Historic battle over lithography

One day in 1992, Intel researcher John Carruthers approached the company’s CEO, Andy Grove, with a strange request. He asked for $200 million in funding to research a technology that no one was sure would even work. The technology was called Extreme Ultraviolet (EUV) Lithography—an ultra-precise process of etching electronic circuits onto silicon.

At the time, Intel was the world’s leading chipmaker, and Grove had vast cash reserves at his disposal. Even so, he was deeply skeptical. EUV technology relied on light with a wavelength of 13.5 nanometers, far more advanced than existing techniques. Most experts believed that mass-producing chips with such fine light was impossible.

Naturally, Grove asked, “You want money for something we don’t even know will work?” Carruthers simply replied, “That’s what research is.” Intel’s co-founder Gordon Moore then reminded Grove of his famous warning: if the chip industry could not move to shorter wavelengths, Moore’s Law—the doubling of chip power every two years—would come to a halt.

In the end, Grove agreed. Intel began pouring vast sums into experimental EUV research. Over the following years, the company invested billions—not to build the machines themselves, but to ensure that someone in the world could.

Developing lithography machines required hundreds of millions of dollars, affordable only to a handful of companies. At the time, Canon and Nikon of Japan dominated lithography, while American firms were steadily falling behind. In this difficult environment, the only surviving challenger was a small Dutch company spun out of Philips in 1984: ASML.

In its early years, ASML lacked money, manpower, and infrastructure. To survive, it adopted a new model—not to build everything itself, but to assemble the best components and technologies from around the world into a single machine. The strategy worked brilliantly. While Japanese firms relied only on domestic suppliers, ASML tapped into the best global technologies. Being Dutch, it also managed to remain neutral during the U.S.–Japan trade wars. American companies, seeking to avoid conflict, began choosing ASML’s machines over Japanese ones. At the same time, with Philips’ support, ASML built a close partnership with TSMC.

In 1996, Intel teamed up with America’s national laboratories to advance EUV research. These labs had scientific expertise but no ability to produce commercial machines. No U.S. company was capable of building EUV systems either. The only viable option was ASML—since Canon and Nikon were Japanese.

Allowing a foreign company into U.S. national labs sparked deep concern in Washington. Policymakers worried: would America become dependent on a foreign firm for the future of computing? But at that time, globalization was widely accepted. The U.S. government approved the partnership on the condition that ASML open a factory in America, though its core research would remain in the Netherlands.

In 2001, ASML acquired SVG, the last U.S. lithography company. News that America’s EUV technology was falling into ASML’s hands alarmed Congress and the Pentagon. Yet most officials dismissed it as Cold War paranoia. Big chipmakers, including Intel, supported the deal. Intel’s CEO Craig Barrett bluntly stated, “Without this, new equipment in America will be delayed.” The Bush administration agreed, declaring that only technologies vital to the military would be protected—and EUV was not on that list.

The result was that ASML became the sole maker of EUV lithography machines. Their massive, complex systems were largely built in Europe, with some parts sourced from the U.S. While the world praised globalization in EUV research, the reality was more stark: the research was international, but production was monopolized. The “lithography war” ended not with many winners, but with just one—ASML.

(Adapted and abridged from Chapter 32, “Lithography Wars,” of Chris Miller’s acclaimed book Chip War)

Author: Mahmud Hossain, a BUET graduate, has over three decades of leadership experience in Bangladesh’s telecom and ICT sectors. He played a pivotal role in introducing mobile technologies in the country. He now serves as a Commissioner at BTRC, following senior leadership roles in several national and multinational industry-leading companies.