EX-99.1 2 u54780exv99w1.htm EX-99.1 exv99w1
 

Exhibit 99.1
 
10th Annual Needham Growth Stock Conference Craig DeYoung, VP IR and Corporate Communications New York, January 8, 2008 A growth company


 

Safe Harbor "Safe Harbor" Statement under the U.S. Private Securities Litigation Reform Act of 1995: the matters discussed in this document may include forward-looking statements that are subject to risks and uncertainties including, but not limited to: economic conditions, product demand and semiconductor equipment industry capacity, worldwide demand and manufacturing capacity utilization for semiconductors (the principal product of our customer base), competitive products and pricing, manufacturing efficiencies, new product development, ability to enforce patents, the outcome of intellectual property litigation, availability of raw materials and critical manufacturing equipment, trade environment, the prevailing market price for ASML shares, and other risks indicated in the risk factors included in ASML's Annual Report on Form 20-F and other filings with the U.S. Securities and Exchange Commission.


 

Agenda ASML overview Drivers for growth Financial performance Outlook


 

ASML The world's largest supplier of Lithography equipment 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 Region 1 0 1 2.5 8.5 7.5 10.5 11.5 10.5 21 21 19 19.5 25.5 31 36 41 41 30 54 45 53 56.5 63 Market share evolution Revenue evolution for 5 years VLSI Research Market share 2006 Source: Semi ASML Nikon Canon 63 23 14 Employees: 6400 (Q3'07) Sales: # 3 Semi Cap Market Cap: # 2 Semi Cap 3,597 &128; M 3,700 &128; M 2007E 2,529 &128; M 2005 2,465 &128; M 2004 1,543 &128; M 2003 Revenues Year Ranked in the top 3 for customer satisfaction for the 5th consecutive year 2006


 

ASML business model Pure focus on lithography justified by high market growth potential Sustainability of business model by ever growing barriers to entry: Ever growing R&D critical mass affordable only by the leader Ever growing internal knowledge accumulation time Ever growing switch costs at customers


 

ASML Strategy Maximum R&D investment for undisputed leadership Lowest cost of execution & Highest value generation Shortest cycle times for customer value, maximum share acquisition and optimum working capital Highest capital efficiency by appropriate balance sheet leveraging and regular share buy-backs


 

Strengthening technology leadership relentlessly ASML R&D investment (excl Zeiss) Total Sales (M&128;) R&D Investment (M&128;) 2007(e) Source: ASML


 

Pure play Lithography, Engines for growth


 

Pure focus on Lithography justified by high market growth potential Lithography market Engines of Growth Driver 1: IC unit growth Driver 2: Customer mix generated growth Driver 3: Litho processing content growth Driver 4: Technology transition ASP generated growth Driver 5: Litho "enhancement" derived growth


 

Driver 1: IC unit Growth 14% growth expected in 2008 by industry analysts 10% Growth Trend 27% -21% 15% 15% 17% 11% 18% 9% 14% Source: WSTS, ASML IC unit history and forecast IC Units Bln IC Revenue ($B) A track record of continuous unit growth


 

Driver 2: Customer mix effect IC exposed area - Strongest growth in memory IC Exposed Area (M Sq Inch) Source: ASML


 

Driver 2 (cont.): Customer mix generates growth Adoption cycle of new technology in various sectors Source: Semiconductor Industry Association Flash volume at 55nm node- introduced 45nm node in 2007 DRAM plans roll-out of 55nm node in early 2008 Logic / Foundry Immersion adoption to start in 2009 200 100 80 60 40 11 07 09 08 04 06 05 01 03 02 Logic DRAM NAND Year 10 0 12 Resolution Logic DRAM NAND


 

Driver 2 (cont.): multiple growth drivers contribute to shorter and shallower cycles Source: ASML Source: ASML Contributor to stability: Unit growth from different segments, none of which dominant Mix impact of technology and segments Technology ASP trajectory Tighter management of capacity and inventory


 

Driver 3: Litho process content growth - Technology node transitions - Impact on litho tool mix and layer #'s - DRAM example % of Litho Layers # of Layers: 35 39 41 Source: ASML


 

Shrink requires more litho machines and more advanced systems - ASML systems Logic Fab 40k wafers/month 65nm Logic ArF I-Line ArF KrF KrF KrF KrF ArF ArF KrF KrF KrF KrF ArF ArF I-Line I-Line I-Line KrF KrF KrF KrF ArF I-Line KrF KrF ArF KrF KrF Total litho investment &128; 392 M 38 litho layers ArF ArFi ArF ArF ArFi ArF ArFi ArFi I-Line I-Line I-Line ArF ArF 45nm Logic KrF KrF KrF KrF ArF ArF KrF KrF KrF KrF KrF KrF KrF KrF KrF KrF 40 litho layers Total litho investment &128; 498 M ArFi Tool ASP 17.2 M Tool ASP 13.1 M


 

Driver 4: Technology Transition ASP generated growth 1M 10M 100M 1985 1990 1995 2000 2005 2010 Year Price [&128;] i-line 300mm 200mm 150mm KrF ArF ArFi EUV Wafer Size Wavelength Stepper Platform Step & Scan Dual Stage 0.4 0.5 0.6 0.7 0.8 0.93 1.2 Aperture 0.25 Source: ASML 1.35


 

Driver 4 (Cont.): Despite higher litho tool ASP, IC unit ASP is trending down.... Litho Cost per Byte (&128; per Mbyte) Source: Gartner, ASML


 

Driver 5: ASML mask and system enhancements extend lithography value added/ASP Offline Dual stage wafer height mapping Focus Dry, Expose Wet Mask enhancement techniques & optimization software DoseMapper for optimum CD Uniformity Flexible off-axis & polarized illumination Illumination source optimization & software + = Application specific lens setup In-built wave-front, polarization and pupil metrology Design Litho Verification and OPC/RET simulations and OPC/RET simulations and OPC/RET simulations Scanner-Track-Metrology information feedback NA k Resolution l x = 1


 

Growth driver - immersion products


 

> 750 TWINSCAN systems shipped worldwide ASML immersion lithography leadership: >70 systems shipped to >20 customer Worldwide US EUROPE ASIA 18+ Immersion Systems Including >10 to Japan ! 8+ Immersion Systems 35+ Immersion Systems


 

Immersion TWINSCAN XT:1900i Shipped 12 immersion tools in Q3 '07 to 8 customers including 4 systems to Japan Booked 22 TWINSCAN XT:1900i in Q3 2007 35 immersion machines in backlog at end Q3 valued at &128; 1,084 million, ASP &128; 30.9M million, ASP &128; 30.9M million, ASP &128; 30.9M million, ASP &128; 30.9M million, ASP &128; 30.9M million, ASP &128; 30.9M


 

0 1 2 3 4 5 6 Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Cumulative immersion wafers in millions Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-05 Oct-07 Nov-07 ASML Immersion is in Volume IC Production! > 6 Million Immersion Wafers exposed XT:1700Fi 1st shipment XT:1400Ei 1st shipment XT:1900Gi 1st shipment Volume production


 

Financial performance


 

Key financial trends 2006 - 2007 Numbers have been rounded for readers' convenience


 

Stable revenue performance, loose bookings correlation Robust results with 6 quarters of over &128; 900 Million revenue, while Memory prices changed dramatically Order intake varied between 30 and 95 litho systems per quarter Recurring operating margin is between 22.2% and 26.2%


 

Multiple Engines of Growth make correlation litho capex - IC unit growth - IC Value growth weaker Source: VLSI Research/WSTS/Gartner CapEx ($B) Year over Year Growth


 

Outlook


 

Market share - further growth opportunities Strategy to grow share: Confirm the Low Risk appetite of customers: Fundamental technology leadership reduces risk High cost of switch or high cost of maintaining 2 litho vendors Provide pricing to achieve cost per function scaling per historical trend Performance... Performance... Performance Gain share in Microprocessors through double patterning and immersion leadership (best COO) Gain share in Japan through immersion and high throughput (best COO) Gain share in i-Line through superior overlay and throughput (best COO)


 

ASML market share growth expected to continue in 2008 Europe Worldwide litho shipments by region Source: ASML and Gartner Dataquest Asia non Japan Japan US Progress in Japan, Microprocessors and i-Line


 

The markets - Memory transitions technology nodes to reduce cost and increase device density DRAM Close alignment in 2008 DRAM unit growth forecasts between market research institutes, ranging between +16% & +18% YoY Ramp-up of 1Gb & DDR3 in 2008 driving technology transition to 5xnm processes and ArFi, accelerated by low ASPs 512Mb DRAM prices remain low, 1Gb dropping Fully depreciated 200mm fabs below cash cost at 80nm forcing manufacturers to sell or convert 200 mm fabs. Up to 250x 200-mm DRAM systems (?130 KWSM 300mm equiv. capacity) could be retired in 2008


 

2008: Strong transition to 1 Gb & DDR3 DRAM based on sub 65 nm processes sub 65 nm processes sub 65 nm processes Source: Gartner Dataquest (October 2007) Source: Gartner Dataquest (October 2007) DDR3 1Gb


 

NAND 2008 NAND unit growth forecast ranges between 28% (VLSI) & 51% (Gartner) Assuming stable NAND prices, limited 200 mm NAND capacity retirement expected in 2008 Unlikely re-allocation of DRAM back to NAND in 2H/07 and 2008, due to limited hybrid capacity, especially for advanced NAND Fast transition to advanced nodes continue The markets - Memory transitions technology nodes to reduce cost and increase device density


 

NAND Flash : Fast transition to advanced nodes to enable higher capacity ICs Source: DRAM eXchange


 

Current market conditions - ASML drivers Short term: Flash Ongoing capacity additions at 55 nm node Higher Flash chip densities require 45 nm imaging Strong Flash unit growth expected to continue Mid term: DRAM DRAM invests in immersion for 55 nm for higher density chips Installing immersion to reduce cost as price pressure continues Reduced DRAM unit growth vs 2007 expected Cost-driven factory conversions from 200 to 300 mm wafers Long term: Foundries Year ending utilization rates are high Litho purchases required to support industry growth


 

Summary ASML, as the leading lithography equipment supplier, is well positioned for growth Multiple drivers underpin ASML's growth opportunity ASML's financial performance shows remarkable stability in dynamic environments


 

Commitment