372: Chapter 372 The Panic of Asmail

"An 18-month lead time is something we can afford to wait for."

[Writing this, I hope readers will remember our domain name: Taiwan Novel Network]

Morris Chang looked toward the legal department again: "Although we can resist, don't let them find any small leverage. Go through all compliance documents and technical specifications clause by clause to ensure there is nothing they can hold against us."

After confirming that the head of legal nodded, he looked at everyone else:

"As for being targeted? As long as our technology is leading, they will need us to check Transsion, and then everything will be fine. Since ASML wants to make money by just lying there, then we'll switch to a different player. Let them know that monopolies can be broken."

Everyone in the conference room nodded excitedly; after all, even a clay bodhisattva has a temper, let alone TSMC!

"Order the first batch of 20 units to replace our old production lines at the Tainan plant. Request two Lithography Machines from them first, and follow up with additional orders based on the yield rate and cost data."

No one in the conference room spoke. They all knew this was not an ordinary procurement. This was crossing a red line... But if it succeeded, TSMC would significantly reduce costs. This was a plan that had to be executed.

...On the other side. The ASML conference room.

"What did you say?" The voice of ASML CEO Peter Wennink sounded as if something had shattered, displaying panic in front of everyone for the first time.

As for all this, it goes back to 4:00 AM, when he was suddenly woken up by an emergency call. He thought some factory had caught fire again, but the news he heard was even more terrifying than a fire: TSMC had placed an order for 20 units of China's Morning Star 193 dry Lithography Machines.

"Has the news been confirmed?" he asked in a panic.

"Confirmed. The procurement contract has been signed for the first batch of 20 units, and they are being very high-profile about it. They said this batch of Lithography Machines will be used to replace the old production lines at the Tainan plant, and furthermore..."

The Asia business manager's voice was trembling slightly; after all, TSMC was not the worst of the news—it was just the beginning.

"Samsung has also signed for 5 units, and they expect to receive one this year. Intel... is evaluating it, but there is a strong internal inclination, and I estimate there will be a result soon."

Wennink had someone take the phone a little further away, as if to confirm whether this was a dream or if he hadn't woken up yet.

After all, for 20 years, ASML had been almost invincible in the DUV Lithography Machine market. Nikon had once tried to catch up but was pinned to the ground by their immersion technology; after Canon retreated to niche fields, it had long since lost any ability to threaten them.

They were too accustomed to the taste of monopoly; prices should have dropped by 5–8% annually, but instead, they raised them by that much every year... Customers, aside from complaining a few times, paid every cent they owed, and if it were China, they even had to pay an extra expediting fee.

But now, the China Semiconductor Fund, a plan they deemed a joke, had really slapped them in the face. The key was that this slap was not pleasant, nor was it funny. Now, the other side was the one watching them as a joke.

Consequently, this meeting was a bit chaotic; almost every executive was pulled into the conference room as soon as they arrived. Some people who couldn't make it in person attended via an online meeting.

But everyone found it hard to believe; after all, how could they set the price so low, and why would those manufacturers dare to buy their dry machines?

"Have the technical specifications been confirmed?" Technical Vice President Klaus Müller had long read the relevant reports, but he still couldn't believe it. After all, that was China... the saline-alkali land of the semiconductor industry, an industrial wasteland, yet now... they had used dry machines to create equipment comparable to their immersion systems, although they knew that was a modified version from Transsion and not for sale.

But Transsion's strength was still there, and it would steal their customers... Moreover, being advanced was only temporary; these modified versions would eventually be sold. By then, for process nodes above 20nm, there would be absolutely no need for immersion machines, and companies would save massive amounts of costs on production lines. How would those manufacturers choose...

"What resolution and throughput can they achieve?"

"According to an evaluation report leaked from TSMC." The Marketing Director felt this report was the answer he wanted them to see. "The specific resolution is uncertain, but it is about 15% higher than our same model, and the throughput is 220 wafers per hour, which is on par with ours. But the key is that they have adopted a new type of solid-state light source and projection system, and the pattern fidelity of a single exposure is close to the effect we need two or even three exposures to achieve."

"Impossible," Muller said casually. "We have evaluated this technology path for the power and stability of solid-state light sources; they simply cannot meet mass production requirements. How did they achieve it?"

"Unclear. The technical details are being kept very tight. Currently, we only know that a portion of the core development team consists of technical experts that China Star poached from the Netherlands, Japan, and the United States after the 2008 economic crisis."

The conference room went completely silent. China Star had started laying the groundwork five years ago, and based on their understanding of China's R&D... this dry machine was definitely not the most advanced. Even the exhibited Morning Star C-series... was a backward product. Perhaps their industrial factories were already using self-developed immersion Lithography Machines.

"So you're saying..." Wennink's voice carried infinite fear. "This is a machine made by a company led by the Semiconductor Fund, using a technology route we never even imagined, that is nearly half the price of ours yet performs better."

This question didn't need an answer; after all, the answer was too obvious.

"What do we do now?" The headquarters sales president wiped his sweat. "TSMC, Samsung, and Intel are all watching us. If they switch orders on a large scale, the revenue from this line will be cut in half. Although it is not the most advanced, due to the price advantage, they remain our sales mainstay."

The sales director's words once again laid a topic bare before them. TSMC and Samsung, while they were shareholders, were primarily customers, and their shareholding was just to get Lithography Machines at the first opportunity. Since they were customers... then price had to do the talking.

"Let's lower the price!" Muller sighed silently. The pride in his bones did not allow him to say these words, but in the face of reality, they had to bow their heads.

"Lower the selling price of the XT:1450 from 140 million to 120 million, or even lower. They are at 80 million, and our price is indeed higher, but if we lower it to 120 million, customers will come back. After all, the industrial ecosystem..."

"And then what?" The CFO immediately raised an objection. "Our cost structure is right there: light sources from the United States, lenses from Germany, vacuum systems from the UK... the supply chain is scattered across seven or eight countries, and logistics and management costs alone account for 30%. Lowering it to 120 million leaves only a 10% gross profit per unit; lowering it to 100 million means a loss."