Canon Inc. has entered the semiconductor manufacturing arena by introducing its nanoimprint lithography systems, aiming to regain market share by positioning its technology as a simpler and more accessible alternative to current leading-edge tools. These new chipmaking machines produced by Canon can create circuits equivalent to the 5-nanometer scale when employing extreme ultraviolet lithography (EUV), a field currently dominated by ASML Holding NV, the industry leader. Canon expects its device to eventually reach the next-generation 2nm production with further advancements and improvements.
While Canon, based in Tokyo, has fallen behind ASML in the EUV race, its nanoimprint lithography approach may help bridge the gap. Notably, these machines could potentially add a new dimension to the ongoing US-China trade war, as the import of EUV machines, the only reliable method for fabricating chips smaller than 5nm, is currently prohibited by trade sanctions. Canon's innovative technique bypasses photolithography and instead impresses the desired circuit pattern onto the silicon wafer. As this approach is fresh and distinct, it is unlikely to be expressly forbidden by existing trade restrictions.
Canon has not yet commented on whether the newly introduced equipment will be subject to Japan's export restrictions. Nevertheless, its nanoimprint lithography technology has long promised to provide a low-cost alternative to optical lithography. In the past, major memory manufacturers such as SK Hynix Inc. and Toshiba Corp. endorsed and tested Canon's nanoimprint machines during their developmental phase. Canon's main challenge now is to demonstrate that it has overcome the previous obstacles, such as high defect rates, that plagued earlier iterations of the technology.
On the other hand, ASML, Europe's most highly valued technology company, has experienced continuous revenue growth and an influx of orders over the past five quarters. The company, headquartered in Veldhoven, the Netherlands, is the leading supplier of EUV technology to top chipmakers worldwide and expects a 30% increase in net sales this year.
Canon shares have seen a 26% surge this year, benefiting from the broader rally in Japanese stocks and the rising demand for chipmaking equipment driven by the advent of artificial intelligence applications.
Unlike its previous focus on products used to manufacture less advanced chips, Canon made a significant move towards nanoimprint lithography by acquiring Molecular Imprints Inc., a pioneer in this field, back in 2014. The company has dedicated almost a decade to further developing the technology. As a supplier to Taiwan Semiconductor Manufacturing Co., Canon is gearing up to open its first new plant for lithography equipment in Utsunomiya, north of Tokyo, in 2025.