To compete in global markets, IC manufacturers must continually develop new products, using ever more advanced fabrication technologies. They need equipment suitable for R&D work, but that can also be easily transferred into volume manufacturing. Managing the investment risk of this continuous product and process development is the key to establishing a successful and competitive business. Recognising this need, ASML designed its newest generation of equipment-the PAS 5500 series-to be able to produce multiple generations of advanced ICs on the same system. In Europe, ASML together with Carl Zeiss & Oxford Instruments formed an industrial consortium for an R&D program on the evaluation of EUV lithography, based on their own strengths & expertise. The goal of this European consortium was to demonstrate within ESPRIT, over the period 1998-2000, solutions to a number of major technical problems for EUVL. ASML are pursuing R&D into the system architecture and attempting to put motion stages in vacuum. At Zeiss, the focus is on R&D for mirror substrates and high reflectivity multi-layer coatings. Oxford Instruments are studying the viability of a synchrotron light source to enable a comparison study between it and other sources. The overall aim is to ensure a viable system concept, meeting the requirements of the semiconductor industry at an acceptable cost of ownership. The extendibility provided by the PAS 5500 series substantially increases value-of-ownership for users. In addition, the PAS 5500 series' modular design enables IC makers to upgrade the systems as their technology requirements increase, thereby building on their capital investment, as well as process knowledge and manufacturing experience. ASML has taken a long-term, market-oriented view and designed each successive generation of lithography equipment to be compatible with its predecessors. Customers may "mix-and-match" any ASML system with any of the company's other products or even with competitors' equipment. This unique product flexibility allows users of ASML's equipment to achieve optimal cost efficiency in their wafer-fabrication facilities. ASML leverages a high-technology network that includes Philips Research Laboratories, Philips Centre for Fabrication Technology, IMEC, Carl Zeiss and Hewlett-Packard, enabling ASML to compete very effectively with other lithography equipment makers in the international marketplace.