ASML Holding(ASML)2022-12-06 19:40ASML Holding N.V. Conference Call Summary Company Overview - Company: ASML Holding N.V. (NASDAQ: ASML) - Event: UBS 2022 Global TMT Conference - Date: December 6, 2022 - Participants: Skip Miller (Vice President Investor Relations Worldwide), Francois-Xavier Bouvignies (UBS) Key Points 2023 Outlook - Macro Uncertainties: Concerns regarding inflation, recession fears, and geopolitical issues create uncertainty for 2023 [4] - Backlog: ASML's backlog is approximately $38 billion, indicating strong demand exceeding supply [4] - EUV and DUV Shipments: Plans to ship 375 or more DUV systems, with 25% being immersion systems, and 60 or more EUV systems in 2023 [5] - Revenue Recognition: $2.2 billion in revenue from 2022 will carry over into 2023, with potential delays in revenue recognition due to accounting issues [5] Market Dynamics - Market Share Gains: ASML is gaining market share despite a projected 20% decline in wafer fab spending [6] - Long Lead Times: Customers are encouraged to order machines in anticipation of a potential recovery in demand, as lead times for orders and installation are lengthy [7][8] - Customer Behavior: Customers are likely to hold strategic investments in EUV technology despite potential changes in DPV capacity [19] Demand and Supply Insights - DPV Demand: Demand remains approximately 40% above planned shipments for DPV systems, with no significant cancellations reported [17][19] - Logic vs. Memory: Logic systems account for about 70% of ASML's revenue, driven by higher litho intensity and growth in advanced nodes [22][24] - EUV Demand Stability: Demand for EUV systems remains stable, with customers reluctant to change their plans due to the strategic nature of technology transitions [26] China and Export Controls - Export Controls: ASML cannot ship EUV systems to China, but DUV systems continue to be shipped without significant impact on demand [13][14] - Potential Indirect Impact: 5% of ASML's backlog may be indirectly affected by Chinese customers' inability to secure non-litho equipment [14] Installed Base Management - Service and Upgrade Revenue: The installed base business is expected to grow, driven by service revenue and potential upgrades as utilization levels may decrease [35][36] Long-Term Growth Drivers - Technological Sovereignty: Increased government initiatives to onshore semiconductor manufacturing may create inefficiencies but also drive demand [39][40] - Intel's Role: Intel is a critical customer, and its success is important for ASML's growth, although the overall demand is driven by end markets rather than specific customers [42][43] Future Projections - Incremental Revenue Targets: ASML has increased its revenue targets, with significant growth expected from mature nodes and advanced logic markets [46][48] - High-NA Technology: High-NA machines are expected to start shipping in volume by 2025-2026, with ongoing research into future technologies beyond High-NA [56][59] Financial Performance - ASP and Margins: New models are expected to improve average selling prices (ASP) and margins, with the potential for significant increases in revenue from upcoming product launches [61][62] Conclusion ASML is positioned for growth in 2023 and beyond, driven by strong demand for its EUV and DUV systems, strategic customer investments, and favorable market dynamics despite macroeconomic uncertainties. The company is actively managing its backlog and exploring opportunities for revenue recognition improvements while preparing for future technological advancements.