Doug Dunn ASML President and Chief Executive Officer Deutsche Bank Conference London, England September 19, 2003 / Slide 1
Safe Harbor Safe Harbor Statement under the U.S. Private Securities Litigation Reform Act of 1995: the matters discussed during this presentation include forward-looking statements that are subject to risks and uncertainties including, but not limited to, economic conditions, product and pricing, manufacturing efficiencies, new products development, ability to enforce patents, availability of raw materials and critical manufacturing equipment, trade environment, and other risks indicated in filings with the U.S. Securities and Exchange Commission. September 2003 / Slide 2
Agenda Market Review Marketplace Strategy Financials Summary September 2003 / Slide 3
July semiconductor unit growth flat but ASP s are up... Semiconductor Sales 22 Semiconductors WW Dollars Semiconductors WW Dollars Seasonal Adjusted 40 20 Semiconductors WW Dollars 3MMA Semiconductors WW Units 18 16 14 12 10 8 6 Jan-97 May-97 Sep-97 Jan-98 May-98 Sep-98 Jan-99 May-99 Sep-99 Jan-00 May-00 Sep-00 Jan-01 May-01 Sep-01 Jan-02 May-02 Sep-02 Semiconductor Sales [B USD] Jan-03 May-03 Sep-03 Semiconductors WW Units Seasonal Adjusted Semiconductors WW Units 3MMA 35 30 25 20 Semiconductor Sales [B Units] 15 Source: WSTS, August 2003 September 2003 / Slide 4
Including non memory... IC Sales without Memory 20 WW IC Sales without Memory WW IC Sales- Memory Seasonal Adjusted 10 IC Sales [B USD] 18 16 14 12 10 WW IC Sales (B$) 3MMA WW IC Units without Memory WW IC Units- Memory Seasonal Adjusted WW IC Sales without Memory (B Units) 3MMA 8 6 Jan-97 May-97 Sep-97 Jan-98 May-98 Sep-98 Jan-99 May-99 Sep-99 Jan-00 May-00 Sep-00 Jan-01 May-01 Sep-01 Jan-02 May-02 Sep-02 Jan-03 May-03 Sep-03 9 8 7 6 5 IC Sales [B Units] 4 3 Source: WSTS, August 2003 September 2003 / Slide 5
Utilization remains high at all technology nodes - highest at <130 nm and > 500nm 110% 100% 90% 80% 70% 60% 50% 90nm 130nm 180nm 250nm 350nm >500nm 40% Aug-01 Oct-01 Dec-01 Feb-02 Apr-02 Jun-02 Aug-02 Oct-02 Dec-02 Feb-03 Apr-03 Jun-03 F Utilization Source: VLSI Research, May 2003 September 2003 / Slide 6
August PMI well above parity supporting recent positive news flows US Purchase Managers Index vs. YoY growth IC Sales 60 60% US Purchase Managers Index 58 56 54 52 50 48 46 44 42 40 PMI Semiconductors WW Dollars YoY Growth 9/11 Jan-97 Jun-97 Nov-97 Apr-98 Sep-98 Feb-99 Jul-99 Dec-99 May-00 Oct-00 Mar-01 Aug-01 Jan-02 Jun-02 Nov-02 Apr-03 Sep-03 Gulf war II SARS 40% 20% 0% -20% -40% -60% YoY Growth Semiconductor Sales September 2003 / Slide 7
Review of the Environment June 2003 August 2003 Consumer confidence weak but slightly improving End driver demand still elusive Amount of silicon manufactured slightly up Device prices down Customer margins under pressure About the same Same About the same Improving Same Chipmaker spending under tight scrutiny Same Corporate Q1 performance generally meets or beats expectations Q2 not as good September 2003 / Slide 8
Reactions Customers are: Still remaining cautious Still optimizing / maximizing tool utilization Waiting for greater visibility ASML is: Executing on our Marketplace Strategy September 2003 / Slide 9
Marketplace Strategy September 2003 / Slide 10
Continued Marketplace leadership Leadership in customer satisfaction Leadership in technology Leadership in providing high value drivers for customers September 2003 / Slide 11
Customer satisfaction equals customer loyalty Top 10 Large Suppliers of Chip Making Equipment 2003 Rank Company 1 Hitachi High Technologies 2 ASML 3 Dainippon Screen Mfg. Co., Ltd. 4 Tokyo Electron Limited 5 Advantest 6 Novellus Systems, Inc. 7 Agilent Technologies, Inc. 8 ASM International 9 Teradyne, Inc. 10 Canon Source: VLSI Research, June 2003 September 2003 / Slide 12
ASML s Technology Leadership - 193 nm product evolution - Immersion Lithography Integrated liquid supply system Modified lens Wafer - lens collision prevention Wet sensors Area of change September 2003 / Slide 13
Immersion Technology going forward at ASML No show stoppers identified with respect to the technology Twin stage technology provides competitive advantage for immersion solutions! September 2003 / Slide 14
Technology Leadership- 157nm Scanners ASML shipped industry s first full field 157nm exposure tool to IMEC Customer interest indicated by 157nm system orders Q2 03 Backlog Value per Technology 157 nm 11% 193 nm 28% i-line 6% ASML will respond to customer production implementation timing of this technology 248 nm 56% September 2003 / Slide 15
Today s leading edge Technology customer wins provide tomorrow s rewards Technology Transitions Critical 25% 248Hi 193 157 Litho Tool Mix Mid Critical 50% Mid Critical 248Lo + 248Lo 248Hi + 248Hi 193 + 193 Non critical 25% 365 248Lo 248Hi September 2003 / Slide 16
Value Driver - Overlay Improvement 5nm Overlay Improvement = >$1 Million Revenue/Month @ 30k Wafers/Month x 501 die/wafer x 0.011 x $6.50 Full wafer Overlay M+3s = 30 nm Overlay Distribution Spec Limit 5nm overlay improvement Full wafer Overlay M+3s = 25 nm Overlay Distribution Spec Limit Overlay (nm) Rework or Yield Loss 110nm memory example ACTUAL Overlay (nm) 1.15% yield + rework improvement! September 2003 / Slide 17
Financials Q2 2003 September 2003 / Slide 18
Total Revenues M 3000 2500 2673 Total Semi-annual Q1 Revenues 2000 1500 1000 500 1518 1493 1180 1589 759 830 1959 820 351 609 Q2 Q3 Q4 647 329 0 179 318 1999 2000 2001 2002 2003 September 2003 / Slide 19
System Revenue per Region H1 2003 Lithography systems shipments Korea 38% Singapore 4% Europe 16% China 5% Taiwan 2% U.S. 35% September 2003 / Slide 20
Backlog: litho unit vs. value 250 2000 200 150 100 50 1500 1000 500 0 0 Jan 02 Feb 02 Mar 02 Apr 02 May 02 Jun 02 July 02 Aug 02 Sep 02 Oct 02 Nov 02 Dec 02 Jan 03 Feb 03 Mar 03 Apr 03 May 03 Jun 03 Backlog units Backlog value M September 2003 / Slide 21
Backlog per June 30, 2003 Total value M 678 Value per type Steppers 1% Scanners 200 mm 32% Value per technology 157 nm 11% i-line 7% 248 nm 43% Scanners 300 mm 67% Korea 24% Value per region China 2% 193 nm 39% Logic 31% Value per end-use R&D 6% Foundry 13% Europe 11% Taiwan 12% Singapore 1% U.S. 50% MPU&MCU 2% Memory 48% September 2003 / Slide 22
Continued business focus Year end cash expectation - approx. 1B euro Execute on cost control actions to lower breakeven point Accelerate Cost of Goods reduction program for margin improvement September 2003 / Slide 23
Summary September 2003 / Slide 24
Summary Continuing positive news is evidence that the industry likely has hit bottom Modest IC industry growth expected in 2003 Customer growth of 8-9% There is delay between their growth and ours We must anticipate market requirements effectively Achieve flexible capacity while controlling costs Reorganize to maximize return Improve financial performance through: Stringent cash management Improved gross margins Continued cost control September 2003 / Slide 25
/ Slide 26 Commitment