ASML HOLDING NV

United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 20-F

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

for the fiscal year ended December 31, 2023

Commission file number 001-33463

ASML HOLDING NV

(Exact Name of Registrant as Specified in Its Charter)

(Jurisdiction of incorporation or organization)

De Run 6501,5504 DR Veldhoven, The Netherlands

(Address of principal executive offices)

Skip Miller

Telephone: +1480 235 0934 E-mail: skip.miller@asml.com

2650 W Geronimo Place, Chandler, AZ 85224, USA

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

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

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

Ordinary Shares ASML The Nasdaq Stock Market LLC

(nominal value €0.09 per share)

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

None

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

None

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

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

393,421,721 Ordinary Shares

(nominal value €0.09 per share)

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

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

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

Yes ☐No ☒

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

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

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

Indicate by check mark whether the registrant has submitted electronically

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

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

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

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

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

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected

not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the

Exchange Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting

Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal

control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared

or issued its audit report.

If securities are registered pursuant to Section 12 (b) of the Act, indicate by check mark whether the financial statements of the registrant included in the

filing reflect the correction of an error to previously issued financial statements.☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation

received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

the financial statements included in this filing:

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

International Accounting Standards Board ☐ Other ☐

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

which financial statement item the registrant has elected to follow.

Item 17 ☐ Item 18 ☐

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

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

Yes☐ No☒

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

James A. McDonald

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

22 Bishopsgate, London, England EC2N 4BQ

We are over 42,400 individuals – thinkers, innovators, problem solvers, planners, movers and makers.

As a team, working together with our partners and customers, we help feed the world’s ever-growing demand for faster and more efficient microchips.

We create impact by pushing technology to new limits, unlocking the potential of society and enabling people to tackle some of humanity’s biggest challenges.

Together we create impact.

Contents

This Annual Report contains statements

relating to our business, expected results,

business and industry trends and other

matters that are “forward-looking”within the

meaning of the Private Securities Litigation

Reform Act of 1995.You can generally

identify these statements by the use of words

like “may”, “will”, “opportunity”, “potential”,

“could”, “should”, “project”, “believe”,

“anticipate”, “expect”, “plan”, “estimate”,

“forecast”, “model”, “aim”, “seek”, “intend”,

“continue”, “target”, “future”, “progress”,

“goal”and variations of these words or

comparable words. They appear in a number

of places throughout this Annual Report and

include statements with respect to expected

trends, plans, expectations, strategies,

priorities, goals, outlook, expected financial

results for Q1 2024, including expected

sales, gross margin, R&D costs and SG&A

costs, expected results for full year 2024,

including expectations with respect to

revenue, gross margin and estimated

annualized effective tax rate, expectations

with respect to sales by market segment and

EUV, non-EUV and IBM sales and expected

drivers thereof, and other full year 2024

expectations and outlook, expectations with

respect to revenue growth in 2025 and other

statements with respect to outlook for 2024

and beyond and expected drivers thereof

and other statements under “Long-term

growth opportunities”, bookings, backlog,

expected capital expenditures, R&D

spending targets, statements made at our

2022 Investor Day, including revenue and

gross margin opportunity, model and

potential for 2025 and 2030, expected

business and industry trends and outlook,

including expected semiconductor industry

trends and trends in markets served by our

customers, business environment trends,

including expected demand, utilization,

inventory levels, expected recovery in the

semiconductor industry and expected timing

thereof, expected growth in semiconductor

end markets and market opportunity for

2025 and 2030 and key drivers and global

trends expected to fuel semiconductor

growth in the longer term, plans to increase

global semiconductor capacity and expected

growth in semiconductor ecosystem,

statements with respect to Moore’s Law and

continuation of shrink, expected trends in

customer demand, export control policy and

regulations and expected impact on us, our

plans to increase capacity, and expected or

planned production capacity, expected

timing of shipments, assumptions and

expectations with respect to fast shipments,

expectations with respect to systems being

operational in customer factories and high-

volume production of High NA systems,

product roadmaps including EUV goals and

roadmaps, customer roadmaps, expected

productivity and other attributes and benefits

of our tools, expected growth opportunities

in holistic lithography, our ESG and

sustainability strategy, plans, commitments

and targets, including emissions and waste

reduction commitments and targets,

recycling and refurbishment initiatives,

energy-saving strategies and targets,

including plans and targets to achieve net

zero carbon emissions and target dates to

achieve net zero emissions, potential for

semiconductors to reduce CO 2 emissions,

plan for our systems to use less energy and

our energy savings plans, diversity and other

ESG targets and commitments, cash return

and dividend policy and statements about

our share buyback program and our

proposed dividend for 2023, and other non-

historical statements. These forward-looking

statements are not historical facts, but rather

are based on current expectations,

estimates, assumptions and projections

about business and future financial results

and readers should not place undue reliance

on them. Forward-looking statements do not

guarantee future performance, and actual

results may differ materially from projected

results as a result of certain risks and

uncertainties. These risks and uncertainties

include, without limitation, those described

under the section entitled“How we manage

risk – Risk factors”. These forward-looking

statements are made only as of the date of

this Annual Report. We do not undertake to

update or revise the forward-looking

statements, whether as a result of new

information, future events or otherwise.

Special note regarding forward-looking statements

Dear Stakeholder,

In last year’s message, I wrote that I

expected 2023 to yet again see us break

records – and ASML's performance has fully

justified that confidence. We have grown

sales by 30% to€27.6 billion and lifted our

gross margin to 51.3%. We returned

€3.3 billion to shareholders through a

combination of dividends and share

buybacks. At the end of 2023, we finished

with a backlog of €39.0 billion and we

anticipate that with our sustained focus on

technology innovation, we will continue to

break new ground – not only in terms of

technological development, but also in how

we manage the environmental impact of our

This stellar performance has been achieved

against a backdrop of what turned out to be

areal downturn in the semiconductor

industry instead of the mild and short-term

correction that many had forecast. In

addition, we had to manage uncertainties

created by geopolitical challenges including

the US and Dutch governments'export

control regulations, and global macro

concerns around inflation, rising interest rates

and lower GDP growth in certain economies.

There have also been other uncertainties at

play, driven by the ongoing war in Ukraine as

well as the more recent conflict in the Middle

East. These have inevitably dented

confidence and reduced investment by our

customers.

In 2023, demand for our DUV systems

continued to be strong, particularly in China.

During the previous two years, our Chinese

customers had received significantly fewer

systems than they had ordered, dueto

global demand for oursy stems exceeding

supply. However, the shifts in demand timing

from other customers that we experienced in

2023 meant that we had the opportunity to

back fill these orders for mature and mid-

critical nodes to China, while of course

complying with export regulations.

Executing our business strategy

Our strategic innovation roadmap has

continued to guide us, and, as you can read

in the Q&A with our Chief Technology Officer

on page 20,we have made good progress on

further enhancements to our EUV, DUV and

metrology and inspection systems. Our

holistic approach to lithography provides

customers with support and solutions at

every stage of the chipmaking process, from

early design and development to high-

volume production. To mention a highlight: In

2023, we shipped the first modules of the

first High NA EUV EXE:5000 system.

Two further elements of our strategic

progress have been particularly pleasing.

Firstly, we strengthened the resilience of our

supply chain, which had been under

immense pressure, witha significant number

of suppliers experiencing challenges to meet

our increasing expectations. During 2023, we

reshaped our sourcing and procurement

organization under the leadership of Wayne

Allan, a new member of the Board of

Management (BoM). This team is now

working with suppliers to help optimize our

partnerships, so they have the flexibility and

capability to deliver the products and

services we need.

Managing the cycle, preparing for greater growth in years to come

Despite macroeconomic and geopolitical challenges, ASML has again delivered strong performance. Now, as we see signs of the industry coming out of its cyclical downturn, we are laying plans for further significant growth.

Our holistic approach to lithography provides customers with support and solutions at every stage of the chipmaking process.”

Peter Wennink

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

The second area is around customer trust.

Trust is the found ation forour customer

relationships – it means always being reliable,

working at the highest possible level of

efficiency, being transparent about what we are

doing and fairly sharing the risks and rewards.

And while customer trust in general was at a

high level in 2023, we – as always – recognize

that we can do even better. So over the last 12

months we have developed plansfor

fundamental reorganization of our customer-

facing roles and responsibilities to prepare for

future growth, andthis was implemented from

January 2024.

We expect that the reorganization will help us

cement greater customer trust, which will be

essential in ensuring that we and our customers

reap the rewards of the upturn that we expect

in 2025 and 2026.

ESG sustainability at the heart of our

company

Developed in 2022, our ESG sustainability

strategy took shape in 2023. It is now being

executed across the business, andwe have

taken important steps in each of the E

(Environmental), S (Social) and G (Governance)

elements.

The overarching aim of our ESG sustainability

strategy is simple: As wegrow our company,

we want to increase our positive impact at the

same time as minimizing our negative impacts

on the environment and people, while doing

business in a responsible way.

The very nature of what we do means we are

already making a contribution to overcoming

the challenges that our world is facing. Without

semiconductors, the changes that society

needs to implement – whether to do with the

energy transition, healthcare, electrification, AI or

many other areas – will not happen.

Our role is to make sure that our customers can

continue to deliver the innovation that is already

transforming the world, and with a reduced CO 2

footprint per chip. In our own facilities, we are

reducing energy consumptionand increasingly

using renewable energy. Together with our

suppliers and other upstream value chain

partners, we are working to jointly reduce our

carbon footprint in our supply chain. In

addition, we are taking steps to increase the

energy efficiencyof our systems at our

customers’ sites –reducing waste intensity,

increasing reuse and repair, supporting our

people and their communities, andpromoting

transparency and accountability through good

governance. There is work to do in all those

areas – but we have made excellent progress

and we are committed to playing our full part in

creating a more responsible and sustainable

society. You can read more details in the ESG

sustainability sections of this report.

Our stakeholder model

ASML oper ates on a stakeholder model.

With every decision we take, the Board of

Management and I, as CEO, aim to balance

the concerns and needs of our five different

stakeholders: Customers, suppliers and

partners, our people, our shareholders and

wider society– for example, the communities

where we operate.

Over the last year, we have used a significant

part of our operational cash flow to support our

customers, extending payment terms to help

them make investments despite their negative

cash flows. This was crucial sustaining their

businesses through difficult times while ensuring

that they have the resources in place to meet

future demand.

Similarly, we encouraged our suppliers to

maintain their investment ambitions through

the downturn, using opportunities such as

our Suppliers’ Day to explain how we

expected our business to accelerate from

2025 onward. It is vital that we retain the

trust of our suppliers.

To retain the trust of ourshareholders, our

key focus is to be as transparent as possible

with them about everything to do with ASML

– on export controls, on industry cyclicality,

on how we are going to use our operational

cash flow, on how we are going to pay

dividends and buy back shares, and on how

we are going to help our customers and

suppliers.

As the stories highlighted in this report

demonstrate, ouremployees – representing

many different nationalities and bringing a

broad range of backgrounds, perspectives

and skills – are key to our success. One of

the reasons why so many talented people

choose ASML as an employer is because we

give them the opportunity to work at the

sharp end of technology and make a real

difference, while also supporting their health

and well-being. We put a lot of effort into

this, providing our employees with

opportunities and the best environments to

develop their talent, to feel respected and to

Our task in 2024 is to reflect on our organization and capabilities and prepare for the rapid growth that is sure to come.”

Peter Wennink

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

thrive. We need our people to trust us, and

the fact that our engagement score has

improved again shows we are on the right

track.

Regarding society, we strive to respect a

range of different and sometimes conflicting

interests around our growth trajectory and

the increasing impact of our products and

services on society. We engage extensively

with communities, institutions, special

interest groups and governments at all levels

across the world on topics that arerelevant

to our business and its role in society and

that therefore require long-term vision and

support, such as education, infrastructure,

culture and environment.

A year of transition

Our expectation is thatour net salesin 2024

will be broadly in line with our net sales in

2023. But above all, this will be a year of

transition – a time to digest the fast growth

we have experienced in recent years and to

prepare for 2025 and 2026, which I believe

will be strong years because of three major

Firstly, demand for semiconductors is

increasingly generated by secular growth

drivers in end markets, such as the energy

transition, electrification and AI. As the

application space expands, with lithography

playing an ever-greater role in future

technology nodes, demand grows for both

advanced and mature semiconductors.

Secondly, the semiconductor industry is

currently working through the bottom of the

cycle. Historically, the downturns of the last

30-40 years have been for two to three

years, with the present downturn really

beginning in the second half of 2022. Our

customers are still not certain of the shape or

slope of the recovery, but there are some

positive signs in the indicators we have been

monitoring. Industry end-market inventory

levels continue to improve and litho tool

utilization levels are beginning to show

improvement. Our strong order intake in the

fourth quarter clearly supports future

demand.

Lastly, we need to prepare for the significant

number of new semiconductor fabs that are

being built. These fabs are spread

geographically across the globe – they’re

strategically important for our customers and

they’re scheduled to take our tools. It is

essential that we keep our focus on the

future and build capacity to be ready for this

ramp.

The semiconductor industry isexpected to

double somewhere in the next decade, as

compared with today. Our task in 2024 is to

reflect on our organization and capabilities

and prepare for the rapid growth that is

expected to come, while managing

increased cost pressures. That means

working on our processes– for example,

ensuring that they are fit for purpose and

have the flexibility to expand rapidly when

and where needed.

And it means taking care of our people,

making sure that they feel fully engaged in

our company. Many thousands of new

employees have joined us in the last few

years, andaround 40% of all our colleagues

have been with us for three years or less.

Our values of challenge, collaborate and care

have been instrumental in our success to

date, and they will continue to guide us in the

future. It is vital that all our people embrace

these values.

In 2024, we need to take the opportunity to

create clarity about the many roles and

responsibilities in our diverse, cross-

functional teams, to maintain a safe

environment where people feel connected,

included and respected.

Stakeholder support

We are tremendously proud of what we’ve

achieved to date and extremely excited for

the years ahead. But none of this would be

possible without the support of our

stakeholders. ASML has succeeded and will

continue to thrive because of thepatience

and success of our customers, the

collaboration of our suppliers and partners,

and the understanding of shareholders and

governments. Most of all, we rely on our

people – and I thank them for all their

expertise and hard work over the last year.

This is myfinal Annual Report messageas

ASML's CEO, following the Supervisory

Board’s announcement that Christophe

Fouquet will succeed me as President and

Chief Executive Officer at the 2024 AGM.

Christophe has been with ASML for 15

years, with a major focus on technology,

products and customers, and I am delighted

that we have been able to secure such a

talented, experienced individual to guide the

business through the coming years.

Christophe and I share the ‘ASML DNA’ of

collaboration and partnership, and we will

work closely together to ensure that he has

the best possible start in his new position.

I wish Christophe and all our stakeholders –

and particularly our fantastic people – every

success as, together, you embark on the

next phase of this great company’s journey.

Peter Wennink

President, Chief Executive Officer and

Chair of the Board of Management

Our values of challenge, collaborate and care have been instrumental in our success.”

Peter Wennink

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

We are a global innovator

As one of the leading innovators in the semiconductor industry, we’ve been helping chipmakers push technology to new limits and unlock the potential of society since 1984. Together, our hardware, software and services provide a holistic approach to mass producing the patterns of microchips.

Berliner Glas (ASML Berlin GmbH) is reflected as part of our business throughout this report, with the exception of non-financial reporting. We are preparing to integrate this in 2024 in line with Corporate Sustainability Reporting Directive (CSRD) requirements.

Why we exist – our purpose

Unlocking the potential of people and society by pushing technology to new limits.

What we try to achieve – our vision

We enable ground-breaking technology to solve some of humanity’s toughest challenges.

What we uniquely do – our mission

Together with our partners, we provide leading patterning solutions that drive the advancement of microchips.

Read more in Our business model on page 32 >

You can see the impact of our collaboration in the commercial results of ASML and our customers.”

George Tao

Director Customer Service Applications

Read more on page 144 >

Managing expansion in high-stress situations means focusing on your people and their well-being.”

Mark Bergkotte

Director Logistics Operations

Read more on page 124 >

The interaction among supply chain partners helps us all improve to support faster growth.”

Manon Hendriks

Senior Director Sourcing & Procurement

Read more on page 135 >

We work together to help society progress

We challenge

We challenge boundaries and question the status quo to keep pushing technology forward.

We collaborate

By tapping into the collective potential of our ecosystem of customers, partners and stakeholders, we can create better solutions.

We care

We act with integrity and respect, and provide a safe, inclusive and trusting environment where our people can learn and grow.

Sustainability is a design challenge that must be solved in parallel with system cost and performance.”

Ton van der Net

Principal Architect D&E

Read more on page 89 >

ASML’s focus on technology and its supportive culture mean you can go wherever your talent and ambition take you.”

Anya Kish

Program Director EUV Source

Read more on page 105 >

My new role will help us safeguard our innovation power as we evolve to support future growth.”

Ron Kool

Head of Business Performance Improvement

Read more on page 35 >

Every few months, I have been given a new challenge to extend myself.”

Manisha Devi

Solution Test Architect

Read more on page 18 >

We live by our values to drive success

Lithography technology is fundamental to the

mass production of microchips. Our holistic

approach is based on integrating our

lithography systems with a set of products

that optimize production and enable

affordable shrink.

The semiconductor industry is driven by

affordable shrink – the ability to make

smaller, more energy-efficient transistors at

the right price. Reducing the size of

transistors means that more can be packed

into a given area, resulting in increased

functionality and improved performance.

Lithography is a key driver for shrink,

enabling what is known as geometric scaling.

This determines the smallest feature sizes

that can be printed on a chip, and therefore

the number of transistors and the

performance. To achieve dimensional

scaling, lithography has to use shorter

wavelengths of light and larger numerical

apertures, as well as other advanced

techniques such as immersion lithography

and multiple patterning.

Our innovations in lithography have enabled

the continuation of Moore’s Law 1 – the

observation that the number of transistors in

an integrated circuit (IC) doubles about every

two years – for more than 30 years.

1. Dr. Gordon Moore, co-founder of chipmaker Intel, and

the man who created Moore’s Law, passed away

peacefully at his home in Hawaii on Friday, March 24,

2023. He was 94 years old.

Lithography explained

Microchips are made by building up complex

patterns of transistors, layer by layer, on a

silicon wafer. Our lithography systems print

those patterns by projecting ultraviolet light

on a blueprint of the pattern (known as a

‘reticle’ or ‘mask’) and shrinking and focusing

that light onto a photosensitive silicon wafer.

This results in a so-called die, a rectangular

pattern on a wafer containing circuitry to

perform a specific function.

ASML's technology is pivotal to

semiconductor production because

lithography is the only stage where the wafer

is processed die by die.

Lithography therefore has a greater impact

on performance – including the number of

good wafers per day, or yield – than any

other stage in the chip manufacturing

process.

The lithography process is repeated to build

up the layers of a chip. Modern chips can

have more than 100 layers, all of which need

to be aligned on top of each other with

nanometer precision. In general, our EUV

systems are used to print the most intricate

layers on a chip first, with the rest of the

layers then printed using various DUV

systems.

Our holistic approach

to lithography

As patterning gets smaller, our lithography

systems become increasingly complex. And as

chipmakers print ever-smaller patterns, they

face unprecedented engineering, material,

structural and manufacturing challenges. Many

sources of variation and error can hinder the

lithography process, and they must be

controlled to ensure that chips are produced

with the required precision, in high volumes, as

fast as possible and at the lowest cost.

To help address these challenges, we provide

customers with a holistic, integrated approach

to lithography that enables them to optimize the

system setup and process window for high-

volume manufacturing, helping them achieve

their highest yields and best chip performance.

What is a process window?

Lithography and all other stages in the microchip manufacturing process must be closely aligned for an optimal result. The process window is the collection of acceptable variations of process parameters that allow a microchip to be manufactured and to operate under desired specifications. By incorporating computational lithography, metrology and inspection, ASML’s holistic lithography portfolio enables customers to maximize the process window, keeping lithography systems stable in a high-volume manufacturing setting, which leads to a higher yield with more good wafers per day.

Holistic lithography

Our holistic approach integrates lithography

systems with computational tools, metrology

and inspection systems, and process control

software solutions. This enables us to

provide chipmakers with support and

solutions at every stage of the chipmaking

process, from early design and development

to high-volume production.

By bringing together the different elements of

our holistic lithography portfolio, we help our

cust omers under stand and correct for

potential issues that could cause variations

or errors.

This helps minimize any deviation between

the intended and printed features of a

microchip layout, thereby optimizing the

lithography system’s performance, stability

and yield – including maximizing the number

of good wafers per day – and enabling ever-

smaller chip features.

What is edge placement error (EPE)?

Creating a microchip involves the patterning of tiny features in precise locations. Edge placement error (EPE) is the difference between the intended and the printed features of the layout of a microchip. For example, a feature could be a line, which has right and left edges. On a microchip, this line and its edges must be precise and placed in exact locations. Any deviation, no matter how slight, can result in misalignment, or an EPE. If one or more EPE issues crop up in the microchip production flow, the device is subject to shorts or poor yields, which could cause the entire chip to fail.

ASML plays an integral role in the microchip manufacturing process

1 Deposition – The first step is typically

to deposit different materials – such as

metals/conductors, insulation films and

semiconductors – onto a silicon wafer.

2 Photoresist coating – The wafer is

then coated with a light-sensitive layer

called a photoresist.

3 Lithography – Light is projected onto

the wafer through a reticle. Optics shrink

and focus the reticle pattern. This

pattern is then printed onto the wafer

when the resist layer is exposed to light.

4 Baking, developing and etching –

The wafer is then baked and developed

to make the pattern permanent, with a

pattern of open spaces. Reactive gases are

used to etch away material from the open

spaces, leaving a 3D version of the pattern.

5 Ion implantation – The wafer may be

bombarded with positive or negative ions

to tune the semiconductor properties.

6 Removing photoresist – After the layer

is etched or ionized, the remainder of the

photoresist coating that was protecting

areas not to be etched is removed.

The entire microchip manufacturing

process – from start to tested and

packaged device, ready for shipment –

can take between 18 and 26 weeks,

depending on the complexity of the

microchip.

Holistic lithography (continued)

Our holistic approach to

lithography integ rates a set of

products – enabling chipmakers

to develop, optimize and control

the semiconductor production

process.

Extreme ultraviolet (EUV) lithography systems

Using extreme ultraviolet (EUV) light at a

wavelength of 13.5 nm, our EUV

lithography systems make it possible to

print the smallest features on microchips at

the highest density. EUV systems are used

for the most intricate, critical layers on the

most advanced microchips. ASML is

currently the world’s only manufacturer of

EUV lithography systems.

EUV 0.33 NA (NXE platform)

EUV lithography uses light with a

wavelength of just 13.5 nm. This enables

EUV systems to print the finest lines and

allows our customers to use them in a

more simplified process compared to

complex multiple-patterning strategies

using DUV immersion systems. Our NXE

EUV platform, with an NA of 0.33, was first

introduced to customers in 2013 and is

now widely adopted in high-volume

manufacturing by our major customers.

The platform is now in its seventh

generation and we continue to industrialize

the technology, innovating further

developments to create value

for customers.

In June 2023, we celebrated the 100 th

shipment of the TWINSCAN NXE:3600D,

our latest-generation EUV 0.33 NA

lithography system. It combines the

highest resolution with 15-20% increased

productivity and around 30% better overlay

compared with its predecessor, the

TWINSCAN NXE:3400C, while also

improving system availability.

Our EUV product roadmap is intended to

drive affordable scaling to 2030 and

beyond. Our EUV NXE platform extends

our customers’ Logic and Memory

roadmaps by delivering improvements in

resolution, productivity and overlay (layer-

to-layer alignment)performance, enabling

year-on-year cost reductions.

EUV 0.55 NA (EXE platform)

We are building the next platform of EUV

lithography systems and we shipped the

first modules intended for R&D purposes in

2023. With a higher NAof 0.55 compared

with the 0.33 NA of ourfirst EUV systems,

these High NA systems are designedto enable

higher-resolution patterning for even

smaller transistor features.

This is an evolutionary step in EUV

technology, introducing a novel optics

design and significantly faster reticle and

wafer stages. In addition, the EUV 0.55 NA

(EXE) platform has been designed to

maximize commonality with the EUV NXE

platform to drive cost reductions, speed up

the development of new solutions and

optimize future reuse.

The enhancements offer considerable

benefits to our customers, enabling

lithography simplification for future nodes,

higher yields and decreased defect density

for both Logic and dynamic random-

access memory (DRAM). EUV 0.55 NA will

help our customers to extend their shrink

roadmap and minimize double or triple

patterning compared with 0.33 NA, leading

to reduced patterning complexity, lower

risk of defects and a shorter cycle time.

EUV 0.55 NA has also been designed to

enable multiple future nodes, with the

industry’s first deployment expected in

2025, followed by Memory technologies

at similar density.

We expect our EXE platform to start

supporting high-volume manufacturing in

2025/2026. We have received purchase

orders from all of our current EUV

customers for the delivery of the

industry’s first TWINSCAN EXE:5200

system – an EUV high-volume production

system with 0.55 NA and higher

productivity.

World-leading holistic lithography solutions

Our comprehensive product portfolio is aligned to our customers’ roadmaps, delivering cost-effective solutions in support of all applications, from leading-edge to mature nodes.

Deep ultraviolet (DUV) lithography systems

Deep ultraviolet (DUV)lithography systems

are the workhorses of the industry,

producing the majority of layers in

microchips. Supporting numerous market

segments, we offer immersion as well as

dry lithography systems, and a range of

light sources to offer all wavelengths

currently used in the semiconductor

industry – argon fluoride (ArF) for 193 nm

wavelength, krypton fluoride (KrF) for 248

nm and mercury gas discharge lamp (i-line)

for 365 nm. Our systems lead the industry

in productivity, imaging and overlay

performance to help manufacture a broad

range of semiconductor nodes and

technologies, and support the industry’s

cost- and energy-efficient scaling.

Immersion systems (NXTi platform)

ArF immersion lithography maintains a thin

film of water between the lens and the

wafer. Using the refractive index of water to

increase NA improves resolution to support

further shrink. Our immersion systems are

suitable for both single-exposure and

multiple-patterning lithography, and can be

used in seamless combination with EUV

systems to print different layers of the

same chip.

Our latest state-of-the-art immersion

system is the TWINSCAN NXT:2100i,

launched in the third quarter of 2022.

Alongside intrinsic improvements to lens

metrology, reticle conditioning and wafer

table, as well as overall cross-matching

improvements, the NXT:2100i features

innovations suchas the Alignment

Optimizer 12 Color package. The system

delivers 295-wafers-per-hour (wph)

productivity combined with unprecedented

overlay performance, providing the most

cost-efficient solution to customers for

critical immersion layers on the sub 3 nm

nodes.

Dry systems (NXT and XT platform)

Not every layer on a chip has to be

produced by the most innovative

immersion lithography systems. While

some more complicated layers do require

more advanced lithography systems,

others can often be printed using ‘older’

technology such as dry lithography

systems. Our dry systems product portfolio

offers our customers more cost-effective

solutions for all types of wavelengths.

Our TWINSCAN NXT:1470 dual-stage ArF

system continues to be adopted by the

majority of Logic and Memory customers

and has been inserted in high-volume

manufacturing processes. It is the first dry

NXT system, building on the common

immersion platform, with improvements in

matched machine overlay (<4.0 nm),

productivity (>300 wph) and footprint.

The TWINSCAN NXT:870 248 nm step-

and-scan system is a high-productivity,

dual-stage KrF lithography tool designed

for high-volume 300 mm wafer production

at and above-110-nm resolution. The

system increases productivity from the 260

wph capability of the XT:860N to 330 wph

through the use of the NXT platform, a

higher scan speed and reduced system

overhead time.

The TWINSCAN XT:400L is our latest i-line

lithography system, which can print

features down to a resolution of 220 nm for

200 mm and 300 mm wafer production.

We are on track with a platform

commonality roadmap in order to reduce

the cost of ownership: The transition in ArF

and KrF from the XT platform to the NXT

platform is resulting in significant

productivity gains (KrF 27% to 330 wph on

NXT:870, ArF 46% to 300 wph on

NXT:1470).

We continue to innovate in productivity,

cost of ownership and performance across

our TWINSCAN XT product lines (ArF, KrF

and i-line) for 200 mm and 300 mm wafer

sizes.

Refurbished systems

Our refurbished products business

refurbishes and upgrades our older

lithography systems to extend their lives,

andoffers associated services and

support. We currently offer refurbished

PAS 5500 and first-generation AT, XT and

NXT systems.

ASML systems have a very long

operational lifetime that often exceeds

their role at the initial customer. Many

customers are therefore able to generate

value by selling off systems they no longer

require. To support this sustainable

product use and ensure used systems

deliver the quality that ASML stands

for, we are actively involved in the used-

system market. Remarkably,95% of the

systems that we have sold in the last

30 years are still in use.

Read more in Environmental – Circular economy

Metrology and inspections systems

Our metrology and inspection systems

allow chipmakers to measure the patterns

that they print on the wafer to see how well

they match the intended pattern. Our

portfolio enables chipmakers to monitor

most steps of bringing a chip to market,

from R&D to mass production.

The systems are a key element of our

holistic approach to lithography. They

produce data at the speed and accuracy

needed during high-volume manufacturing

to enable our process control software

solutions to create automated feedback

control loops. This optimizes the

lithography system settings for each

exposure to reduce EPE, enlarging the

process window to achieve the highest

yield and best performance in a fab

Optical metrology

Our YieldStar optical metrology systems

allow chipmakers to assess the quality of

patterns on the wafer in volume production,

through fast and accurate overlay

measurements. We offer two categories of

YieldStar systems for use before and after

‘etching’ (the stage when the material in any

open spaces is removed to reveal the 3D

version of the patterns on the wafer). Pre-

etch metrology measures the overlay and

focus of the lithography system and the

pattern printed on the photoresist. Post-

etch metrology measures the overlay and

critical dimensions of the final patterns

formed on the wafer.

In 2023, we shipped the YieldStar 500, our

latest optical overlay and focus metrology

tool, designed to be the new benchmark for

measurement accuracy, matching

performance and measurement speed. It is

a standalone optical wafer metrology

system for measuring pre-etch overlay.

Using diffraction-based measurements, the

YieldStar 500 offers fast monitoring of

overlay and focus performance directly on

produced wafers with nanometer-level

accuracy.

E-beam metrology and inspection

Our HMI electron beam (e-beam) solutions

allow customers to locate and analyze

individual chip defects amid millions of

printed patterns, extending the scope for

process control. While e-beam solutions

were historically too slow to monitor volume

production processes, we have increased

the throughput to now uniquely offer e-

beam solutions for use during high-volume

production as well as the R&D phase.

The R&D phase of chip manufacturing

involves extensive testing, validation and

fine-tuning to optimize the complete

manufacturing process for reliable, high-

yield mass production.

We offer two types of solutions to support

this stage: E-beam metrology and defect

detection to monitor critical dimension and

EPE data at resolutions necessary for the

implementation of EUV lithography; and

single-beam inspection to monitor voltage

contrast and physical defects.

Our ground-breaking multiple e-beam

(multibeam) inspection systems operate at

throughput speeds that enable them to be

used inline during mass production to

detect voltage contrast defects and

physical defects.

We continue to extend technology

leadership in voltage contrast inspection

and physical defect inspection with the

widely adopted single-beam platform. The

HMI eScan 600 is our latest highly flexible

e-beam wafer inspection system that can

operate in multiple modes, allowing

chipmakers to capture the widest variety of

defect types in a single system.

Our high-resolution e-beam metrology

system HMI eP5 offers world-class 1 nm

resolution with large field-of-view

capabilities. It produces critical dimension

(CD) and EPE data in high volume with a

quality level that customers need for

monitoring and control. EPE is becoming

more critical for device patterning and yield

with shrinking design rules and the adoption

of EUV lithography.

We also released an EPE metrology application

software product on eP5. It is capable of local

and global EPE measurements on device, both

intralayer and interlayer.

In 2022, we released and shipped the eP5

XLE, which extends the high-resolution

eP5 system with high landing energy up to

30 keV and fast back-scattered electron

detection for inspection and metrology of

3D devices in Logic and Memory. It is

capable of overlay measurement on device

patterns, complementing our YieldStar

product offering. We also released and

shipped the first next-generation high-

resolution e-beam metrology system, eP6,

to succeed eP5. The projected eP6

performance is expected to be more than

10 times the speed of existing technologies.

Building on the 2020 launch of our

breakthrough multibeam inspection tool

HMI eScan 1000, with a 3x3 image, in 2022

we also introduced the next-generation HMI

eScan 1100. With a 5x5 image, it

demonstrates successful multibeam

operation, simultaneously scanning with 25

beams. The 5x5 system has higher

sensitivity for detecting voltage contrast

defects and physical defects, while

substantially increasing inspection

throughput. In 2022, the first eScan 1100

multibeam system was installed at a

customer site to start customer evaluation.

System and process control software

Taking advantage of the huge flexibility of

our lithography systems, our system and

process control software products enable

automated control loops to maintain

optimal operation of lithography

processes and therefore maximize yield.

Using powerful algorithms, they analyze

metrology and inspection data and

calculate necessary corrections for each

individual exposure. This provides a

feedback loop to the lithography system

to minimize EPE in subsequent wafer lots.

Our roadmap aims to apply more

powerful algorithms with higher-order

corrections to enable our customers to

continue improving EPE performance.

Read more on EPE at box-out on page 12 >

Our roadmap aims to apply more powerful algorithms with higher-order corrections to enable our customers to continue improving EPE performance.

Computational lithography

We use computational lithography to

predict and enhance the process window

of our lithography systems by calculating

the optimal settings, depending on the

specific application. This takes place in

the R&D phase, during the development

of new chips to optimize both the reticle

patterns and the setup of the lithography

system to ensure robust, manufacturable

designs that deliver high yields.

Our computational lithography solutions

are based on models of the various

physical and chemical processes that

influence pattern quality. Advanced

algorithms, driven by these models,

predict how a designed pattern will

appear when printed on a wafer. Based

on those predictions, the reticle design

and factors within the lithography system

can be subtly adjusted to ensure that a

chip pattern is printed exactly as

intended. Increasingly, we are using

machine-learning techniques to further

speed up development of models and to

reduce the computational time and cost.

Managing our installed base system

Our installed base continues to grow,

comprising not only new systems but also

refurbished systems with new owners in

new markets and applications. To provide

all our customers with the best possible

value proposition, we offer an extensive

installed base management (IBM)

portfolio, including a wide range of service

and upgrade options.

We develop and sell product options and

enhancements designed to improve

throughput, patterning performance and

overlay. Our field upgrade packages

enable customers to optimize their cost of

ownership over a system’s lifetime by

upgrading older systems to improved

models.

We are one of the world’s leading

manufacturers of chipmaking equipment,

while our customers are the world’s leading

microchip manufacturers. We enable them to

create the patterns that define the electronic

circuits on a chip, and consequently our

success is inextricably linked with theirs.

That’s why we collaborate with our

customers to understand how our technology

best fits their needs and challenges. That

means engaging with our customers at all

levels: Building partnerships, sharing

knowledge and risks, aligning our investments

in innovation and increasingly focusing on the

long-term challenges for the next five toten

years and beyond.

We develop our solutions based on their

input, help them achieve their technology

and cost roadmaps, and work together,

often literally in the same team, to make

sure our solutions fit together perfectly.

Engaging fully with customers is also an

important part of working toward securing

the full product portfolio that will sustain

our company into the future.

As our installed base continues to grow, we

work very closely with our customers to

develop and sell options and enhancements

designed to improve throughput, patterning

performance and overlay to optimize the cost

of ownership over a system’s lifetime.

Building on our customer relationships

We market and sell our products directly to

customers, without agencies or other

intermediaries. Our account managers,

field and application engi neers, and service

and technical support specialists are located

close to our customers' operations

throughout Asia, the US and Europe, the

Middle East and Africa (EMEA).

Customer trust is the foundation for our

customer relationships. Our customers expect

us to have the right means to meet their needs

and expectations, consistently deliver upon the

promises we make, be transparent about what

we are doing and fairly share the risks and

rewards with them. In 2023, we took the first

steps toward a reorganization of our customer-

facing roles and responsibilities, and we

announced the intended appointment of a Chief

Customer Officer in ASML's Board of

Management, effective per the date of the 2024

AGM. This will help us to continue to scale

customer relationships, excellent support and

customer trust as the business grows.

How we provide customer support

We support our customers with a broad range

of applications, services and technical support

products to maintain and enhance our systems’

performance. Our customer support teams

across the world ensure the systems in our

customers’ fabs run at the highest levels of

predictability and availability. We offer 24/7

support, next-day parts delivery and an easy-

to-use, centralized customer portal.

It is essential for us and our customers to

have well-trained engineers in the regions

where we operate. We offer specialized

training to boost the capabilities of our local

customer service teams and enhance local

technical expertise. This helps us to increase

the self-sufficiency of local field engineers.

Read more in Engaging with our stakeholders –

Customers

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

Every few months, I have been given a new challenge to extend myself.”

Manisha Devi

Solution Test Architect

4 years at ASML

Delivering for our customers

After joining ASML four years ago, Manisha Devi led a team of engineers in the roll-out of ASML’s digital platform to customers in 2023. Aware that any mishaps could lead to unplanned downtime that may cost customers millions in lost revenue, Manisha knew the stakes couldn’t be higher.

Finding your passion

I have always been inspired by the quote

from Marie Curie: “I am among those who

think that science has great beauty.” As a

child in a small town in North India, I

dreamed of a career in science and

technology. And I took every opportunity to

make that happen. I left the comfort of home

to study at a premier science & technology

institute before starting work in the telecoms

technology domain, growing with each new

role and responsibility. ASML then gave me

the chance to test my skills in the

semiconductor industry. I joined as a

software tester and am now a solution test

architect – determining test and integration

strategies for new solutions.

Unlocking the code

There is a huge amount of software inside

ASML’s systems, and we are continually

developing more. That software is critical

to the operation of the system and the

economic success of our customers. Any

unintended downtime can cost our customers

millions in lost revenue. So, ASML isn’t just

investing in development, it is also investing

in quality – to ensure all that software works

together seamlessly and doesn’t cause

unplanned stoppages in production.

Like most software-enabled systems,

ASML’s products have a huge amount of

legacy code. You can’t just reengineer that

every time you want to make an update or

add a feature – you need to develop new

software in such a way as to ensure that it

doesn’t break the legacy code. To streamline

the process, ASML has recently switched to

a platform development approach: Instead of

delivering a single software package for the

scanner, we deliver a series of options that

all work together. Part of this transition is to

update all installed systems in the field with

an entire new software stack. I was asked to

lead the team responsible for qualifying and

integrating that new stack. As someone who

loves a challenge, I jumped at the chance.

Replacing all the system software is a

daunting prospect, so quality was essential –

we had to get it right first time. To make that

possible, ASML has recently introduced a

new methodology for software development.

Of course, we make use of the standard

approaches like Lean and Agile, but we take

the parts that work best for us and our

customers, then combine them with new

ideas. For example, for the new stack, we

used a ‘shift-left strategy’ where testing and

quality evaluation starts much earlier. Having

the development team involved in testing

end-to-end helped us bring the software to

the required quality level faster.

A customer-first approach

Throughout the development of the new

software stack, we were guided by our

customers’ needs. ASML is in constant

contact with its customers, and regularly

asks them for feedback. In this case, our

customer representatives provided

continuous feedback on the features

customers will want in the next 9-12 months

and customers’ specific use cases. This

helped us better understand which software

configurations do and don’t work.

We started rolling out the new software stack

to customers in 2023. The goal is to do this

without downtime – this was the most nerve-

wracking part of the process, certainly for our

customers. There are always things that can

go wrong when you go live with such

complicated software, but we had done so

much preparation, studying each customer’s

use case, so we could be one step ahead.

That’s not to say that issues didn’t crop up,

but we were always ready with the solution

when they did. Our customers may not have

been smiling when we arrived, but they

definitely were eight hours later when their

system was running the new stack without

problems. And now they can be confident

about adding new options equally painlessly

in the future.

We expect High NA EUV high-volume manufacturing systems to be fully operational in customer factories by 2025.”

Martin van den Brink

President, Chief Technology Officer and Vice Chair of the Board of Management

Martin: Let me start by saying that in 2024 it

will be 40 years since a small team of

colleagues, including me, first came together

in a leaky shed in Eindhoven, tasked with

developing lithography systems for the

growing semiconductor market. That was

the start of ASML as we know it today. So,

although 2023 was another dynamic year for

innovation, this was not achieved overnight

but as the result of all the hard work that

preceded it.

Having said that, it was undeniably a very

proud moment for our innovation teams

when we success fully shipped the first

modules of our first High NA EUV system,

EXE:5000, following extensive testing and

integration throughout the year. Our EXE

High NA EUV platform increases the

numerical aperture from 0.33 to 0.55 and will

enable geometric chip scaling well into the

next decade. We expect High NA EUV high-

volume manufacturing systems to be fully

operational in customer factories by 2025.

In DUV immersion, we rolled out a lens

distortion manipulator to adjust the optics in

operation and reduce overlay errors, which

gives us an opportunity to improve our mix

and match overlay between EUVand DUV

immersion. It provides us with more flexibility

foll owing distortion of the wafer and is also

applicable for 3D integration bonding.

On the application side, wemade progress with

key technologies such as x-ray, working closely

with our customers, with whom we are closely

aligned. Regarding our metrology and

inspection product portfolio, in 2023, we

brought to market the YieldStar 500, our latest

optical overlay and focus metrology tool,

designed to be the new benchmark for

measurement accuracy, matching performance

and measurement speed. We are now also

delivering ourmultibeam and single-beam high-

voltage system. While there remains some work

for our teams in maximizing reliability and

maturing these systems to a point where

customers can use them in production, this has

been an important step forward, and one where

AIhas played a key role.

Two years ago, we started to develop a

strategy to arrive at a unified or common EUV

platform in order to drive productivity. It was

very exciting to see that strategy begin to bear

fruit during 2023. We now have a clear, articulated

roadmap to achieve a full EUV suite – a common

platform with common manufacturing processes

and a common supplier base. This will drive

cost reductions and speed upthe development

of new solutions, which is important not only for

ASML, but also for our customers.

Driving Moore’s Law across four decades of innovation

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

Martin van den Brink

On April 24, 2024, ASML President & CTO Martin van den Brink will retire from ASML upon completion of his current appointment term. “It has been a privilege to co-lead ASML with Peter Wennink and to have brought a strong focus on product, technology and engineering capabilities to the company and its suppliers. I am proud of the innovations that we have delivered together with our customers over the decades."

Martin: In line with Moore’s Law, shrink has

long played a key role in innovation, and

although this is inevitably becoming more

and more challenging, it will continue

because shrink is the only way to effectively

reduce costs.

However, it’s important to put this into

context. What we are looking at today is

whole-system integration shrink, not just of

the chips themselves. For example, 3D

system integration – vertically stacking

different chips together into a single package

– requires innovative lithography solutions to

handle the increasingly dense

interconnections. We have been working

with both Logic and Memory customers on

how to shrink these connections from chip to

chip. As is always the case with innovation

on this scale and in this industry, we are

engaging with core solution providers, such

as bonding suppliers, to find the answers.

Cost is closely aligned with shrink. As shrink

becomes more challenging over time, and as

technology continues to demand more

energy-efficient transistors per chip, the

industry will need to produce more silicon

but at lower cost. The cost-productivity ratio

is now a key aspect of our roadmap because

we understand the cost pressures that our

customers and suppliers are facing.

Moving forward, we have clear parameters

for R&D to work within so that future

innovations take account of the technology

limits of our supplier base and, where

possible, reduce any risks of suppliers

making unnecessary investments in new

capabilities.

Martin: It is impossible to overstate the

importance of our partners. A significant

number of them are integral to our innovation

activities and several have worked with us for

many years.

Our requirements are frequently unique and

very demanding – so we work hard to help

suppliers engage with our objectives in a

spirit of mutual trust and respect. The

importance of these relationships has been

further recognized at ASML Board level

through the recent appointment of Wayne

Allan as Executive Vice President (EVP) and

Chief Strategic Sourcing & Procurement

Officer (CSPO), heading up the supply

improvement program which aims to

radically step up our ability to work with

suppliers and deliver what our customers

demand. We saw a number of developments

in our supplier relationships in 2023. Having

partnered with imec(Interuniversitair Micro-

Elektronica Centrum) – a leading research

and innovation hub in nanoelectronics and

digital

technologies – since the late 1980s, in 2023

we signed a new Memorandum of

Understanding (MoU) to intensify our

collaboration around High NA. The MoU

includes the installation and service of our full

suite of advanced equipment in the imec

pilot line in Leuven, Belgium. This facility will

enable us to work alongside imec to develop

a new process that will take us to the next

semiconductor process node.

Martin: We aim for R&D spend to be in the

10-15% range ofrevenue. As ourrevenue

increases rapidly, so too does our financial

commitment to supporting innovation – in

2023, we invested€4.0 billion in R&D. Of

that amount, we spend around 10% on pure

explorative research that aims to fill the

innovation pipeline. We continue to work with

our partners, for example by investing in a

high-transmissive illuminator with ZEISS.

Martin: Hyper NA with an NA higher than 0.7 is

certainly an opportunity that will become more

visible from around 2030. It is likely to be most

relevant for Logic – and it will need to be more

affordable than double patterning – but it may

also be an opportunity for DRAM.

For us, the key thing is that Hyper NA is

driving our overall EUV capability platform to

improve both cost and lead time.

Regarding the industry in general, digitalization

will continue to enable many of the solutions

that are transforming our planet. Although

systems such as our EUV platform require a

great deal of energy, I think that we make a

positive contribution to reducing GHG

emissions by enabling the development of

technologies such as smart grids and electric

vehicles. More such technologies will follow – so

at ASML we can feel good that our customers

andtheir customers are engaging with society

in apositive way when it comes to the

Digitalization will continue to enable many of the solutions that are transforming our planet.”

Martin van den Brink

President, Chief Technology Officer and Vice Chair of the Board of Management

Martin: It is fair to say that our innovations

are likely to be restricted by more

boundaries, whether in terms of cost, cycle

time or technology limits. Our challenge is to

make efficiency gains in all these areas over

the next 10 years – to make sure not only

that we invent new solutions and ways of

working but that these can be put into cost-

effective and timely practice for our

customers. It’s all about doing everything we

can to turn theory into practical reality, giving

our customers the most efficient possible

operation in every regard: cost, sustainability

and productivity.

Driving Moore’s Law across four decades of innovation (continued)

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

Martin van den Brink

Innovation is crucial to the continuing

success of our business. Every day, more

than 15,500 of our engineers take on the

exciting challenge of innovating across our

holistic lithography portfolio, including the

most advanced lithography systems in the

world. To stay ahead, we invest heavily in

R&D – in 2023, we spent€4.0 billion in this

vital area, compared with€3.3 billion in 2022,

further building our capability to meet

customer needs.

A collaborative network at the cutting

edge of our digital future

To drive the fast pace of innovation in our

value chain, we rely on our strong innovation

ecosystem to make progress together. We

work hard at developing long-term

relationships with our customers, suppliers,

research partners and peers, listening to and

pushing each other to continuously innovate.

We trust our supply chain to manufacture

most system parts and modules and many

are deeply involved in developing our new

technology.

Read more in Social -Innovation ecosystem on

page 137 >

We innovate across our entire product portfolio

and we aim to do this at the same pace as our

customers through large and sustained

investment in R&D, involving a diverse

international academic network. This so-called

‘double helix’ approach isdesigned to

accelerate innovation and provides access to a

large leading-edge knowledge base across a

wide range of technologies.

Generating ideas and finding

technological innovations and solutions

Our R&D teams focus on generating and

exploring exciting new ideas and

demonstrating their feasibility in the long

term, as wellas finding technological

solutions to the challenges colleaguesmay

face with any products and applications that

have already moved into development.

Our researchers continuously scout for

technological innovations and solutions –

within the semiconductor industry and

beyond – searching for those that can help

us support our customers while delivering on

our ESG sustainability commitments.

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

How we innovate

As a crucial manufacturer of lithography equipment, ASML is a vital part of the semiconductor ecosystemvalue chain. We don't innovate in isolation, but work as architects and integrators – collaborating closely with customers, our supply chain, and industry and research partners in a strong innovation ecosystem.

Filling the innovation funnel

We encourage our experts to build wide

networks in the broader technology

space. This supports the constant stream

of new ideas into the technology pipeline

that flows through what we call our

‘innovation funnel’ (see diagram). Based

on our fundamental understanding of our

markets and the needs of chipmakers,

we select new ideas that have the

potential to advance our products and

their customer application.

Ideas that pass the ideation and selection

stages are assessed in the research

stage for their feasibility to go into our

product generation process (PGP), a

decision-based process for product

development that includes an ESG

assessment as well as the building and

testing of system prototypes in the

relevant environments. Prototypes that

pass these tests may eventually lead to

new product releases.

ASML Fellowship Program

At ASML, we recognize and honor our

technical experts because we know that

our company’s success is built on

technology leadership. One of the ways

we do this is through the ASML

Fellowship Program.

In 2023, three new ASML Fellows were

appointed, and two of our current Fellows

were promoted to the titles of Senior and

Corporate Fellow, respectively, for their

personal outstanding technical

contributions.

How we innovate (continued)

The world around us

The world around us (continued)

The world around us (continued)

Technology is evolving at pace – we are moving fast toward intelligent edge computing, the next level of computing which focuses on processing data closer to its source rather than in centralized data centers. The current era of mobile computing – where you bring the computer with you – is moving us into an immersive world of ubiquitous computing, with computing power available everywhere, driven by artificial intelligence (AI).

The world around us (continued)

3. Semiconductor application areas

Automotive

Automotive is one of the fastest-growing market segments driven, by electrification, autonomy and other mega trends. Integrated automotive systems consist of a full range of scalable, flexible computing solutions that require advanced and mature semiconductor devices. Advanced driver-assistance systems (ADAS) enabled by electronics and semiconductors, considered supercomputers on wheels, are also expected to contribute to the growth of the automotive segment in the semiconductor industry.

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

Autonomous robotics

A new generation of lightweight robots connected to a wide network and fitted with smart sensors enable humans and machines to safely and efficiently work side by side.

Predictive healthcarePredictive analysis of health data from multiple sources combined with machine learning and AI is being harnessed to improve healthcare services and patient outcomes.

Global connectivity5G enables a new kind of network that is designed to connect almost everyone and everything around the world, including machines, objects and devices.

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

Mixed reality

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

Wearables

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

Artificial intelligence

Artificial intelligence (AI) is about developing systems that have the intellectual processes characteristic of humans, such as the ability to reason, discover meaning, generalize or learn from past experience. Due to the exponential growth in computation, along with the availability of massive data sets and improved algorithms, AI has made huge advancements over a short period of time. Today, AI not only matches, but also beats human performance in many areas.

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

Energy transitionThe energy transition is expected to be a key market driver, with semiconductors enabling the global shift from fossil-based energy production to renewable sources like wind and solar. Semi-conductors are crucial in the generation, storage, distribution and consumption of electrical energy. The energy transition also drives the need for more intelligent infrastructure and end devices.

The world around us (continued)

The world around us (continued)