ASML Holding NV · EURONEXT:ASML
ASML Holding NV — 10th Annual Needham Growth Stock Conference (January 2008)
36 slides from ASML Holding NV's conference presentation, Jan 8, 2008
Slide 1: A growth company - 10th Annual Needham Growth Stock Conference
A growth company 10th Annual Needham Growth Stock Conference Craig DeYoung, VP IR and Corporate Communications New York, January 8, 2008
Slide 2: Safe Harbor
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 semico
Slide 3: Agenda
Agenda z ASML overview z Drivers for growth z Financial performance z Outlook / Slide 3
Slide 4: ASML: The world's largest supplier of lithography equipment
ASML The world’s largest supplier of Lithography equipment Ranked in the top 3 for Revenue evolution customer satisfaction for 5 years for the 5th consecutive year Year Revenues 2003 1,543 € M 2004 2,465 € M 2005 2,529 € M Employees: 6400 (Q3‘07) 2006 3,597 € M Sales: # 3 Semi Cap 2007E 3,700 € M Ma
Slide 5: ASML business model
ASML business model Pure focus on lithography justified by high market growth potential z Sustainability of business model by ever growing barriers to entry: z Ever growing R&D critical mass affordable only by the leader z Ever growing internal knowledge accumulation time z Ever growing switch costs
Slide 6: ASML Strategy
ASML Strategy z Maximum R&D investment for undisputed leadership z Lowest cost of execution & Highest value generation z Shortest cycle times for customer value, maximum share acquisition and optimum working capital z Highest capital efficiency by appropriate balance sheet leveraging and regular sha
Slide 7: Strengthening technology leadership relentlessly
Strengthening technology leadership relentlessly ASML R&D investment (excl Zeiss) 4000 500 450 3500 400 3000 R&D Investment (M€) Total Sales (M€) 350 2500 300 2000 250 200 1500 150 1000 100 500 50 0 0 1992 1994 1996 1998 2000 2002 2004 2006 2007(e) Total sales M€ R&D investment M€ Source: ASML / Sli
Slide 8: Pure play Lithography, Engines for growth
Pure play Lithography, Engines for growth / Slide 8
Slide 9: Pure focus on lithography justified by high market growth potential
Pure focus on Lithography justified by high market growth potential z Lithography market Engines of Growth z Driver 1: IC unit growth z Driver 2: Customer mix generated growth z Driver 3: Litho processing content growth z Driver 4: Technology transition ASP generated growth z Driver 5: Litho “enhanc
Slide 10: Driver 1: IC unit growth
Driver 1: IC unit Growth 14% growth expected in 2008 by industry analysts IC unit history and forecast 250 250 IC Revenue ($B) IC Units Bln 200 200 10% 150 Growth 150 Trend 100 100 50 50 27% -21% 15% 15% 17% 11% 18% 9% 14% 0 - 2000 2001 2002 2003 2004 2005 2006 2007E 2008E 2009E 2010E 2011E IC units
Slide 11: Driver 2: Customer mix effect
Driver 2: Customer mix effect IC exposed area – Strongest growth in memory 250000 IC Exposed Area (M Sq Inch) 200000 150000 100000 50000 0 2000 2001 2002 2003 2004 2005 2006 2007E 2008E DRAM NAND NOR MPU LOGIC+MCU+DSP ANALOG OTHER Source: ASML / Slide 11
Slide 12: Driver (cont.): Customer mix generates growth
Driver 2 (cont.): Customer mix generates growth Adoption cycle of new technology in various sectors 200 DRAM Logic Resolution 100 NAND 80 60 40 0 01 02 03 04 05 06 07 08 09 10 11 12 Year Source: Semiconductor Industry Association • Flash volume at 55nm node- introduced 45nm node in 2007 • DRAM plans
Slide 13: Multiple growth drivers contribute to shorter and shallower cycles
Driver 2 (cont.): multiple growth drivers contribute to shorter and shallower cycles WW Lithography Revenue by IC Segment (Q1/04 - Q3/07) 2,000 DRAM NAND FLASH LOGIC MICRO ANALOG NOR FLASH OTHERS ALL SEGMENTS 1,600 Litho SystemRevenues [Mio. Euros] 1,200 800 400 0 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05
Slide 14: Driver 3: Litho process content growth
Driver 3: Litho process content growth - Technology node transitions – Impact on litho tool mix and layer #’s - DRAM example 100% 90% % of Litho Layers 80% 70% 60% 50% 40% 30% 20% 10% 0% 65 nm 55 nm 45 nm DRAM i-line KrF ArF ArFi # of Layers: 35 39 41 Source: ASML / Slide 14
Slide 15: Shrink requires more litho machines and more advanced systems
Shrink requires more litho machines and more advanced systems – ASML systems Logic Fab 65nm Logic 45nm Logic ArF KrF KrF I-Line ArFi ArF KrF KrF I-Line ArF KrF KrF I-Line ArFi ArF KrF KrF I-Line ArF KrF KrF I-Line ArFi ArF KrF KrF I-Line ArF KrF KrF I-Line ArFi ArF KrF KrF ArF KrF KrF I-Line ArFi Ar
Slide 16: Driver 4: Technology Transition ASP generated growth
Driver 4: Technology Transition ASP generated growth 100M 150mm 200mm Wafer Wafer Size Size 300mm 0.25 Dual Stage 1.35 1.2 Price [€] 0.93 Step & Scan 10M Platform Platform 0.8 0.7 Stepper 0.5 0.6 Aperture Aperture Wavelength Wavelength 0.4 i-line KrF ArF ArFi EUV 1M 1985 1990 1995 2000 2005 2010 Yea
Slide 17: Despite higher litho tool ASP, IC unit ASP is trending down
Driver 4 (Cont.): Despite higher litho tool ASP, IC unit ASP is trending down…. 0.008 Litho Cost per Byte (€ per Mbyte) 0.007 0.006 0.005 0.004 0.003 0.002 0.001 0 2004 2005 2006 2007 2008 2009 2010 2011 DRAM Litho cost per Mbyte NAND Litho cost per Mbyte Source: Gartner, ASML / Slide 17
Slide 18: Driver 5: ASML mask and system enhancements extend lithography value
Driver 5: ASML mask and system enhancements extend lithography value added/ASP Resolution = k 1 x λ NA Mask enhancement techniques & DoseMapper for optimum optimization software CD Uniformity Offline Dual stage wafer Flexible off-axis & height mapping polarized illumination Focus Dry, Expose Wet App
Slide 19: Growth driver – immersion products
Growth driver – immersion products / Slide 19
Slide 20: ASML immersion lithography leadership
ASML immersion lithography leadership: >70 systems shipped to >20 customer Worldwide > 750 TWINSCAN systems shipped worldwide US EUROPE ASIA 18+ 8+ 35+ Immersion Immersion Immersion Systems Systems Systems Including >10 to Japan ! / Slide 20
Slide 21: Immersion TWINSCAN XT:1900i
Immersion TWINSCAN XT:1900i z Shipped 12 immersion tools in Q3 ‘07 to 8 customers including 4 systems to Japan z Booked 22 TWINSCAN XT:1900i in Q3 2007 z 35 immersion machines in backlog at end Q3 valued at € 1,084 million, ASP € 30.9M / Slide 21
Slide 22: Cumulative immersion wafers in millions
Cumulative immersion wafers in millions 0 1 2 3 4 5 6 Jan-05 Feb-05 Mar-05 Apr-05 / Slide 22 May-05 Jun-05 Jul-05 XT:1400Ei 1st shipment Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 XT:1700Fi 1st shipment Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 > 6 Million Immersion Wafers expose
Slide 23: Financial performance
Financial performance / Slide 23
Slide 24: Key financial trends 2006 – 2007
Key financial trends 2006 – 2007 Profit & Loss Statement M€ Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Units 71 72 77 69 59 Sales 958 1068 960 935 940 Gross profit 391 439 393 385 387 Gross margin % 40.8% 41.1% 40.9% 41.1% 41.2% R&D 100 107 116 120 120 Amortization in process R&D 23 SG&A 51 52 56 56 56 Operating
Slide 25: Stable revenue performance, loose bookings correlation
Stable revenue performance, loose bookings correlation z Robust results with 6 quarters of over € 900 Million revenue, while z Memory prices changed dramatically z Order intake varied between 30 and 95 litho systems per quarter z Recurring operating margin is between 22.2% and 26.2% 1200 120 1000 10
Slide 26: Multiple Engines of Growth weaken litho capex correlation
Multiple Engines of Growth make correlation litho capex – IC unit growth – IC Value growth weaker 8 30% 7 20% Year over Year Growth 6 10% CapEx ($B) 5 4 0% 3 -10% 2 -20% 1 0 -30% 2000 2001 2002 2003 2004 2005 2006 2007E Litho (Steppers) Revenue IC Unit YoY Grow th IC Revenue YoY Grow th Source: VLSI
Slide 27: Outlook
Outlook / Slide 27 & ASML WY
Slide 28: Market share - further growth opportunities
Market share - further growth opportunities z Strategy to grow share: z Confirm the Low Risk appetite of customers: z Fundamental technology leadership reduces risk z High cost of switch or high cost of maintaining 2 litho vendors z Provide pricing to achieve cost per function scaling per historical
Slide 29: ASML market share growth expected to continue in 2008
ASML market share growth expected to continue in 2008 Worldwide litho shipments by region Progress in Japan, Microprocessors 3,500 and i-Line 3,000 Million Euro 2,500 2,000 Others 1,500 ASML 1,000 500 0 2005 2006 2005 2006 2005 2006 2005 2006 2007(e) 2007(e) 2007(e) 2007(e) Asia non Japan US Europe
Slide 30: Memory transitions technology nodes: DRAM
The markets - Memory transitions technology nodes to reduce cost and increase device density DRAM z Close alignment in 2008 DRAM unit growth forecasts between market research institutes, ranging between +16% & +18% YoY z Ramp-up of 1Gb & DDR3 in 2008 driving technology transition to 5xnm processes a
Slide 31: 2008: Strong transition to 1Gb & DDR3 DRAM
2008: Strong transition to 1 Gb & DDR3 DRAM based on sub 65 nm processes DDR3 1Gb Source: Gartner Dataquest (October 2007) / Slide 31
Slide 32: Memory transitions technology nodes: NAND
The markets - Memory transitions technology nodes to reduce cost and increase device density 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 t
Slide 33: NAND Flash: Fast transition to advanced nodes
NAND Flash : Fast transition to advanced nodes to enable higher capacity ICs 100% 80% 60% 40% 20% 0% Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 4X nm 0.00% 0.00% 0.00% 0.00% 0.00% 0.59% 5.18% 13.31% 5X nm 0.00% 2.89% 14.63% 32.75% 57.13% 70.23% 77.09% 70.22% 6Xnm 89.47% 91.89% 81.83% 65.56% 42.41% 28.8
Slide 34: Current market conditions – ASML drivers
Current market conditions – ASML drivers z Short term: Flash z Ongoing capacity additions at 55 nm node z Higher Flash chip densities require 45 nm imaging z Strong Flash unit growth expected to continue z Mid term: DRAM z DRAM invests in immersion for 55 nm for higher density chips z Installing imm
Slide 35: Summary
Summary z ASML, as the leading lithography equipment supplier, is well positioned for growth z Multiple drivers underpin ASML’s growth opportunity z ASML’s financial performance shows remarkable stability in dynamic environments / Slide 35
Slide 36: Commitment
Commitment
ASML — 10th Annual Needham Growth Stock Conference (January 2008) on 6ix