SCALPEL (SCattering with Angular Limitation Projection Electron beam Lithography) combines the high resolution and wide process latitude inherent in electron beam lithography with the throughput of a projection system. This approach has the potential to satisfy the lithographic requirements for many IC generations, down to the minimum feature sizes contemplated in the SIA roadmap. We believe that with solid industry support and resources, SCALPEL can be introduced in the 130 nm generation as a replacement for 193 nm lithography for critical levels with reduced cost. SCALPEL masks are expected to be considerably lower cost than optical masks which will require OPC and phase shift for the 130 nm generation. We see the evolution of lithography technology directly from 193 nm to SCALPEL. Throughput is usually thought of as the determining factor in determining the cost of ownership for a lithographic technology. As the limits of optical lithography are pushed toward and beyond sub-wavelength printing, strategies such as phase shifting and optical proximity effect correction (OPC) are required. These technologies add significantly to the cost of the masks and thus, contribute to the cost of wafer printing. The size of the mask factor depends strongly on the mask usage. The number of wafers printed for each mask varies according to the nature of an individual IC business with averages for ASIC at 1000 wafers or less printed per mask. The averages for logic and DRAM are roughly 2000 and 3000 respectively. The total cost of printing a wafer level can, particularly in cases of low mask usage, then be dominated by mask costs and less effected by throughput than has been the case in the past. For SCALPEL, technologies such as phase-shifting and OPC are not required and the resulting mask costs at a given design rule (such as 130 nm) can be significantly less than the corresponding photomask costs. Thus, even though SCALPEL throughput will be less than that for 193 nm optical lithography, the overall cost per level of lithography will be lower due to significantly lower mask costs. We believe that this factor will be a major driving force in determining the timing of the shift away from optical lithography to SCALPEL. We have recently completed our proof-of-lithography system which implements the step-and-scan writing strategy. Our recent data shows that we can write stripes over a 1 X 1 cm field and stitch them together with a raw accuracy of better than 50 nm three-sigma. These measurements were made using box-in-box type patterns at the joining of adjacent stripes across the field. Other errors such as those of the mask beam-writer have not been accounted for in this preliminary experiment. We expect that with further calibration and removal of mask errors that we can achieve stitching to the 10 nm level or less as we have seen in the static stitching data. In order to bring SCALPEL technology to the nest step in its evolution, we are beginning a three-year development program aimed at the full-field high throughput system. The program will focus on larger format mask technology, a high throughput exposure tool, and resist and process development. In this talk, we will outline the status of SCALPEL technology as well as the plans for its continued development. This work has been supported in part by DARPA and SEMATECH