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| Thomson Reuters StreetEvents Event Transcript | |
| E D I T E D V E R S I O N | |
| Q4 2015 ASML Holding NV Earnings Call | |
| JANUARY 20, 2016 / 2:00PM GMT | |
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| Corporate Participants | |
| ================================================================================ | |
| * Wolfgang Nickl | |
| ASML Holding NV - EVP and CFO | |
| * Craig DeYoung | |
| ASML Holding NV - VP, IR Worldwide | |
| * Peter Wennink | |
| ASML Holding NV - President and CEO | |
| ================================================================================ | |
| Conference Call Participiants | |
| ================================================================================ | |
| * Mehdi Hosseini | |
| SIG - Analyst | |
| * Andrew Gardiner | |
| Barclays - Analyst | |
| * Francois Meunier | |
| Morgan Stanley - Analyst | |
| * Amit Harchandani | |
| Citigroup - Analyst | |
| * Pierre Ferragu | |
| Bernstein - Analyst | |
| * Jerome Ramel | |
| Exane BNP Paribas - Analyst | |
| * Farhan Ahmad | |
| Credit Suisse - Analyst | |
| * Mahesh Sanganeria | |
| RBC Capital Markets - Analyst | |
| * Timothy Arcuri | |
| Cowen and Company - Analyst | |
| * Gareth Jenkins | |
| UBS Equities - Analyst | |
| * C.J. Muse | |
| Evercore ISI - Analyst | |
| * Sandeep Deshpande | |
| JPMorgan - Analyst | |
| * Kai Korschelt | |
| BofA Merrill Lynch - Analyst | |
| * Patrick Ho | |
| Stifel Nicolaus and Company - Analyst | |
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| Presentation | |
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| Operator [1] | |
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| Ladies and gentlemen, thank you standing by, and welcome to ASML 2015 fourth-quarter and annual results conference call on January 20, 2016. (Operator Instructions). | |
| I would now like to turn the conference call over to Mr. Craig DeYoung. Please go ahead, sir. | |
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| Craig DeYoung, ASML Holding NV - VP, IR Worldwide [2] | |
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| Thank you, Aaron, and good morning and good afternoon, ladies and gentlemen. This is Craig DeYoung, Vice President of Investor Relations at ASML. Joining me today from our headquarters here in Veldhoven, the Netherlands, is Mr. Peter Wennink, our CEO; and Wolfgang Nickl, ASML's CFO. | |
| The subject of today's call is ASML's 2015 fourth-quarter and annual results. Before we start, I'd like to take a brief moment to address some questions from previous calls about our Q&A queue. The process is -- you will be advised that the Q&A starts upon the operator's instructions at the opening of the call, and not before. Therefore, there's really no value in calling in too long before the call starts in an attempt to get into the queue. And as the operator mentioned, questions will be taken in the order that they are received. | |
| The length of the call will be 60 minutes. The call will be broadcast, and is being broadcast live over the Internet at ASML.com, and a replay of the call will be available on our website for approximately 90 days. | |
| Lastly, before we begin, I'd like to caution listeners that comments made by management during the conference call will include forward-looking statements within the meanings of the federal securities laws. These forward-looking statements involve material risks and uncertainties. For a discussion of these risk factors, I encourage you to review the Safe Harbor statement today, contained in today's press release and presentation found on our website at ASML.com, and in ASML's annual report on Form 20-F and other documents, as filed with the Securities and Exchange Commission. | |
| With that, I'd like to turn the call over to Peter Wennink for a brief introduction. | |
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| Peter Wennink, ASML Holding NV - President and CEO [3] | |
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| Good morning, good afternoon, ladies and gentlemen, and thank you for joining us for our fourth-quarter and annual 2015 results conference call. Before we begin the question-and-answer session, Wolfgang and I would like to provide an overview and some commentary on the recent quarter, and provide our review of the coming quarters. Wolfgang will start with a review of the Q4 financial performance with added comments on our short-term outlook, and I will complete the introduction with some further comments on the current channel business environment and on our future business outlook. | |
| So, Wolfgang, if you will? | |
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| Wolfgang Nickl, ASML Holding NV - EVP and CFO [4] | |
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| Thank you, Peter, and welcome, everyone. For Q4, our sales came in at EUR1.43 billion. This included system sales of EUR881 million, of which memory represented 44% and logic represented 56%. Service and field option sales came in strong at EUR553 million. This part of our businesses grows, continues to strengthened by strong demand for holistic lithography options, high-value upgrades, and a growing installed base. | |
| Our gross margin for the quarter came in at 46%, slightly above the guidance. R&D expenses came in at EUR273 million, and SG&A expenses came in at EUR90 million, essentially as we guided. | |
| For the full year, our net sales reached a new record of EUR6.3 billion, which is up 7% from the prior year, and includes over EUR2 billion for field options and services. Gross margin for 2015 was 46.1%, up from 44.3% in 2014. Our basic earnings per share for 2015 were EUR3.22, up 18% year-over-year. | |
| Turning to the balance sheet, quarter-over-quarter cash, cash equivalents, and short-term investments grew from EUR2.68 billion to EUR3.41 billion, driven by strong free cash flow which was impacted by a significant amount of customer prepayments on orders received. In Q4, we repurchased shares worth EUR141 million, bringing the total amount for repurchased shares in 2015 to EUR565 million. | |
| Regarding the order book, Q4 bookings came in at EUR1.2 billion, 31% above our Q3 bookings. Strength in memory bookings continued to be notable, with a significant growth in our foundry bookings, leading to a strong and nicely balanced backlog across all industry sectors of approximately EUR3.2 billion. | |
| What that, I would like to turn to our expectations and guidance for the first quarter of 2016. We expect continued healthy memory shipments, supported by a strong backlog. Our servers and field option sales will be around the EUR500 million mark again. We expect relatively modest logic shipments in the first quarter of 2016, leading us to guide Q1 revenue at approximately EUR1.3 billion. As indicated at this time last quarter, we do, however, expect our logic customers to take shipments in Q2 which will start the ramp of 10 nanometer, and as a result we expect Q2 sales to increase significantly from Q1. | |
| Based upon expected customer and product mix, a lower in sales volume forecast, and lower field option sales, we expect gross margin for Q1 to come in at around 42%. R&D expenses for the first quarter will be about EUR275 million, and SG&A is expected to come in about EUR90 million, both roughly the same as the previous quarter. Our annualized tax rate for 2016 is expected to increase to around 13%, based upon a change in tax rules that transfer some tax benefits into R&D credits. | |
| Peter will talk more about our 2015 EUV accomplishments and 2016 key performance targets shortly. But I would like to make a few points regarding 2016 EUV shipments, and explain a bit further the current and expected situation related to EUV revenue recognition. We completed three EUV shipments in 2015, and started the shipment of a fourth system before year-end. One of the three systems was recognized in revenue during 2015. The other two systems that shipped, and the one system where shipment was started, should lead to a revenue of about EUR110 million in the middle of 2016, with the balance booked in 2017. | |
| For 2016, we expect to ship between six and seven EUV systems. The 2016 shipments will be a combination of NXE:3300s, 3350s, and 3400s, going to both logic and memory customers. As a reminder, we will continue to guide expected revenue timing on additional EUV systems as they ship. | |
| And, finally, but certainly not with significant importance, ASML paid EUR302 million in dividends in 2015, and we purchased 6.3 million of our own shares for EUR565 million, providing a total cash return to shareholders of EUR867 million during the year. | |
| In 2016, we are proposing to our Annual General Meeting of Shareholders on April 29 to increase our dividend by 50% to a level of EUR1.05 per ordinary share. Today, we have also announced the plan for an additional EUR1 billion of share repurchases over 2016 and 2017, on top of the remaining EUR500 million from our prior program. | |
| With that, I would like to turn the call back over to Peter. | |
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| Peter Wennink, ASML Holding NV - President and CEO [5] | |
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| Thank you, Wolfgang. As Wolfgang highlighted, we concluded a financially very satisfying year. Expectations for the first-quarter sales are approximately EUR1.3 billion, reflecting continued shipments for 28, 16, 14 nanometer logic capacity additions, albeit at a relatively low level, and shipments to memory customers consisting of a mix of advanced and more mature system types. | |
| While first-quarter sales are expected to be relatively moderate, we clearly see, as Wolfgang said, a significant increase in combined system and service sales in the second quarter, largely driven by system shipments for the initial ramp of advanced 10 nanometer production processes at our logic customers. | |
| While it is still a bit too early to say anything quantitatively about 2016, we do see trends and developments that we believe are worthwhile mentioning. In memory, as evidenced by the fourth-quarter bookings and our current backlog strength, our customers have indicated that their system demands will continue throughout the first half of 2016 at levels roughly equivalent to those of Q4. | |
| Although we expect that two DRAM fabs will continue to install some additional tools largely meant to support the next DRAM node, we also believe that 2016 shipments to this application will be down versus a strong 2015. | |
| On NAND, we believe that the capacity expansions will be focused on 3D NAND applications. With the announcement of the conversion of a Chinese fab to 3D NAND that is now largely supported in our current backlog, we expect a flattish level of NAND systems revenues versus 2015. | |
| One additional memory development that appears to be worth following is the introduction of the XPoint architecture. While the full opportunity extent of this new memory architecture is still under evaluation, its potential seems significant and could, therefore, become important to our business as the advanced processes anticipated in this application are quite litho-intensive. | |
| As for logic, it has now become clear to us that the introduction of the advanced 10 nanometer node ramp is progressing well, hence the continued and clear customer commitment to ramp this node starting in Q2 2016. The speed and initial size of this ramp can be explained by the value proposition provided by the significant shrink of this node versus the 16 and 14 nanometer node. | |
| The ultimate spend levels for logic in 2016 will depend, amongst other things, about the level of end demand, and the rate at which our customers will be able to execute their ramp; and it's, therefore, too early to accurately predict this today. For field options and services, we see continued strength in 2016, and this should show growth, previously estimated to be in the range of 10%. | |
| On the product side, ASML continues to focus R&D spend on lithography tools that are essential to ramp all of the current and advanced processes. With the growing litho challenges of complex and costly multipass patterning, our recently launched TWINSCAN NXT:1980 deep UV immersion scanner, with significant improvements in all key performance metrics, started volume shipment last quarter. And now with its widespread acceptance, it is ramping at a rate greater than any other advanced system in our history. | |
| Our holistic lithography products continue to gain acceptance at leading-edge customers, who are using our full suite of immersion process window enhancements and process control solutions to optimize yields at the most advanced product nodes. Holistic lithography products are now extending also into EUV processes, with customers evaluating our EUV Source Mask Optimization software for the development of their 7 and 5 nanometer technologies. | |
| And finally on EUV, as most of you are aware, our 2015 focus has been on improving EUV stability, availability, and productivity, the key performance metrics that drive new technology adoption. In several recent public presentations, our customers have clearly recognized our EUV progress in these areas. In a four-week, customer-run manufacturing readiness test at production conditions, we've seen 15,000 wafers exposed with comparable results achieved using the same power configuration at multiple customers. | |
| On the raw productivity side, we have a new system configuration, the NXT:3350, that has demonstrated in our factory more than 1,250 wafers exposed in a 24-hour period. Six out of eight systems at customer sites have achieved four-week average system availability of greater than 70%, with one system reaching the 80% mark. However, the worldwide average is currently still lower, indicating that performance stability in the entire installed base needs to be further improved. | |
| We believe that our 2016 performance targets of 1,500 wafers per day and 80% total system availability are achievable, and will therefore be aggressively pursued over the course of this calendar year. | |
| Now, with that, we would be happy to take your questions. | |
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| Craig DeYoung, ASML Holding NV - VP, IR Worldwide [6] | |
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| Thank you, Peter. Ladies and gentlemen, the operator will instruct you momentarily on the protocol for the Q&A session. But beforehand, as I always do, I would like to ask you to kindly limit yourself to one question, with one short follow-up if necessary. This will allow us to get as many callers on today as possible. | |
| Now, operator, can we have your instructions and then the first caller, please? | |
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| Questions and Answers | |
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| Operator [1] | |
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| (Operator Instructions). Kai Korschelt, Bank of America. | |
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| Kai Korschelt, BofA Merrill Lynch - Analyst [2] | |
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| So the first one was just on the second quarter. So I'm just wondering, what level of visibility do you have? What could be the magnitude of the snapback? And the reason I'm asking is, I think if I just take your bookings in the fourth quarter, and if I add maybe EUR0.5 billion service sales, then it looks like we should be well above EUR1.6 billion. So I'm just wondering if that's the right ballpark. And then I have a follow-up. Thank you. | |
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| Wolfgang Nickl, ASML Holding NV - EVP and CFO [3] | |
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| Well, we don't want to leave you down any particular number, but we chose the word significantly wisely, so we wouldn't do that if it would be just a little bit up. So we'll leave it at that today, but it's all underpinned by a strong ramp in 10 nanometer. And we also said that memory will be, throughout the first half, at Q4 levels, so I think you can approximate it from there pretty well. | |
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| Kai Korschelt, BofA Merrill Lynch - Analyst [4] | |
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| Okay. And then just a quick one on the gross margin. So, I think the Q1 guidance is probably below where most people think it would be, even if we look back at quarters with similar revenue -- run rates. So I'm just wondering, broadly, what are the reasons? And should we expect that if we do see the recovery in demand and revenues in the second quarter, that we should settle back at the 47%, 48% level that I think we've become used to it, as obviously before EUV? Thank you. | |
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| Wolfgang Nickl, ASML Holding NV - EVP and CFO [5] | |
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| Yes, Kai, I can address it, as well. First of all, there are no structural changes in the sense that you should be worried that pricing came down, or we have any cost issues. This is purely a function of lower volume at one, and then more so a change in mix between products and customers. And then also within the service and field options, that the service is a bit higher when compared to the field options, which come at higher margin. And then you can also read that when we say foundry is lower and memory is higher, foundry tools are usually in a richer configuration going to the customer. | |
| Now, if you want to look at Q2, we won't give you an exact number. But when you consider that the volume will go up and the foundry shipments will go up, and it's 10 nanometer, it will be pretty nicely configured tools, you'll know in which direction the margin will go. | |
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| Kai Korschelt, BofA Merrill Lynch - Analyst [6] | |
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| Okay, great. Thank you. | |
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| Operator [7] | |
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| Sandeep Deshpande. | |
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| Sandeep Deshpande, JPMorgan - Analyst [8] | |
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| Sandeep Deshpande from JP Morgan. My question would be, Peter, on the memory market. You've said that you are going to have a flattish trend in the first half in the memory market. Do you see this, into the second half, substantially correcting? Or you don't have visibility at this point into this segment? | |
| Secondly, I have a quick question on EUV as well. Clearly, EUV is progressing much better at this point in terms of throughput, and you've given some of the statistics. What time frame do you see EUV actually being built for production volumes? Thanks. | |
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| Peter Wennink, ASML Holding NV - President and CEO [9] | |
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| Okay. On the memory market, like I said in the introductory comments, we have very clear visibility given by our customers, also evidenced by our bookings that we received in the fourth quarter. On what we are going to ship in the first half, we're just focused on also the introduction of the new DRAM nodes. So you could say it's clearly a technology transition that is driving the shipments in the first half. | |
| We don't have that visibility yet on the second half, is our current thinking. I can only give you some indication of what was said by some of the market research analyst firms. They expect -- and if they are right, and 25% bit growth for next year would mean about flat wafer capacity year-on-year, 2016 versus 2015. So that means that if the initial shipments of the technology [trends] happen in the first half, then the second half will be lower than all capacity additions needed. | |
| How much lower? That's a bit too early to say. But clearly first-half technology trend and transitions; and second half, probably a lot less. | |
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| Sandeep Deshpande, JPMorgan - Analyst [10] | |
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| Thank you. | |
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| Peter Wennink, ASML Holding NV - President and CEO [11] | |
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| On EUV throughput, yes, and on that we've made good progress. We've agreed with our customers the targets for 2016, and we have good confidence that we are going to get there. You have to look at 2016 as, I would say, the last phase in the EUV introduction of where our customers are developing their next nodes for which they are planning their production output in 2018 and 2019. So, it's the last phase of the development node, and the qualification of those architectures that we will see in 2018, 2019, hitting the market. | |
| That means that 2017 will be the year where we will start to see the start of the EUV shipments for production, and they will be used in 2018. And that will accelerate through 2018. So 2017 will see the first start to make sure we can do -- customers can do the output in 2018, which will accelerate in 2018 further on. So, that's nothing different than we said, I think, last quarter; so, no change from that respect. | |
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| Sandeep Deshpande, JPMorgan - Analyst [12] | |
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| Thanks, Peter. | |
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| Operator [13] | |
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| Gareth Jenkins. | |
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| Gareth Jenkins, UBS Equities - Analyst [14] | |
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| Yes, a couple if I could -- or rather one, and one follow-up. So, I just wondered if we could talk about 10 nanometer ramp, now you've got maybe a bit more visibility around it. Should we still be thinking about 10% pure wafer starts between the 2016 14 node and the 7/10 nodes, but also a 40% to 50% lithography intensity increase? Just wondered if we could elaborate on that, now you've got more line of sight. And that I have a follow-up on EUV. Thank you. | |
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| Peter Wennink, ASML Holding NV - President and CEO [15] | |
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| Yes, just for clarification, I just missed part of your question on your 10%. You referred to 10% (technical difficulty). | |
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| Gareth Jenkins, UBS Equities - Analyst [16] | |
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| The low wafer starts, Peter, between -- so, 2016 -- 14, and 7/10. | |
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| Peter Wennink, ASML Holding NV - President and CEO [17] | |
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| Okay, okay, sorry. Yes, yes. Yes, it's basically --that's the assumption on the 10% that we still work with. We don't have any other data. I'll comment on that a bit later, also. The 40% litho intensity, yes, that's what node-on-node -- that's still what we think is a realistic number. On the node-on-node wafer capacity reduction, the 10% is still what we are using. You have to bear in mind that, starting from the 28 nanometer node, we see those nodes extending a lot longer than what we saw in the past. | |
| And you've been around a long time, so you know that, between 5 and 10 years ago, nodes had a two-year life. And then the previous nodes stopped, next node came, and lasted about two years, and almost all logic customers moved in that same time period, which is less the case today, or not the case today. We see the initial acceptance of a new node being driven by the leading-edge customers. And they install, rather swiftly and rather fast, a quite a significant amount of capacity. And then you see the other customers in that segment, you could say the second-tier customers, following later. | |
| That is also what we see today. 28 nanometer is still being shipped, even in Q1 of 2016, which is more than four years after the initial introduction. So, you can see kind of a camel back in the first phase of that node, and then a much longer tail. Which also makes it more difficult for us to say how much will that wafer capacity for that node be. We assume 10%, but over time we will -- it needs to be proven whether this is the correct number. | |
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| Gareth Jenkins, UBS Equities - Analyst [18] | |
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| That's fair. And just one follow-up. It looks like your Chinese orders are very strong, somewhere around EUR500 million, which I would assume is mostly Dalian. Can you just give us a sense of your market share into China through the course of this year, or rather on those orders? | |
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| Peter Wennink, ASML Holding NV - President and CEO [19] | |
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| Well, our market share in China has always been pretty good, and it will stay pretty good. I'm not going to give you an exact number, but we have no worries about our market share in China. | |
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| Peter Wennink, ASML Holding NV - President and CEO [20] | |
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| Okay, thanks. | |
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| Operator [21] | |
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| Jerome Ramel. | |
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| Jerome Ramel, Exane BNP Paribas - Analyst [22] | |
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| Good afternoon. Jerome Ramel from Exane BNP Paribas. Peter, just want to come back to the point you made that your clients seem to be keen on moving to the 10 nanometer node because that's a [terrific] count improvement compared to the 16/14 versus the 20. Could you just give us a sense what is better? Is it the term of yield, it's in term of cost per transistor? What would make the 10 nanometer node more attractive than the 16/14? | |
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| Peter Wennink, ASML Holding NV - President and CEO [23] | |
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| Yes. From a lithography point of view, the 16/14 node is very similar from a little half-pitch dimension point of view, very similar to the 20 nanometer node. So you really should not go past 16 and 14, from a litho pitch point of view, to 10, but really 20 to 10. And that's a big shrink. And, as you know, shrink has a big impact on the cost per bit. And so it is driven by cost per bit. And for some customers, actually it's also value; just putting more functionality on the same square surface. That's what's driving it. | |
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| Jerome Ramel, Exane BNP Paribas - Analyst [24] | |
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| So you'd see -- to make clear, you see the cost per transistor going down at 10 nanometer node? | |
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| Peter Wennink, ASML Holding NV - President and CEO [25] | |
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| Yes. Yes. | |
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| Jerome Ramel, Exane BNP Paribas - Analyst [26] | |
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| Okay. And maybe just one follow-up. You gave guidance for the full year -- I mean quantitative guidance for the memory -- so Flash being flat, and DRAM going down. I'm not sure I understood for logic and foundry what the trend are, in term of quantitatively compared to 2015. | |
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| Peter Wennink, ASML Holding NV - President and CEO [27] | |
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| Well, I think the -- Wolfgang said the first quarter is relatively benign, but we really see the ramp starting in Q2. And then also we are extending into IDM, not only for foundry but also IDM on 10 nanometer, which will be the remainder of the year, which will drive the remainder of the year. Now, if you just look at the size of that ramp -- and the ultimate size for this year is always a bit difficult to predict in the third week of January, so as we are very early in this year. | |
| But if you look at that -- what customers are telling us, it's going to be a significant ramp, and will be driven by the leading-edge players, not so much by the followers, which will follow on, I said as an answer to an earlier question, which will probably have a much longer tail. But the initial ramp up we are seeing will be significant, and that causes us to state that the 2016 logic market for us will be significantly higher than 2015. | |
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| Jerome Ramel, Exane BNP Paribas - Analyst [28] | |
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| For logic, that includes logic and foundry, or that's just purely logic? | |
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| Peter Wennink, ASML Holding NV - President and CEO [29] | |
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| That's logic versus foundry and IDM. | |
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| Jerome Ramel, Exane BNP Paribas - Analyst [30] | |
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| Okay. Thanks. | |
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| Operator [31] | |
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| C.J. Muse. | |
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| C.J. Muse, Evercore ISI - Analyst [32] | |
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| Good afternoon, C.J. Muse with Evercore ISI. I guess first question, I know there's a lot of moving parts here, but curious what are the key milestones we should be watching for EUV to be designed in at the 7 nanometer node. | |
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| Peter Wennink, ASML Holding NV - President and CEO [33] | |
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| I think we mentioned those. I think, for our customers, it's most important that they have a certain level of productivity. But it's very important that when you start planning your production, that availability is critical. So, the 80% availability target is what we agreed with our customers. This is what we are, at least, following. I also like to refer to our presentation, where you can see that. | |
| On productivity, quite interesting: one of our key customers -- in the question that was asked recently on where the 500 wafers spread day would be sufficient for them to go into production, assuming a reliable or a, let's say, good availability of the tool. And the answer was yes, they would use it. So, you can draw a conclusion from that answer, that it's not so much now about the productivity, it is about the availability. So this is what we are really focusing on this year. | |
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| C.J. Muse, Evercore ISI - Analyst [34] | |
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| That's helpful. And as a follow-up, in terms of foundry logic spend this year, clearly a very good year for 10 nanometer. Curious if you could share your thoughts on the mix this year between 10 nanometer China foundry spending year-over-year, as well as whether you're seeing any incremental capacity adds at the 14/16 nanometer nodes. And then to follow on to that, your expectations for that 10 nanometer ramp to continue into 2017. | |
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| Peter Wennink, ASML Holding NV - President and CEO [35] | |
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| Yes, I made some notes. The 10 nanometer ramp is predominantly outside China, if you refer to China. When we see China -- the Chinese logic or foundry market, we are clearly focusing on the nodes before 10. So the 28 nanometer node is still relatively strong in China, but also very clear indications of the move to 16 and 14. And that is where we see Chinese foundries going. Like I said, the 10 nanometer ramp will be outside China. | |
| 2017 is a good question. I think it's too early for us to say anything about 2017. I think what we'll have to go through is the next two, three quarters of the initial ramp, which we have a pretty decent visibility of. And 2017 will be driven, I think, by the end markets. And we'll just -- a bit too early to comment on that, C.J. (multiple speakers). | |
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| Wolfgang Nickl, ASML Holding NV - EVP and CFO [36] | |
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| But C.J., directionally for 2016, the 10 nanometer will make up the majority of our shipments. But there will still be 28 and 16 and 14 shipments as well. | |
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| Peter Wennink, ASML Holding NV - President and CEO [37] | |
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| Yes, but those are then predominantly in the direction of China, and somewhat in Taiwan. | |
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| C.J. Muse, Evercore ISI - Analyst [38] | |
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| Great. Thank you so much. | |
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| Operator [39] | |
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| Mr. Hosseini. | |
| Mr. Hosseini, you can ask your question. | |
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| Craig DeYoung, ASML Holding NV - VP, IR Worldwide [40] | |
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| Sound like he's not there, operator. Want to go to the next one? | |
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| Operator [41] | |
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| Amit Harchandani, Citi. | |
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| Amit Harchandani, Citigroup - Analyst [42] | |
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| This is Amit Harchandani from Citigroup. Good afternoon, ladies and gentlemen. Two questions: firstly, with regards to a topic that does come up often for discussion, which is equipment reuse -- we've heard some of your peers talk about it, the customers talk about it. Could you give us a sense for how you see equipment reuse impacting your prospects for this year as compared to last year? I'm also looking forward to your medium-term financial roadmap across the different end segments. So that would be my first question, and I have a follow-up. | |
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| Peter Wennink, ASML Holding NV - President and CEO [43] | |
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| Okay. The equipment reuse is always -- it appears to dominate some of our discussions lately, but it's always been there. Large IDMs have always done this, and it's a very sensible way to manage your capital efficiency. Now, with tool prices going up to where they currently are -- advanced DPV prices are EUR50 million -- there is more and more focus of our customers on capital efficiency. | |
| And the reuse program, which we have designed by adapting the architecture in such a way that we can upgrade from one node to the other. And with litho intensity going up with about 40% node-on-node. And there's a very clear driver of our customers to say, what part of my installed base can we upgrade to the next node? That's called a reuse. That doesn't cover the 40% litho intensity at all. It just covers part of it. | |
| And we have had situations whereby reuses, let's say upgrades, were planned on the previous node, that never happened because the previous node extended longer than the original planning. So, it's nothing new. I think it's going to be part of our business going forward. Very healthy part, if you think about an extensive upgrade from a 1950 to a 1970, for instance, is a EUR20 million-plus upgrade, with these margins. Which is good business for us; helps us increase our services and option sales business, and helps our customers to manage their installed base. | |
| So I think it's going to be part of our business, going forward. It might be new to some of our peers. But it isn't to us because, our tools have always been one of the most expensive in the customer fabs. So, it's here to stay, and it's good. | |
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| Amit Harchandani, Citigroup - Analyst [44] | |
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| Thanks, Peter. And then just to clarify, the extent of reuse that you're seeing out there right now is in line with your 2020 financial roadmap? | |
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| Peter Wennink, ASML Holding NV - President and CEO [45] | |
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| Absolutely. Yes, in our 2020 roadmap, we have actually included that reuse. It is an inevitable event. And the level of reuse that we are seeing is very much in line with our expectations. | |
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| Amit Harchandani, Citigroup - Analyst [46] | |
| -------------------------------------------------------------------------------- | |
| Thank you. And just as a follow-up if I may, Wolfgang, could you kindly just once again explain or elaborate upon your comment of EUV revenue recognition for this year? I'm afraid I did not catch it correctly. Was it EUR110 million in the middle of the year? So what are we looking for, in terms of EUV revenues this year? If you could shed some light on that. Thank you. | |
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| Wolfgang Nickl, ASML Holding NV - EVP and CFO [47] | |
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| You got that right. Well, first of all, we told you that while we're in this transition period where we can recognize not when a tool leaves our factory, we will give you guidance as we ship the tools. And I said we shipped three tools last year, and of which only one recognized. And on top of that, we started the shipment of another tool. Of the two tools that shipped and have not recognized last year, and the tool that has started to ship, from these three tools together you should expect approximately EUR110 million in revenue. And that will be somewhere in the Q2, Q3, mid-year time frame. And the balance of the revenue will likely recognize in 2017. | |
| Now (multiple speakers) the starting point, and then we also said that we will ship more tools this year. And those, of course, will -- we also told you there is, for instance, a 3300 amongst them, which will recognize faster because there the recognition rules are different because we just need to demonstrate that we can print the wafer. So there's more to come, so you've got to bear with us as we make these shipments. | |
| And lastly, I'll say also that we will start to see some service revenue in the EUV field. We already had some last year. Our total revenue was about EUR100 million or so, and only a little bit over EUR60 million came from systems. So you have to bear with us, Amit. We will give you information as we go through the year. | |
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| Amit Harchandani, Citigroup - Analyst [48] | |
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| Just to confirm, a minimum of EUR110 million, but the actual number could vary depending on your updates as you go through the quarters now? | |
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| Wolfgang Nickl, ASML Holding NV - EVP and CFO [49] | |
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| That is correct. | |
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| Amit Harchandani, Citigroup - Analyst [50] | |
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| Thank you. | |
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| Operator [51] | |
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| Mr. Sanganeria. One moment. | |
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| Mahesh Sanganeria, RBC Capital Markets - Analyst [52] | |
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| (technical difficulty) there is same level as -- hello? | |
| Yes. Okay, so you said memory at similar level to Q4, which was about EUR350 million, down 35%. So, first half at that level, and second half you said decline. That will indicate a significant down, year-over-year. Did I understand that clearly? | |
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| Peter Wennink, ASML Holding NV - President and CEO [53] | |
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| Well, I referred to DRAM system. And since we don't split out DRAM in the fourth quarter results -- so, DRAM shipments will be about equivalent to Q4. NAND will be over the year, year-on-year, will be about flat. | |
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| Mahesh Sanganeria, RBC Capital Markets - Analyst [54] | |
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| Okay. And I want to follow up on the China. You had pretty strong orders on China; somebody mentioned EUR500 million, pretty close. And mostly, probably on NAND side, is that shipment to China mostly in Q2? | |
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| Peter Wennink, ASML Holding NV - President and CEO [55] | |
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| That shipment starts in Q1. | |
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| Mahesh Sanganeria, RBC Capital Markets - Analyst [56] | |
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| Starts in Q1? | |
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| Peter Wennink, ASML Holding NV - President and CEO [57] | |
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| And (multiple speakers) will continue. | |
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| Mahesh Sanganeria, RBC Capital Markets - Analyst [58] | |
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| All right. Thank you. | |
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| Operator [59] | |
| -------------------------------------------------------------------------------- | |
| Mehdi Hosseini. | |
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| Mehdi Hosseini, SIG - Analyst [60] | |
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| Peter, going back to your 2015 performance, your foundry revenues were up 36%, but immersion systems shipment was down, and ASPs were down, too. Can you help me understand how did this mix change, despite the fact that foundries were up so much? And I have a follow-up. | |
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| Peter Wennink, ASML Holding NV - President and CEO [61] | |
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| For 2016, you said? | |
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| Mehdi Hosseini, SIG - Analyst [62] | |
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| 2015. | |
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| Peter Wennink, ASML Holding NV - President and CEO [63] | |
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| Yes. Foundry shipments are up -- the ASP -- we shipped significantly more systems altogether. And they were also KrF and other systems in there. So like-for-like, the ASP didn't go down; but because of the mix, the ASP went down. | |
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| Wolfgang Nickl, ASML Holding NV - EVP and CFO [64] | |
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| Yes, and it's KrF. | |
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| Mehdi Hosseini, SIG - Analyst [65] | |
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| Does not reflect that foundries spend more on their trailing edge versus leading edge? | |
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| Peter Wennink, ASML Holding NV - President and CEO [66] | |
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| That is absolutely -- like we said earlier, we are currently shipping a different node layers. We're -- 28 nanometer, 14/16, the first 10 nanometer R&D tools. So it's quite a mixed bag of those tools. So to draw a conclusion on ASPs or ASP trends is a bit difficult because it's quite a mixed bag. But what we can say is that with every node transition, the ASP goes up because of the richer configuration, including a lot more holistic litho options. | |
| Now in 2015, which is true, we had a mixed bag of 28 nanometer node, 14/16 nanometer node, and some early 10 nanometer node shipments. So, I think it's a bit difficult. And it did include, as we put in the presentation, there's a lot more KrF. | |
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| Mehdi Hosseini, SIG - Analyst [67] | |
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| Okay. And then my final question [is actually] China. Can you elaborate more whether the key end markets or device stock that is driving such a strong growth in backlog, as it relates to China? | |
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| Peter Wennink, ASML Holding NV - President and CEO [68] | |
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| Well, it's both foundry and now also memory. So it's shipped due -- so it's the ship to region is indeed stronger. And that's because memory is now also adding, on top of the logic shipments, which are predominantly driven by 28 nanometer. | |
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| Mehdi Hosseini, SIG - Analyst [69] | |
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| So there is a new NAND fab that is coming online, but also one of your Korean customers has a fab [Icheon]. How should we think about the mix -- new fab/existing fab on the 3-D NAND, and also the foundry market? Is it evenly split, or is one more than the others? | |
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| Peter Wennink, ASML Holding NV - President and CEO [70] | |
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| Well, I think there are existing fabs and the refurb fab -- one of the existing fabs that you referred to is already full. So, that means that the refurb fab is going to take tools. That's what it is. It's as simple as that, and not more difficult than that. | |
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| Mehdi Hosseini, SIG - Analyst [71] | |
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| Got it. Thank you. (multiple speakers) | |
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| Operator [72] | |
| -------------------------------------------------------------------------------- | |
| Pierre Ferragu. | |
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| Pierre Ferragu, Bernstein - Analyst [73] | |
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| Good morning, it's Pierre Ferragu, Bernstein. So, I have a question on your gross margin for the back end of the year. If I understand you correctly, foundry is going to be very strong. That's a 10 nanometer node. It's very high-end tools, a lot of options and upgrades, and memory is going to be low. So should we expect a very, very healthy gross margin development beyond Q2? So in Q3 and Q4, gross margin should be also heading in the right direction? So that's one question. | |
| And then I have just a quick follow-up on EUV. I got, at some point, confused about insertion. By understanding is that both your IDM customers and your foundry customers are going to insert EUV at the 5 nanometer nodes, so not the next one but the one after. Is that also how you see the world from where you are? | |
| And then maybe on this 5 nanometer node insertion, how much visibility do you have today on how heavy an insertion it is going to be? Are we going to use EUV tools only at a very, very low level for the first layers? Or are we heading into a more massive adoption of EUV at this 5 nanometer node? Thanks. | |
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| Peter Wennink, ASML Holding NV - President and CEO [74] | |
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| Yes, let me answer that EUV question first. Whether it's called 5 nanometer or 7 nanometer, I don't want to go into that nomenclature, because there is a lot of confusion about what is what. I'm also not going to tell you what we believe the lithography pitch is, because that's what's probably going to make it easier to understand that we're talking about this same thing. | |
| What is most important -- and that's what we should focus on, is whether you call it 5 or whether you call it 7 -- our customers, our leading-edge customers, make it very clear to us that they will start the output of their chip architectures that need EUV -- whether that's 5 or whether that's 7, and I don't know how they call it, and I don't care -- but when they need EUV for output is 2018 starting; 2018, 2019. Which actually means that our shipments for production purposes need to start in 2017. It takes about a year to really qualify for a production run. | |
| So, this is what we are focused on. This is what we are discussing with our customers. And this is also driving the decision points and the entry points for our customer for production insertion. It's this 2018-2019 time frame (multiple speakers). | |
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| Pierre Ferragu, Bernstein - Analyst [75] | |
| -------------------------------------------------------------------------------- | |
| Okay, and in terms of the volume of insertion, so is that going -- do you have already visibility? And how high in the architecture of the chip EUV is going to be used? Is it just going to be the most critical layers, or more than that? Do you have that visibility already, or is that still something that has to be defined? | |
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| Peter Wennink, ASML Holding NV - President and CEO [76] | |
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| Yes, we have that visibility -- reasonable visibility from our customers. But it actually leads us to believe what we said in the past that the first year of volume ramp -- and, as you know, with the lengthening of the nodes -- we discussed it a couple of quarters ago -- everything is about 6 to 12 months later than we thought about a year ago. But we believe that the initial year of the production shipment will be a dozen or so tools. And then this will double every year that we move on. | |
| So, we are still -- all our simulation models still show the same thing. So the first year of the production shipments is about a dozen tools. And then it will double the year after that, and double the year after that. (multiple speakers) right model. | |
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| Wolfgang Nickl, ASML Holding NV - EVP and CFO [77] | |
| -------------------------------------------------------------------------------- | |
| And that's related to the gross margin question, Pierre. Yes, you are right from the direction in the second half, as logic will be a bigger part of it. Directionally, margin goes up. Of course, we don't know the exact volume yet, so we can't describe that volume effect; but, directionally, you are right. One caveat: if there's a concentration of EUV revenue recognition in a quarter, you will see some distortion. But when we get to that bridge, we will explain to you how that works, and show you the margin without EUV as well. | |
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| Pierre Ferragu, Bernstein - Analyst [78] | |
| -------------------------------------------------------------------------------- | |
| Excellent. Thank you very much. | |
| -------------------------------------------------------------------------------- | |
| Operator [79] | |
| -------------------------------------------------------------------------------- | |
| Andrew Gardiner. | |
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| Andrew Gardiner, Barclays - Analyst [80] | |
| -------------------------------------------------------------------------------- | |
| Thank you. It's Barclays. Good afternoon, guys. Just another one on EUV. In terms of the -- looking at the milestones you are targeting for this year, I'm just trying to understand roughly when we might be able to get a better idea as to how you are making progress. | |
| You seem to be in a bit of a gap at the moment. Clearly, the customers have the 3300 tools installed and running, and those are a lot of the metrics you are talking about. The 3350s are there, or on their way. So when can we expect to see some of the first news on the 3350 tools at the customer sites? Is SPIE too early, or is it going to be a bit later than that? | |
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| Peter Wennink, ASML Holding NV - President and CEO [81] | |
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| That's a good question. You pointed out the 3350 is really the tool that has the improvements on it that will give us the 1,500 wafers per day and the 80% availability capability. Those tools are just starting to ship. They need to be installed. The installation only takes a quarter or three months, which actually makes it too late for any significant information on the SPIE conference, which is in February. So it will be around mid-year. That's what you need to focus on. | |
| -------------------------------------------------------------------------------- | |
| Andrew Gardiner, Barclays - Analyst [82] | |
| -------------------------------------------------------------------------------- | |
| Okay. And then just a quick follow-up. You've highlighted the 6 to 7 EUV tool shipments this year. Can you give us any sense as to when those are coming? Or you haven't really -- I know there's no revenue recognition for those tools. But just in terms of the rough timing of shipment to -- for us to gauge when those are leaving the facility. | |
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| Peter Wennink, ASML Holding NV - President and CEO [83] | |
| -------------------------------------------------------------------------------- | |
| Well, they are starting to leave the facility this quarter, the first one. So it will be throughout the year. There will be tools shipping every quarter. And as to revenue recognition, Wolfgang already said it. I gave some clear guidance for the revenue recognition of the tools that we shipped last year, and the one that was in the process of shipping towards the end of the year. But of the 6 to 7 tools that will ship in this year, there will be some revenue recognition because there's a 3300 in there, which will very likely -- two of them, could be, which will book revenue. | |
| And also on the 3350s, it depends on the commissions or the order conditions, where we can take some revenue already in 2016. So that's why Wolfgang said, it's the minimum, and there's very likely going to be EUV revenue on top of that in the course of the year. | |
| -------------------------------------------------------------------------------- | |
| Andrew Gardiner, Barclays - Analyst [84] | |
| -------------------------------------------------------------------------------- | |
| Understood. Thanks very much, guys. | |
| -------------------------------------------------------------------------------- | |
| Operator [85] | |
| -------------------------------------------------------------------------------- | |
| Francois Meunier. | |
| -------------------------------------------------------------------------------- | |
| Francois Meunier, Morgan Stanley - Analyst [86] | |
| -------------------------------------------------------------------------------- | |
| I just wanted to have some technical details about this 3350B that you are currently running in your factory. And first, congratulations for achieving the 1,250 wafers per day in Q4. That's a great achievement. What is, or what was, the availability of this machine actually during Q4? And maybe if you could give us some details about the laser which was used, if it was a 120 watts or a different laser source for EUV? That's the first question. | |
| The second question is -- I know it's a bit cheeky, but it's good to announce the EUR1 billion share buyback. But why not more, given the progress made by EUV [adornment] and your confidence in the 2020 target of EUR10 billion revenues? Thank you. | |
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| Wolfgang Nickl, ASML Holding NV - EVP and CFO [87] | |
| -------------------------------------------------------------------------------- | |
| Well, I'll start with the second part, and then Peter the first part. Well, this is just another layer. We have a very clearly stated financial policy that says we evaluate what our minimum cash needs are, then we service the dividend first; that we want to have at least stable, preferably growing. Last six years, we have always been growing it. And then all the balance will go towards share buybacks. | |
| Now, we just roll out layers of these share buybacks. And as soon as we have used up the money, we will introduce the next layer of (technical difficulty) be concerned by that at all. We're executing and the financial policy. And as we generate the free cash flow, once we are through the remaining 1.5, you should expect us to announce the next tranche. | |
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| Peter Wennink, ASML Holding NV - President and CEO [88] | |
| -------------------------------------------------------------------------------- | |
| On your question on the technical details of the 3350, well, we started shipping the 3350 in our factory, and we measure availability at that customer sites. While we haven't installed it yet and are running it at the customer sites, so it would be a bit difficult to give you an answer there. It's too early. | |
| Also to the question of -- there's an earlier question: when are we going to see data on availability and wafer spread per day? Probably more towards the middle of the year. | |
| So the technical details -- but there are some features in the 3350, like the in situ cleaning and some other features, that give us the confidence that we should have a higher availability and also a higher throughput. Not so much because we have a stronger laser; the laser is the same, but more because of the transparency of the illuminator and the optics that gives us a better transmission. And that's why we get better throughput. | |
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| Francois Meunier, Morgan Stanley - Analyst [89] | |
| -------------------------------------------------------------------------------- | |
| Okay. Thank you. | |
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| Operator [90] | |
| -------------------------------------------------------------------------------- | |
| Mr. Ahmad. | |
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| Farhan Ahmad, Credit Suisse - Analyst [91] | |
| -------------------------------------------------------------------------------- | |
| Hello, this is Farhan Ahmad from Credit Suisse. Thanks for taking my question. Peter, my first question is regarding 3D NAND. I just wanted to make sure I understand correctly, relative to your last call, it seems like you are up-ticking on the overall NAND CapEx. And I wanted to understand whether the linearity of the CapEx is also more weighted like the DRAM CapEx in the first half, or do you expect the NAND CapEx to be more evenly split throughout the year? | |
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| Peter Wennink, ASML Holding NV - President and CEO [92] | |
| -------------------------------------------------------------------------------- | |
| Well, the 3D NAND guidance is up as compared to last quarter, where we thought we were going to be down in this year. But that's because we have this new refurb fab of 3D NAND in China. That actually came up. And it's relatively flat throughout the year, so it's not a big bias to one or the other half. | |
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| Farhan Ahmad, Credit Suisse - Analyst [93] | |
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| Got it. And then relative to your NXE:3350 systems, they are supposed to get you to about 80% availability and 1,500 wafers per day. Where do you see the performance in the lab today? And what should we expect when the tools are at the customer's site? Should we start getting like 1,500 wafers per day from the get-go, or will that take some time to get demonstrated at the customer sites? | |
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| Peter Wennink, ASML Holding NV - President and CEO [94] | |
| -------------------------------------------------------------------------------- | |
| Well, what customers will actually do, because they are very expensive machines, they will always ramp these tools slowly. They go through a process of qualification, and then they will start increasing the power; they will start increasing -- with increasing the power, they will get more wafers. So it's going to be through cycles of learning. So, it is not to be expected that they will go gung-ho from day one. They will probably say, let's start where the 3300 left off, and then they are going to gradually increase. | |
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| Farhan Ahmad, Credit Suisse - Analyst [95] | |
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| Got it. Thank you. That's all I had. | |
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| Operator [96] | |
| -------------------------------------------------------------------------------- | |
| Patrick Ho. | |
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| Patrick Ho, Stifel Nicolaus and Company - Analyst [97] | |
| -------------------------------------------------------------------------------- | |
| Stifel Nicolaus. Peter, just in terms of the EUV insertion at the 7 nanometer logic node, do you believe the change in cadence with their tick-tock process -- do you believe that buys you a little more time, in terms of guaranteeing the insertion for high-volume production at 7 nanometers? | |
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| Peter Wennink, ASML Holding NV - President and CEO [98] | |
| -------------------------------------------------------------------------------- | |
| Well, I don't think they are that related. Customers have their plans, and whether they follow cadence A or cadence B. What they tell us is that they need their production output in a certain period, in a certain year, which is starting (technical difficulty) and in 2018. And then you just calculate back, using the cycle time that we need. And then we come to a moment where we need to start shipping the tool. | |
| And what ultimately drives the decision of the customer to say, I need that output in 2018 or 2019 -- there are many, many reasons. It is not only cadence. It is also time that they need to actually develop that next node. And, for us, it's not that relevant. Most relevant is when do they need the tool? When do they tell us that they need the tool? And that's [for] 2018-2019 output, 2017 shipment, starting for us. | |
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| Patrick Ho, Stifel Nicolaus and Company - Analyst [99] | |
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| Right. And my follow-up question, in terms of the holistic lithography growth that you've seen over the last few years, how do you project the growth first in 2016 and maybe over the next couple of years? Given that it's gotten strong adoption, do you see the growth rates tapering out somewhat? Or where do you expect to continue to see that growth in that segment of your business? | |
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| Wolfgang Nickl, ASML Holding NV - EVP and CFO [100] | |
| -------------------------------------------------------------------------------- | |
| Yes, so, in 2014, our holistic lithography business was just over EUR500 million. Last year, it was over EUR600 million, so it's growing nicely. We've previously talked about by 2017, 2018, we want to be at EUR1 billion for this business. And as a reminder, to a very large degree, a software type of business with very healthy gross margins, only the yields start being the hardware there. | |
| And then you can anticipate that it will continue to grow going into our 2020 plan. It's part of helping us on the accretion of the gross margin to a 50% level. And we have also started to see, and reported back to you, that customers are evaluating some of the software features for EUV, as well. So it's not going to go away when EUV is coming in. | |
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| Peter Wennink, ASML Holding NV - President and CEO [101] | |
| -------------------------------------------------------------------------------- | |
| Yes, and I think just to add to this, I think on the total service end option sales, which includes holistic litho that Wolfgang referred to, in our model we see that growing from the EUR2 billion where we are today to the EUR3 billion to EUR3.5 billion by that time, by 2020. | |
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| Patrick Ho, Stifel Nicolaus and Company - Analyst [102] | |
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| Great. Thank you. | |
| -------------------------------------------------------------------------------- | |
| Craig DeYoung, ASML Holding NV - VP, IR Worldwide [103] | |
| -------------------------------------------------------------------------------- | |
| Excuse me. Ladies and gentlemen, we have time for one last call. So if you were unable to get through on this call and still have questions, please feel free to contact the Investor Relations department with your question, and we'll get back to you soon as we can. | |
| Now, Arran, can we have the last caller please? | |
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| Operator [104] | |
| -------------------------------------------------------------------------------- | |
| Timothy Arcuri. | |
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| Timothy Arcuri, Cowen and Company - Analyst [105] | |
| -------------------------------------------------------------------------------- | |
| Cowen and Company, thanks. I had two questions. I guess first of all, Peter, just on the overall 2016 outlook -- I know you said that DRAM is going to be down a lot, NAND is flat, and logic is up a lot due to 10 nanometer. So, where do you and Wolfgang think that that leaves us for the year? Obviously it's going to be up, but how much? Is up 10 a comfortable number for the year, at least? | |
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| Peter Wennink, ASML Holding NV - President and CEO [106] | |
| -------------------------------------------------------------------------------- | |
| Well, we're all well-trained accountants. So if you take 2015, and I would give you a percentage up, we would guide you for 2016, which we said we weren't going to do. So, unfortunately, we have to stick to what we call this qualitative guidance. And I think throughout the year we get -- there's a better feel for how the back end of the year is developing, and really talk about really the Q4 back end of 2016. | |
| -------------------------------------------------------------------------------- | |
| Timothy Arcuri, Cowen and Company - Analyst [107] | |
| -------------------------------------------------------------------------------- | |
| Okay. And then just to follow up on China, I know that there was some questions asked about this. But the big order number of roughly $500 million -- sounds like this is really 3D NAND. But if I divide the numbers, that suggests it's like 120,000 of wafer starts worth of capacity. And we know that the Korea fab in China is full, and the only fab this big is the one that's still searching for a technology partner. I think the fab you talked about in the prepared remarks was half this size. So are we seeing orders for this other fab that is still looking for a technology partner? Or is my math not right? | |
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| Peter Wennink, ASML Holding NV - President and CEO [108] | |
| -------------------------------------------------------------------------------- | |
| Let me make one thing clear: China is not only 3D NAND. That's a new feature of the Chinese market, on this particular refurb fab. But it's only part of the story. There's also Chinese foundries in there. So there's also onesies and twosies shipment to a fab that are almost full. So it's a mixed bag. It's definitely not only 3D NAND. | |
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| Timothy Arcuri, Cowen and Company - Analyst [109] | |
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| Okay. Thanks so much. | |
| -------------------------------------------------------------------------------- | |
| Peter Wennink, ASML Holding NV - President and CEO [110] | |
| -------------------------------------------------------------------------------- | |
| Yes, okay. | |
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| Craig DeYoung, ASML Holding NV - VP, IR Worldwide [111] | |
| -------------------------------------------------------------------------------- | |
| Well, thank you, everybody. On behalf of ASML's Board and management, I'd like to thank you for joining us on the call today. | |
| So, operator, if you could formerly close the call, we'd appreciate it. Thank you. | |
| -------------------------------------------------------------------------------- | |
| Operator [112] | |
| -------------------------------------------------------------------------------- | |
| Ladies and gentlemen, this concludes the ASML 2015 fourth-quarter and annual results conference call. Thank you for participating. You may now disconnect your line. | |
| -------------------------------------------------------------------------------- | |
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