ASML-Cymer merger imminent after Korean approval

28 May 2013

€2 billion cash-plus-stock acquisition clears final regulatory hurdle.

Lithography giant ASML’s planned acquisition of key light source supplier Cymer is set to be completed within days, after the deal was approved by regulators in Korea.

ASML announced on May 26 that the Korean Fair Trade Commission (KFTC) had cleared the plan, and added:

“As a result, all conditions to closing the transaction, except for those conditions that can be satisfied only at the closing, have been fulfilled. The parties expect to close the transaction end of May – early June.”

First announced in October last year, ASML’s acquisition of Cymer will see the lithography industry’s dominant supplier of systems take full control of the equally dominant light-source provider.

According to the KFTC, in 2011 ASML held a market share of more than 80%, with its only real competitor, Japan-based Nikon, holding just a 16% share. The Netherlands-based company’s three leading customers - Intel, Korea-based Samsung and Taiwan Semiconductor Manufacturing Company (TSMC) - account for more than half of the market for such systems.

Cymer held a slightly smaller share of the market for the deep-ultraviolet light sources used in lithography systems - “only” 72% - ahead of its Japanese rival Gigaphoton with 28%, the KFTC said. The vast majority of those Cymer light sources already end up in ASML systems.

EUV supply chain
A major part of ASML’s rationale for the acquisition is to support the production scale-up of light sources needed for extreme ultraviolet (EUV) lithography, with the first such systems being constructed at present.

That scale-up will have a considerable impact on the photonics industry supply chain, because high-power carbon dioxide lasers and related optical components are key to producing EUV light sources with sufficient output power for cost-effective chip production.

For the Korean authorities, the impact of the ASML-Cymer merger on Samsung would have been a primary concern. ASML has previously said that, post-merger, Cymer would operate as an independent business unit, as far as sales of commercial hardware and services are concerned.

“Cymer will continue to supply sources to and engage in R&D activities with all lithography tool manufacturers on fair, reasonable and non-discriminatory commercial terms,” stressed the firm.

“Furthermore, ASML reiterates it will continue to let its scanner customers choose their preferred light source, and its scanners will continue to interface with light sources from all manufacturers,” it added.

Back in October, when the deal was first announced, ASML’s CFO Peter Wennink, who is about to step up to the CEO role when it is vacated by Eric Meurice, said: “Cymer products will be available to anybody in the industry and at a reasonable, normal price.”