ASML Holding(ASML)2022-09-08 16:10ASML Holding N.V. Conference Call Summary Company Overview - Company: ASML Holding N.V. (NASDAQ: ASML) - Event: Citi 2022 Global Technology Conference - Date: September 8, 2022 Key Points Industry Dynamics - Current State of Business: Demand remains significantly above supply, with expectations of 10% revenue growth for the year despite supply chain challenges [4][27] - Supply Chain Challenges: Initial issues with chip supply have been resolved, but broader component-level challenges persist [6][7][12] - Delayed Revenue: €2.8 billion of revenue has been deferred into next year due to fast shipments, up from €1 billion earlier in the year [4][27] Demand Insights - Memory Market: Despite reports of reduced CapEx from memory customers, ASML has not seen a change in demand, attributed to long lead times for lithography tools [14][15][17] - Logic Demand: Mixed signals exist, with strong demand in high-performance computing and automotive sectors, while consumer electronics show weakness [22][23] - Backlog and Bookings: ASML reported a record backlog of over €33 billion, indicating strong order flow and healthy bookings expected for Q3 and Q4 [25][26] Capacity and Growth Projections - Future Capacity Plans: Plans to increase EUV units to over 60 and Deep-UV units to over 375 next year, with expectations for continued double-digit volume growth [26][28] - Long-term Demand Drivers: Factors such as digital transformation, energy efficiency, and government initiatives (e.g., CHIPS Act) are expected to drive demand beyond 2023 [43][46] Financial Considerations - Gross Margin Trends: Gross margins have been impacted by inflation, with adjustments made from a target of 53% down to 49%-50% for the year [61][62] - Inflation Impact: Significant increases in freight and labor costs have affected margins, with discussions ongoing with customers to share these costs [62] Technology Transitions - Gate-All-Around Technology: Expected to enhance control over smaller features, continuing the trend of Moore's Law and increasing litho intensity [51][52] - Increased Die Sizes: Larger die sizes are anticipated to drive wafer demand, contributing to ASML's revenue growth [56] Regional Insights - China Market: Demand for trailing-edge technology remains strong in China, despite reports of declining utilization rates in foundries [36][39] Additional Insights - Fast Shipments: A strategy to reduce cycle time in production, allowing for quicker delivery to customers, though revenue recognition may be delayed [31][34] - Talent Challenges: Ongoing pressure on talent acquisition as the supply chain ramps up production capacity [12][13] This summary encapsulates the key insights and dynamics discussed during the ASML conference call, highlighting the company's current position, future outlook, and the broader industry context.