20 years of restarting life

Chapter 3690 The Negotiation Stalemate Part Two

"This $5 million expansion was a decision approved by the board of directors. We need Intel, Motorola, AMD, and IBM to participate, so the $2 million they provide is necessary. Therefore, the maximum financing amount we can offer your company is only $3 million."

Allen said to Subo, "Thank you for your company's recognition of ASML. However, you could also do it this way. Your company invests $3 million, and according to the board's decision on the swap, you will have the same swap treatment as companies like Intel, and you can get 1.36% of the shares. The remaining $7 million can be raised through the stock market later. I believe the board and all ASML shareholders would support your company doing this."

What Allen said was all nonsense. If ASML's shareholders wanted to acquire shares in AMSL, given that AMSL North America had $7 million in its hands, they had no right to interfere, whether they wanted to or not.

Zhao Chang'an and Su Bo had already analyzed these points clearly during their midday call.

ASML's R&D investment for ArFi and the next step EUV is limited. If it invests $10 billion in North America for one nanometer now, it will need $7 million less in R&D funding when ASML officially expands its capacity in the future.

Moreover, if $7 million is poured into the stock market now, it will definitely boost the stock prices of many companies. One nanometer is equivalent to an open investment of $7 million to accumulate shares. The current market value of $190 billion could very well be driven up to $300 billion for him to take over the shares.

The increased market capitalization means that future investments and shareholdings by companies like Intel will increase, which inadvertently puts the company at a disadvantage and offends these companies.

“OneNano North America has always been optimistic about ASML, especially considering the numerous difficulties the company has faced over the past decade, yet it has managed to achieve its current position as the second-largest player in the industry. Therefore, OneNano North America’s $10 billion investment can only be used for the research and development of the next generation of ArFi and the next EUV lithography machine, rather than for stock market investments or shareholder changes that do not benefit the company’s operations and development.”

Both sides insisted on their own positions, leading to a stalemate in negotiations, which had to be halted until the third round of talks.

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Dinner was hosted by Allen, and Zhao Chang'an and his group took a long walk before returning to the hotel.

"We are very happy to see your company insist on investing $10 billion in ASML entirely through financing for the development of immersion lithography machines. The problem is that from the perspective of the company's shareholders, this $5 million expansion in R&D, while not lowering the value of their shares, does dilute their shareholding. It is only because of purchasers and technology licensees like Intel that they agreed to make concessions for the sake of longer-term interests."

Allen sincerely explained to Zhao Chang'an, Su Bo, and the OneNano North America team: "This is because Intel was only willing to provide $2 million, which was not enough for R&D expenses, so they agreed to investments from other non-purchasers and technical support providers. Only after obtaining this approval could we negotiate with OneNano North America. Otherwise, even if your company offered $3 million in funding, those greedy directors would not have agreed."

Zhao Chang'an nodded in understanding. If the maximum financing was only $3 million, Zhao Chang'an would not invest the remaining $7 million in ASML.

Because after this $7 million investment, Zhao Chang'an estimates that his total shareholding will not exceed 4%.

The problem is that he would rather have the 3% raised through financing than the 4% he obtained through 3 million in financing and 7 million in fundraising.

Zhao Chang'an's original purpose in holding ASML shares was not to profit, but to gain sufficient influence within ASML. This 7 million yuan investment drove up ASML's stock price, making companies like Philips, which were eager to reduce their holdings, extremely happy to call Zhao Chang'an "father."

However, companies like Intel, TSMC, and Samsung, which are expected to raise funds in the next phase, will definitely be disgusted by OneNano North America. It's no wonder they won't treat OneNano North America well in future collaborations.

Moreover, a 4% stake is far from Zhao Chang'an's goal. OneNano North America will definitely accumulate more shares in the future, which will increase OneNano North America's future shareholding cost.

Therefore, if the final investment is only $3 million, Zhao Chang'an feels that his plan to acquire ASML equity is likely to fail completely.

When the Twinscan AT:750T is successfully developed next year, ASML's market value will soar by who knows how much. Although it will not be as exaggerated as RIM's, its base value will be seven or eight times larger than RIM's last year.

With such a surge in stock price, and the unstoppable momentum that followed, Zhao Chang'an simply didn't have enough money to outpace ASML's stock price growth and acquire at least 15% of the shares.

Zhao Chang'an saw Svilak sitting next to Mina, whispering to each other with their heads close together. Mina noticed Zhao Chang'an's gaze and gave him a charming smile. He knew that he hadn't gone to comfort her last night, leaving the woman who had flown hundreds of miles to see him off feeling disappointed. He was trying to rekindle his possessiveness as a male by doing this.

After dinner, everyone dispersed. The third round of negotiations was scheduled for the morning after tomorrow. Tomorrow, ASML will arrange for the North American team of the 1nm procession to visit Philips in Amsterdam.

Currently, Philips remains ASML's largest shareholder, although it is almost common knowledge that it wants to sell all of its ASML shares.

However, even based on ASML's current market value, the remaining shares held by Philips are worth $51 billion. Although ASML is the world's second-largest lithography machine company, its second place is somewhat unjustified.

It was only after acquiring SGV that it rose to second place; otherwise, it would still be ranked third, with sales figures not much different from SGV, which ranked fourth.

Moreover, ASML's only competitive product is the PAS5500 series, with a minimum process technology of only 220nm. Before acquiring AGV, the company had zero research on 193nm.

The newly launched TWINSCAN AT:750T incorporates a large number of SGV technologies and patents.

So don't be fooled by ASML's current aggressive claims of being the world's second-largest lithography machine manufacturer. In reality, the world's recognized leaders in lithography machines are still Nikon and Canon, and even SGV in the past, as well as Hitachi, ABM, NuFlare Technology (a subsidiary of Toshiba), and TEL (Tokyo Electron). Their true technological foundation is not much inferior to that of ASML.

However, the North American semiconductor industry alone cannot support a lithography machine giant that can replace Nikon and Canon. Therefore, they had to choose the best among the worst and bring ASML, the only competitive company in Europe, into the EUV-LLC alliance to fight against the Japanese semiconductor industry.