Semiconductor supplier ASML Holding NV has announced an acquisition agreement to acquire a 24.9 percent minority stake in optics developer Carl Zeiss AG’s subsidiary Carl Zeiss SMT, for which ASML will pay Zeiss €1 billion ($1.09 billion) in cash. The agreement’s main objective is to facilitate the development of the future generation of extreme ultraviolet (EUV) lithography systems due in the first few years of the next decade. This technology will enable the semiconductor industry to produce much higher performance microchips at lower costs. ASML is a supplier of semiconductor patterning products and services used by microchip producers. The optics of Carl Zeiss SMT supply a subsystem of ASML's semiconductor lithography scanners, making them strategic partners. A new cycle of investments required for the development of an entirely new optical system for the future generation of EUV, expected to be provided to the chip making industry in the first few years of the next decade, has triggered the partners to take a further step in the collaboration. “In 2018, the first chips made on current-technology EUV scanners are expected to roll off the production lines of our customers,” said Peter Wennink, president and CEO of ASML. “A lot of work is still being done to ensure the introduction of EUV in volume manufacturing, in tight conjunction with our highly successful immersion scanners which we continue to improve. Yet ASML and ZEISS are looking beyond this important milestone. We see a long and successful future for EUV lithography in advanced chip manufacturing and with this agreement we set the right conditions for development of the next generation of EUV by ASML and Carl Zeiss SMT, so that our customers can reap the rewards of their EUV investments up to the end of the next decade.” Zeiss develops and distributes semiconductor manufacturing equipment, measuring technology, microscopes, medical technology, eyeglass lenses, camera and cine lenses, binoculars and planetarium technology. ASML is a manufacturer of chip-making equipment.