Abstract
This study showcases the specific inspiration from Professor Kemp by focusing on one particular firm—ASML, a Dutch lithography company. It has become the only producer to launch a group of products, the extreme ultraviolet (EUV) systems for advanced integrated circuits (ICs). Such success is relatively new and is due to a single, unprecedented multi-year programme, Customer Co-investment Program CCIP), since 2012. This programme accelerated ASML’s development of EUV, which has marginalised the other two rivals and former market leaders, Nikon and Canon, that they can only compete in the less advanced DUV and i-line systems. The article explores a number of interrelated aspects about the selected case. It discusses how economic theories offer tools into the crux of the matter. It then reviews technical and historical facts to facilitate further understanding. Next, the article considers two main issues: Is the ASML’s claim that CCIP is necessary based on the financing requirement linked to the new technology true? And is the outcome good? The first question is analysed by four inter-related levels of information asymmetry, and the second is discussed at a broader level. Finally, the article explains how Kemp and Shimomura inspires the analysis here of the illustrative case of ASML. JEL Codes: D22, D23, D82, L22, L63
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