Q2 2024 ASML Holding NV Earnings Call

Operator: Good day, and thank you for standing by.

Good day and thank you for standing by welcome to the ASML 2024 second quarter financial results Conference call on July 17, 2024.

Operator: Welcome to the ASML 2024 second quarter financial results conference call on July 17th, 2024.

Operator: At this time, all participants are in a listen-only mode. After the speaker's introduction, there'll be a question-and-answer session. To ask a question in session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again.

Speaker Change: This time, all participants are in a listen only mode. After the Speakers' introduction that there'll be a question and answer session to ask a question on the session you will need to press star one on your telephone.

Doesn't have an automated message advising you on how it is raised to withdraw your question. Please press star one on one again. Please be advised that today's conference is being recorded I would now like to turn the conference call over to Mr. Skip Miller. Please go ahead.

Operator: Please be advised that today's conference is being recorded.

Skip Miller: I would now like to hand the conference call over to Mr. Skip Miller. Please go ahead.

Skip Miller: Thank you, operator.

Operator: Thank you, operator. Welcome, everyone.

Thank you operator welcome everyone. This is skip Miller, Vice President of Investor Relations at ASML.

Skip Miller: This is Skip Miller, Vice President of Investor Relations at ASML. Joining me today on the call are ASML's CEO, Christophe Fouquet, and our CFO, Roger Dassen. The subject of today's call is ASML's 2024 second quarter results. The length of this call will be 60 minutes, and questions will be taken in the order that they are received. This call will also be broadcast live over the internet at ASML.com. A transcript of management's opening remarks and a replay of the call will be available on our website shortly following the conclusion of this call.

Skip Miller: Welcome everyone. This is Skip Miller, Vice President of Investor Relations at ASML. Going to me today on the call, our ASML CEO, Christophe Fouquet, and our CFO, Roger Dassen.

Speaker Change: Joining me today on the call are ASML CEO Christophe, Okay, and our CFO Broche Dawson.

Skip Miller: The subject of today's call is ASML 2024 second quarter results. The link to this call will be 60 minutes, and questions will be taken in the order that they are received. This call will also be broadcast live on our overnet, now over the Internet at ASML.com.

Speaker Change: The subject of today's call is Asml's 2024 second quarter results.

Speaker Change: The length of this call will be 60 minutes and questions will be taken in the order they are received.

Call will also be broadcast live on our overnight over the internet at ASML Dot com.

Skip Miller: The transcript of management's opening remarks and a replay of the call will be available on our website shortly following the conclusion of this call. Before we begin, I'd like to caution listeners that comments made by management during this conference call will include forward-looking statements within the meaning of the federal securities laws. These forward-looking statements involve material risks and uncertainties.

A transcript of management's opening remarks, and a replay of the call will be available on our website. Shortly following the conclusion of this call.

Skip Miller: Before we begin, I'd like to caution listeners that comments made by management during this conference call will include forward-looking statements within the meaning of the Federal Securities Law. These four forward-looking statements involve material risks and uncertainties. For a discussion of risk factors, I encourage you to review the Safe Harbor Statement contained in today's press release and presentation found on our website at ASML.com and in ASML's annual report on Form 20-F and other documents as filed with the SEC. And with that, I'd like to turn the call over to Christophe Fouquet for... Thank you, Skip.

Before we begin I'd like to caution listeners that comments made by management. During this conference call will include forward looking statements within the meaning of the federal Securities laws.

These forward looking statements involve material risks and uncertainties.

Skip Miller: For discussion or risk factors, I encourage you to review the Safe Harbor Statement contained in today's press release and presentation found on our website at ASML.com and in ASML's annual report on Form 20-F and other documents as filed with the Securities and Exchange Commission.

Speaker Change: A discussion of risk factors I encourage you to review the Safe Harbor statement.

Speaker Change: In today's press release and presentation found on our website at ASML Dot com and in Asml's annual report on form 20-F, and other documents as filed with the Securities and Exchange Commission.

Christophe Fouquet: With that, I'd like to turn the call over to Christophe Fouquet for a brief introduction. Thank you, Skip. Welcome everyone, and thank you for joining us for a second quarter of 2024 results conference call. Before we begin the Q&A session, Vodja and I would like to provide another view and some commentary on the second quarter of 2024, as well as provide our view of the coming quarter.

Christophe: With that I'd like to turn the call over to Christophe Okay for a brief introduction.

Christophe D. Fouquet: Welcome, everyone, and thank you for joining us for our second quarter 2024 Results Conference. Before we begin the Q&A session, Roger and I would like to provide an overview and some commentary on the second quarter of 2024, as well as provide our view of the coming year. Roger, we'll start with a review of our second quarter 2024 financial performance with added comments on our short-term outlook. I will complete the introduction with some additional comments on the current business environment and on our... How are you? Are you all good?

Christophe D. Fouquet: Thank you skip welcome everyone and thank you for joining us for our second quarter 2024 results conference call.

Christophe D. Fouquet: Before we begin the Q&A session, Roger and I would like to provide an overview and some commentary on the second quarter of 2024 as well as provide our view of the coming.

Roger Dassen: Vodja, we'll start with a review of our second quarter of 2024 financial performance, with added comments on our short-term outlook.

Speaker Change: Well she always starts with a review of our second quarter 2024 financial performance with added comments on our short term outlook.

Christophe Fouquet: I will complete the introduction with some additional comments on the current business environment and on our outlook.

Speaker Change: Complete the introduction with some additional comments on the current business environment.

Speaker Change: No.

Speaker Change: Got it.

Roger Dassen: Thank you, Christophe, and welcome everyone. I will first review the second quarter of 2024 financial accomplishments and then provide guidance on the third quarter of 2024. Let me start with our second quarter accomplishments. Total net sales command at 6.2 billion euros, which is just above guidance. Net system sales of 4.8 billion euros, which is made up of 1.5 billion euros of EV sales and 3.3 billion euros of non EV sales. Net system sales was driven by logic. It's 54% with the remaining 46% coming from memory. Insult base management sales for the quarter came in at 1.48 billion euros, slightly higher than guided.

Okay.

Roger J. M. Dassen: Thank you, Christophe, and welcome, everyone. I will first review the second quarter of 2024 financial accomplishments and then provide guidance for the third quarter of 2024. Let me start with our second quarter accomplishment.

Speaker Change: Christophe and welcome everyone I will first review the second quarter 2024 financial accomplishments and then provide guidance on the third quarter of 2024.

Speaker Change: Let me start with our second quarter accomplishments total net sales came in at $6 2 billion euros, which is just about guidance now.

Roger J. M. Dassen: Total net sales came in at 6.2 billion euros, which is just above guidance. Net system sales of 4.8 billion euros, which is made up of 1.5 billion euros of EUV sales and 3.3 billion euros of non-EUV sales. Net system sales were driven by logic at 54%, with the remaining 46% coming from them. Installed base management sales for the quarter came in at 1.48 billion euros, slightly higher than. Rose margin for the quarter came in at 51.5%, which was above our guidance, primarily driven by more immersion systems than planned.

Speaker Change: Net system sales of $4 8 billion euros, which is made up of $1 5 billion euros of EV sales and $3 3 billion euros of non EV sales.

Speaker Change: Some sales was driven by logic at 54% with the remaining 46% coming from memory.

Speaker Change: Installed base management sales for the quarter came in at $1 48 billion euros slightly higher than guidance.

Roger Dassen: Rose margin for the quarter came in at 51.5%, which was above our guidance, primarily driven by more immersion systems than plants. On operating expenses, R&D expenses came in slightly above guidance at 1.1 billion euros due to higher R&D expenses regarding metrology and inspection, while FGNA expenses came in slightly below guidance at 277 million euros as a result of lower IT spend. Now, the income in Q2 was 1.6 billion euros, representing 25.3% of total sales and resulting in an EPS of 4.1 euros. Turning to the balance sheet, we ended the second quarter with cash equivalent insurance of investments at a level of 5.0 billion euros.

Speaker Change: Gross margin for the quarter came in at 51, 5%, which was above our guidance, primarily driven by more immersion systems than planned.

Roger J. M. Dassen: On operating expenses, R&D expenses came in slightly above guidance at 1.1 billion euros due to higher R&D expenses regarding metrology and inspection, while FG&A expenses came in slightly below our guidance at 277 million euros as a result of lower IT spending. Net income in Q2 was 1.6 billion euros, representing 25.3% of total net sales and resulting in an EPS of 4.01 euros. Turning to the balance sheets, we ended the second quarter with cash, cash equivalents, and shorts of investments at a level of 5.0 billion euros.

Speaker Change: On operating expenses R&D expenses came in slightly above guidance at $1 1 billion euros due to higher R&D expenses regarding metrology and inspection.

Speaker Change: While SG&A expenses came in slightly below our guidance of 277 million euros as a result of lower it spend.

Speaker Change: Net income in Q2 was $1 6 billion euros, representing 25, 3% of total net sales and resulting in an EPS of $4 or one year.

Speaker Change: Turning to the balance sheet, we ended the second quarter with cash cash equivalents and short term investments at a level of 5.0 billion euros.

Roger Dassen: We ended Q2 with 3.386 million euros, which is an improvement relative to last quarter. However, as mentioned last quarter, there continues to be pressure on free cash flow as we provide some support for our customers and operate at higher inventory levels. So that are being a result of the increased material intake, including high NA, as part of our planned capacity random preparation for a strong demand next year.

Roger J. M. Dassen: We ended Q2 with free cash flow of €386 million, which is an improvement relative to last quarter. However, as mentioned last quarter, there continues to be pressure on free cash flow as we provide some support for our customers and operate at a higher inventory level. The latter being a result of the increased material intake, including high in A, as part of our planned capacity ramp in preparation for strong demand. We expect a gradual return to normal cash conversion levels as the industry continues to recover.

Speaker Change: We ended Q2 with free cash flow of 386 million euros, which is an improvement relative to last quarter. However.

Speaker Change: However, as mentioned last quarter, there continues to be pressure on free cash flow as we provide some support for our customers and operate at the higher inventory levels.

Speaker Change: And that are being a result of the increased material intake, including high Nee as part of our planned capacity ramp in preparation for a strong demand next year.

Roger Dassen: We expect a gradual return to normal cash conversion levels of the industry to continue to recover. Moving to the autobook, Q2 net system bookings came in at 5.6 billion euros, which is made up of 2.5 billion euros of EUV bookings and 3.1 billion euros of non-UV bookings. Net system bookings in the quarter were mainly driven by logic at 73% and memory the remaining 27% of the bookings. At the end of Q2, 2024, we finished with a backlog of around 39 billion euros.

Speaker Change: We expect a gradual return to normal cash conversion levels as the industry.

Speaker Change: <unk> continues to recover.

Roger J. M. Dassen: Moving to the order book, Q2 net system bookings came in at 5.6 billion euros, which is made up of 2.5 billion euros of EUV bookings and 3.1 billion euros of non-EUV bookings. Net system bookings in the quarter were mainly driven by logic at 73% and memory at the remaining 27% of the bookings.

Speaker Change: Moving through the order book Q2 net system bookings came in at $5 6 billion euros, which is made up of $2 5 billion euros of E&P bookings and $3 1 billion euros of non <unk> bookings.

Speaker Change: Net system bookings in the quarter were mainly driven by logic at 73% and memory the remaining 27% of the bookings.

Speaker Change: At the end of Q2 2024, we finished with a backlog of around 39 billion euros.

Roger Dassen: With that, I would like to turn to our expectations for the third quarter of 2024. We expect Q3 total net sales to be between 6.7 billion euros and 7.3 billion euros. We expect our Q3 installed base management sales to be around 1.4 billion euros. Gross margin for Q3 is expected to be between 50 and 51%. We still expect a slightly lower gross margin for the full year 2024 compared to 2023. Although margins for the second half of the year are expected to be positively impacted by higher volume and more favorable EUV low and A-mix, we expect this to be offset by increased high in A costs relative to the first half of the year.

Roger J. M. Dassen: At the end of Q2 2024, we finish with a backlog of around 39 billion euros. With that, I would like to turn to our expectations for the third quarter of 2025. We expect Q3 total net sales to be between 6.7 billion euros and 7.3 billion euros. We expect our Q3 install-based management sales to be around 1.4 billion euros. Gross margin for Q3 is expected to be between 50 and 51%.

Speaker Change: With that I would like to turn to our expectations for the third quarter of 2024.

Speaker Change: We expect Q3 total net sales to be between $6 7 billion euros, and seven 3 billion euros fixed.

Speaker Change: We expect our Q3 installed base management sales to be around $1 4 billion euros gross margin for Q3 is expected to be between 50 and 51%.

Roger J. M. Dassen: We still expect a slightly lower growth margin for the full year 2024 compared to 2020. However, although margins for the second half of the year are expected to be positively impacted by higher volume and a more favorable EUV low NA mix, we expect this to be offset by increased high NA costs relative to the first half of the year. The expected R&D expenses for Q3 are around 1.1 billion euros, and FG&A is expected to be around 295 million euros.

Speaker Change: We still expect a slightly lower gross margin for the full year 2024 compared to 2023, although margins for the second half of the year are expected to be positively impacted by higher volume and more favorable UV <unk>. We expect this to be offset by increased <unk> costs relative to the first half.

Speaker Change: Of the year.

Roger Dassen: We expected R&D expenses for Q3 are around 1.1 billion euros and SGNA is expected to be around 295 million euros. Or estimated 2024 annualized effective tax rate is expected to be between 16 to 70%. In Q2, ASML paid a final dividend of 1.75 euros for ordinary share. Together with the interim dividend paid in 2023 and 2024, this resulted in a total dividend for 2023 of 6.10 euros for ordinary share. The first quarterly interim dividend over 2024 will be 1.52 euros for ordinary share and will be made payable on August 7, 2024. In Q2, 2024, we purchased 106,000 shares for a total amount of 96 million euros.

Speaker Change: The expected R&D expenses for Q3 are around $1 1 billion euros, and SG&A is expected to be around 295 million euros.

Roger J. M. Dassen: Our estimated 2024 annualized effective tax rate is expected to be between 16.7% and 18.7%. In Q2, ASML paid a final dividend of €1.75 per ordinary share. Together with the interim dividends paid in 2023 and 2024, this resulted in a total dividend for 2023 of 6.10 euros per ordinary share. The first quarterly interim dividend for 2024 will be 1.52 euros per ordinary share and will be made payable on August 7th, 2024

Our estimated 2024 annualized effective tax rate is expected to be between 16.

17%.

Speaker Change: In Q2, ASML paid a final dividend of $1 75 per ordinary share.

Together with the interim dividend paid in 2023 and 2024. This resulted in a total dividend for 2023 of six points in euros per ordinary share.

Speaker Change: The first quarterly interim dividend over 2024 will be $1 52 per ordinary share and will be made payable on August 7th 2024.

Christophe D. Fouquet: In Q2 2024, we purchased 106,000 shares for a total amount of 96 million euros. With that, I would like to turn the call back over to Christophe. Thank you, Roger. As Roger highlighted, this was a good quarter with sales and profitability above the guide. Although microuncertainty remains, overall semiconductor industry levels continue to improve, trending towards more healthy levels. We also see continued improvement in lithography tool utilization levels at both logic and memory customization, all in line with the industry's continued recovery from the dark.

In Q2 2024, we've purchased 106000 shares for a total amount of 96 million euros.

Roger Dassen: With that, I would like to turn the call back over to First Off.

Speaker Change: That I would like to turn the call back over to Christophe.

Christophe Fouquet: Thank you, Roger. As Roger highlighted, a good quarter with sales and profitability of both guidance. Although macro uncertainty remains, overall semiconductor industry levels continue to improve, running towards more healthy levels. We also see continued improvement in lithography tools, due to the shared level at both logic and memory customers. All in line with the industries continue to recover from the downturn. Our outlook for the full year is in change, with revenue expected to be similar to last year. We currently see strong developments in AI, drawing most of the industry recovery and growth, ahead of other hand market segments.

Christophe D. Fouquet: So rohit as Jose lighted, a good quarter with sales and positivity tier below guidance.

Christophe D. Fouquet: Although macro uncertainty remains overhaul semiconductor industry livers continue to improve training towards more healthy levels. We.

Christophe D. Fouquet: We also see continued improvement in lithography tools due to this should level at both logic and memory customers.

Christophe D. Fouquet: In line with the industry has continued to recovery from the downturn.

Christophe D. Fouquet: Our outlook for the full year isn't changed, with revenue expected to be similar to last year. We currently see strong development in AI during most of the industry recovery and growth ahead of other hand markets. We still expect a stronger second half relative to the first half.

Christophe D. Fouquet: Our outlook for the full year is unchanged with revenue expected to be similar to last year.

Christophe D. Fouquet: We currently see strong developments in AI drove most of the industry recovery and growth of other end market segments, we still expect a stronger second half relative to the first half of the year.

Christophe Fouquet: We still expect a stronger second half, relative to the first half of the year. Logic customers continue to digest the significant capacity additions made over the past year. With this digestion, we see lower revenue from logic this year relative to last year. In memory, demand is primarily driven by DRAM technology node transitions in support of advanced memories, such as DDR5 and HBM. In support of this transition, we expect growth in revenue from memory this year relative to 2024. For our install based business, we continue to expect a similar level of revenue compared to last year.

Christophe D. Fouquet: Logic customers continue to digest the significant capacity additions made over the past year. With this digestion, we see lower revenue from logic this year relative to last. In memory, demand is primarily driven by DRAM technology node transitions in support of advanced memories such as DDR5 and HBM. In support of this transition, we expect growth in revenue from memory this year relative to 2020. For our install-based business, we continue to expect a similar level of revenue compared to last year.

Logic customers continue to digest, the significant capacity additions made over the past year.

Christophe D. Fouquet: This designation, we see lower revenue from logic this year relative to last year.

Christophe D. Fouquet: In memory demand is primarily driven by DRAM technology node transitions in support of advanced memories, such as video five HPA.

Christophe D. Fouquet: In support of this transition we expect growth in revenue from memory this year relative to 2020.

Christophe D. Fouquet: All installed base business, we continue to expect a similar level of revenue compared to last year.

Christophe D. Fouquet: As the recovery becomes more clear this year, customers may look to upgrade their systems in preparation for 2025. Turning to our businesses, we expect EUV revenue growth in 2020. We plan to recognize revenue on a similar number of EUV systems as 2023, with expected revenue from 1 to 2 INSE. On our log, in a UVC step.

Christophe Fouquet: As the recovery becomes more clear this year, customer may look to upgrade their system in preparation for 2025.

Christophe D. Fouquet: As the as the recovery becomes more clear this year customer may look to a grid to FC statement preparation for 2025.

Christophe Fouquet: Turning to our businesses, we expect EUV revenue growth in 2024. We plan to recognize revenue on a similar number of EUV systems as 2023, with expected revenue from 1 to 2 INS systems. For now, a low NA EUV system, additional NXE 3800E system, this quarter, as we continue to ramp production. As customers transition to advanced nodes in both logic and memory, we expect the majority of shipments in the second half of the year to be NXE 3800E system. Regarding our NA, we shipped the second system this quarter, and it is currently under installation. The first system shipped to a customer is running qualification with her.

Christophe D. Fouquet: Turning to our business is we expect <unk> revenue growth in 2024.

Christophe D. Fouquet: We plan to recognize revenue on a similar number of UEC statements 2023, we expect to deliver new from one to two <unk>.

Speaker Change: I will now low.

Dave: This is Dave.

Christophe D. Fouquet: Additional NXP3800E systems this quarter as we continue to ramp production. As customers transition to advanced nodes in both logic and memory, we expect the majority of shipments in the second half of the year to be NXE3800EC. Regarding ANA, we shipped the second system this quarter, and it is currently under installation. The first system shipped to a customer is running qualification. Overall, the interest is high, with EUV customers now using our INA system in the joint ASML-IMEC demo lab in Veldhoven for their initial development. We have already demonstrated WAFER for multiple logic and memory customers and have now achieved the imaging resolution specification of 8 nanometers. INA will enable an almost three-time increase in transistor density relative to the low NACD.

Speaker Change: Additional 3800 easy steps this quarter as we continue to ramp production.

Speaker Change: As customers transition to advanced nodes in both logic and memory.

Speaker Change: We expect the majority of shipments in the second half of the year to be <unk> <unk> eastern.

Speaker Change: Regarding M&A, we shipped the second system this quarter and it is currently under installation.

Speaker Change: The first systems shipped to our customer is running qualification wafers.

Christophe Fouquet: Overall, the interest is high, with EUV customer now using our INS system in the joint ISML I make demolab development for their initial development. We have already exposed weather for multiple logic and memory customers, and have now achieved the imaging resolution specification of 8 nanometer. INA will enable an almost free time increase in transistor density relative to the low NA system. So all in all, good momentum on INA and progressing well against customer expectation.

Speaker Change: Overall, the interest is high with EV customers now using our <unk> system in the joined ASML I make similar I've been relevant for their initial development.

Speaker Change: We have already exposed wafer for multiple logic and memory customer in <unk>.

Speaker Change: <unk> achieved the imaging resolution specification of eight nanometer.

Speaker Change: <unk> will enable an almost three times increase in transistor density relative to the low NAC step.

Christophe D. Fouquet: So, all in all, good momentum on INA and progressing well against customer expectations. We expect our non-UV business to be done in 2024, primarily driven by lower emergent system sales relative to 2020. As we have stated over the last few quarters, we view 2024 as a transition year and continue to make investments this year, both in capacity and in technology to be ready for future demand. First, the secular growth driver in semiconductor end markets, which we have previously discussed, such as energy transition, electrification, and AI, are still very much in place. The expanding application space, along with increasing lithography on future technology nodes, drives demand for both advanced and mature nodes.

Speaker Change: So all in all good momentum on <unk> and progressing well against customer expectation.

Christophe Fouquet: We expect our non-EUV business to be done in 2024, primarily driven by lower emerging systems sales relative to 2023. As we have stated over the last few quarters, we view 2024 as a transition year and continue to make investments this year both in capacity ramp and in technology to be ready for future things. While the slope of the industry recovery is still uncertain, based on discussion with our customer and supported by our strong backlog, we expect 2025 to be a strong year, driven by a number of factors, as mentioned last quarter. First, the secret of rose driver in semiconductor and markets, which we have previously discussed, such as energy transition, electrification, and AI, are still very much intact.

Speaker Change: We expect our non UV business to be done in 2024, primarily driven by lower immersion system sales relative to 2023.

Speaker Change: As we have stated over the last few quarters, we view 2024 as it transition year and continue to make investments this year, both in capacity ramp and in technology to be ready for future demands.

Speaker Change: While the slope of the industry recovery is still uncertain based on discussion with our customer and supported by our strong backlog. We expect 2025 to be a strong year driven by a number of sectors as mentioned last quarter.

Speaker Change: First the secular growth driver and semiconductor end markets, which we have previously discussed such as energy transition electrification and AI are still very much intact.

Christophe Fouquet: The expanding application space, along with increasing lithography on future technology nodes, drives demand for both advanced and mature nodes. Second, the industry expects to be in a quicker turn in 2025. And last, as mentioned earlier, we need to prepare for a number of new facts that are being built across the globe, in some instances clearly supported by several government incentive plans. These facts are sporadically and are strategic for customers. They are all scheduled to take out tools.

Speaker Change: The expanding application space, along with increasingly silversea on future technology nodes drives demand for both advanced and mature nodes.

Christophe D. Fouquet: Second, the industry expects to be in a critical turn in 2020. And last, as mentioned earlier, we need to prepare for a number of new FADs that are being built across the globe, in some instances clearly supported by several government incentive plans. These five are spread geographically and are strategic for our customers. They are all scheduled to take our tour.

Speaker Change: Kent the industry expects to be in a cyclical upturn in 2025.

And loss as mentioned earlier, we need to prepare for a number of new fabs that are being built across the globe in some instances clearly supported by several of our government incentive plans. These fabs are spread geographically.

Speaker Change: Our strategy for our customers.

Speaker Change: Scheduled to take out tools.

Christophe Fouquet: It is essential that we keep our focus on the future and build capacity and preparation for future long-term growth, as we discuss in the markets in our year for 2025 and 2030 during our Investor Day in November of 2022. We plan to update our view during our Investor Day this year on November 14, 2024. In summary, although there is near-term uncertainty, we remain confident in our long-term growth opportunity.

Christophe D. Fouquet: It is essential that we keep our focus on the future and build capacity in preparation for future long-term growth, as we discussed in the market scenario for 2025 and 2030 during our investor day in November 2022. We plan to update our view during our investor day this year on November 14, 2024. In summary, although there is near-term uncertainty, we remain confident in our long-term growth opportunities. With that, we will be happy to take your questions. Thank you, Roger and Christophe.

Speaker Change: It is essential that we keep our focus on the future and build capacity in preparation for future long term growth as we discussed in the market scenario for 2025 and 2013 during our Investor day in November of 2022.

Speaker Change: We plan to update our view during our Investor day. This year on November 14 2024.

Speaker Change: In summary, although there is near term uncertainty we remain confident in our long term growth opportunity.

Unknown Executive: With that, we will be happy to take your wish.

Speaker Change: With that we will be happy to take your questions.

Operator: Thank you, Roger and Kristoff. The operator will instruct you momentarily on the protocol for the Q&A session. Beforehand, I would like to ask you that you kindly limit yourself to one question with one short follow-up if necessary. This will allow us to get to as many colleges as possible.

Skip Miller: The operator will instruct you momentarily on the protocol for the Q&A session, but beforehand, I would like to ask you to kindly limit yourself to one question with one short follow-up, if necessary. This will allow us to get to as many callers as possible. Operator, could we have your final instructions and the first question? Thank you. As a reminder, to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced.

Speaker Change: Thank you Rochelle and Christophe the operator will instruct you momentarily on the protocol for the Q&A session beforehand I'd like to ask you that you kindly limit yourself to one question with one short follow up if necessary. This will allow us to get to as many callers as possible now.

Operator: To withdraw your question, please press star one and one again. We will now go to the first question. And your first question comes from the line of Krish Sankar from TD Cowan. Please go ahead.

Operator: Now, operator, could we have your final instructions and the first question, please?

Speaker Change: Now operator could we have your final instructions and the first question. Please.

Operator: Thank you. As a reminder, to ask a question, you will need to press star, one, and one on your telephone and wait for your name to be announced.

Speaker Change: Thank you as a reminder to ask a question you will need to press star one on one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one on one again.

Operator: To destroy your question, please press star one and one again.

Chris Fanker: We will now go to the first question, and your first question comes from the line of Chris Fanker from TD Cowan. Please go ahead. The first question is on the booking composition and the outlook. In the booking for EUV and the 2.5 billion euros, whether any two nanometer orders from foundry customers that you said you should expect in Q2 or Q3, any high NA in the mix and based on the booking's momentum and backlog. How do you think about calendar 25 revenues? Do you think it could be towards the upper end of the 30 to 40 billion euro range?

Speaker Change: We will now go to the first question.

Christopher James Muse: And your first question comes from the line of Chris <unk> from TD Cowen. Please go ahead.

Krish Sankar: Hi, thanks for taking my question. Christopher, Roger, the first question is on the bookings composition and the outlook. You know, in the booking for EUV in the two and a half billion euros, were there any two nanometer orders from Foundry customers that you said you should expect in Q2 or Q3? Any high NA in the mix?

Speaker Change: Hi, Thanks for taking my question Christopher Rossi. The first question is on the bookings composition in the outlook.

Christopher James Muse: You know in the booking for <unk> and the $2 1 billion euros, whether any two nanometer orders from foundry customers that you said you should expect in Q2 or Q3 any high end in the mix and based on the bookings momentum and backlog.

Roger J. M. Dassen: And based on the bookings momentum and backlog, how do you think about Calendar 25 revenues? Do you think it could be towards the upper end of the 30 to 40 billion euro range? I'm going to add a quick follow-up. So on the bookings, as you would have seen, in the booking mix, 73% of the bookings were related to logic. So I think that gives you a pretty strong indication of who the buyers are and who is in the mix. So I think it is reasonable to assume that the foundry business at 2 nanometers is in the books. So that is one. High NA is not in there.

How do you think about calendar 'twenty revenues do you think it could be towards the upper end of the 30% to 40 billion Euro range I'm going to have a quick follow up.

Roger Dassen: We're going to have a quick follow-up. So, on the bookings, as you would have seen in the bookings mix, 73 percent of the bookings is related to Logic. That gives you a pretty strong indication who the buyers are and who is in the mix. I think it is reasonable to assume that the foundry business at 2 nanometer is in the book. That's one. High NA is not in there. No high NA bookings in this quarter. Everything you see there on EUV is related to low NA. As it relates to 2025, Krish, very consistent, I think, in our messaging.

Speaker Change: So on the on the bookings as you would have seen.

Speaker Change: In the bookings mix, 73% of the.

Speaker Change: Of the bookings as it related to was related to two two logic. So I think that gives you a pretty strong indication.

Speaker Change: Who the buyers are and who is in the mix. So I think it is it is reasonable to assume that that's.

Speaker Change: The foundry business that two nanometer is in the books. So thats one <unk> is not in there so no hiding a bookings in this in this quarter. So everything you see there on the on EV is related to <unk>.

Roger J. M. Dassen: So no high NA bookings in this quarter. So everything you see there on EUV is related to low NA. As it relates to 2025, Krish, we are very consistent, I think, in our messaging. And that is why we say we confirm what we said in November of 2022, which is that we expect 2025 to be between $30 and $40 billion. And we've also said that it's not the low point of that guidance.

Speaker Change: As it relates to plenty twenty-five crush.

Speaker Change: Consistent nothing in our in our messaging and that's why we say we confirm what we said in our in November of 2022, which is we expect 2025 to be between 30 and 41 billion. We've also said, it's not the low point of that of that guidance.

Roger Dassen: That's what we say. We confirm what we said in November of 2022, which is we expect 2025 to be between 30 and 40 billion. We've also said it's not the low point of that guidance. That's quarter. We've given you a bit of an understanding of what it takes to be fully booked at the beginning of 2025 for the midpoint of the range. I think you can conclude with the bookings number that we've reported that we're nicely on track, but with that we still confirm that our expectation is between the $3.40 billion or not, and are not going to be more specific than what we've been so far.

Roger J. M. Dassen: Last quarter, we gave you a bit of an understanding of what it takes to be fully booked at the beginning of 2025 at the midpoint of the range. I think you can conclude, with the bookings number that we've reported, that we're nicely on track. But with that, we still confirm that our expectation is between $30 billion and $40 billion and we are not going to be more specific than what we've been so far. Got it.

Speaker Change: Last quarter, we have given you a bit of an a.

A bit of understanding of what it takes to be to be fully booked at the beginning of 2025 for the midpoint of the range. I think you can conclude with the bookings number that we've reported.

Speaker Change: We're nicely.

Speaker Change: We're nicely on track.

Speaker Change: With that we still confirm that our expectation is between 30 and $40 billion or not and are not going to be more specific than what we've been what we have been so far.

Roger J. M. Dassen: And Krish, one more thing, and Christophe was very clear about that in his comments. You know, I think the capital markets data we're going to have in November of 2020, 2024; that's going to be the point in time where we are going to be more specific. So that's where we will be more specific as to what we expect for 2025. That's when we're going to, you know, narrow the guidance, but we're not going to do that. We're not going to do that. Thanks, Roger. Thanks a lot for that amazing color.

Speaker Change: Got it.

Roger Dassen: I think it's also a quick question. One more thing, and Christophe is very clear on that in his comments.

Speaker Change: Quick.

Speaker Change: And Chris one more thing and Christophe was very clear on that in his comments.

Christophe Fouquet: You know, I think in the capital markets data we're going to have in November of 2024, that's going to be the point in time where we are going to be more specific. So that's where we will be most specific as to what we expect for 2025. That's what we're going to, you know, narrow the guidance, but we're not going to do that. We're not going to do that before that. Thanks, Roger. Thanks a lot for that amazing color. And then a quick follow-up for Christophe.

Speaker Change: I think in the capital markets day that we're gonna have in November of 2000, 22024, that's going to be the point in time, but we are going to be more specific so thats, where we will be more specific as to what we expect for 2025, that's when we're going to narrow the guidance, but we're not going to do that we're not going to do that before that.

Krish Sankar: And then a quick follow-up for Christophe, you know, obviously, the article today about the US administration looking to impose some severe trade restrictions using the, you know, the foreign direct product rule on China's shipments. I know, obviously, you folks are good citizens; follow the rules. I'm curious, what do you think about the potential implications for ASML from here? How much more severe could it be given the fact that you do have a pretty high exposure to China? If you can give it some color or some bookends around it, that'd be very helpful.

Speaker Change: Thanks, Thanks, a lot for that amazing color and then a quick follow up for Christophe you know obviously the article today about the U S administration looking to impose some severe trade restrictions using the foreign direct product rule in China shipments.

Christophe Fouquet: Obviously, the article today about the US administration looking to impose some severe trade restrictions using the foreign direct product rule on China treatment. I know, obviously, you folks are good citizens, follow the rules, kind of curious. What do you think about the potential implications for someone from here? How much more severe could it be given the fact that you don't have a pretty high exposure to China. If you can give some color or some bookings around it, that would be very helpful. Thank you. Well, I think first few years that we don't comment on the remarks and, you know, there's a lot of rumors on that topic.

Speaker Change: Obviously, you folks so good citizens followed the rules kind of curious.

Speaker Change: What do you think about the potential implication for asthma from here how much more severe could it be given the fact that you do have a pretty high exposure to China. If you can give some color or some bookends around it that would be very helpful. Thank you.

Christophe D. Fouquet: Thank you. Well, I think first of all, you... But we don't comment on the rumors.

Speaker Change: Well I think first you missed.

Christophe D. Fouquet: And, you know, there's a lot of rumors on that topic. So I think on that topic, we comment even less. I will say So that's the first thing. I think we had a discussion about China in the past together. I think the point Roger and I have made in the last few quarters, which is still valid, is that before you look at China, I think you have to look at the opportunity we see in the mature semiconductor market.

Speaker Change: We don't comment on rumors and there is a lot of rumors on desktop so on that topic, we come in even less I would say so that's the first thing.

Christophe Fouquet: So I think on that topic we comment even less, I would say. So that's the first thing. I think we had discussion on China in the past together. I think the point for you and I have met in the last few quarters, which is still valid, is before you look at China, I think you have to look at the opportunity we see on the mature semiconductor market. That opportunity was defined as being significant in our Capital Market Day in November 2022. We still believe it's significant. In 2023, 2024, China has been investing a large part of this market.

Speaker Change: I think we had discussion on.

Speaker Change: China in the past together.

Speaker Change: I think the point towards you and I have met in the last few quarters, which is still a valid is before you look at China you have to look at the opportunity we see on the mature semiconductor market.

Christophe D. Fouquet: That opportunity we defined as being significant on our capital market day in November 2022, we still believe it's significant. In 2023-2024, China has been investing a large part of this market, and this is why I think our revenue from China has been high. Moving forward, we still believe that, you know, this market is needed, and therefore that the capacity... [inaudible] We are a bit less sensitive to where that capacity may be produced. Thanks, Christophe.

Speaker Change: That opportunity is defined as being significant in our capital market day in November 2022.

Speaker Change: Still believe it's significant.

Speaker Change: In 2023 2020 for.

Speaker Change: China has been investing a large part.

Speaker Change: So this market and this is why as CCAR revenue on China has been has been high.

Christophe Fouquet: And this is why I think our revenue on China has been high. Moving forward, we still believe that, you know, this market is needed. And therefore that the capacity is coming out of somewhere. So that's a bit the position we take on that discussion. I think we always look at the end market at what's the need of the market. I think we are a bit less sensitive on where that capacity may be produced. Thanks, Kristoff. Thank you.

Speaker Change: Moving forward, we still believe that this market is needed.

Speaker Change: And therefore that the capacity.

Speaker Change: Coming out of somewhere so that's a bit the position we take on the on that discussion I think we always look at.

Speaker Change: At the end market at what is the need of the end market.

Speaker Change: I think of.

Speaker Change: We are a bit less sensitive on where that capacity may be produced.

Speaker Change: Thanks Christophe thank you.

Speaker Change: Thank you.

Unknown Executive: So now I'll take the next question.

Operator: Thank you. We will now take the next question, and the question comes from Alexander Duval from Goldman Sachs. Please go ahead.

Speaker Change: We will now take the next question.

Alexander Duval: And the question comes from the line of Alexander Deval from Goldman Sachs; please go ahead. Yes, thanks for the question. You confirmed today that it's fair to assume that a logic customer ordered on two nanometer this quarter, but clearly for such a large node, one would expect to see more order flow. So I wanted to know to what extent it's fair to assume one should expect more EUV orders from them in the coming quarters, and as a quick follow-up, you mentioned in your prepared remarks that AI is driving most of the industry's recovering growth. Are you able to decompose what specifically is driving this for ASML?

Speaker Change: The question comes from the line of Alexander Duval from Goldman Sachs. Please go ahead.

Speaker Change: Yeah. Thanks for the question you confirm today that it's fair to assume.

Speaker Change: Customer ordered on 10 nanometer this quarter.

Speaker Change: Clearly for such a large node one would expect to see more order flow. So wonder to what extent, it's fair to assume.

Speaker Change: One should expect more EV orders from them in the coming quarters and as a quick follow up you mentioned in your prepared remarks. The AI is driving most of the industry's recovery and growth are you able to decompose what specifically is driving this ASML.

Alexander Duval: I should expect more EUV orders in the coming quarters. And as a quick follow-up, you mentioned in your prepared remarks that AI is driving most... [inaudible] To what extent do you see LISO needs being driven by high-bandwidth memory, data center processing, or edge AI? Is there any area that's surprising to the outside world?

Christophe Fouquet: To what extent do you see Litho needs being driven by high bandwidth memory, data center processing, or edge AI? Is there any area that's surprising to the outside? Many thanks. It's clear, I think, that if you look at the orders that came in, and that there is a healthy start, I would say, for the M2, for the M200 business, I think it's a healthy start. It's also clear that obviously not the full capacity that you would need for this note is in there, but that is pretty logical, right? I mean, obviously this customer is going to run, and you will see a gradual build-up, and that you will also see at some stage, you will see additional orders coming in for that ramp.

Speaker Change: To what extent, you see litho needs being driven by high bandwidth memory datacenter processing or edge AI is there any area that surprising to you I'm sorry, many thanks.

Roger J. M. Dassen: So it's clear, I think, that if you look at the orders that came in and see that there is a healthy start, I would say, for the M2 Foundry. It's also clear that, obviously, not the full capacity that you would need for this node is there, but that is pretty logical, right? I mean, obviously, this customer is going to ramp up, and you will see a gradual buildup, and that will, you know, you will also see, at some stage, additional orders coming in for that ramp. You know, exactly how much that buildup will be, you might want to raise that question by tomorrow. I think I said it in my initial comment initially. I think we've also been consistent there.

Speaker Change: So it's a it's clear I think that if you look at the orders that said that came in.

Speaker Change: There is a healthy start I would say four and for the for the and to fully and two foundry. There's nothing good southeast start. It's also clear that obviously not the not the full capacity that said that you would need for this no. One is in there but that is pretty logical right. I mean, obviously this customer has gone it is going to ramp and you will see a gradual buildup in that.

Speaker Change: You will also see at some stage you will see additional orders coming in for that for that ramp exactly.

Christophe Fouquet: You know, exactly the same. You know, what that build-up will be, you might wonder if there's a question that question by tomorrow.

Speaker Change: What that buildup with B will be you might wonder if I could just a question that that question Bye Bye Bye tomorrow.

Christophe Fouquet: Maybe the second part of it for you, Chris. Yeah, so I think I said it in my comment initially. I think we've been also consistent there. So I think AI is driving, I would say, right now the biggest part of the recovery. This is true for logic. This is true for memory. OJ just commented on logic. I think, you know, that for high bandwidth memory, those products drive more demand, more weapon demand, because we are looking basically at a higher density of the RAM on those products. And, you know, we look at something that, of course, will take course over several months.

Speaker Change: And maybe the second part of <unk> for your question, Yes, I think so I think I said it in my comment initially I think we have been also consistent there. So I think AI is driving.

Christophe D. Fouquet: So I think AI is driving, I would say, right now, the biggest part of the recovery. This is true for logic. This is true for memory. Roger just commented on logic.

Speaker Change: I'd say right now the biggest part of the recovery.

Speaker Change: This is true for logic this is true for memory.

Speaker Change: Oh as you just commented on la <unk> that for high bandwidth memory.

Christophe D. Fouquet: I think you know that for high bandwidth memory, those products drive more demand, more wafer demand because we are looking basically at a higher density of DRAM on those products. And, you know, we are looking at something that, of course, will take place over several months. So we started to see the positive effects of that in 2025, and we expect that to continue into 2026, both for memory and for logic. And at some point of time, I also mentioned that maybe the other segments are behind in terms of recovery.

Speaker Change: Those product drive more demand more wafer demand because we.

Speaker Change: We are looking basically at a higher density of DRAM on those products.

Speaker Change: And we look at something that of course will take course over several months. So we started to see the positive effects of that for 2025.

Christophe Fouquet: So we started to see the positive effect of that for 2025. We expect that to continue in 2026, both for memory and for logic. And at some point of time also, you know, mentioned that maybe the other segments are being behind in terms of recovery. So a lot of the capacity today, either logic or derived capacity, will be a lot of those AI products. As the other segments recover, we also expect potentially some capacity to be needed there. And that's also why we believe, overall, that 2025 will be a strong year. And I think what everyone is trying to understand, what you try to understand, is exactly the pace of it.

Speaker Change: That to continue into 2026, both for memory and for logic.

Christophe D. Fouquet: So a lot of the capacity today, either logic or DRAM capacity, will be needed for those AI products. As the other segments recover, we also expect potentially some capacity to be needed there. And that's also why we believe overall that 2025 will be a strong year. And I think what everyone is trying to understand, what you're trying to understand is exactly the pace of it. Which I think we don't know exactly.

Speaker Change: And at some point of time I also mentioned that maybe the other segments are behind in terms of recovery. So a lot of the capacity today, either logic or deriving capacity would be.

Speaker Change: Those AI product.

Speaker Change: As the other segments recover we also.

Speaker Change: Specced potentially some capacity to be needed there and that's also why we believe overall that 2025 would be a strong year.

Speaker Change: And I think.

Speaker Change: What everyone is trying to understand what you're trying to understand is exactly the pace of it.

Christophe Fouquet: That I think we don't know exactly, but the fundamentals, I would say, on AI, and I think the recovery in general are strong from our point of view.

Speaker Change: I think we don't know exactly.

Speaker Change: But the fundamentals I would say on the eye and I think the recovery in general are strong from our point of view.

Unknown Executive: Thanks.

Speaker Change: Hi, Thanks.

Unknown Executive: Thank you.

Speaker Change: Thank you.

Tommy Qiu: Your next question comes from the line of Tommy Q from Bamberg. Please go ahead. Right. Thank you for taking my question. So first on the leading edge, tuna on only to ramp up pace. So you mentioned that they are starting to ramp up their leading edge, tuna on either capacity already or preparing for that. Do you notice anything in this quarter, suggesting that they are poorly in the ramp-up phase or everything is as planned? And the second question I have is regarding the DRAM adoption of more UV layers as well as high-end UV. How do you see the layer count change over the next few generations?

Your next question comes from the line of Tommy can you from buying back. Please go ahead.

Christophe D. Fouquet: But the fundamentals, I will say on AI, and I think the recovery in general is strong from our point of view. Thank you. Your next question comes from the line of Tammy Qiu from Birmingham. Please go ahead. Hi, thank you for taking my question. So first one, on the leading edge, two nanometer ramp up.

Speaker Change: Hi, Thank you for taking my question.

Tammy Qiu: So you mentioned that they are starting to ramp up their leading edge 2 nanometer capacity already or preparing for that. Do you notice anything in this quarter suggesting that they are pulling back in the ramp-up phase, or everything is as planned? And the second question I have is regarding the DRAM adoption of more EUV layers as well as high-energy EUV, how do you see the layer count change over the next few generations? Are we going to see a similar level of growth of layers as we have seen over the past two years, or will it gradually slow down? If there is a number you can share, it would be great.

Speaker Change: On the leading edge two nanometer ramp up pace.

You mentioned that they're starting to ramp up that leading edge 10 nanometer capacity already all preparing for that do you mean noticed anything in this quarter, suggesting that they are poorly in the ramp up or everything is as planned and the second question I'll have Ed.

Speaker Change: Regarding the DRAM adoption of using that yes, as well as highlight UV. How do you see them may account change over the next few generations are we going to see similar level of crime itself as we have seen over the past two years. So it will gradually slow down if there is a number you can share would be great. Thank you.

Christophe Fouquet: Are we going to see similar levels of growth of layers as we have seen over the past two years, or will it gradually slow down? If there is a number, you can share it will be great. Thanks. Thank you.

Christophe Fouquet: I think the first part, Christopher, you can take the second. But as it comes to, you know, do you notice any pull in there? I think the foundry customer has indicated that they're looking at, you know, with and to in the second half of 2025. I think you're typically put as customer looking at a, at a, at a lead time around the year as we said. I think putting in orders at this stage, I think is consistent with that. To the extent that there is a different than in timing or ramp, again, I think that's a question that you might want to raise on a conference tomorrow.

Roger J. M. Dassen: Thank you. I'll take the first part, Christophe, and you can take the second. But as it comes to, you know, do you notice any pull in there?

Speaker Change: I'll take the first part that Christophe and you can take the second but as it comes to the <unk>.

Speaker Change: What is any any pull in there.

Roger J. M. Dassen: I think the Foundry customer has indicated that they're looking at N2 in the second half of 2025. I think you're typically, for this customer, looking at a lead time of around a year, as we've said. I think putting in orders at this stage is consistent with that, to the extent that there is a difference in timing or ramp. Again, I think that's a question that you might want to raise on a conference call tomorrow. But I think what we see here is pretty consistent with what we've also heard publicly, state publicly, about, you know, starting this in the second half of 2025. Let's start with DRAM.

Speaker Change: I think the the foundry customer has indicated that theyre looking at.

Speaker Change: And two in the second half of 2025 I think you are typically for this customer looking at a.

Speaker Change: At a lead time of around a year as we started.

Speaker Change: So I think.

Putting in orders at this stage I think is consistent with that to the extent that there is a difference in timing around again I think that's a question that you might want to raise on a.

Speaker Change: On a conference call Tomorrow.

Christophe Fouquet: But I think what we see here is pretty consistent with what we've also heard publicly, the publicly about, you know, starting this in the second half of 2025. So I think there will be a very consistent with the information we shared with you previously. So we see on the, you know, an increase of UV use on every node. I think this; this is a trend that continues at least in the foreseeable future. Of course, it's always more difficult to make forecasts on nodes or technology that are still being defined by customers, but that logic is still in place.

Speaker Change: I think what we see here is pretty consistent with what we've also heard publicly.

Speaker Change: To state the publicly about starting this in the second half of 2025.

Speaker Change: First off on DRAM, yeah on DRAM, So I think there will be.

Christophe D. Fouquet: Yeah, on DRAM, so I think I'll be very consistent with the information we've shared with you previously. So, we see an increase in UVUs on every node. I think this is a trend that continues at least in the foreseeable future. Of course, it's always more difficult to make forecasts on nodes or technologies that are still being defined by a customer. But that logic is still in place.

Speaker Change: Very consistent with the information we shared with you previously so we see on the.

Speaker Change: An increase of UV use.

Speaker Change: Every notes.

Speaker Change: This is a trend that continue at least in the foreseeable future.

Speaker Change: Of course, it's always more difficult to make forecast on all nodes or technology that is still being defined by customer.

Speaker Change: <unk> is still in place.

Christophe Fouquet: I think you have seen also in the RAM that this point of time, all customers are using UV in production. I see the last customer was very public about that recently. So you see a gradual, basically adoption with different speed, maybe per customer, but I would say very much in line with, I think what we explained already now for 40 years.

Christophe D. Fouquet: I think you have also seen in DRAM that at this point in time, all customers are using EUV in production. I think the last customer was very public about that recently. So you see a gradual, basically, adoption at a different speed, maybe per customer. But I would say, very much in line with what we have explained for a few years now, we also see opportunity for DRAM in the horizon of 2025-2026. As I mentioned in my comments, we see customers very eager to test the INA tool in our lab, using their own wafers to validate basically that INA can provide a nice opportunity, both in performance and also in cost-saving.

Speaker Change: I think you have seen also in DRAM that is.

Speaker Change: This point of time, all customer are using <unk> in production and see the lost customer was very public about that recently, so you'll see a gradual basically adoption with different speeds maybe per customer but.

Speaker Change: I would say very much in line with what we explained already.

Speaker Change: For two years.

Christophe Fouquet: On INA, we also see opportunity for DRAM, a dear riser of 2526. As I mentioned in my commentaries, we see customer of very eager to test the ANA tool in our lab exposing their own weather to validate, basically that INA can provide a nice, supporting both in performance, but also in cost saving. So they also, same as before, we believe that 2526 is about the time where we could see some insertion of RNA for DRAM. Okay, thank you. Thank you.

Speaker Change: On M&A.

Speaker Change: We also see opportunity for DRAM.

Speaker Change: Ryzen of 'twenty five 'twenty six.

Speaker Change: As I mentioned in my commentary as we.

Speaker Change: We see customer are very eager to test and a tool in our lab exposing their home with her to validate basically that <unk> can provide.

Nice reporting G boss in performance, but also in cost savings. So they also same as before we believe that $25 96 is about the time, where we could see some in.

Christophe D. Fouquet: They are also, same as before, we believe that 2025-2026 is about the time when we could see some insertion of INA for DRAM. Thank you. We'll now take the next question, and your next question comes from the line of Francois Bouvier from UGS. Please go ahead. Thank you very much. My first question would be about China. I'm afraid, I mean, and it's very simple. Could you make, in the future, deep UV tools without USIP at all?

Speaker Change: Insertion of fire in April for DRAM.

Speaker Change: Okay. Thank you.

Speaker Change: Thank you.

Francois Bowie: Now I'll take the next question. And your next question is the one of Francois Bowie from UDS. Please go ahead. Thank you very much. My first question would be on China.

Speaker Change: I will now take the next question.

Fundswa Izea: Your next question comes from the line of fund swap IZEA from UBS. Please go ahead.

Speaker Change: Thank you very much.

Speaker Change: My first question would be on China, I'm afraid I mean.

Christophe Fouquet: I'm afraid, I mean, and it's very simple: could you make in the future a deep UV tools without USIP at all? And are all your deep UV tools using USIP? That's my first question.

Speaker Change: And then could you make in the future deep UV tools without U S. IP at all.

Unknown Executive: And are all your deep UV tools using USIP? That's my first question. That's a very hypothetical question.

Speaker Change: Are all your deep UV tools using U S IP.

Speaker Change: My first question.

Roger J. M. Dassen: You know, at this stage, there is, as you know, we have a lot of operations also in the United States. So there is a significant contingent of US technology in those tools. So speculating about whether we could do it without US technology is speculation that we shouldn't and will not go into, you know, I think, or the way we produce and the way we run our business, you know, should not be influenced by this kind of question. I think maybe, to add to that, I think we have also been very vocal. Thank you very much.

Christophe Fouquet: That's a very hypothetical question. At this stage, there is, as you know, we have a lot of operations also in the United States. So there is a significant contingent of U.S. technology in those tools. So speculating about could we do it without U.S. technology?

Speaker Change: That's a very hypothetical question.

Speaker Change:

Speaker Change: At this stage there is a there is as you know.

Speaker Change: We have a lot of operations also in the United States. So there is a significant contingent contingent of U S technology and those tools. So speculating about could we do it without U S technology I think is.

Christophe Fouquet: I think it's a speculation that we shouldn't say that we shouldn't and will not go into, you know, I think, or the way we produce and the way we run our business, you know, should not be influenced by this kind of question. Okay, I think maybe if I had to, that, I think we've been also very vocal to say that we believe that preserving the ecosystem as much as possible is a good thing for this industry. I think we still believe that. And, you know, therefore, I think that's still also the discussion we're trying to have with all the stakeholders.

Speculation that said that we should and said that we shouldn't that will not go into I think the way, we produce and the way we run our business should not be influenced by by by discounting question.

Speaker Change: Okay.

Speaker Change: Maybe to add to that will take we've been also very vocal.

Speaker Change: To say that we believe that preserving the ecosystem as much as possible. It is a good thing for this industry I think we still believe that.

Speaker Change: And.

Speaker Change: No.

Speaker Change: Therefore, I think that's still also.

Speaker Change: The discussion, we'll try to have with all the stakeholders.

Christophe Fouquet: Makes sense. Thank you very much. And the main second question I had is a bit of a follow up. So if we take like this EUV orders of 2.5 billion and your 39 billion of backlog that you have, I come with like, you know, you still have 32 EUV tools to book for next year to reach a midpoint of the guidance. So Roger, you said that nicely that your order backlog is order is going well on track above this four billion, but it's mainly driven by DPUV. And on EUV, seems that you still need 30 to book for the rest of the year, which would imply around seven billion of EUV orders coming in each two versus three billion in each one.

Speaker Change: Makes sense. Thank you very much in the maybe the second question I had is a bit of a follow up so if we take like this.

Unknown Executive: So if we take this EUV orders of 2.5 billion and your 39 billion backlog that you have, I come with like, you know, you still have 30 EUV tools to book for next year to reach the midpoint of the guidance, book for the rest of the year, which would imply around 7 billion EUV orders coming in H2 versus 3 billion in H1. Is my math correct in a way to think that you still have a significant part of your EUV to be booked in the second half of the year, assuming, of course, you have one year lead time?

Speaker Change: Orders of $2 5 billion in your $39 billion of backlog.

Speaker Change: The two that you have I come with like.

Speaker Change: You still have 30 tools UV tours to book for next year to reach the midpoint of the guidance.

Speaker Change: So Roger you said done nicely.

Speaker Change: The backlog is.

Roger: Oh, Oh does is going well on track.

Speaker Change: Above these 4 billion, but this is mainly driven by deep UV and <unk>.

Speaker Change: And on the EV seems set to student at 52.

Speaker Change: Book for the rest of the year, which would imply around $7 billion.

<unk> orders coming in next two versus 3 billion unit one.

Roger Dassen: Is my mask correct in a way to think that you still have a significant part of your EUV to be booked in the second half of the year, assuming, of course, you have one year lead times. There are still, you know, I think the math that we gave before, I think still hold. So, as I mentioned, I think we're well on track to achieve the objective there. And, you know, we have given indications or we have given a bandwidth for 2025, for, you know, for the full for the full revenue. I think you're now, you know, jumping into one specific element of the revenue, but I think our math holds for the full revenue.

Is my math correct way to think that you still have a significant part of your UV.

Speaker Change: To be booked in the second half of the year assuming of course, you have one year lead times.

Unknown Executive: There's still, you know, I think the math that we gave before still holds. So, as I mentioned, I think we're well on track to achieve the objective there. And, you know, we have given indications or we have given a bandwidth for 2025 for the full for the full revenue. I think you're now, you know, jumping into one specific element of the revenue, but I think our math holds for the full revenue. And I think that's important. I think going deeper into that and saying, "understood." I tried my chance.

Speaker Change: There is still.

Speaker Change: I think the math the math that we gave before I think still still holds so as I mentioned I think we're well on track to achieve the year to achieve the objective the objective there.

Speaker Change: And we have given indications are we have given a bandwidth for 2025 horsepower for for the for the full revenue I think you are now jumped.

Speaker Change: Jumping into one specific element of the revenue, but I think our math holds for that for the for the full revenue and I think that holds then I think going deeper into that and go.

Roger Dassen: And I think that holds, and I think going deeper into that and going there, I don't think adds anything to the overall message that I believe we are. You know, we're nicely on the way to achieve the objectives and the bandwidth that we've discussed before.

Speaker Change: I don't think as anything to the overall message that I believe we are.

Speaker Change: We're nicely underway to achieve the objectives and the bandwidth that we had discussed before.

Roger Dassen: So I wouldn't go; I wouldn't want to go at this age any more specific and to any of the components. As I mentioned before, you know, we have a Capital Market Day coming up; there we will be a lot more specific on how we look at 2025. And until that point in time, I think we're just going to stick to our core messaging that I've given before. Understood.

Speaker Change: I wouldn't go I wouldn't want to go at this stage any more specific than to any of the components as I mentioned before we had the capital markets day coming up that we will be a lot more specific in how we look at 2025 and until that point in time I think we're just going to stick to our core messaging that I've given before.

Unknown Executive: I tried my 10th. Thank you.

I tried in my 10, thank you.

Speaker Change: [laughter].

Speaker Change: Thank you.

Stefan Ulrich: We will now take the next question. And your next question will be from the line of Stefan. Ulri from ODOBHS. Please go ahead. Yes. Hello. Thank you for taking my question. In your prepared remarks this morning, you seem to talk pretty much about increasing capacity or at least preparing for the RAM. So does it mean that, and at the same time, you're talking very highly about the reception of the UV RNA.

Speaker Change: We will now take the next question.

Stephane Houri: Thank you. Thank you. We will now take the next question, and your next question comes from the line of Stephane Houri from Odo BHS. Please go ahead. Hello, thank you for taking my question. In your prepared remarks this morning, you seemed to talk pretty much about increasing capacity or at least preparing for the ramp. So, does it mean that, and at the same time, you're talking very highly about the reception of EUVINA?

Speaker Change: And your next question comes from the line of Stefan <unk> from <unk> BHF. Please go ahead.

Roger J. M. Dassen: So maybe you could clarify what you mean by preparing the ramp and if it does mean that you want to increase your capacity, do more investment, and maybe open a new plant? Thank you. So in general, when we talk about increasing capacity, we really talk about increasing, you know, increasing capacity across the board. And this really relates to the capacity expansion that we've talked about in the past, which is that we're driving towards the capacity of 600 DPV tools and 90 UV tools.

Stefan: Yes, Hello, Thank you for taking my question.

Speaker Change: In your prepared remarks. This morning, you seem to.

Speaker Change: Talk.

Speaker Change: Pretty much about increasing capacity.

Speaker Change: Or at least preparing for the ramp so.

Speaker Change: Does it mean that and at the same time you were talking about very highly about the reception of the <unk>.

Speaker Change: <unk>. So maybe if you could clarify what you, but you mean by preparing the ramp in the.

Roger Dassen: So maybe if you could clarify what you mean by preparing the RAM, and if it does mean that you want to increase your capacity, do more investment, and maybe open a new plan. Thank you. So, in general, when we talk about increase in capacity, we really talk about increase in capacity across the board, and this really relates to the capacity expansion that we've talked about in the past, which is that we're driving towards the capacity of 600 DPV tools at 90, 90 UV tools. But then add it to that, you know, we are indeed, we are indeed also expanding our capacity when it comes to high in A.

Speaker Change: It doesn't mean that you want to increase your capacity do more investments and maybe open the new plans. Thank you.

Speaker Change: So in general when we talk about the increase of capacity, we really talk about inquiry increase in capacity across the board and this really relates to the capacity expansion that we talked about in the past, which is that we're driving towards a capacity of 600 deep UV tools at 90 at 1919 UV tools.

Roger J. M. Dassen: But then added to that, you know, we are indeed also expanding our capacity when it comes to high-end aid. And that's, I think, that combination. So when we talk about adding capacity and ramping up capacity, it's really across the board. It's the 9600.

Speaker Change: But on how to do that we are indeed, we RMB is also expanding our capacity when it comes to high <unk>.

Roger Dassen: And that's, I think, it's that combination. So, when we talk about adding capacity, ramping capacity is really across the board; it's the 9600. And as we mentioned before, medium term, working towards 20, 20, 20, 20, 20 tools.

Speaker Change: And that's I think it's that combination so when we talk about our.

Speaker Change: Adding capacity and ramping capacity, it's really across the board. It's been 9600 and as we mentioned before our medium term working towards a 20 year high knee 20 hind equals.

Roger J. M. Dassen: And as we mentioned before, medium term working towards 20 high-end aid tools. Okay, and can you maybe clarify where we are standing in terms of ASP for RNA tools? On the high-end tools, what we said before is that we're looking at an ASP north of $350 million. That's the ASP that we have for the 5200 tool, which is the high-volume manufacturing tool that customers are ordering in this timeframe. Okay, thank you. You're welcome.

Roger Dassen: Okay. And can you clarify where we're standing in terms of ASP for high in A tools? Thank you. On the high in A tools, what we said before is that we're looking at an ASP north of 350 million. That's the ASP that we have for a 40 for the 5200 tool, which is the high volume, the high volume manufacturing tool. That's, you know, that's the customers are ordering in this, in this timeframe. Okay. Thank you. You're welcome.

Speaker Change: Okay and can you maybe clarify.

Where we are standing in camera ASP Stifel Hi, how are you.

Speaker Change: Thank you.

Speaker Change: On the high end <unk> tools, what we said before is that we're looking at an ASP is north of $350 million. That's the that's the ASC that we have for our for the year for the 50 to 102, which is the.

Speaker Change: The high volume to high volume manufacturing that tool.

Speaker Change: That said the customers are.

Speaker Change: Our ordering.

Speaker Change: In this in this time frame.

Speaker Change: Okay. Thank you.

Speaker Change: Youre welcome.

Andrew Gardner: Thank you. Your next question comes from the line of Andrew Gardner, up from City. Please go ahead. Good afternoon, gentlemen. Thanks for taking the question. If you don't mind, I'll try another one on China. I'll try to be specific, and we'll see whether you can comment on it. The article this morning seems to be again quite focused on your service activity in China. And in particular, the, you're servicing of tools that you were able to shift last year. Like the high-end immersion tools, NXT 2000 2050 models, but as a start of this year, you're no longer able to shift.

Speaker Change: Thank you.

Speaker Change: Your next question comes from the line of Andrew Gardiner from Citi. Please go ahead.

Andrew Michael Gardiner: Thank you. Your next question comes from the line of Andrew Gardiner from City; please go ahead. Good afternoon, gentlemen. Thanks for taking the question. If you don't mind, I'll try another one on China.

Roger J. M. Dassen: I'll try and be specific, and we'll see whether you can comment on it. The article this morning seems to be again quite focused on your service activity in China and, in particular, your servicing of tools that you were able to ship last year, like the high-end immersion tools, NXT 2000 and 2050 models, but as of the start of this year, you're no longer able to ship. Can you tell us whether you're still indeed servicing those tools at some of those clients?

Andrew Michael Gardiner: Good afternoon, gentlemen, thanks for taking the question.

If you don't mind I'll try another one on China, I'll try and be specific and well see whether you can comment on that.

Andrew Michael Gardiner: Article this morning seems to be again quite focused on your service activity in China.

Speaker Change: In particular.

Speaker Change: Youll servicing of tools that you were able to shift last year at the high end immersion tools and <unk> in 2050 models, but as of the start of this year you are no longer able to two shifts.

Christophe Fouquet: Can you tell us whether you're still indeed servicing those tools at some of those clients? Yeah. Can you just clarify that? Well, we are, we are following, we are following all the applicable laws and regulations when it comes to expert controls. And of course, that is a landscape with the tools and with such rules. So for some fact, there are more limitations to others, but in general, it is still the case that we can operate in the maps of our customers. So we still have, as we call it, we still have, you know, eyes on the tool.

Speaker Change #102: Can you just tell us whether youll still indeed servicing those tools at some of those.

Speaker Change: <unk>.

Speaker Change #100: Yes can you just clarify that.

Roger J. M. Dassen: Yeah, can you just clarify that? Well, we are following all the applicable laws and regulations when it comes to expert controls. And, of course, that is a landscape with U.S. rules and Dutch rules.

Speaker Change: Oh.

Speaker Change #103: We are we are following we are following all applicable laws and regulations when it comes to export controls and of course that is a.

Roger J. M. Dassen: So, for some fabs, there are more limitations than others. But, in general, it is still the case that we can operate in the fabs of our customers. So, we still have, as we call it, we still have, you know, eyes on the tool. So, we're still at the fabs of our customers. But there are limitations that some fabs are more stringent, and this is particularly related to, you know, parts being sent either from the United States or from Europe, or when it comes to the use of, when it comes to the use of technology, so manuals, etc.

Lance Cape: Lance Cape with a vast rules and with such a rules. So for some fabs there are more limitations to others.

Lance Cape: In general it is still the case that that we can operate in the fabs of our customers. So we still have as we call. It we still have.

On the tool so we're still in the Fabs of our customers, but there are limitations that for some fabs are more stringent and does done particularly related to two parts.

Christophe Fouquet: So we're still in the, in the maps of our customers. But there are limitations that, for some facts, are more stringent. And there's them, particularly related to, you know, to parts, and so to parts being sent either from the United States or from Europe. Or when it comes to the use of, when it comes to the use of technology, so manuals, et cetera.

Lance Cape: Two parts being sand either from the United States or from from Europe, or when it comes through the use of when it comes to the use of technology. So manuals etcetera. So there are limitations that for some fabs are more stringent than for other fabs, but in general we're still in a position that our people can that can continue to serve.

Christophe Fouquet: So there are limitations that for some facts are more stringent than for other facts, but in general, we're still in a position that all people can, can continue to serve in the, in the facts of our customers in the or from the United States or from the United States or from the United States or from the United States or from the United States or from the United States or from the United States or from the United States or from the United States or from the United States And I think I'll be aware we have been now in this position for quite a few months.

Roger J. M. Dassen: So, there are limitations that are more stringent for some fabs than for other fabs. But in general, we're still in a position that our people can continue to serve in the fabs of our customers. And, as you can be aware, we have been in this position for quite a few months. I think the landscape has been set. As Roger said it, we fully understand the new regulation.

<unk> and the Fabs of our customers in the U S.

Speaker Change #105: He can re will be aware, we have been in this position.

Speaker Change #105: Position for quite a few months. So I think the landscape has been set so I think.

Christophe Fouquet: So I think the landscape has been set. So I think Roger said it. We, we, we understand the new regulation. We, I would say, adjusted our service, our action according to that. But for us, this is not new news at this point of time. We have been doing that for many months already.

Christophe D. Fouquet: We, I would say, have adjusted our service, our actions according to that. But for us, this is not new news at this point in time. We have been doing that for many months, Fabs that are going to be built, some of which are supported by Chips Act money or equivalent funds in other jurisdictions. With all of those, quote, scheduled-to-take tools, how much of an impact do you think that will have in 2025, and how much is actually beyond that, given, you know, the lead time it takes to build. A lot of concrete and steel are going in at the moment, but there's certainly not many ready to take actual cleanroom equipment just yet.

Speaker Change #104: What did you say this we understand the new regulation.

Speaker Change #104: <unk> adjusted our service.

Speaker Change #104: Action according to that but.

This is not new news at this point is that we've been doing that for many months already.

Christophe Fouquet: Thank you. Well, if I could have a quick follow-up, Christophe, you mentioned the new fabs that are going to be built, some of which are supported by Kipsack money or the equivalent funds and other jurisdictions. With all of those quotes scheduled to take tools, how much of an impact you think if that in 2025 and amateurs actually beyond that given the lead time it takes to build a lot of concrete and steel going in at the moment. But it's certainly not many ready to take actual clean equipment just yet.

Speaker Change #108: Thank you.

Christophe D. Fouquet: If I could have a quick follow up Christophe you mentioned, the new fabs that are going to be built.

Christophe D. Fouquet: Some of which supported by chip tax money or equivalent funds in other jurisdictions.

Speaker Change #106: With all of those court schedule to take tools, how much of an impact you think that in 2025 and how much is actually beyond that.

Speaker Change #107: And then the lead time it takes to build a lot of concrete and steel going in at the moment, but.

Not many ready to take actual claim equipment, just yet can you help us with how you think that's going to phase in over 25, and 26 and beyond.

Christophe D. Fouquet: Can you help us with how you think that's going to phase over 2025, and then 2026 and beyond? Yeah, so to make the answer simple, I think most of it will come, in fact, after 2025. So I think the volume from those five is still limited next year. I think you're mostly aware of the big announcements either, you know, in the US, in Europe, in Japan.

Christophe Fouquet: Can you help us with anything that's kind of the size of a 25 and then 26 and beyond. Yeah, so I think to make the answer simple, I think most of it would come in fact after 2025. I think the volume from those fab is still limited next year. I think you're most really aware of the big announcement either in the US, in Europe, or in Japan. So I think this will come after 25, which is starting in 2026. This was also with my comment about preparing also the capacity for that. So, as Roger explained, when we prepare the capacity, taking into account the lead time, we have some for some of our factories, some of our suppliers.

Speaker Change #107: Yes, so I think to make the.

Speaker Change #109: So simpler I think most of it will come in fact after 2025, so I think the volume from those fab is still limited next year.

Speaker Change #110: Thank you, mostly aware of the big announcements in.

Speaker Change #110: In the U S and Europe, and Japan. So I think this would come after 25 in the streets of starting 2020 seats.

Christophe D. Fouquet: So I think this will come after 25, mostly starting 2026. This was also a bit my comment about preparing also the capacity for that. So, as Roger explained, when we prepare the capacity, taking into account the lead time we have for some of our factories, some of our suppliers, of course, the capacity is there to meet the market demand, in fact, beyond 2025. So, this is what we wanted to be ready for.

Speaker Change #110: This was also with my comment about preparing also the capacity for that so.

Speaker Change #111: Would you explain when we prepare to capacity.

Speaker Change #111: Taking into account the lead time, we have for some of our factories some of our suppliers of course the capacity.

Christophe Fouquet: Of course, the capacity is there to meet the market demand, in fact, beyond 2035. So this is what we wanted to be ready for. So this is also why we are still very comfortable with the long term view of the market because those things are going to come. And, you know, we could expect even some more government funding moving forward because, as you also, you know, see it in the news. I think there is more and more wish from everyone to invest in this business. I think that's also something we don't expect to down over time.

Speaker Change #111: Is there too to meet the market demand in fact beyond 2025. So this is what we wanted to be ready for.

Christophe D. Fouquet: So, this is also why we are still very comfortable with the long-term view of the market, because those things are going to come, and we could expect even some more government funding moving forward. Because, as you also see in the news, I think there is more and more a wish from everyone to invest in this business. So, I think that's also something we don't expect to slow down over time. We expect that there will be more after the first wave of investment. Sandra, that's absolutely right.

Speaker Change #111: This is also why we are still very comfortable with the long term view of the market because those things are going to come.

Speaker Change #111: And.

So we could expect even some more government funding moving forward because as you also.

We see it in the news I think there is more and more which for me is we want to really invest in this business. So I think thats also something we don't expect to slow down over time, we expect that there would be more after the first wave of <unk>.

Roger Dassen: We expect that there will be more after the first wave of investment.

Speaker Change #111: Investment.

Roger J. M. Dassen: And to add to that, Of course, there are many new fabs that are being built, and not all of them are necessarily associated with the CHIPS Act money. So that's why, also in the past, we've said that when it comes to 2025, more than half of the shipments will go. But that will include new fabs, you know, including new fabs, for instance, that are being constructed in Taiwan. So more than 50% of our shipments for 2025, we expect to go to new fabs. But Christophe is absolutely right.

Roger Dassen: Sandra, that's absolutely right. And to add to that, of course, there are many new facts that are being built, and not all of them are necessarily associated with the Chips Act and money. So that's why also in the past, we've said that when it comes to 2025, more than half of the shipments will go, but that will include new facts, including new facts, for instance, to be that are being constructed in Taiwan. So more than 50% of the shipments for 2025, we expect to go to new facts. But Chris, that's it. You're right.

Speaker Change #112: Thunder depth, that's absolutely right and to add to that.

Speaker Change #111: <unk>.

Speaker Change #113: Of course, there are many new fabs that are being built and not all of them arent necessarily associated with the with the chips Act money. So that's why also in the past we've said that when it comes to 2025 more than half of the shipments will go.

Speaker Change #113: But that will include new fabs.

Speaker Change #113: Building, new Fabs for instance to be.

Speaker Change #113: Then there are being constructed in Taiwan, so more than 50% of our shipments for 2025, we expect to go to two new Fabs.

Christoph: Christoph is absolutely right I think the effect really of the chipset Bonnie I think you should probably see beyond that year.

Unknown Executive: I think the effect really of the chips act money, I think you should probably see beyond that here. Thank you very much. Thank you.

Speaker Change #115: Thank you very much.

Speaker Change #116: Thank you.

Chris Caso: So now I'll take the next question. And the question was from the line of Chris Kazo from Wolf Research. Please go ahead.

Roger J. M. Dassen: I think the effect really of the CHEP SAC funding is that you should probably see beyond that. Thank you very much. Thank you. We'll now take the next question, and the question comes from the line of Chris Caso from Wolf Research. Please go ahead. Yes, thank you. Good morning.

Speaker Change #117: We will now take the next question on.

Christopher James Muse: The question comes from the line of Chris <unk> from Wolfe Research. Please go ahead.

Yes. Thank you good morning.

Christopher Caso: The question is regarding revenue for the back half of the year, based on, you know, where you're guiding for the third quarter and maintaining. [inaudible] Chris, what you see is that we are indeed building up momentum. I think that's also what you might expect, given what we said; we look at 2025 as a growth year. And I think what you see, you know, over the quarters in 2024 is that it is clearly building up over the quarters.

Speaker Change #118: Regarding revenue for the back half of the year and.

Speaker Change #119: Based on where you're guiding for the third quarter and maintaining the view on the full year that does anticipate some acceleration.

Speaker Change #120: As you go into the fourth quarter could you give some color on that.

Speaker Change #121: What's going on there with regard to the timing of the orders is this just kind of typical.

Speaker Change #122: Some some timing differences between some of the shipments in the third quarter and fourth quarter. What gives you the confidence in the fourth quarter. Please.

Speaker Change #123: First of all you see is that said that we are indeed building up momentum I think that's what you might expect given what we said we look at 2025 years as a growth year and that's I think what you see over the quarters in 2024.

Speaker Change #123: That is clearly building up over the over the quarter.

Christopher Caso: I think, and as we said before, we have the building capacity, so we're able to do it. But the demand is also, you know, building up this momentum over the quarters leading into, you know, the growth year in 2025. I should also add that, as we've mentioned before, there is also some deferred revenue that we've been building up. And that means systems that we have shipped that we have not yet recognized revenue for. And the impact of that in the, you know, in the second half is expected to be around a billion. So that's a substantive number.

Speaker Change #123: I think and as we said before we have the building capacity. So we're able to do it but the demand is also building up this momentum over the quarters meeting into the growth the year in 2025, I should also add that.

Speaker Change #123: As we've mentioned before and there are the results of some deferred revenue.

Speaker Change #123: That we've been building up and that means systems that we have ships that we have not yet recognized revenue.

And the impacts of that in the in the in the.

Second half is expected to be around $1 billion. So that's a substantive substantive number and that comes either from fast shipments.

Roger J. M. Dassen: And that comes either from the fast shipments that we have been doing, or, as you know, we no longer intend to fast ship by the end of this year. So that gives you a bit of a tailwind there.

Speaker Change #123: We have been that we have been doing and as you know we no longer intend to fast shipped by the end of this year. So that gives you a bit of a tailwind there, but it's also a number of 38 hundreds tool sets that were shipping and that we that we take revenue for after shipments outside acceptance of desperate for the customer.

Roger J. M. Dassen: But it's also a number of 3,800 tools that we're shipping and that we take revenue for after shipment at site acceptance by the customer. And also, as you know, we're in the process of shipping high-end aid tools that have already been shipped but will only take revenue at the moment of site acceptance. So there are a number of reasons why we will recognize revenue for stuff that has already been shipped. And I think with that tailwind and with the building up of momentum, both in terms of capacity and in terms of demand, we're indeed looking at a very progressive buildup of revenue throughout this year and leading to, you know, an over $9 billion expectation indeed in Q4. That's a very helpful color.

Speaker Change #123: And also as you know we're in the process of shifting high need tools that have been shipped but will be only take revenue at the moment of site acceptance that so there is a number of reasons why we will recognize revenue for stuff that said that has that has already been shipped and I think with that tailwind and with the building up of momentum both.

Speaker Change #123: In terms of capacity and in terms of.

From demand.

Speaker Change #123: No.

Speaker Change #123: We are indeed looking at a at a very progressive buildup of revenue throughout this year and then leading to.

Speaker Change #123: And over $9 billion expectation indeed in Q4.

Roger J. M. Dassen: Thank you. As a follow-up, I just wanted to follow up on some of the comments you spoke about for high-end aid. And, you know, speaking of, you'd think 25.

Speaker Change #124: That's very helpful color. Thank you as a follow up I just wanted to follow up on some of the comments you spoke about for high and a DRAM.

Speaker Change #125: And speaking of.

Speaker Change #126: Do you think 'twenty five 'twenty six.

Roger J. M. Dassen: Transcription by https://otter.ai/ Well, I think maybe I should start. I think, you know, as we said in the past, we have, I would say, a good backlog for INA, which means that the customer I was referring to, all our EUV customers have ordered those systems. I think you see that we are starting to deliver those tools, and, of course, this is timely, aligned with some of the opportunities to introduce them. The addition of the lab, basically, is good for our customers because this gives them a chance, even before that tool hits the ground, to get the first data.

Speaker Change #127: Insertion timeframe for that obviously the lead time for those tools are very long it sounds like the customers are in your labs right now.

Speaker Change #128: What's your anticipation regarding timing on.

Speaker Change #129: Development tools are production tools.

Speaker Change #129: For that and some.

Speaker Change #129: The idea of perhaps magnitude of tools or or or layer count for that going forward.

Speaker Change #129: Yeah.

Speaker Change #130: Well I think maybe I should start I think you know as we said in the past we have a I would say.

Speaker Change #130: Good backlog for <unk>, which means that the customer I was referring to.

Speaker Change #130: All are easy customer have older. Those system, you see that we start to deliver those too.

Speaker Change #130: And of course this is a timely align with some of the opportunity to ensure.

Speaker Change #131: The addition of the lab basically is good for our customer because this gives them a chance even before that to hit the ground to get the first data and I seek your understanding on its taken them in at a very first data are critical to who I understand exactly.

Christophe D. Fouquet: And I think you understand the technology; I think the very first data are critical to understand exactly what the value of the technology is. So this is why, today, the wafers that are being exposed are already providing very valuable information to our customers, information they can start to use to refine a bit their insertion scenario and the value that INA could bring. That's why we've been, I would say, quite excited about the fact that we are generating this data today. And as I mentioned, I think what we see so far is that the data is well meeting our customer expectations. So this is also positive.

Speaker Change #132: What's the value of the technology.

Speaker Change #132: So this is why today, the Woodford without being exposed are already providing very valuable information to our customer information. They can start to use to refine a bit there.

Speaker Change #132: Insertions in value and the value that they could bring.

Speaker Change #132: Why we have been obviously quite excited about the fact that we are generating this.

Speaker Change #132: Data today, and as I mentioned I think what we see so far is the data.

Speaker Change #132: Well meeting our customer expectations. So this is also positive.

Speaker Change #133: Thank you.

Speaker Change #133: Thank you.

Christophe D. Fouquet: Thank you. Thank you. Your next question comes from the line of CJ Muse from Cantor Fitzgerald. Please go ahead. Good morning, good afternoon.

Speaker Change #135: Your next question comes from the line of C. J Muse from Cantor Fitzgerald. Please go ahead.

Christopher James Muse: Thank you for taking the question. I guess the first question is, we'd love to hear your thoughts around any changes in customer conversations over the last three months, whether foundry logic and particularly as it relates to your more robust immersion shipment outlook for the second half of this year. Well, the short answer is no, no big change.

Speaker Change #134: Yes. Good morning, good afternoon, and thank you for taking the question I guess first question would love to hear your thoughts around any changes in customer conversations over the last three months, whether foundry logic and particularly as it relates to your more robust emergent shipment outlook.

For the second half of this year.

Speaker Change #136: Well the short answer is no no big changes.

Christophe D. Fouquet: I think, you know, the discussions we have with our customers are very consistent: a lot of the ramp of AI, the ramp beyond that, we don't see any major change. I think, in fact, I would say our view of the market this quarter is very much the same as the one we had the last quarter. I think the big difference, as you have seen, is that we have made progress with booking on some of the segments, answering maybe one of the big questions we got from all of you last quarter. But the view of the market, for me, is not changing. I think the discussions are very consistent. When it comes to emergencies... [inaudible] Sorry, please go ahead.

Speaker Change #136: The discussion we have with our customer are.

Speaker Change #137: A very consistent so losses.

Speaker Change #138: <unk> plus AI the ramp beyond that.

Speaker Change #138: We don't see any major change I think in fact, I would say our view of the market. This quarter is very much the same as the one we had the last quarter I think the big difference.

Speaker Change #140: As you have seen is that we have made progress with booking on some of the segments.

Answering maybe one of the Big question, we got from all of you last quarter, but the view of the market.

Speaker Change #138: For <unk> for me is not changing I think.

Speaker Change #138: A discussion a very constant.

I wanted to a couple of emergency.

P J: So as P J.

Speaker Change #142: Sorry. Please go ahead.

Speaker Change #139: When it comes to imagine that your other question.

Roger J. M. Dassen: When it comes to immersion, your other question, we continue to believe that immersion will continue to be strong, even though in the total mix, we do believe that the mix in the second half will be a lot more dry. So in the DPV mix, you will see the dry component becoming more significant than it was in the first half. But, you know, overall, we do believe that immersion will continue to be strong in the second half. Thank you. And as a quick follow-up, can you speak to the 3800?

Speaker Change #144: We continue American to continue to be strong even though in the total mix, we do believe that the mix in the second half.

Speaker Change #143: We'll be a lot more dry so in the deep UV mix, you will see the dry component, becoming a more significant than it was in the first half, but overall, we do believe that immersion will continue to be strong also in the second half of it.

Speaker Change #145: Thank you.

Christopher James Muse: You talked about the majority of shipments in the second half of this, Think about the impact on gross margins and ASPs in the second half of 24 and then kind of the same question for all of 2025. Thank you. So indeed, as Christophe said, the majority of EUV tools in the second half will be 3800s. I should add, as you know, CJ, and we talked about this before, we have a RAM schedule where the initial 3800s are not yet up to full configuration.

Speaker Change #148: Quick follow up can you speak to the 3800, you talked about majority of shipments in the second half of this year.

Speaker Change #149: Think about the impact to gross margins and Asps second half 'twenty four and then kind of same question for all of 2025. Thank you.

Christoph: So indeed as Christoph said it will be the majority of tool of vessels in the second half will be 38, hundreds I should add as you know C J and we talked about this before.

Speaker Change #145: The.

Speaker Change #147: We have a ramp schedule, where the initial 38 hundreds are not yet up to full configuration. So gradually we will get the the 3800 up to the full specification of 220 wafers.

Roger J. M. Dassen: So gradually, we will get the 3800s up to the full specification of 220 wafers per hour. But that also means that not all of the 3800s that will ship in the second half of this year will command the higher ASP because some revenue is deferred up until the point where the tools have been upgraded to that higher specification. So we will not get the full tailwind, I would say, of the... [inaudible] You have the sign-up of customers on the tool, as we expect in the second half of this year.

Speaker Change #146: <unk> per hour.

Speaker Change #145: Also means that not all of the.

Speaker Change #145: The 38, hundreds that said that will that will ship in the second half of this year.

Speaker Change #145: Will command the higher ASP, because some some revenue deferred up until the point, where the tools have been have been upgraded to that to the high specification.

Speaker Change #145: We will not get the full tailwind I would say of the.

Speaker Change #145: The strong 78 hundreds of pricing in the second in the second half, but it's definitely going to help.

Speaker Change #145: And that you will see a stronger effect of that in 2025, we are of course.

Speaker Change #145: The share of the 3800 is going to be even stronger and theyre. All the tools essentially will be it will be and final specification and we've also got some deferred revenue that will be recognized in 2000.

Speaker Change #145: From groups that have been shipped in 2024. So if you look at the gross margin for the for the second half.

Speaker Change #150: Of course, that's what this is one element <unk> element in there. We also have our slides and Thats a positive I would say.

Speaker Change #150: And then we have a higher volume obviously in 2025 in the second half of 'twenty 'twenty four as we just as we just calculated that's also a positive or slightly negative is that in the deep UV mix as I mentioned before the dry component is going to be more visible right. So that's that's a bit of a drag on the on the gross margin and then we also.

Speaker Change #150: In the second half we're going to have the first revenue recognition of the of the high <unk> tools and of course on the one hand upgrades because that means that you.

Speaker Change #150: You have the sign off of.

Speaker Change #150: Customers on the on the tool as we expect in the second half of this year, but you also know that the gross margin on that through this upgrade so that will also be a drag. So that's the reason why for this for the second half of this of this year, we expect a slightly lower gross margin than we expect then we were able to record in the first half.

Roger J. M. Dassen: But you also know that the gross margin on that tool is not great, so that will also be a drag. So that's the reason why, for the second half of this year, we expect a slightly lower gross margin than we were able to record in the first half. Very helpful. Thank you.

Speaker Change #151: Very helpful. Thank you.

Speaker Change #151: Welcome.

Speaker Change #152: Thank you.

Didier Scemama: Thank you. Your next question comes from the line of Didier Scemama from Bank of America. Please go ahead.

Speaker Change #153: Your next question comes from the line of <unk> from Bank of America. Please go ahead.

<unk>: Yes, good afternoon.

Didier Scemama: Good afternoon. I have a couple of questions. First, on HiNA, and then, maybe, for Christophe.

Speaker Change #155: Couple of questions first on higher than initial Christoph.

Okay.

Didier Scemama: Good news, good stuff that you told us about, you know, transistor density and the quality of the imaging on the high NA. You know, how are your conversations going with one of your customers that, you know, historically was a bit reluctant with that technology? I understand they came to visit you in Veldhoven, which is reasonably unusual.

Speaker Change #156: Good news that <unk> stuff that you told us about the transistor density and the liquidity of the imaging on the high and a how are your conversations are going and who's one of your customers.

Speaker Change #157: <unk> was a bit reluctant to use that technology.

Speaker Change #158: I understand.

Speaker Change #159: Two visits to adulthood, and which is reasonably unusual.

Christophe D. Fouquet: Just tell us a little bit about the feedback you got from that visit, whether you think the bid has spread between what they want and what you can deliver. How is that progressing? And I've got a follow-up. Yeah, so first I'd like to say, I think we never qualify any customer as being an electant for INA. I think this information came from somewhere else. I think the short answer is, you know, data generation helped. Again, we were exposing important weather.

Just tell us a little bit about the feedback you got from from that visit whether you seem to be that spread between what they wanted and what you can deliver.

Speaker Change #160: Is that progressing and I've got a follow up.

Speaker Change #161: Yeah. So first I'd like to say I think we never quantify any customer is being in elektron from <unk>.

Speaker Change #162: <unk> ASIC this information came from.

Speaker Change #163: Somewhere else.

Speaker Change #164: I think the short answer is.

Speaker Change #165: Data generation health again, we are exposing importance with her.

Christophe D. Fouquet: We told you in the past we were happy to get that amount of backlog on INA because our customers were showing trust in the technology without having any data at hand. So they were basically following our, I would say, analyses or our promise that this would help them move forward. And they have been willing to invest in R&D quite heavily and, by the way, even downpay some of those systems.

Speaker Change #165: We told you in the past we were happy to get set the amount of backlog on <unk>, because our customer way of assuring the trust and the technology without having any data hence so they were basically.

Speaker Change #165: Our.

Speaker Change #166: I would say.

Speaker Change #166: And that disease.

Speaker Change #167: Our problem is that this will help them moving forward.

Speaker Change #168: <unk> been willing to invest for R&D quite.

Speaker Change #168: Heavily and by the way even don't pay some of those systems. So this is a huge commitment from the industry.

Christophe D. Fouquet: So this was a huge commitment from the industry. I think the data is helping tremendously because our customers can see the data. I think that can be used also for potentially their customers to have a much better discussion around INA. So I think the dynamic is good, and I would say the discussion is getting a lot more concrete. And I think, you know, we need to give a few more months to that discussion so that, based on data this time, everyone has a bit of a better idea of what could be done moving forward with INA and how quickly. Thank you. My follow-up is a bit of just picking your brains. And I'm sure you've got armies of PhDs running simulations.

Speaker Change #168: The data is helping tremendously because our customer can see the data.

Speaker Change #168: That can be used also for potentially their customer to have a much better discussion around <unk>.

Speaker Change #168: The dynamic is good and I would say the discussion in Europe.

Speaker Change #168: More concrete.

Speaker Change #168: And I think.

Speaker Change #168: We need to give a few more months to that discussion.

Speaker Change #168: Everyone based on data at this time of a bit of a better idea of what could be them moving forward with <unk> are quickly.

Excellent. Thank you Mike.

Didier Scemama: But if we were to assume that there is some sort of AI, PC, and smartphone refresh cycle pushing volumes for those combined markets to maybe a high single-digit volume growth in calendar 25 or calendar 26, do you think that there is enough capacity in DRAM, maybe MEND, and maybe to a lesser degree in logic? to deliver that potential uplifting volume. Well, I think, you know, everyone is maybe trying to answer that question.

Speaker Change #169: There's a bit of a just picking your brains and I'm sure you've got like armies of Phds worrying simulations, but if we were to assume that there is some sort of AI PC and smartphone refresh cycle pushing volumes for those combined markets to maybe a high single digit volume growth in calendar <unk>.

Speaker Change #169: Five or calendar 2006 <unk>.

Speaker Change #170: Do you think that there is enough capacity in DRAM demand and maybe to a lesser degree in logic.

Speaker Change #170: To deliver on that potential uplift in volumes.

Speaker Change #171: Well I think.

Christophe D. Fouquet: I think it's very difficult to answer the question. I think what we have seen with AI is a major investment from many companies in supercomputers in the ability basically to train models. What we still miss in AI, I think, is the emergence of the end product.

Speaker Change #172: One is maybe trying to answer that question I think it's very difficult to answer. The question I think what we have seen with AI is a major investment from many companies in the supercomputer and the ability basically to trend model.

Speaker Change #172: Which we still <unk> is the emergence of end product. So I think today there is not much revenue made on AI. It is just a lot of investment.

Speaker Change #172: <unk>.

Christophe D. Fouquet: So I think today there's not much revenue made on AI; there's just a lot of investment. What we see is that, you know, still, that investment requires a lot of capacity. I think you've seen some of our customers announcing more capacity to be built before 2028. And as I said before, if the rest of the application were to recover, what has been done so far, which is to reallocate some of the capacity to HBM, may become more difficult.

Speaker Change #172: What we see is that you know.

Speaker Change #172: Still that investment require a lot of capacity.

Speaker Change #173: I've seen some of our customer announcing or so more capacity to be bids.

Speaker Change #173: Before 2020.

Speaker Change #173: Eight.

Speaker Change #173: And as I said before if the rest of the application where to recover.

The what has been done so far which is to reallocate some of the capacity to HBM may become more difficult. So overall I think we still expect as the rest of the markets recover to see a need for more capacity.

Christophe D. Fouquet: So overall, I think we still expect, as the rest of the market recovers, to see a need for more capacity. And that's, I think, also true for DRAM. Now, to tell you at what speed, I think this is still a bit difficult.

I think also true for DRAM.

Speaker Change #174: Now to tell you.

Speaker Change #174: At what speed I think this is still a bit difficult to I think we stated a few times I think the the recovery is something we are looking at everyday.

Speaker Change #174: And there's also a lot of uncertainty. So this is why you see us being I would say.

Christophe D. Fouquet: I think we've said it a few times. I think the recovery is something we look at every day. And there is also a lot of uncertainty. So this is why you still see us being, I would say, strong in our view of 2025, but also a bit cautious, because there's still a lot of uncertainty around those opportunities. Brilliant. Thank you.

Speaker Change #174: Strong in our view of 2025, but also a bit cautious because there's still a lot of uncertainty around those opportunities.

Speaker Change #175: Thank you.

Speaker Change #175: Thank you.

Mehdi Hosseini: Thank you. We will now take the next question, and the question comes from the line of Mehdi Hosseini from Susquehanna. Please go ahead. Yes, thank you for letting me ask the question to follow up. Christophe, is there anything you can share with me to give me confidence that 3800 is going to finally be on track? If I go back to your 22 analysts' day, the transition was supposed to happen in 23, got pushed back to early 24, and now there's a big hockey stick coming with the 3800E shipment. Is there anything you can share with us in terms of throughput or any other thing that would help us with incremental confidence and have a follow-up? Yeah, so I think there are two parts to that.

Speaker Change #176: We will now take the next question and the question comes from the line of Matthew You say any from Susquehanna. Please go ahead.

Yes. Thank you for letting me ask a question to follow up Chris.

Speaker Change #176: Christa.

Chris: Is there anything you can share with me too.

Speaker Change #178: Give me confidence that 3800 is going to finally be on track if I go back to your 'twenty two analyst day.

Speaker Change #179: Zika was supposed to happen in 'twenty three got pushed out to early 'twenty four now.

Speaker Change #180: It's a big hockey stick come.

Coming with a 300 shipment.

Speaker Change #180: Is there anything you can share with us in terms of.

Speaker Change #182: Throughput or any other thing that would help us with incremental confidence that I have a follow up.

Christophe D. Fouquet: I think there's the technology part where, you know, we are busy here in ASML to demonstrate basically the performance of the tool. We have seen very big progress there. We have measured 195 with a browse on the tool. We expect to see the final specification being measured also in the coming weeks. We don't see any hard showstopper.

Speaker Change #181: Yes, so I think there's two parts of that thing.

Speaker Change #184: The technology parts, where huh.

Speaker Change #180: We are.

Speaker Change #180: Busy here in ASML to demonstrate basically the performance of the tool.

Speaker Change #180: We have seen.

Speaker Change #180: Very big progress there, we have measured 195 with a crowd on the tool we expect to see the final specification being measure also in the coming weeks.

Christophe D. Fouquet: So, you know, we just see some work to be done. With the customer, I think some of the delay was also a choice we made to support the demand in the previous year. So, if you remember, 2022 was a year where we saw very strong demand from all customers for EUV, and we thought it would be wise to slow down a bit the ramp to the next product to not disrupt that demand.

Speaker Change #180: We don't see any how the.

Speaker Change #180: Showstopper, so we just see.

Speaker Change #180: Some work to be done.

Speaker Change #183: With the customer I think some of the delay was also a choice we made to support the demand in the previous year. So if you remember 2022 was a year, where we saw a very strong demand from all customer on EV and we thought this would be wise to slow down a bit the ramp to the next product to not disrupt that.

Speaker Change #183: <unk> demand.

Christophe D. Fouquet: At this point in time, the tool also is getting a customer. We made a choice, as has been explained before, to ship it initially at a lower throughput so that the qualification could start earlier at our customer so that it can be ready basically for high-volume manufacturing next year when I think this is the real expectation for this tool to run manufacturing. From my point of view, maybe I would say that the biggest element to help you is that, technology-wise, there is no concern at all, and when it comes to qualification with our customer, I think this is underway, and, of course, we are going to use the next few months to mature the system. It always takes a few months to do.

At this point of time.

Speaker Change #183: <unk> is getting a customer.

Speaker Change #183: We made a choice has been explained before to ship.

Speaker Change #183: Ship it initially at lower throughput so that the qualification could start earlier with our customer so that it can be ready basically.

Speaker Change #183: Our high volume manufacturing next year when I think this is a real expectation for these two run manufacturing so.

Speaker Change #183: From my point of view.

Speaker Change #186: I would say the biggest element too.

Speaker Change #183: To help you is that technology wise there is no concern at all.

Speaker Change #183: And when it comes to qualification with our customer I think this is underway and of course, we are going to use. The next few months to two material. The system. It always takes a few months to do that.

Roger J. M. Dassen: Thank you. And for Roger, I think, if I'm not mistaken, in the last conference call, you talked about 700 million euros of fast shipment. Did I hear you correctly that it is up to 1 billion now? Is that the right figure for fast shipment? Yeah, I think those are, there are different numbers Mehdi.

Thank you.

Speaker Change #185: I think if I'm not.

Speaker Change #183: Thank you.

Speaker Change #193: In the last conference call you talked about the 700 moving your shipment did I hear you correctly that you said is up to one 1 billion is that the right figure for first shipment.

Roger J. M. Dassen: And that's, that's why, that's why I just lumped them all together. So, as I mentioned, we have a fast shipment effect, and you'll certainly remember it well. But then, in addition to that, we also have 3800s that we shipped in H1, but we're recognizing revenue in H2. And also, a great aid tool that, you know, with the long lead times, and given this is a, you know, very new technology, we're going to recognize revenue, not upon shipment but upon SAT.

Speaker Change #187: Yes, I think those are the different number of thematic.

Speaker Change #188: That said, that's why and that's why just lumped. It together so as I mentioned, we have a passionate might affect them and youll memory serves me well.

Speaker Change #188: In addition to that we also have 38 hundreds.

Speaker Change #194: That we shipped in each one but recognized in revenue in <unk>, two and also a finite tools that with it with the long lead times and given this is a <unk>.

Very new technology, we're going to recognize revenue not upon shipment but upon.

Speaker Change #188: And that combination of things that we expect around 1 billion to be added to the to get to the revenue. So the deferred revenue that we expect to see in their SEC recorded in revenue in the second half. So thats. The difference its not just a fast shipment, but also the other dynamics that I just talked about.

Roger J. M. Dassen: And that combination of things that we expect around a billion to be added to revenue. So deferred revenue that we expect to see recorded in revenue in the second half. So that's the difference. It's not just a fast shipment but also the other dynamics that I just talked about. Thank you. You're welcome.

Speaker Change #191: Thank you.

Speaker Change #189: You're welcome.

Speaker Change #190: Thank you.

Sandeep Sudhir Deshpande: Thank you. Your next question comes from the line of Sandeep Deshpande from J.P. Morgan. Please go ahead. It would be, what is the capacity you have for EUV next year? And I mean, are you building fully to that capacity? Or are you going to be building less than that capacity at this point? And I have a quick follow-up. Hmm. An A for effort, Sandeep, for sure, in asking the question.

Speaker Change #192: Your next question comes from the line of Sandeep Deshpande from Jpmorgan. Please go ahead.

Sandeep Sudhir Deshpande: Yes, hi, Thank you for letting me on.

Sandeep Sudhir Deshpande: My first question I mean, clearly there was earlier questions on this but I'm trying to put it another way, which is you don't have a view on where you are going to land in 2005.

Speaker Change #196: One can understand that given <unk> et cetera, they have much shorter lead times, but on <unk>, So given where the lead times on <unk>. We are you probably have a view on how many tools.

Speaker Change #196: <unk> already so my question would be.

What is the capacity you have for <unk> next year and.

Speaker Change #197: I mean are you building fully to that capacity or are you going to be building less than that capacity at this point I don't have a quick follow up.

Speaker Change #197: Yeah.

Speaker Change #198: And a for effort Sunday for sure.

Roger J. M. Dassen: But you know, we're gonna stick to our guns here, also on EUV. Wait until capital market day, then we will give you a lot more color and context. We have been building capacity for EUV. As you know, we are working towards a capacity level of 90 in a 25-26 timeframe. So we have been driving up the capacity quite a bit. So there is quite some room that we have to accommodate demand on EUV.

Speaker Change #198: And asking asking the question but.

Speaker Change #199: We're going to we're going to stick to our guns here also on UV wait and sort of the capital markets day that we will give you a lot more color and context.

Speaker Change #200: <unk> been building capacity for <unk> as you know we are working towards.

Speaker Change #200: The level of 90, and a $25 26 timeframe. So we have been driving up their capacity quite a bit. So the risk there is quite some room that we have to accommodate a demand on on EV.

Roger J. M. Dassen: But you know, we're not going to give any more color as to what our expectations for EUV sales are going to be. In November of 2025, we'll give you a more concrete picture. Just reiterating, between $30 and $40 billion, and that will not be the low point. I think that's the expectation that we've articulated before, and that's what we still have in the industry about whether Litho is going to continue the kind of scaling it has done over the last 20 years, given the challenges with shrinking here from the current level.

But.

Not going to give any more color as to what our expectations for EV sales are going to be in November of 2025, We will give you more concrete picture just reiterating between 30% and $40 billion and it will not be the low point I think that that's that's the expectation that we've articulated before and Thats why we still are.

Speaker Change #201: Thank you.

Speaker Change #202: Maybe stepping back a little bit I mean, there hasn't been a lot of conversations in the industry about whether to deploy is going to continue the kind of scaling. It has done over the last 20 years given the challenges with shrinking from these from the current level.

Krzysztof: So maybe in terms of the adoption of high Amy and literally Krzysztof maybe you can make any comments on.

Roger J. M. Dassen: So maybe in terms of the adoption of HiNA and Litho itself, Christophe, maybe you can make any comments on what your interactions with the foundries and the memory companies have been in terms of using Litho as a critical driver of the scaling in semiconductors over the next few years, because there has been a lot more conversation in the industry about the limitations of Litho. Well, I think it's two things that are well known.

Your interactions.

Krzysztof: The foundries and memory companies have been in terms of using litho as a critical driver of the of the scaling in semiconductors over the next few years, because there has been a lot more conversation.

Krzysztof: Industry about the limitations of little.

Roger J. M. Dassen: So first, I think you're hinting at it. I think if we look at the last few years, the scaling, the shrinking is slowing down. I think this is not new. And for a long time, you know, little had an impact on that.

Krzysztof: Well I think.

Krzysztof: It's a sourcing that are well known so first I think you are hinting two eight if we look at.

Krzysztof: The last few years the scanning the shrink is slowing down and I think this is not this is not new.

Krzysztof: And for a long time you know.

Krzysztof: This all had an impact on that.

Krzysztof: This point of time, it's more fundamentals basically and the related to all the innovation you need to put in place in order to be able to scale the transistor.

Christophe D. Fouquet: I think at this point in time, it's more fundamentals, basically, and related to all the innovation you need to put in place in order to be able to scale the transition. Now that being said, scaling is slowing down, so that's been many years already. But what is not slowing down is the need for transistor density. So that curve, which is Moore's law practically, is not slowing down.

Krzysztof: Now this being said, it's getting is slowing down so thats many years already.

What is not slowing down is the need for transition with MCT, so that curve, which is more low practically is not slowing down so customers are asking more and more density.

Christophe D. Fouquet: So customers are asking for more and more density at the same speed they have done for many, many years. And as scaling slows down, I would say shrink becomes even more valuable, because shrink is still today the best way to save costs on density. Everything else requires you to just build more transistors with more steps.

Krzysztof: At the same speed they have done for many many years.

As scanning slowdown I would say shrink can become even more valuable because shrink is still today, the best way to save costs on density.

Krzysztof: Everything else require you to just build more transistor with more steps so shrink today and it's true today, it's going to be true.

Christophe D. Fouquet: So sharing today, and it's true today, it's going to be true tomorrow. ASML is still the best way to reduce cost. And sometimes we say, the less you can shrink, the more the value of shrink is going to be. That's one thing.

Krzysztof: The mall is still the best way to reduce cost.

Krzysztof: And sometimes we say the less you can shrink the more of the value of shrink is going to do.

Krzysztof: B.

Christophe D. Fouquet: The other thing, of course, is if you shrink less, you need more volume, and more volume can be obtained by exposing more wafer or exposing more stack on the wafer. But in both cases, this drives more lithography. So, you know, we never really feared the reduction in shrink because this was driving volume.

Krzysztof: That's one thing the other thing of course is if you shrink less.

Krzysztof: More volume and more volume can be.

<unk> bye.

Krzysztof: Exposing more wafer.

Krzysztof: Exposing more stack on the wafer.

Krzysztof: But in both cases, you this drive or so more lithography, so we never really fear.

Krzysztof: The reduction of offshoring, because this was driving volume. This is one of the reason why we have been building capacity and at the same time, we know that every state we would be able to make in lithography.

Christophe D. Fouquet: This is one of the reasons why we have been building capacity. And at the same time, we know that every step we will be able to make in lithography will have huge value for our customers. So this is something we also believe continues to be important. And, of course, probably over time, and we'll also talk a bit about that in November, we will look at more ways to help our customers to drive this density basically up. So, I say there's no news there. Scaling is slowing down. You know, it's not a difficult thing to say for a lethal person.

Krzysztof: We have huge value for our customers. So this is something also we believe.

Krzysztof: <unk> continues to be important.

Krzysztof: And of course.

Krzysztof: Most of it really over time and we'd also talk a bit about that in November we will look at more ways to help our customer to drive these density basically up.

Krzysztof: So I'd say no news there scaling is slowing down.

Speaker Change #204: It's not a difficult things to stay for lethal pair of certain it's just reality.

Christophe D. Fouquet: It's just reality. Density does not. Therefore, a need for more volume, and more value for shrink. And I would say there is some opportunity to look at other applications to help our customers to get this density at cost. We'll talk a lot about that in November, I'd like to say, because I think it's one of the things we want to explain again, everyone. Thank you, Christopher.

Speaker Change #204: Density does not.

Speaker Change #204: Therefore, our need for more volume more volume or shrink and I would say some opportunity to look at other applications and help our customer to get these density at cost.

Speaker Change #204: Talk a lot about that in November I'd like to say it because I think it's a it's one of the things we want to explain again everyone.

Christopher James Muse: Thank you Christopher.

Christopher James Muse: Okay.

Skip Miller: All right, we have time for one last question. If you were unable to get through on this call and still have questions, please feel free to contact the ASML Investor Relations Department with your question. Operator, maybe we have the last caller.

Speaker Change #205: Alright, we have time for one last question. If you were unable to get through on this call and still have questions. Please feel free to contact ASML Investor Relations Department with your question.

Speaker Change #205: Or maybe we have the last caller please.

Speaker Change #206: Thank you.

Operator: Thank you. The last question today comes from the line of Aditya Matuku from HSBC. Please go ahead. Yeah, good morning.

Last question today comes from the line of Aditya <unk> from HSBC. Please go ahead.

Aditya <unk>: Yeah. Good morning. Good afternoon, guys. Thank you for taking my questions. So firstly just a clarification.

Aditya Matuku: Good afternoon, guys. Thank you for taking the time to answer my questions. So firstly, just a clarification on your backlog. I just wondered if you could give us a sense for how big domestic Chinese demand is as a part of your backlog today, just to get a sense for the level to which it may contribute to revenues next year. And secondly, just on this, there are a lot of rumors flying around, and I suspect the rules that are in place today are the result of some give and take, different companies, and different stakeholders pushing in different ways.

Aditya <unk>: On your backlog I, just wondered if you could give us a sense for how big domestic Chinese demand is as a part of your backlog today, just to get a sense for the level to which.

Aditya <unk>: It may contribute to revenues next year and secondly, just on China again.

Speaker Change #208: A lot of rumors flying around and.

Speaker Change #209: I suspect the rules that are in place today are the result of some give and take.

Speaker Change #210: In a different companies different stakeholders pushing in different ways.

Aditya Matuku: But just to hear it from the horse's mouth, can you give us some idea of what the US government would ideally like you to ship to China, regardless of the rules that are in place today? And how does that compare to what you're shipping to China today? Any color on that would be helpful.

Speaker Change #211: But just to hear it from the horses mouth can you give us some idea of what the U S government would ideally like to ship to China.

Speaker Change #212: Regardless of the rules that are in place today, and how does that compare to what you're shipping to China today.

Speaker Change #212: Any color on that would be helpful. Thank you.

Roger J. M. Dassen: Thank you. On the backlog, I think we said it before that our backlog is a little bit north of 20%, and that's still the case. So that's the Chinese share in our backlog. On the Chinese rumors, we're not going to add, I think, to the rumors that are already out there. I think this is a negotiation between governments. Companies are not at the table.

Roger Dassen: you. As they jump on the backlog, I think we felt before that our backlog is a little bit a little bit north of 20%, and that's still the case. So that's on the Chinese, you know, share in our backlog. On the China rumors, we're not going to add, I think, through the rumors that are already out there. I think this is a negotiation between governments; companies are not at the table. And, you know, we live by; we obviously stick to what what what allows us to do. And we're not going to speculate about what governments A might want to see in the rules and what governments B might want to have in the rules.

Speaker Change #214: I think on the backlog I think we said before that our backlog is a little bit a little bit north of 20% and that's still that's still the case. So that's on the <unk>.

Speaker Change #213: Chinese Oh, sure and or <unk>, and our backlogs on the China rumors were not going to add I think through the rumors that are already out there I think this is a negotiation between governments companies are not at the table.

Roger J. M. Dassen: And, you know, we live by, we obviously stick to what we're allowed to do. And we're not going to speculate about what governments, A, might want to see in the rules and what governments, B, might want to have in the rules. I don't think that's going to add to any clarity. I think what is very important to understand, and Christophe said it at the beginning of the call, the way we look at the demand for our tools is not from a specific geography, in this case, China.

Speaker Change #212: And we live by it.

Speaker Change #215: We obviously stick to what we're allowed to do and we're not going to speculate about what government a might want to see in the rules of what governments have you might want to happen to work I don't think that's going to add any clarity I think what is very important to understand and Christophe said at the beginning of the call. The way we look at the demand for our tools is not from a specific geography.

Roger Dassen: I don't think that's going to have to, to any clarity. I think what is very important to understand, and Christophe said that at the beginning of the call, the way we look at the demand for tools is not from a specific geography. In this case, we look at, and that's the way we model our sales medium term and long term. We look at what is the global demand for wafers. And whether those wafers are being produced in country actual country, why at the end of the day does matter. And I think that is very important to recognize in, in looking at the looking at your model.

Speaker Change #217: In this case, we look at and that's the way we model or sales medium term and long term. We look at what is the global demand for wafers and whether those wafers are being produced in country X or a country wide at the end of the day does matter and I think that is very important to recognize that and looking at I'm looking at your.

Roger J. M. Dassen: We look at, and that's the way we model our sales, medium-term and long-term. We look at what the global demand for wafers is and whether those wafers are being produced in country X or country Y. At the end of the day, it doesn't matter. And I think that is very important to recognize when looking at your model. We don't have a specific China element in our models. It is the global demand for wafers that drives our models.

Speaker Change #219: Our model, we don't have a a.

Roger Dassen: We don't have a, you know, a specific China element in our models. It is the global demand for wafers to rise over all modeling. Understood. Thank you, Russian.

Margaret: Specific China elements in our models as the global demand for wafers that drives or Margaret.

Speaker Change #215: Okay.

Roger J. M. Dassen: Okay. Thank you, Roger. All right, now, on behalf of ASML, I would like to thank you all for joining us today. Operator, if you could formally conclude the call, I'd appreciate it. Thank you. Thank you. This concludes the ASML 2024 second quarter financial results conference call. Thank you for participating. You may now disconnect. Thank you for watching!

Speaker Change #216: Understood. Thank you Roger.

Speaker Change #220: Alright, now on behalf of ASML I would like to thank you all for joining US today, operator, if you could formally conclude the call I'd appreciate it. Thank you.

Unknown Executive: All right.

Unknown Executive: Now, on behalf of ASML, I would like to thank you all for joining us today.

Operator: Operator, if you could formally conclude the call, I'd appreciate it. Thank you.

Speaker Change #221: Thank you. This concludes the ASML 'twenty to 'twenty four second quarter financial results Conference call. Thank you for participating you may now disconnect.

Operator: This concludes the ASML 2024 second quarter financial results conference call. Thank you for participating.

Operator: You may now disconnect.

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