Asml Holding Nv · EURONEXT:ASML
Asml Holding Nv — 10th Annual Needham Growth Stock Conference (February 2008)
36 slides from Asml Holding Nv's conference presentation, Feb 5, 2008
Slide 1: 10th Annual Needham Growth Stock Conference
10th Annual Needham Growth Stock Conference Craig DeYoung, VP IR and Corporate Communications New York, January 8, 2008 A growth company
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 ASML overview Drivers for growth Financial performance Outlook
Slide 4: ASML: The world's largest supplier of lithography equipment
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 2
Slide 5: ASML business model
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 cust
Slide 6: ASML Strategy
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-b
Slide 7: Strengthening technology leadership relentlessly
Strengthening technology leadership relentlessly ASML R&D investment (excl Zeiss) Total Sales (M&128;) R&D Investment (M&128;) 2007(e) Source: ASML
Slide 8: Pure play Lithography, Engines for growth
Pure play Lithography, Engines for growth
Slide 9: Pure focus on Lithography justified by high market growth potential
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" deriv
Slide 10: Driver 1: IC unit 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
Slide 11: Driver 2: Customer mix effect
Driver 2: Customer mix effect IC exposed area - Strongest growth in memory IC Exposed Area (M Sq Inch) Source: ASML
Slide 12: Customer mix generates growth
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 20
Slide 13: Multiple growth drivers contribute to shorter and shallower cycles
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 inve
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 % of Litho Layers # of Layers: 35 39 41 Source: ASML
Slide 15: Shrink requires more litho machines and more advanced systems
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
Slide 16: Driver 4: Technology Transition ASP generated growth
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
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.... Litho Cost per Byte (&128; per Mbyte) Source: Gartner, ASML
Slide 18: Driver 5: mask and system enhancements extend lithography value
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 optimiz
Slide 19: Growth driver - immersion products
Growth driver - immersion products
Slide 20: ASML immersion lithography leadership
> 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
Slide 21: Immersion TWINSCAN XT:1900i
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
Slide 22: ASML Immersion is in Volume IC Production
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 A
Slide 23: Financial performance
Financial performance 1 Slide 23
Slide 24: Key financial trends 2006 - 2007
Key financial trends 2006 - 2007 Numbers have been rounded for readers' convenience
Slide 25: Stable revenue performance, loose bookings correlation
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%
Slide 26: Multiple Engines of Growth make correlation litho capex - IC unit growth weaker
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
Slide 27: Outlook
Outlook Y _ & ASML
Slide 28: Market share - further growth opportunities
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 Per
Slide 29: ASML market share growth expected to continue in 2008
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
Slide 30: Memory transitions technology nodes: DRAM
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 A
Slide 31: 2008: Strong transition to Gb & DDR3 DRAM
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
Slide 32: Memory transitions technology nodes: NAND
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 transit
Slide 33: NAND Flash: Fast transition to advanced nodes
NAND Flash : Fast transition to advanced nodes to enable higher capacity ICs Source: DRAM eXchange
Slide 34: Current market conditions - ASML drivers
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 redu
Slide 35: Summary
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
Slide 36: ASML Commitment
4 e ASML Commitment
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