Q4 2024 ASML Holding NV Earnings Call - Press Conference

January 29, 2025

A short film by Sebastien Michel A production by

Monique Molls: Good morning, everyone, and welcome to this press conference of the Q4 and full year 2024 results at ASML. My name is Monique Molls. I am responsible for media relations at ASML. You are here at the auditorium in Veldhove, our headquarters, and we are here to talk you through our numbers, our developments, what we see in the future. We have a couple of journalists here in the room. Welcome. Thank you for traveling to Veldhove.

Monique Mols: Good morning everyone, and welcome to this press conference of the Q4 and full year 2024 results at ASML. My name is Monique Mols. I am responsible for media relations at ASML. You are here at the auditorium in Veldhoven, our headquarters, and we are here to talk you through our numbers, our developments, what we see in the future. We have a couple of journalists here in the room. Welcome. Thank you for traveling to Veldhoven. Very nice to see you. It's always nice to see people in person. We also have some people that are watching online. A very warm welcome to those watching from Asia, a happy new year, and hope the year of the snake will bring good luck and fortune to you. Thank you very much for joining in this special day.

Monique Molls: But we also have some people that are watching online. And a very warm welcome to those watching from Asia and a Happy New Year and hope the Year of the Snake will bring good luck and fortune to you.

Monique Mols: We appreciate the effort you're making. The people online, if you have a question, you can actually use the menu on the website. There's a screen that allows you to fill in your question, submit it to us, and we'll take it after the presentations. For those who are here, just raise your hand when you have a question later on in the Q&A, and we'll get to you. I'm not going to do the presentation for all the numbers, and I realize I forgot my clicker. Wait a minute. I have some help. We've got the CEO of ASML, Roger Dassen, who will, who loves forward-looking statements. Roger Dassen will talk you through the numbers, and you've seen him before.

Monique Molls: People online, if you have a question, you can actually use the menu on the website. There's a screen that allows you to fill in your question. Submit it to us and we'll take it after the presentations. And for those who are here, just raise your hand when you have a question later on in the Q&A and we'll get to you. I'm not going to do the presentation for all the numbers. And I realize I forgot my clicker. Wait a minute.

Speaker Change: I have some help. We've got the CEO of HML, Roger Dassen, who loves forward-looking statements.

Speaker Change: So Roger Dassen will talk you through the numbers and you've seen him before and this year for the first time our CEO Christophe Fouquet will be here to talk you through the development and our progress in 2024. So with that I'd like to welcome Christophe to the stage. Thank you.

Monique Mols: This year, for the first time, our CEO, Christophe Fouquet, will be here to talk you through the development and our progress in 2024. With that, I'd like to welcome Chris, Christophe to the stage. Thank you. I'll hand this over to you.

Thank you very much, Monique.

Christophe Fouquet: Thank you very much, Monique. Good morning, everyone. Roger and I are very happy to welcome all of you here at ASML to spend a bit of time to reflect on 2024, look at what we expect in 2025 and beyond, and of course, take some of your questions. A bit more than a year ago, we defined 2024 as a transition year, and this has definitely been a transition year. There's a couple of things I will be stressing in my presentation, which were very, very important in 2024. The first one is AI. I think you have all noticed how AI became important for this industry. I think there's not one day without all of you talking about AI. Sometimes in very optimistic terms, sometimes more recently in more fearful terms.

and of course take some of your questions.

Speaker Change: So, a bit more than a year ago, we defined 2024 as a transition year.

Speaker Change: The first one is AI. I think you have all noticed how AI became important for this industry. I think there is not one day without all of you talking about AI.

Speaker Change: sometimes in very optimistic terms, sometimes more recently in a more fearful term. But AI is definitely a major, major change for this industry, and we'll talk about that.

Christophe Fouquet: AI is definitely a major change for this industry, and we'll talk about that. The second transition, you know that ASML is a technology company. I think you know that our success has come from the fact that we have tried to always stay one step ahead when it comes to technology. 2024 also has been an important year, a very rich year in technology at ASML, preparing also for this technological transition we are going to see happening starting in 2025 with 2 nm logic, but also some of the needs of the AI chips, High Bandwidth Memory, high power computer. This has been also a major focus for 2024.

Speaker Change: And 2024 also has been an important year, a very rich year in technology at ASML, preparing also for this technological transition we are going to see happening.

Speaker Change: starting in 2025 with 2-nanometer logic, but also some of the needs of the AI chips, high bandwidth memory, high power computer. So this has been also a major focus for 2024.

Christophe Fouquet: Roger, of course, is going to talk about the number, about 24, 25, but I think you already realize that we finished the year very strongly. This is a new record year for ASML. This is a very strong record Q4. We are very happy, of course, with those results, and I cannot not use this opportunity to thank the entire ASML team everywhere in the world for all the hard work and the commitment basically to help us achieve those number. You have noticed also we start 2025 on a good note. Roger will spend some time on that. But again, so far, a pretty good day. Let me go a bit into some of the key trends in this industry. I already mentioned AI. We talked about AI also in our Capital Markets Day in November.

Speaker Change: Roger, of course, is going to talk about the number, about 24, 25, but I think you already realize that we finish the year very strongly. This is a new record year for ISML.

This is a very strong record Q4 quarter.

Speaker Change: We are very happy, of course, with those reserves. And I cannot not use this opportunity to thank the entire ICML team everywhere in the world for all the hard work and the commitment, basically, to help us achieve those numbers.

Speaker Change: You have noticed also we start 2025 on a good note. Roger will spend some time on that, but again so far a pretty good day.

Speaker Change: So let me go a bit into some of the key trends in this industry.

Christophe Fouquet: What we explained is that in this industry, we used to talk about semiconductor everywhere, right? Because today, any major application requires semiconductor. Today, more and more, we believe that we'll be talking about AI everywhere. Semiconductor will be everywhere, but AI will be everywhere too. The reason for that is that the opportunity that AI represent for the entire economy, for the entire humanity is huge. We are just at the beginning of that. What you see today is people starting to invest basically in hyperscale computer in order to develop their product, and those products will come over time to hit our market. This is really a very, very important change. What you see here also is the number, the impact potentially on the GDP. We talk about trillions of dollars, which is huge.

Speaker Change: Today, more and more, we believe that we will be talking about AI everywhere. So semiconductors will be everywhere, but AI will be everywhere too.

Speaker Change: And the reason for that is that the opportunity that AI represents for the entire economy, for the entire humanity, is huge.

Speaker Change: And we are just at the beginning of that. What you see today is people starting to invest basically in hyper-scale computers in order to develop their product. And those products will come over time to eat our market.

This is really a very, very important change.

Speaker Change: What you see here also is the number, the impact potentially on the GDP. We talk about trillion of dollar, which is huge.

Christophe Fouquet: This will also mean that we can expect over time that a lot of company will want to play in this field. I know some of you maybe were surprised in the last few days that a new company suddenly come and want to compete. Well, I think we have to get used to that because this is such an opportunity that there will be more and more player to grab this opportunity. We also explained in November that for AI to succeed, cost has to go down and energy efficiency has to go down. We also explained that this will come only with innovation. I can promise you that in our industry, any innovation that has ever reduced cost, always created more volume and more opportunity. Again, we will see a lot of that happening hopefully in the next few months.

Speaker Change: So this will also mean that we can expect over time that a lot of companies will want to play in this field.

Speaker Change: So I know some of you maybe were surprised in the last few days that a new company suddenly come and want to compete.

Speaker Change: Well, I think we have to get used to that, because this is such an opportunity that there will be more and more players to grab this opportunity.

Speaker Change: And we also explained in November that for AI to succeed, cost has to go down.

and energy efficiency has to go down.

We also explained that this will come only with innovation.

Speaker Change: And I can promise you that in our industry, any innovation that has ever reduced cost always created more volume and more opportunity. And again, we will see a lot of that happening, hopefully, in the next few years.

few months.

Christophe Fouquet: What does it mean for us? AI is going to be everywhere, and everyone, everywhere means two things. You will see two types of different products. The very advanced one, the one that we talk about every day, which are going to require very high technology, but also what we call mainstream semiconductor, because you need sensors to feed basically AI with data. What we see happening on our market is that both the advanced technology segment is growing. We see more and more appetite, in fact, for advanced technology in logic, in the DRAM. This is, of course, a good thing for ASML, but we see also a major increase in the volume of semiconductors overall. This is mainstream, so this is a bit less sexy, so people talk less about it. This is, of course, a very, very important part of our business.

Speaker Change: but also what we call mainstream semiconductor because you need sensor to feed basically.

AI with data.

This is, of course, a good thing for ASML.

Speaker Change: But we see also a major increase in the volume of semiconductor overhaul. So this is mainstream, so this is a bit less sexy, so people talk less about it. But this is, of course, a very, very important part of our business.

Christophe Fouquet: This will continue to drive our entire portfolio. As I will explain later, that's also why we are continuing to invest basically in all those technologies, advanced ones like EUV, less advanced ones like DUV. If we look at the number, we still talk about a trillion-dollar opportunity, 2030. There's a lot of debate on how big this could be. Is it bigger than 1 trillion? How much bigger? I think we are not really entering into this debate. This is already a big number. We're going to drive that. Of course, our business will scale with whatever this number will scale with. But we're still looking at, of course, a very significant opportunity. The only thing we don't know exactly today is how this is going to happen, right? We see the investment of everyone in AI.

Speaker Change: So this will continue to drive our entire portfolio and as I will explain later That's also why we are continuing to invest basically in all those technology advanced one like UV less advanced one like deep UV

Speaker Change: If we look at the number, we still talk about a trillion dollar opportunity, 2030.

Speaker Change: There's a lot of debate on how big this could be. Is it bigger than 1 trillion? How much bigger? I think we are not really entering into this debate. This is already a big number. We're going to drive that. And, of course, our business will scale with whatever this number will scale with. But we're still looking, of course, as a very significant...

Speaker Change: The only thing we don't know exactly today is how this is going to happen.

Right, so we see the investment of everyone in AI.

Christophe Fouquet: We don't know exactly how this will play out into applications. When do you start yourself to buy mobile phone with AI, computer with AI, car with AI, et cetera, et cetera. That's the part I think we have to still understand. We're going to watch what's happening this year, next year. This is why, you know, we are also still, in our case, sometimes people say a bit cautious on the long-term view because we don't have yet all the understanding again on how the AI opportunity will really play out in the coming years. Now, this being said, I think you have seen this slide in the past. This is showing basically the EBIT, total EBIT of our ecosystem, all the people that are playing, investing in this industry.

Speaker Change: We don't know exactly how this will play out into applications. So when do you start yourself to buy mobile phone with AI, computer with AI, car with AI, etc, etc.

Speaker Change: So that's the part I think we have to still understand. We're going to watch what's happening this year, next year.

Speaker Change: And this is why, you know, we are also still, in our case, sometimes people say a bit cautious on the long-term view because we don't have yet all the understanding, again, on how the AI opportunity will really play out in the coming years.

Speaker Change: Now, this being said, I think you have seen this slide in the past, this is showing basically the EBIT, total EBIT of our ecosystem, all the people that are being playing, investing in this industry.

Christophe Fouquet: This is huge, and this has been growing more than 13% year on year for many, many years. What does it say? This says that basically this industry has the means to continue to fuel innovation. In fact, you most probably don't have any other industry that has this kind of means to keep driving innovation. That's why we always show that, because this is still a good news. There is means for innovation, and as you see it here, the return is very good. People are investing on not only what's happening next year or the year after, they invest for what's going to happen in 5 and 10 years.

This is huge.

Speaker Change: And this has been growing more than 13% year-on-year for many, many years. And what does it say? This says that basically this industry has the means to continue to fuel innovation.

Speaker Change: In fact, you most probably don't have any other industry that has this kind of means to keep driving innovation.

Speaker Change: So that's why we always show that because this is still a good news. There is means for innovation and as you see it here, the return is very good.

Speaker Change: And people are investing on not only what's happening next year or the year after, they invest for what's going to happen in five and ten years. And as you know, we do the same in ASML because we have to look basically not only to 2025, we have to look even already at what may happen in the next decade. So this is good news.

Christophe Fouquet: As you know, we do the same in ASML because we have to look basically not only to 2025, we have to look even already at what may happen in the next decade. This is good news. If I summarize a bit the future, it's bright. We're still very bullish. I think, if anything, AI has strengthened the opportunity for this business. AI is going to be a key driver starting next year. On the short term, it's also create a shift. That's what we have also experienced in 2024. Some of our customer have done extremely well with AI, in fact, so well that they cannot produce enough chips to supply to their customer. Those customer have been driving our own demand, and they will continue to do that in 2025.

If I summarize a bit...

Speaker Change: But, on the short term, it also creates a shift, and that's what we have also experienced in 2024.

Speaker Change: Some of our customers have done extremely well with AI. In fact, so well that they cannot produce enough chips.

to supply to their customer.

Speaker Change: And those customers have been driving our own demand, and they will continue to do that in 2025.

Christophe Fouquet: You have also seen in 2024 that some of our customer were not doing as well because they were not yet basically on this, AI opportunity. This has created a bit of, you know, this change also of, dynamic, last year. The second thing, AI has a couple of challenges, cost, energy efficiency. To improve that, innovation is needed. One of the innovation is Moore's Law, and we expect an acceleration of Moore's Law. We also expect that the market will have a higher product mix towards advanced logic and advanced DRAM. All of that is good for ASML. All of that will contribute to increase, as we explained in November, the need for the most advanced lithography machine, EUV, DUV, and this will contribute to basically increase the size of our business.

Speaker Change: But you have also seen in 2024 that some of our customers were not doing as well because they were not yet basically on this AI opportunity and this has created a bit of you know this change also of dynamic last year.

The second thing...

Speaker Change: AI has a couple of challenges. Cost, energy efficiency. To improve that, innovation is needed. One of the innovation is Moore's law and we expect an acceleration of Moore's law.

Speaker Change: We also expect that the market will have a higher product mix towards advanced logic and advanced DRAM.

And all of that is good for ASML.

Speaker Change: All of that will contribute to increase, as we explained in November, the need for the most advanced lithography machine, EUV, DeepUV, and this will contribute to basically increase the size of our business.

Christophe Fouquet: This is why when we look at 2030, our expectation in terms of revenue is that we will be somewhere between EUR 44 and 60 billion. In terms of gross margin, we are looking at a range of between 56% and 60%. Those are good numbers, again, resulting from this opportunity. Now you know that I'm an engineer still. I still spend quite some time on technology because technology, at the end of the day, is what feed our success. This is what prepare basically the opportunity for the next few years. As I said in my introduction, 2024 has been a great year for technology.

Speaker Change: This is why when we look at 2030, our expectation in terms of revenue is that we will be somewhere between 44 and 60 billion euros. In terms of gross margin, we are looking at a range of 56.

between 56 and 60 percent.

Speaker Change: So those are a good number, again, resulting from this opportunity.

Speaker Change: Now you know that I'm an engineer still, I still spend quite some time on technology, because technology at the end of the day is what feeds our success, this is what prepares basically the opportunity for the next few years.

Speaker Change: As I said in my introduction, 2024 has been a great year for technology.

Christophe Fouquet: We have released many important product on EUV, so we talked quite a bit about the latest Low-NA product, the NXE 3800, which provide almost 40% improvement on productivity. That tool was released to customer end of last year. We've been shipping quite a few of those tool, and those system are now being qualified. They will be very important part of the ramp of the advanced technology in the next few months. This is very important. We have demonstrated the full specification at ASML, major step, again, in terms of performance, and we are working now with customer to mature the platform. High-NA has been a big news. You know, High-NA is a program that we started in 2014.

Speaker Change: That tool was released to customer end of last year. We've been shipping quite a few of those tools and Those systems are now being qualified. They will be very important part of the ramp of the advanced technology in the next

Humance

Speaker Change: So this is very important. We have demonstrated the full specification at ISML. Major step, again, in terms of performance. And we are working now with customers to mature the platform.

Speaker Change: INA, INA has been a big news, you know, INA is a program that we started in 2014.

Christophe Fouquet: You can imagine that when at the end of Q4, we get our first 2 customer acceptances, this is a major validation, not only of the value of the technology we bring to the customer, but also of the investment we have made. This is millions of hours of work, a lot of innovation, and therefore, we are very, very happy that the feedback from our customer on High-NA is positive. They like what they see, and now we're going to work with them to define exactly when, how, and to what extent to introduce High-NA in the future. High-NA is going to complement very nicely Low-NA to drive advanced technology manufacturing moving forward. Now, we always talk a lot about EUV. DUV remains a very, very important product. Most of the wafers today are exposed with DUV.

Speaker Change: This is a major validation not only of the value of the technology we bring to the customer

Speaker Change: but also of the investment we have made because this is a million of hours of work, a lot of innovation and therefore we are very very happy that the feedback from our customer on INA is positive. They like what they see and now we're going to work with them to define exactly

Speaker Change: when, how, and in which extent to introduce INA in the future. But INA is going to complement very nicely low ENA to drive advanced technology manufacturing moving forward.

Speaker Change: Now we talk always a lot about UV. Deep UV remains a very, very important product.

Christophe Fouquet: EUV is a very small part of the lithography layers. You see it here, the number of exposure on DUV is going to continue to grow between now and 2030. There also we need innovation, also because DUV being a bit of a older technology, maybe the competition around those product is getting higher. We're continuing to invest, and here also we come with major innovation on our KrF product line with the first shipment of the NXT:870B, which allow us to get to more than 400 wafers per hour, so giving productivity. Productivity for customer means lower cost. Lower cost means for ASML that the customer will be more willing to work with those tool because they provide a cost advantage. We have also shipped our latest generation of immersion.

Speaker Change: And you see it here, the number of exposure on DPUV is going to continue to grow between now and 2030.

Speaker Change: So there also we need innovation, also because DPV being a bit of a holder of technology, maybe the competition around those products is getting higher. So we are continuing to invest, and here also we come with major innovation.

on our KRF.

Speaker Change: product line with the first shipment of the NXT 870B which allows us to get to more than 400 Wh per hour.

Speaker Change: So, giving productivity. Productivity for customer means lower cost, lower cost means for ASML that the customer will be more willing to work with those tools because they provide a cost advantage.

Speaker Change: And we have also shipped our latest generation of Immersion. So Immersion, if you want, is the most advanced deep UV technology before EUV. There also, the NXT2150 was shipped to an advanced DRAM customer, opening...

Christophe Fouquet: Immersion, if you want, is the most advanced DUV technology before EUV. There also, the NXT:2150i was shipped to an advanced DRAM customer, opening the era for, again, higher performance, higher productivity also on this tool. Finally, if you remember a few years ago, we started our application business, our holistic lithography business. We make still a lot of progress there. We grow the size of this business every year. If you look at the year-start install base, we have more than 1,000 systems right now in the field, which is of course very significant. The one thing I'd like to focus a bit more today is e-beam. If you remember, we acquired HMI a few years ago, a Taiwanese company doing e-beam.

Speaker Change: The era for again higher performance higher productivity also on this tool

Finally, if you remember a few years ago, we...

Speaker Change: Still a lot of progress there. We grow the size of this business every year. If you look at the year-start install base, we have more than 1,000 systems right now in the field, which is of course very significant.

Speaker Change: But the one thing I'd like to focus a bit more today is e-beam. If you remember, we acquired HMI a few years ago, a Taiwanese company, doing e-beam. And the reason for that was to bring fast e-beam technology to the market, what we call multi-beam.

Christophe Fouquet: The reason for that was to bring fast e-beam technology to the market, what we call multi-beam. This year, the other big news I will say on technology, together with the first customer acceptance for High-NA product, was the first customer acceptance of our multi-beam product by several customer. Which is again a validation of the technology, the investment, but also the need moving forward of this tool. You are mostly a bit less familiar with this, but these are also some of the very important technology, important product we are developing for our customer. We are also very happy to achieve good results on that last year. Now we have to prepare the future with just more than technology. People is a strong focus in ASML.

Speaker Change: And this year the other big news I would say on technology together with the first customer acceptance for INA product was the first customer acceptance of our multi-beam product by several customers.

Speaker Change: which is again a validation of the technology, the investment, but also the need moving forward of this tool.

Speaker Change: So you are mostly a bit less familiar with this, but these are also some of the very important technology, important product we are developing for our customer, and we are also very happy to achieve good results on that last year.

P. Paul

Christophe Fouquet: I think that, you know, when Roger and I look at the assets of the company, I think people always come first because they are capable, year after year, to create all those technological miracles in R&D, but also bring them to customers and make sure that customers can really use them in high-volume manufacturing. Investing in people remains absolutely a priority for ASML. We do it differently than we did it in the past because we have a long-term view. We invest, I would say, earlier. What you see here are a few examples. We are getting more and more interns in ASML, so we are opening the doors of ASML to students as early as possible so that they get an idea, a bit of what we are doing.

Speaker Change: but also bring them to customer and make sure that customer can really use them in high-volume manufacturing. So, investing in people remains absolutely a priority for ASML.

Speaker Change: And we do it differently than we did it in the past, because we have a long-term view. We invest, I will say, earlier.

Speaker Change: So what you see here are a few examples. We are getting more and more interns in ASML. So we are opening the doors of ASML to students as early as possible so that they they get an idea a bit of what we are doing and that, you know, we make sure that ASML is high on their list when it comes to choose their next job.

Christophe Fouquet: That, you know, we make sure that ASML is high on their list when it comes to choose their next job. We have been focusing on diversity. We will continue to focus on diversity. We are very happy that over time, the percentage of women in the company has grown. It has been growing every year for the last 10 years. It continues to grow. In order to do that, we have to work very early on the pipeline. We have to go basically also to school, university, to make sure that right there, women also find an interest in ASML. You know, ASML used to be seen as a company that is a bit rough and you only have guys, engineers working there.

Speaker Change: We have been focusing on diversity. We will continue to focus on diversity.

Speaker Change: percentage of women in the company has grown. It has been growing every year for the last 10 years. It continues to grow. And in order to do that, we have to work very early on on the pipeline. So we have to go basically also to school, university, to make sure that right there,

find an interest in asthma.

Speaker Change: You know, ASML used to be seen as a company that is a bit rough and you only have guys, engineers working there. I think this image is changing for good reason because this is, of course, a very open, very interesting place to be for anyone.

Christophe Fouquet: I think this image is changing for good reason, because this is of course a very open, very interesting place to be for anyone. Finally, we're reaching out to universities. A lot of you, at least the local journalists, are very much aware of the cooperation we have with the Eindhoven University of Technology in Eindhoven, many other universities in the Netherlands. We're also extending that basically to a very global network of universities. There also, it's a way to invest in the future, and I will say a way to support, in a broader term, the entire industry, because you understand that not all those students will come to ASML, but they may end up supporting our customers, our suppliers, et cetera, et cetera. That's also very important. More and more focus paid on that.

Speaker Change: support in a broader term the entire industry because you understand that not all those students will come to SML but they may end up supporting our customers, our suppliers etc etc and that's also very important.

Speaker Change: So more and more focus paid on that, I think this is really a key element of attention for the leadership in ASML in the recent years.

Christophe Fouquet: I think this is really a key element of attention for the leadership in ASML in the recent years. In addition, we are growing. I want to show you the number for 2030. This is clearly according to growth in people, growth in capacity. As you know, we are a global company. We have a very strong presence in the Netherlands, of course, where we have the core of our R&D, the core of our manufacturing, but we also have activity in the US, elsewhere in Europe, Germany, for example, and in Asia. As we grow our business, those places will grow with us. You will see. I mean, if you drove around for some of you this morning, you see that there's still a lot of construction happening here in the campus.

Speaker Change: Extension, we are going, I want to show you the number for 2030, this is

elsewhere in Europe, Germany for example, and in Asia.

Speaker Change: And as we grow our business, those places will grow with us.

Speaker Change: So you will see, I mean, if you drove around for some of you this morning, you see that there's still a lot of construction happening here in the campus. You know about our plan of the second campus in Eindhoven.

Christophe Fouquet: You know, about our plan of the second campus in Eindhoven. This also extends again to other parts of the world. This is in preparation to support basically our growth. Still a lot of activity here. When we look at our ESG sustainability agenda, I think we started very early on to drive this agenda, you know, long before we had CSRD and all those regulations coming our way. The reason for that is because we believe this was the right things to do. We believe it was important to reduce our energy consumption, reduce our impact on our environment through some of the logistic activity we have. We believe, I said it already, that our people are at the core of ASML success.

Speaker Change: But this also extends again to other parts of the world, and this is in preparation to support basically our growth. So still a lot of activity here.

When we look at our ESG sustainability agenda,

Speaker Change: The reason for that is because we believe this was the right thing to do. We believe it was important to reduce our energy consumption, reduce our impact on our environment through some of the logistic activity we have.

Christophe Fouquet: We developed basically a lot of activity to make sure they feel well in ASML, and I think that we continue in terms of governance to have, you know, the ambition to be a leader in this industry. We want to lead by example. To give you a few examples on environment, we have reduced our EUV consumption per wafer by more than 54% since the first EUV machine, which is enormous. We're still working to get another 40% off in the next few years. We are actively making sure that the amount of energy we need on the EUV machine to expose the wafer goes down. We become a bit brave. We shipped our first DUV system on a boat, which, you know, I can tell you 10 years ago was out of the question in ASML.

Speaker Change: And I think that we continue in terms of governance to have the ambition to be a leader in this industry. So we want to lead by example.

So to give you a few examples on the environment.

Speaker Change: We have reduced our EUV consumption per wafer by more than 54% since the first EUV machine, which is enormous.

Speaker Change: And we're still working to get another 40% off in the next few years. So we are actively making sure that the amount of energy we need on the EV machine to expose the wafer goes down.

Speaker Change: We've become a bit brave, we shipped our first DPV system on a boat.

Speaker Change: which, you know, I can tell you 10 years ago was out of the question in ASML.

Christophe Fouquet: We are learning how to do things differently and create new opportunity. We shipped our first DUV tool, our first YieldStar system as well. In the future, we plan to do a lot more than that in coordination with our customer, supplier, et cetera. On social, we have a lot of activity with the community. We are very proud of that. More than 57 projects and more coming. We're spending time, sorry, on housing, on infrastructure projects, of course, here in Veldhoven, but not only. Everywhere we have a strong presence. We believe this is important to do that. We're also very happy that our employees are contributing themselves. We have a strong gift matching program, which is getting also quite some success among our employees, and we are very thankful that they do that.

Speaker Change: But we are learning how to do things differently and create new opportunities. We shipped our first DPV tool, our first Heelstar system as well, and in the future we plan to do a lot more than that, in coordination with our customers, suppliers, etc.

Speaker Change: We're spending time on housing, on infrastructure projects, of course here in Brentport, but not only Everywhere we have a strong presence. We believe this is important to do that

Speaker Change: And we're also very happy that our employees are contributing themselves. So we have a strong gift matching program, which is getting also quite some success among our employees. And we are very thankful that they do that.

Christophe Fouquet: We skip governance. We get pretty high score on sustainability. I think I'm more hot on what we do than the score we get. I think, you know, the rest of the industry is also recognizing a bit this effort. One last thing to end, because I think it's important. This is about, again, the community. I talked about housing. We try to do more to really, I would say increase, improve the experience of the people around us. We had many discussions about growth, and one of the things Roger and I believe, the rest of the leadership believe, is that we want to grow, but we never want to be a burden for the community. In order to do that, you have to find the right balance and, of course, proactively contribute to make sure that housing, school, infrastructure are available.

Speaker Change: We skip governance. We get a pretty high score on sustainability. I think I'm more hot on what we do than the score we get. But I think the rest of the industry is also recognizing a bit this effort.

Speaker Change: One last thing to end because I think it's important. This is about again the community.

Speaker Change: We try to do more to really, I would say, increase, improve the experience of the people around us.

Speaker Change: We had many discussions about growth and one of the things Roger and I believe, the rest of the leadership believe, is that we want to grow but we never want to be a burden for the community.

Christophe Fouquet: That of course, discussions that require strong support from local, and global government. We have those discussions as well, but that remains important. Education, STEM. We start very early. That's why you see a picture of very young kids. We believe that you have to start as early as possible to explain, you know, children why this is a great world, why this is a positive world, why ASML, why this industry is positively contributing to society, to humanity. We help also people who are working on other ESG innovation locally again, but also beyond that. Well, you may have seen, in our social media also this year, we have quite some activity when it comes to employee giving.

Speaker Change: That, of course, is a discussion that requires strong support from local and global governments. So we have those discussions as well, but that remains important.

Education, STEM,

Speaker Change: We help also people who are working on other ESG innovation, locally again, but also beyond that.

Speaker Change: and well you may have seen in our social media also this year we have quite some activity when it comes to employee giving. So we talked about the gift matching program but we have also a lot of people volunteering basically every day many hours in order to engage with the community.

Christophe Fouquet: We talked about the gift matching program, but we have also a lot of people volunteering basically every day, many hours in order to engage with the community. This is a bit who we are today. Roger is going to now give you a view of the number. It's also exciting. With no further delay, I'd like to introduce Roger.

Speaker Change: So this is a bit who we are today. Roger is going to now give you a view of the number. That's also exciting. So with no further delay I'd like to introduce Roger.

Roger Dassen: Thank you, Christophe. It's good to hear the CEO say that, numbers are exciting, and they are. That's what we want to share with you. Christophe said it, if we look at Q4, it was a very strong quarter. It was a strong quarter. It was a quarter where I think the company really ran on all cylinders. It was a strong quarter based on the top line. If you look at net sales, it was a record quarter for ASML exceeding our guidance from that vantage point.

Thank you, Christophe.

Speaker Change: So, if you look at Napsales, it was a record quarter for ASML, exceeding our guidance from that vantage point.

Roger Dassen: It was a very strong quarter from a gross margin perspective, particularly helped by the fact that we, you know, that we had very strong install base business. That was one of the reasons why revenue was up. It was also an important driver of the gross margin. It was a very strong quarter because we had a very strong order intake of EUR 7.1 billion, which you know is a very good start, I think for this year. It's a very strong quarter because we had very significant cash generation in Q4, if only to make the CFO very happy. You know, all in all, I think it's a quarter to tick all the boxes.

Speaker Change: It was a very strong quarter because we had a very strong order intake of 7.1 billion, which is a very good start, I think, for this year.

Speaker Change: And it's a very strong quarter because we had very significant cash generation in the NQ4 If only to make the CFO very happy, so you know all in all I think it's a quarter to tick all the boxes

Roger Dassen: It was a quarter that indeed meant that we could end 2024 as a really strong year. If you look at what we said at the beginning of the year, you know, we said, and Christophe made reference to it, a transition year. We said we expect the business to be approximately similar to what we had in 2023. You know, indeed, we were able to get a little bit better than 2023 with a top line of EUR 28.3 billion. Gross margin of 51.3%. Also a little bit better than what we expected at the beginning of the year. Strong net income, as you see here, EUR 7.6 billion in earnings per share of EUR 19.25.

Speaker Change: You know, we said, and Christophe made reference to a transition year, we said we expect the business to be approximately similar to what we had in 2023 and, you know, indeed we were able to get a little bit better than 2023 with a top line of $28.3 billion.

Speaker Change: Gross Margin of 51.3%, also a little bit better than what we expected at the beginning of the year.

Roger Dassen: We were able to return EUR 3 billion to shareholders, either through dividends or share buybacks. We'll come back to that in a moment. All in all, I think a pretty strong picture for 2024 and, you know, more or less in line and actually a little bit better than what we anticipated at the beginning of the year. If you look at the different businesses, already Christophe highlighted some of the key elements in there. If you look at the numbers for EUV sales, a little bit down, 9% down, to EUR 8.3 billion with 44 EUV systems, both NXE and the EXE. Also there, it was a transition year.

Speaker Change: And we were able to return 3 billion to shareholders either through dividends or share buybacks. We'll come back to that in a moment. So, all in all, I think a pretty strong picture for 2024 and, you know, more or less in line and actually a little bit better than what we anticipated at the beginning of the year.

Speaker Change: with 44 EUV systems, both Annex E and the EXE, but also there, it was a transition year. It was a transition year because we did introduce after, you know, 10 years, as Christophe explained, after 10 years of working on HiNA, we were able to get the first HiNA tool really to the customer, get it installed at the customer and get a customer to accept the tool. So I think that was an important part of the transition.

Roger Dassen: It was a transition year because we did introduce after, you know, 10 years as Christophe explained, after 10 years of working on High-NA, we were able to get the first High-NA tool really to the customer, get it installed at the customer, and get a customer to accept the tool. I think that was an important part of the transition. We were able to bring the 3,800 into the field and indeed get customers excited about that tool as well. That is a tool that really drives the performance of EUV Low-NA to the next level. You know, we used to look at an EUV tool with 160 wafers per hour. This one in final configuration gets you to 220 wafers per hour.

Speaker Change: We were able to bring the 3800 into the field and indeed get customers excited about that tool as well. That is a tool that really drives the performance of EUV low and A to the next level.

Speaker Change: You know, we used to look at an EUV tool with 160 wafers per hour. This one, a final configuration, gets you to 220 wafers per hour. So also that, I think, is the biggest step that we made in EUV since the inception in terms of the improvement of productivity. So from that vantage point, being able to bring that one into the field, I think, is a major step as well. So EUV, a little bit down in terms of total business, but really a transition year that is positioning us very well for the future.

Roger Dassen: Also that I think is the biggest step that we made in EUV since the inception in terms of improvement of productivity. From that vantage point, you know, being able to bring that one into the field I think is a major step as well. EUV little bit down in terms of total business, but really a transition year that is positioning us very well for the future. DUV grow a bit, 4% as you see here. Also there we introduce important new products into the market with the 2150, Christophe showed it, and the 870B in the KrF system on the NXT platform. Major breakthroughs from a technology perspective there.

Speaker Change: DPV grew a bit, 4% as you see here, and also there we introduced important new products into the market with the 2150, Christophe showed it, and the 870B, the KRF system on the NXT platform.

Speaker Change: major major breakthroughs from a technology perspective there. Application grew very nicely with the 20% both yield star and multi-beam in particular contributing to that to that growth.

Roger Dassen: Applications grew very nicely with the 20% both YieldStar and MultiBeam in particular contributing to that growth. There I think, you know, Christophe again mentioned that the fact that we were able to get sign off from multiple customers on MultiBeam, again, a project that we've been working on for many, many years, I think is a milestone for the company. I find the install base growing very, very strongly at 16%, and this is both on the service side and also on the upgrade side. All in all, as I mentioned, 2024, you know, quite in line with what we expected at the beginning of the year and actually exceeding that a little bit.

Speaker Change: And there I think, you know, and Christophe again mentioned that the fact that we were able to get sign-off from multiple customers on MultiBeam, again a project that we've been working on for many many years, I think is a milestone for the company.

Speaker Change: And finally, Install Base, growing very, very strongly at 16%, and this is both on the service side and also on the upgrade side. So all in all, as I mentioned, 2024, you know, quite in line with what we expected at the beginning of the year and actually exceeding that a little bit.

Roger Dassen: If we move to the composition of our sales, a few things that immediately you will recognize. Immersion, very strong. You saw that in the growth number for DUV, but clearly driven by the immersion business, making up for 44% of our systems sales. Also clear that memory is very strong. And there I think the importance of high bandwidth memory to make AI work, I think is clearly recognized, and I think that's filtered through also in the order. Memory, you know, quite well recovered, I would say, from 2023. If you look at the regional mix, obviously the thing that catches your eye is China.

Speaker Change: If we now move to the composition of our sales, a few things that immediately you will recognize. Immersion is very, very strong. You saw it in the growth number for DPV, clearly driven by the immersion business, making up for 44% of our system sales.

Speaker Change: Also clear that memory is very strong and there I think the importance of high bandwidth memory to make AI work I think is clearly recognized and I think that filtered through also in the order so memory you know quite well recovered I would say from 2023.

Speaker Change: If you look at the regional mix, obviously the thing that catches your eye is China. China is very strong at 41%.

Roger Dassen: China very strong at 41%. Already quite strong, I would say, in 2023 at 29%. You know the story. We've said it before. You know, all the way through 2022, our order fill rate for China was quite low. We had an order fill rate for China of around 40%, so we could only give to China 40% of what they were asking for. As a result of that, the backlog for China had been filled all the way through 2022 massively. What you see here is that, you know, in 2023 and 2024, with the capacity expansions that we've been carrying through, we were able to execute on that historically built up backlog.

already quite strong, I would say, in 2023 at 29%.

Speaker Change: You know the story, we've said it before, you know all the way through 2022, our order fill rate for China was quite low, we had an order fill rate for China of around 40%, so we could only give to China 40% of what they were asking for, so as a result of that

Speaker Change: The backlog for China had been filled all the way through 2022, massively. And what you see here is that in 2023 and 2024, with the capacity expansions that we've been carrying through, we were able to execute on that historically built-up backlog.

Roger Dassen: As we mentioned before, we do expect that on a going forward basis, China will go back to more normal percentages of our business, and that means lower 20%, you know, is what we expect them to contribute to our sales, this year. That is commensurate with the representation of China in our backlog today. Those are just some of the headlines if you look at the composition of our net sales. I think this gives you a similar picture. Again, it shows very clearly the strength of the memory business, which has been nicely building up, I would say, over the past couple of years.

Speaker Change: As we mentioned before, we do expect that on a going forward basis, China will go back to more normal percentages of our business, and that means lower 20% is what we expect them to contribute to our sales.

Speaker Change: this year and that is commensurate with the representation of China in our backlog today. So those are just some of the headlines if you look at the composition of our net sales.

Speaker Change: I think this gives you a similar picture. Again, it shows very clearly the strength of the memory business which has been nicely building up, I would say, over the past couple of years. But the real spike this year, given the significance of high bandwidth memory for AI.

Roger Dassen: A real spike this year, given the significance of High Bandwidth Memory for AI. This gives you the full PNL, if you like, for the consolidated statements of operation. Again, as I mentioned before, I think very much in line with 2023. Most of the numbers are quite comparable, although you would say that, you would see that, on the R&D side, we keep on pushing the pedal to the metal, right?

Speaker Change: This gives you the full P&L, if you like, for the consolidated statements of operation.

Speaker Change: and again as I mentioned before I think very much in line with 2023 so most of the numbers are quite comparable.

Speaker Change: Although, you would see that on the R&D side, we keep on pushing the pedal to the metal, right? So it's very clear that with all the projects that we have, with the R&D pipeline that we have, with the very strong ambitions that we have, also in the medium to long term, and the good ideas that we have, we keep on investing in R&D, because I think that is something that we will be able to do.

Roger Dassen: It's very clear that with all the projects that we have, with the R&D pipeline that we have, with the very strong ambitions that we have also in the medium to long term, and the good ideas that we have, we keep on investing in R&D, because I think that is something that we will be able to very firmly capitalize on in the years to come. In terms of net bookings, I just want to highlight that because net bookings has you know captured the headlines in a few quarters last year, and not always in a positive way. Just, you know, if you look at it from an annual perspective, if you put all those quarters together, you see it wasn't too shabby, was it?

very firmly capitalize on in the years to come.

Speaker Change: But just, you know, if you look at it from an annual perspective, if you put all those quarters together, you see it wasn't too shabby, was it? I mean, you're looking at an order intake for 2024 more or less on par with the order intake that we had in 2023.

Roger Dassen: I mean, you're looking at an order intake for 2024, more or less on par with the order intake that we had in 2023. You know, as we mentioned at the beginning of the year, quite in line with what we had in 2023. A bit of growth and the fact that we were able to sustain the growth margin in spite of the fact that we had the first High-NA tools recognized, I think is a strong achievement. Cash return to shareholders. What we propose to the AGM is to declare a total dividend of EUR 6.40 per ordinary share. That would be a 5% increase over the total dividend for 2023.

Speaker Change: So, you know, as we mentioned at the beginning of the year, a year, you know, quite in line with what we had in 2023. A bit of growth and the fact that we were able to sustain the growth margin in spite of the fact that we had the first high innate tools recognized, I think is a strong achievement.

Speaker Change: Cash return to shareholders. What we propose to the AGM is to declare a total dividend of 6.40 euros per ordinary share. That would be a 5% increase over the total dividend for 2023. And I think that's very much in line with the policy that we have, a policy of growing dividends and whatever cash remains after we've used the cash in the business, whatever excess cash.

Roger Dassen: I think that's very much in line with the policy that we have, a policy of growing dividends. You know, whatever cash remains after we've used the cash in the business, whatever excess cash is there, and after distribution of dividend will be used in terms of share buybacks. Share buybacks this year, fairly low in comparison to some of the previous years. As you see it here, we bought back shares for approximately EUR 500 million. That is related to what I mentioned a bit earlier. Q4 was very, very strong in terms of cash generation, but it really made up like, you know, more than 90%, I think, of the total cash generation for the year. The cash came in quite late.

Speaker Change: And that is related to what I mentioned a bit earlier. Q4 was very, very strong in terms of cash generation, but it really made up like, you know, more than 90% I think of the total cash generation for the year. So the cash came in quite late.

Roger Dassen: At the end of the year, we're actually looking at a very high cash balance. As a result of that, we chose not to do too much share buybacks in 2024. In terms of outlook, starting with Q1 2025, we expect net sales between EUR 7 and a half billion and 8 billion. Installed base at EUR 2.1 billion is what we expect for the first quarter, which is on par with the, you know, very strong installed base sales that we already showed in Q4. Gross margin for this first quarter between 52% and 53%.

Speaker Change: So at the end of the year, we're actually looking at a very high cash balance, but as a result of that, we chose not to do too much share buybacks in 2024.

Speaker Change: Install base at 2.1 billion is what we expect for the first quarter, which is on par with the, you know, very strong install base sales that we already showed in Q4.

Roger Dassen: A little bit higher than the guidance or narrower if you want to define it in that way, than the guidance that you see there for the full year. That is also related to the fact that in Q1 we will not see revenue recognition for High-NA. High-NA will be more skewed towards the second half of the year as a result of that a slightly better gross margin in Q1. R&D approximately at the level that we saw for last quarter. SG&A, I think well managed even a little bit below the level that we had in the last quarter. For the full year, we're looking at total net sales between EUR 30 and 35 billion.

Speaker Change: That is also related to the fact that in Q1, we will not see revenue recognition for high NA. So high NA will be more skewed towards the second half of the year, as a result of that a slightly better gross margin in Q1.

Speaker Change: R&D approximately at the level that we saw for last quarter and SG&A I think well managed even a little bit below the level that we had in the last quarter.

Speaker Change: And then for the full year, we're looking at total net sales between 30 and 35 billion. So this is in line with what we discussed in Q3.

Roger Dassen: This is in line with what we discussed in Q3. A gross margin between 51% and 53%. You do see a good increase there in comparison to, you know, previous years. An annualized effective tax rate of around 17%. That is the guidance that we have provided at Q3 and that we're reiterating actually today. I would say all in all, a very strong start of the year. Typically, what you would see is a very strong Q4, a not so strong Q1. I think what you just saw was a pretty strong Q4, pretty strong Q1. I think that's good momentum.

Speaker Change: a gross margin between 51 and 53 percent, so you do see a good increase there in comparison to, you know, to previous previous years and an annualized effective tax rate of around 17 percent. So that is the guidance that we have provided at Q3 and that we're reiterating in actually today.

Speaker Change: So I would say, all in all, a very strong start of the year. Typically what you would see is a very strong Q4, a not so strong Q1. I think what you just saw was a pretty strong Q4, a pretty strong Q1. So I think that's good momentum.

Roger Dassen: Overall, you know, looking forward a little bit, beyond 2025, what do we expect? I think Christophe gave you the foundational comments for how we look at the business. What is very important, and you saw that also in the R&D number, we continue to invest in R&D in a big way. The roadmap that we have is quite broad and quite deep, and we do believe that it sets us up for capturing the opportunities that the markets provide. The market as we see it, and as many people see it, the market by 2030, it could be a market, a semiconductor market that could exceed $1 trillion.

Speaker Change: Overall, and you know, looking forward a little bit beyond 2025, what do we what do we expect? And I think Christophe gave you the foundational comments.

Speaker Change: for how we look at the business. What is very important, and you saw that also in the R&D number, we continue to invest in R&D in a big way. So the roadmap that we have is quite broad and quite deep, and we do believe that it sets us up for capturing the opportunities that the markets provide.

Roger Dassen: You know, very significant growth in comparison to where we are today. Obviously, as Christophe said, AI is a very important driver of that growth. We believe we are well positioned to, you know, with our products, capture the opportunities that such a growing semiconductor market actually provides. In the capital markets today, we talked quite a bit about our roadmap there and about how we see, you know, a very significant share of ASML and an increasing share of ASML in the fabs of our customers, both on the logic side and particularly also on the DRAM side.

Speaker Change: In the Capital Markets Day we talked quite a bit about our roadmap there and about how we see a very significant share of ASML and an increasing share of ASML.

in the fabs of our customers.

Speaker Change: both on the logic side and particularly also on the on the DRAM side. In terms of what that pans out, you know, how that pans out and what that leads to, you know, reiterating the numbers that Christophe just gave you as well.

Roger Dassen: In terms of what that pans out, you know, how that pans out and what that leads to, you know, reiterating the numbers that Christophe just gave you as well. We see growth scenarios leading to a market in 2030 for us, or a business for us by 2030, somewhere between EUR 44 billion and 60 billion, and a gross margin between 56% and 60%. I would say both, you know, good upticks from where we are today. Finally, reiterating our capital allocation and financing policy, which hasn't changed. Again, what we need for the business, we actually use in the business. You saw some of the projects that we're driving.

Speaker Change: Somewhere between 44 billion and 60 billion and the gross margin between 56 and 60 percent I would say both, you know good optics from where we are where we are today

Speaker Change: And finally, reiterating our capital allocation and financing policy, which hasn't changed. So again, what we need for the business, we actually use in the business. And you saw some of the projects that we're driving. So we have the R&D efforts, but also the CapEx efforts that were very visible and tangible on the slide that Christophe presented.

Roger Dassen: We have the R&D efforts, but also the CapEx efforts that were very visible and tangible on the slide that Christophe presented. Well, you know, we have a policy of growing dividends, and then whatever remains will be shared with our shareholders by means of share buyback. That's the longer-term perspective. I think it's looking bright, and it's fueled by many of the dynamics in the market that Christophe talked about and many of the very strong ideas, projects, and products that we have on our roadmap. With that, I would like to hand it back over again to Monique.

Speaker Change: will, you know, we have a policy of growing dividends and then whatever remains will be shared with or shareholders by means of by means of share buyback, so

Speaker Change: That's the long-term perspective. I think it's looking bright, and it's fueled by many of the dynamics in the market that Christophe talked about, and many of the very strong ideas and projects that we have on our roadmap.

Speaker Change: And with that, I would like to hand it back over again to Monique, who is going to grill us on Q&A. Yeah, just stay here. There you go. And I'd like to invite Christophe as well.

Monique Mols: Yep.

Roger Dassen: Who is going to-

Monique Mols: So you can-

Roger Dassen: Grill us on Q&A.

Monique Mols: Yeah. Just stay here.

Roger Dassen: There you go.

Monique Mols: I'd like to invite Christophe as well for some Q&As. We are getting questions online, so continue to submit those if you're watching. Just a small reminder, we are only taking questions from journalists. It is a media conference, and the conference call for analysts will be later today at 3:00 p.m. I see a lot of hands going up, and Mark has the microphone. Mark, can you-

Speaker Change: for some Q&A's. We are getting questions in online so continue to submit those if you're watching. Just a small reminder we are only taking questions from journalists so

Mark: It is a media conference and the conference call for analysts will be later today at three o'clock I see a lot of hands going up and Mark has the microphone. So Mark, can you

Roger Dassen: Make a choice.

Monique Mols: Start there? Yeah. With Bo Smolka. Can you say your name first and your publication, so everyone knows who you are?

Max Smolka: Start there? Yeah, with Max Smolka. Smolka, can you say your name first and your publication, so everyone knows who you are? Sure. Thank you very much. It's Klaus Max Smolka of German newspaper Frankfurter Allgemeine Zeitung.

Klaus Max Smolka: Sure. Thank you very much. It's Klaus Max Smolka of German newspaper Frankfurter Allgemeine Zeitung. The elephant in the room this week is DeepSeek. What is your expectation? What's the effect of DeepSeek-like technology on ASML? And in particular, is DeepSeek technology going to jeopardize your sales in terms of the most advanced high technology machines? Thank you.

The elephant in the room this week is DeepSeek.

Speaker Change: Is deep-seek technology going to jeopardize your sales in terms of the most advanced high-technology machines? Thank you.

Monique Mols: Yep. Christophe?

Roger Dassen: Yeah. I think a lot of this question in the last couple of days. First I'd like to say we're not a model expert, so I don't have a strong opinion on how good or bad the new model is. I'll leave that part aside. From a more general point of view, you know, we believe that AI success, AI expansion has 2 main challenges moving forward. Cost, put differently, today AI is too expensive to be able to be rolled out to many applications, and power consumption. In order for AI to be everywhere, we need to see major progress on cost and energy consumption. That's the first thing. The second thing is, if you look at this industry, lowering cost has always contributed to more volume, right?

Christophe Fouquet: Yeah. I think a lot of this question in the last couple of days. First I'd like to say we're not a model expert, so I don't have a strong opinion on how good or bad the new model is. I'll leave that part aside. From a more general point of view, you know, we believe that AI success, AI expansion has 2 main challenges moving forward. Cost, put differently, today AI is too expensive to be able to be rolled out to many applications, and power consumption. In order for AI to be everywhere, we need to see major progress on cost and energy consumption. That's the first thing. The second thing is, if you look at this industry, lowering cost has always contributed to more volume, right?

From a more general point of view,

You know, we believe that...

E.I.

Success, AI expansion has two main challenges moving forward. Cost

Speaker Change: say differently, today AI is too expensive to be able to be rolled out to many many applications and power consumption.

Speaker Change: And in order for AI to be everywhere, we need to see major progress on cost.

and energy consumption.

Speaker Change: That's the first thing. The second thing is, if you look at this industry, lowering cost has always contributed to more volume. This is basically the fundamental of Moore's Law. Moore's Law is about reducing cost every single generation, so that you create more opportunity.

Roger Dassen: This is basically the fundamental of Moore's Law. Moore's Law is about reducing cost every single generation so that you create more opportunity.

Christophe Fouquet: This is basically the fundamental of Moore's Law. Moore's Law is about reducing cost every single generation so that you create more opportunity. I will say in general that any technology, whatever it is, that will contribute into a cost reduction overhaul of AI will increase the opportunity. This has been true in this industry for the last 40, 60 years. I think it's still true moving forward. That's the first thing. If you ask me, for us, anyone that lower cost is in fact a good news for ASML, because lower cost means AI can be used in more application. More application mean more chips. We are in the business of providing equipment to people who make chips.

Christophe Fouquet: I will say in general that any technology, whatever it is, that will contribute into a cost reduction overhaul of AI will increase the opportunity. This has been true in this industry for the last 40, 60 years. I think it's still true moving forward. That's the first thing. If you ask me, for us, anyone that lower cost is in fact a good news for ASML, because lower cost means AI can be used in more application. More application mean more chips. We are in the business of providing equipment to people who make chips. That's the first thing. The second thing I also mentioned, AI is a huge opportunity. Therefore, I think, you know, you should expect to see a few elephant in the rooms in the next few months or few years because everyone will want to be in.

So I would say in general that any technology...

Speaker Change: whatever it is, that will contribute into a cost reduction overhaul of AI will increase the opportunity. This has been true in this industry for the last 40-60 years. I think it's still true moving forward.

Speaker Change: That's the first thing. So if you ask me for us, anyone that lower cost is in fact a good news for SML because lower cost means AI can be used in more application, more application means more chips and we are in the business of providing equipment to people who make chips.

Christophe Fouquet: That's the first thing. The second thing I also mentioned, AI is a huge opportunity. Therefore, I think, you know, you should expect to see a few elephant in the rooms in the next few months or few years because everyone will want to be in. I think the competition, especially when it comes to software, because I think this is where the threshold to access is the lowest, will be very high. You cannot have an industry with this amount of opportunity without, you know, the key player being, I would say, challenged.

So that's the first thing.

The second thing also mentioned, AI is a huge opportunity.

Speaker Change: Therefore, I think, you know, you should expect to see a few elephants in the rooms in the next few months or few years because everyone will want to be in.

Christophe Fouquet: I think the competition, especially when it comes to software, because I think this is where the threshold to access is the lowest, will be very high. You cannot have an industry with this amount of opportunity without, you know, the key player being, I would say, challenged. I think you will see a lot more of those discussion happening in the next few months or years. I think it's a good news, if I make it short. Again, I don't know exactly what DeepSeek can or cannot do, but I said again, anything that will drive costs down is a good news for ASML on the long term.

Speaker Change: And I think the competition, especially when it comes to software, because I think this is where the threshold to access is the lowest, will be very high.

Speaker Change: So, you cannot have an industry with this amount of opportunity without, you know, the key player being, I would say, challenge.

Christophe Fouquet: I think you will see a lot more of those discussion happening in the next few months or years. I think it's a good news, if I make it short. Again, I don't know exactly what DeepSeek can or cannot do, but I said again, anything that will drive costs down is a good news for ASML on the long term.

Speaker Change: Again, I don't know exactly what DeepSea can or cannot do, but as I said again, anything that will drive costs down is good news for ASML on the long term.

Monique Mols: Yeah. Thank you, Christophe. Kim here, The Wall Street Journal.

Thank you, Christophe. Kim here, Wall Street Journal.

Kim Mackrael: Thank you.

Monique Mols: Thank you.

Kim Mackrael: Kim Mackrael from The Wall Street Journal. Another DeepSeek question. Sorry about that. I'm wondering, you know, over recent years, export controls to China and to particular fabs have been tightened. Does DeepSeek say anything to you about the effectiveness of those controls? What impact do you think controls have had on DeepSeek or on the ability to do something like that? Thanks.

Thank you.

Speaker Change: Does DeepSeek say anything to you about the effectiveness of those controls? What impact do you think controls have had on DeepSeek or on the ability to do something like that?

Christophe Fouquet: Yeah. I think that any answer on that would be quite speculative. I think, I don't know. Again, there's a lot of opinion being given on, you know, what how this relate to export control. I think it's hard to say. I think you look at, we talk about software, we talk about algorithm, we talk about people working to develop better algorithm than other. I think you're still pretty high at the surface of AI. Do you know what I mean? I think the software part, the algorithm part will be the most open field, most probably moving forward. I will not draw any conclusion. I think you will see a lot of people trying to do that. I think, of course, the topic being emotional, this is also a reason for that.

Thank you.

Speaker Change: Yeah I think that any answer on that would be quite speculative so I think I don't know again there's a lot of opinion being given on you know what how this relates to export control I think it's hard to say.

Speaker Change: I think you look at, we talk about software, we talk about algorithms, we talk about people working to develop better algorithms than others.

Speaker Change: I think you're still pretty high at the surface of AI, if you know what I mean. I think the software part, the algorithm part, will be the most open field, most probably, moving forward.

Speaker Change: So, I would not draw any conclusion. I think you will see a lot of people trying to do that. I think, of course, the topic being emotional, this is also a reason for that, but I don't know, to be honest. I think that would be highly speculative.

Christophe Fouquet: I don't know, to be honest. I think that will be highly speculative.

Monique Mols: Yeah. Okay. I see you. Let's return to a question online from Le Monde.

Thank you.

Let's return to a question online from Le Monde.

Christophe Fouquet: Must be for you.

Speaker Change: What about the Beethoven plan of the government? Is everything okay with the promised investments? And will ASML stay definitely in the Netherlands?

Monique Mols: Yeah. No. What about the Beethoven plan of the government? Is everything okay with the promised investments, and will ASML stay definitely in the Netherlands? I think that's also a question, especially, you know, there's some speculation and some chat in the news about France. Maybe you wanna address that first, and then we go to Beethoven.

Speaker Change: question, especially, you know, there's some speculation and some chat and news about France. So maybe you want to address that first, and then we go to Beethoven. Well, I think we've been very clear many, many times, and I'm going to try to be clear again, but this is the place we want to be.

Christophe Fouquet: Well, I think we've been very clear many times, and I'm going to try to be clear again, but this is the place we want to be.

Monique Mols: Right.

Christophe Fouquet: This is the place we want to be because we have developed our infrastructure, R&D, manufacturing here in Veldhoven. We believe that keeping those two close is very important for our success. We want to continue to grow here, you know, around Veldhoven, and this is why we had this, basically, agreement to look for a second campus, and we are finalizing that. We want to be here. I cannot be more-

Speaker Change: We believe that keeping those two close is very important for success. So we want to continue to grow here, you know, around Veldhoven, and this is why we had this basically agreement to look for a second campus, and we are finalizing that.

Monique Mols: Yeah.

Christophe Fouquet: Clearer than that.

Monique Mols: Thank you.

Christophe Fouquet: I think we are working as a result with the different parties to make Beethoven, our second campus, a success. We are deeply involved. I think we have developed good working relationship with the municipality, but also with the Dutch government, because some of the things we need require attention. You know, of course, it's a bit of work, but we need, as a country, as a region, to be able to do that because, of course, we are competing with many other places in the world where this doesn't sound like a big deal at all. I think we have to believe that we can do that.

things we need to require attention.

And, you know, of course it's a bit of work.

but

We need...

As a country

Monique Mols: Mm-hmm.

Christophe Fouquet: I'm convinced we can do that. So far, the progress is good. I think, Jos, you can say a few more words because he's involved deeply on almost a weekly basis to track the progress. I think the intention and the ambition are remaining very, very strong.

Speaker Change: But I think the intention and the ambition are remaining very very strong. I don't know what you want to say. Yeah, sure, we can say a few words on progress because obviously there are challenges, right? I mean if it's about nitrogen deposition or it's about the grid or it's about the execution power in municipalities, which recently drew some attention and it's all true. But what is very very clear is that there is a very strong commitment to

Monique Mols: Yeah.

Christophe Fouquet: I don't know what you want to-

Jos Benschop: Oh, sure.

Jos Benschop: Yeah, sure. We can say a few words on progress 'cause obviously there are challenges, right? I mean, if it's about nitrogen deposition or it's about the grid, or it's about the execution power in municipalities, which recently drew some attention, and it's all true. What is very, very clear is that there is a very strong commitment of our government and government at very different levels. You know, be it at the national level or be it at the local or regional level, there is a very strong commitment to making this happen. You know, that is what works for us.

Speaker Change: of our government and government at very different levels, you know, be it at the national level or be it at the local or regional level. There is a very strong commitment to making this happen. So, you know, that is what works for us. And then at the end of the day, this is collaboration. And at the end of the day, making sure that the right resources are working on the right projects.

Roger Dassen: At the end of the day, this is collaboration, and at the end of the day, making sure that the right resources are working on the right projects and getting stuff done in time. You know, we have all the confidence that the things will be executed in time, such that we can execute on the expansion as we have planned.

Jos Benschop: At the end of the day, this is collaboration, and at the end of the day, making sure that the right resources are working on the right projects and getting stuff done in time. You know, we have all the confidence that the things will be executed in time, such that we can execute on the expansion as we have planned.

Monique Mols: Okay. Thank you. Ian King had a question from Bloomberg. Thank you. Hi, John. Does this work? Can you hear me? No.

Monique Mols: Okay. Thank you. John had a question from Bloomberg. Thank you.

Christophe Fouquet: Hi, John.

John Revill: Does this work? Can you hear me?

Monique Mols: No.

Ian King: Hello?

John Revill: Hello?

Ian King: Yeah. Yeah.

Roger Dassen: Perfect.

Hello? Yeah, yeah. It works.

Monique Mols: Of course.

Roger Dassen: Two questions. One on DeepSeek. Well, the news on Monday sent tech stocks into a tailspin, especially NVIDIA, but also ASML's market cap fell by more than $20 billion on Monday. Was this overblown, this reaction, do you think? And what's your kind of response to investors who question the need to spend billions on advanced chips and hardware on AI? The second question is, last week, Dutch Prime Minister Dick Schoof said that he expects the Trump administration to keep pushing the Netherlands for more export controls on ASML sales to China. What else can we expect on export controls this year? Do you expect sales of your older DUV machines to be affected?

John Revill: Two questions. One on DeepSeek. Well, the news on Monday sent tech stocks into a tailspin, especially NVIDIA, but also ASML's market cap fell by more than $20 billion on Monday. Was this overblown, this reaction, do you think? And what's your kind of response to investors who question the need to spend billions on advanced chips and hardware on AI? The second question is, last week, Dutch Prime Minister Dick Schoof said that he expects the Trump administration to keep pushing the Netherlands for more export controls on ASML sales to China. What else can we expect on export controls this year? Do you expect sales of your older DUV machines to be affected?

Speaker Change: Two questions, one on DeepSeek, well the news on Monday sent.

tech stocks into a tailspin, especially NVIDIA.

Speaker Change: So, was this overblown, this reaction, do you think, and what's your kind of response to investors who question the need?

Speaker Change: to spend billions on advanced chips and hardware on AI? And then the second question is, last week Dutch Prime Minister Dik Schoof said that he expects...

Monique Mols: Do you wanna start, Roger?

Do you want to start with it?

Christophe Fouquet: Would you like to have the second one, and then I go back to DeepSeek. You want to-

Roger Dassen: Okay. Yeah.

Christophe Fouquet: That's great.

Roger Dassen: Deep well.

Christophe Fouquet: I'm gonna-

Roger Dassen: On the second one, in terms of export controls, John, we're not gonna speculate on that. I mean, let's be clear, export controls is not new. It's something that we've been living for many years. I think in a good collaboration with governments, have been able to work it, and we'll just see what's gonna happen there. There is enough speculation. We're not gonna add to the speculation there. I would make one comment on DeepSeek, and then I'll give it to Christophe. We're not second-guessing the market. I mean, the market does what it wants to do.

Speaker Change: in good collaboration with governments have been able to to work it and we'll just see what's going to happen there. There is enough speculation we're not going to add to the speculation there. I would make one comment on Dietzig and then I'll give it to Christophe.

Roger Dassen: If you read the analyst reports on, you know, on the tech stocks, I think there is an increasing voice that echoes what Christophe said, which is, at the end of the day, you know, if you make it cheaper and if you make it more accessible, if you make it more energy efficient, it can lead to a democratization of AI in a way that is necessary in order for this to become prevalent. That's what you see now in most of the analyst reports that I see. That is what is being echoed there.

Speaker Change: increasing voice that echoes what Christophe said, which is at the end of the day you know if you make it cheaper and if you make it more accessible if you make it more energy efficient it can lead to a democratization of AI in a way that is necessary in order for this to become prevalent and that's what you see now in most of the analyst reports that I see that is what is being echoed there.

Christophe Fouquet: Yeah. I think what we do on AI or try to do that also in November, this is a long-term trend, long-term opportunity. When it comes to this topic, we always invite everyone to look at the long term. I think on the short term, we explained that. For us, for example, this created a major shift on the market, and this was not all good, as you have seen last year. I mean, some of our customers really struggled with the fact that this huge opportunity was coming. It was changing the game of the market, and not all of them did well, as you noticed. We also say, I said that in my presentation today, we don't know exactly how AI will build itself, right? You know, there will be a lot of new players coming in.

Speaker Change: Yeah, and I think what we do on AI, or try to do that also in November, this is a long-term trend, long-term opportunity. And when it comes to this topic, we always invite everyone to look at the long term.

Speaker Change: I think on the short term we explained that, so for us, for example, this created a major shift on the market.

Speaker Change: And this was not all good, as you have seen last year. I mean, some of our customers really struggled with the fact that this huge opportunity was coming. It was changing the game of the market, and not all of them did well, as you noticed.

Speaker Change: And we also say, I say that in my presentation, today we don't know exactly how AI will build itself.

All right, so...

Christophe Fouquet: I don't think that you can define today who is the winner in 2030. I think there will be a lot of competition because I said, again, the opportunity is huge. To amplify Roger, we welcome in many ways that competition because this will go against cost, which will increase the opportunity, and it will go in favor of innovation. I think the challenge is to be able to project yourself. Now try to dream up what's happened in the next five years. Like I say, you will get a lot of those discussion, because I don't think that DeepSeek is the last company that say, "Hey, this is a great opportunity I'd like to be in." It's not like everyone is going to sit and say, "Well, you know, we declare the winner today.

Speaker Change: And, to amplify Roger, we welcome in many ways that competition because this will go against cost, which will increase the opportunity, and it will go in favor of innovation.

Speaker Change: So I think the challenge is to be able to project yourself, now try to dream up what's happening next five years and like I say you will get a lot of those discussions.

Christophe Fouquet: They are X, B, whatever." No, people are going to fight for the opportunity, and I think it's a good thing. Well, now, you know, you know, the question is always when it comes to market, how you look at short versus long term. We run a business. We look at the long term because this is where the success, the opportunity is.

Speaker Change: And, well, now, you know, the question is always, when it comes to market, you look at short versus long term.

Speaker Change: We run a business, we look at the long term because this is where the success, the opportunity is.

Monique Mols: Thank you. Toby, Reuters.

Thank you.

Speaker Change: Toby from Reuters. I'm not sure is there a logical contradiction there if you say it's good if it's good if the prices come down but it's also right it's also good if there's huge demand for for lots of AI chips so I'm just not sure if that if that if there's a lot if it makes complete logical sense what you say that lower prices will drive

[Reporter] (Reuters): Hi. Yeah. I'm Toby from Reuters. I'm not sure. Is there a logical contradiction there if you say it's good if the prices come down, but it's also, right, it's also good if there's huge demand for lots of AI chips. I'm just not sure if it makes complete logical sense what you say, that lower prices will drive-

Toby Sterling: Hi. Yeah. I'm Toby from Reuters. I'm not sure. Is there a logical contradiction there if you say it's good if the prices come down, but it's also, right, it's also good if there's huge demand for lots of AI chips. I'm just not sure if it makes complete logical sense what you say, that lower prices will drive- You know, better volumes for ASML in any case. Maybe it's a wash, right? Second question, I wanted to ask you had a great comment, I think three months ago when you said that outside of AI, the chip market looks pretty sad. I'm wondering whether you see any change there with the rest of the market.

Monique Mols: Mm.

Roger Dassen: You know, better volumes for ASML in any case. Maybe it's a wash, right? Second question, I wanted to ask you had a great comment, I think three months ago when you said that outside of AI, the chip market looks pretty sad. I'm wondering whether you see any change there with the rest of the market.

Speaker Change: you know, better volumes for ASML in any case. Maybe it's a wash, right?

Speaker Change: Second question, I wanted to ask you, you had a great comment I think three months ago when you said that outside of AI the chip market looks pretty sad and I'm wondering whether you see any change there with the rest of the market.

Christophe Fouquet: Yeah. On the first one, on the cost relation to volume, let me try to put a bit of color on that. Today, the level of AI sales is pretty high, but most of it goes to hyperscale computer servers. If you look at the number of chips related to that, it's pretty small, in fact. Right? This is not the majority of chips. If it stays like this, then you only have people spending money in R&D to develop models, but you don't have, which is a big question in AI, you don't have the application that basically create the return on this investment. What we expect to come over the years is those application. Those application most probably will end up on the phone, on the car, in industrial application.

Speaker Change: Yeah, so on the first one, on the cost relation to volume, let me try to put a bit of color on that.

Speaker Change: The level of AI sales is pretty high, but most of it goes to hyperscale computers, servers.

Speaker Change: If you look at the number of chips related to that, it's pretty small in fact.

Alright, this is not the majority of chips.

Speaker Change: If it stays like this, then you only have people spending money in R&D to develop models, but you don't have, which is a big question in AI, you don't have the application that basically creates the return on this investment.

Christophe Fouquet: You see a lot of new expectation on the robotics, for example. There's one new area, of course, on PC, et cetera, on what we call also AGI. Today, those chips are not yet in demand. We believe that when it comes to the size of our business, the demand will come more from the use of AI than the research on AI. Right. That's why to get those chips, if you want to have an AI chip on your phone, the cost of those chips has to be a fraction of what maybe the hyperscaler can pay for it. You cannot afford a $25,000 chip on your phone, right? This has to happen.

Those chips are not yet in demand.

Speaker Change: We believe that when it comes to the size of our business, the demand will come more from the use of AI than the research on AI.

Speaker Change: And to get those chips, if you want to have AI chips on your phone, the cost of those chips has to be a fraction of what maybe the hyperscaler can pay for it. You cannot afford 25,000 chips on your phone, right?

Speaker Change: So this has to happen, and when this happens, which we see again most probably in the second half of the end of this decade, then AI will really drive volume.

Christophe Fouquet: When this happen, which we see again most probably in the second half of the end of this decade, then AI will really drive volume. Right? That's the relationship. If the cost doesn't go down, you may continue to sell a few very expensive chips and make a few people very happy, but you will not basically bring this technology to, well, let's say to the mass, and the volume will remain small, right? We have to get to that point, and we don't know exactly when and how, but what we expect is mostly this happen between now and the end of the decade.

That's the relationship.

Speaker Change: If the cost doesn't go down, you may continue to sell a few very expensive chips and make a few people very happy but you will not basically bring this technology to well, let's say to to the mass and the volume will remain small.

Speaker Change: Right, so we have to get to that point and we don't know exactly when and how but what we expect is mostly this happen between now and the end of the decade.

Roger Dassen: Toby, it's a classic case of microeconomics, right? Where it's all about price sensitivity. I think anything related to tech in the past has demonstrated to be very, very price sensitive. To the extent that you're able to drive down cost and prices, it more than compensates for in demand. I think that's what we've seen in the past, and that's the basis why indeed Christophe has been saying, you know, starting last year, cost needs to be driven down in order for AI to be successful.

Speaker Change: It's a classic case of microeconomy, right, where it's all about price sensitivity, and I think anything related to tech in the past has demonstrated to be very, very price sensitive.

Speaker Change: So, to the extent that you're able to drive down cost and prices, it more than compensates for in demand. I think that's what we've seen in the past. And that's the basis why, indeed, Christophe has been saying, you know, starting last year, cost needs to be driven down in order for AI to be successful.

Christophe Fouquet: Yeah. I think on the second question, Toby, I think what Roger and I, we had many discussion on that in the last few months. What we really see is, you know, we used to look at when the recovery of the normal business happened. I think today we believe that what's really happening in the market is a real shift.

Speaker Change: Yeah and I think on the second question Toby I think what we...

Speaker Change: Roger and I had many discussions on that in the last few months. What we really see is, you know, we used to look at when the recovery of the normal business happened. I think today we believe that what's really happening in the market is a real shift.

Monique Mols: Mm.

Christophe Fouquet: AI is changing quite a few things. With some customers, some of our customers are doing extremely well, some of them having to catch up. We see it changing potentially the roadmap of our customer because they have to develop basically processes that will be more targeting, you know, hyper computer or High Bandwidth Memory. Roger talked about that. There's a real change. There is a bit of a reorganization of the market, which I think we really started to sense in the second half of last year, and this came with a bit of turbulence. I think this is still happening because everyone is a bit lining up to basically go after this opportunity. This is quite a big change, to be honest. It affects quite a few parts of our business.

So, AI is changing quite a few things.

Speaker Change: We see it changing potentially the road map of our customer because they have to develop basically processes that will be more...

Speaker Change: targeting, you know, a high-power computer or high-bandwidth memory. Roger talked about it. So there is a real change, there is a bit of a reorganization of the market, which I think we really started to sense in the second half of last year. And this came with a bit of turbulences.

Speaker Change: a big change to B&S. It affects quite a few parts of our business. That's, I think, the way we look at it today. We still have a few minutes, so there were some questions here.

Monique Mols: Yeah.

Christophe Fouquet: That's, I think, the way we look at it today.

Monique Mols: Okay. We still have a few minutes, so there were some questions here. Can you start there? Yeah.

Huub Giesbers: Okay.

Huub Giesbers ): Okay.

Can you stop there? Yeah.

Monique Mols: We'll try to be brief and get to all of you.

Huub Giesbers: Yes. Yes. I'm Huub Giesbers for Dutch News Agency ANP. I was wondering, since I hear you mentioning that innovation is so important also for the semiconductor industry to reach volume, is it a bit of a concern that the world markets are fragmenting because of trade wars or the threatening of trade wars with the US government, mentioning tariffs almost every day also on semiconductors? Will this in some way impact your long-term outlook?

Huub Giesbers ): Yes. Yes. I'm Huub Giesbers for Dutch News Agency ANP. I was wondering, since I hear you mentioning that innovation is so important also for the semiconductor industry to reach volume, is it a bit of a concern that the world markets are fragmenting because of trade wars or the threatening of trade wars with the US government, mentioning tariffs almost every day also on semiconductors? Will this in some way impact your long-term outlook?

Speaker Change: almost every day also on semiconductors, and will this in some way impact your long-term

your long-term outlook.

Speaker Change: So I think we can both, so the short answer I think we've been consistent on that. I think this industry has developed on a very successful open ecosystem.

Christophe Fouquet: The short answer, I think we've been consistent on that. I think this industry has developed on a very successful open ecosystem. The model where you decouple this ecosystem, where you try to have two maybe instead of one, makes things more expensive, that's for sure, and slow us down. I would say this is true almost for any, you know, economical matter. That I think is still true. Does it necessarily affect the long term? There you can get more tactical, where you say, "Well, now if I have two, then there could be more." There is no clear picture. It depends a bit on how the whole thing evolve. The biggest impact is on cost and speed of innovation. If you have an open ecosystem, both will be better.

Speaker Change: The model where you decouple this ecosystem, where you try to have two maybe instead of one, makes things more expensive, that's for sure, and slows us down.

economic matter. So that I think is still true.

Speaker Change: Does it necessarily affect the long term? So there you can get more tactical, where you say, well, now if I have two, then that could be more. So there, there's no clear picture. It depends a bit on how the whole thing evolves. But the biggest impact is on cost.

Speaker Change: and speed of innovation. If you have an open ecosystem, both will be better.

Monique Mols: Okay. We need to speed it up a little bit. Bert, sorry, Dan, I'm trying to get to you.

Speaker Change: Okay, we need to speed it up a little bit, Bert, and Dana gets it, sorry, Dana, I'm trying to get to you.

Bert van Dijk: Bert van Dijk, Het Financieele Dagblad. Just a follow-up question on Toby's question about the other industry than the AI sector. I was just wondering if you could elaborate a little bit on the auto market, the automotive market, and the industry market. Do you see some kind of recovery happening there, or are you talking also about a shift in that industry as well? The short second question is about the order intake. You're going to stop reporting on that from 2026. I was just wondering, is that because you feel like that the investors are too much focused on that number that leads to swings in your share price? Or could you elaborate a bit on why you decided to stop? Because it seems to be a step back in transparency.

Bert van Dijk, Financiële Dagblad

Just a follow-up question on Toby's question about...

the other industry than the AI sector.

Speaker Change: I was just wondering if you could elaborate a little bit on the auto market and the automotive market and the industry market. Do you see some kind of recovery happening there or are you talking also about a shift in that industry as well? And the short second question is about the auto intake. You're going to stop reporting on that from 2026.

Speaker Change: I was just wondering, is that because you feel like that the investors are too much focused on that number that...

Speaker Change: leads to swings in your share price or we should elaborate a bit on why you decided to stop because it seems to be a step back in transparency, so

Monique Mols: Mm.

Roger Dassen: Let me take both. On the automotive market, the relevance for us for the automotive market has two angles to it. On the one hand, it is the electrification, and on the other hand it is ADAS, so autonomous driving or assistance and assistance systems.

Monique Mols: Yeah.

Roger Dassen: Yeah.

Monique Mols: We're counting down quickly.

Roger Dassen: Yeah. For sure. Those are the two there. I think electrification is clearly in a significant part of the world is not happening as rapidly as was anticipated. I think when it comes to ADAS, it will be heavily dependent on how regulation is going to develop. There we are more positive, and we do see that ADAS will break through. Yes, I think the automotive market globally right now is going through a bit of a dip with the electrification. I think long term, I think ADAS is still strong.

Roger Dassen: When it comes to the transparency argument, on what we're doing, I think at the end of the day, what matters to us is that we give investors the right information and the information that they can take the right decisions on. We give them guidance. We give you guidance every single year. That guidance is based on ongoing conversations with our customers, and we think that guidance that we provide gives you a better indication of the momentum of our business, than you know, providing on a quarterly basis, order intake, which we have been saying for quite a while is pretty lumpy. That's why we think in this case, over the longer term, less is more.

Speaker Change: than, you know, providing on a quarterly basis order intake, which we have been saying for quite a while is pretty lumpy. So that's why we think in this case, over the longer term, less is more. Sorry, we have to end this.

Monique Mols: Yep. Sorry, we have to end this. If you have any more questions, contact one of the media relations colleagues, and we'll get back to you. Thank you for joining. Thank you for coming to Veldhoven. Thank you for joining online, and hope to see you next year. Thank you.

Speaker Change: So if you have any more questions, contact one of the Media Relations colleagues and we'll get back to you. Thank you for joining. Thank you for coming to Veldhoven. Thank you for joining online. And hope to see you next year. Thank you.

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