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Samsung to Buy 3% Stake in ASML for 503 Million Euros

Samsung Electronics Co. (005930) agreed to invest 779 million euros ($974 million) in ASML Holding NV (ASML), joining Intel Corp. (INTC) and Taiwan Semiconductor Manufacturing Co. in taking a stake in Europe’s largest chip-equipment maker to secure future technology.

Samsung will buy a 3 percent equity holding in Veldhoven, Netherlands-based ASML for 503 million euros and invest a further 276 million euros in research and development of next- generation lithography technologies, ASML said today.

The deal completes ASML’s so-called co-investment program announced in July, with which the company seeks to accelerate product development. Samsung, Intel and TSMC have now agreed to buy 23 percent of ASML for 3.85 billion euros, and the Dutch manufacturer said it no longer plans to solicit the participation of other customers.

“ASML is getting the maximum amount to fund research and development costs, and Samsung opted for only a 3 percent equity stake instead of the 5 percent that was still available,” said Niels de Zwart, an analyst at ING Groep NV in Amsterdam who recommends holding ASML shares. “That is good news for existing shareholders.”

ASML advanced 0.2 percent to 46.26 euros at 11:18 a.m. Amsterdam time, giving the company a market value of 19.4 billion euros. Since the announcement of the program on July 9, ASML has gained 16 percent.

‘Win-Win’

Under the investment program, ASML will speed up the costly development of extreme ultraviolet, or EUV, technology, which will help shrink the size of chips while increasing their capacity and speed for devices such as mobile phones and tablet computers.

The funding from Suwon, South Korea-based Samsung, Intel and TSMC should also allow ASML to step up the transition to a new chipmaking standard that relies on 450-millimeter disks of silicon, compared with the current 300-millimeter standard, a shift that will enable manufacturers to produce more chips faster.

The investment program is “a win-win,” giving ASML funding and allowing the shareholders to benefit from a possible appreciation in the company’s value, ASML Chief Executive Officer Eric Meurice said after announcing the plan last month.

To contact the reporter on this story: Maaike Noordhuis in Amsterdam at mnoordhuis@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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