Asml Holding Nv · EURONEXT:ASML
Asml Holding Nv — Investor Day (December 2007)
28 slides from Asml Holding Nv's investor day presentation, Dec 6, 2007
Slide 1: ASML: A growth company
ASML: A growth company Eric Meurice, CEO London, November 2nd 2007 Investor Day
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 presentation may include forward-looking statements that are subject to risks and uncertainties including, but not limited to: economic conditions, product demand and se
Slide 3: 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
Slide 4: ASML business model
ASML business model Pure focus on lithography justified by high market growth potential Market share expected to rise to "natural level" above 70% Sustainability of business model by ever growing barriers to entry: Ever growing R&D critical mass affordable only by the leader Ever growing internal kn
Slide 5: 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 6: 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 enhancers
Slide 7: 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 8: 2: Customer mix effect
Driver 2: Customer mix effect Logic and analog major sectors in size IC Units Bln Source: IC Insights
Slide 9: (cont): Customer mix effect
Driver 2 (cont): Customer mix effect IC exposed area - Strongest growth in memory IC Exposed Area (M Sq Inch) Source: ASML
Slide 10: (cont.): Customer mix generates growth
Driver 2 (cont.): Customer mix generates growth Adoption cycle of new technology in various sectors Source: Semiconductor Industry Association Flash 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
Slide 11: 3: Technology node transitions - Impact on litho tool mix
Driver 3: Technology node transitions - Impact on litho tool mix - DRAM example % of Litho Layers # of Layers: 35 39 41 Source: ASML
Slide 12: Impact of Technology node transition on Fab Capex
Driver 3 (Cont.): Impact of Technology node transition on Fab Capex - 300mm NAND Flash memory example 4xnm NAND Flash 5xnm NAND Flash 90k wafers/month Total litho investment &128; 474 M 28 litho layers 30 litho layers Total litho investment &128; 562 M ArFi ArF KrF KrF ArF KrF KrF I-Line I-Line ArF
Slide 13: 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
Slide 14: 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 15: Litho is growing as a % of WFE Capex
Driver 4 (Cont.): Litho is growing as a % of WFE Capex Innovation requires more expensive machines Source: SEMI including August 2007 data Lithography share of equipment approaching 17% level
Slide 16: 5: ASML 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 17: Multiple Engines of Growth make correlation weak
Multiple Engines of Growth make correlation litho capex - IC unit growth - IC Value growth weak... Source: VLSI Research/WSTS/Gartner CapEx ($B) Year over Year Growth
Slide 18: Multiple growth drivers contribute to shorter and shallower cycles
.... but 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
Slide 19: Lithography market growth threats
Lithography market growth threats Market consolidation Memory market slow down Moore's Law slowdown Disruptive Technologies
Slide 20: Market share heading toward a natural level above 70%
Source: ASML, SEMI Market share heading toward a "natural level" above 70% Market share almost tripled in 10 years ASML Market Share (revenue) 0% 10% 20% 30% 40% 50% 60% 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2004 2006 (e)
Slide 21: 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 22: Market share further growth opportunities
Market share further growth opportunities Strategy to grow share: Confirm the Low Risk approach with customers: Fundamental technology leadership reduces risk High cost of switch or high cost of maintaining 2 litho vendors Pricing to achieve cost per function scaling per historical trend Performance
Slide 23: 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 24: Lowest cost of execution & Highest value generated
Lowest cost of execution & Highest value generated Current COGS reduction and product performance improvement High percentage of R&D invested for cost/value Increasing volume leverage on fixed cost Impact of cycle time reduction Drive on manufacturing and supply chain performance => 10% to 15% value
Slide 25: Lowest cost of execution & Highest value generated (cont.)
Lowest cost of execution & Highest value generated (cont.) Cost Structure Scaling SG&A from 7.3% of sales in 2004 to 6% of sales in 2007 Amortization and depreciation level at 110 M Euro or 3% of sales Variability through high level of sub contracting to manage potential cycles 30% short term variab
Slide 26: Shortest cycle times for customer value
Shortest cycle times for customer value, maximum share acquisition and optimum working capital Current Cycle time reduction Standard lead time 9 - 12 months in 2005, 6 - 9 month in 2007 Cycle times reduced below standard lead times on "options" and "turns business" to allow up to 40% of business mad
Slide 27: A strategy leading to Customer recognition
.... a strategy leading to Customer recognition .... a strategy leading to Customer recognition VLSI Research's Customer Satisfaction Survey on Chip Making Equipment is the only public feedback forum available to the chip industry. For the 2007 survey, over 48,000 questionnaires were sent out worldw
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