ASML Holding N.V. (NASDAQ:ASML) Goldman Sachs Global Semiconductor Virtual Conference June 14, 2022 11:00 AM ET
Company Participants
Christophe Fouquet – Executive Vice President of EUV and Member of Management Board
Conference Call Participants
Alex Duval – Goldman Sachs
Alex Duval
Hi, everyone. I’m Alex Duval. I lead the European Tech Hardware, SMEs and Gaming Research team here at Goldman Sachs in London. Delighted to be joined today by Christophe Fouquet, Head of EUV; Extreme Ultraviolet Lithography at ASML. Before, we get started, I’d like to state some disclosures. I’d like to state that this conversation is not intended for the media and is off the record. We are required to make certain disclosures and public appearances about Goldman Sachs’ relationships with companies that we discuss. The disclosures related to investment banking relationships, compensation received a 1% or more ownership. We are prepared to read aloud disclosures for any issue upon request. However, these disclosures are available in our most recent reports available to you as clients on our firm portals.
Question-and-Answer Session
Operator
[Operator Instructions]
Alex Duval
Great. So with that completed, thank you so much again, Christophe for joining us. And I’d like to just kick-off with a high level question really to sort of set the scene for EUV. For those who maybe are more on the general side, could you give a quick description for two or three minutes? Summarizing to investors who might be new to your business? What role — what your role at ASML is? And frame the importance of EUV to the evolution of the semiconductor and global electronic industries? Appreciate it’s a big question. But glad, if we could get some perspectives to kick off.
Christophe Fouquet
Okay, so I’d try to be short. So I’m Christophe Fouquet, indeed, I’ve been in ASML for the last 15 years. And today, I’m a member of the Board of Management of ASML. And responsible for EUV. And the fact that EUV responsibility reside in the Board of Management of ASML was just a sign on how important this product was for us and for the industry. A few words about EUV. I think that ASML for many years has been focusing on delivering very advanced lithography scanners to the industry in order to allow our customer to deliver basically the most advanced chips. And EUV was a very important step in this mission. Very important because it took us quite a bit after immersion to come with a new wavelength, which was basically capable to provide customer with smaller resolution. So EUV, what does EUV do, just offer smaller capability to our customer, ability to shrink, ability to basically print smaller features. This is very important, EUV, it’s in the name, this is about the wavelength of the tool, going to EUV, we went from 193 nanometer wavelength to 13.5, which basically allowed us to make a very significant step in resolution. You have seen most probably that customer have been adopted as a result EUV very aggressively in the last two, three years. It took us many years to develop the product, of course, because of the challenging technology, especially in relation to the source. But once we were successful in the industry as the product, we have seen the major, major pull forward by our customer for EUV.
Alex Duval
Great, well, thank you so much for setting the scene, Christophe. And I’d like to kick-off by talking about sort of EUV and its applications and as a digital enabler. You recently announced that ASML is examining the feasibility to expand EUV production capacity to about 90 units, which is obviously up from the 70 units you talked about before. And that’s a 2025. And I think as part of that ASML is referenced strong structural trends related to digitalization. So what do you think of the sort of secular drivers here that underpin your confidence in that sort of robust multiyear demand picture for EUV? And how does digitalization related to some of these applications like 5G, AI high performance compute translate into demand for your tools?
Christophe Fouquet
Well, I think, some of the application you just mentioned are requiring basically the most advanced chips I was talking about. And any company who is engaged in AI, in 5G is really driving the very best possible product because the competition there is also pretty high. So EUV is by default, serving those advanced application. We have seen a major growth in the demand for those application. And we expect this to last. We’ve been a bit surprised, to be honest, in the last, I would say 12-18 months on how strongly the demand was increasing. I think there’s been a bit of a COVID-19 effect some kind of acceleration of the appetite for all this technology. So those application, the one that you see in the news every day are really at the core of EUV demand.
On top of this, there’s a few more things. One thing that you may also be aware of is that most chip makers are trying to improve energy performance for their devices. This is to basically extend battery life, reduce power consumption, ESG is becoming a big topic for also those company and in order to reduce basically power consumption, you typically need to use less transistor of the chips you’re going to make and this leads for the demand for larger chips. And if you look basically at some of the latest chips created by some of our customer, customer we see also there that they are becoming bigger and bigger chips means for us more demand for silicon and therefore more demand for tool. So the combination of those two is driving what we believe is a structural increase on the demand for EUV. The number of 90, by the way, is already validated by what we call bottoms up demand by our customer. We even anticipate more demand moving forward. So we already see sign that this may not be the last step. This is happening despite the fact that we also increased productivity, that we have made several steps on EUV. So our tools are becoming faster. But this has not been sufficient, basically, to meet all the demands. So our customers are already looking at, indeed, 90 system per years, maybe even more in the future. So that’s something we believe to be structural.
Alex Duval
That’s super interesting that 90 may not be the limit there. And I guess, you reference sort of bottom up modeling. And we’ve obviously seen announcements of a large amount of spend on a multi-year basis, from some of your sort of biggest customers in Taiwan, Korea, US, et cetera. I think you referenced some of the structural drivers there, but what do you see as the kind of drivers for their capital investment? And how do you see that kind of underpinned that large amount of investment there? And secondly, you referenced sort of COVID, and the pandemic and the spending there. And to what degree is there a kind of spend, that’s happening that’s actually been structurally accelerated versus to what extent should we be thinking that there’s been a pull forward that could unwind in the next couple of years?
Christophe Fouquet
Yes, so I think what you’re asking, Alex, is a bit what do we see as a structural growth, which I think is what I tried to explain. And there I think we are convinced that over time, we will see an increased demand. So we don’t look at the peak. We look really at the growth that will continue over time. This is a feeling that our customers share. And of course, around that, we also believe that you may have some cycle, one of it indeed, could be related to the fact that today, we see very fierce competition between our customers, so everyone is investing very heavily, especially in foundries. But there if you have more foundries customer, you, by default, create a need for more capacity. And this doesn’t go away, because you cannot be in the foundry business, and not have capacity. So it could be that the utilization of a whole is not as high as it used to be when there is only one foundry customer, for example. But everyone needs to have some capacity in order to be able to compete. So mostly, the competition we see could be having about 10%, 15% on the demand on the short term. And this demand, you could in theory think will go away, but it will only go away, if one of those customer goes away, as long as the customer are there, they will all want to continue to build their whole capacity, and that resource creates a bit of an efficiency.
On the COVID-19, so I told you, I think it did accelerate the demand for application. I think there we don’t really see that going away. The only question, of course, is related to the macro economy we’re all looking at. And you can never, of course, know exactly what the overall consumer demand will be depends on a lot of also some of the external factor, we see inflation, et cetera, et cetera. So we could have some bumps in the road. And a lot of people try to already forecast or speculate when this may happen. This may happen, but still on the long term, we truly believe that the demand will continue to be there.
Alex Duval
Understood, that makes sense sort of macro backdrop, but with those sort of secular overlays. And I guess coming back to this question about what your sort of key customers will do. Can you talk a bit about what you’re hearing from those key partners in terms of future technology roadmaps and willingness to use EUV at smaller nodes? Maybe you could elaborate a bit on some of the sort of comments from key partners, and sort of — their sort of longer-term plans in order to ensure that they get the capacity. Obviously, it looks like there have been some developments on the memory side and the logic side. So it would be great to get an overview there.
Christophe Fouquet
Yes. So I think on the logic, I talked already a bit about it. So very competitive market right now between, I would say three main players. And I think one of their biggest concern today is indeed to maybe not get all the capacity they need. So that’s one element on EUV. So we don’t see them slowing down, I think we see them continuing to apply a lot of pressure on us to deliver system. When it comes to their road map, I think if you look at the logic road map, there is a pretty good view of what can happen for the next 10-15 years. So the transistor structure I think is a very clear on map. And this also includes scanning, which means that when we look at the future, we are also in very advanced discussion about how to improve the current 0.33-NA EUV machine. But as you’re aware, as well, we are also in very advanced discussion on how to introduce and ramp the next platform, which is the high NA tool. So pretty good visibility on the road map, I would say, alignment, their commitment to the long term. And major again, concern focused on capacity. When it comes to memory, I think the EUV adoption in memory has been stronger than we initially sought. And the reason for that is that EUV is being used more than just for scanning.
When we think lithographically, we typically think about scanning, right? I did it myself, in the introduction, I talked about the resolution improvement. But what we have seen with DRAM customers, that EUV can be used to simplify dramatically the process and therefore create some more yield. I think our customer, Samsung, for example, have been very, very public about it. So increased demand more than we expected. And they also on the long term road map, there’s been many discussion about 3D DRAM versus 2D scanning. We believe today that the 3D DRAM will come most pretty at some point, but to this getting most probably at least 5 to 10 years of very, very stronger, I will say an aggressive road map from our customer. And as a result, we also very much engaged with DRAM customer on both the extension of the current EUV platform, but also high NA, as you may have also read in some of our quarterly publication. So EUV, when we talk with our customer, EUV is really a very important component of their road map. And I will say if I compare what we know today versus what we sought four or five years ago, the reliance on EUV and futurization is most probably quite higher than we expected.
Alex Duval
That’s great. I really appreciate that Christophe, for sort of taking us through the latest on the logic side and memory side. And in particular, highlighting the high and expected demand on the DRAM side. And looking back at the last period, maybe if we can come on to your sort of pricing model and the sort of economic side of things. We’ve obviously seen over the years ASML has been able progressively to increase the EUV ASPs, as you’ve improved productivity, but also a number of other factors, which you mentioned. Could you sort of perhaps explain a bit your value based pricing model? And perhaps related to that, to what extent are you seeing an increased or reduced willingness from customers to pay higher ASPs, as you’re able to deliver better productivity and better features.
Christophe Fouquet
Yes. So I don’t know if you’ve ever made this exercise. But if you look at our ASP over time, and you compare it to our productivity road map, there is almost a one to one correlation, which means that for many, many years, the appetite for productivity is extremely high. And the reason for that is, of course, productivity is measure efficiency gain for our customer, right, you get a lot more output with only a fraction of the tools you need. So I think we don’t see the appetite going down. In fact, our customer are driving us to continue to increase our productivity. We have a very strong road map when it comes to the source power of EUV, which is at the core of course of productivity, the more photon we can get, the faster we can move and for us, we also see as a result, you mentioned it profitability increase because the same happened for us, we can basically ship more value, while spending less money on parts on manufacturing and service, et cetera, et cetera. So this is also why our profitability on the EUV, this has been true in the past, another platform I’ve been following quite a bit our productivity improvement. So this is something we expect to continue to be honest. And I think, as long as the appetite of our customer is strong on productivity, we will improve our system. And I will say we do expect to continue to see similar benefit out of it. Maybe one more thing on productivity, because we talked about the demand, right. And I told you, we have to do 90 machine, despite the fact for example, that our next generation of EUV 0.33, the NXT3800E would be 20%, 25% faster than the previous one. And so productivity at this point of time is also helping us with capacity enormously. And I think this also helps our customer will get again, a lot more output in the same square feet area. So I would say productivity is a value is almost at the all-time high, because not only we bring, of course more out of the same tool, but in the recent months, this really can help us with capacity.
Alex Duval
Really appreciate that and giving us a sort of historical recap, but also pointing to the 3800E. And I guess the other one we’ve had questions about is if I remember, rightly, the 4000F. So if we move to the sort of F model, can you talk a little bit as to your expectations there? Clearly, that should be an improvement, again, in terms of productivity overlay, and then presumably sort of trending into ASP as well. So what do you expect to see there? And if we think kind of longer term, you’ve obviously talked about hiring high NA and a big ASP there. But should we expect that low NA will continue to have these sort of increasing ASPs as well?
Christophe Fouquet
Yes, so I think the 4000F, we call it F, because we also expect to make indeed a productivity step. So it’s, we currently plan to ship the first one around 2025. So it’s a bit far away. We do expect to improve the throughput because we expect to make a step on the power. We don’t know exactly how much yet most probably, again, somewhere between 10% and 20%. So we’re still doing some work on this. But this is something we’ll do for the 4000 and to your other question, yes, I think we will continue to do that on the 0.33-NA platform as long as we have ideas to get more better output for system. And right now, we do have again, ideas for quite a few years. So you should expect a few more system that will provide more productivity better overlay, you mentioned that as well, on point 0.33 moving forward. High NA, so high NA, we will follow a bit the same logic. So when you introduce a new platform, you’re a bit careful so that the 5000 system is a system, which we shipped basically, in order to get the learning on high NA as quickly as possible, then the EXE: 5200 will come with much higher productivity. And this is the tool that we think most customer will use in high volume manufacturing. And then moving forward, if we look at the high NA platform, if we look at the 0.33 platform, the source is common. And whatever gain in power, and therefore productivity we can get on one platform, we will also get on the other one. So we will have those two products running in parallel. And on both of them because we have developed them with a very high level of commonality we will continue to improve both overlay and productivity. So this is a bit the motto of our road map most likely for at least the next 10 years and we have a pretty good idea of what we could do there. We still have to validate all of that but we’re not lacking ideas.
Alex Duval
Great and again maybe looking backwards and looking forwards you made steady improvement on EUV gross margin. And that means now seems to be not too far off the group average. What should we be expecting in future in terms of your gross margin progression for the sort of upcoming EUV tools? You obviously reference to the productivity could get better. So one would think ASP better therefore gross margin should be better. And then how should we be thinking about the sort of key improvements you can make as far as cost reduction goes? Because there’s always been this story about sort of scaling up and getting cost down effectively per unit?
Christophe Fouquet
Yes, so this good point. So I think the cost down continues, it comes with the learning. I think we’ve made major cost down, of course on EUV in the first couple of years of the rent, because we rationalize our manufacturing activity, rationalized service, and this continue to improve. But at the same time, over time, of course, the improvement on costs you see year-over-year become more difficult. See that’s something we have seen on the EUV platform. So this means also that the biggest contribution to potential margin improvement will remain the value we continue to bring to our customer. And there it’s very difficult to give you a number. I know you’re looking for the exact number. But I will stick to the principle I gave you, which is if we continue to be able to improve productivity by 10%, 15%, every generation, we do expect some margin improvement as a result of that, of course, as long as the cost of the technology makes sense for our customer. But I think there also we, most when you look at for EUV quite a few years, where we should be able to continue to improve the margin of the tool.
Alex Duval
Really appreciate that. And maybe going back to the sort of capacity plan or sort of 90 tools. Clearly, that’s something you’re going to execute over a multiyear basis. Could you give a bit of color, Christophe, on what do you see as a kind of greatest bottlenecks to that happening? Obviously, it’s a very complicated type of technology. Obviously, there are complications in the world more broadly right now. So are there particular components where there could be more sort of difficulties in terms of the ramp up? What are the kind of moving parts that need to fall into place for your, for you to be able to execute on that kind of capacity plan?
Christophe Fouquet
Well, the biggest challenge to ramp particularly like EUV is lead time, to be honest, and to go from 40, 50, 60 to 90, there’s nothing really difficult in it, and it’s all about building a cleanroom, getting the same process tool we use today to get more capacity. So there is no real operational challenge, if you want. The biggest challenge we have in this ramp is really the lead time because some of the equipment needed for EUV can take more than a year, sometimes two years, basically to be ready. And I think that’s a bit also one of the learning we had in the last few months, we don’t need to plan of course, always for a capacity, that would be a lot higher than the customer demand. That’s why we talk about 90. But on top of planning for 90, we also take steps to make sure that the lead time for the next number, if they were to be a next number will be a lot shorter. So we talk a lot about the 90 because this is also the number everyone is looking for looking at the market. But I think what we have done and it’s also very important in the last few months is to make sure that if we had to go one day beyond 90, the lead time to do that will be a lot shorter so that we can react to our customer demand a lot faster. So no real if you want technical challenge, no real operational challenge, I think today lead time because the technology is indeed very unique. That’s something that of course, we have means to reduce by investing a very small amount of money on the most critical either space or equipment we need to further ramp, if needed.
Alex Duval
Really appreciate that. And also the color about the lead time if you were to go beyond 90 machines. If we go back to high NA, I think you sort of touched on this. And I think you’ve sort of commented ASML that you receive multiple orders for 100 high NA machine this quarter. Clearly, these machines are significantly more expensive than low NA machines. But I think the discussion was about potentially having a need for 20 of these machines or capacity to produce 20 in a given year. So could you remind us a bit about the sort of benefits there that customers are getting? And your latest view, in terms of what that will drive in terms of advantages as to the granularity of lithography, the productivity, and perhaps also the chip performance. And, of course, related to that, it seems that high NA really obviates the need for multiple path patenting, on sort of low NA. But it would be helpful to get a recap there and any other benefits I’m not mentioning.
Christophe Fouquet
No, I think the biggest benefit is what you described. So again, high NA is also in the name, so resolution is about wavelengths. But it’s also about the new numerical aperture of the tool. By increasing the numerical aperture of the tool, we improve the resolution, which basically, either allow customer to scale more so getting to even smaller pitch, or allow them, you mentioned it already to avoid too many multi patenting steps. So when it comes to the value of high NA, I always say if you understood the value going from EUV — application, thanks again to the better resolution, less defect, all those parameters that our customer have published. The value of high NA is exactly the same. We’re going to make another step which will simplify the process again, and bring a yield benefit, extend roadmap of our customer, et cetera, et cetera. So that’s the exact same type of benefit as when we introduce EUV. The biggest difference with the previous introduction was that when we put 0.33-NA on the market, we had major challenges with the source, the EUV source. And what we like very much about high NA and what our customer like about high NA is that in this case, we’re going to use the exact same source, meaning that whatever we have learned will be applicable to high NA. So we expect to follow smoother introduction, if you want with either a bit like when we move from the XT platform to NXT platform on immersion. So that’s and I mentioned that because the maturity of the product you introduces is also a big part of the value because the more mature, the faster it is for our customer to introduce it.
The number of high NA tool now you mentioned 20. So that’s always difficult to estimate, I mean, you have seen with 0.33-NA that we were wrong, because we start, we have a certain assumption of how many layers are going to be used with the new product. And that’s always a fraction of the total layers. And typically, the more advanced the product, the less layer, so we have a lot more carrier of layer than immersion layer and a lot more immersion layer than EUV, that’s always true. There’s always a bit of less layer. The reason for that is that customer optimizing basically their cost, and only use the most advanced tool on the most complicated layer. So we do prepare for 22 tool a year, you mentioned that, but again, learning from what’s happened in the last few months, you understand that if the overall market was to grow, the number 20, which we have given to the market also, a few years ago, were scale in the same extent. So we also looking at, we also try to prepare ourselves for more than that, again, with a much shorter lead time. So we don’t invest anything today. But we make sure that if we are successful with the high NA introduction and the volume was to increase faster than we expected. We could react also fairly quickly.
Alex Duval
That’s great. And a question we get from investors really is about an extent to which high NA tools could end up cannibalizing effectively demand for low NA so regular EUV machines. I wonder if you could provide a perspective on that. Does it even make sense to think about cannibalization, does it matter for ASML? I don’t want to lead the witness here but curious on your view.
Christophe Fouquet
No, it’s always different how you look at it. If I’m, in fact, say at certain process stack and replace some multi-patenting 0.33 EUV with high NA EUV it means that those layer are not going to be 0.33 anymore. So this very special stack, you have more high NA tool and a bit less 0.33 tools, right? This is just what’s happened when you replace one layer with a more advanced tool, you take away from the less advanced tool. But now, when you have this discussion and look at it this way, what you always miss is the fact that in the same time, volume goes up. And we have seen that for DPV, for example, where EUV never fully took into account the fact that despite this transition from DPV to EUV, the volume will grow so fast that the total number of DPV tool today we ship is higher, in fact than it was a few years ago. Now, will it be exactly the same for portrait for EUV, it’s always difficult to predict. But what I’m trying to say is that we expect that some of the vertical cannibalization, which is a transition for layer one to the other. When this happens, some of these will be compensated by additional volume on the demand basically from our customer. So we don’t really see at least or don’t really plan on our side to necessarily reduce dramatically our capacity on 0.33 EUV when high NA comes to the market.
Alex Duval
Got it. And going back to first quarter results, you talked about sort of ASML having received our high NA orders from two memory customers. I think we’ve seen some broadening over time. So I guess just from a sort of technological standpoint, on the memory side what’s driving increased adoption of these kind of quite expensive tools by memory customers? How should we be thinking about that?
Christophe Fouquet
Well, I think, I could refer to maybe the Micron Investor Presentation, because that’s only a few weeks hold. Where I think Micron nicely showed a bit the order of what they had in mind for the road map. And I think one thing that was clear there is that they were still counting on extending 2D for quite a bit. And some of it was the help of high NA. So I think that’s a bit what we see with DRAM customer, I think they are counting on 2D device for I would say at least the next 10 years. There’s a lot of discussion about 3D DRAM transition, I think there would be a lot of work done there. But the complexity is pretty high. And also the cost benefit is tricky, because in order to move to 3D, you need to have already enough stack to be able to compete cost wise with wherever the 2D road map would be. So I think the commitment of our DRAM customer to high NA which I think has been strong in the last few months is most probably the sign of their commitment to 2D scanning for still quite a few years.
Alex Duval
That’s great. And I guess another question that we get from investors is just on sort of layer counts. Obviously, when you lost the forecast for 2025, you talked about a certain layer count, generally speaking, for example, on the EUV on the logic side, what we’ve got feeling be in terms of sort of how that’s tracking and sort of the, sort of comfort level of and desire to maybe have more layers and so on from customers, as we look out a few years, and then I guess, as we sort of evolved from low NA to high NA after 2025, what will that do? I guess, in terms of layer counts, how should we be thinking about that?
Christophe Fouquet
Well, so I think if you look at the high NA introduction typically, we, people used to think about our tools or our road map as succession of cliff, right where we have one tool, and then we get a new tool and the whole tool disappear and the new tools take over. I think it’s very far from reality. I think customer are building a very flexible road map which allow them basically to insert new technology very rationally. So if you look at layer of count when high NA is being inserted in production, for example, for logic around 2025-26, I would expect customers to start with one or two layers. Two reason for that, first one is because they use that for their own learning, they reduce the risk. Second because this also correspond a bit to the capacity we can offer on high NA in the first few years. We also cannot follow up this kind of very abrupt ramp. And then for logic, there’s still a lot of debate on the road map and the node after that could be anywhere between five to seven layer depending on the customer. Then we see that climbing further a bit like we have seen with 0.33 but when we asked customer about what’s happening in 2000, mostly now I’m in 2028-29, they don’t really know. So you can rely a bit on the historical trend, I think because history has been repeated itself. So we have no doubt that the number of layer will grow. Our experience with the last EUV tool was that we always calculate for scaling. Like I said before, we typically mix all the other reason like Process Integration simplification, because we are not expert for that in ASML. So I would say usually, there’s always a bit of upside at customer based on the opportunity they see with new product in their process, compared to, for example, what we told you at the Investor Day, so it’s very difficult to, the prediction we make for ‘29, or even beyond that, because that’s the type of now question you’re asking me are more based on our experience than the clear understanding of what customer would do. I think they honestly, they usually tell us they don’t know themselves.
Alex Duval
That’s very clear, Christophe. And as we go into last five or six minutes. So I’d like to just put to you a couple of questions we’ve also had from investors, firstly, on gate-all-around, there’s been some recent news flow that a Korean player has achieved, perhaps lower than expected process yield performance on three nanometer gate-all-around. Is that significant? And could that have an impact on EUV adoption by ASML’s key customers? And then if we think about geopolitics, ASML talked about a desire to build our capacity to levels in 2025, which are well beyond current abilities in terms of EUV units. And there’s been talk of secular drivers, but also geopolitically driven demand. So what has sort of tangibly made ASML more confident on the geopolitical side of things being an important driver? And how important how significant is that driver relative to some of the other factors you’ve mentioned?
Christophe Fouquet
Yes, so maybe I start with the gate-all-around. So there I think the understanding that this will come in the road map is pretty clear. So we have factor in this transition in all our forecasts already for quite a few years. So you will get a lot of press around that because first results will come in, but we see our customer very solidly moving forward this step on the transistor, and we don’t expect any real, I would say noise for us around that. The geopolitics so I could go back to some of the comment I made in the first part of the discussion where I told you we see for logic, I see that’s where most of the geopolitics come in quite fierce competition between I would say Samsung, Intel, and TSMC. I think geopolitics is part of that. I think that if you look at the latest Intel presentation, I think they are clearly making geopolitics an argument, I think presenting themselves as the only company that can be in any location that mostly could happen with the other player. So this I would say almost amplify this competition, but when it comes to the effect, it’s still part of the 10%, 15% extra demand I was talking about before. It’s — you see everyone putting fab everywhere so that they are ready to take the business if the business come. And like I said before, as a result, they will see some inefficiencies. So this could have an impact for our customer costs because at the end buy tool that they may or may not use depending on who wins the market. And for us, yes, this is capacity we put on the ground. And, of course, whatever utilization is, those tool will begin. So I think you could mix a bit the geopolitics element on EUV with what I call the fierce competition before. I think the two are very much combined right now, because the geopolitics also drive some of the competition we see.
Alex Duval
Great, and Christophe, I see we are downs last two minutes. And another question I received from investors is just around China, you talked about geopolitics. To what extent will China be allowed to get EUV at some point to lean on at the moment? Could there be a scenario where they could eventually be allowed to get EUV? For example, several nodes down the line? To what extent does that matter for ASML?
Christophe Fouquet
Yes, I think for the foreseeable future. I think that I don’t see EUV going to China soon. Because I think that the current position taken by the US administration is pretty strong. And I think there is a real well willingness to block China to have access to this technology. So on the foreseeable future, we don’t expect up EUV to go to China. Now, of course, you could ask yourself, what’s the time, at some point, the US may or may not allow in terms of technology delay there. It’s very speculative. So I won’t, of course, I won’t say EUV will never be in China. But I think this will take quite a few years. That is based on the discussion we are having today.
Alex Duval
Great. Well, Christophe, I think we’re out of time. We’d like to thank you very much indeed, always, greatly appreciate the dialogue. It’s been a very wide ranging conversation, spanning drivers of EUV, high NA and also geopolitics. Really appreciate your time as ever, and look forward to speaking soon.
Christophe Fouquet
You’re very welcome. Thank you very much for the invitation.
Alex Duval
Thanks again.
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