I-line stepper technology is described which features a new generation high NA lens and an improved implementation of a phase grating alignment system. Combining the high NA lens with high contrast resist processing enables O.5um processing to be supported with good process latitude and CD control without adverse effects due to lens heating. Alignment technology compatible with advanced processing is described. Overlay data taken from several steppers shows less than lOOnm capability which is sufficient to support O.5um design rules. Further advancements in Iline processing technology to O.41um are described which allows this technology to be used in developing advanced products.