New reports show that Taiwan Semiconductor Manufacturing Company or TSMC has inked a deal with Advanced Semiconductor Materials Lithography or ASML for a new type of lithography machine to print miniature circuit patterns on silicon wafers.

Why is this important? Because TSMC is the world’s dominant seller of chips, for cars, for computers, or for anything else. Apple uses TSMC to source its system-on-chip (SOC) design. Also, Nvidia, itself the monolithic AI GU vendor, uses TSMC as well. As I’ve pointed out many times here, TSMC just doesn’t have many viable competitors, excepting, perhaps, the likes of Intel and Samsung. When it comes to foundry, TSMC is mostly it.

So it makes sense to look into the supply chain, and when you do that, you see that ASML, as a maker of circuit-printing gear, has been in play for some time.

Now, photolithography, using light and masks to print the circuits, has been around for decades. Makers were already doing this at the time that TSMC was founded, in 1987, at 3.0-micron and 2.5-micron levels. Since then, for reference, the scale has changed from microns to nanometers.

A little digging reveals that TSMC, in earlier years, used vendors like Nikon and Canon for circuit printing, and that ASML came into the mix gradually, but that TSMC has been working with the Dutch firm for some time. The newest EUV machines came out in 2023, and they have some new features and design for today’s demanding fab environment.

The methods have evolved, too. Today’s printing systems use something called optical stepping, where the machine focuses on one area of the silicon surface at a time, and immersion lithography, where water can help focus the print.

Let’s look at the new line of ASML machines, the EXE systems, that are in the news right now, compared to the last round which ASML called NXL EUVs. There’s a finer aperture (0.55 vs. 0.33), better resolution at 8 nm vs. 13 nm, and higher potential transistor density: about 2.9× higher for comparable patterning. The EXE’s imaging contrast is also supposed to be better.

As for the method, using extreme ultraviolet (EUV) light, which has wavelengths shorter than ordinary ultraviolet light, means smaller drawing. I got this explanation, and note on TSMC’s rationale, from ChatGPT, in the interest of full disclosure, but I think it’s a good one:

“TSMC uses EUV because shorter wavelengths can create much smaller, more intricate patterns on silicon wafers. Think of it like drawing with an extraordinarily fine-tipped pen instead of a marker.”

A main point here is that, in the newest round of machines, the wavelength of the light hasn’t changed: it’s the aperture change that provides a better result.

What about the price tag? Some of the breathless reporting on ASML’s new deal with TSMC and Samsung points out that these behemoths can cost up to $400 million a piece. So as capex, you really have to budget for these.

Simply put, the modern photolithography machine is a wonder: here’s a bit of a description from Simone Rossetti, an AI research engineer with his own blog, who calls these pieces of equipment “The Most Insane Machine on Earth” in a breakdown of EUV design :

“EUV lithography requires a unique combination of extreme ultraviolet light generation, atomic-scale mirrors, vacuum operation, and nanometer-precision mechanics that only ASML has successfully developed, integrated, and industrialized at scale.”

Rossetti provides these specs under the subhead “The Insane Scale” – a weight of around 180 metric tons, a size roughly equal to that of a city bus, and an estimated 100,000 components, 3,000 cables, 40,000 bolts, and over a mile of hoses.

“These machines aren’t just expensive curiosities, they are the foundations of modern computing,” Rossetti writes. “Every advanced chip in your smartphones, laptops, AI accelerators, and supercomputers relies on patterns printed by EUV lithography … next time you think about a smartphone or neural net, remember; the invisible giant behind the scenes is this room‑sized lithography machine, built with the highest engineering precision humanity has ever managed.”

These machines are crucial for the kinds of modern manufacturing that supports the AI boom, (some might call it a bubble) and everything that’s going on in a superheated industry right now. Stay tuned.