Lithography Battle in Chip Equipment

The semiconductor industry is coming down to a critical inflection point for lithography. Nikon recently shipped its first model S620 tool and ASML(ASML Quote) recently shipped its first NXT tool.

The NXT and S620 will be running off against each other at multiple key customer sites around the world over the next six to eight months. After that time, the market share for the lithography market will be set for the next several years as semiconductor manufacturers design-in DUV immersion processes in their future chips.

Once customers make a decision, they will use that immersion tool for the next three to four years before EUVL (extreme ultraviolet lithograhpy) comes along. Customers don't want to change after they optimize their immersion process.

By mid 2010, the market will change -- either ASML will be set as the dominant immersion company probably through the end of the immersion era (because no new immersion tools are being developed after these) or Nikon will take a big jump forward and gain position with the new S620.

Nikon's S620 has a through-put increase of 70% vs. its older S610. The S620 immersion tool is already shipping to companies like Intel(INTC Quote). ASML recently reported DRAM manufacturers, in particular Samsung and Hynix, are placing new orders with ASML for 193nm ArF immersion tools.

Semiconductor lithography is a process in which a silicon substrate is uniformly coated with a photoresist, or radiation-sensitive film, and exposed to a radiant energy source through an intervening photomask or template to form a particular pattern.