Yield, the percentage of usable chips per wafer, is where lithography economics become punishing or profitable. At 30% yields, costs are three times as high as at 90% yields. This 3x multiplier explains why chipmakers pay premium prices for ASML’s machines and services.
TSMC achieves approximately 90% yields on mature processes. Manufacturing yield rates below 90% are a cause of concern in the industry. The top performers in semiconductor manufacturing maintain yield success rates above 97% for mature processes.
The Math in Practice
Consider a wafer costing $5,000 from the foundry at a 100-wafer-per-month volume:
At 96% yield: $15,000 monthly savings, $180,000 annually on a single product
Scale this across a leading-edge fab producing millions of wafers annually, and single-digit yield improvements translate to hundreds of millions in cost savings.
A defect density below 0.4 means that over 67% of manufactured chips will work. As technology goes into volume production, the defect density reported by leading fabs drops to 0.1, or over 90% yield.
Why Service Matters
This is why ASML deploys 50-60 engineers permanently at customer sites and guarantees greater than 90% machine availability. The machine purchase price is just the beginning. The yield improvement is where the real value accrues.
ASML tools are priced against avoided yield loss, not tool cost. Each system generates $10-15 million annually in service and optimization revenue. On-site engineers maximize uptime and yield, turning installed tools into multi-decade recurring revenue assets.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
