ASML HOLDING NV [ASMLF] Filings

20-F 1 asml-20221231.htm 20-F asml-20221231

United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 20-F

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

for the fiscal year ended December 31, 2022

Commission file number 001-33463

ASML HOLDING NV

(Exact Name of Registrant as Specified in Its Charter)

The Netherlands

(Jurisdiction of incorporation or organization)

De Run 6501, 5504 DR Veldhoven, The Netherlands

(Address of principal executive offices)

Skip Miller

Telephone: +1 480 235 0934 E-mail: skip.miller@asml.com

2650 W Geronimo Place, Chandler, AZ 85224, USA

(Name, Telephone, E-mail, and / or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol Name of each exchange on which registered

Ordinary Shares ASML The NASDAQ Stock Market LLC

(nominal value €0.09 per share)

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

Indicate the number of outstanding shares of each of the issuer’s classes of

capital or common stock as of the close of the period covered by the annual report.

394,589,411 Ordinary Shares

(nominal value €0.09 per share)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☒ No ☐

If this report is an annual or transition report, indicate by check mark if the registrant

is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the

Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant

was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically

every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the

preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company.

See definition of "large accelerated filer,” “accelerated filer" and “emerging growth company" in Rule 12b-2 of the Exchange Act.:

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

Yes ☒ No ☐

If securities are registered pursuant to Section 12 (b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare

the financial statements included in this filing:

U.S. GAAP ☒ International Financial Reporting Standards as issued by the

International Accounting Standards Board ☐ Other ☐

If "Other" has been checked in response to the previous question, indicate by check mark

which financial statement item the registrant has elected to follow.

Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a

shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes ☐ No ☒

Name and address of person authorized to receive notices and communications from the Securities and Exchange Commission:

James A. McDonald

Skadden, Arps, Slate, Meagher & Flom (UK) LLP

40 Bank Street, Canary Wharf London E14 5DS England

ASML ANNUAL REPORT 2022

STRATEGIC REPORT

GOVERNANCE

FINANCIALS



			Smaller size, bigger capability is a well-established trend in the chip industry. And thanks to the joint efforts of our 39,000 people working together with suppliers, customers and innovation partners, we are taking that ever further. Every day we push the boundaries of physics and shrink patterns to help shape the future of life, work and play across the planet. Strongly embedded in a global innovation ecosystem, we enable ground-breaking technology that can help humanity manage challenges and seize opportunities by facilitating smart living and mobility, accessible healthcare, food security and the transition to renewable energy.
			Creating small patterns that enable a big impact.

Tackling
pollution

Global
well-being

Food
security

Energy
transition

Smart
mobility

Virtual and augmented reality

Wearable technology

See page 8 >

See page 22 >

See page 30 >

See page 40 >

See page 51 >

See page 69 >

See page 149 >

ASML ANNUAL REPORT 2022

CONTENTS

STRATEGIC REPORT

GOVERNANCE

FINANCIALS

Contents






			Message from the CEO on page 5 >


			Q&A with the CTO on page 20 >


			Q&A with the CFO on page 41 >


			View our Highlights online >


STRATEGIC REPORT

4	Forward-looking statements		Environmental
5	Message from the CEO	76	Energy efficiency and climate action
9	Our company	85	Circular economy
20	Q&A with the CTO		Social
23	Marketplace	97	Attractive workplace for all
31	Our business and ESG strategy	109	Our supply chain
33	Our business model	118	Innovation ecosystem
41	Q&A with the CFO	124	Valued partner in our communities
	Financial performance		Governance
44	Performance KPIs	134	Managing ESG Sustainability
49	Long-term growth opportunities	135	Responsible business
	Risk	147	Our approach to tax
52	How we manage risk
56	Risk factors		Our stories
	Environmental, Social and Governance	8	Tackling pollution
		22	Global well-being
70	ESG at a glance	30	Food security
71	Our material ESG sustainability topics	40	Energy transition
		51	Smart mobility
		69	Virtual and augmented reality
		149	Wearable technology


CORPORATE GOVERNANCE
						Corporate Governance
152						Board of Management
154						Supervisory Board
157						Other Board-related matters
160						AGM and share capital
165						Financial reporting and audit
167						Compliance with Corporate Governance requirements
						Supervisory Board report
168						Message from the Chair of the Supervisory Board
170						Supervisory Board focus in 2022
174						Meetings and attendance
177						Supervisory Board committees
185						Financial Statements and Profit Allocation
						Remuneration Report
186						Message from the Chair of the Remuneration Committee
188						Remuneration at a glance
190						Remuneration Committee
192						Board of Management remuneration
208						Supervisory Board remuneration

A definition or explanation of abbreviations, technical terms and other terms used throughout this Annual Report can be found in the chapter Definitions. In some cases, numbers have been rounded for readers’ convenience.

This report comprises regulated information within the meaning of articles 1:1 and 5:25c of the Dutch Financial Markets Supervision Act (Wet op het Financieel Toezicht).


FINANCIALS & NON FINANCIALS

						Consolidated Financial Statements
214						Report of Independent Registered Public Accounting Firm
216						Consolidated Statements of Operations
217						Consolidated Statements of Comprehensive Income
218						Consolidated Balance Sheets
219						Consolidated Statements of Shareholders’ Equity
221						Consolidated Statements of Cash Flows
222						Notes to the Consolidated Financial Statements
						Non-financial statements
264						Assurance Report of the Independent Auditor
266						About the non-financial information
272						Non-financial indicators
290						Other appendices
309						Definitions
317						Exhibit index

In this report the name ‘ASML’ is sometimes used for convenience in contexts where reference is made to ASML Holding N.V. and/or any of its subsidiaries, as the context may require.

References to our website and/or video presentations in this Annual Report are for reference only and none nor any portion thereof are incorporated by reference in this report.

ASML ANNUAL REPORT 2022

FORWARD-LOOKING STATEMENTS

STRATEGIC REPORT

GOVERNANCE

FINANCIALS

Special note regarding forward-looking statements

This Annual Report contains statements relating to our expected business, results projections, business trends and other matters that are “forward-looking” within the meaning of the Private Securities Litigation Reform Act of 1995. You can generally identify these statements by the use of words like “may”, “will”, “could”, “should”, “project”, “believe”, “anticipate”, “expect”, “plan”, “estimate”, “forecast”, “potential”, “intend”, “continue” and variations of these words or comparable words. They appear in a number of places throughout this Annual Report and include statements with respect to our expected trends and outlook, strategies, corporate priorities and goals, expected semiconductor industry trends, expected trends in markets served by our customers, including expected growth in semiconductor demand, manufacturing

capacity, expected semiconductor market trends and market growth and drivers of such trends and growth, expected financial results, including expected sales, service revenue, gross margin, expected capital expenditures, R&D and SG&A expenses, effective annualized tax rate, annual revenue growth rate and outlook for 2023 and other statements under “Trend Information”, annual sales and gross margin opportunity and potential and growth outlook and for 2025 and 2030, sales model for 2025 and other statements under the section entitled “Long-term growth opportunities”, statements under the section entitled "Risk factors", expected trends in customer demand and demand for semiconductors including expected trends in end markets, including Memory and Logic, expected development of High-NA and expected timing to start shipment of High-NA systems

and high-volume production of High-NA systems, for semiconductor industry market opportunities, expected EUV and DUV and installed based management sales and the expectation about continuing role of DUV systems, EUV product roadmap, our supply chain strategies and goals, customer, partner and industry roadmaps, expected productivity and benefits of our tools, potential future innovations and system performance, expected shipments of our tools, including demand for and timing of shipments, statements with respect to DUV and EUV competitiveness, the development of EUV technology, revenue recognition, expected demand for wafers, expected impact of inflation, ESG strategy including our sustainability targets, goals and strategies, environmental, diversity and sustainability strategy, ambitions, goals and

targets, including circular procurement goals, targeted greenhouse gas emissions and waste reduction, recycling and refurbishment initiatives, investments and goals and energy-saving strategies and targets, including statements on targeting zero carbon emissions and indirect emissions from energy use across operations and reducing intensity of all other emissions in the value chain and the goals for timing thereof, statements with respect to Moore’s Law, cash return and dividend policy, our expectation to continue to return cash to our shareholders through share buybacks and dividends including our proposed dividend for 2022 and statements relating to our share buyback program, statements with respect to the expected impact of accounting standards and other non-historical statements. These forward-looking

statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about business and future financial results and readers should not place undue reliance on them. Forward-looking statements do not guarantee future performance, and actual results may differ materially from projected results as a result of certain risks, and uncertainties. These risks and uncertainties include, without limitation, those described under How we manage risk – Risk factors. These forward-looking statements are made only as of the date of this Annual Report. We do not undertake to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

ASML ANNUAL REPORT 2022

MESSAGE FROM THE CEO

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Record performance in a challenging year

With record net bookings for 2022, an innovation pipeline filled with new products and services
and our talented, energized and engaged people, we face the future with great confidence.

Dear Stakeholder,

The figures speak for themselves: record sales of €21.2 billion, up by 13.8% compared with 2021, a gross margin of 50.5% and a dividend per share of €5.80 add up to another outstanding year for ASML. Our net bookings stand at an unparalleled €30.7 billion for the year 2022, our pipeline is flowing freely, with a number of new products launched, set to launch or in development, and our people are talented, energized and engaged. Not surprisingly, we are looking forward to a very bright future with strong growth. I would like to thank all our stakeholders for their support during the year – and in particular I wish to pay tribute to our people, who have again displayed outstanding commitment and expertise, and without whom none of our achievements would have been possible.

Yet despite the positive numbers, the reality is that 2022 could actually have been even better. Our ability to meet customer demand continued to be impacted by a set of circumstances that were not fully in our control. The aftermath of COVID-19, the ongoing war in Ukraine and struggles among some of our supply chain partners to deliver according to our agreed plans due to material shortages have combined to cause significant turbulence and meant that we were unable to give our customers what they needed all of the time.

Ultimately, we have seen the global chip shortage that first appeared in 2020 continue through 2022. We have all encountered this in one way or another in our personal lives, whether through delays in taking ownership of a new vehicle or reduced availability of technology such as solar panels.

Delivering on our business strategy…

Although we have at times struggled operationally, from a strategic standpoint we have continued to deliver. Our comprehensive product portfolio is aligned to our customers’ roadmaps, delivering cost-effective solutions in support of all applications, from leading-edge to mature nodes. Among many highlights of the year, we shipped the first TWINSCAN NXT:2100i, received new orders for the TWINSCAN EXE:5200 and saw several customers adopt Alignment Optimization 12 Color.




Our investments are set to increase capacity.”
Peter Wennink
President, Chief Executive Officer and Chair of the Board of Management

While we had more unhappy customers than I would have liked, we have also experienced empathy and support. We have always kept customers fully informed of any delays to shipments, and they can see for themselves how our investments are set to increase capacity. Cranes stand across the skylines of our sites as our investment to increase our manufacturing capacity to 90 EUV 0.33 NA and 600 DUV systems by 2025-2026 begins to take shape, while we are also ramping our EUV 0.55 NA (High-NA) capacity to 20 systems by 2027-2028. And key partners such as Carl Zeiss are also busy adding capacity, doing everything they can to free the logjam in the supply chain.

ASML ANNUAL REPORT 2022

MESSAGE FROM THE CEO CONTINUED

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Record performance in a challenging year (continued)

It is true that some customers, concerned about the global economic environment, are choosing to delay shipments. But as evidenced by our order book, most are continuing to push us to get the tools they need and are eager to take up any spare capacity we can release to get deliveries even earlier than scheduled if possible.

We have also been working to improve the flexibility of our manufacturing capacity, our workforce and our supply chain to enable us to respond quickly and appropriately to the current waves of uncertainty.

…and on our ESG strategy

The theme for this annual report is Small patterns. Big impact. The things we do at ASML have a wide-ranging impact, not only on our customers but on society at large. The technology pioneered by our R&D teams and partners sits at the heart of global digitalization, and has the potential to transform how we all live and work, from enabling predictive healthcare, energy transition and smart cities to wearables, self-driving cars and robotics.

Launched in 2021, our ESG strategy acknowledges and addresses the impact we have on society. It underpins our drive to be a responsible organization and a force for good in the world.

Of course, we are not unique in this. All responsible companies now dedicate significant resources to ESG matters, reflecting how the world is coming to terms with its major challenges, notably climate change and the energy transition. For us, ESG is about helping to create a responsible society – one where as many people as possible have a safe and healthy environment, a job, a home and access to food, good schools and quality medical care. These are important basic conditions for businesses to flourish and for economies to grow. As we outline in 'Environmental, Social and Governance - ESG at a glance', we have made good progress over the last 12 months.

We have always been very vocal about the fact that we’re running this company to a stakeholder model, not per se only a shareholder model. We have five stakeholder groups – our people, our customers, our suppliers, our shareholders and society. It is the balance between those five that actually makes a company credible. If you focus only on one or two of those stakeholders, the others are likely going to suffer. So we work very hard to get the balance right. We are not perfect and there remains much to do – but our ESG strategy is an important beacon that is lighting up the way ahead.

Working with our partners

We can’t survive without our partnership ecosystem, and this goes right to the heart of our values – challenge, collaborate and care. We love being challenged, and we rise to challenges much better when we collaborate with others, from academia and research institutions to leading-edge companies from all over the world, creating trust and sharing both risks and rewards. Together, we are developing technology that can have a positive impact – caring for the ecosystem, for all our stakeholders and for our planet.

We work together in a strong global semiconductor innovation ecosystem with our suppliers and innovation partners, as well as with other equipment providers such as etch and deposition partners, to understand patterning and how we can provide the solutions that our customers, our customers’ customers and our end users demand.

As architects and integrators, we orchestrate this process – building on our values to help fill our innovation funnel and keep the ASML pipeline flowing freely. The Brainport Eindhoven innovation ecosystem, in which we operate from our headquarters in Veldhoven, is a good example of this level of cooperation, which is based on trust, transparency and a willingness to share expertise and knowledge.






Our ESG strategy is an important beacon that is lighting up the way ahead.”
Peter Wennink
President, Chief Executive Officer and Chair of the Board of Management

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Record performance in a challenging year (continued)

Driving the search for global talent

It may be a cliché that people are a company’s greatest asset, but it is also very true – and the shortage of talent is a factor that is impacting every industry on the planet, including ours. To meet the chip industry’s ambitions, globally and within the European ecosystem, we need to significantly increase the inflow of engineering talent in the coming decade.

The governments of South Korea, the US, Taiwan and Japan are all investing heavily in chip-related education and vocational training. We need to see the Dutch and other European governments doing the same. At ASML, we’re playing our part. Education is a key pillar of our community engagement activities, and during 2022 we again supported programs to boost interest in technology among young people and increase local talent pools in [all the main] geographies where we operate.

Read more in:

Social

In 2022 we welcomed 7,130 new people into ASML, so our efforts to attract talented individuals are paying dividends, supported by the fact that we’re able to offer them the opportunity to work at the cutting edge of technology. Today, we have more than 140 nationalities at ASML – but we know that young people move often and may not stick around for 20 years or so as previous generations did. So our challenge is to make sure that ASML is an attractive long-term option where people can contribute and enjoy the benefits of doing so and develop themselves. That is where our 'can do' culture is so important. We have a workplace environment here where people can drive innovation forward, inspire each other and help make sure that digital technology fulfills its potential.

Looking ahead to 2023 and beyond

At the 2023 AGM, Gerard Kleisterlee, the Chairman of our Supervisory Board, will step down after having served on the Supervisory Board since 2015. I would like to express our gratitude to Gerard for his valuable contributions as Chairman of the Supervisory Board and the Selection and Nomination Committee, and member of the Technology Committee. He has brought profound experience to the Supervisory Board during his eight years of service and has been a great source of guidance and advice for ASML. We wish Gerard all the best for the future.

When looking at our business environment, in the short term it is clouded by uncertainty due to a number of macroeconomic concerns including energy shortages, inflation, reduced consumer confidence and recession. On a geopolitical level, the bifurcation of socio-economic blocks – with the associated export and import controls – is threatening the development of the global village that contributed so much to a lot of the innovation we have seen in recent years. If countries or trade blocks withdraw into their own territories, then innovation will be less effective and more expensive.

Several news organizations reported end of January 2023 that the US, the Netherlands and Japan agreed to further restrict the export of semiconductor manufacturing equipment to China. We understand that steps have been taken that would cover advanced lithography tools as well as other types of equipment. The terms of this agreement have not been publicly disclosed and remain confidential for now. We expect that it will take many months for the governments to write and enact new rules. Combined with the current market situation, we do not expect these measures to have a material effect on our expectations for 2023.

Looking at the immediate future, we will have to deal with the shocks in the system, and I am confident that we will do so, supported by growing demand for semiconductors and semiconductor equipment. Over the next 12 months, I anticipate that we will yet again break records.

Beyond 2023, I am very positive about our industry in general and about ASML in particular. Some industry analysts believe that our semiconductor industry will grow to be worth a trillion dollars by 2030 – and we do not disagree. Our own expectation is that our combined systems and installed base revenue could provide an annual revenue growth rate of around 14%1 for the period 2020-2030.

Teamwork, both within ASML and externally with our partners and suppliers, will be a crucial component if we are to achieve that ambition. By challenging, collaborating and caring, we will play a leading role in meeting customer demands, delivering the right technology at the right time to enable the semiconductor industry to thrive while taking to heart the interests of the communities around us.

Peter Wennink

President, Chief Executive Officer and Chair of the Board of Management




By challenging, collaborating and caring, we will play a leading role in meeting customer demands, delivering the right technology at the right time.”
Peter Wennink
President, Chief Executive Officer and Chair of the Board of Management

1.Using the midpoint of the 2030 revenue scenarios ASML models over the period 2020-2030, we expect a potential compound annual growth rate of around 14% from our base 2020 revenue, around €14.0 billion. This is a combination of growth in our systems sales as well as our installed base management revenue.

ASML ANNUAL REPORT 2022

SMALL PATTERNS. BIG IMPACT.

STRATEGIC REPORT

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						TACKLING POLLUTION
						Nano innovations, macro challenges
						Our lithography solutions not only help to reduce chip size – they also increase performance and energy efficiency. That’s opened the door to nano-innovations such as the ‘winged microchip’ – inspired by the way seeds disperse through the air, these ultra-miniaturized electronic devices can ride the wind to track air pollution, airborne disease and environmental contamination.
						Read more online

ASML ANNUAL REPORT 2022

OUR COMPANY

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At a glance

As a global innovation leader in the chip industry, we provide chipmakers with hardware, software and services to mass produce patterns on silicon through lithography.

Berliner Glas (ASML Berlin GmbH), which we acquired in 2020, is reflected as part of our business throughout this report, with the exception of non-financial reporting.

Key facts

€21.2bn

€3.3bn

Total net sales

R&D investments

€18.6bn Asia

€2.0bn US

€0.6bn EMEA

We innovate across our entire
product portfolio through strong investment in R&D

Read more on page 97 >

Key products and services

Lithography systems

Extreme ultraviolet (EUV). We are the world’s only manufacturer of EUV equipment, the most advanced system with the capability of printing smaller features with higher density.

Deep ultraviolet (DUV). As the workhorse of the semiconductor industry, DUV produces the majority of layers in a customer device today, and will remain important for future devices.

Metrology and
inspection systems

Computational
lithography

Using optical and e-beam technology, these systems enable chipmakers to assess their performance across the chip manufacturing process, helping to improve accuracy, performance and quality control.

This process is used in the development of new chips to optimize reticle designs and enable more precise monitoring and control.

Software

Lithography process and control software solutions.

Refurbishment

Customer support

We measure a machine’s life in decades, not years. We refurbish and upgrade our older lithography systems to extend their lives, and we offer associated services.

We support our customers with a broad range of applications, services, technical support products and upgrades to ensure our equipment works reliably in their production process.

Our global presence

Asia

China

Hong Kong

Japan

South Korea

Malaysia

Singapore

Taiwan

North America

Arizona

Oregon

California

Texas

Colorado

Utah

Connecticut

Virginia

Idaho

Massachusetts

New Mexico

New York

EMEA

Belgium

France

Germany

Ireland

Israel

Italy

Netherlands

United Kingdom

ASML ANNUAL REPORT 2022

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What makes us ASML


			Our purpose

			Why we exist
			Unlocking the potential of people and society by pushing technology to new limits
			Society has made huge advances over the years, but the world still faces crucial challenges for the future. We must change how we think and act on themes that impact everyone. That’s why we seek to innovate at least at the same pace as our customers, focusing our intellect and resources to constantly look for new ways that will help improve society in areas such as energy use, climate change, mobility, healthcare, education and nutrition.


			Our vision

			What we try to achieve
			We enable ground-breaking technology to solve some of humanity’s toughest challenges
			At ASML, we believe that the microchip industry is in a unique position to help tackle these challenges. From artificial intelligence (AI) to a vast internet of things (IoT), microchips are at the heart of modern technology that’s enabling the transition to sustainable energy, improving global health, increasing the safety and efficiency of transport, tackling pollution, bridging the digital divide or feeding close to eight billion people without exhausting the earth’s resources.


			Our mission

			What we uniquely do
			Together with our partners, we provide leading patterning solutions that drive the advancement of microchips
			The long-term growth of the semiconductor industry is based on the principle that the energy, cost and time required for electronic computations can be reduced by shrinking transistors on microchips. To enable shrink, what we do – lithography – is key. Through our sustained investment in and dedication to research and development, we have become the innovation leader and a focused supplier of holistic lithography solutions to all of the world’s major chipmakers.

ASML ANNUAL REPORT 2022

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What makes us ASML (continued)

Our core values

To help solve humanity’s toughest challenges while at the same time addressing our own, we must continue to amplify ASML’s core values that created our success – challenge, collaborate and care. We believe that these values help to provide opportunities for our employees in a safe, inclusive environment to develop their talent, feel respected and thrive, which enables them to make smart decisions that benefit all stakeholders.

We challenge

We collaborate

We care

Say it can’t be done, we dare you. We bravely challenge boundaries and question the status quo. We continuously refine our ideas and processes, which enables us to keep pushing technology forward.

We collaborate to tap into our collective potential. Together with our partners in our ecosystem, we expand our knowledge and skills, learn from each other and share approaches to deliver the best results. This way, we create solutions that are optimized for ASML as a whole.

As an industry leader, we act with integrity and respect, realizing that our impact extends beyond technology to people, society and the planet. We take personal responsibility to create a safe, inclusive and trusting environment where people from all backgrounds are encouraged and enabled to speak up, contribute, make mistakes, learn and grow.

We bravely challenge boundaries,

we expand our knowledge and skills,

to people, society and the planet.

Watch 'Our values' video

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How we innovate

Our innovation philosophy is one where we see ourselves as architects
and integrators, working with partners in an innovation ecosystem.

Tiny microchips, driving a global ecosystem

Every moment of every day, people make use of technology that contains microchips. These are small but mighty devices, and fabricating the layers on even the simplest chip requires an elaborate process that few companies in the world have mastered. This can take months from start to finished product, as the silicon wafer travels through dozens of different machines in a chipmaker’s fab (semiconductor fabrication plant) before it finds its way into electronic products.

This multifaceted production process has led, over decades, to the semiconductor industry becoming a global ecosystem. This ecosystem includes specialized chip design companies, equipment and infrastructure suppliers and the chipmakers themselves.

A strong collaborative network at the cutting edge of our digital future

As a crucial manufacturer of lithography equipment, ASML is a vital part of this ecosystem chain. The fabrication of the circuitry patterns on silicon wafers, made possible by our lithography systems, can be found in the factories of every major chipmaker in the world.

But our systems are just one part of a network and process involving numerous suppliers and the latest chipmaking equipment. Every step and every machine in the process is important. That’s why collaboration and innovation are key. At ASML, we collaborate to succeed – from the academics who help us understand and push the laws of physics, to our customers who identify new possibilities and the suppliers that translate our ideas into products and technology.

Our ecosystem partners

We innovate through partnerships. By developing our technology in close collaboration with our customers, we seek to build today what they need tomorrow. We develop our machines based on their input, and engage closely with them to help pursue their technology and cost roadmaps.

We also work closely with our suppliers, trusting them to manufacture parts and modules for our systems. Many of them are deeply involved in developing new technology and achieving the innovations we seek. With some of these so-called ‘farmout suppliers’, we work as co-investors.

Our partnership with Carl Zeiss SMT has spanned more than three decades, and we also hold an important strategic interest in the company. We apply the principle of ‘two companies, one business’, working together to drive operational excellence in innovation and technology.

We co-develop expertise through a wide network of technology partners, including universities and research institutions such as imec in Belgium and the technical universities in Twente, Delft and Eindhoven and Advanced Research Center for Nanolithography (ARCNL), all in the Netherlands.

Generating ideas and finding technological innovations and solutions

With more than 14,000 of the brightest minds in the industry in our R&D department, ASML is uniquely placed to innovate the most advanced lithography systems in the world. We continue to invest heavily in R&D – in 2022, we spent €3.3 billion in this vital area, compared with €2.5 billion in 2021, while balancing our customers’ needs, product capabilities and technology solutions.

Our R&D teams focus on generating and exploring exciting new ideas and demonstrating their feasibility in the long term, as well as finding technological solutions to the challenges colleagues may face with any products and applications that have already moved into development.

Our researchers continuously scout for technological innovations and solutions – within the semiconductor industry and beyond – to assess if they can be applied in ASML’s technology roadmap to support our customers and help drive their own semiconductor device roadmaps.




			We innovate through partnerships. By developing our technology in close collaboration with our customers, we seek to build today what they need tomorrow.

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How we innovate (continued)

Filling the ‘innovation funnel’

We encourage our experts to build a wide network in the broader technology space. This supports the constant stream of new ideas to our technology pipeline that flows through what we call our ‘innovation funnel’ (see diagram on the right). This helps us select new ideas that have the potential to advance our products and their customer application.

Ideas that pass the feasibility assessment go into our product generation process (PGP), a decision-based process for product development that includes building and testing system prototypes in the necessary environments. Prototypes that pass these tests may eventually lead to new product releases.

–Our research teams scout for new ideas

–These ideas are taken through the ‘proof of concept’ stage

–Those that pass the feasibility assessment are transferred to our Development and Engineering (D&E) department

–Guided by the PGP, our D&E engineers create new components or subsystems, integrating them into the functional system

–They also develop new applications

–They ensure we innovate with a strong focus on time-to-market

Innovation achievements in 2022

Every day, our teams take on the exciting challenge of building and driving innovation to enhance our reputation as the providers of the most advanced lithography systems in the world. To do this, we apply concurrent engineering, often starting new system development before the previous generation has even reached the customer. At the same time, we continuously seek to improve our products and capabilities, while safeguarding their reliability, manufacturability and serviceability.

In DUV, we shipped the first TWINSCAN NXT:870 – the first NXT KrF system – and the first TWINSCAN NXT:2100i – enabling over 20% improvement of on-product overlay to a customer.

In our EUV High-NA business, we received both the first High-NA mechanical projection optics and

illuminator and the new wafer stage from suppliers. These modules will be used for initial testing and integration, an important step for the EXE:5000 program.

In addition, to further strengthen our product offering, we released ALO12C – a hardware-software combination – that enables our customers to optimize wafer alignment performance using 12 colors instead of four.

We have also continued to progress our metrology and inspection roadmap. For example, the HMI eScan 1100 multibeam system, our first-generation multibeam system with 25 beams (5x5), has been shipped for customer evaluation.

In 2022, we also shipped our first eScan460 system, which is our next-generation single-beam inspection system.

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Customer intimacy

We believe a true partnership with our customers is vitally important,
to ensure we share the risks and rewards of what we do.

Engaging with our customers at all levels and focusing on long-term challenges

We are one of the world’s leading manufacturers of chipmaking equipment, while our customers are the world’s leading microchip manufacturers. We enable them to create the patterns that define the electronic circuits on a chip, and consequently our success is inextricably linked with theirs.

That’s why we collaborate with our customers to understand how our technology best fits their needs and challenges. That means engaging with our customers at all levels: building partnerships, sharing know-ledge and risks, aligning our investments in innovation and increasingly focusing on the long-term challenges for the next five to ten years and beyond. We develop our

solutions based on their input, help them achieve their technology and cost roadmaps, and work together, often literally in the same team, to make sure our solutions fit together perfectly.

Engaging fully with customers is also an important part of working toward securing the full product portfolio that will sustain our company into the future – which includes increasing the adoption of EUV in high-volume manufacturing environments. In 2022, we received additional orders for the TWINSCAN EXE:5200, the high-volume manufacturing version of our EUV 0.55 NA (High-NA) platform. All current EUV customers have submitted orders for High-NA, demonstrating the demand for continuing shrink.

Complete customer satisfaction

When we talk about customer intimacy, we mean the entire customer relationship across all channels, from the early stages of innovation onward. At each stage, we aim to foster trust, advocacy and continuous engagement, with the goal of achieving complete customer satisfaction.

As customer requirements become more complex, it takes longer to align with a shared vision, so we seek to start earlier in the process. Transparency is key, and our customer intimacy strategy helps us to leverage our innovations and develop even more sophisticated solutions with our customers.

Close customer alignment

We have built a structure of customer interactions across various channels in the organization to support and sustain our partnerships with customers. For example, we run regular meetings with our key customers to align our product development plans with their business goals and needs.

These meetings include Executive Review Meetings, at which members of our senior management team and Board of Management discuss business and strategies with customers; Technology Review Meetings, at which our senior technology experts, our Chief Technology Officer and our Chief Business Officer discuss technology roadmaps and requirements with customers; and Operational Review Meetings, where we review topics related to our customers’ operational activities.

Building on our customer relationships

We market and sell our products directly to customers, without agencies or other intermediaries. Our dedicated Sales and Customer Management department is responsible for building and maintaining our customer relationships and ensuring all relevant ASML departments contribute to meeting customer needs. Our account managers, field and application engineers and service and technical support specialists are located close to our customers throughout Asia, the US and EMEA.

We know how essential it is for us to have well-trained engineers in the regions where we operate, so we offer training designed to boost the capabilities of our local customer service teams as well as enhance local technical expertise. Alongside good remote-control capabilities, this ensures that we continue to increase the self-sufficiency of the local field engineers.

Working with customers in 2022

While we maintained a high level of engagement with our customers throughout the pandemic, we were pleased that the physical interactions started to return to ‘normal’ this year. With travel restrictions, quarantine and workforce constraints coming to an end in many countries, we were able to hold physical meetings with more customers around the world, and they were able to visit us at the Veldhoven campus more and more.




			We collaborate with our customers to understand how our technology best fits their needs and challenges.

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Customer intimacy (continued)

However, some restrictions remained around the world during the year.

Our customer relationships have been important in trying to manage the significant ramp-up of demand in the first part of the year. The market remained strong, but the overheated nature of the market this year, combined with the challenges we experienced in delivering systems as fast as our customers needed, impacted the conversations we had with them. While we went through the delivery challenges together, we did our best to keep our customers fully informed of shipment status and progress in our capacity plans.

Given the shortages that built up in the early part of 2022, our customers still needed our equipment urgently. We have worked with them to achieve this, focusing on the dynamics of different customers in various areas in the industry. As part of our commitment to responding rapidly to our customers’ needs, we also introduced ‘fast shipments'.

The market continues to be influenced by governments, for example through the CHIPS and Science Act in the US and EU, which focuses on federal aid to encourage the construction of microprocessor manufacturing facilities. This type of governmental attention requires major investments in specific regions, which also require delivery of our equipment for new fabs.

Measuring our approach

Our Voice of the Customer program helps to ensure our employees hear firsthand about our customers’ needs and challenges. This is especially important for employees without direct access to customers. To reach as many of our people as possible, the program makes use of different channels of communication: live presentations and Q&As with senior customer representatives, recorded customer interviews, online articles and personal engagement with customer representatives.

While we still face the long tail of COVID-19 restrictions in some areas, we continue to run local Voice of the Customer initiatives and remote customer interviews. Our regular schedule of interactions continued throughout the year, and we are starting to reintroduce live presentations with larger audiences and combining remote with face-to-face interactions where we can.

We also ask our customers to rate our performance through our Customer Feedback Survey. Their direct ratings and frank comments provide valuable insight into how we can contribute to our customers’ successes and help them to overcome challenges. We carefully analyze the results, check the insights gained with each customer and then define targeted, continuous improvement plans with their input to ensure we take their priorities into account.

We have been busy deploying the improvement actions identified in our 2020 survey. This has helped us focus on truly understanding what customers need from us, and validating that we are on the right track with the right improvements. We have updated our customers regularly on the progress being made, and in September 2022 we sent out our latest survey. The results of the 2022 survey show us that our customers are satisfied with our teams, and products, performance and the business support we provide for them. They also ask us to closely listen to their feedback, provide them with shorter delivery times and continue pushing the technology forward in collaboration with them and in line with their needs.

Externally, TechInsights, through its annual Customer Satisfaction Survey, benchmarks the performance of suppliers across the semiconductor industry based on three key factors: supplier performance, customer service and product performance. Our target is to achieve a top-three ranking among large suppliers of semiconductor equipment. In the 2022 TechInsights benchmark, we again achieved a second place Customer Satisfaction ranking among the ‘10 Best Large Suppliers of Chip Making Equipment’, and first place in the best suppliers of fab equipment category.

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Our products and services

Our highly differentiated solutions provide unique value drivers, for both our customers
and ASML, that will enable affordable shrink well into the next decade.

Holistic lithography product and
service portfolio

The semiconductor industry is driven by affordable scaling – the ability to make smaller, more energy-efficient transistors at the right price. Our holistic lithography product portfolio is geared toward lithography-enabled shrink that goes far beyond the current decade, allowing our customers to generate the greatest value per silicon wafer for many years to come.

Our comprehensive portfolio supports customers with a broad range of products and services, from mass-producing advanced Logic and Memory chips to creating novel ‘More than Moore’ applications or cost-effective mature chip technologies. Our product offerings provide patterning solutions for various industry wavelengths – from the most advanced 13.5 nm EUV wavelength to the industry’s workhorse DUV wavelengths of 193 nm, 248 nm and 365 nm.

As chipmakers continue to scale nodes, they face unprecedented engineering, material, structural and manufacturing difficulties. Our applications products support our lithography platforms, driven by our unique capability to help customers maximize patterning performance. This portfolio includes optical and e-beam metrology, high-resolution e-beam inspection, computational lithography and scanner and process control software solutions.

We also support our growing installed base with best-in-class customer support, providing our customers with upgrade solutions for higher productivity and improved imaging, overlay and availability.



Our holistic lithography approach
See page 35 >

In more than two decades since we started developing EUV technology, we have invested billions in R&D and acquired Cymer, a San Diego-based maker of light sources, to accelerate our EUV source technology. This has helped us solve several technical challenges to enable the EUV infrastructure our customers need for high-volume manufacturing.

Our success has come through close cooperation with our customers and suppliers, and ASML is currently the world’s only manufacturer of EUV lithography systems. Since its introduction, our EUV installed base produced more than 111 million wafers, compared with 59 million wafers produced by end of 2021.

EUV 0.33 NA

Our EUV platform extends our customers’ Logic and Memory roadmaps by delivering resolution improvements and state-of-the-art overlay performance, enabling year-on-year cost reductions. EUV lithography uses light with a wavelength of just 13.5 nm and a numerical aperture of 0.33. This is a wavelength reduction of almost 15 times compared with the next most advanced lithography solution used in advanced chipmaking – deep ultraviolet (DUV) argon fluoride (ArF) lithography, with its 193 nm light. This allows our customers to use EUV in a single exposure, rather than complex multiple-patterning strategies with ArF immersion, and enables them to further shrink microchip structures. Our EUV product roadmap is intended to drive affordable scaling to 2030 and beyond.

The TWINSCAN NXE:3600D is our latest-generation EUV 0.33 NA lithography system. It combines the highest resolution with 15-20% increased productivity and around 30% better overlay compared with its predecessor, the TWINSCAN NXE:3400C, while also improving system availability.

EUV 0.55 NA (High-NA)

After six years of engineering, we have started to build the next generation of EUV lithography systems – further improving resolution with a higher numerical aperture (NA) of 0.55 NA compared with the 0.33 NA of our current EUV platform. To reduce technological introduction risk and R&D costs, the EUV 0.55 NA (High-NA) platform maximizes commonality with the EUV 0.33 NA platform.

Our EUV 0.55 NA systems – TWINSCAN EXE:5000 and EXE:5200 – are an evolutionary step in EUV technology, introducing a novel optics design and significantly faster reticle and wafer stages. Their 0.55 NA provides a resolution increase compared with the 0.33 NA lens used in our previous EUV machines, and this enables higher-resolution patterning for even smaller transistor features.

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Our products and services (continued)

These enhancements offer considerable benefits to our customers, enabling lithography simplification for future nodes, higher yield and decreased defect density for both Logic and dynamic random-access memory (DRAM). With its larger optics, the EXE platform can print smaller features with higher density, reducing patterning costs for customers. EUV 0.55 NA helps our customers to extend their shrink roadmap and minimize double or triple patterning compared with 0.33 NA, leading to reduced patterning complexity, lower risk of defects and a shorter cycle time.

EUV 0.55 NA has also been designed to enable multiple future nodes, with the industry’s first deployment expected in 2025, followed by memory technologies at similar density. We expect EUV 0.55 NA (High-NA) technology to start supporting high-volume manufacturing in 2025/2026.

In 2022, we received purchase orders from all of our current EUV customers for the delivery of the industry’s first TWINSCAN EXE:5200 system – EUV high-volume production system with a high NA and a productivity of 220 wafers per hour.

DUV lithography systems are the workhorses of the industry. Supporting numerous market segments, DUV systems produce the majority of layers in a customer device today and will remain important for future devices. We offer immersion as well as dry lithography solutions for all wavelengths currently used in the semiconductor industry – i-line using 365 nm wavelength, KrF using 248 nm and ArF using 193 nm. These systems help manufacture a broad range of semiconductor nodes and technologies, and support the industry’s cost- and energy-efficient scaling.

Our DUV immersion and dry systems lead the industry in productivity, imaging and overlay performance for high-volume manufacturing of the most advanced Logic and Memory chips in combination with EUV, while continuing to deliver value for mature nodes and lower-volume applications.

Immersion systems

ArF immersion lithography maintains a thin film of water between the lens and the wafer. Using the refractive index of water to increase NA improves resolution to support further shrink. Our immersion systems are suitable for both single-exposure and multiple-patterning lithography, and can be used in seamless combination with EUV systems to print different layers of the same chip.

Our latest state-of-the-art immersion system is the TWINSCAN NXT:2100i, launched in the third quarter of 2022. Alongside intrinsic improvements to lens metrology, reticle conditioning and wafer table, as well as overall cross-matching improvements, the NXT:2100i features innovations such as the Alignment Optimizer 12 Color package. The system delivers 295-wafers-per-hour productivity combined with unprecedented overlay performance, providing the most cost-efficient solution to customers for critical immersion layers on the sub 3 nm nodes.

Dry systems

Not every layer on a chip has to be produced by the most innovative immersion lithography systems. While some more complicated layers do require more advanced lithography systems, others can often be printed using ‘older’ technology such as dry lithography systems. Our dry systems product portfolio offers our customers more cost-effective solutions for all types of wavelengths.

Our TWINSCAN NXT:1470 dual-stage ArF system continues to be adopted by the majority of Memory and Logic customers and has been inserted in high-volume manufacturing processes. It is the first dry NXT system, building on the common immersion platform, with improvements in matched machine overlay (<4.0 nm), productivity (>300 wafers per hour) and footprint.

Following our new-generation KrF system, the TWINSCAN XT:860N, we shipped the first TWINSCAN NXT:870 248 nm step-and-scan system to a customer. The NXT:870 is a high-productivity, dual-stage KrF lithography tool designed for volume 300 mm wafer production at and above 110 nm resolution. The system increases productivity from the 260 wafers per hour capability of the XT:860N to 330 wafers per hour through the use of the NXT platform, a higher scan speed and reduced system overhead time.

For more critical KrF layers, the 0.93 NA TWINSCAN XT:1060K is our most advanced dual-stage KrF lithography tool at 248 nm, with the highest NA and productivity in the industry, offering best-in-class resolution at and below 80 nm.

The TWINSCAN XT:400L is our latest i-line lithography system, which can print features down to a resolution of 220 nm for 200 mm and 300 mm wafer production.



With an 0.80 NA, the TWINSCAN NXT:870 is our new generation KrF system.

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Our products and services (continued)

Before EUV, before immersion and even before our TWINSCAN systems, there was the PAS. In 1991, seven years after the company was founded, we launched the PAS 5500, which would prove to be our breakthrough platform. This system dramatically reduced manufacturing times for our customers, and its modular design enabled them to produce multiple generations of advanced chips using the same system.

Our refurbished products business, known as Mature Products and Services (MPS), refurbishes and upgrades our older lithography systems to extend their lives and offer associated services. MPS’s customer base is wide and active in a variety of markets, especially in the ‘More than Moore’ space.

ASML systems have a very long operational lifetime that often exceeds their role at the initial customer. Many customers are therefore able to generate value by selling off systems they no longer require. To support this sustainable product use and ensure used systems deliver the quality that ASML stands for, we are actively involved in the used-system market through our refurbishment and associated services. Remarkably, 95% of the systems that we have sold in the last 30 years are still in use.

We offer refurbished systems of the PAS 5500 and first-generation AT, XT and NXT systems. Our refurbishment and associated services are adept at extending the lifespan of our customers’ installed base, drawing value from their capital and contributing to sustainable product use.

Our metrology and inspection systems allow chipmakers to measure the patterns that they actually print on the wafer to see how well they match the intended pattern. Our portfolio covers every phase of bringing a chip to market, from R&D to mass production, and our systems monitor each step of the manufacturing process – enabling chipmakers to assess the performance of the entire process.

The systems offer the speed and accuracy needed to create automated control loops via our process control solutions. This optimizes the lithography system settings for each exposure to reduce edge placement error (EPE), which is the combination of product overlay and critical dimension uniformity, enlarge the process window and achieve the highest yield and best performance in mass production.

Optical metrology

Our YieldStar optical metrology solutions allow chipmakers to assess the quality of patterns on the wafer in volume production, through fast and accurate overlay measurements. Overlay, or how well one layer of a chip is aligned with the previous one, is an important measure of lithography performance and a key contributor to EPE. As structures on microchips get smaller and smaller, overlay and EPE become increasingly important.

The YieldStar 385H, launched in 2020, offers in-resist post-lithography (pre-etch) overlay and focus metrology, with enhanced throughput and accuracy. Compared with previous systems, key enhancements include a faster stage and faster wavelength changing. This enables highly accurate overlay measurements and tool matching using multiple wavelengths without impacting throughput.

Our latest model, launched in 2021, the YieldStar 1385H, provides the ability to measure after-etch device patterns, enabling extended yield control capability for our customers. This system for fast, accurate in-device overlay and metrology delivers improved in-device accuracy and around 50% productivity improvement capability over the previous YieldStar 1375 model, and has the capability to measure multiple layers at once, helping customers to improve yield through post-etch process control.

E-beam metrology and inspection

Our HMI e-beam solutions allow customers to locate and analyze individual chip defects amid billions of printed features, extending the scope for process control. While e-beam solutions were historically too slow to monitor volume production processes, we have made progress in various methods of increasing the throughput of e-beam systems.

We continue to extend technology leadership in voltage contrast inspection and physical defect inspection with the widely adopted single-beam platform. The eScan 430 is our latest single-beam inspection system, delivering more than 35% throughput improvement across various applications in Logic, DRAM and 3D NAND.

Our high-resolution e-beam metrology system eP5 offers world-class 1 nm resolution with large field-of-view capabilities. It produces critical dimension (CD) and EPE data in high volume with a quality level that customers need for monitoring and control. EPE is becoming more critical for device patterning and yield with shrinking design rules and the adoption of EUV lithography. We also released an EPE metrology application software product on eP5. It is capable of local and global EPE measurements on device, both intralayer and interlayer.

In 2022, we released and shipped eP5 XLE, which extends the high-resolution eP5 system with high landing energy up to 30 keV and fast back-scattered electron detection for inspection and metrology of 3D devices in Logic and Memory. It is capable of overlay measurement on device patterns, complementing our YieldStar product offering. We have also released and shipped the first next generation high resolution e-beam metrology system eP6 to succeed eP5. The projected eP6 performance is expected to be more than 10 times the speed of existing technologies.

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Our products and services (continued)


Metrology and inspection systems (continued)

Building on the 2020 launch of our breakthrough multibeam inspection tool HMI eScan 1000, with a 3x3 image, we have now introduced the next-generation HMI eScan 1100 to our product portfolio. With a 5x5 image, it demonstrates successful multibeam operation, simultaneously scanning with 25 beams. The 5x5 system has higher sensitivity for detecting voltage contrast defects and physical defects, while substantially increasing inspection throughput. In 2022, the first eScan1100 multibeam system was installed at a customer site to start customer evaluation.

System and process control

Our system and process control software products enable automated control loops to maintain optimal operation of lithography processes. Using powerful algorithms, they analyze metrology and inspection data and calculate necessary corrections for each individual exposure. These are then fed back to the lithography system to minimize EPE in subsequent wafer lots. In this way they enable the creation of ever more advanced microchips with maximum yield and performance. Our system and process control roadmap aims to take increasing advantage of the huge flexibility of our lithography systems. We are able to apply more powerful algorithms with higher-order corrections to support our customers, own roadmaps for increasing EPE performance.

Computational lithography and software solutions

Our computational lithography solutions are used in the development of new chips to optimize both the reticle patterns and the setup of the lithography system to ensure robust, manufacturable designs that deliver high yields. Insight from computational lithography solutions is also increasingly being used to guide metrology and inspection, increasing throughput and enabling more precise process monitoring and control in high-volume manufacturing.

These products are based on accurate computer simulations of the lithography system and process, representing a wide variety of physical and chemical effects. Increasingly, we are using machine-learning techniques to further speed up development, and are continually developing our computational lithography offering to increase the range and accuracy of models and reduce the computational time and cost.

To provide all our customers with the best possible value proposition, we offer an extensive installed base management portfolio, including a wide range of service and upgrade options.

Our installed base continues to grow, with many systems finding second or even third lives at new owners in new markets and applications.

We develop and sell product options and enhancements designed to improve throughput, patterning performance and overlay. Our field-upgrade packages enable customers to optimize their cost of ownership over a system’s lifetime by upgrading older systems to improved models.

Customer support

We support our customers with a broad range of applications, services and technical support products to maintain and enhance our systems’ performance. We have more than 9,000 customer support employees, who work to ensure the systems in our customers’ fabs run at the highest levels of predictability and availability. We offer 24/7 support, next-day parts delivery, an easy, centralized customer portal and training for customer engineers.

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Innovation – the driving force behind our progress

In conversation with our President, Chief Technology Officer and Vice Chair of the Board of Management

Martin van den Brink

What were the stand-out achievements of the last 12 months?

For us, innovation is all about making a difference in the marketplace. Our goal is always to give customers the products and capabilities they need to deliver on the potential of technology for making a positive contribution to society. The hunger for computational power is endless. Energy transition, connectivity, healthcare and many more areas are all being transformed by digital technology – we do not directly create the tech that is making these developments possible, but we are important enablers.

So the most pleasing aspects of the last year have included seeing some of the ideas we have been working on in recent years become reality. For example, we made the first shipment of our latest DUV NXT technology, the TWINSCAN NXT:2100i. Furthermore, all our current EUV customers have now submitted orders for EUV 0.55 NA (High-NA). Customers will start their R&D in 2024-2025, aiming for high-volume manufacturing in 2025-2026.

The Rayleigh criterion that drives Moore’s Law

–CD is the critical dimension, a measure of how small the smallest structures are that the lithography system can print.

–Lambda is the wavelength of the light source used and the smaller the wavelength, the smaller the structures that can be printed. Our deep ultraviolet (DUV) lithography systems, known as the industry workhorse, dive deep into the UV light spectrum to print the tiny features that form the basis of the microchip. Over the years, ASML has made several wavelength steps, and our DUV lithography systems range from 365 nm (i-line), 248 nm (KrF) to 193 nm (ArF). With the extreme ultraviolet (EUV) systems, we provide highest-resolution lithography in high-volume manufacturing as these systems make a major step in wavelength. With EUV tin plasma, we generate EUV light which has a wavelength of just 13.5 nm.

–NA is the numerical aperture, indicating the
entrance angle of the light – with larger NA
lenses/mirrors, smaller structures can be printed. Besides larger lenses, ASML has increased the NA
of our ArF systems by maintaining a thin film of water between the last lens element and the wafer, using the breaking index of the water to increase
the NA (so-called immersion systems). After the wavelength step to EUV, ASML is developing the next-generation EUV systems, called EUV 0.55 NA (High- NA), where we push the numerical aperture from 0.33 to 0.55.

–k1 is a factor relating to optical and process optimizations. Together with our computational lithography and patterning control software solutions, we provide the control loops for our customers to optimize their mask designs and illumination conditions.

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Innovation – the driving force behind our progress (continued)

In conversation with our President, Chief Technology Officer and Vice Chair of the Board of Management

Martin van den Brink

We are 100% committed to advancing both EUV and DUV technologies in order to provide a balanced product portfolio. We have seen something of a transition in our R&D focus in recent years, with increased emphasis and resources dedicated to DUV, which will continue to be the industry workhorse and the technology of choice for many customers. We are now ramping up our development of solutions that are driving commonality, productivity and performance to new standards, underpinning the future of DUV.

Behind the scenes, we have been making good progress with our scanner and process control software solutions, as well as with our computational engine and optical and e-beam metrology and inspection solutions. And there is a lot more to come in the years ahead, as we continue to sharpen our focus on holistic lithography. Lithography systems are highly complex, so we aim to provide customers with a holistic, integrated approach that enables them to optimize the lithography process. To take the new half-dome mirror as an example, this provides the customer with around 100 different controls, in addition to the approximately 1,000 that we already offered. This year we enhanced our virtual computing platform that brings data together from every part of the lithography process, analyzes it and provides a feedback loop to control the performance of our tools and optimize what is a very complex process.

Is Moore’s Law still alive and well?

Overall shrink will continue for years to come. In his book ‘The Singularity is Near’, Ray Kurzweil explains how the number of transistors per device will continue to increase for a decade or more due to system innovation, of which lithography is one aspect.

But first of all, let’s be clear that shrink is a really complicated story. It is partly determined by what we do with our lithography, in line with Moore’s Law, and through dimensional scaling this has been the main driver of shrink over the last 15 years. This is still hugely significant but is slowing down a little [as patterns become ever smaller]. In addition to dimensional scaling, shrink is being enabled by both device and system scaling. Device scaling involves innovation in the materials and structures used to make transistors, while system scaling results from greater on-chip integration, such as system-on-chip solutions that combine processors, memory and auxiliary functionality into one chip.

Looking beyond scaling and Moore’s Law, other metrics are also important in our industry – for example, energy-efficient performance (EEP), which was pioneered at TSMC, one of our key customers. EEP tracks energy efficiency, which is expected to increase threefold every two years.

What are the main challenges for you
as CTO?

As CTO, I’m always asking myself how I can best drive innovation at ASML and make sure the pipeline continues to be filled. And one of the most important factors in that is people. Our growth and ability to hire large numbers of new staff present challenges in their own right. We employ more than 14,000 FTE in R&D and are adding 7-8% to that number every year. So that’s 1,000 or more new people over a 12-month period, all of whom need to quickly learn about and buy into our culture before they can become part of our team.

Sustainability is another challenge that has moved rapidly up the agenda in recent years. The amount of passion and expertise that we are now able to bring to a topic like re-use and repair – not only internally within ASML but also externally among our partners – is very encouraging. As a group, we are acknowledging responsibility for our environmental footprint, which of course is increasing in line with the industry’s growth. We are constantly striving to improve EEP, but the fact remains that more lithography equipment at work in fabs will inevitably require more energy in total. It is going to be challenging to understand what it means to create a truly sustainable semiconductor industry.

What’s next for innovation at ASML?

I could talk about EUV with an NA higher than 0.7 (known as Hyper-NA) potentially becoming a reality shortly after the end of this decade; however, the most appropriate guide to what comes next is actually: it all depends on cost. We need to be more and more focused on cost reduction – that means not reducing resources but making sure that the solutions we bring to market are simpler, more sustainable, more serviceable, more manufacturable and more scalable. It is not responsible to move to the next product without understanding the cost and complexity constraints we have to put on those products from the very beginning. That is exactly what we did with our new optical metrology system, which will come to market in 2023. We re-examined this project within intense cost parameters and have been able to achieve a new technology that is many times more cost-effective than before.

Similarly, we are continuing to work to contain the cost of the current EUV 0.33 NA systems, as well as High-NA and Hyper-NA, to make sure that the appetite for shrink remains strong. Ten years ago, when we developed High-NA, we could not have imagined that NA beyond 0.55 even existed. So Hyper-NA is very, very difficult to achieve. The great thing is that our business and R&D capability are such that we can handle all of these things simultaneously. We can develop technology like Hyper-NA while focusing on cost containment, simplicity, sustainability, manufacturability and serviceability all at the same time.

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						GLOBAL WELL-BEING
						Molecular-scale diagnostics, global health impact
						The COVID-pandemic has underlined the urgent need for a new generation of healthcare diagnostic tools. Ongoing scaling and miniaturization could result in a microchip smaller than a fingernail that can grab a single molecule and analyze it, providing real-time access to biological information and enabling well-being on a global scale.
						Read more online

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The world around us


The big picture

The world faces a range of macro challenges, including the war in Ukraine, post-COVID-19 supply chain constraints, inflationary pressures and risk of a global recession.

The big picture for our sector continues to be dominated by the global shortage of semiconductors. With its ability to transform how we all live and work, digital technology sits at the heart of the macroeconomic landscape. Expanding application space and relentless innovation are expected to continue to fuel growth across semiconductor markets. Industry sources anticipate annual growth rates of 9% and more than a doubling of semiconductor revenue from 2020 to 2030.

However, while the medium- and long-term outlook and trends remain unchanged, the current macro environment creates some near-term uncertainties. The war in Ukraine has changed short-term economic pressures around the world by driving a rapid and significant increase in energy costs which is likely to dampen consumer demand. Not surprisingly, people will choose to pay their utility bills rather than buy the latest smartphone. In addition, we are seeing inflation increases across all the world’s major economies, and this will in the short term also reduce demand for products that use semiconductors.

We continue to be very positive about the outlook for our sector in general, and for ASML in particular. While the current macro environment creates near-term uncertainties, we expect longer-term demand and capacity showing healthy growth. Expanding application space, continued industry innovation, more foundry competition and technological sovereignty drive an increased demand across semiconductor markets.

The issues that restricted the supply chain during and after the pandemic surges of 2020 and 2021 are beginning to abate, and we are scaling up for capacity increases. With additional global demand for wafers expected to be over 780,000 wafer starts per month per year in 2030, we plan to increase our annual capacity to 90 EUV 0.33 NA and 600 DUV systems (2025-2026), while also ramping up EUV 0.55 NA (High-NA) capacity to 20 systems per year (2027-2028).


Trends affecting our marketplace

The following are some of the major themes and trends driving our industry’s development, both today and tomorrow.

Increasing market demand

The convergence of wireless communication, telecom, media and cloud via connected devices continues to drive demand for advanced semiconductors across the globe. Growing populations, urbanization, the transition toward renewable energy using wind and solar power, and ongoing electrification to support smart mobility are creating increasing demand for advanced electronic devices.

Microchips are at the heart of all of these devices, ranging from sensors and actuators to smart, scalable and flexible computing solutions. This drives the demand for both new and mature chips that are specifically designed for a wave of new applications in areas ranging from smart homes, cities and industries to predictive healthcare, smart wearables and autonomous robotics.

Read more on page 26 >

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The world around us (continued)

Global geopolitics

The current trade environment presents significant challenges for the global semiconductor industry. Geopolitical tensions and increased protectionism are likely to continue. Recently steps have been made towards an agreement between governments that will further restrict the export of semiconductor manufacturing equipment to China. This agreement will be translated into legislation in the course of 2023 and, to our understanding, will be focused on advanced chip manufacturing technology, including but not limited to

advanced lithography tools. The pandemic has alerted governments around the world that global supply chains can create significant geographical dependencies on services, raw materials and end products.

Semiconductors are playing an increasingly important role in the growth and continuity of large industrial complexes, and the strategic importance of the semiconductor industry is only likely to increase.

Governments have turned their attention to securing sufficient semiconductor supplies to support their local industries, ensuring higher levels of technological sovereignty, and they are planning significant investments in the semiconductor industry. Industry forecasts indicate that the top three semiconductor manufacturers plan to invest over $300 billion in global capacity in the coming years.

The industry continues to manage its overall costs, though price rises could ultimately be passed on to the end market, resulting in an increase of prices of devices. Trade tensions and protectionism also introduce significant complexity throughout the supply chain and the processes required. The industry, like so many others in this trading environment, needs to review its global supply chain.

Acting on climate change

Climate change is an urgent matter for governments, companies and individuals around the world. It is a global challenge that requires a global response to limit global warming to 1.5°C. Technologies to counter climate change – from the energy transition to electrification, supporting smart mobility and agricultural innovation – all require semiconductors. For example, semiconductors are crucial in the generation, storage, distribution and consumption of electrical energy.

Internally, the semiconductor industry has an important role to play, as the manufacturing process alone consumes large volumes of energy and water resources.

Driving Moore’s Law to enable shrink and, at the same time, improve computing power and storage capacity, also fuels the demand for these vital resources. New architectures and a new way of looking at the entire ecosystem will be required to enhance energy and water resource efficiency.

Read more on page 76 >

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The world around us (continued)

Trends affecting our marketplace (continued)

Technological developments

Technology is evolving fast, and the next level of computing is approaching at speed. The era of mobile computing – where you bring the computer with you – is moving toward an immersive world of ‘ubiquitous computing’, with computing power available wherever you go.

Unleashing the power of data better and faster with artificial intelligence

The transition to ubiquitous computing is enabled by what has been termed the ‘artificial intelligence of things’ (AIoT). AIoT is a smart and connected network of devices that seamlessly communicate over powerful 5G networks, unleashing the power of data better and faster than ever. This combination of artificial intelligence (AI) technologies and the internet of things (loT) infrastructure will achieve more efficient loT operations, improve human-to-machine interactions and enhance data management and analytics.

The potential of AloT will gradually open up as AI and loT increasingly intertwine, facilitated by 5G. The vast amount of data that people can access, and the insights this provides, will fuel semiconductor business growth and digital transformation.

There are around 40 billion connected devices currently in use, with more being added every second. This number is expected to increase to 350 billion devices by 2030. Connected IoT devices are expected to create up to 175 ZB (zettabytes) of data per year by 2025 based on external research. To put that in perspective, one zettabyte is equal to a trillion gigabytes. And to download 175 ZB of data with the average internet connection speed currently available would take one person 1.8 billion years – a very long day at the office (or anywhere else).

So, this big data will also need to become fast data to allow for ubiquitous computing, as the world moves toward ‘edge’ computing, where processing is brought as close to the source of data as possible, rather than happening in the cloud.

Semiconductor-enabled computing trends

Moore’s Law is the guiding principle for the semiconductor industry, the motor driving the industry to transit from mobile computing to ubiquitous computing. This transition continues to expand, facilitating three major trends in computing, as shown in the overview on the right: applications, data and algorithms.

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Trends affecting our marketplace (continued)


Semiconductor industry market	Smartphone	Personal computing	Consumer electronics	Automotive	Industrial electronics	Wired and wireless infrastructure	Servers, data centers and storage
In 2020, more than 953 billion chips were manufactured around the world, feeding a $471 billion industry. In 2022, the semiconductor industry increased the output to over 1.11 trillion chips, which fed a $618 billion market. Growth is set to continue, with market analysts predicting the industry could reach an over $700 billion by 2025. Semiconductor technology plays a crucial part in shaping the interconnected and intelligent network future, and end markets continue to grow. The overview shows an outlook on the current market size and market opportunity for the entire industry based on external research.

	Key driver
	Continued refresh of all semiconductor content including image sensors	High-end compute and Memory, fast conversion to SSD	Legacy products and packaged ICs, advanced ICs in add-ons	Strong IC content growth: GPU, sensors, V2X communication sensing	High-end compute for AI on big data and sensors	Devices for fast data processing, modem, base-station infrastructure refresh	High processor and Memory growth, hardware accelerations including GPU
	2020 market size ($bn)							Total
	117	100	50	40	51	38	76	471
	2022 market size ($bn)
	144	115	71	63	73	53	100	618
	2025 market opportunity ($bn)
	150	124	79	93	93	62	136	737
	2030 market opportunity ($bn)
	213	131	114	149	160	82	249	1,098
	Outlook CAGR 2020-2030 (%)
	6%	3%	9%	14%	12%	8%	13%	9%
	Source: ASML’s Investor Day presentation (November 2022). Please note rounding differences may exist.

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The world around us (continued)

Our customers – the world’s leading microchip manufacturers – can be grouped into Memory and Logic chipmakers. We design our machines based on their input, and we work together to make sure our machines run smoothly in their fabs.

Memory and Logic chips

Memory chips can store a large amount of data in a very small area. They are used in an increasing variety of electronic products like servers, data centers, smartphones, high-performance computing, automotive or personal computers and other communication devices. There are two main classes of chips typically made in dedicated Memory-chip factories: NAND chips that can store data even when a device is powered off, and DRAM memory chips that are used to efficiently provide data to the processor.

Logic chips, which process information in electronic devices, are produced by two groups of manufacturers. The first group, known as integrated device manufacturers (IDMs), designs and manufactures Logic chips. The second group comprises contract manufacturers known as foundries. Foundry manufacturers produce chips for ‘fabless’ companies that focus only on chip design and distribution, but do not manufacture microchips themselves.

Both Logic and Memory chips can vary greatly in complexity and capability. For example, the most advanced chips power leading-edge technology in AI, big data and automotive technology, while simpler, low-cost chips integrate sensing capabilities into everyday technology to create a vast loT.

Growth in the chip market

The historical market compound annual growth rate (CAGR) over the last 10 years was 6%, while industry sources project the chip market (worldwide semiconductor revenues) will grow at a CAGR of 9%1 in the period 2020-2023.

1 Source: ASML’s Investor Day presentation (November 2022).

Lithography is where we come in. It is a driving force in the creation of faster and cheaper chips that are also more powerful and energy efficient. Today’s most advanced processors are based on the Logic N5 node, and contain billions of transistors. Shrinking transistors further is becoming increasingly difficult, but we are not as close to the fundamental limits of physics as some might think.

Next-generation chip designs will include more advanced materials, new packaging technologies and more complex 3D designs, all of which will create the electronics of the future.

The manufacturing of chips becomes increasingly complex as semiconductor feature sizes shrink, but the need to mass produce at an acceptable cost remains. Our holistic lithography product portfolio helps to optimize production and enable affordable shrink by integrating lithography systems with computational modeling, as well as metrology and inspection solutions that help our customers to improve their yield.

Our computational models enable our customers to optimize their mask design and tape-out time (the time taken in sending the final design to the manufacturer for production). This works through mask-correction software to prepare and modify the design for optimized exposures, while the metrology and inspection solutions help in analyzing and controlling the manufacturing process in real time.

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This process is repeated until the wafer is covered in patterns, completing one layer of the wafer’s chips. To make an entire microchip, this process is repeated on layer after layer, stacking the patterns to create an integrated circuit (IC). The simplest chips have around 40 layers, while the most complex can have more than 150 layers.

The size of the features to be printed varies depending on the layer, which means that different types of lithography systems are used for different layers – our latest-generation EUV systems are used for the most critical layers with the smallest features, while our ArFi, ArF, KrF and i-line systems can be used for less critical layers with larger features.

The lithography process

Inside a fab

The making of a microchip involves a multiple-step sequence, including lithography to create a pattern in the photoresist and chemical processing steps such as deposition, photoresist coating, ion implantation and etching, to create electronic circuits on a silicon wafer.

Microchips are made of layers about 50-150 nm thick that are built on the semiconductor substrate one layer at a time. The most advanced chips require EUV and DUV immersion lithography tools to make them. Simpler microchips, such as sensors for loT applications, can be produced using DUV dry machines.

After adding material for a new layer during deposition, the desired pattern is exposed onto it, which after development leaves lines and geometric shapes positioned precisely in the desired locations. Then the layer is etched, making these designs permanent on the wafer. The entire manufacturing process of microchips – from start to tested and packaged device, ready for shipment – can take between 18 and 26 weeks, depending on their complexity.

When you break it down, a lithography system is essentially a projection system. In our DUV systems, light is projected through a blueprint of the pattern that will be printed (known as 'mask' or 'reticle'); in our EUV systems, light is reflected via the reticle. With the pattern encoded in the light, the system’s optics shrink and focus the pattern onto a photosensitive silicon wafer. After the pattern is printed, the system moves the wafer slightly and makes another copy on the wafer.

A semiconductor fabrication plant, commonly known as a ‘fab’, is a factory where microchips are manufactured. The heart of a fab is the cleanroom. All fabrication steps take place here, so the environment is controlled to eliminate dust on a nanoscale. Under the cleanroom floor is the ‘sub fab’, which contains auxiliary equipment such as the drive laser. The utility fab – containing the pumping and abatement systems for vacuum and cooling – is usually found one floor below this.

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Semiconductor application areas

Predictive healthcare

Predictive analysis of health data from many sources combined with machine learning and AI is helping to improve healthcare services and patient outcomes.

Read our story on page 22 >

Smart home

Smart home devices, such as thermostats, lights and smart TVs, learn a user’s habits to provide automated support for everyday tasks.

Wearables

Wearable devices (such as fitness trackers smart watches, smart rings, jewelry or glasses) are able
to connect to the internet and continuously monitor, track and transmit personal data.

Read our story on page 149 >

Autonomous robotics

A new generation of lightweight robots connected to a greater network and fitted with smart sensors enables humans and machines to work side by side,
with greater safety and efficiency.

Energy transition

Semiconductors play a key enabling role in the global shift from fossil-based energy production and consumption to renewable energy sources like wind and solar.

Read our story on page 40 >

Global connectivity

5G enables a new kind of network that is designed to connect virtually everyone and everything across the world – including machines, objects and devices.

Mixed reality

Combining augmented reality and virtual reality technology (so that physical and digital objects coexist and interact in real time) will bring together the real world and digital elements to create the next-level user experience.

Read our
story on
page 69 >

Smart cities

Smart cities that use technology and digital networks to integrate transportation and infrastructure, connectivity, energy and lighting, and other public services.

Smart industry

Smart industry devices use real-time data analytics and machine-to-machine sensors to optimize processes to foresee bottlenecks and prevent errors and injuries.

Self-driving cars

These vehicles are literally supercomputers on wheels, with advanced driver-assistance systems (ADAS) enabled by electronics and semiconductors.

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						FOOD SECURITY
						Lower cost, higher yield
						Farmland in remote locations, particularly in emerging economies such as Kenya and Ethiopia, can be extremely vulnerable to climate change. As microchips become smaller and cheaper, access to mobile devices is increasing across the world. Farmers are now using smartphones to access vital weather information – aiming to ensure better crops and greater food security.
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Focused on long-term value creation


Our purpose is to unlock the potential of people and society by pushing technology to new limits – with a vision that our ground-breaking technology solves some of humanity’s toughest challenges. Our strategy and priorities are designed to deliver on these points and create value for our stakeholders.

We provide chipmakers with everything they need – hardware, software and services – to mass produce patterns on silicon through lithography. Our customers depend on our products to bring cutting-edge technology to life. To meet their needs, we invest in the future. We invest in research and development to create chipmaking machines that can deliver the smallest features and highest yields.

We invest in our factories and facilities around the world so we can meet increasing customer demand for our products and services, driven by strong growth rates across both advanced and mature semiconductor markets, continued innovation, more foundry competition and technological sovereignty. The number of machines we plan to deliver in the coming years continues to grow.

We also invest in our workforce, the people who give life to our values – challenge, collaborate and care. They come from more than 100 countries to work together and advance ASML's mission. Our values push us to invest in being a good neighbor and global citizen. From supporting our preservation to minimizing our environmental impact, our initiatives lay the groundwork for long-term sustainable growth.

To make our vision for the future a reality, we need to collaborate with our customers and suppliers, across departments, sectors and continents, effectively executing improvements and processes across ASML and our ecosystem to bring our holistic lithography solutions to the market. Our investors enable the innovation that advances our technology and creates value. Together, we aim to lead the semiconductor industry into a sustainable and profitable future.


	Our core strategy is to

1.		Grow our core holistic lithography business

2.		Secure unique supply chain capabilities to ensure business continuity

3.		Move toward adjacent business opportunities


			4.						Increase our focus on ESG sustainability

			With a current focus on five priorities

									Strengthen customer trust

									Holistic lithography

									DUV competitiveness

									EUV.33 NA for manufacturing

									EUV.55 NA insertion


			Grow our holistic lithography business two- to threefold by 2030

Fueled by strong customer demand, we expect substantial growth opportunities for our holistic lithography business in this decade. We will continue to increase the capacity of our company to meet this demand, both for mature and advanced lithography systems, preparing for cyclicality while sharing risks and rewards fairly with all stakeholders.

Based on different market scenarios, we see an opportunity to achieve the following in 2025 and 2030:

–In 2025: annual revenue between approximately €30 billion and €40 billion with a gross margin between approximately 54% and 56%

–In 2030: annual revenue between approximately €44 billion and €60 billion with a gross margin between approximately 56% and 60%

To realize this significant growth, we will focus on protecting and gaining market share by delivering on our technology roadmap, addressing our growth and execution challenges, and securing competitiveness in DUV and metrology and inspection.

The semiconductor industry innovates at an incredible pace to deliver on Moore's Law, producing microchips that are three times more energy-efficient every two years. By continuing to advance our lithography and patterning control solutions for silicon substrates, we will provide the continued shrink and reduction in edge placement error that our customers' semiconductor roadmaps require over the next decade.

Our holistic lithography approach integrates a set of products that enables chipmakers to develop, optimize, and control the semiconductor production process. In addition to our lithography systems, we provide customers with process control solutions that include computational lithography, optical and e-beam metrology, high-resolution inspection, and scanner and process control software solutions. Our comprehensive product portfolio is aligned to our customers’ roadmaps, delivering cost-effective solutions in support of all applications, from leading-edge to mature nodes.

We aim to innovate responsibly by improving the simplicity, sustainability, serviceability, manufacturability and scalability of our future lithography solutions. By considering the cost and complexity constraints of a new technology from day one, we can efficiently allocate our resources and cost-effectively deliver new capabilities to our customers.

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Focused on long-term value creation (continued)

Secure unique supply chain capabilities to ensure business continuity

Increase our focus on ESG sustainability

Our five strategic priorities

Our ESG Sustainability strategy

We believe digital technologies are among the most important tools available to help society make progress and address environmental challenges. Enabled by microchips, these technologies are fueling a digital transformation that is helping to address global challenges, such as tackling climate change by reducing energy consumption and greenhouse gas emissions.

We recognize that development of technology comes with new problems to solve, such as the energy use of devices and data centers, increased waste and material use, and social challenges. We believe our industry has a great opportunity and a moral obligation to drive sustainable growth.

We are committed to using our innovations to also enable the semiconductor industry to reduce its footprint. We aim to help our customers minimize materials and energy required to produce advanced microchips. Within our own operations, including our supply chain, we are also looking closely at our social and environmental impact.

Through the continued execution of our strategic priorities, we aim to provide cost-effective solutions for our customers, enable the extension of the industry roadmap into the next decade, and support our long-term commitment to our environmental, social and governance (ESG) ambitions.

Central to our strategic approach, we collaborate with our stakeholders to deliver on the ambitions of our ESG Sustainability strategy:

Environmental

We want to continue to expand computing power but with minimal waste, energy use and emissions. That's why we focus on energy efficiency, climate action and circular economy.

Social

We want to ensure that responsible growth benefits all our stakeholders – to have an attractive workplace for all, a responsible supply chain, to fuel innovation in our ecosystem and to be a valued partner in our communities.

Governance

We commit to act on our responsibilities and fully anchor them in the way we do business through our focus on integrated governance, engaged stakeholders and transparent reporting.

Our ESG Sustainability strategy is based on a materiality assessment where we determine the most significant impacts for our company. Our aim is to create long-term value for our stakeholders, while also contributing to the United Nations’ Sustainable Development Goals (SDGs).

We will continue to focus on securing business continuity in our core lithography business and controlling future unique, roadmap-enabling technologies. Our supply chain is a critical enabler of our ambition to grow our core business. In order to deliver our growth aspirations, we need to secure innovation, scale-up and continuity, sound business conditions and a constructive collaboration model with our unique technology suppliers. We are pro-actively assessing our supply base for projected demand and control of future roadmap-enabling capabilities.

Strengthen customer trust

DUV competitiveness

Enhance our innovation and operational excellence capabilities to deliver on our roadmap for new product introductions and system deliveries, on time and with the highest quality, to address the needs of our customers. Increase our focus on sustainability through parts commonality and re-use, and drive improvements in performance and energy efficiency of our products to reduce costs and waste.

Continue our innovation leadership, enabling execution of customer roadmaps by driving DUV to the highest level of performance while remaining cost-competitive. Expand our installed base and support customer needs.

EUV .33 NA for manufacturing

Move toward adjacent business opportunities

Secure high-volume manufacturing performance and enhance the value of EUV technology by extending the product portfolio for future nodes. Improve cost effectiveness for our customers by improving system performance.

Beyond, if core growth is secured, we can move into adjacencies representing additional growth opportunities. We aim to do this by focusing on synergetic opportunities at the forefront of holistic transistor scaling to best serve our customers, by leveraging product and technology synergies, and by tapping into different future semiconductor scaling engines.

Read more on page 118 >

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Creating value within the fab

We are a critical part of the chip manufacturing process, but
our world-leading technology would not function without
other key partners in the value chain.

Digital technology is required to help people and society progress

See page 35 >

1. Deposition

2. Photoresist coating

3. Lithography

4. Baking and developing

5. Etching

6. Ion implantation

7. Removing photoresist

The first step is typically to deposit thin films of semiconducting material onto the silicon wafer.

The wafer is then coated with a light-sensitive layer called a ‘photoresist’.

Light is projected onto the wafer through a reticle. Optics shrink and focus the reticle pattern. This pattern is then printed onto the wafer when the resist layer is exposed to light.

The wafer is then baked and developed to make the pattern permanent, with a pattern of open spaces.

Materials such as gases are used to etch away material from the open spaces, leaving a 3D version of the pattern.

The wafer may be bombarded with positive or negative ions to tune the semiconductor properties.

After the layer is ionized, the remainder of the photoresist coating that was protecting areas not to be etched is removed.

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Creating value with our holistic approach

Our holistic approach is based on the intelligent integration of computational lithography, lithography systems and metrology and inspection.
This enables shrink by optimizing setup and control of the system’s process window during high-volume manufacturing – improving the
availability of our lithography systems, reducing downtime and overall costs, and optimizing yield for our customers.



Our world-leading systems									Lithography



			Computational lithography						Metrology and inspection

			Computational lithography is used to predict and enhance the process window of our lithography systems by calculating the optimal settings, depending on the specific application. This takes place in the research and development phase, before a lithography system goes into high-volume manufacturing.						We have a suite of tools – optical and e-beam metrology, high-resolution inspection and scanner and process control software solutions – which control the process window and help ensure that the lithography system operates optimally in the fab environment. Lithography is the only way in which inline adjustments can optimize performance as part of the manufacturing process.

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The value we create for our stakeholders

Our success depends on strong, sustainable relationships with all stakeholders
in the value chain. We aim to create sustainable value for them, and to use
their input to develop our strategy, products and services.

Shareholders

Customers

Suppliers

Employees

Society

Our large and sustained investments in research and development help us execute our business strategy and enable us to maintain our position as a leader in holistic lithography. Our innovations contribute to the long-term growth of the semiconductor industry, which contributes to our solid financial performance and cash return policy by means of share buyback and paid dividends.

We invest in innovations that enable our world-leading lithographic systems to continue to shrink microchips. With EUV 0.33 NA and the next-generation EUV 0.55 NA platform, we pursue the continuation of Moore’s Law. This allows our customers to develop ever more powerful chips for new applications and devices. At the same time, we help our customers reduce costs and their environmental footprint.

We innovate together with our strategic partnerships, sharing knowledge and tapping into each other’s technology expertise to drive ever higher levels of complexity and capability.

We conduct our business in a sustainable and responsible manner, where long-term relationships, close collaboration and transparency with our suppliers are key to our success.

ASML is a growth business providing employment opportunities around the world. With our headquarters in Veldhoven, Netherlands, we are a major employer in the community.

We invest in people’s career development and well-being, and provide a diverse and inclusive environment where people can achieve their full potential. This results in both high employee engagement scores and low attrition.

Our continuous innovations enable new technology to support the growth and transformation of the semiconductor industry to help address society’s needs. As a global technology leader and employer, we play an active role in the local communities we operate in. Our collaborative ecosystem nurtures innovation and benefits society. For example, we share our expertise with universities and

research institutes, support young tech companies and promote STEM education worldwide. We also develop ground-breaking technology to minimize our own environmental footprint. We do this by seeking to minimize waste and maximize the value of the materials we use, and executing our carbon footprint strategy and product energy-efficiency strategy.

€4.6bn

€21.2bn

€12.4bn

78%

€11.5m

87%

Share buyback

Total net sales

Total sourcing spend

Employee engagement score

Community investment

Re-use rate of parts returned from field and factory

€5.80

345

5,000

6.0%

€14.7m

38.1 kt

Proposed annualized dividend per share

Lithography systems sold

Number of suppliers (rounded)

Attrition rate

Contribution to EU
research projects

Emissions from manufacturing and buildings (scope 1 + 2)

€14.14

24%

95%

11.9 Mt

Earnings per share

TechInsights Customer Satisfaction ranking of the 10 Best Large Suppliers of Chip Making Equipment

Gender diversity – % females inflow

% of systems sold in the past 30 years still active in the field

Indirect emissions from total value chain (scope 3)

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Engaging with stakeholders



We develop our materiality assessment based on GRI, which includes the principle of stakeholder engagement, where we identify key topics to discuss with the relevant stakeholder group.

Read more on page 71 >

We think about our stakeholders as belonging to five groups: shareholders, customers, employees, suppliers and society. These groups can affect or be affected by our business, and we embrace continuous open dialogue and knowledge sharing for the benefit of all parties.

This group consists of current shareholders, potential active and passive investors, financial and ESG analysts. We aim to help them to understand our (long-term) investment opportunities. We communicate with them about our financial growth strategies and opportunities, financial performance and outlook and shareholder returns as well as our sustainability strategy.

Shareholders

How we engage

–Direct interaction with the Investor Relations department (e.g. calls, ESG performance surveys, email exchange, site visits – at ASML and/or at the investor)

–AGM

–Investor Day

–Company quarterly results presentations and press releases

–Various investor conferences and roadshows

–Various sustainability questionnaires, assessments and survey feedback

Main topics

– Financial results

– Cash return

– Market outlook

– Products and end market

–Customer adoption

– Geopolitics

– Business summary

– Company roadmap and product portfolio

– ESG targets and results: human capital development, carbon footprint, waste, recycling, energy consumption, social responsibility in supply chain

– Board diversity and remuneration

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Engaging with stakeholders (continued)

We are a manufacturer of leading-edge chipmaking equipment. We enable our customers to create the patterns that define the electronic circuits on a chip. Our customers are the world’s leading microchip manufacturers, and our success is inextricably linked with theirs.

Customers

How we engage

–Customer feedback survey

–Direct interaction via account teams and zone quality managers

–Voice of the Customer sessions

–Technology Review Meetings (between our CTO, product managers, other executives and our major customers)

–Executive Review Meetings (between ASML executives and major customers)

–Different technology symposia and special events

Main topics

–Products and technology

–Customer roadmap

–Innovation

–Customer support, cost of ownership and quality

–ESG: energy efficiency, integrating ESG sustainability in strategy and roadmaps, waste reduction and reuse of materials and safety awareness and behavior

Our customers are the world's leading microchip manufacturers.

We want to provide a unified direction and anchor ASML’s identity deep in the organization. To do this, we aim to help people embrace our values, familiarize themselves with our strategy and purpose and uphold our Code of Conduct principles. Employee engagement is important to the success of our company and employer brand enables us to attract talent. We are committed to good labor practice and respect human rights.

Employees

How we engage

–Employee engagement survey

–Training and development programs, including employee evaluation/feedback

–ASML's Speak Up service

–Works Council

– Employee networks, such as Next, Women/WAVES, Seniors, Parents, Veterans, Green ASML, Atypical, SHADES and Proud

–Internal communication and awareness (e.g. intranet, Ethics program, department employee meeting, lunch with Board members)

–Onboarding program for new employees

–All-employee meeting and senior management meetings

Main topics

–Training and development

–Code of Conduct/Ethics

–Strategy

–Diversity and inclusion

–Labor conditions

–Vitality

–Human rights

–Sustainability target and performance

ASML ANNUAL REPORT 2022

OUR BUSINESS MODEL CONTINUED

STRATEGIC REPORT

GOVERNANCE

FINANCIALS

Engaging with stakeholders (continued)

ASML HOLDING NV [ASMLF] Filings

ASML HOLDING NV [ASML] Filings