I recently read Focus: The ASML Way by Marc Hijink, a book I’d recommend to anyone interested in getting up to speed on ASML. Among the many interesting anecdotes cited in this terrific book, the one that stood out most to me pertained not to its mind-boggling technology but its approach to a patent dispute. In 2017, just as ASML’s investments in EUV technology began to be commercialized, Nikon, a Japanese lithography competitor better known for its digital cameras and whose own efforts at developing EUV foundered in 2009, sued ASML for patent infringement, in the process pulling in Carl Zeiss SMT, a critical supplier of lenses to ASML. The stakes were existential. “Once again, the survival of the company was at stake”.
This gave Eric Maurice an idea – and a brilliant one, he might add. In 2011, two years before the Frenchman stepped down as CEO, he approached Martin van den Brink with a plan. As soon as the Japanese filed their first complaint about lithography machines, ASML should use camera patents to hit Nikon where it hurt the most. Maurice could feel the storm brewing, and he gave a stark warning to Van den Brink: ‘You’re gonna have a problem Martin, that’s why you need to attack them on their own turf. Make sure you get those patents.’ (emphasis mine)
So, in a neat demonstration of legal Judo, ASML set up a shell company, Tarsium B.V., in 2011 for the express purpose of acquiring a portfolio of patents related to digital photography. When Nikon formally sued in April 2017, Tarsium’s IP was transferred to ASML and Zeiss, who then countersued Nikon over the camera patents. To demonstrate commercial harm, ASML and Zeiss needed an actual product available for sale in the US that used the patents they were suing Nikon over. To that end, Zeiss literally manufactured a consumer camera, the ZX1, and publicly announced its pending availability at the 2019 Photokina fair in Frankfurt, with the media present and everything. Nikon freaked out and agreed to a settlement that was palatable to ASML. Tarsium and the ZX1 quietly vanished.
I bring up this tag-team patent trolling adventure because it exemplifies the symbiotic and quirky ways ASML is entangled with its suppliers. Over the years, many have gawked at the technical virtuosity of an EUV machine, to the point where certain facts now roll off the tongue and border on platitude – laser pulses heat tin droplets to temperatures many times hotter than the sun’s surface; Zeiss’ mirrors are so smooth that were they scaled up to the size of Germany, the largest bump would be just 1mm high. It requires astonishing feats of physics to print circuits sized in single digit nanometers over and over again with near flawless accuracy. But as impressive as the precision physics itself is the fact that 80% of the machine’s critical parts are manufactured by outside vendors (ultra-precise mirrors come from Zeiss; high-power lasers from TRUMPF; wafer-feeding robotic arms from VDL). Somehow, more than 100k parts from 5k different suppliers congeal into a ~$400mn double-decker bus-sized marvel.