Additionally, DuPont Photomasks entered into a long-term supply agreement with Schott, to provide continued reliable access to commercial photoblanks. The companies also formed a strategic alliance to jointly develop advanced photoblanks, which are the substrates from which photomasks are fabricated.
The deal is valued at up to $42 million. Schott Lithotec has agreed to pay DuPont Photomasks $28 million in cash and $2 million in Schott Lithotec AG stock. Schott Lithotec AG has also agreed to pay DuPont Photomasks up to $12 million in stock over the next two years, subject to achieving certain milestones. All of the shares issued to DuPont Photomasks are subject to guarantee of minimum value.
The agreement includes Schott Lithotec's acquisition of DuPont Photomasks photoblank production facility located in Poughkeepsie, New York. Schott Lithotec will offer all of the approximately 80 employees of the Poughkeepsie facility a position within its organization.
Peter Kirlin, chairman and chief executive officer of DuPont Photomasks, said, While further strengthening our balance sheet, this arrangement allows each party to do what it does best. We will focus on delivering microimaging solutions to our customers through our core business of photomasks, while Schott Lithotec will apply its exceptional optical capabilities to the manufacture of photoblanks at the Poughkeepsie facility.
We are pleased to have forged this alliance with Schott Lithotec, one of the world's leading producers of advanced optical materials, added Kirlin. As the semiconductor industry moves deeper into the subwavelength era, advanced photoblanks will become even more integral to the production of photomasks at the leading edge. This collaborative approach will accelerate the development of advanced photoblank technology by combining our practical experience in photoblank production with Schott's superior knowledge and expertise in developing technically sophisticated glass- and quartz-based products.
By aligning with the global leader in photomask production, Schott Lithotec is positioned to become a top-tier supplier of photoblanks to the industry, said Dr. Martin Heming, chairman of the board of management of Schott Lithotec AG. We have the winning combination of our existing photoblank operations in Germany; the newly acquired facility in New York; DuPont Photomasks as our premier customer; and the advanced photoblank development agreement.
Dr. Leopold von Heimendahl, head of the supervisory board of Schott Lithotec, and chairman of the board of management of Schott, a leading technology group in specialty materials, said, This agreement is an important step for Schott Lithotec AG to become the leading supplier of materials and components for the semiconductor industry.
The semiconductor industry has become dependent on advanced photomask technologies, including phase shift masks (PSMs) and masks with optical proximity correction (OPC), to create smaller and more powerful semiconductor devices. To enable the production of these increasingly complex photomasks, DuPont Photomasks has embarked on an aggressive campaign to extend its technological capabilities through strategic alliances with key members of the semiconductor value chain, a strategy that dates back five years to the company's creation of the DPI Reticle Technology Center. In 2001, DuPont Photomasks entered into several advanced photomask development agreements with suppliers and customers. The Schott alliance is the latest agreement in this ongoing initiative.
Schott Lithotec AG currently operates a photoblank production facility in Meiningen, Germany. The photoblank operation was recently upgraded to include technologies required to produce advanced photoblanks supporting 193-nm and 157-nm lithography. Expanding production in the United States enables Schott Lithotec to become one of the largest suppliers of photoblanks in the world. The company also has a leading position in technology, quality and production of calcium fluoride crystals, the key material for the production of 193-nm and 157-nm photolithography systems. Additionally the company operates a quartz glass production plant in Jena, Germany.
A photoblank is a highly polished quartz plate coated with ultra-thin layers of absorbers, such as chrome or molysilicide, and photoresist. The photoblank's photoresist and absorber are selectively removed to produce a photomask that contains precision images of one layer of an integrated circuit design. A set of 15 to 30 photomasks is then used to optically transfer the circuit images onto silicon wafers during the semiconductor manufacturing process.