UBS Global Technology and Services Conference New York City Craig DeYoung VP, Investor Relations & Corporate Communications June 9, 2009 / Slide 1
Safe Harbor "Safe Harbor" Statement under the US Private Securities Litigation Reform Act of 1995: the matters discussed in this document may include forward-looking statements, including statements made about our outlook, realization of backlog, IC unit demand, financial results, average sales price, gross margin and expenses. These forward looking statements are subject to risks and uncertainties including, but not limited to: economic conditions, product demand and semiconductor equipment industry capacity, worldwide demand and manufacturing capacity utilization for semiconductors (the principal product of our customer base), including the impact of credit market deterioration on consumer confidence and demand for our customers products, competitive products and pricing, manufacturing efficiencies, new product development and customer acceptance of new products, ability to enforce patents and protect intellectual property rights, the outcome of intellectual property litigation, availability of raw materials and critical manufacturing equipment, trade environment, changes in exchange rates and other risks indicated in the risk factors included in ASML s Annual Report on Form 20-F and other filings with the US Securities and Exchange Commission. / Slide 2
The Markets DRAM NAND 300mm litho capacity utilization recovering while 200mm capacity is being built off DRAM 1Gb prices continue to rise DRAM manufacturers with 55nm process are making money DRAM manufacturer without 55nm process resume process shrink plans Some DRAM players preparing 45nm processes Litho capacity utilization moving back toward normal levels NAND 16Gb MLC prices stabilize above 4X nm and 5X nm cash costs Manufacturer prepare 3X nm processes to improve memory density/cost Foundry Litho capacity utilizations show significant improvement Capacity additions being made at 4X nm process node / Slide 3
DRAM revenues appear to bottom out in March YoY DRAM unit growth still well below average of analysts DRAM Sales [B USD/Units] DRAM revenue and unit sales history YoY Seasonal adjusted DRAM revenue 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Jan-04 Jan-05 YoY Seasonal adjusted DRAM units Revenue DRAM Seasonal Adjusted Units DRAM Seasonal Adjusted Revenue 3mma Units 3mma Jan-06 Source: WSTS, ASML Last data point: March 2009 Jan-07 Jan-08 Jan-09 120% 100% 80% 60% 40% 20% 0% -20% -40% -60% YoY Growth [%] DRAM unit sales compared with year before Units [B] 16 14 12 10 8 6 4 2 - Analyst Average 2008 Cumm 2009 Cumm Growth YTD 1 2 3 4 5 6 7 8 9 101112 Month YoY-3mma 0% -5% -10% -15% -20% -25% Growth [%] / Slide 4
DRAM 300 mm utilization recovering while 200mm capacity is built off DRAM Utilization Performance 100 80 60 40 20 0-20 -40-60 -80 STEPPER units SCANNERS units TWINSCAN units STEPPERS SCANNERS TWINSCAN 1500 1400 1300 1200 1100 1000 900 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 ASML Tool Utilization [%] 800 700 Measured ASML tools [units] 600 500 400 300 200 100-100 0 Time source: ASML status: cw18-2009 / Slide 5
DRAM 1 Gb prices continue to increase during April, due to persistent supply cut-backs, 5x nm manufacturers are cash positive MAIN DRAM SPOT & CONTRACT PRICES (01/2008-2009YTD) 2.4 2.1 1.8 512Mb DDR2 667 SPOT PRICE 512Mb DDR2 667 CONTRACT PRICE 1Gb DDR2 667 SPOT PRICE 1Gb DDR2 667 CONTRACT PRICE Chip ASP [$US] 1.5 1.2 0.9 0.6 300 mm cash-costs for 7x nm 1 Gb DRAM between 1.4 & 1.6 USD 300 mm cash-costs for 6x nm 1 Gb DRAM between 1.0 & 1.2 USD 0.3 0 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 300 mm cash-costs for 5x nm 1 Gb DRAM between 0.8 & 0.9 USD Source: DRAM Exchange (05/2009) / Slide 6
Q1/09 DRAM operating margins: Production cut-backs resulted in negative op. margins for all players, despite rising ASPs 60% Operating Margins of main DRAM Manufacturers (Q1/06 - Q1/09) 40% Operating Margin [% of Sales] 20% 0% -20% -40% -60% -80% -100% -120% -140% Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q208 Q308 4Q08 1Q09 Samsung Hynix Micron Qimonda Elpida ProMOS Powerchip Nanya Most advanced prod. node in Q1/09: 5x nm 5x nm 6x nm 6x nm 7x nm 7x nm Source: DRAMeXchange (2/09), ASML / Slide 7
3mma NAND sales is rising as normal seasonal behavior 1Q09 units growth lower than annual forecast FLASH Sales [B USD/Units] NAND revenue and unit sales history 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 Jan-04 Jan-05 YoY Seasonal adjusted NAND revenue YoY Seasonal adjusted NAND units Revenue NAND Seasonal Adjusted Units NAND Seasonal Adjusted Revenue 3mma Units 3mma Jan-06 Jan-07 Jan-08 Jan-09 250% 200% 150% 100% 50% 0% -50% -100% YoY Growth [%] Units [B] NAND unit sales compared with year before 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5-2008 Cumm 2009 Cumm Growth YTD YoY-3mma Analyst Average 1 2 3 4 5 6 7 8 9 10 11 12 Month 0% -2% -4% -6% -8% -10% -12% -14% -16% -18% -20% Growth [%] Source: WSTS, ASML Last data point: March 2009 / Slide 8
NAND utilization, moving back to normal levels NAND Utilization Performance 100 80 60 40 20 I-Line units KrF units ArF units ArFi units I-Line KrF ArF ArFi 500 450 400 350 300 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 Measured ASML tools [units] ASML tool utilization [%] 0-20 -40-60 -80 250 200 150 100 50-100 Time 0 * One major manufacturer s dry tool utilization ( 30% idle) is not capture in this graph source: ASML status: cw18-2009 / Slide 9
NAND MLC 16 Gb mainstream ASPs stabilized above 4x and 5x nm cash-costs Chip ASP [$US] 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 Jan-08 Feb-08 MAIN NAND SPOT & CONTRACT PRICES (01/2008-2009YTD) 16Gb NAND SLC SPOT PRICE 16Gb NAND SLC CONTRACT PRICE 16Gb NAND MLC SPOT PRICE 16Gb NAND MLC CONTRACT PRICE Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 300 mm cash-costs for 5x nm 16 Gb MLC NAND between 2.5 and 3,1 USD 300 mm cash-costs for 4x nm 16 Gb MLC NAND between 1,9 and 2,4 USD Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Source: DRAM Exchange (05/2009) / Slide 10
Q1/09 NAND operating margins: Margins driven by raising ASPs. 60% Operating Margins of main NAND Manufacturers (Q1/06 - Q1/09) 40% Operating Margin [% of Sales] 20% 0% -20% -40% -60% 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Most advanced volume node in Q1/09: 4x nm SE 4x nm SE 3x nm SPT 4x nm SE -80% -100% Source: DRAMeXchange (2/09), ASML / Slide 11
Logic sales appear to have reached a bottom in March 2009 Logic Sales [B USD/Units] 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 LOGIC revenue and unit sales history Jan-04 Jan-05 YoY Seasonal adjusted Logic revenue YoY Seasonal adjusted Logic units Revenue Logic Seasonal Adjusted Units Logic Seasonal Adjusted Revenue 3mma Units 3mma Jan-06 Jan-07 Jan-08 Jan-09 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% YoY Growth [%] Units [B] Logic unit sales compared with year before 45 40 35 30 25 20 15 10-5 Analyst Average 2008 Cumm 2009 Cumm Growth YTD 1 2 3 4 5 6 7 8 9 10 11 12 Month YoY-3mma 0% -5% -10% -15% -20% -25% -30% -35% -40% Growth [%] Source: WSTS, ASML Last data point: March 2009 / Slide 12
Foundry utilizations are recovering fast but well below trigger point for capacity buys Foundry Top-4 Utilization Performance 100 STEPPER units SCANNER units TWINSCAN units 2000 STEPPERS SCANNERS TWINSCAN 80 60 40 20 1800 1600 1400 1200 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 ASML tool utilization [%] 0-20 -40-60 -80-100 1000 Measured ASML systems [units] 800 600 400 200 0 Time source: ASML status: cw18-2009 / Slide 13
Market Opportunity / Slide 14
Technology developments continue Drivers of lower device cost and greater device functionality 200 Logic / SRAM Resolution/half pitch, "Shrink" [nm] 100 80 60 50 40 30 20 DRAM k 1 0.30 ~ 0.35 NAND Flash k 1 0.27 ~ 0.30 Logic NAND 6 Transistor SRAM Cell k 1 0.40 ~ 0.44 DRAM 1/1/15 1/1/14 1/1/13 1/1/12 1/1/11 1/1/10 1/1/09 1/1/08 1/1/07 1/1/06 1/1/05 1/1/04 1/1/03 1/1/02 Year of production start* * Note: Process development 1.5 ~ 2 years in advance of manufacturing / Slide 15 Source: ASML - updated 12/08
Lithography total market growth opportunity - simulation Historical trends projected WW Litho Demand Simulation (2006-2015) : Lithography System Revenue [Mio. ] 11000 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 Factual until 2008 + simulation for 2009 IC trend-based simulation CAGR (2006-15): 9.7% Semiconductor unit growth continues at 9% per year Moore s law unaffected 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: ASML / Slide 16 Based on simulations, NOT a forecast
Bottom-up scenario: Four engines of growth Even when assuming slow chip unit growth of 4% (due to Moore s Law slowdown and slower electronics consumption in the West) More DRAM in expanding consumer electronics. Additional 1.2B Litho revenue over 5 years. NAND/DRAM penetration rises to 10% of hard disk drives storage capacity, versus 7% in slow-down scenario, adding 6.7 billion in Litho revenue over 5 years. Middle class population growth expected, driven by Brazil, Russia, India and China (BRIC). Electronics spending in BRIC to more than double to $46/year, adding 6.4B in Litho revenue over 5 years. / Slide 17 Based on simulations, NOT a forecast Emerging new Storage Class Memory makes computer servers perform 25% better, leading to 30% penetration by 2015, adding 1.5B Litho revenue in 2013-2015 period.
Bottoms-up scenario: significant litho demand indicated Conservative scenario (4% unit growth) + emerging growth markets Worldwide litho demand simulation Lithography System Revenue [Mio. ] 11000 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 Factual until 2008 + simulation for 2009 IC trend-based simulation 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 NAND in servers (PCRAM) More DRAM in consumer products More spending in BRIC countries NAND penetration in PC s 10% Half of historic chip growth of 4% Source: ASML / Slide 18 Based on simulations, NOT a forecast
ASML confirms its strategy The lithography market offers significant growth potential; the company target of EUR 5 billion in annual revenues is still achievable, timing depending on macro economic circumstances ASML s key success factor is unmatched R&D innovation which will remain unaffected in the current crisis and is in line with customer roadmaps, focused on a high level of product differentiation Production capacity (assets and staff) will be maintained to meet customer needs without lengthy lead times ASML scales down its cost structure for positive cash generation even at very low quarterly revenue levels Drive improvement in the long term cost structure through efficiency initiatives / Slide 19
ASML Product Strategy Enabling the future / Slide 20
Committed to R&D New product introduction on track ASML is using its financial strength to uniquely continue aggressive R&D spending in strategic development programs to ensure timely introduction of next node production solutions Proved EUV imaging with the first full field 28 nm dense lines Introduced new suite of lithography-aware design and manufacturing tools supported by our subsidiary Brion State of art Immersion TWINSCAN NXT for Double Patterning (DP) on track to ship in July / Slide 21
TWINSCAN NXT - improved overlay and productivity Suitable for double patterning 32 nm and beyond Platform capability >200 wafers per hour Excellent overlay shown during SPIE x, y : 1.9nm, 1.8nm overlay x, y : 1.6nm, 1.7nm overlay 5 nm 99.7% x: 1.9 nm y: 1.8 nm 5 nm 99.7% x: 1.6 nm y: 1.7 nm / Slide 22
EUV pre-production systems ready in 2010 First full field 28 nm dense lines imaged Sub-40nm dense line resolution 22.5x15mm 2 field size 28nm 1:1 LS 35 30 Wafer CDU 3σ (nm) 40 32 30 28 H 1.5 1.5 2.1 2.8 V 1.4 1.6 1.8 2.2 32nm Avg. 31.6nm 3σ=2.2nm Resist: Shin-Etsu SEVR-40 25 28nm Good wafer CD uniformity obtained for 30nm dense LS, first 28nm dense line CDU data are promising Jan Hermans SPIE 2009 1 / Slide 23
Summary / Slide 24
Summary Litho system utilization at leading edge improving across all sectors Shrink drivers remain in all sectors (Device cost and functionality improvements) Technology purchases resume to support litho process node transitions in all sectors ASML continues to manage the company for cash generation and long term cost structure optimization, while keeping our current aggressive technology development roadmap ASML is prepared to support all customers future litho performance and timing requirements / Slide 25
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