TSMC eyes future technology with $1.4bn ASML investment

Taiwan Semiconductor Manufacturing Company (TSMC) has agreed to invest 1.1bn euro ($1.4bn; £872m) in ASML, the world's largest manufacturer of chip-making equipment.

TSMC will invest 276m euro in ASML's research programmes and a further 838m euro to acquire a 5% stake in the firm.

The research programmes will focus on developing equipment to manufacture smaller and more cost-effective chips.

Intel, the world's biggest chipmaker, has signed a similar deal with ASML.

Shang-yi Chiang, TSMC's co-chief operating officer, said that one of the biggest challenges facing the industry was "how to effectively control the escalating wafer manufacturing cost".

He said the co-investment programme with ASML to develop future technology will help keep the costs in check in the long run.

TSMC will invest the said amount in the Dutch firm's research programmes over a period of five years.