It might seem impossible to believe but all the most advanced semiconductors are made by machines built by one company, named ASML.

TRANSCRIPT:

It’s probably not something you think about much, but computer chips are in everything these days.

Which is why when a semiconductor shortage hit this last year, we saw delays in products of all kinds all around the world.

You would think that given the importance of computer chips in this day and age, there would be companies all over the world making chips, and you would be right.

But the machines these companies use to make these chips pretty much all come from one single company.

It’s a company called ASML. And you might not have heard of them, but they are not only pushing the boundaries of chip technology, they’re becoming a major player in geopolitics.

The one company that makes the machines that makes modern life possible. Let’s talk about it.

Maybe something about the semiconductor shortage recently.

Here are all great info graphics that could inform the shortage and ASML’s importance to the market. Probably would be good for shorts too.
We are officially in the age of the “internet of things.” Everything is connected now, which means pretty much everything you can think of has a computer chip in it.

From your electric toothbrush, tractors, washing machine, car, cellphone, watch, and even some shoes… oh and Furby’s. Which are somehow still a thing.

It’s to the point that “e-waste” has become a problem. I covered that in a different video.

So, it’s not just computers. These things are everywhere, which is why it was such a big deal when the pandemic created a semiconductor shortage.

In response to this, both The E.U. and The United States to shore up their semiconductor manufacturing so they don’t have to rely on foreign powers.

Of course it wasn’t enough to just produce more chips, we had to prevent our adversaries from doing the same. This is where the geopolitics thing comes in.

Because in a move that didn’t make a lot of headlines, Biden banned a company from selling chip making machines to China. That company was ASML.

Okay so before we get to nanometer lasers, faraday cups, tin generated plasma which yes all sounds more like techbabble from a Star Trek episode, let’s step back and go over some fundamentals.

Yes, it is time to have “The Talk” on where do baby microchips come from.

And if you want to start at the VERY beginning… It’s sand.

Yeah, I know it gets everywhere but you know what gets in it? Silicon.

Before anything remotely starts looking like a microchip it starts at locating and refining sand abundant with silicon.

If you’ve always wondered why we use silicon for these things, it’s because it’s both an insulator and conductor with an almost 50/50 distribution.

And it’s also easily “doped” with other elements like boron and phosphorus, which allows for the controlling of electrical signals.

This lets you create positive and negative states, which translates to ones and zeroes. But I’m getting slightly ahead of myself.

So you take this silicon rich sand and subject it to extreme temperatures with a little carbon thrown in. that carbon bonds to oxygen creating carbon monoxide, which isn’t great, along with 99% pure silicon. Which is awesome.

By the way, we’re kinda lucky because silicon is the 2nd most abundant element in Earth’s crust, making up 28.2%. So that’s a thing you know now.
The real trick is to get this molten silicon into a crystalline form. To do that, they add a crystal to the molten silicon and this serves as a kind of nucleation point.

Once it cools and crystalizes, you get what they call a boule of silicon. Just a big ol’ cylinder of silicon.

And it’s this cylinder that gets sliced up and creates that circular shape that you always see chips printed on. That’s why they’re like that.

The last step is to add some final deposition layers on the wafer, these are coatings of light resistant and photosensitive materials.

And the chips are created by blasting those layers with an electron beam laser. This process among others is called lithography.

Lithography is like building with light but on the nanoscopic scale.

So you can think of ASML’s machines as a kind of 3D printer, but one that operates with an accuracy of one thousandth width of a human hair.

For reference, a human hair is 50 microns.

And it’s this ever smaller nanoscale printing that has allowed ASML to keep up with Moore’s Law. The doubling of transistors every year onto the same space.

Which, as I’ve talked about on here before, is getting to the point that weird quantum effects like quantum tunneling are starting to become an issue.

Right now they’re dealing with it by raising the resistance at the gates, or make the gates more complex so rogue electrons don’t ruin the processing.

This is making it possible for their machines to print at 5 NANOMETERS with 2 NANOMETERS coming very soon. Like 2025 soon.

Now, you may want more details on that statement, and I don’t have them, all I can say is ASML is very confident that they can do 2NM. And go even smaller.

Keep in mind the EUV tech that they use now took 30 years to perfect. So they’re working on the microchips of 2060 right now.

Think picometers not nanometers. A Picometer is 1/trillionth of a meter.

Now obviously there are a lot of details I’m leaving out here, this is a high-level view and frankly some of their technology is proprietary but I’m just getting you the broad strokes.

And again, to be clear, ASML doesn’t design the chips. That’s done by the various chip manufacturers, but ASML makes it possible for them to make the chips.

You might say that ASML builds the oven and the chip manufacturers are the bakers. If that makes sense.

ASML stands for Advanced Semiconductor Materials Lithography, and it was originally a spin off from Phillips, and they struggled at first but eventually found success with their PAS 2000 step and scanner.

Then ASML came out with PAS 5500 which is still used today, so safe to say that stepper really let them…step up their game.

They then continued their winning streak with their TWINSCAN tech and Immersion Lithography.

And shortly thereafter in 2010 Extreme UltraViolet tech was born. Which is still state of the art to this day.

In as brief detail as possible, how does this machine work?

How does a $300 million dollar machine print nanoscopic details into a silicon wafer… well buckle up.

Molten tin droplets measuring 25 microns in diameter are ejected from a generator at 70 meters per second.

As they are shot out, the droplets are hit first by a low-intensity laser pulse that flattens them into an ellipsoidal pancake shape.

Then a more powerful laser pulse vaporizes the flattened droplet to create a plasma that emits EUV light. And it does this 50,000 times per second.

I’m sorry, just in case your mind wasn’t sufficiently blown, it’s a 25 micron tin ball traveling 70 M/S. Getting blasted by a laser 50,000 times a second. And that’s just to create the light source.

And this machine works 24/7/365 there are 86,400 seconds in a day so 4,320,000,000 times this machine is vaporizing tin into extreme ultra violet light in ONE day.

But then, it gets even crazier because then that EUV has to be bounced off a series of Zeiss made mirrors which are so perfectly made that if the mirrors were the size of the United States there would be only little 0.4 micron bump on the mirror.

The mirrors have to be this accurate to make the light print with such extreme precision. And each of them costs $100k.

These mirrors bounce finally into a reticle, this reticle is like the “cookie cutter” in the process. It shapes the light into the pattern needed for the transistor to be printed.

What all these optics DON’T do is move the laser around on the wafer. Just far too delicate for that. What does move is the wafer itself, using the wafer robot stepper.

Just in case you were wondering if this is any less impressive, it keeps the wafer moving at a rate of 700 millimeters per second.

That is faster than an accelerating fighter jet. 50,000 times a second.

And it just prints this same pattern over and over again until the wafer is full.

At that point, they put a new wafer and reticle in and the process starts all over again.

ASMLs machine also makes things like DRAM (performance media), and Storage Memory.

You too could have one of these humble machines for the low, low cost of $160 million dollars. Or if you are INTEL you can say I don’t want the machine of today I want the machine of tomorrow!

And then proceed to spend $340 million. Casual.

Of course you could just buy from a competitor… But there are none.

The CEO of ASML said the reason they don’t have competitors is well…it is hard. EUV took over 30 years to make work.

The CEO also said that they have to spend $60 million a year just on security to continually repel spies (text: mostly from China) and cyber attacks.

And the fact that CHINA, a country with massive resources is having to try and steal their tech rather than just make their own kinda speaks to just how hard this science is.

And where is this company located that secretly kinda runs the world? Who is behind this? (look at paper) Veldhoven, The Netherlands. (a beat) Of course it’s the Dutch.

Computer chips are just 21st century spice. Go watch my video on the spice trade if you haven’t, it’s… illuminating.

Although, to be fair to the Dutch, the company is headquartered there but the extreme ultraviolet technology that makes their dominance possible… isn’t theirs.

I mentioned earlier that ASML was spun off of Phillips, well Phillips, which is headquartered in the United States, holds the patent to that technology.

This was why when the United States told ASML not to sell their chips to China they sorta had to listen.
https://www.semiconductoronline.com/doc/euv-llc-enters-development-agreement-with-new-0001

Granted, ASML does have competitors for making other kinds of chips but nothing for the highest-end EUV chips.

For example there’s DUV printing or Deep Ultra Violet, these are less complicated and actually Nikon and Canon are strong competitors there.

And here you thought they just made cameras. And… printers.

So the China thing, turns out it’s kinda a big deal?

Before things get too political, understand this was initiated by the Trump administration but Biden has continued this policy.

What this means for China is if they want to compete technologically with the rest of the world they either need to figure out how to compress 30 years of EUV development down to… well, nothing… Or find another source of chips.

And you know who manufactures 90% of the world’s most advanced computer chips? Taiwan. Yeah.
(Source: Boston Consulting Group, 2021)

But the US is desperate to boost chip production as well.

The pandemic exposed that our American supply chain was highly dependent on semiconductors from abroad. And not even the super advanced chips but the basic ten cents a pop chips.

And this is why back in October Congress passed and President Biden signed the CHIPS and Science Act, which allocates $280 billion to chip manufacturing and research.

As well as build a more inclusive STEM workforce. Hence the “science” part of the act.

The hope is that the CHIPS act will make the United States more of a player in the semiconductor space. Today we make 12 percent of the world’s semiconductors – we made 37 percent in the 1990s.

Also, the semiconductor industry is poised to become a $1 trillion industry by the end of the decade. So the US wants a piece of that.

And at the moment, that just means more machine sales for ASML.

ASML in 2022 sold 55 of their machines and are expecting to sell 60 machines in 2023 as well as improve on their most advanced commercially available machine, the NEX:3600D.

The NEX:3600D will boast being able to process 20% more wafers. At the same time ASML has to sell more DUV machines as that’s where the greatest competition exists and are at risk of losing market share.

At the same time ASML will be pushing out their newest and greatest machine the High Numerical Aperture EUV machine (High NA EUV).

But as I said before, they are already working on the next 30 year technology, who even can imagine what that will be like.

ASML is a company in a race with Moore’s Law. I mean, they have no other competitors to race against.

Which is kinda interesting, it sorta makes Moore’s Law a self-fulfilling prophecy. Like the only reason we’re keeping up with Moore’s Law is so that we can keep up with Moore’s Law.

But hey if all that processing power makes it more possible for us to see to the edge of the universe and peer further inside the atom and cure all kids of diseases… I’d say it’s worth it.