Philips Electronics

Philips was one of the largest consumer electronics and professional systems companies in the world in the 1980s, headquartered in Eindhoven. Its wafer stepper began as the Silicon Repeater prototypes at Philips Research and was moved to the Philips Science & Industry division in 1978 for commercialization as the PAS 2000. By 1983 the wafer stepper group of about 50 engineers needed roughly 120 million Dutch guilders, equivalent to about $277 million (245 million euros) at current price levels, to upgrade, produce and market the machine, which Philips was not willing to fund alone. It therefore sought a partner and, after negotiations with Perkin Elmer failed, agreed a 50-50 joint venture with ASM International. Philips also provided the decisive rescue in 1988, when board member Henk Bodt persuaded chief executive Jan Timmer to approve a final 30 million guilder investment. Philips sold half of its shares at the 1995 IPO and divested the remainder over the following years.

ASML was not founded by an individual with a vision. It was an underfunded joint venture between a conglomerate that wanted a project off its books and a smaller equipment company that wanted into lithography. Philips had developed a wafer stepper, the PAS 2000, out of the Silicon Repeater prototypes at Philips Research, but the project was small inside Philips, over budget and behind schedule, and the corporation was under severe financial pressure. Philips first pursued a partnership with the market leader Perkin Elmer, which wanted the leading role in sales and service; Philips would not grant access to Philips Research in a subordinate position and the talks dragged on until Perkin Elmer partnered with Censor instead. Philips then returned to ASM International, the company Arthur del Prado had built, which it had previously judged too junior, and the two agreed terms quickly. They announced the joint venture on September 5, 1983 and ASM Lithography commenced operations on April 1, 1984, initially in the Philips Strijp TQ building in Eindhoven, with Gjalt Smit brought in as managing director. Of the 50 engineers in the Philips wafer stepper group, 47 signed on, many of them reluctantly, since they were giving up jobs for life at Philips for a startup with no market access and a machine that had to be redesigned. Sheds were added as the company outgrew the building, and it moved into purpose-built premises in Veldhoven in 1985. The decisions that mattered came next: buying optics from Carl Zeiss from 1986 instead of building them, and later light sources from Cymer, which let ASML iterate faster than the vertically integrated Nikon and Canon. That systems integration model carried it through near-collapse in 1988, the PAS 5500 turnaround in 1991, TWINSCAN in 2001, immersion in 2003 and finally roughly two decades of EUV development.