Samsung CEO Visits The Netherlands to Bolster Chipmaking Value Chain

Chipmakers are competing to secure Dutch supplier's extreme ultraviolet lithography system

ASML CEO Peter Wennink (right) greets Samsung Electronics Vice Chairman Lee Jae-yong (left) at the Dutch chip equipment giant’s headquarters in Eindhoven, the Netherlands, on June 14, 2022. Courtesy of Samsung Electronics

Samsung Vice Chairman Lee Jae-yong recently visited the Netherlands to lay the foundations for the South Korean giant’s semiconductor value chain.

Chipmakers racing to expand production amid a global shortage are competing to secure Dutch chipmaking equipment supplier ASML’s EUV lithography systems—devices essential to making advanced microchips.

EUV stands for “extreme ultraviolet,” the wavelength of light used by ASML’s most advanced machines.

These machines are imperative for producing advanced semiconductors below the 7-nanometer process, allowing chipmakers to create smaller, higher-performing chips with greater production efficiency at reduced costs.

Smaller is better in chipmaking, as the more transistors that are packed into the same space, the faster and more energy efficient a chip can be.

The Dutch supplier enjoys a near-monopoly in advanced EUV lithography systems, with a small annual output of about 40 units in 2021. These machines are in high demand as chipmakers worldwide rely on the equipment to stay competitive.

Representatives of Samsung Electronics and ASML, including Samsung Vice Chairman Lee Jae-yong (second from left), check ASML's EUV machine at ASML headquarters in Eindhoven, the Netherlands, on June 14. Courtesy of Samsung Electronics

On June 14, Lee visited ASML in Eindhoven, the Netherlands, and met with the company’s CEO Peter Wennink and other executives. The heads of the two companies discussed prospects for the chip market, and supply and demand for EUV lithography machines, according to a statement from Samsung.

Additionally, the executives also discussed medium and long-term business strategies for the two companies.

Samsung and ASML have worked together on EUV technologies since early 2000. Samsung currently holds a 1.5 percent stake in the Dutch company.

AMSL CEO Wennink said last year that the company plans to manufacture 55 units of EUV lithography systems in 2022, of which Samsung secured 18 units.

In early January, a fire broke out at one of ASML’s factories in Berlin, which somewhat impacted the production and possibly the delivery timeline of its newer EUV systems. The fire reportedly damaged a part of its production area.

However, Wennink said in a fourth-quarter conference call that the fire would not affect ASML’s output and revenue targets.

With the sharp increase in semiconductor demand, chipmakers worldwide have fiercely competed to secure AMSL’s EUV machines. They include U.S. player Intel, South Korea’s Samsung, and Taiwan’s TSMC, the biggest, which makes chips for Apple, AMD, and Nvidia.

In order to curb Beijing’s hegemony in the semiconductor field, in 2020, the Trump administration blocked ASML from selling its EUV lithography systems to China on national security grounds. The efforts were carried over by the Biden administration, continuing the stance of the Trump White House.

Before visiting ASML, Lee also met with Dutch Prime Minister Marco Rutte on June 14 to discuss the semiconductor partnership. Lee reportedly asked the Dutch PM to support Samsung in securing more ASML machines that are currently in tight supply due to chip shortages, according to The Korea Herald.

Dutch Prime Minister Mark Rutte (left) and Samsung Electronics Vice Chairman Lee Jae-yong pose at the prime minister’s office in The Hague, Netherlands, on June 14. Courtesy of Samsung Electronics

In March, the Dutch PM had a telephone call with then President-elect Yoon Suk-yeol about a similar topic. The two reportedly agreed to expand the bilateral partnership between the two nations, especially in the field of semiconductors.

On June 15, local time, Lee visited the Interuniversity Microelectronics Centre (IMEC), the largest semiconductor research institute in Europe, located in Leu, Belgium. He met with IMEC CEO Luc Van den hove, where they reportedly discussed the latest chip technologies and R&D directions.

U.S. President Joe Biden visited South Korea during his first trip to Asia since taking office. During the tour, the leaders pledged to strengthen semiconductor alliances among the world’s largest chip-making countries to ease global shortages.

President Joe Biden (left) and South Korean President Yoon Suk-yeol (center) and Samsung Electronics Co. Vice Chairman Lee Jae-yong (right) during their visit to the Samsung Electronic Pyeongtaek Campus in Pyeongtaek on May 20. Kim Min-hee/Pool/AFP via Getty Images

Shortly after Biden left South Korea, Samsung Electronics announced it would spend about $360 billion over the next several years until 2026 to boost its businesses, from semiconductor chips to biotech. In a May 24 announcement, the company revealed that roughly 80 percent of the investments would be made in South Korea, where it is headquartered.

Last November, Samsung Electronics announced a $17 billion investment in building a new semiconductor manufacturing facility in Tyler, Texas, with construction starting in the first half of this year.

The new facility is scheduled to start mass production in the second half of 2024, producing products based on advanced process technologies for application in areas such as mobile, 5G, high-performance computing (HPC), and artificial intelligence (AI).

Texas Gov. Greg Abbott and Dr. Kinam Kim, vice chairman and CEO of Samsung Electronics Device Solutions Division, announce that the chip-making company will build a $17 billion plant in Central Texas. Courtesy of Samsung