ASML (Nasdaq: [[ticker:ASML]]), the Dutch semiconductor equipment manufacturer, said today it has agreed to acquire San Diego-based Cymer (Nasdaq: [[ticker:CYMI]]), the leading maker of ultraviolet lasers used in lithographic systems to make microcircuit patterns in silicon wafers. The cash-and-stock deal is valued at more than $2.5 billion.
The companies say the deal represents a 61-percent premium over the price of Cymer shares over the past month. (The price of Cymer’s stock closed yesterday at $47.83 and the deal was announced before markets opened today.)
The two companies have been working closely together as ASML upgrades its machines with Cymer’s next-generation laser to produce smaller, faster, and more energy-efficient chips. The move comes amid a global downturn in demand for personal computers, with companies like IBM and Intel reporting disappointing financial results earlier this week. ASML also reported lower-than-expected third-quarter orders, and Gartner recently predicted the global market for semiconductor equipment will deteriorate next year.
Since it was founded in 1986, Cymer has helped to drive the economics of Moore’s Law by pioneering the development of lasers operating at ever-smaller wavelengths—needed to create circuit patterns at ever-smaller resolution. Cymer pioneered the development of deep-ultraviolet lasers (DUV) in the late 1990s, producing light at a wavelength of 193 nanometers—enabling chipmakers over time to shrink the resolution of semiconductor circuit patterns from 180 to 32 nanometers.
Cymer introduced its “NanoLith” laser in 2000, and has shipped thousands of deep-ultraviolet machines to all three lithography systems manufacturers—ASML, Canon, and Nikon. ASML now holds a commanding lead in the global market for lithographic equipment; by one estimate, the company shipped 57 percent of the advanced tools last year.
In 2009, Cymer said it had shipped a new extreme-ultraviolet (EUV) laser to ASML that could produce light at a wavelength of less than 13 nanometers—enabling ASML customers to manufacture semiconductors scaling to resolutions of 10 nanometers and smaller. The two companies say they have been working closely to integrate the new laser technology into ASML equipment for over a year.
In their joint statement, Cymer and ASML said the acquisition was the “natural evolution” of their collaboration in EUV technology. It’s also a reflection of the increasing complexities of semiconductor manufacturing, and of the costs involved in making the next-generation of computer chips.
To help finance their efforts, ASML sold a 23 percent stake in July to Intel, Samsung Electronics and Taiwan Semiconductor Manufacturing, its three biggest customers.
ASML says its biggest deal consists of three-quarters stock and one quarter in cash. Cymer shareholders will get $20 in cash per Cymer share plus 1.1502 ASML shares.
