ASML Holding(ASML)2024-04-17 16:23Financial Data and Key Metrics - Total net sales for Q1 2024 were EUR5.3 billion, at the midpoint of guidance [8] - Gross margin for Q1 was 51%, above guidance, driven by product mix [9] - Net income in Q1 was EUR1.2 billion, representing 23.1% of total net sales, with EPS of EUR3.11 [9] - Cash, cash equivalents, and short-term investments stood at EUR5.4 billion at the end of Q1, lower than the previous quarter [10] - Q1 net system bookings were EUR3.6 billion, with EUR656 million for EUV and EUR2.9 billion for non-EUV [10] - The backlog at the end of Q1 was around EUR38 billion [11] Business Line Data and Key Metrics - EUV systems revenue recognized was EUR1.8 billion from 11 systems shipped [8] - Net system sales were EUR4 billion, with 63% from logic and 37% from memory [8] - Installed Base Management sales were EUR1.3 billion, in line with guidance [8] - R&D expenses were EUR1.32 billion, and SG&A expenses were EUR273 million, both slightly lower than guided [9] - The NXE:3800E EUV system was shipped for qualification, offering a 37% productivity increase over the NXE:3600D [17] Market Data and Key Metrics - Memory demand is driven by DRAM technology node transitions, supporting advanced memories like DDR5 and HBM [14] - Logic customers are digesting significant capacity additions made over the past year [14] - China sales were EUR1.9 billion in Q1, down from EUR2.2 billion in Q4 2023, but still strong [33] - The company expects a stronger second half of 2024, driven by industry recovery and customer upgrades [19] Company Strategy and Industry Competition - The company views 2024 as a transition year, investing in capacity ramp and technology for the upturn in the cycle [19] - Long-term growth drivers include energy transition, electrification, and AI, with 2025 expected to be a strong year [20] - The company plans to update its market scenarios during the Investor Day on November 14, 2024 [21] Management Commentary on Operating Environment and Future Outlook - The semiconductor industry is recovering, with inventory levels trending towards healthier levels [14] - The company expects memory revenue growth in 2024, driven by technology transitions, but lower logic revenue as customers digest capacity [16] - High NA EUV systems are under installation, with customer interest high for early process development [18] - The company remains confident in long-term growth opportunities despite near-term uncertainties [21] Other Important Information - The company paid a quarterly interim dividend of EUR1.45 per ordinary share in Q1 2024 [13] - Share repurchases in Q1 amounted to 0.5 million shares for EUR400 million [13] - The CEO transition is planned for April 24, 2024, following the AGM [22] Q&A Session Summary Question: EUV Order Intake and China's Role - EUV orders were lower in Q1, but the company expects significant orders from foundry and logic customers in the coming quarters [24][26] - China's share in the order intake is healthy but not overly concentrated, with sales distributed globally [28] - The company's view on China sales impact (10%-15%) remains unchanged despite ongoing export control discussions [30] Question: China Business Trends - China sales were strong in Q1 but lower than Q4 2023, with demand driven by mature technology [33][35] - The company expects China to remain strong in 2024, with capacity additions aligned with global needs [36] Question: EUV and 2nm/3nm Demand - Foundry customers are digesting 3nm and 5nm capacity, with 2nm ramp expected to start next year [38] - EUV layer counts for 2nm are similar to 3nm, with no significant changes expected [39] Question: Order Cadence and Pre-Building Tools - The company's pre-building of low NA tools is based on customer needs and long lead times, not just order timing [43][46] - Memory orders are still driven by technology transitions like DDR5 and HBM [48] Question: High NA EUV Lead Times and Adoption - High NA EUV systems have achieved first images with sub-10nm resolution, with customer interest high for early process development [56] - The company expects further decisions on High NA adoption after customer exposure to the system in the lab [57] Question: Long-Term Growth and Electrification - High-performance compute and AI are driving demand for both advanced and mainstream semiconductors [60][62] - Electrification and grid upgrades are significant drivers for mainstream semiconductor demand [71][74] Question: Second-Half Revenue Growth and China - The company expects strong second-half revenue growth, driven by fab openings and capacity ramps across logic and memory [77] - China sales are expected to remain strong, with demand supported by mature technology [78] Question: Memory Capacity and DPV Orders - Memory utilization is increasing, with capacity additions expected in the second half of 2024 [81] - Revenue growth in memory will be driven by both technology transitions and bit additions [83] Question: Backlog Composition and NXE:3800E Throughput - The company does not disclose the geographic composition of its backlog but notes China's share is around 20% [86] - The NXE:3800E will reach 220 wafers per hour in the second half of 2024, with upgrades planned for early 2025 [87] Question: EUV Adoption in DRAM - EUV layer counts in DRAM are increasing node by node, with high bandwidth memory driving wafer capacity needs [93] - The company expects the 70-30 mix between logic and memory for EUV to remain stable [95]