Next-Generation Chips Hit a Snag

As chipmaking advances have run up against the limits of physics, threatening to push up manufacturing costs, the industry’s leaders have placed a great deal of faith in a Dutch company called ASML. For most of the past decade, ASML has been promising that its new technique for creating transistors would allow chips to keep getting slimmer and more powerful at the rates we’re used to. In 2012, Intel, Samsung, and TSMC took the unprecedented step of investing about $1.6 billion in ASML to speed its research and paid close to $5 billion for 23 percent of the company.

ASML expects to ship as many as seven new machines this year so chipmakers can start testing the technology, known as extreme ultraviolet lithography (EUV). Chief Executive Officer Peter Wennink says most of his customers expect to incorporate EUV by 2019, and he’s prepping for orders within the next year. “The industry needs EUV,” he says.