ASML Holding(ASML)2022-06-14 20:38Summary of ASML Holding N.V. Conference Call Company Overview - Company: ASML Holding N.V. (NASDAQ: ASML) - Industry: Semiconductor Equipment Manufacturing - Event: Goldman Sachs Global Semiconductor Virtual Conference - Date: June 14, 2022 Key Points Importance of EUV Technology - EUV (Extreme Ultraviolet Lithography) is crucial for producing advanced chips, allowing for smaller feature sizes due to a wavelength reduction from 193 nanometers to 13.5 nanometers [3][4] - The adoption of EUV technology has accelerated significantly over the past two to three years, driven by customer demand for advanced applications such as AI and 5G [3][6] Production Capacity Expansion - ASML is examining the feasibility of expanding EUV production capacity to 90 units by 2025, up from a previous estimate of 70 units [4][5] - The demand for EUV tools is expected to be structurally robust, driven by digitalization trends and the need for advanced chips [5][7] Demand Drivers - The demand for EUV is being fueled by applications requiring high-performance computing, AI, and 5G technologies [6][9] - Customers are increasingly focused on improving energy performance and reducing power consumption, which necessitates larger chips and more advanced manufacturing tools [7][9] Customer Insights and Roadmaps - Key customers are under pressure to secure capacity, with a clear roadmap for the next 10-15 years focusing on transistor structure and technology advancements [13][14] - EUV adoption in memory applications has exceeded expectations, with significant interest from DRAM customers [14][32] Pricing and Profitability - ASML has been able to increase the average selling prices (ASPs) of EUV tools in correlation with productivity improvements [15][16] - The company expects continued margin improvement as productivity increases and costs decrease over time [21][22] Challenges and Bottlenecks - The primary challenge in ramping up production is lead time for equipment, which can take over a year to prepare [24] - ASML is taking steps to ensure that lead times for future capacity increases are minimized [24] High NA Technology - ASML has received multiple orders for high NA (Numerical Aperture) machines, which are expected to offer significant benefits in terms of resolution and productivity [25][26] - The introduction of high NA technology is anticipated to follow a smoother path compared to previous technologies due to shared source technology [26][27] Geopolitical Factors - Geopolitical tensions are influencing the semiconductor industry, with increased competition among major players like Samsung, Intel, and TSMC [37][38] - ASML does not foresee EUV technology being available in China in the near future due to current U.S. administration policies [40] Future Outlook - Long-term demand for EUV tools is expected to remain strong, despite potential short-term fluctuations due to macroeconomic factors [10][11] - The company is preparing for potential increases in demand beyond the planned 90 units, with a focus on reducing lead times for future capacity [24][28] Additional Insights - The transition from low NA to high NA tools is not expected to cannibalize demand significantly, as overall market volume is projected to grow [29][30] - Customers are likely to adopt high NA technology gradually, starting with one or two layers in production [35]