build its equipment similar to ASML’s. “From China’s perspective, that is a frustrating thing.”
ASML’s machine has turned into a choke point within the supply chain of chips, which are the brains for computers and other electronic devices. The tool’s development across three continents of manufacturing utilizing the expertise of experts and components from Japan and Germany, the United States and Germany -is also an indication of how international the supply chain is. It’s an assessment of the situation for any country looking to lead in the field of semiconductors on its own.
This includes not just China but also the United States, where Congress is mulling plans to invest greater than $50 billion to lessen dependence on foreign chip makers. The federal government, including the Pentagon, has been concerned over concerns about the U.S. dependence on Taiwan’s largest chip manufacturer as well as its proximity to China.
The study in the spring by Boston Consulting Group and the Semiconductor Industry Association estimated that developing an efficient supply chain for chip manufacturing will cost at least $1 trillion, and dramatically raise prices for chips and other products that are made from them.
The objective can be described as “completely unrealistic” for anybody that has ever been there, said Willy Shih, a management professor at Harvard Business School who studies supply chains. The ASML technology “is a great example of why you have global trade.”
The current situation demonstrates the critical importance of ASML which was once a tin-foil company whose value today surpasses the $285 billion mark. ASML is “the most important company you never heard of,” stated C.J. Muse Analyst of Evercore ISI.
In 1984, it was founded by the electronics giant Philips and another toolmaker, Advanced Semiconductor Materials International, ASML has since become an independent firm and is the biggest manufacturer of chip-manufacturing equipment, which is a process known as lithography.
Utilizing lithography, the manufacturers continuously create patterns of circuitry for silicon wafers. The smaller transistors and other parts that can be integrated into any chip stronger it gets and the greater amount of information it can store. The speed of this diminution is called Moore’s Law, named in honor of Gordon Moore, one of the co-founders of the Intel chip company. Intel.
The year 1997 was when ASML started to study a move towards making use of extreme ultraviolet (EUV) light. The light is extremely small in wavelength which can result in much smaller circuitry than that which is achievable using traditional lithography. The company decided later to develop machines based on this technology, which has cost the company $8 billion since the end of the 1990s.
The development process swiftly went to the world. ASML is now assembling the latest machines that use mirrors made in Germany and hardware designed in San Diego that generates light by blasting tin droplets with the help of a laser. The key chemicals and components are from Japan.
Peter Wennink, ASML’s chief executive, explained that the lack of funds in the company’s early days had led to it incorporating inventions from specialty suppliers, creating what he called a “collaborative knowledge network” that creates rapid innovation.
“We were forced to not do ourselves what other people do better,” He stated.
ASML is based on international collaboration. In the 1980s, researchers from Europe, the United States, Japan, and Europe started to think about the drastic change in light sources. The idea was embraced by a group comprised of Intel as well as the two additional U.S. chip makers, along with the Department of Energy labs.
ASML joined the ASML in 1999 after nearly a whole year’s talks according to Martin van den Brink, ASML’s chief tech officer. ASML’s other partners comprised ASML’s Imec Research Center in Belgium as well as a U.S. group, Sematech. ASML later received significant investments in the form of Intel, Samsung Electronics, and Taiwan Semiconductor Manufacturing Company to help fund research and development.
This development was complicated by the peculiarities of ultra-violet light. The Lithography machine typically focuses light on lenses to create patterns of circuits onto wafers. However, the smaller EUV wavelengths are absorbed by glass, which means that lenses can’t be used. Mirrors, another tool used for directing light suffer from similar issues. This meant that the new lithography technique required mirrors that had elaborate coatings to reflect better the tiny wavelengths.
As a result, ASML looked to Zeiss Group, a 175-year-old German optics manufacturer and long-term partner. Zeiss Group’s contribution included a two-ton projection system that can handle extremely ultraviolet light. The system has six specially-shaped mirrors, which are polished, ground, and coated over several months using an elaborate process of robotics that uses ion beams to eliminate imperfections.
Insufficient light to create images rapidly also led to delays in the process, Mr. van den Brink explained. However, Cymer, an San Diego company that ASML purchased in 2013, later upgraded a system that sends beams of laser power to strike tin droplets at 50,000 times per second at first to flatten them, then the second time to melt the droplets to produce intense light.
It also requires modified components known as photomasks which function as stencils for projecting circuit designs along with new chemicals that are deposited on wafers that create photographs when exposed to sunlight. Japanese companies are now the main suppliers of the products.
Since ASML launched its commercial EUV model in the year 2017 the company has sold around 100 units. The buyers consist of Samsung and TSMC which is the largest company making chips developed for other businesses. TSMC employs the software to create the processors developed for Apple for its new iPhones. Intel along with IBM have both said that EUV is essential in their strategies.
“It’s the most complicated machine humans have built,” said Dario Gil, who is a Senior Vice President at IBM.
Dutch restriction on exporting machines to China The restrictions, which were imposed at the beginning of 2019, haven’t had any economic impact on ASML as the company has an order backlog that comes from countries other than its own. About 15% of ASML’s revenue comes from selling older models in China.
In an end-of-year document in a final report to Congress and the Vice President. Biden in March, the National Security Commission on Artificial Intelligence suggested that export controls be extended to other advanced ASML and machines in addition. The commission, which is supported by Congress is seeking to restrict AI advancements that have military applications.
He said. Hunt and other policy experts believed that, since China already had these machines, preventing further sales would harm ASML without bringing any strategic benefits. And so does ASML.
“I hope common sense will prevail,” Mr. van den Brink said.