Intel Corp. will spend more than $4-billion (U.S.) to buy a stake in ASML Holding NV and bankroll the Dutch firm's research, aiming to speed up the development of costly next-generation technology.
Shares of ASML, the world's largest maker of machines that etch circuits on silicon wafers and a barometer for the chip sector, leapt 6.3 per cent on the Nasdaq Stock Market.
Intel said on Monday it had agreed to buy an initial 10 per cent stake in the European firm. It intends to take another 5 per cent pending shareholders' approval, spending a total of about $3.1-billion.
The world's top chipmaker will also help finance $1-billion of research into 450-millimeter wafer and extreme-ultraviolet chipmaking, both cutting-edge technologies that had been expected to emerge in the decade's second half.
Intel said its assistance might accelerate their emergence and adoption by up to two years.
"If Intel is able to ramp 450mm production ahead of the world's fabs such as TSMC or Global Foundries et al, it may yet prove that real men have fabs," said John Jackson from CCS Insight. "There are signs that the global semiconductor fabrication sector is poised to realign."
Intel is the first major chipmaker to sign up for ASML's "customer investment" program, under which it hopes to enlist partners to fund expensive research into 450mm wafer technology, a more economical chipmaking process.
Under their agreement, Intel will pay €1.7-billion ($2.1-billion) for an initial 10 per cent slice of ASML, and a preliminary €553-million for research. The remainder of its total $4.1-billion expenditure is conditional upon shareholder approval.
The pact also involves advance orders of next-generation ASML chipmaking gear, strengthening the Dutch firm's assurance to move ahead in developing the technology.
Intel shares slid about 1 per cent to $25.87 after hours, from a close of $26.17 on Nasdaq. ASML shot up 6.3 per cent to $51.53 from a close of $48.46.
ASML is the world's leader in semiconductor lithography, and competes with Japanese groups Canon and Nikon. Its clients include Intel and Samsung Electronics.