The long-established Japanese brand Nikon is quietly returning to the chip manufacturing field, competing with ASML.

In the history of optics, the Nikon brand has been known globally for producing precision lenses and professional cameras; however, in the semiconductor equipment field, this company has also stood at the pinnacle of the world. It was only in the past twenty years that ASML monopolized the global market with extreme ultraviolet (EUV) equipment, forcing Nikon to withdraw from the advanced process track, leaving only DUV (deep ultraviolet) equipment and special application markets. However, in recent years, global geopolitical changes have reshaped the Supply Chain, with the United States, Japan, and the European Union seeking to drop their dependence on ASML. Wafer processing has begun to have new developments, allowing Nikon to see the dawn of re-entering the market and the opportunity to participate again in the chip manufacturing race. This longtime Japanese optical giant is quietly making its return to the world stage. This article is excerpted from the highlights of the video “Nikon’s Comeback: Japan’s Quiet Return to Chipmaking.”

From Peak to Silence: Nikon Displaced by ASML in Twenty Years

At the end of the last century, Nikon and Canon shared the world with ASML, jointly dominating the global Extreme Ultraviolet (EUV) lithography machine market. At that time, Nikon's wafer stepper and scanner technology were considered the standard for high-end processes, with its optical system stability leading the market for many years. However, the emergence of EUV changed Nikon's fate. ASML, which invested substantial research and development funds, was backed by the funding and industrial integration capabilities of multiple European governments, ultimately succeeding in creating the world's only commercially available EUV. The accumulation of costs, production capacity, supply chain, and patent barriers forced Nikon to completely abandon EUV development in the late 2010s, turning to mature processes and special applications.

ASML from a follower to becoming the EUV dominator

Today's lithography market presents a stark contrast: ASML holds over 60% of the global lithography market share, and in the most advanced EUV (Extreme Ultraviolet Lithography) field, it has a 100% monopoly position.

In the wafer manufacturing process, the deep ultraviolet lithography technology using 248 nm or 193 nm light has been the industry's mainstay for decades. It is still widely used in automotive chips, Internet of Things devices, and everyday electronics, with equipment from companies such as Nikon, Canon, and ASML servicing nodes in the 28 to 90 nm range. However, to further shrink transistor sizes to 7 nm and below, the industry has turned to extreme ultraviolet lithography (EUV). Around 2018, EUV uses light with a wavelength of 13.5 nm, requiring special lasers and vacuum systems to etch extremely fine features. EUV has become the gold standard for the most advanced logic chips.

ASML is the only company capable of mass-producing EUV equipment, with the cost of each unit possibly exceeding $150 million to $350 million. These massive machines have allowed Moore's Law to continue, integrating billions of transistors onto a small piece of silicon. Today, the global semiconductor landscape is heavily influenced by EUV lithography technology. ASML's EUV lithography equipment is used by TSMC, Samsung, and Intel to manufacture the fastest processors. Nikon and Canon once dominated the market, but now mainly provide DUV lithography equipment for older nodes and specialized markets. This represents a significant technological leap. Nikon perfected the previous generation of technology, while ASML achieved breakthrough development through a highly risky new technology and has reaped substantial rewards.

The price of ASML's EUV scanning equipment ranges from 150 to 350 million USD, with a power consumption that could supply a small community, yet it still prompts TSMC, Samsung, and Intel to compete for its purchase, as EUV is an essential core for processes below 7 nanometers. In contrast, Nikon stopped its development after launching an experimental EUV device in 2008, and since 2017, its high-end lithography business has rapidly shrunk, with ASML's market share in the immersion DUV market even exceeding 90%.

Nikon's counterattack

On the surface, it seems that the situation is settled, but Nikon's fate will迎來 a turning point in 2025, as Nikon quietly makes a comeback through another path. The world's demand for advanced chips has made EUV lithography technology indispensable. This is why ASML's stock has soared in recent years. So, what about nanoimprint lithography technology? Traditional nanoimprint lithography technology, whether DUV or EUV, uses light passing through a lens to project circuit patterns onto wafers.

Nikon has not attempted to directly challenge ASML's EUV monopoly, but has instead turned to two rapidly growing areas that have been overlooked by the mainstream market:

Advanced Packaging

Nanoimprint Lithography, abbreviated as NIL

These two fields are the battlegrounds where ASML has not formed an absolute advantage, and they are also where Nikon's precision engineering and large-area exposure technology can be best utilized.

Strategic Counterattack 1: Transitioning to Advanced Packaging DSP 100 Backend Lithography Machine

AI chips, Chiplets, and 3D stacking have significantly increased the importance of packaging. Packaging lines are becoming more like another layer of photolithography, requiring high resolution at the micron or even sub-micron level, large panels greater than 300 mm wafers, and high throughput. Nikon will launch the DSP 100 digital lithography system in 2025, featuring:

Supports 600 × 600 mm panels (9 times the area of a 300mm wafer)

1 μm line width / ±0.3 μm alignment error

Adopt Nikon FPD technology × semiconductor photolithography hybrid architecture

DSP 100 is tailor-made for back-end processes, perfectly meeting the rapidly growing demands of chipsets, AI accelerators, and HPC packaging.

Strategic Counterattack 2: Nanoimprint Lithography (NIL) Challenges EUV Cost Hell

The NIL technology does not use optical projection, but instead directly “imprints” circuit patterns onto wafers using nano molds, similar to printing money or molds, completing the physical imprinting of the pattern in one step.

Its advantages are tremendous:

The cost may only be 40% of EUV.

The power consumption is only 10% of EUV.

Not bound by the optical diffraction limit, theoretically can be below 10 nm.

Suitable for memory processes with high repetition, such as NAND and DRAM.

Canon has launched NIL equipment capable of reaching 14 nm in 2023, and has collaborated with Armor to test 10 nm capabilities. Nikon is also entering this field, and the market looks forward to the Japanese duo setting a new standard.

NIL ( Nanoimprint Lithography ( may change the game.

No need for a 150 million dollar EUV, no need for a huge light source and mirror system, you can also manufacture sub-10 nanometer chips. For emerging chip manufacturing countries and budget-limited foundries, this is an unprecedented opportunity. The cost of nanoimprint equipment may only be about 40% of that of extreme ultraviolet lithography systems, while the power consumption is only about 10% of that of extreme ultraviolet lithography systems. Specifically, if the cost of an extreme ultraviolet lithography tool is about 150 million dollars with a power consumption of 1 megawatt, then the cost of a nanoimprint tool may be about 60 million dollars with a power consumption of 100 kilowatts. These are significant drops.

Why is Nikon's new strategy so important right now? The semiconductor industry is at a turning point. The costs and complexities of further developing EUV technology are skyrocketing, with the unit price of the new generation of high NA EUV equipment exceeding $300 million. At the same time, an increasing number of methods are emerging. Companies are no longer solely pursuing the continuous reduction of single chip sizes but are focusing on chipsets and advanced packaging technologies to continuously enhance performance by combining multiple chips in one package (e.g., microcircuits). The growth of artificial intelligence )AI( and the Internet of Things )IoT( is simultaneously driving strong demand for high-end chips. As geopolitical landscapes change, countries are looking to enhance domestic chip production capacity, and there is a desire to find alternatives centered around ASML, giving Nikon the opportunity.

Nikon does not aim to completely replace EUV technology, but rather to create a new blue ocean as the industry seeks different solutions. Nikon is quietly making a comeback, once again playing a key role in the global semiconductor supply chain.

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