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Technology Stocks : ASML Holding NV -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (928)	4/20/2004 11:21:07 AM
From: Proud_Infidel	Read Replies (1) \| Respond to of 43410

ASML introduces new tool for smaller chips Tuesday April 20, 11:00 am ET By Lucas van Grinsven, European Technology Correspondent AMSTERDAM, April 20 (Reuters) - Dutch electronic chip manufacturing equipment maker ASML (Amsterdam:ASML.AS - News; NasdaqNM:ASML - News) announced its latest lithography tool on Tuesday, which will produce thinner circuits and smaller chips to give it an edge over Japanese rivals. Lithography machines lie at the heart of the chip making process as they map out circuits on silicon wafers. Machines sell at an average 10 million euros ($12 million) apiece, but the most modern ones are much more expensive. The new ASML machine, dubbed Twinscan XT:1400, can mass produce chips with circuits as thin as 65 nanometres, upping the ante from the XT:1250 which goes down to mass production at the 70 nanometre level -- one nanometre is one millionth of a millimetre. The new tool, due for delivery by December 2004, can be upgraded to "wet" semiconductor manufacturing -- in which a fluid between the lens and the silicon wafer improves depth of focus and resolution. The new "wet" technology is being watched by analysts because it may well enable mass production of chips with 45-nanometre thin circuits. In its "dry" state the new machine can do pre-production testing and development at the 45-nanometre node. Analysts hope that ASML's progress in "wet" technology might make the firm's management more explicit on gross profit margins when it reports first-quarter results on Wednesday. Management has already said gross margins will rise to above 35 percent some time in 2004 from 28.5 percent in the fourth quarter. Next year Chief Executive Doug Dunn has said the margin may top the record levels of above 40 percent reached in 2000. THIN IS GOOD Making electronic circuits thinner is essential in the race towards lower cost chips, because it allows semiconductor producers to put more circuits on one silicon wafer. ASML, the world's largest maker of semiconductor lithography machines, made the announcement during the Semicon Europe trade fair in Munich. The firm, which competes with Japan's Nikon Corp (Tokyo:7731.T - News) and Canon Inc (Tokyo:7751.T - News), is expected by analysts to book a first-quarter net profit of 24.6 million euros ($29.66 million) on 60 percent higher sales of 509 million euros, thanks to booming demand for PCs and handsets which is fuelling investments. Some analysts estimate that ASML has a 12-month lead in "wet", or "immersion" lithography on its rivals, although no meaningful sales of immersion machines are expected this year. Immersion allows ASML to keep improving and keep selling its Twinscan machines long beyond the period it had anticipated, which is good for sales and profit margins. The $177-billion a year chip industry will move on to an entirely new technology, using extreme ultraviolet (EUV) light. Immersion technology, invented last year, is seen bridging the gap until EUV is ready later this decade, analysts said. This will limit the industry's research and development costs, because an expensive intermediate step with another camera light wavelength will probably not be necessary. "The strategy behind our...immersion-prepared system means chipmakers move toward new technologies at their own pace and with minimum investment. This significantly lowers the risk traditionally associated with wavelength reductions," marketing and technology chief Martin van den Brink said in a statement. The upgrade kit to convert the new machine into an immersion tool will be available from the fourth quarter of 2005. ASML's customers include the world's largest chip maker Intel Corp (NasdaqNM:INTC - News) and Taiwan Semiconductor Manufacturing (Taiwan:2330.TW - News), the world's largest contract chip maker.