Intel (NASDAQ:INTC) will invest $4.1 billion to purchase up to 15% of ASML (NASDAQ:ASML), which builds microprocessor manufacturing equipment.
The deal will provide ASML with the funds to advance research and development of new chip-making technologies.
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), 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).