TSMC Commits to ASML’s Customer Co-Investment Program for Innovation

By Will SoutterAug 7 2012

ASML, the Netherlands-based provider of lithography systems for semiconductor manufacturers, has announced that TSMC has committed to ASML’s Customer Co-Investment Program for innovation with a promised investment of EUR 276 million towards research and development initiatives in the field of lithography spread over a five year period. TSMC will also be subscribing to a 5% equity stake in ASML which is valued at EUR 838 million.

ASML launched the Co-Investment program on July 9, 2012 with the aim of hastening the development of next generation Extreme Ultraviolet (EUV) lithography technology and 450 mm silicon wafer technology. Intel is another customer that has committed to the co-investment program. Under the program, ASML can issue minority equity shares up to 25% to the customers. Currently 20% of this allocation is committed to Intel and TSMC. The remaining 5% minority stake is pending allocation owing to ongoing discussions with other customers. The cash raised from this share issuance would be returned by means of a synthetic buy-back to other ASML shareholders. Customers acquiring stake in ASML via the co-investment program are not entitled to voting rights except under extraordinary situations.

As per the outcome of the 2012 Annual General Meeting of shareholders of ASML, new shares amounting to 9.99% of ASML's issued share capital can be allocated to Intel. Shareholder approval is pending for the synthetic buy-back and further issuance of shares under the co-investment program. The outcome of this will be known on September 7, 2012 when the extraordinary meeting of shareholders is scheduled to take place.