Dutch chip equipment maker ASML is buying U.S. group Cymer in a $2.5 billion deal in a bid to develop new  extreme ultraviolet (EUV) semiconductor lithography.

ASML said that the cash-and-shares acquisition would speed up the development of extreme ultraviolet (EUV) semiconductor lithography. Upgrading its machines to produce these smaller, faster chips is a key concern for the company. In July, it sold a 23 percent stake to its three biggest customers, Intel, Samsung Electronics and Taiwan Semiconductor Manufacturing, to help finance research into the technology behind its new equipment.

Both ASML and Cymer have both been working on EUV technology but thinks are proving too slow. AMSL chief financial officer Peter Wennink told Digitimes that combining the two companies will definitely speed up the development of EUV. Cymer shareholders will receive $20 in cash per Cymer share plus 1.1502 ASML shares.

ASML will pay the $630 million cash component from its 3 billion euros of available reserves and issue new shares for the rest, an ASML spokesman said. The deal might have a few problems with antitrust watchdogs since Japan's Nikon, a key AMSL competitor in lithography is a Cymer customer.