Intel to Buy $4.1B Stake in ASML to Fund Research

by Christopher Freeburn | July 10, 2012 10:47 am

Intel (NASDAQ:INTC[1]) will invest $4.1 billion to purchase up to 15% of ASML (NASDAQ:ASML[2]), which builds microprocessor manufacturing equipment.

The deal will provide ASML with the funds to advance research and development of new chip-making technologies[3].

Shares of ASML jumped more than 8% in Tuesday morning trading, while Intel shares slipped about 1%.

ASML is also soliciting investments from its other leading customers, Samsung and TSMC (NYSE:TSM[4]), to help fund its research. In exchange for their investments, ASML is offering equity stakes up to 25% of its shares, Reuters noted.

The investments could accelerate the adoption of extreme ultraviolet technology that would print circuits on 450-millimeter wafers, creating new chips, and refine existing manufacturing techniques, by as much as two years, leading to faster, cheaper chips.

Manufacturing 450-millimeter chips could save Intel as much as $2 billion annually, compared to the current 300-millimeter chips, analysts said.

Intel is expected to invest $1 billion into new ASML manufacturing technologies. The company will acquire an initial 10% of ASML and will purchase another 5% if shareholders okay the move, for $3.1 billion.

ASML’s investment offer was seen by analysts as bolstering its technology edge and blunting competition from rivals like Nikon (PINK:NINOF[5]).

  1. INTC:
  2. ASML:
  3. advance research and development of new chip-making technologies:
  4. TSM:
  5. NINOF:

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