Specialist
Former senior executive at ASML Holding NV
Agenda
- Impact of shrinking process nodes and lithography key demand drivers, focusing on EUV (extreme ultraviolet) sales
- Evolution of customer spend on lithography
- ASML’s (AMS: ASML) ASP and COGS trends
- Capacity utilisation and expansion outlook
Questions
1.
What is your outlook for EUV [extreme ultraviolet] sales in lithography tools through 2025? ASML’s Q1 2022 guidance indicates 20% sales growth for 2022. Is that reasonable and would that also include a 25% increase in EUV sales?
2.
Could you explain the layer count and impact of nodes shrinking? Does it mean more layers need EUV? Is that driving demand and your positive outlook for ASML?
3.
When nodes shrink, does it increase the number of tools or is it also how they’re used? What exactly drives demand? Is it simply volume and more people actually using EUV tools?
4.
What key factors could disrupt ASML’s leading market position and when could they be resolved? You mentioned a chip shortage, there’s also a problem with optical lenses and light-source supply, system assembly, capacity, the new logistics centre and the January 2022 fire incident in its Berlin factory.
5.
Could you see ASML increasing its equity stake in Zeiss, or other suppliers, to help speed up its capacity expansion or some more financially motivated vertical integration there?
6.
Do you think we could ever see ASML have a full vertical integration and acquire a company such as Zeiss or Trumpf to secure supply?
7.
Of the challenges you highlighted – macroeconomic environment, geopolitics, capacity and supply chain – what’s your outlook for capacity? There are estimates that chipmakers could spend USD 109bn on fab machinery during 2022-23. How well-placed is ASML’s capacity to capitalise on this? How concerned should the management team be about potential gains from players such as Nikon and Canon?
8.
You indicated that 80-85 EUV tools is realistic, but demand suggests 90-plus. Is there any way for ASML to serve that demand in the 2022-23 time frame, which many estimates refer to? What might the company need to do to serve that demand?
9.
What’s the risk for ASML of potential overcapacity in the semiconductor industry beyond 2023 or 2025, after the company has taken advantage of the high demand?
10.
What are your thoughts on the pricing justifications given the machines high price points, especially in the EUV and high-NA [high-numerical aperture] place? What’s the main justification for TSMC and others potentially spending up to USD 250m on these tools? Will expenditure shrink in the long term due to yield improvements, or does it reduce the process steps?
11.
What could slow EUV adoption in any meaningful way, whether changes in chip architecture, chiplets or advanced packaging? Could any of that improve the performance of chips made with DUV [deep ultraviolet] to the point where EUV adoption slows?
12.
Would you agree that the main limit to ASML’s success will be its capacity to keep up with demand?
13.
Could you see any significant greenfield or brownfield capacity expansion for ASML? How long would it take to increase the capacity to serve the demand drivers we’ve discussed?
14.
How did ASML become dominant in EUV? Was it anything to do with the Japan-based player Gigaphoton, whether its operations had any impact on ASML’s dominance in the EUV scanner space?
15.
How are lead times and production cycle times trending for EUV, ArFi [argon fluoride immersion], ArF [argon fluoride] dry and KrF [krypton fluoride] respectively? Does fast shipment only apply to EUV?
16.
What are your thoughts on layer count, specifically with TSMC? I understand that TSMC’s EUV layer count has been changing for three nanometres – it was initially expected to be around 26 but it’s been coming down.
17.
Is there anything additional to highlight about ASML related to the themes we’ve been discussing?
