An Investment Meant to Ensure Stable Supply of EUV Equipment
Samsung Electronics invested 363 billion won for a stake in ASML in the Netherlands 10 years ago. The value of the stake in the Dutch semiconductor equipment manufacturer swelled nine times in 2020. Currently, it stands at around 4.5 trillion won, 12 times the amount of investment.
Samsung Electronics held 6,297,787 ASML shares at the end of 2020, with the book value estimated at 3.35 trillion won, up more than 1 trillion won from the 2.15 billion won in 2019.
ASML’s stock price jumped further in 2021 amid soaring global semiconductor demand. As of April 16, its stock price was US$645.69 per share, up more than 32 percent from US$487.72 at the end of 2020. The current value of Samsung Electronics’ stake amounts to 4,435.7 billion won.
Samsung Electronics bought a 3 percent stake in ASML in 2012 to secure an advantageous position in procuring equipment from the company. For Samsung Electronics, which is trailing TSMC in the global foundry industry, a timely acquisition of extreme ultraviolet (EUV) equipment is essential. ASML is the world’s only producer of EVU lithography equipment.
Intel and TSMC also bought 15 percent and 5 percent stakes in ASML, respectively, around the same time as Samsung Electronics. They wanted to have amicable relationships with ASML. However, Intel lowered its stake to 3 percent, while TSMC sold off all of its stake in 2015.
Samsung Electronics also sold half of its stake (1.5 percent) in 2016 but is more passive in selling its shares than the other two companies. Since the 2000s, it has been working with ASML to develop ultra-micro fabrication process technologies and equipment. In October 2020, Samsung vice chairman Lee Jae-yong visited ASML in the Netherlands and requested a stable supply of EUV equipment from ASML.
ASML says that it shipped 18 EUV equipment units in 2018, 26 in 2019, and 31 in 2020. In 2021, the company plans to increase the figure to 40 by improving productivity, but even this volume is not enough to cover all current demand. ASML has fully booked orders for 2021 and even 2022.
Samsung Electronics and TSMC are highly likely to take 70 to 80 percent of 40 pieces of EUV equipment that will roll out in 2021. As of the end of 2020, the number of EUV lithography equipment secured by both companies is estimated at 40 for TSMC and 17 to 19 for Samsung Electronics.
Global semiconductor companies are scrambling to secure even one more piece of EUV equipment as they may fall behind in competition for a micro-fabrication process if equipment is delayed.
SK Hynix announced that it will spend 4.75 trillion won to purchasing EUV equipment from 2021 to 2025. Considering the cost of transporting and installing equipment, the chipmaker is expected to bring in 18 units.
Intel announced its plan to invest US$20 billion, jumping into the competition to secure EUV lithography equipment. Intel already owns EUV equipment, but analysts predict that it will start securing EUV lithography equipment in earnest as it expands its foundry business.
ASML business performance is on the uptick as demand is exploding. In 2020, ASML racked up 14 billion euros in sales and 3.6 billion euros in net profit, up 18.6 percent and 38.5 percent from a year earlier, respectively.