The aggressive node migrations seen at NAND flash memory manufacturers as they attempt to reduce production costs to keep pace with falling ASPs has been a boon for lithography tool suppliers ASML and Nikon with respect to increasing adoption of immersion lithography technology at the sub-60nm nodes. 

However, DRAM manufacturers are now aggressively shifting from 193nm ArF dry tools to immersion as they too step up die shrinks in a bid to tackle tumbling prices, according to ASML executives during a press event to report 2007 financial results. With much of today’s DRAM production at the 70nm node, ASML noted that manufacturers have accelerated migration plans to the 5xnm range resulting in a need to use immersion lithography for critical layers for the first time.

The rush to shift imaging to immersion technology is one year ahead of ASML’s own projections and was a pleasant surprise for executives at the company.

Approximately 65 percent of revenues from its fourth quarter came from memory manufacturers with a 50:50 split between NAND and DRAM, the company said. The backlog in orders now stands at €1.7 billion with approximately 60 percent of that figure related to 193nm ArF tools, both immersion and dry.

However, one current disappointment is the lack of business from the major foundries, which have steadfastly kept capital spending locked away even though utilization rates have increased quarter-on-quarter in 2007.

Indeed, the impact on a regional sales basis is significant as Taiwan, normally a strong sales region due the presence of the two largest foundries, TSMC and UMC respectively, hit an all time low in ASML’s fourth quarter contributing only 9 percent of revenues.

However, Eric Meurice, President and CEO of ASML, noted that poor economic visibility at the foundries was a key factor in the lack of tool orders. However, with very high utilization rates and an expected 10 percent semiconductor sales growth in 2008, it would, Meurice noted, only be a matter of time and better visibility before the foundries started placing orders for lithography tools again as there was an inherent need for advanced tools including immersion systems.

In Q4 2007, ASML shipped 50 new and 5 used systems worldwide and has now shipped 20 XT:1900i systems since the first shipment in July of 2007. Executives noted that several XT:1900i tools had been purchased by Japanese customers boosting sales and market share.

ASML also noted that it increased its global market share to 65 percent in 2007, up from 63 percent in 2006, according to the latest available data reported by SEMI.