# Not Just EUV Lithography: ASML Plans to Enter Advanced Packaging Track, Deepening AI Chip Equipment

IT House, March 3 — An executive from ASML in the Netherlands told Reuters that the company has set ambitious plans to expand its chip manufacturing equipment product line to include several new products, aiming to capture a larger share of the rapidly growing AI chip market.

After more than a decade of research and development, ASML is the only manufacturer of extreme ultraviolet (EUV) lithography equipment in the world. This equipment is crucial for TSMC and Intel in producing the most advanced AI chips globally. ASML has invested billions of dollars in developing EUV systems, with the next-generation products about to be launched, and is also working on third-generation potential models.

The Dutch company hopes to diversify beyond EUV, planning to enter the advanced packaging equipment market, which can bond and connect multiple dedicated chips. Advanced packaging is a key component of AI chips and high-end memory modules. As part of this plan, ASML will incorporate artificial intelligence technology into both new and existing businesses.

ASML’s Chief Technology Officer, Mark Pitter, told Reuters, “We are not only looking at the next five years but also focusing on the next ten or even fifteen years. We will analyze potential industry development directions and what technological support is needed for packaging, bonding, and other processes.”

ASML’s EUV equipment is used in lithography processes, which involve projecting complex circuit patterns onto silicon wafers to manufacture chips. The company is also exploring whether it can break through the current size limit of about the size of a postage stamp for lithography, which constrains chip speed.

In October last year, ASML appointed Pitter as Chief Technology Officer, succeeding Martin Vandenbroucke, who had been in the technical department for nearly 40 years. In January, ASML announced a restructuring of its technical business, prioritizing engineering roles over management positions.

Investors have already priced in ASML’s dominance in the EUV field and hold high expectations for Pitter and the new CEO, Christophe Foucault, who will take office in 2024. The company’s current price-to-earnings ratio is about 40, compared to NVIDIA’s approximately 22. This $560 billion market cap company (IT House note: approximately 3.87 trillion RMB at current exchange rates) has seen its stock price increase by over 30% this year.

ASML is accelerating the development of chip packaging equipment and has begun developing tools for manufacturing next-generation high-end AI processors. Pitter said, “We are indeed researching this area — how much we can participate and what additional value we can bring to this business.”

With a background in software development, Pitter noted that as the company’s equipment speeds improve, engineers will use AI to optimize device control software and enhance defect detection during chip manufacturing.

Until a few years ago, chips designed by companies like NVIDIA and AMD were mostly flat structures, similar to single-story houses. Today, chips are increasingly like multi-story interconnected skyscrapers, with layers connected via nanometer-scale wiring.

Limited by the size of lithography (about the size of a postage stamp), stacking or horizontally connecting chips can boost computing speed and meet the complex computational demands of building large AI models and running chatbots like ChatGPT.

These “skyscraper-style” chips require extremely high manufacturing precision and complexity. Once a low-margin, high-volume packaging process, it has now become a more profitable manufacturing field for companies like ASML. TSMC uses advanced packaging technology to produce top-tier AI chips for NVIDIA.

Regarding the deployment of companies like TSMC, Pitter said, “We also see that more advanced packaging technologies are extending toward the front end of chip manufacturing, and precision is becoming increasingly important.”

After studying the plans of chip manufacturers like SK Hynix, Pitter believes that the market clearly needs more new equipment to help produce stacked chips and similar products.

Last year, ASML launched the XT:260 scanning system designed specifically for manufacturing high-end AI storage chips and AI processors. Pitter revealed that the company’s engineers are still developing more related equipment. “One of my current tasks is planning this product portfolio.”

As AI chip sizes have significantly increased, ASML is researching more scanning systems and lithography equipment to support the production of larger chips.

Pitter stated that because this type of scanning equipment involves optical and other specialized technologies, as well as proprietary methods for handling silicon wafers, it will be a competitive advantage for ASML’s future models. “This business will develop alongside the fields we have been working on for the past 40 years.”