Asml Holding Nv · EURONEXT:ASML
Asml Holding Nv — Investor Day (November 2007)
28 slides from Asml Holding Nv's investor day presentation, Nov 2, 2007
Slide 1: Investor Day: ASML: A growth company
Investor Day ASML: A growth company Eric Meurice, CEO London, November 2nd 2007 / Slide 1
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 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 2006 3,597 € M Employees: 6400 (Q3 ‘07) Sales: # 3 SemiCap 2007E 3,700 € M M
Slide 4: ASML business model
ASML business model z Pure focus on lithography justified by high market growth potential z Market share expected to rise to “natural level” above 70% 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 i
Slide 5: 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 6: 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 enhance
Slide 7: 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 8: 2: Customer mix effect
Driver 2: Customer mix effect Logic and analog major sectors in size 180 160 140 120 IC Units Bln 100 80 60 40 20 0 2000 2001 2002 2003 2004 2005 2006 2007E 2008E DRAM NAND NOR MPU LOGIC+MCU+DSP ANALOG OTHER Source: IC Insights / Slide 8
Slide 9: (cont): Customer mix effect
Driver 2 (cont): 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 9
Slide 10: (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 introduced 45nm node in 2007 • DRAM plans roll-out of 55nm nod
Slide 11: 3: Technology node transitions - Impact on litho tool mix
Driver 3: Technology node transitions – Impact on litho tool mix - 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 11
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 5xnm NAND Flash 4xnm NAND Flash ArFi ArF KrF KrF I-Line ArFi ArF KrF KrF I-Line ArFi ArF KrF KrF I-Line ArFi ArF KrF KrF I-Line ArFi ArF KrF KrF I-Line ArFi ArF KrF KrF I-Line ArFi ArF KrF KrF I-Lin
Slide 13: 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 1.2 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 Year Sou
Slide 14: (Cont.): 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 14
Slide 15: (Cont.): Litho is growing as a % of WFE Capex
Driver 4 (Cont.): Litho is growing as a % of WFE Capex Innovation requires more expensive machines Lithography share Litho Equipment of equipment Sales approaching as % of Total Equipment sales 17% level Litho as % of Total Equipment (12mma) Expon. (Litho as % of Total Equipment (12mma)) 17% 16% 15%
Slide 16: 5: ASML mask and system enhancements extend lithography value added/ASP
Driver 5: ASML mask and system enhancements extend lithography value added/ASP 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 Application specific lens s
Slide 17: Multiple Engines of Growth make correlation weak
Multiple Engines of Growth make correlation litho capex – IC unit growth – IC Value growth weak… 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 18: Multiple growth drivers contribute to shorter and shallower cycles
… but 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 Q3/05 Q4/05
Slide 19: Lithography market growth threats
Lithography market growth threats z Market consolidation z Memory market slow down z Moore’s Law slowdown z Disruptive Technologies / Slide 19
Slide 20: Market share heading toward a natural level above 70%
Market share heading toward a “natural level” above 70% Market share almost tripled in 10 years 60% ASML Market Share (revenue) 50% 40% 30% 20% 10% 0% 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 (e) Source: ASML, SEMI / Slide 20
Slide 21: 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 22: Market share further growth opportunities
Market share further growth opportunities z Strategy to grow share: z Confirm the Low Risk approach with customers: z Fundamental technology leadership reduces risk z High cost of switch or high cost of maintaining 2 litho vendors z Pricing to achieve cost per function scaling per historical trend z
Slide 23: 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 24: Lowest cost of execution & Highest value generated
Lowest cost of execution & Highest value generated z Current COGS reduction and product performance improvement z High percentage of R&D invested for cost/value z Increasing volume leverage on fixed cost z Impact of cycle time reduction z Drive on manufacturing and supply chain performance => 10% to
Slide 25: Lowest cost of execution & Highest value generated (cont.)
Lowest cost of execution & Highest value generated (cont.) z Cost Structure zScaling SG&A from 7.3% of sales in 2004 to 6% of sales in 2007 zAmortization and depreciation level at 110 M Euro or 3% of sales zVariability through high level of sub contracting to manage potential cycles z 30% short term
Slide 26: Shortest cycle times for customer value, maximum share acquisition
Shortest cycle times for customer value, maximum share acquisition and optimum working capital z Current Cycle time reduction zStandard lead time 9 - 12 months in 2005, 6 - 9 month in 2007 zCycle times reduced below standard lead times on “options” and “turns business” to allow up to 40% of business
Slide 27: 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 worldwide For the fifth consecutive year, ASML has been a
Slide 28: Commitment
Commitment / Slide 28