ASML Holding(ASML)2021-01-20 20:11Financial Data and Key Metrics Changes - Net sales for Q4 2020 were €4.3 billion, exceeding guidance, driven by additional DUV system revenue and upgrades [9] - Full-year net sales grew 18% to €14 billion, with net income for the year at €3.6 billion, resulting in an EPS of €8.49 [11][12] - Gross margin for Q4 was 52%, above guidance, while the expected gross margin for Q1 2021 is between 50% and 51% [10][13] Business Line Data and Key Metrics Changes - In Q4, net system sales were €3.2 billion, with 72% from Logic and 28% from Memory [9] - Installed Base Management sales for Q4 were €1.1 billion, showing continued strength in service and upgrade business [10] - Full-year Installed Base Management sales increased by 30% to €3.7 billion [11] Market Data and Key Metrics Changes - Q4 net system bookings were €4.2 billion, with 78% driven by Logic and 22% by Memory [10] - The company expects Memory revenue to increase by around 20% in 2021, driven by demand in data centers and consumer electronics [18] - Logic revenue is expected to grow at least 10% from €7.4 billion in 2020 [17] Company Strategy and Development Direction - The company plans to continue investing in R&D, with spending increasing to €2.2 billion in 2020, primarily for the EUV roadmap [12] - The strategy includes a focus on expanding DUV and EUV product offerings to meet growing demand across various markets [24][25] - The company anticipates a significant share buyback in Q1 2021, reflecting a strong cash position and positive outlook [15] Management Comments on Operating Environment and Future Outlook - Management expressed optimism for 2021, expecting another year of good growth in revenue and profitability despite ongoing challenges from the pandemic [16] - The company highlighted strong demand across the industry, particularly in Logic and recovering Memory segments [20] - Management remains cautious about geopolitical uncertainties and export control regulations impacting future growth [20][39] Other Important Information - The company intends to declare a total dividend of €2.75 per ordinary share for 2020, a 15% increase compared to the previous year [14] - The company shipped 9 EUV systems in Q4, with a total of 31 systems shipped in 2020, reflecting a 60% growth in EUV systems revenue [21] Q&A Session Summary Question: Memory business demand and growth expectations - Management indicated that the missed 30% growth in Memory was due to reallocating tools to Logic, with continued momentum expected in 2021 [30][32] Question: Supply chain limitations affecting EUV production - Management confirmed that while internal capacity exists to build 50 systems, supply chain constraints on modules may impact production numbers [34][36] Question: CapEx spending and guidance - Management noted that TSMC's CapEx guidance does not directly correlate to ASML's revenue guidance, but there is potential upside depending on market conditions [38][39] Question: Long-term outlook for 3nm transition and High-NA impact - Management believes that architectural changes will not significantly impact lithographic capabilities, and High-NA systems will not affect 3nm node shipments [43][45] Question: Growth in China and overall revenue mix - Management expects continued growth in China, particularly in Memory, with potential upside in Logic depending on regulatory conditions [46][47] Question: Gross margins and future expectations - Management anticipates gross margins to trend towards the upper limit of the previously stated bandwidth due to strong sales composition [50] Question: EUV service gross margins outlook - Management expects EUV service gross margins to improve as more tools come out of warranty and throughput increases [78]