Specialist
Former senior executive at Tokyo Electron US Holdings.
Agenda
- ASML’s (AMS: ASML) order volume outlook logic vs DRAM
- Capacity utilisation and expansion trends
- EUV (extreme ultraviolet) and high-NA (numerical aperture) pricing outlook
- Russia-Ukraine conflict's impact on neon supply and the semiconductor shortage
- Margin and growth outlook vs key players including Tokyo Electron (TYO: 8035), Applied Materials (NASDAQ: AMAT) and Lam Research (NASDAQ: LRCX)
Questions
1.
ASML’s 2025 revenue guidance is currently around EUR 24bn-30bn, and it’s predicting 20% sales growth in 2022. How much will EUV [extreme ultraviolet] sales contribute to that growth story?
2.
How much do you think EUV sales will contribute to ASML’s projected EUR 24bn-30bn revenue by 2025? The revenue split between EUV and DUV [deep ultraviolet] and service and field options has been moving recently. What might the picture be in 2025?
3.
How might Intel’s recently announced USD 36m chip-making investment in Europe – notably including a German fab at Magdeburg – impact demand for ASML tools? I know Intel is already an ASML customer.
4.
Intel announced it will spend around EUR 17bn on the fab in Germany. How much of that would be equipment costs and how much would be a player such as ASML’s products?
5.
To what extent does lithography take a higher share of fab CAPEX as nodes shrink? How might that influence demand for EUV machines?
6.
Does the number of tools needed increase as nodes shrink? Does it change the type of tools required, and are they more expensive?
7.
What’s the revenue difference between 7nm and 2nm nodes?
8.
When could we start seeing significant volumes at a 2nm node for it to meaningfully impact ASML’s revenue?
9.
How do you think ASML’s projected revenue growth will split across DRAM, NAND, logic and foundry?
10.
Do you see any uncertainty around memory vs logic spending?
11.
Are there any barriers to EUV adoption in memory? What would you say are the top three barriers?
12.
Could advanced packaging chiplets or chip architecture changes improve the performance of chips made with EUV to a point where EUV adoption is slower than anticipated?
13.
How many EUV tools are needed and how important are they at different wafer starts? If we say 50,000 wafer starts per month vs 100,000, how would a player such as Intel assess its need for EUV tools?
14.
Will ASML’s DUV tools – specifically KrF [krypton fluoride] immersion tools – still grow as EUV adoption increases? Are they purchased simultaneously?
15.
How do you view the growth of service revenue and field options for ASML vs tool count? In the company’s most recent annual report, service and field options revenue had started to take up a much larger proportion of its EUR 18.6bn revenue in 2021. How might that develop through 2025 and why is it happening?
16.
You said ASML’s service revenue and field options’ margins were well above 50%. Are we talking close to 60%? Is this what’s driving the company’s margin expansion?
17.
I believe ASML wants 54-56% gross margin by 2025, but it looks like it could exit 2022 with 54% margins, so at the low end. Where could margins go if it was possible for the company to exceed its 2025 guidance?
18.
ASML said it plans to produce 55 EUV machines in 2022. What could that number be in 2025?
19.
If ASML were to increase the number of units it produced to, say, 100, what CAPEX would be needed to provide this capacity?
20.
To what extent do economies of scale reduce the CAPEX required as the number of units increases? Let’s say it moves from 100 to 200 units.
21.
To what extent are supply chain choke points, such as Carl Zeiss or Trumpf, issues for ASML? Can they scale at the right speed to support ASML’s EUV growth?
22.
To what extent could neon shortages stemming from the Russia-Ukraine conflict impact ASML? I understand neon is more broadly a by-product of steel production, so it could presumably be procured from more locations besides Ukraine.
23.
What does ASML use neon for?
24.
You highlighted cost as a major barrier to EUV adoption. Are there any technological barriers?
25.
Applied Materials suggested the DRAM industry moving to 3D NAND might not require EUV. Do you have a view on this and a potential timeline?
26.
Could TSMC moving to 3nm – particularly in logic with gate-all-around – be a negative for EUV demand? Would there be fewer EUV layers?
27.
Is there anything that might hamper the intense need for lithography through 2025 and beyond?
28.
How long are lead times for EUV and DUV machines and to what extent could these be reduced?
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