ASML doesn't see major cuts in merger of SVG

ASML doesn't see major cuts in merger of SVG
TEMPE, Ariz. -- ASM Lithography believes it could take up to one year to complete the process of merging its own operations with Silicon Valley Group Inc., once ASML wraps up its purchase of San Jose-based SVG for $1.6 billion in stock later this month.

The Dutch company does not anticipate significant layoffs as a result of the merger, but it does plan to quickly integrate SVG's lithography sales and service operations into its own units, resulting in new assignments for some managers and staff, said Doug Marsh, ASML's vice president of business integration.

"Sales integration will be very rapid, and service will also be combined," said Marsh, who is based in Tempe, Ariz. "Ultimately, in a regional office, we will have a single manager but still have the technical competency to support the individual SVG and ASML factory organizations."

To win government approval of the purchase, ASML last week agreed to maintain U.S. development and manufacturing at SVG's Lithography Division. The Dutch lithography giant also agreed to try and sell SVG's Tinsley Laboratories lens-polishing subsidiary to a U.S. owner because of concerns over national security and defense-related optics used in satellites (see May 3 story).

Under the agreement, ASML must make a "good faith effort" to sell Tinsley to a U.S.-based buyer, and already, several interested parties have contacted the company (see story). But if ASML is unable to strike an acceptable deal in six months, the California-based Tinsley subsidiary will most likely be used as a compatible source of lithography optics along with ASML's main supplier, Carl Zeiss Jena GmbH of Germany.

How Tinsley will be used

Marsh said ASML will not restrict the use of Tinsley lens technology by other customers in the United States--including other lithography suppliers. Marsh indicated that ASML was most interested in using Tinsley as a source for short-volume runs--or a "job shop"--for lithography optics, while using Carl Zeiss as the main high-volume lens supplier.

ASML also plans to keep the operations of SVG's Track Systems Division in San Jose and Thermal Systems Division in Scotts Valley, Calif., as separate units, Marsh said.

Meanwhile, ASML will be looking hard at how to commbine the exposure tools from SVG's Lithography Division in Wilton, Conn., with its own offering of step-and-scan systems. "We will be evaluating where we try to introduce commonality in products," Marsh said.

SVG and ASML have both been selling different lithography platforms for the new 193-nm scanner generation. ASML's 193-nm system is built on the company's Twinscan platform, which is intended to support all future lithography generations until optical exposure technology runs out of steam later in the decade.

ASML, in Veldhoven, the Netherlands, plans to use a new platform for extreme ultraviolet (EUV) technology, which is still in the early stages of development in the industry. Previously, ASML managers said a common EUV platform will definitely be used by ASML and SVG operations (see May 4 story).

"The Twinscan platform will take us all the way to the last optical generation, and we figure we could take it down close to the 50-nm 0.05-micron IC process node range," Marsh told SBN. Currently, the platform is expected to be used for ASML's planned 157-nm exposure systems, but SVG is most likely to be out first with a narrow-field 157-nm tool.

SVG has also been marketing its 193-nm scanner. ASML is now slightly ahead of SVG's 193-nm tool, and it expects to begin shipping a high numerical aperture (NA) 193-nm Twinscan system late in the second quarter or early Q3, according to Marsh.

At the end of April, SVG warned that it was delaying shipments of its 193-nm argon-fluoride (ArF) exposure tools by about three to four months. SVG's Micrascan 193-nm high-NA scanners were set to be delivered to Intel Corp. in April but now it looks more like they won't be shipped until July (see April 25 story).

ASML is concerned about the delays of SVG systems, but Marsh believes the Dutch company is at least one year ahead of its Japanese rivals--Nikon Corp. and Canon Inc.--in shipping high-NA 193-nm scanners. "ASML is ahead, and we haven't slipped our program at all," he added.

"I think there is an opportunity to sell all of the 193-nm high-NA tools we can build," added the ASML executive.

Marsh said ASML has asked SVG management to size their operations appropriately for the current downturn, which is expected to last another 12 months. ASML does not want to be faced with making cuts in SVG operations due to weak market conditions.

"SVG is taking advantage of such things as using up vacation time, attrition, and hiring freezes," Marsh said. "We don't expect massive issues layoffs."

In fact, ASML is going to try to keep as many people as possible because skilled workers and engineers are difficult to find.

"Times are not always going to be bad, and if we look at last year, we missed the market request for over 200 machines," recalled Marsh, referring to the booming equipment markets early last year. "If we had a manufacturing base in the United States and a broader supplier base, we probably could have come close to meeting all of the demand last year."