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. |
Delivering for
our customers
|
Embracing
change,
driving innovation
|
A sustainability
mindset
|
Making a
difference
|
Helping our
teams thrive
|
Working
together,
growing together
|
Impact through
collaboration
|
|||||||
See page 18 > |
See page 35 > |
See page 89 > |
See page 105 > |
See page 124 > |
See page 135 > |
See page 144 > |
ASML ANNUAL REPORT 2023 |
SMALL PATTERNS. BIG IMPACT. |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
2 |
Together we create impact |
||||
Throughout this year's report we feature
ASML colleagues and look at the impact
they are having on ASML and society.
|
||||
Delivering for our customers |
||||
Embracing change, driving
innovation
|
||||
A sustainability mindset |
||||
Making a difference |
||||
Helping our teams thrive |
||||
Working together, growing
together
|
||||
Impact through collaboration |
||||
View our Highlights online > |
||||
Our 2023 online report highlights key information
from this pdf with additional links to relevant
information on our corporate website.
|
||||
Forward-looking statements |
|
Message from the CEO |
|
At a glance |
|
Our unique offer |
|
Our products and services |
|
Q&A with the CTO |
|
Innovation |
|
Marketplace |
|
Our business strategy |
|
Our business model |
|
Q&A with the CFO |
|
Financial performance |
|
Performance KPIs |
|
Long-term growth opportunities |
Risk |
|
How we manage risk |
|
Risk factors |
|
Q&A with the CBO |
|
Environmental, social and
governance
|
|
Our material ESG sustainability topics |
|
Contributing to the UN Sustainable
Development Goals
|
|
Environmental |
|
Energy efficiency and climate action |
|
Circular economy |
|
Water management |
|
Social |
|
Attractive workplace for all |
|
Responsible supply chain |
|
Innovation ecosystem |
|
Valued partner in our communities |
|
Governance |
|
ESG integrated governance |
|
Transparent reporting |
Corporate Governance |
|
Board of Management |
|
Supervisory Board |
|
Other Board-related matters |
|
AGM and share capital |
|
Financial reporting and audit |
|
Compliance with Corporate
Governance requirements
|
|
Supervisory Board Report |
|
Message from the Chair of the
Supervisory Board
|
|
Supervisory Board focus in 2023 |
|
Meetings and attendance |
|
Supervisory Board committees |
|
Financial statements and Profit Allocation |
|
Remuneration Report |
|
Message from the Chair of the
Remuneration Committee
|
|
Remuneration at a glance |
|
Remuneration Committee |
|
Board of Management remuneration |
|
Supervisory Board remuneration |
Consolidated Financial Statements |
|
Report of Independent Registered
Public Accounting Firm
|
|
Consolidated Statements of Operations |
|
Consolidated Statements of
Comprehensive Income
|
|
Consolidated Balance Sheets |
|
Consolidated Statements of
Shareholders’ Equity
|
|
Consolidated Statements of Cash Flows |
|
Notes to the Consolidated
Financial Statements
|
|
Non-financial Statements |
|
Assurance Report of the
Independent Auditor
|
|
About the non-financial information |
|
Non-financial indicators |
|
Other appendices |
|
Definitions |
|
Exhibit index |
ASML ANNUAL REPORT 2023 |
CONTENTS |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
3 |
|
Contents |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS & NON-FINANCIALS |
A definition or explanation of abbreviations, technical
terms and other terms used throughout this Annual
Report can be found in the Definitions section. In
some cases, numbers have been rounded for
readers’ convenience.
This report comprises regulated information within
the meaning of articles 1:1 and 5:25c of the Dutch
Financial Markets Supervision Act (Wet op het
Financieel Toezicht).
|
In this report the name ‘ASML’ is sometimes used for
convenience in contexts where reference is made to
ASML Holding NV and/or any of its subsidiaries, as
the context may require.
References to our website and/or video presentations
in this Annual Report are for reference only and none
nor any portion thereof are incorporated by reference
in this report.
© 2024, ASML Holding NV All Rights Reserved.
|
|||
ASML ANNUAL REPORT 2023 |
FORWARD-LOOKING STATEMENTS |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
4 |
|
Special note regarding forward-looking statements |
ASML ANNUAL REPORT 2023 |
MESSAGE FROM THE CEO |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
5 |
|
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 |
ASML ANNUAL REPORT 2023 |
MESSAGE FROM THE CEO CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
6 |
|
Managing the cycle, preparing for greater growth in years to come (continued) |
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
|
ASML ANNUAL REPORT 2023 |
MESSAGE FROM THE CEO CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
7 |
|
Managing the cycle, preparing for greater growth in years to come (continued) |
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
|
Key facts in 2023 |
||||
€27.6bn |
42,416 |
|||
Total net sales |
Employees (FTE) |
|||
€23.2bn Asia
€3.2bn US
€1.2bn EMEA
|
19,805 in Operations
15,604 in R&D
7,007 in Sales and Support
|
|||
Read more on page 43 > |
Read more on page 107 > |
|||
€4.0bn |
35.1 kt |
|||
R&D investments |
Scope 1 and 2 CO2e
emissions
|
|||
We innovate across our entire
product portfolio through strong
investment in R&D
|
||||
(2025 target net zero) |
||||
Read more on page 137 > |
Read more on page 76 > |
|||
€15.5bn |
80.3% |
|||
Total sourcing spend1 |
Employee engagement
score against
benchmark
|
|||
(Netherlands: 40% | EMEA (excl. NL): 40%
North America: 13% | Asia: 7%)
|
||||
1.Reported for non-financial (GRI) reporting
purposes
|
||||
(2025 target -2% vs. top 25%
performing companies)
|
||||
Read more on page 126 > |
Read more on page 107 > |
What we do |
||||
At ASML, we design and integrate lithography
systems with computational tools, metrology
and inspection systems, and process control
software solutions. This holistic approach
to lithography provides chipmakers with
support and solutions at every stage of the
chipmaking process, from early design
and development to high-volume production.
It enables chipmakers to optimize the
lithography system setup and process window
for high-volume manufacturing, helping them
achieve their highest yields and best chip
performance.
|
||||
Read more in Our unique offer on page 11 > |
||||
Our key products and services |
||||
•Lithography systems
•Metrology and inspection
systems
•Computational
lithography
•Supporting our customers
|
•System and process
control software
•Managing our
installed base
systems
•Refurbished systems
|
|||
Read more in Our products and services on
page 13 >
|
Where we operate – more than 60 locations across 3 continents |
||||||
Asia |
||||||
China |
||||||
Japan |
||||||
Malaysia |
||||||
Singapore |
||||||
South Korea |
||||||
Taiwan |
||||||
North America |
||||||
Arizona |
New Mexico |
|||||
California |
New York |
|||||
Colorado |
Oregon |
|||||
Connecticut |
Texas |
|||||
Idaho |
Utah |
|||||
Massachusetts |
Virginia |
|||||
EMEA |
||||||
Belgium |
||||||
France |
||||||
Germany |
||||||
Ireland |
||||||
Israel |
||||||
Italy |
||||||
Netherlands |
||||||
United Kingdom |
||||||
ASML ANNUAL REPORT 2023 |
AT A GLANCE |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
8 |
|
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 > |
ASML ANNUAL REPORT 2023 |
AT A GLANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
9 |
|
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 > |
ASML ANNUAL REPORT 2023 |
AT A GLANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
10 |
|
We live by our values to drive success |
The Rayleigh criterion that drives Moore’s Law |
||||||
Over the years, ASML has made several wavelength
steps, and our DUV lithography systems range from
365 nm (i-line), through 248 nm (KrF) to 193 nm
(ArF). With our extreme ultraviolet (EUV) systems, we
provide highest-resolution lithography in high-volume
manufacturing as these systems make a major step
in wavelength – with EUV tin plasma, we generate
EUV light which has a wavelength of just 13.5 nm.
•NA is the numerical aperture, indicating the entrance
angle of the light – with larger NA lenses/mirrors,
smaller structures can be printed. Besides larger
lenses, ASML has increased the NA of our ArF
systems by maintaining a thin film of water between
the last lens element and the wafer in our so-called
immersion systems, using the breaking index of the
water to increase the NA.
|
After the wavelength step to EUV, we are developing
the next-generation EUV systems, called EUV
0.55 NA (High NA), where we push the numerical
aperture from 0.33 to 0.55.
•k1 is a factor relating to optical and process
optimizations. Together with our computational
lithography and patterning control software
solutions, we provide the control loops for our
customers to optimize their mask designs and
illumination conditions.
|
|||||
•CD is the critical dimension, a measure of how
small the smallest structures are that the
lithography system can print.
•Lambda ⁁ is the wavelength of the light source
used, and the smaller the wavelength, the smaller
the structures that can be printed. Our deep
ultraviolet (DUV) lithography systems, known as the
industry workhorse, dive deep into the UV light
spectrum to print the tiny features that form the
basis of a microchip.
|
Watch Gordon Moore video |
|||||
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.
|
ASML ANNUAL REPORT 2023 |
OUR UNIQUE OFFER |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
11 |
|
Holistic lithography |
||||||
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 |
|
ASML ANNUAL REPORT 2023 |
OUR UNIQUE OFFER CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
12 |
|
Holistic lithography (continued) |
Extreme ultraviolet (EUV) lithography systems |
ASML ANNUAL REPORT 2023 |
OUR PRODUCTS AND SERVICES |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
13 |
|
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 |
Refurbished systems |
ASML ANNUAL REPORT 2023 |
OUR PRODUCTS AND SERVICES CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
14 |
|
World-leading holistic lithography solutions (continued) |
Metrology and inspections systems |
ASML ANNUAL REPORT 2023 |
OUR PRODUCTS AND SERVICES CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
15 |
|
World-leading holistic lithography solutions (continued) |
System and process control software |
Our roadmap aims
to apply more powerful
algorithms with higher-
order corrections to
enable our customers
to continue improving
EPE performance.
|
Computational lithography |
Managing our installed base system |
ASML ANNUAL REPORT 2023 |
OUR PRODUCTS AND SERVICES CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
16 |
|
World-leading holistic lithography solutions (continued) |
ASML ANNUAL REPORT 2023 |
OUR PRODUCTS AND SERVICES CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
17 |
|
Supporting our customers |
||||||
We believe a true partnership with our customers based on mutual trust is vitally important,
ensuring that we share the risks and rewards of what we do.
|
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.
|
ASML ANNUAL REPORT 2023 |
SMALL PATTERNS. BIG IMPACT. |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
18 |
ASML ANNUAL REPORT 2023 |
SMALL PATTERNS. BIG IMPACT. CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
19 |
|
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 |
Q |
What were the highlights in
technology development and
innovation in 2023?
|
ASML ANNUAL REPORT 2023 |
Q&A WITH THE CTO |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
20 |
|
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."
|
||
Q |
Is shrink still the most
important driver of
innovation?
|
Q |
How have your ecosystem
partners driven innovation in
2023?
|
Q |
How do you safeguard
ASML’s ability to continually
improve?
|
Q |
Can you update us on future
developments such as Hyper
NA?
|
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
|
Q |
How do you envisage ASML
on its 50th anniversary?
|
ASML ANNUAL REPORT 2023 |
Q&A WITH THE CTO CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
21 |
|
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 |
We innovate through
partnerships.
By developing our
technology in close
collaboration with our
customers, we seek to
build today what they
need tomorrow.
|
ASML ANNUAL REPORT 2023 |
INNOVATION |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
22 |
|
How we innovate |
||||||
As a crucial manufacturer of lithography equipment, ASML is a vital part of the semiconductor ecosystem
value 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.
|
Innovation achievements in 2023 |
||||
Our goal is to give customers the products
and capabilities they need to deliver on
technology’s potential to make a positive
contribution to society. As well as creating
some of the most advanced machines in
the world, this includes an increased focus
on sustainability through parts
commonality and reuse, and
improvements in the performance
and energy efficiency of our products
to reduce costs and waste.
Innovation achievements of the last
12 months include:
•Soft x-ray (SXR) scatterometry. Using
10-20 nm wavelength light, this is a
revolutionary next-generation metrology
for 3D metrology suitable for measuring
3D profiles of advanced devices such as
Gate All Around (GAA) transistors.
|
•Generation of smooth mirror surfaces.
This innovation is used on the EXE:5200
mirror block. The mirror block carries the
wafer table, with its mirrors used to
position the wafer in three dimensions.
The smooth mirror surface has greater
stiffness compared to other glass
materials, enabling it to better cope with
the extreme stage accelerations in our
next-generation NXE and EXE systems.
|
|||
ASML ANNUAL REPORT 2023 |
INNOVATION CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
23 |
|
How we innovate (continued) |
ASML ANNUAL REPORT 2023 |
MARKETPLACE |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
24 |
|
The world around us |
||||||
The macroeconomic situation remains volatile and we continue to
see macro trends such as high interest rates, inflation, fear of
recession and geopolitical tensions increasing in some parts of
the world. The semiconductor industry is trying to manage its
inventory levels in some end-market segments to balance supply
and demand.
|
||||
The semiconductor market was still in the
aftermath of the COVID-19 crisis in 2023,
during which large stimulus packages
accelerated economic growth. This created
shortages in supply in the electronics industry
as companies built safety stocks to increase
future resilience.
End demand for electronics slowed as we
reached the end of the pandemic, while the
supply chain was still building safety buffers.
This resulted in a supply chain correction in
2023 which impacted our industry.
In the context of demand for lithography,
some customers delayed the timing of their
demand for specific systems, as some of
their facilities were not ready to receive the
systems as well as a result of their end
demand. This provided an opportunity to
allocate these systems to customers whose
demand profile we could not initially meet.
Despite these delays, for certain system
types the supply is still the main constraint,
with demand being higher than supply,
albeit at a reduced level than was
experienced at the start of the year.
|
All in all, global trends – such as generative
AI, the energy transition, the electrification
of mobility and the industrial Internet of
Things (IoT) – continue to fuel
semiconductor growth in the longer term.
Our highest-priority objective is to optimize
supply so that we can deliver and live up to
our customers’ expectations.
We have strong confidence that the
semiconductor ecosystem will continue to
innovate and grow at a high single-digit
compound annual growth rate. Factors that
may impact our business are explained in
more detail over the next few pages,
including:
|
|||
1.Macroeconomic and geopolitical
trends
|
||||
2.Semiconductor market trends |
||||
3.Semiconductor application areas |
||||
4.Semiconductor industry market |
||||
1. Macroeconomic and geopolitical trends |
||||||||
Economic outlook |
Middle East conflict |
Russia-Ukraine war |
||||||
Description
The macroeconomic situation did not
improve in 2023; inflation rates and interest
rates stayed relatively high and the fear of
recession, amid the geopolitical conflicts,
remained. The continued macroeconomic
uncertainty means our customers in
different market segments have remained
cautious. A later recovery of markets is
expected, and the timing and shape of the
recovery slope remains unclear.
What it means for ASML
Our EUV business saw a slight shift in
demand timing, predominantly driven by
a lack of readiness of fabs. This was due
to the market environment and a
shortage of people who have the
capability to build advanced fabs. With
DUV demand higher than we can deliver,
particularly in China, we are working
closely with our customers and suppliers
to ride out the uncertainty and manage
the risks.
|
Description
The military action in the Middle East is an
additional factor in the current uncertainty
in the macroeconomic environment.
What it means for ASML
Both ASML and our customers have
operations in the Middle East. Additional
military action in the region has and could
further adversely affect the global
economy, financial markets and the
supply chain. This may impact our people
and operations and our customers'
operations, customer demand, delivery of
products and services to customers, and
the ability to obtain parts and components
due to supply chain disruption. The safety
and well-being of our employees and their
families are a priority for us.
|
Description
The military action in Ukraine is an element
of the current uncertainty in the
macroeconomic environment.
What it means for ASML
While we do not have operations in Russia
or Ukraine, sanctions and other measures
taken in response to the military action
have adversely affected – and could
further affect – the global economy,
financial markets and the supply chain.
This may impact our customer demand,
delivery of products and services to
customers, and the ability of us and our
suppliers to obtain parts, components and
gas supply due to supply chain
disruption.
|
||||||
Read more in Our business strategy
Read more in Risk - How we manage risk
|
||||||||
1. Macroeconomic and geopolitical trends (continued) |
||||||||||||
Global geopolitics –
technological sovereignty
|
Global geopolitics – export controls |
Mitigating climate change |
||||||||||
Description
Semiconductors are crucial to the economic
and strategic development of countries and
regions, with the strategic importance of the
semiconductor industry only likely to grow.
Many countries and regions are pushing for
‘technological sovereignty’ to ensure security
of supply, resilience and technological
leadership in semiconductor technologies
and applications. This is fueling capital
expenditures in new regions.
What it means for ASML
As governments increasingly see
semiconductor manufacturing as
strategically significant, chips acts are
incentivizing our customers to build
manufacturing facilities in the US, Europe
and Asia.
Besides sharing our views with
governments on semiconductor
manufacturing, we work closely with our
customers to build the semiconductor
manufacturing ecosystem in new regions,
while retaining our focus on supporting
incumbent regions.
|
Description
On June 30, 2023, the Dutch Government
published new regulations regarding the
export control of semiconductor equipment
that came into effect on September 1, 2023.
These controls focus on advanced chip
manufacturing technology, including the
most advanced deposition and immersion
lithography systems (NXT:2000i, NXT:2050i,
NXT:2100i and subsequent systems). In
addition, in October 2023, the US
government published updated US export
control regulations which include restrictions
on shipping mature immersion lithography
systems (NXT:1970 and NXT:1980) to a
limited group of customers in certain
countries (including China). Governments
have turned their attention to securing
sufficient semiconductor supplies to ensure
greater technological sovereignty and
support local industries. Significant
investments in the semiconductor industry
are being planned, with industry forecasts
suggesting that the top three semiconductor
manufacturers plan to invest over $300
billion in global capacity in the coming years.
While the industry is managing its overall
costs, price rises could ultimately be passed
on to the end market, driving up the price of
devices. Trade tensions and protectionism
introduce significant complexity across the
supply chain and the processes required.
|
Like so many others in this trading environment,
the semiconductor industry needs to review
its global supply chain. At the end of 2023,
the Dutch Government partially revoked a
license for the shipment of NXT:2050i and
NXT:2100i lithography systems, impacting
a small number of customers in China.
What it means for ASML
The new regulations require ASML to apply
for Dutch export licenses for all shipments of
its most advanced DUV immersion
lithography systems (TWINSCAN NXT:2000i
and subsequent immersion systems) as well
as US licenses for mature systems for a
limited number of customers in China. The
governments will determine whether to grant
or deny the required export licenses and
provide further details to the company on any
conditions that apply. From January 1, 2024,
we will work with our customers to deliver
the non-advanced lithography systems
which are not impacted by the new
restrictions. We continue to educate
governments on the semiconductor
manufacturing process and ecosystem to
foster understanding of the potential impacts
of current and future regulatory measures.
|
Description
With an urgent collective response needed
to limit global warming to 1.5°C, climate
change is a crucial matter for governments,
companies and individuals worldwide.
Energy and water resources
Technologies to counter climate change –
from the energy transition to electrification,
smart mobility and agricultural innovation –
require semiconductors. Semiconductors
are crucial to the generation, storage,
distribution and consumption of electrical
energy. They are at the core of smart (home)
devices and play an important role in
reducing overall energy consumption.
The semiconductor industry also has an
important role to play by reducing its own
climate impacts; the semiconductor
manufacturing process consumes large
volumes of energy and water resources.
Driving Moore’s Law to enable shrink and
improve computing power and storage
capacity fuels demand for these vital
resources. Innovative architectures and a
new way of looking at the entire ecosystem
will be required to enhance energy and
water resource efficiency of the industry.
|
What it means for ASML
Our goal is to achieve net zero emissions
across our value chain by 2040. We plan to
do it by decreasing our GHG emissions and
reducing our carbon footprint across our
value chain, enhancing the energy efficiency
of our products and properties. We aim to
achieve this by reducing energy
consumption, using renewable energy and
compensating CO2 emissions.
We are also committed to using water
responsibly. This includes acting to preserve
water quality and conservation across our
operations and in the communities where we
operate.
We work closely with our customers and
suppliers to minimize waste and maximize
the value gained through use of resources.
By 2030, we aim to send zero waste from
operations to landfill or incineration.
|
||||||||
Read more in Environmental – Energy efficiency and
Read more in Risk – Risk factors
|
||||||||||||
Read more in Risk - Risk factors
|
ASML ANNUAL REPORT 2023 |
MARKETPLACE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
25 |
|
The world around us (continued) |
ASML ANNUAL REPORT 2023 |
MARKETPLACE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
26 |
|
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).
|
2. Semiconductor market trends |
||||||
Trends |
||||||
Increasing market demand
The continuing convergence of wireless
communication, telecoms, media and cloud
technology via connected devices is driving
demand for advanced semiconductors
across the globe.
Growing populations, urbanization, the energy
transition and electrification to support smart
mobility are increasing demand for advanced
electronic devices.
Microchips are at the heart of these devices,
ranging from sensors and actuators to smart,
scalable and flexible computing solutions. This
is driving demand for chips in both leading
edge and mature process nodes, which are
specifically designed for innovative
applications in areas ranging from smart
homes, cities and industries to predictive
healthcare, smart wearables and autonomous
robotics.
The virtuous cycle of a data-
driven society
Moore’s Law is the guiding principle for the
semiconductor industry. It is the motor
behind the industry transition from mobile
computing to ubiquitous computing. This
transition continues to expand, driving the
three main elements in computing –
applications, data and algorithms – that
|
feed each other in a virtuous cycle:
applications generate data, data fuels new
algorithms, which again leads to new
applications that generate new data, etc.
This is the virtuous cycle of our data-driven
society.
Unleashing the power of data
better and faster with AI
AI is becoming more ubiquitous and
embedded into the environment and smaller
devices, which moves us into the era of
intelligent edge computing – smart,
connected networks of more energy-efficient
devices that seamlessly communicate over
powerful 5G networks to unleash the power
of data better and faster than ever. This
provides people with more innovative
functionalities and applications, improves
human-to-machine interactions, and
enhances data management and analytics.
With intelligent edge computing, data
processing is brought as close to the source
of data as possible, rather than happening in
the cloud. The vast amounts of data and
insights that people can access are expected
to fuel semiconductor business growth and
the digital transformation.
|
Edge intelligence and AI-empowered
mobile and ubiquitous computing
technologies are key to solving some of
society's toughest challenges, such as
mitigating climate change, enabling the
energy transition, creating sustainable
social communities and improving quality of
life.
|
||||
ASML ANNUAL REPORT 2023 |
MARKETPLACE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
27 |
|
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 industry
Smart 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 healthcare
Predictive analysis of health data
from multiple sources combined
with machine learning and AI is
being harnessed to improve
healthcare services and patient
outcomes.
|
Global connectivity
5G enables a new kind of network
that is designed to connect almost
everyone and everything around the
world, including machines, objects
and devices.
|
||
Smart cities
Smart 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 home
Smart home devices, such as
thermostats, lights and smart TVs,
learn a user’s habits to provide
automated support for everyday
tasks.
|
Energy transition
The 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.
|
4. Semiconductor industry market |
||||||||||||||||||||||||
Semiconductor technology plays a crucial
role in shaping the interconnected and
intelligent network future. As a result, end
markets continue to grow. This overview
provides an outlook on current market size
and opportunity for the entire industry,
based on external research. The historical
market compound annual growth rate
(CAGR) from 2012 to 2022 was 7%. In
2022, almost 1.1 trillion chips were
manufactured around the world, feeding a
$0.6 trillion industry. 2023 was a correction
year, as consumer markets like PC slowed
following the peak in working-from-home
triggered by COVID-19. At the same time,
the supply chain continued to build safety
buffers in 2022 to increase resilience against
future supply chain disruptions, and these
needed to be corrected given lower
demand. Industry sources project that the
chip market (worldwide semiconductor
revenues) will resume growth after 2023 in
line with historical growth rates. The longer-
term market outlook is not expected to be
materially impacted by the 2023 downturn.
With an expected global annual wafer
capacity growth of over 780,000 wafer
starts per month per year, we plan to
increase our annual capacity to 90 EUV 0.33
NA and 600 DUV systems (2025-2026),
while ramping up EUV 0.55 NA (High NA)
capacity to 20 systems per year
(2027-2028).
|
Smartphone |
Personal
computing
|
Consumer
electronics
|
Automotive |
Industrial
electronics
|
Wired and wireless
infrastructure
|
Servers, data
centers and storage
|
|||||||||||||||||
Key driver |
||||||||||||||||||||||||
Continued refresh of
all semiconductor
content including
image sensors and
edge AI processors
|
High-end compute
and Memory, fast
conversion to solid-
state drive (SSD),
edge AI processors
|
Both low-power and
high-bandwidth
connectivity, sensors
|
Strong IC content
growth: graphics
processing unit
(GPU), sensors,
vehicle-to-everything
(V2X) communication
sensing
|
Connectivity, edge
processors, sensors
|
High-bandwidth
connectivity, edge
processors
|
High processor and
Memory growth,
hardware
accelerations
including GPU for AI
applications
|
||||||||||||||||||
2020 market size
($bn)
|
Total |
|||||||||||||||||||||||
117 |
100 |
50 |
40 |
51 |
38 |
76 |
471 |
|||||||||||||||||
2023 market size
($bn)
|
||||||||||||||||||||||||
104 |
89 |
60 |
79 |
74 |
50 |
78 |
534 |
|||||||||||||||||
2025 market opportunity
($bn)
|
||||||||||||||||||||||||
146 |
107 |
74 |
104 |
94 |
60 |
136 |
721 |
|||||||||||||||||
Outlook CAGR 2020-2025
(%)
|
||||||||||||||||||||||||
5% |
2% |
8% |
21% |
14% |
10% |
12% |
9% |
|||||||||||||||||
Source: Based on external market research firms |
||||||||||||||||||||||||
ASML ANNUAL REPORT 2023 |
MARKETPLACE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
28 |
|
The world around us (continued) |
Logic and Memory chips |
||||||||
Logic chips are the ‘brains’ that process
information in electronic devices. They are
produced by two groups of manufacturers:
integrated device manufacturers (IDMs),
which design and manufacture Logic chips,
and contract manufacturers, known as
foundries. Foundry manufacturers produce
chips for ‘fabless’ companies that focus on
chip design and distribution but do not
manufacture microchips themselves.
Memory chips can store large amounts of
data in a very small area. They are used in
an increasing variety of electronic products
like servers, data centers, smartphones,
high-performance computing, automotive,
or personal computers and other
communication devices. There are two
main classes of chips typically made in
dedicated Memory-chip factories: NAND
chips that can store data even when a
device is powered off and DRAM Memory
chips that are used to efficiently provide
data to the processor.
|
Logic and Memory chips can vary greatly in
complexity and capability. For example, the
most advanced chips power leading-edge
technology, in AI, big data and automotive
technology, while simpler low-cost chips
integrate sensing capabilities into everyday
technology to create a vast network of
connected devices, the loT.
During 2023 generative AI got a lot of
traction, which resulted in strong demand
for GPU chips (Logic) and High-Bandwidth
Memory (HBM) at our customers. Both
products are still a small portion of the
overall Logic and Memory market.
|
|||||||
ASML ANNUAL REPORT 2023 |
MARKETPLACE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
29 |
|
The world around us (continued) |
Our strategy is to |
||
1 |
Grow our
holistic lithography
business
|
|
2 |
Secure unique supply
chain capabilities to
ensure business
continuity
|
|
3 |
Move toward adjacent
business
opportunities
|
|
4 |
Deliver on our ESG
sustainability
commitments
|
1. Grow our holistic lithography business |
2025 |
2030 |
||||
€30-40bn |
€44-60bn |
||||
Annual revenue |
Annual revenue |
||||
54-56% |
56-60% |
||||
Gross margin |
Gross margin |
||||
Our five priorities are: |
||||||
Strengthen
customer trust
|
Enhance the value of EUV
0.33 NA for manufacturing
|
|||||
Enhance our innovation and operational
excellence capabilities to deliver on our
roadmap for new product introductions
and system deliveries, on time and with
the highest quality, to address the needs
of our customers. Increase our focus on
sustainability through parts commonality
and reuse, and drive improvements in the
performance and energy efficiency of our
products to reduce costs and waste.
|
Secure high-volume manufacturing
performance and enhance the value of
EUV technology by extending our product
portfolio for future nodes. Improve cost
effectiveness for our customers by
improving system performance and
energy efficiency.
|
|||||
Build a winning position
in holistic lithography
|
Insert EUV 0.55 NA into
high-volume manufacturing
|
|||||
Build a winning position in edge placement
metrology and process control to support
customer needs. Integrate our complete
product portfolio into a holistic lithography
solution to optimize and control lithography
performance.
|
Insert EUV 0.55 NA (High NA) in Logic and
DRAM for high-volume manufacturing from
2025 onward to support customer
roadmaps by simplifying patterning
schemes and decreasing defect density.
|
|||||
Continue innovation
leadership in DUV
|
||||||
Continue our innovation leadership,
enabling execution of customer roadmaps
by driving DUV to the highest level of
performance while remaining cost-
competitive. Expand our installed base
and support customer needs.
|
Toward the end of 2023 and in light of our
expectation that 2024 would be a year of
transition, we reviewed our strategic
business priorities, adding operational
excellence and people empowerment as
supplementary focus points.
|
|||||
ASML ANNUAL REPORT 2023 |
OUR BUSINESS STRATEGY |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
30 |
|
Focused on sustainable long-term value creation |
2. Secure unique supply chain
capabilities
|
4. Deliver on our ESG sustainability commitments |
||||||||||||||
We believe digital technologies can have a
positive impact on the world – supporting
society to make progress and addressing
environmental and social challenges.
Enabled by microchips, these technologies
are fueling a digital transformation that is
helping to address global challenges, such
as tackling climate change by reducing
energy consumption and GHG emissions.
We recognize that new technology comes
with new challenges – and we’re committed
to using our innovations to enable the
semiconductor industry to reduce its
footprint. We aim to help our customers
minimize the materials and energy required
to produce advanced microchips. Within
our own operations, including our supply
chain, we aim to minimize our environmental
impact while having a positive role in society
for our employees, the communities around
us and everyone involved in our innovation
ecosystem.
|
Our ESG sustainability strategy
Our aim is to create long-term sustainable
value for our stakeholders, while also
contributing to the United Nations’
Sustainable Development Goals (SDGs). Our
ESG sustainability strategy is based on a
materiality assessment that helps us identify
and focus on the ESG sustainability topics
where we can have the biggest impact.
Environmental
We want to continue to expand computing
power but with minimal waste, energy use
and emissions. That's why we focus on
energy efficiency and climate action, and a
circular economy.
Social
We want to ensure that responsible growth
benefits all our stakeholders – we aim to offer
an attractive workplace for all, to build and
maintain a responsible supply chain, to fuel
innovation in our ecosystem and to be a
valued partner in our communities.
|
Governance
We act on our responsibilities and aim to
fully anchor them in the way we do
business through our focus on integrated
governance, engaged stakeholders and
transparent reporting.
|
|||||||||||||
In order to deliver on our growth
aspirations, we need to secure innovation,
scale-up and continuity, while preserving
sound business conditions and a
constructive collaboration model with our
unique technology suppliers.
Our supply chain is a critical enabler of our
ambition to grow our core business.
Therefore, we are proactively assessing
our supply base for projected demand
and control of future roadmap-enabling
capabilities.
|
|||||||||||||||
See how we're delivering on our ESG
sustainability commitments
|
|||||||||||||||
3. Move toward adjacent business
opportunities
|
|||||||||||||||
Once core growth is secured, we can
move into adjacent business opportunities
representing additional growth
opportunities. We aim to do this by
focusing on synergetic opportunities at the
forefront of holistic transistor scaling to
best serve our customers. This includes
leveraging product and technology
synergies, and tapping into different future
semiconductor scaling engines.
|
|||||||||||||||
Read more in ESG - Our material ESG sustainability
|
|||||||||||||||
ASML ANNUAL REPORT 2023 |
OUR BUSINESS STRATEGY CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
31 |
|
Focused on sustainable long-term value creation (continued) |
People and culture |
Manufacturing facilities |
Ecosystem of innovation partners |
||||||||||
We depend on more than 42,400
talented, dedicated and highly motivated
employees who live our values of
challenge, collaborate and care.
Every day, our colleagues in R&D,
manufacturing, customer support,
sourcing and supply chain, and
support functions take on the
exciting challenge of building and
maintaining the most advanced
lithography, metrology and
inspection systems in the world.
|
We have eight manufacturing sites in the EU, US
and Asia that provide high-precision, highly
controlled environments where we assemble, test and
deliver our complex lithography and metrology and
inspection portfolio, from prototype to final product.
|
|||||||||||
Read more on page 13 > |
||||||||||||
Our lithography solutions are the result of strong partnerships based
on trust, respect, and shared risks and incentives to compete and
drive innovation.
|
||||||||||||
C
a
p
i
t
a
l
|
Capital |
Innovation |
Customers
We believe a true partnership with
our customers is vitally important,
to ensure we share the risks and
rewards of what we do.
|
Research partners
We co-develop R&D expertise within
a wide network of technology
partners, such as universities and
research institutions – accelerating
innovation and giving us access to a
large leading-edge knowledge base
across a wide range of technologies.
|
||||||||||
We have strong capital reserves, underpinned by a
robust balance sheet. Total shareholders' equity at the
end of 2023 amounts to €13.5 billion on a
consolidated balance sheet total of €40.0 billion and
net cash provided by operating activities of
€5.4 billion in 2023.
|
In 2023, we spent a total of €4.0
billion on R&D. We do not innovate
alone – our more than 15,500 R&D
employees collaborate closely within
an innovation ecosystem of key
partners in the value chain.
|
|||||||||||||
Suppliers |
Peers |
|||||||||||||
Our lithography systems comprise
thousands of parts, with most of
them co-designed with and made
by our suppliers. Early involvement
of our suppliers has always been a
key part of our business model.
|
Our semiconductor industry peers
optimize the total manufacturing
process by delivering
complementary process equipment,
critical materials, essential data and
new processing steps.
|
|||||||||||||
Read more on page 250 > |
Read more on page 137 > |
ASML ANNUAL REPORT 2023 |
OUR BUSINESS MODEL |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
32 |
|||
What we need to create sustainable long-term value |
||||||||
The depth and breadth of our resources and the relationships we build are key to our continued
success in growing a sustainable holistic lithography business.
|
ASML ANNUAL REPORT 2023 |
OUR BUSINESS MODEL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
33 |
||
Creating sustainable long-term value through holistic lithography |
|||||||
Our holistic approach is based on the intelligent integration of computational lithography, lithography
systems, and metrology and inspection.
|
Customers |
Employees |
Suppliers |
Shareholders |
Society |
|||||||||||||||||||
Our world-leading lithographic
systems enable our customers to
develop ever more powerful and
energy-efficient chips for new
applications and devices. At the
same time, we help our
customers reduce costs and their
environmental footprint.
|
ASML is a growth business
providing employment
opportunities around the world.
We invest in people’s career
development and well-being, and
provide a diverse and inclusive
environment where people can
achieve their full potential.
|
We innovate together with our
strategic partners, sharing
knowledge and tapping into each
other’s technology expertise to
drive ever higher levels of
complexity and capability. Long-
term relationships, close
collaboration, transparency and a
commitment to sustainability with
our suppliers are key to our
success.
|
The effective and disciplined
investment of free cash flow drives
the profitable growth of our
company, and delivers solid
financial performance and a
healthy financial position. This
underpins our cash return policy
through share buybacks and
dividends.
|
We play an active role in the
communities where we operate,
recognizing that when the
community thrives, we thrive. And
our collaborative ecosystem
nurtures innovation and benefits
society. For example, we share
our expertise with universities and
|
research institutes, support young
tech companies and promote
science, technology, engineering
and mathematics (STEM)
education worldwide.
We are also committed to
creating sustainable value by
reducing our environmental
footprint, both from our
operations and during the use of
our products and services.
|
||||||||||||||||||
€27.6bn |
80.3% |
€15.5bn |
€3.2bn |
€413 |
88% |
||||||||||||||||||
Total net sales |
Employee engagement score |
Total sourcing spend |
Free cash flow1 |
Community partnership
program: amount invested per
employee
|
% Reuse rate of parts returned
from field and factory
|
||||||||||||||||||
600 |
27% |
5,100 |
€6.10 |
€16.4m |
35.1 kt |
||||||||||||||||||
Net system sales (in units) |
Gender diversity – % inflow of
women
|
Number of suppliers |
Proposed annualized dividend
per share
|
Contribution to
EU research projects
|
Emissions from manufacturing
and building (scope 1 and 2)
|
||||||||||||||||||
#2 |
3.6% |
57% |
€1.0bn |
95% |
15.0 Mt |
||||||||||||||||||
TechInsights customer
satisfaction ranking
|
Attrition rate |
% supplier spend covered by
commitment to sustainability
via Letter of Intent (LOI)
|
Share buyback |
% of systems sold in the past
30 years still active in the field
|
Indirect emissions from total
value change (scope 3)
|
||||||||||||||||||
Read more in Engaging with our
stakeholders – Customers
|
Read more in Engaging with our
stakeholders – Employees
|
Read more in Engaging with our
stakeholders – Suppliers
|
Read more in Engaging with our
stakeholders – Shareholders
|
Read more in Engaging with our
stakeholders – Society
|
ASML ANNUAL REPORT 2023 |
OUR BUSINESS MODEL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
34 |
||
The sustainable long-term value we created for our stakeholders in 2023 |
|||||||
Our success depends on strong, sustainable relationships with all stakeholders
in the value chain. We aim to create sustainable value for them, and to use their
input to develop our strategy, products and services.
|
My new role will help
us safeguard our
innovation power as
we evolve to support
future growth.”
|
||
Ron Kool |
||
Head of Business Performance Improvement |
||
26 years at ASML |
Embracing change,
driving innovation
|
|
Ron Kool spent over 25 years in
various product-related roles within
ASML, most recently leading our
deep ultraviolet (DUV) lithography
business. In 2023, he changed
direction to use the experience he
has gained in improving our
technology to help us improve
our business processes.
|
ASML ANNUAL REPORT 2023 |
SMALL PATTERNS. BIG IMPACT. |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
35 |
ASML ANNUAL REPORT 2023 |
SMALL PATTERNS. BIG IMPACT. CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
36 |
|
We engage with our stakeholders on an ongoing basis,
working hard to understand how we impact them and
how we can best meet their needs. This approach plays
a key role in our ability to build stakeholder relationships
based on mutual trust.
| ||
Read more on page 71 > |
||
A new Stakeholder Engagement
Policy has been published.
Read more at asml.com
|
||
Our stakeholders – customers,
employees, suppliers,
shareholders and society – can
affect or be affected by our
business, and we embrace
continuous open dialogue and
knowledge-sharing for the
benefit of all parties.
|
At each stage of the customer relationship, we aim to foster trust, advocacy and
continuous engagement, with the goal of achieving complete customer satisfaction
and loyalty. As customer requirements become more complex, it takes longer to align
with a shared vision, so we seek to start earlier in the process. Transparency is key,
and our customer intimacy strategy helps us to leverage our innovations and develop
even more sophisticated solutions with our customers.
|
|||||||
Customers |
|||||||
What’s happening in their world |
|||||||
Macroeconomic uncertainty across different market
segments led our customers to more carefully control
capital expenditure and cash flow. In 2023, the market
continued to be influenced by governments focusing on
incentives to encourage the construction of
semiconductor manufacturing facilities in their respective
countries through chips acts. This led our customers to
look into expanding their manufacturing in these new
geographical locations. However, the readiness of these
'off-shore' facilities has been impacted due to a shortage
of experienced staff in these new locations. In addition,
new regulations were announced and imposed by the
Dutch, US and Japanese governments regarding the
export control of advanced semiconductor equipment
impacting the customers in China that are using
advanced lithography tools.
|
We have deployed improvement actions identified in our
2022 customer survey. This has helped us focus on truly
understanding what customers need from us, and
validating that we are on the right track with the right
improvements. We have updated our customers
regularly on the progress being made, and in September
2023 we sent out our latest survey, including a new set
of questions to measure customer trust.
Survey results reveal that our customers have high levels of
trust in us, mainly driven by our transparency and
commitment to fairness in driving mutual success. They ask
us to listen closely to their feedback, resolve issues in a
timely manner, provide them with shorter delivery times for
good-quality products and continue pushing the technology
forward to meet their current and future needs.
|
||||||
How we respond |
How we engage |
||||||
We had delivery challenges for our DUV systems (in
light of the heightened demand) and we kept our
customers informed about shipment status and
progress in our capacity plans. To respond to their
demand faster, we implemented the fast shipment
solution as a standard way of working in 2023. We
continued to closely collaborate with our customers to
support them in settling in to their new manufacturing
locations by providing them with operational flexibility
where needed. We worked with governments and our
customers to minimize the potential impact of new
regulations on our customers’ deliveries. In new
product design, we are increasing our focus on
reducing energy consumption of our systems.
|
•Regular meetings with our key customers
•Technology Review Meetings where our senior
technology experts, our Chief Technology Officer (CTO)
and our Chief Business Officer (CBO) discuss technology
roadmaps and requirements with customers
•Executive Review Meetings where members of our senior
management team and Board of Management discuss
business and strategies with customers
•Operational Review Meetings where we review topics
related to our customers’ operational activities
•Annual customer feedback survey
•Voice of the Customer program, which provides firsthand
feedback about our customers’ needs and challenges for
employees without direct access to customers
•Various technology symposia and special events
|
||||||
ASML ANNUAL REPORT 2023 |
OUR BUSINESS MODEL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
37 |
|
Engaging with our stakeholders |
We strive for engaged employees who are proud to work for ASML and deliver
jointly our vision and our ambitions as a company.
|
|||||||
Employees |
|||||||
What’s happening in their world |
How we engage |
||||||
Our growth in recent years has been accompanied by
a large increase in our workforce. This has brought
benefits – such as a more diverse employee base – as
well as challenges. As the organization becomes more
complex, and the expectations of our customers and
stakeholders increase, the need to engage all our
employees becomes even more crucial.
Our employees feel respected and have trust in each
other. They continue to raise suggestions to improve
processes, and they like to have more opportunities to
participate in sustainability initiatives.
|
•Employee engagement survey
•Training and development programs, including
employee evaluation and feedback
•ASML's Speak Up service
•Works Council/Unions
•Employee networks, such as Next, Women/WAVES,
Seniors, Parents, Veterans, Green ASML, Atypical,
SHADES and Proud
•ASML Ambassadors community, aiming to attract
and inspire talent, engage colleagues and show the
community our appreciation
•Internal communication and awareness, for example
through the intranet, our Ethics program,
department employee meetings and interactive
lunch sessions with Board members
•Onboarding program for new employees
•All-employee meeting and senior management
meetings
|
||||||
Read more in Social - Attractive workplace for all |
|||||||
How we respond |
|||||||
Since the pandemic, employee expectations have
continued to change, especially around work-life
balance, hybrid working and well-being. Staying on top
of these trends and understanding how the world of
work and expectations is evolving is a key part of our
strategy to attract and retain talent.
Inclusion, well-being and job enablement are the key
themes we will focus on to further increase our
engagement. Cross-collaboration and sharing
knowledge across teams also remain subjects for
improvement.
|
|||||||
We engage with our suppliers to help deliver our innovations.
They are critical to our value chain and our ambition to be a sustainable
leader in the semiconductor industry.
|
||||||
Suppliers |
||||||
What’s happening in their world |
How we engage |
|||||
Over recent years, the world of our suppliers has been
quite turbulent. First of all, geopolitical uncertainties led
to disruptions in our supply chain due to less
availability of materials as well as increased price
levels. Furthermore, on a broader scale, the inflationary
pressure has hit our suppliers, mainly in areas of raw
materials, energy and wages. And finally, throughout
all those challenges, ASML continued to grow, and
despite short-term market uncertainties was still
requiring suppliers to build up further capacity for
future growth while putting pressure on cost and
quality performance.
The future growth in demand of ASML’s customers
can only be met if our suppliers are capable and willing
to keep up.
|
•ASML’s Suppliers' Day
•Direct interactions via supplier account teams /
sourcing account leaders
•Supplier audits
•Site visits
•Newsletter
•Responsible Business Alliance (RBA) self-
assessment questionnaire (SAQ)
•ASML's Speak Up service
•Knowledge sessions on ESG sustainability
|
|||||
How we respond |
||||||
Our commitment to our suppliers is that we want to
maintain and build a strong business relationship
based on mutual trust. We listen to our suppliers when
they openly share their pain points and challenges. We
are implementing improvements relating to quality
issues, early supplier involvement during the
industrialization phase of new product introductions,
reducing cycle time and cost, planning with our
suppliers and ESG sustainability.
|
||||||
ASML ANNUAL REPORT 2023 |
OUR BUSINESS MODEL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
38 |
|
Engaging with our stakeholders (continued) |
We aim to help shareholders – as well as financial and ESG sustainability
analysts – to understand our long-term investment opportunities. We
communicate with them about our financial growth strategies and opportunities,
financial and ESG sustainability performance, and our outlook and shareholder
returns.
|
||||||
Shareholders |
||||||
What’s happening in their world |
How we engage |
|||||
For investors in the semiconductor industry, 2023 was an
interesting, highly dynamic year in which ASML showed
impressive sales growth while overall semiconductor
sales went down. Key focus areas for investors were to
get a better sense of when the industry will recover from
its short-term cyclical downturn in order to understand
how 2024 will shape up. There were also positive
developments of (generative) AI gaining strong traction.
In addition to uncertainties around a potential recession,
inflationary costs, the Russia-Ukraine war and the conflict
in the Middle East, the Dutch and US governments
published new regulations in 2023 regarding the export
controls of semiconductor equipment.
|
•AGM
•Investor calls and Investor Days
•Company quarterly results presentations and press
releases
•Various (ESG) investor conferences and roadshows
•Various sustainability questionnaires, assessments
and survey feedback
•Direct personal interactions in line with our Bilateral
Contacts Policy as published on our website
|
|||||
How we respond |
||||||
During the year, ASML’s management and Investor
Relations team actively engaged with our investor
community to discuss specific topics that are relevant
to ASML’s equity story. We focus on being
transparent, accessible, credible, reliable and
responsive. We actively engage with the investor
community via a large number of (ESG-related)
conferences, roadshows and conference calls. We
also encourage investors to visit our Veldhoven (NL) or
Wilton (US) facilities to be able to discuss our capacity
expansion plans as well as our technology challenges
and opportunities in our ASML Experience Centers.
|
||||||
We know that our actions and our activities have an impact beyond ASML – on
the environment, for example, and on the world around us in its broadest sense,
which is how we define society. We engage with organizations, communities and
other bodies in society on a wide range of issues – from reducing our
environmental footprint to regulatory matters and fulfilling our commitment to
playing an active role in the communities where we operate.
|
|||||||
Society |
|||||||
What’s happening in their world |
How we engage |
||||||
Increasingly the local community feels the impact of
the rapid development of our headquarters in the
Brainport Eindhoven region, home to around half of
ASML’s employees. Our community stakeholders
expect ASML to take its fair share in keeping the
region attractive and inclusive for all community
members, with sufficient affordable housing,
sustainable transportation, a strong (technology)
education system for all and opportunities for the
underserved. Meanwhile, our headquarter campus
expansion should take into account the interests of
our close neighbors.
|
With industry unions and associations
•Member conferences and technical forums
•Member consultation on standards
•Brainport Eindhoven
With governments and authorities
•Dialogue with tax authorities
•Relevant EU roundtable discussions
•Compliance reporting
•Proactive dialogue with government, authorities and
municipalities
With communities and other bodies
•In the Veldhoven region, via regular dialogue at six-
weekly intervals with local government
representatives and local residents. In addition, we
regularly hold information events, open house events,
town halls and other opportunities for discussion,
and also invite local input through the 'ASML
Dichtbij' (ASML close by) section of our website.
• At our site in Wilton in the US, we held information
sessions during 2023 where local officials and
neighbors could discuss our expansion plans
• Quarterly surveys of a random sample of the 800,000
residents of the Brainport Eindhoven region
• Regular discussion between the managers of our 17
community programs and various stakeholders and
specialists
• Through (social) media, conferences and other mass
communication channels, we have an intensive
communication plan to inform and engage with
stakeholders around our communities
|
||||||
How we respond |
|||||||
Launched in collaboration with our ESG Sustainability
team at the start of 2023, ASML’s Society &
Community Engagement team focuses on four areas:
boosting the attractiveness of the communities, aiming
to keep these communities inclusive, promoting
science and technology education, and supporting
ESG innovation. Within these focus areas, we and our
stakeholders have identified and formed 17 program
strategies that we began to execute during 2023.
|
|||||||
Read more in Social - Valued partner in our communities
|
|||||||
Operating in an international industry with a global
value chain where strong incentives to compete and
drive innovation are key, we work with and collaborate
with governments on all levels (national, regional and
local) to ensure our growth and objectives are clear
and can be supported.
Read more in our ASML Government & External Affairs
Report at asml.com
|
|||||||
ASML ANNUAL REPORT 2023 |
OUR BUSINESS MODEL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
39 |
|
Engaging with our stakeholders (continued) |
Q |
Can you reflect on ASML's
financial performance in
2023?
|
ASML ANNUAL REPORT 2023 |
Q&A WITH THE CFO |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
40 |
|
Robust results in a challenging macro environment |
||||||
In conversation with our Executive Vice President and Chief Financial Officer |
||||||
Roger Dassen |
We delivered on our
expectations in spite of the
challenges.”
|
Roger Dassen |
Executive Vice President
and Chief Financial Officer
|
1. Free cash flow is a non-GAAP measure and is defined as net cash provided by operating activities (2023: €5,443.4 million and 2022: €8,486.8 million) minus purchase of property, plant and equipment (2023: €2,155.6 million and 2022: €1,281.8 million) and
purchase of intangible assets (2023: €40.6 million and 2022: €37.5 million). We believe that free cash flow is an important liquidity metric for our investors, reflecting cash that is available for acquisitions, to repay debt and to return money to our shareholders
by means of dividends and share buybacks. Purchase of property, plant and equipment and purchase of intangible assets are deducted from net cash provided by operating activities in calculating free cash flow because these payments are necessary to
support the maintenance and investments in our assets to maintain the current asset base.
|
Q |
What were the main drivers
for that performance?
|
Q |
How do you manage industry
cyclicality?
|
Q |
What other matters have
required focus during 2023?
|
ASML ANNUAL REPORT 2023 |
Q&A WITH THE CFO CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
41 |
|
Robust results in a challenging macro environment (continued) |
||||||
In conversation with our Executive Vice President and Chief Financial Officer |
||||||
Roger Dassen |
We believe
that the years
ahead will see
a significant
uptick in the
market.”
|
Roger Dassen |
Executive Vice President
and Chief Financial Officer
|
€27.6bn |
Total net sales |
51.3% |
Gross margin |
€3.3bn |
Returned to shareholder |
Q |
What’s the outlook for 2024
and beyond?
|
ASML ANNUAL REPORT 2023 |
Q&A WITH THE CFO CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
42 |
|
Robust results in a challenging macro environment (continued) |
||||||
In conversation with our Executive Vice President and Chief Financial Officer |
||||||
Roger Dassen |
For 2024, we envisage a
transition year with revenue
broadly similar to 2023.”
|
Roger Dassen |
Executive Vice President
and Chief Financial Officer
|
Sales |
Profitability |
Liquidity |
|||||
Total net sales |
Gross profit |
% of total net sales |
Cash and cash equivalents & short-term investments (year-end) |
||||
€27.6bn |
€14.1bn |
51.3% |
€7.0bn |
||||
2022: €21.2bn |
2022: €10.7bn |
50.5% |
2022: €7.4bn |
||||
Net system sales |
Income from operations |
Net cash provided by operating activities |
|||||
€21.9bn |
€9.0bn |
32.8% |
€5.4bn |
||||
2022: €15.4bn |
2022: €6.5bn |
30.7% |
2022: €8.5bn |
||||
Net service and field option sales |
Net income |
Free cash flow2 |
|||||
€5.6bn |
€7.8bn |
28.4% |
€3.2bn |
||||
2022: €5.7bn |
2022: €5.6bn |
26.6% |
2022: €7.2bn |
||||
Sales of lithography systems (in units)1 |
Earnings per share |
||||||
449 |
€19.91 |
||||||
2022: 345 |
2022: €14.14 |
||||||
EUV systems recognized (in units) |
|||||||
53 |
|||||||
2022: 40 |
1.Lithography systems do not include metrology and inspection systems. |
||||||
2. Free cash flow is a non-GAAP measure and is defined as net cash provided by operating activities (2023: €5,443.4 million and 2022: €8,486.8 million) minus purchase of property, plant and
equipment (2023: €2,155.6 million and 2022: €1,281.8 million) and purchase of intangible assets (2023: €40.6 million and 2022: €37.5 million). We believe that free cash flow is an important
liquidity metric for our investors, reflecting cash that is available for acquisitions, to repay debt and to return money to our shareholders by means of dividends and share buybacks. Purchase of
property, plant and equipment and purchase of intangible assets are deducted from net cash provided by operating activities in calculating free cash flow because these payments are
necessary to support the maintenance and investments in our assets to maintain the current asset base.
|
|||||||
ASML ANNUAL REPORT 2023 |
FINANCIAL PERFORMANCE |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
43 |
|
Performance KPIs |
||||||
Operating results of 2023 compared to 2022 |
Year ended December 31 (€, in millions) |
2022 |
%1 |
2023 |
%1 |
% Change |
Net system sales |
15,430.3 |
72.9 |
21,938.6 |
79.6 |
42.2 |
Net service and field option sales |
5,743.1 |
27.1 |
5,619.9 |
20.4 |
(2.1) |
Total net sales |
21,173.4 |
100.0 |
27,558.5 |
100.0 |
30.2 |
Cost of system sales |
(7,582.3) |
(35.8) |
(10,151.0) |
(36.8) |
33.9 |
Cost of service and field option sales |
(2,891.0) |
(13.7) |
(3,271.4) |
(11.9) |
13.2 |
Total cost of sales |
(10,473.3) |
(49.5) |
(13,422.4) |
(48.7) |
28.2 |
Gross profit |
10,700.1 |
50.5 |
14,136.1 |
51.3 |
32.1 |
Research and development costs |
(3,253.5) |
(15.4) |
(3,980.6) |
(14.4) |
22.3 |
Selling, general and administrative costs |
(945.9) |
(4.5) |
(1,113.2) |
(4.0) |
17.7 |
Income from operations |
6,500.7 |
30.7 |
9,042.3 |
32.8 |
39.1 |
Interest and other, net |
(44.6) |
(0.2) |
41.2 |
0.1 |
(192.4) |
Income before income taxes |
6,456.1 |
30.5 |
9,083.5 |
33.0 |
40.7 |
Income tax expense |
(969.9) |
(4.6) |
(1,435.8) |
(5.2) |
48.0 |
Income after income taxes |
5,486.2 |
25.9 |
7,647.7 |
27.8 |
39.4 |
Profit from equity method investments |
138.0 |
0.7 |
191.3 |
0.7 |
38.6 |
Net income |
5,624.2 |
26.6 |
7,839.0 |
28.4 |
39.4 |
For a comparison of ASML’s operating results for the year ended December 31, 2022, with the year ended
December 31, 2021, please see Our performance in 2022 – Financial – Financial performance – Operating results of
2022 compared with 2021 of ASML’s annual report on Form 20-F for the year ended December 31, 2022.
The preparation of our Consolidated Financial Statements in conformity with US GAAP requires management to
make estimates and assumptions. Reference is made to Note 1 General information / summary of general
accounting policies to the Consolidated Financial Statements for detailed information on critical accounting
estimates.
|
Revenue growth from Logic and Memory markets |
(in millions) |
30.2% |
Net sales |
42.2% |
Net system sales |
(2.1)% |
Net service and field option sales |
ASML ANNUAL REPORT 2023 |
FINANCIAL PERFORMANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
44 |
|
Performance KPIs (continued) |
||||||
Increase in net sales driven by growth in NXE and
DUV immersion
|
(in millions) |
Gross profit |
(in millions) |
Research and development costs |
(in millions) |
ASML ANNUAL REPORT 2023 |
FINANCIAL PERFORMANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
45 |
|
Performance KPIs (continued) |
||||||
Selling, general and administrative costs |
Income taxes |
Net income |
ASML ANNUAL REPORT 2023 |
FINANCIAL PERFORMANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
46 |
|
Performance KPIs (continued) |
||||||
Year ended December 31 (€, in millions) |
2022 |
2023 |
Cash and cash equivalents, beginning of period |
6,951.8 |
7,268.3 |
Net cash provided by (used in) operating activities |
8,486.8 |
5,443.4 |
Net cash provided by (used in) investing activities |
(1,028.9) |
(2,689.3) |
Net cash provided by (used in) financing activities |
(7,138.3) |
(3,003.9) |
Effect of changes in exchange rates on cash |
(3.1) |
(13.8) |
Net increase (decrease) in cash and cash equivalents |
316.5 |
(263.6) |
Cash and cash equivalents, end of period |
7,268.3 |
7,004.7 |
Short-term investments, end of period |
107.7 |
5.4 |
Cash and cash equivalents and short-term investments |
7,376.0 |
7,010.1 |
Purchases of property, plant and equipment and intangible assets |
(1,319.3) |
(2,196.2) |
Free cash flow1 |
7,167.5 |
3,247.2 |
ASML ANNUAL REPORT 2023 |
FINANCIAL PERFORMANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
47 |
|
Performance KPIs (continued) |
||||||
ASML ANNUAL REPORT 2023 |
FINANCIAL PERFORMANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
48 |
|
Long-term growth opportunities |
||||||
Long-term models as presented at CMD2022 |
||||||||||
Market |
System units |
Total sales opportunity (in €bn) |
||||||||
High |
CMD 2022
Units ASML
|
CMD 2022
Units ASML
|
CMD 2022
Sales
|
CMD 2022
Sales
|
||||||
2025 |
2030 |
2025 |
2030 |
|||||||
EUV High NA 0.55 |
5 |
30 |
Systems
(Lithography & M&I1)
|
32 |
47 |
|||||
EUV Low NA 0.33 |
80 |
80 |
||||||||
ArFi (immersion) |
105 |
115 |
Installed Base
Management2
|
8 |
13 |
|||||
Dry |
385 |
425 |
||||||||
Total |
575 |
650 |
Total |
40 |
60 |
|||||
Low |
CMD 2022
Units ASML
|
CMD 2022
Units ASML
|
CMD 2022
Sales
|
CMD 2022
Sales
|
||||||
2025 |
2030 |
2025 |
2030 |
|||||||
EUV High NA 0.55 |
5 |
15 |
Systems
(Lithography & M&I1)
|
23 |
33 |
|||||
EUV Low NA 0.33 |
65 |
65 |
||||||||
ArFi (immersion) |
75 |
85 |
Installed Base
Management2
|
7 |
11 |
|||||
Dry |
180 |
250 |
||||||||
Total |
325 |
415 |
Total |
30 |
44 |
|||||
1. M&I: Metrology and inspection.
2. Installed Base Management equals our net service and field option sales.
|
||||||||||
ASML ANNUAL REPORT 2023 |
FINANCIAL PERFORMANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
49 |
|
Long-term growth opportunities (continued) |
||||||
The purpose of risk management is to
maximize the probability of achieving
business objectives responsibly.”
|
Geert Beullens |
Head of Risk and Business Assurance |
Risk management governance structure |
|||||||||
Supervisory Board |
Audit Committee |
||||||||
Request to investigate
specific risk topics
|
•Bi-annual risk review
•Risk topics feedback
|
•Assertion on control effectiveness
•Quarterly progress reporting
|
|||||||
Board of Management |
|||||||||
Corporate Risk Committee (CRC)
Risk oversight
|
Disclosure Committee
Internal Control Committee
|
||||||||
•Risk appetite
•Risk management policy
•CRC sub committees
(governance)
|
•Risk assessment results
•Risk response progress
•Incidents
|
•Control effectiveness |
|||||||
Risk owners |
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ASML ANNUAL REPORT 2023 |
RISK |
STRATEGIC REPORT |
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FINANCIALS |
50 |
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How we manage risk |
|||||||
We use a robust enterprise risk management (ERM) framework to embed risk management into our
daily business activities and strategic planning.
|
ASML's risk management process
provides direction for adequate risk
and control measures for key risks.”
|
Roel Verstegen |
Risk manager |
ASML risk universe |
|||||||||
Strategy and products |
|||||||||
•Industry cycle risk
•Geopolitical risk
•Climate change risk
|
•Business model risk
•Merger and
acquisition risk
|
•Competition risk
•Innovation risk
•Product
stewardship risk
|
•Product roadmap
execution risk
•Intellectual property
rights risk
|
||||||
Finance and
reporting
|
Partners |
People |
Operations |
||||||
•Business planning risk
•Financial risk
•Shareholder activism risk
•Disclosure/external
reporting risk
•Tax and customs risk
|
•Customer
dependency risk
•Product/service
quality risk
•Supplier strategy and
performance risk
•Supply chain
disruption risk
|
•Knowledge
management risk
•Organizational
effectiveness risk
•Human resource risk
|
•Product
industrialization risk
•Process effectiveness and
efficiency risk
•Environment, health and
safety risk
•Continuity of own
operation risk
•Security risk
•Information technology risk
•Manufacturing and
install risk
|
||||||
Legal and compliance |
|||||||||
•Contractual liability risk |
•Violation of laws and regulations risk |
•Violation of internal policies risk |
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STRATEGIC REPORT |
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51 |
||
How we manage risk (continued) |
Risk assessment |
Risk response |
|||||||||||
Top-down risk assessment |
Coordination and follow-up |
|||||||||||
Corporate Risk Committee/Risk owners/Emerging risks |
Risk owners |
|||||||||||
Risk identification |
Risk
landscape
|
Risk appetite |
||||||||||
Risk analysis |
||||||||||||
Risk evaluation |
Risk treatment |
|||||||||||
Bottom-up risk assessment |
Execution |
|||||||||||
Country/Sector |
Action owners |
|||||||||||
Risk appetite levels |
|||||||||||||||||
Risk type |
Averse |
Prudent |
Moderate |
High |
Extensive |
||||||||||||
Strategy and products |
|||||||||||||||||
Partners |
|||||||||||||||||
People |
|||||||||||||||||
Operations |
|||||||||||||||||
Finance and reporting |
|||||||||||||||||
Legal and compliance |
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ASML ANNUAL REPORT 2023 |
RISK CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
52 |
||
How we manage risk (continued) |
Grow our holistic lithography business |
||||||||||||||
Risk development |
Risk trend |
Risk universe reference |
Risk response |
|||||||||||
Geopolitical tensions |
•Geopolitical
•Competition
•Supply chain
disruption
•Continuity of own
operations
•Business model
|
•Violation of laws and
regulations
•Security
•IP rights
•HR
|
•Active engagement with authorities and governments
•Scenario planning
•Collaborate with peers in global advocacy
•Optimize industrial footprint
•Apply for export licenses
•Comply with applicable regulations
|
|||||||||||
Geopolitical tensions and the strive for technological sovereignty may lead to a decoupled ecosystem and – in
longer term – overcapacity. Additional export restrictions have been imposed during 2023. There is a risk that
future trade restrictions (e.g. raw materials, technology, systems, investments) further limit our ability to source
parts and/or sell and service systems to certain customers.
|
||||||||||||||
Uncertain global economy |
•Industry cycle
•Business model
•Financial
|
•Competition
•Supply chain
disruption
|
•Cost control
•Maintain flexibility
•Scenario planning
|
|||||||||||
Global economic conditions lead to uncertainty for semiconductor demand and therefore demand for our
products. We have experienced order push-outs. The macroeconomic weakness continues into 2024 and
duration is uncertain.
|
||||||||||||||
Pressure on innovation in ecosystem |
•Innovation
•Product roadmap
•Supplier strategy
and performance
|
•IP rights
•Competition
•Security
|
•Open innovation – sharing risk and reward
•Intellectual property portfolio management
•Patents and relevant technical publications monitoring
•Substantial investments in security
•Awareness and training programs
•Cyber defense capabilities
|
|||||||||||
ASML’s strengths are based on the innovation power in our ecosystem and the ability to protect our IP. There is
a risk that we are not able to deliver on our technology roadmap. In addition, there is significant pressure on
know-how and IP protection for ASML and its open innovation partners. We and our partners experience
cyberattacks and other security threats.
|
||||||||||||||
Growth challenges |
•Manufacturing and
install
•Supplier strategy
and performance
•HR
|
•Product
industrialization
•Process effectiveness
•Product/service
quality
|
•Increase of manufacturing capabilities
•Cycle time reduction
•Fast shipments
•Supplier move rate support
•Secure unique supply chain capabilities
•Onboarding, retention and well-being program
•Shorten time to knowledge
|
|||||||||||
The increasing demand in recent years is an opportunity for us that also brings challenges. While we are now facing
uncertainty in customer demand outlook, we face challenges to increase production capacity in our end-to-end supply
chain to meet future demand. This is amplified by supply chain constraints. In addition, hiring, onboarding and retaining
our workforce in the competitive market is challenging. Our ability to attract people also depends on the government to
accommodate them, e.g. by income tax policies and investments in appropriate infrastructure.
|
ASML ANNUAL REPORT 2023 |
RISK CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
53 |
||
How we manage risk (continued) |
Deliver on our ESG sustainability commitments |
||||||||||||||
Risk development |
Risk trend |
Risk universe reference |
Risk response |
|||||||||||
Strengthening ESG regulations and increasing stakeholder expectations |
•Product
stewardship
•EHS
•Climate change
|
•Human resource
•Violation of laws
and regulations
|
•Stakeholder engagement and disclosures
•Deployment of ESG strategy in ASML & value chain
•Non-financial reporting in accordance with the Global
Reporting Initiative (GRI)
•Preparing for CSRD reporting requirements
|
|||||||||||
Stakeholders are increasingly focused on our contribution to society and expect us to minimize the environmental
and social impact of our products throughout all life-cycle stages. There is a risk that we fail in achieving our ESG
objectives. In addition, we are faced with increasing regulations and disclosure requirements (e.g. CSRD).
|
||||||||||||||
Climate change fueling extreme weather |
•Continuity of
own operations
•Supply chain
disruption
|
•Deployment of business continuity plans
•Include extreme weather aspects in building upgrades
and new designs
|
||||||||||||
Climate change contributes to increasing severity and frequency of extreme weather events (such as cyclones,
flood, fire stress, drought, excessive heat and precipitation, rising sea levels) that can impact continuity of our
operations and/or our supply chain.
|
ASML ANNUAL REPORT 2023 |
RISK CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
54 |
||
How we manage risk (continued) |
The risk factors in this section are
classified under these six risk types. Any
of these risks and the related events or
circumstances described therein may
have a material adverse effect on our
business, financial condition, results of
operations and reputation.
These risks are not the only ones that we
face. Some risks may not yet be known to
us, and certain risks that we do not
currently believe to be material could
become material in the future.
Many risks may be intensified by global
events such as interstate conflicts,
geopolitical tensions, inflation, industry
downturn, global measures (including
new regulations) taken in response to
these events and/or any worsening of the
associated global business and economic
conditions.
|
1. Strategy and products |
|||||||||
Our future success depends on our ability to respond timely to commercial and technological
developments in the semiconductor industry
|
The success of new product introductions is
uncertain and depends on our ability to
successfully execute our R&D programs
|
|||||||||
Risk category: |
Risk category: |
|||||||||
Business model, Innovation |
Product roadmap execution, Innovation |
|||||||||
Our success in developing new and enhancing existing technologies,
products and services, depends on a variety of factors. These include
the success of our and our suppliers’ R&D programs and the timely,
cost-effective and successful completion of product development and
design relative to competitors.
Our business will suffer if the technologies we pursue to assist our
customers in producing smaller and more energy-efficient chips are
not as effective as, or are more costly than, those developed by
competitors. Our business will also suffer if our customers do not
adopt technologies that we develop, or if they adopt new
technological architectures that are less focused on lithography
products.
The success of our EUV 0.55 NA (High NA) technology, which we
believe is critical for keeping pace with Moore’s Law, depends on
continuing technical advances by us and our suppliers. We invest
considerable financial resources to develop and introduce new and
enhanced technologies, products and service offerings. If we are
unsuccessful in developing (or if our customers do not adopt) these
technologies, products and service offerings such as EUV 0.55 NA
and multibeam inspection, or if alternative technologies or processes
are successfully introduced by others, our competitive position and
business may suffer.
|
We make significant investments in developing new products and
product enhancements and we may be unable to recoup some or all
of these investments. We may incur impairment charges on
capitalized technology including prototypes or incur costs related to
inventory obsolescence, as a result of technological changes. Such
costs may increase as the complexity of technology increases. Due to
the highly complex nature and costs of our systems, including newer
technologies, our customers may purchase existing technology
systems rather than new leading-edge systems, or they may delay
their investment in new technology systems to the extent that such
investment is not economical or required, given their product cycles.
Global economic conditions affect our customers’ investment
decisions and lead to uncertainties in the timing around the
introduction of and demand for new leading-edge systems. Some of
our customers have experienced and may continue to experience
delays in implementing their product roadmaps. This increases the
risk of slowing down the overall transition period (or cadence) for the
introduction of new nodes, and therefore new systems.
We also depend on our suppliers to maintain their development
roadmaps to enable us to introduce new technologies in a timely
manner. If they are unable to keep pace, whether due to
technological factors, lack of financial resources or otherwise, we may
not meet our development roadmaps.
|
As our lithography systems and applications have become
increasingly complex, the cost and time to develop new products
and technologies have increased and we expect this trend to
continue. In particular, developing new technology, such as EUV
0.55 NA (High NA) and multibeam, requires significant R&D
investments by us and our suppliers.
Our suppliers may not be able or willing to invest the resources
necessary to continue the (co-) development of new technologies to
the extent that such investments are necessary. This has resulted
and may continue to result in ASML contributing funds to such R&D
programs or limiting the R&D investments that we can undertake.
Furthermore, if our R&D programs are not successful in developing
the desired new technology on time or at all, we may be
unsuccessful in introducing new products and unable to recoup our
R&D investments. In case of high levels of customer demand, we
may prioritize our resources toward increasing production over R&D
programs.
|
||||||||
ASML ANNUAL REPORT 2023 |
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55 |
||
Risk factors |
|||||||
Many risks have the potential to impact our business. It is important to understand the nature of these risks.
We assess risks by using the ASML risk universe which comprises six risk types (Strategy and products,
Finance and reporting, Partners, People, Operations, Legal and compliance).
|
1. Strategy and products (continued) |
||||||||||||
We face intense competition |
The semiconductor industry can be cyclical and we
may be adversely affected by any downturn
|
We derive most of our revenues from the sale of
a relatively small number of products
|
||||||||||
Risk category: |
Risk category: |
Risk category: |
||||||||||
Competition |
Industry cycle risk |
Business model |
||||||||||
The semiconductor equipment industry is highly competitive. Our
competitiveness depends on our ability to develop new and
enhanced lithography equipment, related applications and services
that bring value to our customers and are competitively priced and
introduced on a timely basis – as well as our ability to protect and
defend our intellectual property, trade secrets or other proprietary
information.
We compete primarily with Canon and Nikon in respect of DUV
systems. Both Canon and Nikon have substantial financial
resources and broad patent portfolios. Each continues to offer
products that compete directly with our DUV systems, which may
impact our sales or business. In addition, adverse market
conditions, long-term overcapacity or a decrease in the value of the
Japanese yen in relation to the euro could increase price-based
competition, resulting in lower prices and lower sales and margins.
We also face competition from new competitors with substantial
financial resources, as well as from competitors driven by the
ambition of self-sufficiency in the geopolitical context. Furthermore,
we face competition from alternative technological solutions or
semiconductor manufacturing processes.
We also compete with providers of applications that support or
enhance complex patterning solutions, such as Applied Materials
Inc. and KLA-Tencor Corporation. These applications effectively
compete with our Applications offering, which is a significant part of
our business.
|
The semiconductor industry has historically been cyclical. As a
supplier to the global semiconductor industry, we are subject to the
industry’s business cycles. The timing, duration and volatility are
difficult to predict and can have a significant impact on
semiconductor manufacturers including ASML. Newer entrants to the
industry, including Chinese semiconductor manufacturers, could
increase the risk of cyclicality in the future. Certain key end-market
customers – Logic and Memory – exhibit different levels of cyclicality
and different business cycles. Cyclicality may be worsened by the
geopolitical situation if countries increase semiconductor capacity for
higher levels of self-sufficiency, thereby creating global overcapacity.
Sales of our lithography systems, services and other holistic
lithography products depend in large part on the level of capital
expenditures by semiconductor manufacturers. These in turn are
influenced by industry cycles, the drive for technological sovereignty
and a range of competitive and market factors, including
semiconductor industry conditions and prospects. The timing and
magnitude of capital expenditures of our customers also impact the
available production capacity of the industry to produce chips, which
can lead to imbalances in the supply and demand of chips.
Reductions or delays in capital expenditures by our customers, or
incorrect assumptions by us about our customers’ capital
expenditures, could adversely impact our business.
|
In addition, industry trends that are positively impacting our business,
such as increasing capital expenditures by our customers, may not
continue. We have experienced changes in timing of orders from
certain customers, and while we currently have significant backlog
and therefore such timing changes have not impacted sales, we are
subject to uncertainty in future customer demand. The current global
economic environment, including inflation and high interest rates,
contribute to this uncertainty. Our ability to maintain profitability in an
industry downturn will depend substantially on whether we are able to
lower our costs to break-even level. If sales decrease significantly as a
result of an industry downturn and we are unable to adjust our costs
over the same period, and if down payments need to be returned, our
net income may decline significantly or we may suffer losses.
As we have significantly increased our organization in terms of
employees, infrastructure, manufacturing capacity and other areas,
we may not be able to adjust our costs adequately in a timely manner
in the event of an industry downturn.
An uncertain global economy frequently leads to reduced consumer
and business spending, and could cause our customers to decrease,
cancel or delay their orders. High interest rates and volatility in
financial markets could make it more difficult for our customers to
raise capital, whether debt or equity, to finance their purchases of
equipment, including the products we sell. The foregoing could lead
to reduced demand, which may adversely affect our product sales
and revenues and may harm our business and operating results.
If we are unable to adapt appropriately and in a timely manner to
changes resulting from difficult macroeconomic conditions, our
business, financial condition or results of operations may be materially
and adversely affected.
|
We derive most of our revenues from the sale of a relatively small
number of lithography systems (449 units in 2023 and 345 units in
2022). As a result, the timing of shipments, including any delays,
and recognition of system sales for a particular reporting period
from a small number of systems, with an increase in sales prices,
may have a material adverse effect on our business, financial
condition and results of operations in that period. In recent years,
we have used fast shipments for some customers, which allows us
to deliver systems more quickly to customers by having some final
testing and formal acceptance carried out on customer sites instead
of at our own facilities. In general, this leads to a delay of revenue
recognition for those shipments until formal customer acceptance,
which can impact comparability of our results of operations from
quarter to quarter.
In addition, we may not be able to increase installed base revenues
to the extent we planned, as, for example, customers may perform
more of these services themselves, find other third-party suppliers
to provide them or we may be limited by national security
restrictions.
|
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FINANCIALS |
56 |
||
Risk factors (continued) |
1. Strategy and products (continued) |
|||||||||||||
Failure to adequately protect intellectual property could harm our business |
Defending against intellectual property claims brought by others
could harm our business
|
||||||||||||
Risk category: |
Risk category: |
||||||||||||
Intellectual property rights |
Intellectual property rights |
||||||||||||
We rely on intellectual property (IP) rights such as patents and
copyrights to protect our proprietary technology. However, we face
the risk that such protective measures could prove inadequate and
we could suffer material harm because, among other matters:
•IP laws may not sufficiently support our proprietary rights or may
change adversely in the future.
•Our agreements (e.g. confidentiality, licensing) with our
customers, employees and technology development partners
and others to protect our IP may not be sufficient or may be
breached or terminated.
•Patent rights may not be granted or interpreted as we expect;
•Patent rights will expire, which may result in key technology
becoming widely available that may harm our competitive
position.
•The steps we take to prevent misappropriation or infringement of
our proprietary rights may not be successful.
•IP rights and trade secrets are difficult to enforce in countries
where the application and enforcement of the laws governing
such rights may not have reached the same level compared with
other jurisdictions where we operate.
•Third parties may be able to develop or obtain patents for our
own or for similar competing technology.
|
Legal proceedings may be necessary to enforce our IP rights and the
validity and scope may be challenged by others. Any such
proceedings may result in substantial costs and diversion of
management resources, and, if unfavorable decisions are made,
could result in significant costs or have a significant impact on our
business.
We have experienced and may in the future experience
misappropriation attacks by third parties or our employees, including
theft of intellectual property. Such incidents may result in third parties
or others, without authorization, obtaining, copying, using or
disclosing our intellectual property, despite our efforts to protect
them.
|
In the course of our business, we have been and are subject to
claims by third parties alleging that our products or processes
infringe upon their IP. If successful, such claims could limit or
prohibit us from developing our technology, manufacturing and
selling our products.
Our customers or suppliers may also be subject to claims of
infringement from third parties, including patent holder companies,
alleging that our products used by such customers in the
manufacturing of semiconductor products and/or the processes
relating to the use of our products infringe on one or more patents
issued to such third parties. If such claims are successful, we could
be required to indemnify our customers for some or all of any losses
incurred or damages assessed against them as a result of such
infringement.
|
We may incur substantial licensing or settlement costs to settle
claims or to potentially strengthen or expand our IP rights or limit
our exposure to IP claims of third parties.
Patent litigation is complex and may extend for a protracted period
of time, giving rise to the potential for substantial costs and
diverting the attention of key management and technical personnel.
Potential adverse outcomes from patent litigation may include
payment of significant monetary damages, injunctive relief
prohibiting our manufacturing, exporting or selling of products,
reputational damage and/or settlement involving significant costs to
be paid by us.
|
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ASML ANNUAL REPORT 2023 |
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STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
57 |
||
Risk factors (continued) |
1. Strategy and products (continued) |
||||||||||||||
We are exposed to economic, geopolitical and other developments
in our international operations
|
We may be unable to make desirable acquisitions or to integrate successfully
any businesses we acquire
|
|||||||||||||
Risk category: |
Risk category: |
|||||||||||||
Geopolitical |
Mergers and acquisitions |
|||||||||||||
Geopolitical tensions may result in export control restrictions, trade
sanctions, tariffs and more generally international trade regulations
which may impact our ability to deliver our systems, technology,
and services. Our ability to deliver technology in certain countries
such as China has been and continues to be impacted by our ability
to obtain required licenses and approvals. Our business involves the
sale of systems and services to customers in a number of countries,
including China, and includes technologies that may be the subject
of increased export regulations or policies. We are required under
Dutch regulations and other applicable legislation to obtain licenses
for the export of certain technologies. In some cases, such licenses
have not been granted or renewed. For example, at the end of
2023, the Dutch government partially revoked a license for
shipment of NXT:2050i and NXT:2100i systems, impacting a small
number of customers in China. Following recent changes in the
Dutch regulations, advanced DUV-immersion is also now subject to
license requirement. The US government has enacted trade
measures, including national security regulations and restrictions on
conducting business with certain Chinese entities, restricting our
ability to provide certain products and services to such entities
without a license. The list of Chinese entities impacted by export
control restrictions has increased since 2022, with the recently
updated additional export controls on semiconductor manufacturing
items imposing license requirements on the sale / transfer of US
origin items as well as on the support by US persons on non-US
origin items destined for certain fabs in China working on advanced
node ICs. The list of restricted customers and the scope of the
restrictions are subject to change. These and further developments
in multilateral and bilateral treaties, national regulation, and trade,
national security and investment policies and practices have
affected and may further affect our business, and the businesses of
our suppliers and customers. For example, the ability to obtain US
licenses to authorize employees
|
with foreign nationalities to work in programs that include controlled
US items has been reduced over the last couple of years. Such
developments, including the drive for technological sovereignty,
could also lead to long-term changes in global trade, competition
and technology supply chains, which could adversely affect our
business and growth prospects. Customers in China represented
26.3% of our 2023 total net sales. The semiconductor industry
makes use of (raw) materials that are controlled by certain countries.
In the current geopolitical context, we see an increasing risk
exposure that these materials may become unavailable or restricted,
which could impact our suppliers, our customers and ASML.
Interstate conflicts and/or nationalization of ASML assets can also
impact our business. For example, some of our facilities and supply
chain and customers are located in Taiwan. Customers in Taiwan
represented 29.3% of our 2023 total net sales and 38.2% of our
2022 total net sales. Taiwan has a unique international political
status. Changes in relations between Taiwan and China, Taiwanese
government policies and other factors affecting Taiwan’s political,
economic or social environment could, for example, impact our
ability to service our customers in Taiwan. Furthermore, certain of
our facilities as well as our supply chain and customers are located
in South Korea. Customers in South Korea represented 25.2% of
our 2023 total net sales and 28.6% of our 2022 total net sales. In
addition, there are tensions with the Democratic People’s Republic
of Korea (North Korea). A worsening of relations between those
countries or the outbreak of war on the Korean Peninsula could
impact our ability to service customers. A small percentage of our
suppliers and customers as well as our customer support
organization is based in Israel. There are tensions in this region that
have resulted and may continue to result in violence and/or the
outbreak of war that could impact our business.
|
From time to time, we may acquire businesses or technologies to
complement, enhance or expand our current business or products
or that might offer us growth opportunities. Any such acquisitions
could lead to failure to achieve our financial or strategic objectives or
our ability to perform as we plan or disrupt our ongoing business
and adversely impact our results of operations. Our ability to
complete such transactions may be hindered by a number of
factors, including potential difficulties in obtaining government
approvals, for example, anti-trust and/or inbound and outbound
foreign direct investment approval processes.
Any acquisition could pose risks related to the integration of the new
business or technology with our existing business and organization.
We may not be able to achieve the benefits we expect from an
acquisition investment. Such transactions may also strain our
managerial and operational resources and the challenge of
managing new operations may divert our management from day-to-
day operations. Furthermore, we may be unable to retain key
personnel from acquired businesses or we may have difficulty
integrating employees, business systems and technology. The
controls, processes and procedures of acquired businesses may
also not adequately ensure compliance with laws and regulations,
and we may fail to identify compliance issues or liabilities.
|
In connection with acquisitions, antitrust and national security
regulators have and may in the future impose conditions, including
requirements to divest assets or other conditions that could make it
difficult for us to integrate the businesses that we acquire.
Furthermore, we may have difficulty in obtaining, or be unable to
obtain, antitrust and national security clearances, which could
inhibit future desired acquisitions.
As a result of acquisitions, we have recorded a significant amount
of goodwill and intangible assets. Accounting standards require
periodic review of these assets for indicators of impairment. If one
or more indicators of impairment are found to exist, then valuation
of the related asset could change and may incur impairment
charges.
|
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58 |
||
Risk factors (continued) |
1. Strategy and products (continued) |
||||||||||||||
We may not be able to achieve our ESG objectives or adapt and respond timely to emerging ESG
expectations and regulations
|
||||||||||||||
Risk category: |
||||||||||||||
Climate change, Product stewardship |
||||||||||||||
Companies across all industries are facing increasing scrutiny of
their ESG policies and practices. Investors, capital providers,
shareholder advocacy groups, market participants, customers and
other stakeholders are increasingly focused on ESG practices and
ESG matters. In particular, within the semiconductor industry, there
is a focus on contribution to society and minimizing environmental
and social impacts of products throughout all life-cycle stages.
Failure to achieve our ESG objectives, meet the emerging ESG
expectations of our stakeholders and/or respond in a timely way to
enhanced regulations, reporting and disclosure obligations could
negatively affect our brand and reputation and impede our ability to
recruit or retain employees, which may adversely affect our
operations.
|
Climate change contributes to increasing severity and frequency of
extreme weather events, rising sea levels and droughts that can
impact continuity of our operations and/or our supply chain. Climate
change concerns and the potential environmental impact of climate
change have and may result in new laws and regulations that affect
us, our suppliers and our customers. Such laws or regulations could
cause us to incur additional direct costs for compliance, as well as
increased indirect costs resulting from our value chain. Furthermore,
the ability to improve our product-related environmental
performance (such as energy efficiency) may be affected by the
complexity of our technology and products. In order to meet our
ESG goals and requirements, we are dependent on our suppliers
and their ability to reduce their ecological footprints. In addition, we
are dependent on our customers and/or our customers may not be
satisfied with our progress, which can impact demand.
|
A global trend to transition to a lower-carbon economy has resulted
in increased regulations that could lead to technology restrictions,
modification of product designs, an increase in energy prices and
energy or carbon taxes, restrictions on pollution, remediation
measures, or other requirements that could impact our business
and increase our costs. A variety of regulatory developments have
been introduced that focus on restricting or managing carbon and
GHG emissions. This could result in a need to redesign products
and/or purchase at higher costs new equipment or materials with
lower carbon footprints. We publish disclosures on ESG matters
relating to our business and our partners as required by applicable
regulations and guidance and other data which may not be required
but which we nonetheless elect to disclose.
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Such disclosures include statements based on our ESG goals,
expectations and assumptions, including forecasts about costs and
future circumstances, which may prove to be incorrect. In addition,
our ESG sustainability strategy may not deliver the intended results,
and our estimates concerning feasibility, timing and cost of meeting
stated goals are subject to risks and uncertainties. This could result
in us not meeting our goals on expected timing or at all. ESG
disclosure requirements are increasing and authorities have
proposed disclosure requirements on ESG matters which differ from
the requirements that we are currently subject to. We face risks in
complying with such regulations, including the risk of complying
with requirements in different jurisdictions, costs associated with
such compliance and potential liability in the event that our ESG
disclosures prove incorrect.
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Risk factors (continued) |
2. Finance and reporting |
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We are exposed to financial risks including liquidity risk, interest rate risk, credit risk,
foreign exchange risk and inflation
|
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Risk category: |
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Financial |
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As a global company, we are exposed to a variety of financial risks,
including those related to liquidity, interest rates, credit, foreign
exchange and inflation.
Liquidity risk
Negative developments in our business or global capital markets
could affect our ability to meet our financial obligations or to raise or
refinance debt in the capital or loan markets. In addition, we might
be unable to repatriate cash from a country when needed for use
elsewhere due to legal restrictions or required formalities.
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Interest rate risk |
Currency risk
Our Financial Statements are expressed in euros. Accordingly, our
results of operations are exposed to fluctuations in exchange rates
between the euro and other currencies. Changes in currency
exchange rates can result in losses in our Financial Statements. We
are particularly exposed to fluctuations in the exchange rates
between the US dollar and the euro, and to a lesser extent to the
Japanese yen, the South Korean won, the Taiwanese dollar and the
Chinese yuan, in relation to the euro. We incur costs of sales
predominantly in euros, with portions also denominated in US and
Taiwanese dollars. A small portion of our operating results are driven
by movements in currencies other than the euro, US dollar,
Japanese yen, South Korean won, Taiwanese dollar or Chinese
yuan.
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Inflation risk
We are exposed to increases in costs due to inflation for costs of
goods, transportation and wages, which may impact our
profitability. We are experiencing higher-than-normal inflation, which
impacts our costs and margins to the extent that we are not able to
pass on increased costs in our prices.
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Our Eurobonds bear interest at fixed rates. Our cash, investments
and credit facilities bear interest at a floating rate. Failure to
effectively hedge this risk could impact our financial condition and
results of operation. In addition, we could experience an increase in
borrowing costs due to a ratings downgrade (or the expectation of a
downgrade), developments in capital and lending markets or
developments in our businesses.
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Counterparty credit risk |
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We are exposed to credit risk, particularly with respect to financial
counterparties with whom we hold our cash and investments as well
as our customers. As a result of our limited number of customers,
credit risk on our receivables is concentrated. Our three largest
customers (based on total net sales) accounted for €3,718.8 million,
or 64.4% of accounts receivable and finance receivables at
December 31, 2023 compared with €5,252.8 million, or 78.6%, at
December 31, 2022. Accordingly, business failure or insolvency of
one of our main customers could result in significant credit losses.
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Risk factors (continued) |
3. Partners |
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Our success is highly dependent on the performance of a limited number of critical suppliers
of single-source key components
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Risk category: |
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Supply chain disruption, Supplier strategy and performance |
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We rely on outside vendors for components and subassemblies
used in our systems, including the design thereof. These
components and subassemblies are obtained from a single supplier
or a limited number of suppliers. As our business has grown, our
dependence on single suppliers or a limited number of suppliers has
grown. The highly specialized nature of many of our components,
particularly for EUV systems, means it is not economical to source
from more than one supplier. In many cases, our sourcing strategy
prescribes ‘single sourcing, dual competence’. Our reliance on a
limited group of suppliers involves several risks, including a potential
inability to obtain an adequate supply of required components or
subassemblies in time and at acceptable costs, and reduced
control over pricing and quality. Delays in supply of these
components and subassemblies could occur due to disruptions
experienced by our suppliers for reasons including work stoppages,
fire, energy shortages, pandemic outbreaks, flooding, cyberattacks,
blockades, sabotage or other disasters, natural or otherwise. This
could lead to delays in delivery of our products, which could impact
our business. For example, certain of our suppliers experienced
disruptions in their operations as a result of material shortages and
cyberattacks. Consistent delays or prolonged inability to obtain
adequate deliveries of components or subassemblies, or any other
circumstance that requires us to seek alternative sources of supply,
could significantly hinder our ability to deliver our products in a
timely manner. This could damage relationships with our customers
and materially impact our business.
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The number of lithography systems we are able to produce is
limited by the production capacity of one of our key suppliers, Carl
Zeiss SMT, is our sole supplier of lenses, mirrors, illuminators,
collectors and other critical optical components (which we refer to
as optics). We have an exclusive arrangement with Carl Zeiss SMT.
If this supplier became unable to maintain and increase production
levels, we could be unable to fulfill orders. This could have a material
impact on our business and damage relationships with our
customers. Furthermore, if Carl Zeiss SMT were to terminate its
supply relationship with us or be unable to maintain production of
optics over a prolonged period, we would effectively cease to be
able to conduct our business.
From time to time, we experience supply constraints which can
impact our production. In 2023, we were impacted by delays and
shortages in our supply chain, resulting in a late start on the
assembly of a number of systems. We and our suppliers are
investing in additional capacity to meet the demand. However,
increasing capacity takes time, and we may be unable to meet the
full demand of our customers for a few years. Further, we face the
risk that demand may decrease, which could result in overcapacity
and loss of investment in increasing capacity. In addition, most of
our key suppliers, including Carl Zeiss SMT, have a limited number
of manufacturing facilities, the disruption of which may significantly
and adversely affect our production capacity.
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Lead times in obtaining components have increased as our
products have become more complex. A failure by us to adequately
predict demand for our systems, or any delays in the shipment of
components, can result in insufficient supply of components. This
could lead to delays in delivery of our systems and could limit our
ability to react quickly to changing market conditions. Conversely, a
failure to predict demand could lead to excess and obsolete
inventory.
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We are also dependent on suppliers to develop new models and
products to meet our development roadmaps. If our suppliers do
not meet our requirements or timetable in product development, our
business could suffer.
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Risk factors (continued) |
3. Partners (continued) |
4. People |
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A high percentage of net sales is derived from
a few customers
|
Our business and future success depend on our ability to manage the growth of our organization and attract and retain a sufficient number of adequately
educated and skilled employees
|
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Risk category: |
Risk category: |
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Customer dependency |
Human resources, Knowledge management, Organizational effectiveness |
|||||||||||
Historically, we have sold a substantial number of lithography
systems to a limited number of customers. Customer concentration
can increase because of continuing consolidation in the
semiconductor manufacturing industry. In addition, although the
applications part of our holistic lithography solutions constitutes an
increasing portion of our revenue, a significant portion of those
customers are the same customers as those for our systems.
Consequently, while the identity of our largest customers may vary
from year to year, sales may remain concentrated among relatively
few customers in any particular year.
The recognized total net sales to our largest customer amounted to
€8,772.9 million, or 31.8% of total net sales in 2023, compared with
7,046.9 million, or 33.3% of total net sales in 2022. In 2023, 53.9%
of total net sales were made to two customers. The loss of any
significant customer or any significant reduction or delay in orders
by such a customer may have a material adverse effect on our
business, financial condition and results of operations.
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Our business success depends significantly on our ability to attract
and retain employees, including a large number of highly qualified
professionals. Competition for talent is intense and has intensified in
recent years. Continuing to attract sufficient numbers of qualified
employees to meet our growing needs will remain a challenge. Our
business has grown significantly and the risk of not being able to
attract, onboard and retain qualified personnel increases as our
business grows.
Our R&D programs require a large number of qualified employees. If
we are unable to attract sufficient numbers of such employees, this
could affect our ability to conduct R&D on a timely basis. The loss of
key employees for unexpected reasons such as resignation or long-
term illness is also a risk.
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As a result of the uniqueness and complexity of our technology,
qualified engineers capable of working on our systems are scarce
and generally not available from other industries or companies. We
invest a significant amount in educating and training our employees
to work on our systems and their retention is a critical success factor
for us.
The increasing complexity of our products results in a longer learning
curve for new and existing employees and suppliers. Our suppliers
face similar risks in attracting and retaining qualified employees,
including those in connection with programs that will support our
R&D programs and technology developments. If our suppliers are
unable to attract and retain qualified employees, this could impact
our R&D programs or delivery of components to us.
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Our organization has grown significantly in recent years. We may be
unable to effectively manage, monitor and control our employees,
facilities, operations and other resources. Our rapid growth driven
by strong customer demand has put pressure on our organization
and employee well-being. This may negatively impact the efficiency
of our operations, our ability to comply with laws and regulations
and our reputation as an employer.
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Risk factors (continued) |
5. Operations |
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We may face challenges in managing the industrialization of our products and bringing them
to high-volume production
|
We are dependent on the continued operation of a limited number
of manufacturing facilities
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Risk category: |
Risk category: |
|||||||||||||
Product industrialization |
Continuity of own operation |
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Bringing our products to high-volume production at a value-based
price and in a cost-effective manner depends on our ability to
manage the industrialization of our products and to manage costs.
Customer adoption of our products depends on the performance of
our products in the field. As our products become more complex,
we face an increasing risk that products may not meet development
milestones or specifications and may not perform according to
specifications, including quality standards. If our products do not
perform according to specifications and performance criteria, or if
quality or performance issues arise, this may result in additional
costs and reduced demand for our products. Our customers may
not be able to meet planned wafer capacity.
Transitioning newly developed products to full-scale production
requires the expansion of infrastructure, including enhancing
manufacturing capabilities, increasing the supply of components
and training qualified personnel. It may also require our suppliers to
expand their infrastructure capabilities. If we or our suppliers are
unable to expand infrastructure as necessary, we may be unable to
introduce new technologies, products or product enhancements, or
to reach high-volume production of newly developed products on a
timely basis or at all.
|
When we are successful in industrializing new products, it can take
years to reach profitable margins. New technologies might not have
the same margins as existing technologies, and we might not be
able to adjust value-based pricing and/or cost in an effective
manner. In addition, the introduction of new technologies, products
or product enhancements also impacts ASML’s liquidity. New
products may have higher cycle times, resulting in increased
working capital needs. As our products become more complex, the
investments needed before new product introduction and the timing
of revenue recognition of these products may have a significant
negative effect on our cost structure and margins.
The capability, capacity and costs associated with providing the
required customer support to cover the increasing number of
shipments and service a growing number of EUV systems that are
operational in the field could affect the timing of shipments. It could
also impact the efficient execution of maintenance, servicing and
upgrades, which are key to our systems continuing to achieve the
required productivity.
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All of our manufacturing activities, including subassembly, final
assembly and system testing, take place in (cleanroom) facilities in
Veldhoven, Oirschot (the Netherlands), Berlin (Germany), Wilton, San
Diego (US), Pyeongtaek (South Korea), and Linkou and Tainan
(Taiwan). These facilities may be subject to disruption for reasons
including work stoppages, fire, energy shortages, pandemic
outbreaks, flooding, cyberattacks, blockages, sabotage or other
disasters, natural or otherwise. We cannot be sure that alternative
production capacity would be available if a major disruption were to
occur.
|
We are not able to fully insure our risk exposure and not all
disasters are insurable. As a result, we may be subject to the
financial impact of uninsured losses, which could have an adverse
impact on our financial condition and results of operations.
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Risk factors (continued) |
5. Operations (continued) |
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We face challenges to meet demand |
Our operations expose us to health, safety and
environment risks
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Risk category: |
Risk category: |
|||||||||||||
Manufacturing and install, Human resources, Supplier strategy and performance |
Environment, health and safety |
|||||||||||||
In recent years, we have experienced significant demand across all
our market segments and product portfolio. This high level of
demand brings challenges. We have and are continuing to increase
production capacity in our end-to-end supply chain to meet
demand, but we face challenges in increasing capacity. For
example, we depend on our suppliers increasing their capacity and
their ability to invest, and it takes time to build the production space
and equipment required for expansion. We and our supply chain
also need to obtain permits to make expansion possible, and the
time it takes for these to be granted may cause delays.
|
It is a challenge for ASML and its suppliers to hire and retain
employees to support expansion. Our processes and systems and
that of our supply chain may also not be able to adequately support
our growth. If we are not successful in increasing our capacity to
meet demand, this could impact our relationships with customers
and our competitive position. The increased demand and resultant
supply constraints that we are continuing to experience lead to
longer lead times for customers. This could result in customers
changing their sourcing strategy to become less dependent on
ASML, impacting our market share in certain product offerings.
|
Hazardous substances are used in the production and operation of
our products and systems. Their use subjects us to a variety of
governmental regulations relating to environmental protection and
employee and product health and safety. This includes the
transport, use, storage, discharge, handling, emission, generation,
and disposal of toxic or other hazardous substances. In addition,
operating our systems (which use lasers and other potentially
hazardous systems) can be dangerous and can result in injury.
Failure to comply with regulations could result in harm to people and
environment. Substantial fines could be imposed on us, as well as
suspension of production, alteration of our manufacturing and
assembly and test processes, damage to our reputation and/or
restrictions on our operations or sale or other adverse
consequences.
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Additionally, our products have become increasingly complex. This
requires us to invest in ongoing risk assessments and development
of appropriate preventative and protective measures for health and
safety for both our employees (in connection with the production
and installation of our systems and field options and performance
of our services) and our customers’ employees (in connection with
the operation of our systems). Our health and safety practices may
not be effective in mitigating all health and safety risks. Failure to
comply with applicable regulations, or the failure of our
implemented practices for customer and employee health and
safety, could subject us to significant liabilities.
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Risk factors (continued) |
5. Operations (continued) |
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Cybersecurity and other security incidents, or disruptions in our processes or information technology
systems, could materially adversely affect our business operations
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Risk category: |
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Security, Information technology, Process effectiveness and efficiency |
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We rely on the accuracy, availability and security of our information
technology (IT) systems. Despite the measures that we have
implemented, including those related to cybersecurity, our systems
could be breached or damaged by malware and systems attacks,
natural or man-made incidents, disasters or unauthorized physical
or electronic access. We have experienced some of these incidents
in the past.
We are experiencing an increasing number of cyberattacks on our
IT systems as well as the IT systems of our suppliers, customers
and other service providers, whose systems we do not control.
These attacks include malicious software (malware), attempts and
acts to gain unauthorized access to data, and other electronic and
physical security breaches of our IT systems. They also include the
IT systems of our suppliers, customers and other service providers
that have led and could lead to disruptions in critical systems,
unauthorized release, misappropriation, corruption, or loss of data
or confidential information (including confidential information relating
to our customers, employees and suppliers).
|
Further, we depend on our employees and the employees of our
suppliers to appropriately handle confidential and sensitive data and
deploy our IT resources in a safe and secure manner that does not
expose our network systems to security breaches or the loss of
data. Inadvertent disclosure, actions or malfeasance by our
employees, those of our suppliers or other third parties have
resulted and may in the future result in a loss or misappropriation of
data or a breach or interruption of our IT systems. This could result
in competitive harm and violate export controls and other laws and
regulations which could result in fines and penalties, business
disruption, reputational harm and additional regulatory scrutiny or
export control measures.
Any system failure, accident or security breach could result in
business disruption, theft of our intellectual property or trade
secrets, unauthorized access to, or disclosure of, customer,
personnel, supplier or other confidential information, corruption of
our data or of our systems, reputational damage or litigation and
violation of applicable laws.
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Furthermore, malware may harm our systems and software and
could be inadvertently transmitted to our customers’ systems and
operations. This could result in loss of customers, litigation,
regulatory investigation and proceedings that could expose us to
civil or criminal liabilities and diversion of significant management
attention and resources to remedy the damages that result. We may
also incur significant costs to protect against or repair the damage
caused by these disruptions or security breaches, including, for
example, rebuilding internal systems, implementing additional threat
protection measures, providing modifications to our products and
services, defending against litigation, responding to regulatory
inquiries or actions, paying damages, or taking other remedial steps
with respect to third parties. Further, remediation efforts may not be
successful and could result in interruptions, delays or cessation of
service, unfavorable publicity, damage to our reputation, customer
allegations of breach-of-contract, possible litigation and loss of
existing or potential customers that may impede our sales or other
critical functions.
Cybersecurity threats are constantly evolving. We remain potentially
vulnerable to additional known or as yet unknown threats, as in
some instances, we and our customers, partners and suppliers may
be unaware of an incident or its magnitude and effects.
|
We also face the risk that we could unintentionally expose our
customers to cybersecurity attacks through the systems we deliver
to them, including in the form of malware or other types of attacks,
which could harm our customers.
Overall, cybersecurity incidents have not had a material impact on
our results of operations. However, ASML’s visibility and importance
for the semiconductor industry continues to increase. There is a risk
that this may lead to actions that may adversely impact the security
of ASML or the safety of its employees.
In addition, processes and systems may not be able to adequately
support the growth that we have experienced in recent years and
continue to experience. From time to time, we implement updates
to our IT systems and software which can disrupt or shut down our
IT systems. We may not be able to successfully launch and
integrate IT systems as planned without disruption to our
operations.
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Read more in How we manage risk and ESG integrated
|
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Risk factors (continued) |
6. Legal and compliance |
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We are subject to regulatory and compliance obligations in the various countries where we operate
and as our business grows ensuring compliance becomes more challenging
|
Changes in taxation could affect our future profitability |
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Risk category: |
Risk category: |
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Violation of laws and regulations |
Tax and customs |
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We are subject to a variety of laws and regulations across the
jurisdictions where we operate, including those relating to trade,
national security, tax, export controls, reporting, product
compliance, anti-corruption, antitrust, ESG, human rights, data
protection, spatial planning and environmental matters. With the
significant growth of our business in recent years, including an
increase in our sales, operations, workforce and infrastructure,
ensuring compliance with laws and regulations and our internal
policies across our continually expanding organization has become
more challenging. We face the risk that, despite our significant
efforts and proactive approach to compliance, we may fail to
comply with such laws, regulations or policies.
As a result of our expanding international operations, we operate in
a significant and growing number of countries in the world, and we
are therefore subject to numerous and differing, and sometimes
competing, regulatory frameworks, which can impact how we
operate our business. In particular, the trade and national security
regulatory environment has become increasingly restrictive, and as
a result, our ability to sell some of our products and services to
certain customers has been subject to restrictions, delays in
shipments due to a requirement to obtain permits, and a prohibition
on shipments of products to certain customers.
|
Laws and regulations that impact our business are regularly
amended and we are subject to new laws and regulations, including
in response to changing global geopolitical dynamics. We are also
subject to the changing interpretations and positioning of regulators,
including in the granting of required licenses to ship products as well
as in investigations and enforcement. Additional or amended
regulations or changes in policies of governments and regulators
could increase compliance costs and risks associated with non-
compliance or further limit our ability to sell our products and
services in certain jurisdictions.
We are subject to investigations, audits and reviews by regulatory
authorities in the various jurisdictions where we operate regarding
compliance with laws and regulations, including tax laws. These
may arise due to misunderstandings, disputes, or suspicions of
non-compliance or otherwise, and can be resource-intensive and
have reputational and financial implications for us. Despite our
efforts and proactive compliance program, we may be found to be
non-compliant with applicable regulations.
Compliance with existing and new regulations can result in
compliance costs, increased risk of non-compliance and limitations
on our business which can impact our results of operations. The
consequences of non-compliance include fines, penalties and
litigation, as well as business disruption, the loss of trade or export
privileges, reputational harm, additional regulatory scrutiny
measures and the erosion of stakeholder trust, which could have a
material adverse impact on our business and results of operations.
|
We are subject to income taxes in the Netherlands and other
countries in which we are active. Our effective tax rate has
fluctuated in the past and may fluctuate in the future.
Changes in our business environment can affect our effective tax
rate. The same applies to changes in tax legislation in the countries
where we operate, together with developments driven by global
organizations such as the Organization for Economic Co-operation
and Development (OECD), as well as any change in approach to tax
by tax authorities. These initiatives have already resulted in and may
result in further increased compliance obligations for ASML.
Additionally, this may result in an increase in our effective tax rate in
future years.
|
Changes in tax legislation may adversely impact our tax position
and consequently our net income. Our worldwide effective tax rate
is heavily impacted by R&D incentives included in tax laws and
regulations in the countries where we operate. Examples include
the so-called innovation box in the Netherlands and the R&D
credits we obtain in the US. If jurisdictions alter their tax policies/
laws in this respect, it may have an adverse effect on our worldwide
effective tax rate. In addition, jurisdictions levy corporate income tax
at different rates. The mix of our sales over the various jurisdictions
in which we operate may vary from year to year, resulting in a
different mix of corporate income tax rates applicable to our profits.
This can also affect our worldwide effective tax rate and impact our
net income.
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Risk factors (continued) |
7. Other risk factors |
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Restrictions on shareholder rights may dilute
voting power
|
We may not declare cash dividends, conduct share buyback programs or cancel shares at all or in any
particular amounts in any given year
|
|||||||
ASML's Articles of Association provide that it is subject to the
provisions of Dutch law applicable to large corporations, called
‘structuurregime’. These provisions concentrate control of certain
corporate decisions and transactions in the hands of the
Supervisory Board. As a result, holders of ordinary shares may have
more difficulty in protecting their interests in the face of actions by
members of the Supervisory Board than if we were not subject to
the ‘structuurregime’.
Our authorized share capital includes a class of cumulative
preference shares. We have granted our preference shares
foundation (Stichting Preferente Aandelen ASML), an option to
acquire, at the nominal value of €0.09 per share, such cumulative
preference shares. Exercise of the preference share option would
effectively dilute the voting power of our outstanding ordinary shares
by one-half, which may discourage or significantly impede a third
party from acquiring a majority of our voting shares.
|
We aim to pay a quarterly dividend that is growing (on an annualized
basis) over time, and we conduct share buybacks from time to time.
The dividend proposal, amount of share buybacks and cancellation
of shares in any given year is subject to the availability of distributable
profits, retained earnings and cash. It may also be affected by,
among other factors, the Board of Management’s views on our
potential future liquidity requirements, including for investments in
production capacity and working capital requirements, the funding of
our R&D programs and for acquisition opportunities that may arise
from time to time, and by future changes in applicable tax and
corporate laws (for example plans of the Dutch government to tax
share buy backs).
|
The Board of Management may decide not to pay a dividend or to
pay a lower dividend and may suspend, adjust the amount of or
discontinue share buyback programs, or we may otherwise fail to
complete buyback programs.
|
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Risk factors (continued) |
Q |
Why is ESG sustainability
such an important topic for
ASML?
|
Q |
What are the main aims of
the ESG sustainability
strategy?
|
Q |
Where are ASML’s
greatest ESG
challenges?
|
ASML ANNUAL REPORT 2023 |
Q&A WITH THE CBO |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
68 |
|
Developing our competitive advantage |
||||||
In conversation with our Executive Vice President and Chief Business Officer |
||||||
Christophe D. Fouquet on his responsibility for the ESG sustainability strategy |
For us, ESG sustainability is a real competitive
advantage and we embrace it wholeheartedly.”
|
Christophe D. Fouquet |
Executive Vice President and Chief Business Officer |
On November 30, 2023, the Supervisory Board of ASML announced its intention to appoint Christophe Fouquet, currently
ASML’s Chief Business Officer and member of the Board of Management, as the company’s next President and Chief
Executive Officer. The appointment is subject to notification of the Annual General Meeting of shareholders on April 24, 2024.
|
||
Our success springs
from innovation and
teamwork delivered
by very effective,
high-performing
people.”
|
|
Christophe D. Fouquet |
|
Executive Vice President and Chief Business Officer |
Q |
Does the semiconductor
industry have a positive or
negative influence on the
environment?
|
Q |
How important are ASML’s
people to the company’s
success?
|
Q |
How would you sum up
ASML’s commitment to ESG
sustainability?
|
ASML ANNUAL REPORT 2023 |
Q&A WITH THE CBO CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
69 |
|
Developing our competitive advantage (continued) |
||||||
In conversation with our Executive Vice President and Chief Business Officer |
||||||
Christophe D. Fouquet on his responsibility for the ESG sustainability strategy |
Our contribution to a digital,
sustainable future
Increasing digitalization can pave the way to a society
that is more environmentally and socially sustainable
for everyone. The large-scale digitalization that is
required to achieve a sustainable future relies on the
semiconductor industry’s ability to produce faster,
more powerful microchips that are energy-efficient
and affordable. Together with our partners, we
provide the patterning solutions that can help make
this possible. The benefits our industry brings come at
a cost, including energy and resource use. We are
committed to innovating and investing to enable our
company and the industry as a whole to reduce these
and other negative impacts.
|
Our vision is to enable ground-breaking technology that solves some of humanity’s toughest challenges |
||||||||||||||||||||||||||||||||||||||||
> |
> |
> |
|||||||||||||||||||||||||||||||||||||||
1 |
Grow our holistic
lithography business
|
2 |
Secure unique supply chain capabilities
to ensure business continuity
|
3 |
Move toward adjacent
business opportunities
|
4 |
Deliver on our ESG
sustainability
commitments
|
||||||||||||||||||||||||||||||||||
Environmental |
Social |
Governance |
|||||||||||||||||||||||||||||||||||||||
Read more on page 75 > |
Read more on page 104 > |
Read more on page 155 > |
|||||||||||||||||||||||||||||||||||||||
We want to help drive expanding computing
power while minimizing waste, energy use and
emissions. Our focus on energy efficiency and
climate action, and the circular economy, is
fundamental to achieving this goal.
|
We also want to deliver responsible growth that
benefits all our stakeholders – to provide an
attractive workplace for all, build a responsible
supply chain, fuel innovation in our ecosystem
and be a valued partner to communities.
|
As a foundation, we commit to act
on our responsibilities and anchor
them across our entire business through
integrated governance, engaged
stakeholders and transparent reporting.
|
|||||||||||||||||||||||||||||||||||||||
Circular economy
page 91 >
|
Responsible supply chain
page 126 >
|
||||||||||||||||||||||||||||||||||||||||
Innovation ecosystem
page 137 >
|
Transparent reporting
page 174 >
|
||||||||||||||||||||||||||||||||||||||||
Our ESG sustainability strategy is underpinned by targets which are detailed across the following pages |
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL, SOCIAL AND GOVERNANCE |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
70 |
|
ESG at a glance |
||||||
To be a sustainability leader, we must drive progress toward a sustainable society. This means enabling ground-breaking
technology that solves some of humanity’s toughest challenges.
|
Why it matters |
How we’re managing
our impact
|
Environmental – We want to continue to expand
computing power but with minimal waste, energy
use and emissions. Our focus is on energy efficiency
and climate action, and the transition to a circular
economy.
|
|
Social – We want to ensure responsible growth that
benefits all stakeholders – to provide an attractive
workplace for all, build a responsible supply chain, fuel
innovation in our ecosystems and be a valued partner
to communities.
|
|
Governance – We want to anchor our responsibilities
in the way we do business through integrated
governance, engaged stakeholders and transparent
reporting.
|
|
How we identified our material topics | ||||
Step 1: Understand the context |
Step 2: Identify sustainability matters and impacts |
|||
Identifying affected stakeholders and users of
sustainability information is the foundation of our
materiality assessment process. We identify five
relevant stakeholder groups: customers, employees,
suppliers, shareholders and society. We continually
engage with these groups to understand their
concerns and how their interests may be impacted.
This engagement informs improvement actions and
feedback on performance and progress.
|
We use the insights gained from stakeholder
engagement and other relevant sources to identify
sustainability matters and impacts that are relevant to
us. This results in an overview that includes positive
and negative, actual and potential, and short-,
medium- and long-term impacts. The aim of the
overview is to cover all impacts that might be material,
considering our business activities and relationships
across our value chain.
|
|||
Read more in Our business model - Engaging with our
stakeholders
|
||||
Step 3: Assess the significance of the impacts |
Step 4: Prioritize the most significant impacts |
|||
ASML subject matter experts assess the materiality of
negative impacts based on scale, scope and irremediable
character, also referred to as severity. In case of potential
impacts, likelihood is considered. The materiality of positive
impacts is assessed based on scale and scope, and, in
case of potential impacts, likelihood. For potential negative
human-rights-related impacts, severity takes precedence
over likelihood.
|
The assessment results in a materiality score for each
impact, and we use these materiality scores to
determine thresholds for materiality. Thresholds are
determined separately for negative impacts and
positive impacts, as these cannot always be
compared. Impacts that meet the materiality threshold
are clustered into material sustainability matters.
The outcomes of the materiality assessment are used
to shape our strategy and targets, with the aim of
sustainable long-term value creation for all our
stakeholders. The Board of Management sets this
strategy.
|
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
71 |
|
Our material ESG sustainability topics |
||||||
To create long-term value for our stakeholders, we focus our strategy
on the sustainability topics where we can have the greatest impact.
|
Material topics (positive or negative, actual or potential) which are considered material for 2023 based on the materiality assessment |
||||||||
Material topic name |
Material impacts |
Positive or negative impact |
Actual or potential impact |
Impact area value chain |
Please read more in |
|||
Energy
management &
carbon footprint –
Operations
|
Impact on climate change through energy use and GHG emissions from manufacturing, buildings,
business travel and employee commuting
|
Negative |
Actual |
Own operations |
Energy efficiency and climate
action – Emissions from our
own operations –
Manufacturing and buildings
and Business travel and
commuting
|
|||
Energy
management &
carbon footprint –
Supply chain
|
Impact on climate change through energy use and GHG emissions from purchased goods and
services and logistics
|
Negative |
Actual |
Upstream – suppliers |
Energy efficiency and climate
action – Emissions from our
supply chain (including
logistics)
|
|||
Energy
management &
carbon footprint –
Product use
|
Impact on climate change through energy use and GHG emissions from use of our products at our
customers
|
Negative |
Actual |
Downstream – customers |
Energy efficiency and climate
action – Emissions from
product use at our customers
|
|||
Energy
management &
carbon footprint –
Downstream
impact
|
Impacts in the ICT industry and society through the use of our customers' products in all kinds of
applications that contribute to climate change or support climate change mitigation and adaptation
|
Positive and negative |
Actual |
Downstream – beyond
customers
|
Energy efficiency and climate
action
|
|||
Pollution of air |
Impacts on the environment through emission of nitrogen oxides (NOx), non-methane volatile
organic compounds (NMVOC) and hydrogen (H2) from manufacturing
|
Negative |
Actual |
Own operations |
Energy efficiency and climate
action – Emissions from our
own operations –
Manufacturing and buildings
|
|||
Circular economy |
Impacts on the environment through resource use and waste related to systems, parts, tools,
packaging, real estate and non-product-related activities
|
Negative |
Actual |
Own operations & customers |
Circular economy |
|||
Circular economy |
Impact on the transition to a regenerative and circular economy through the use of our customers'
products in all kinds of applications
|
Positive and negative |
Actual |
Downstream – beyond
customers
|
Circular economy |
|||
Diversity
and inclusion
|
Impact on employees by providing equal opportunities for all, including gender equality, fair
remuneration, measures against discrimination and harassment, and promotion of diversity and
inclusion
|
Positive |
Actual |
Own operations |
Attractive workplace for all –
Inspiring a unified culture
|
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
72 |
|
Our material ESG sustainability topics (continued) |
Material topics (positive or negative, actual or potential) which are considered material for 2023 based on the materiality assessment (continued) |
||||||||
Material topic name |
Material impacts |
Positive or negative impact |
Actual or potential impact |
Impact area value chain |
Please read more in |
|||
Talent attraction,
employee
engagement
and retention
|
Impact on employees' well-being through labor conditions, including social protection, fair
remuneration practices, freedom of association and collective bargaining, and existence of works
councils
|
Positive |
Actual |
Own operations |
Attractive workplace –
Providing the best employee
experience
|
|||
Training and skills
development
|
Impact on employees’ well-being and careers by providing training and development opportunities |
Positive |
Actual |
Own operations |
Attractive workplace –
Providing the best employee
experience
|
|||
Occupational
health and safety
|
Impacts on employee health, safety and well-being in case of incidents with hazardous substances
or systems and work-related pressure on physical and mental health
|
Negative |
Potential |
Own operations |
Attractive workplace –
Ensuring employee health and
safety and Providing the best
employee experience
|
|||
Responsible
supply chain
and product
stewardship
|
Potential impacts on the environment and workers in the supply chain, including labor conditions,
forced and child labor, and management of those impacts through product stewardship and
supply chain due diligence
|
Positive and negative |
Potential |
Upstream – suppliers |
Responsible supply chain |
|||
Innovation
ecosystem
|
Impacts in society through supporting the innovation ecosystem and contributing to R&D, public –
private partnerships, academic, industry and other research, STEM education and ESG innovation
|
Positive |
Actual |
Downstream – beyond
customers
|
Innovation ecosystem and
Valued partner in our
communities
|
|||
Community
engagement
|
Impacts on local communities through job creation and pressure on housing, infrastructure, social
cohesion and access to talent
|
Positive and negative |
Actual |
Own operations |
Valued partner in our
communities
|
|||
Quality of life |
Impacts on people’s well-being, health, safety and human rights through the use of technology in
all kinds of applications that affect quality of life
|
Positive and negative |
Actual |
Downstream – beyond
customers
|
Responsible supply chain |
|||
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
73 |
|
Our material ESG sustainability topics (continued) |
Why it matters
The UN’s Sustainable Development Goals (SDGs)
represent the global sustainable development agenda
and inform public policy. As a responsible business, we
support the SDGs, and it is critical that we accelerate
action to play our part. Our ESG sustainability strategy
supports this ambition, focusing on the six SDGs where
we can contribute most. We also became a signatory to
the UN Global Compact in 2023.
How we’re managing our contribution
We contribute to SDG 4 (Quality education) by
developing our people and promoting lifelong learning
opportunities for the communities where we operate.
SDG 8 (Decent work and economic growth) is covered
by our commitment to provide an attractive workplace
that promotes sustained, inclusive growth, full and
productive employment, and decent work for all
throughout our supply chain, including protecting labor
rights and promoting a safe and secure working
environment for everyone. Our contribution to SDG 9
(Industry, innovation and infrastructure) is demonstrated
by our work to build a resilient ecosystem that fosters
innovation while promoting inclusive and sustainable
industrialization. We contribute to SDG 11 (Sustainable
cities and communities) by working with our community
outreach partners to make cities and human
settlements inclusive, safe, resilient and sustainable. We
contribute to SDG 12 (Responsible consumption and
production) via our circular economy work and our work
to achieve environmentally sound management of
chemicals and all wastes throughout their life cycles, in
accordance with agreed international frameworks. We
contribute to SDG 13 (Climate action) by promoting
energy efficiency and climate action across our value
chain.
|
||||||||||
SDG 4 |
SDG 11 |
|||||||||
Quality education |
Sustainable cities
and communities
|
|||||||||
Ensure inclusive and equitable quality education and promote lifelong
learning opportunities for all
|
Make cities and human settlements inclusive, safe, resilient and
sustainable
|
|||||||||
Our contribution |
Our contribution |
|||||||||
– Attractive workplace for all Read more on page 107 > |
– Valued partner in our communities Read more on page 146 > |
|||||||||
– Valued partner in our communities Read more on page 146 > |
||||||||||
SDG 8 |
SDG 12 |
|||||||||
Decent work and
economic growth
|
Responsible consumption
and production
|
|||||||||
Promote sustained, inclusive and sustainable economic growth, full
and productive employment and decent work for all
|
Ensure sustainable consumption and production patterns |
|||||||||
Our contribution |
Our contribution |
|||||||||
– Attractive workplace for all Read more on page 107 > |
– Circular economy Read more on page 91 > |
|||||||||
– Responsible supply chain Read more on page 126 > |
– Responsible supply chain Read more on page 126 > |
|||||||||
– ESG integrated governance Read more on page 156 > |
– ESG integrated governance Read more on page 156 > |
|||||||||
SDG 9 |
SDG 13 |
|||||||||
Industry, innovation
and infrastructure
|
Climate action |
|||||||||
Build resilient infrastructure, promote inclusive and sustainable
industrialization, and foster innovation
|
Take urgent action to combat climate change and its impacts by
regulating emissions and promoting developments in renewable
energy
|
|||||||||
Our contribution |
Our contribution |
|||||||||
– Innovation ecosystem Read more on page 137 > |
– Energy efficiency and climate action Read more on page 76 > |
|||||||||
– Responsible supply chain Read more on page 126 > |
||||||||||
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
74 |
|
Contributing to the UN's Sustainable Development Goals |
||||||
The UN’s 2030 Agenda for Sustainable Development provides a shared blueprint for peace and prosperity,
for people and planet, now and in the future.
|
ENVIRONMENTAL |
||
Energy efficiency and climate action |
||
Scope 1 and 2 emissions from our own
operations – Manufacturing and buildings
|
||
Scope 3 emissions from our own operations –
Business travel and commuting
|
||
Scope 3 emissions from our supply chain
(including logistics)
|
||
Scope 3 emissions from product use at our
customers
|
||
Circular economy |
||
Prevent waste |
||
Extend the lifetime of our products |
||
Reuse resources |
||
Recycle materials |
||
Water management |
Energy efficiency
and climate action
|
|
We are working to reduce our carbon
footprint to achieve net zero emissions
across our value chain by 2040.
|
|
Broadening energy efficiency
efforts across our product
portfolio.
|
Circular economy |
|
We aim to maximize the value of our systems, reusing resources as much as possible, while
minimizing waste, decoupling our growth from resource consumption, and recycling materials.
|
|
Aiming for zero waste from operations to landfill or incineration by 2030. |
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL |
STRATEGIC REPORT |
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FINANCIALS |
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|
Environmental at a glance |
||||||
We are committed to reducing the environmental footprint of our operations
and supply chain as well as the environmental impacts of our products and services.
|
IN THIS SECTION |
||
Our overall performance in 2023 |
||
Scope 1 and 2 emissions from our own
operations – Manufacturing and buildings
|
||
Scope 3 emissions from our own operations –
Business travel and commuting
|
||
Scope 3 emissions from our supply chain
(including logistics)
|
||
Scope 3 emissions from product use at our
customers
|
||
Why it matters |
35.1 kt |
15.0 Mt |
1.06 kt |
0.55 kt |
7.7 kWh |
|||||
Scope 1 and 2
CO2e emissions
(2025 target: net zero)
|
Scope 3
CO2e emissions
(2040 target: net zero)
|
Scope 3 CO2e
emissions intensity
(per €m gross profit)
(2025 target: 1.016)
|
Net scope 3 CO2e
emissions intensity
(per €m revenue)
|
NXE energy use per
wafer pass
(NXE:3600D, measured in 2023)
(2025 target: 5.1 kWh)
|
How we’re managing
our impact
|
We measure our performance
in the following ways:
|
|
•Scope 1 and 2 CO2e emissions
•Scope 3 CO2e emissions
•Scope 3 CO2e emissions intensity (per €m
gross profit)
•Scope 3 CO2e emissions intensity (per €m revenue)
•NXE energy use per exposed wafer
|
|
Our environmental management system |
||
We have implemented an environmental management
system (EMS) to monitor energy use and emissions
and improve performance and enhance efficiency
across our global operations. The EMS is integrated
into the overall environmental, health and safety (EHS)
management system operated by all ASML facilities.
This system was recertified for ISO 14001 (the
standard for environmental management systems) in
2023 and structured in accordance with ISO 45001
(the standard for occupational health and safety
management systems) requirements.
|
||
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
76 |
|
Energy efficiency and climate action |
||||||
We are working to reduce our carbon footprint to achieve net zero emissions
across our value chain by 2040.
|
1 |
Reduce energy use and innovate to achieve greater
energy efficiency by redesigning our assets, products
and processes.
|
|
2 |
Aim to lead the shift toward 100% credible,
renewable energy.
|
|
3 |
Compensate for residual emissions if no reasonable
other improvement actions are available.
|
|
The diagram below illustrates our journey to net zero emissions in our value chain: |
|
2025 |
Net zero scope 1 and 2 emissions
from manufacturing and buildings
|
|
We use natural gas resulting in direct emissions
(scope 1). In some parts of the world, we have
been unable as of yet to buy green electricity.
This results in local emissions caused by fossil
power plants (scope 2).
|
||
2025 |
Net zero scope 3 emissions
from business travel and commuting
|
|
Emissions from employees traveling to our
customers, suppliers and other parts of ASML,
and from employees traveling to and from work.
|
||
2030 |
Net zero scope 3 emissions
from our supply chain (including logistics)
|
|
A significant portion of our GHG emissions are
generated indirectly in our supply chain, as we
mainly assemble modules that we source from
suppliers. Parts and modules have to be
transported to us or our customers directly, and
our assembled systems are shipped from ASML
premises to customers. As today’s freight
logistics, especially air transportation, are still
carbon-intensive, a significant part of our supply
chain emissions stem from logistics (operated
by our logistics suppliers).
|
||
2040 |
Net zero scope 3 emissions from product
use at our customers
|
|
The largest portion of our indirect emissions arises
during use of our systems at customers’ factories.
Our customers are not always able to use 100%
renewable electricity to run their business.
|
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
77 |
|
Energy efficiency and climate action (continued) |
How semiconductors support climate action |
|||||
While we measure and aim to reduce the impacts of our
operations, supply chain and product use, ASML’s climate
impacts extend far beyond these areas to include the
benefits and risks that our technology brings to society.
The technology pioneered by our R&D teams and
partners sits at the heart of global digitalization and has
the potential to transform how we all live and work. We
enable our customers to innovate the semiconductor
technologies that can help humanity manage its
challenges and seize opportunities by facilitating
sustainable living and mobility, accessible healthcare, food
security and the transition to renewable energy.
For example, semiconductors are harnessing,
converting, transferring and storing energy from
sources such as solar and wind power as electricity
and helping to ensure that national power grids are
both responsive and robust.
|
Mitigating climate change means reducing energy
demand by developing end-use applications that are
as energy efficient as possible. Digital technology can
help businesses and citizens cut energy consumption
and save money. Smart sensors can detect room
occupancy, allowing lights and heating to be switched
off and on automatically. Smartphone applications
make it possible for people to remotely control their
appliances or get from A to B through car-sharing,
ride-sharing or other demand-driven, flexible ways of
transportation. And as we transition away from fossil
fuels, electric vehicles will become the norm and will
require new, potentially diverse electronic solutions.
On the adverse side, we acknowledge the effects of
digital technologies that increase energy demand, such
as AI, IoT, blockchain and cryptocurrency mining.
|
||||
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
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FINANCIALS |
78 |
|
Energy efficiency and climate action (continued) |
Progress tracking |
||||||||||
Topic |
Target 2025 |
Performance indicator |
2021 |
2022 |
2023 |
Status |
||||
Climate action |
Net zero |
Scope 1 – Direct emissions from fossil fuels in our operations (kt) |
19.3 |
17.3 |
19.2 |
• |
||||
Net zero |
Scope 2 – Indirect emissions from energy consumption (kt) [market-based]2 |
20.1 |
20.8 |
15.9 |
• |
|||||
Net zero (2040) |
Scope 3 – Indirect emissions from total value chain (kt)3 |
11,426.2 |
11,936.3 |
15,025.2 |
n |
|||||
Total footprint (in kt)1 |
11,465.6 |
11,974.4 |
15,060.3 |
n |
||||||
No target |
Scope 3 CO2e emissions intensity (per €m revenue)3 |
0.61 |
0.56 |
0.55 |
n/a |
|||||
1.016 |
Scope 3 CO2e emissions intensity (per €m gross profit)3 |
1.165 |
1.116 |
1.060 |
• |
|||||
No target |
Reduction in GHG emissions from projects (kt) |
n/a |
2.6 |
1.6 |
n/a |
|||||
Energy efficiency |
5.1 |
Products – NXE energy use per wafer pass (in kWh) |
8.3 (NXE:3600D) |
8.3 (NXE:3600D) |
7.7 (NXE:3600D) |
n |
||||
No target |
Products – NXT energy use per wafer pass (in kWh)4 |
0.56 (NXT:1980Ei) |
0.55 (NXT:2100i) |
0.52 (NXT:1980Fi) |
n/a |
|||||
No target |
Energy consumption (in TJ) |
1,689 |
1,633 |
1,729 |
n/a |
|||||
100 TJ |
Energy savings worldwide through projects (in TJ)5 |
12.7 |
31.7 |
47.3 |
• |
|||||
100% |
Renewable electricity (of total electricity purchased) |
92% |
91% |
91% |
n |
|||||
(10)% |
Energy consumption (NXE) (reduction in % of baseline 2018 1.4 MW) |
(6)% (NXE:3600D) |
(6)% (NXE:3600D) |
(12)% (NXE:3600D) |
n |
|||||
No target |
Throughput (in wph) (NXE) |
160 (NXE:3600D) |
160 (NXE:3600D) |
160 (NXE:3600D) |
n/a |
|||||
(60)% |
Energy use per wafer pass (NXE) (reduction in % of baseline 2018)6 |
(35)% (NXE:3600D) |
(35)% (NXE:3600D) |
(40)% (NXE:3600D) |
n |
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
79 |
|
Energy efficiency and climate action (continued) |
||||||
On track •
Ongoing focus area n
|
How we’re managing
our impact
|
1 |
Reducing energy consumption |
|
2 |
Using renewable energy |
|
3 |
Compensating CO2 emissions |
|
Our targets and performance
in 2023
|
Our actions in 2023 |
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
80 |
|
Energy efficiency and climate action (continued) |
||||||
Scope 1 and 2 emissions from our own operations – Manufacturing and buildings |
Key projects in 2023 |
|
In 2023, as part of our energy savings master plan, we
executed key projects in the Netherlands, the US and
Taiwan which resulted in around 16 TJ annual energy
savings. The total energy savings delivered by projects
executed between 2021 and 2023 amounted to 47 TJ.
In 2023, if we include part of the savings realized by
projects started in 2022 and not accounted for in
2022, we realized savings of:
|
|
•11 TJ per year through operationalizing systems of
the energy grid and implementing H2 venting in two
manufacturing buildings in Veldhoven
•3 TJ per year in Wilton by installing sand filters on
cooling towers
•1 TJ in San Diego through the installation of solar
panels
•1 TJ in Taiwan factories by optimizing the operation
of cooling installations and replacing ventilation
systems
|
|
The remaining 31 TJ is from savings realized by
projects executed in 2021 and 2022.
|
|
100% | |
of the electricity used in the EU, US and China
was from renewable sources
|
Promoting industry-wide collaboration to reduce GHG emissions across the value chain |
||||||
Established in November 2022 with ASML as a
founding member, the Semiconductor Climate
Consortium aims to address the challenges of climate
change and speed up the industry’s efforts to reduce
GHG emissions throughout the value chain.
Founding members have affirmed their support of the
Paris Agreement and related accords driving the 1.5⁰C
pathway.
The consortium’s members are committed to working
toward the following pillars and objectives:
|
by reducing the carbon footprint stemming from
electricity usage for semiconductor manufacturing
and for powering chips in electronics devices.
3.Investment and innovation to solve remaining 16%:
Reducing emissions from the supply chain and from
manufacturing process gases will require
considerable R&D, necessitating investments now.
4.Future manufacturing emissions scenarios: Current
government and company commitments will
substantially reduce manufacturing emissions, but
they are still forecasted to overshoot the carbon
budget for the 1.5°C pathway.
5.Dilemma of value chain emissions: Digital
technologies that require semiconductors play a
crucial role in reducing energy use and emissions
across industries while simultaneously adding to the
overall carbon footprint.
Read more at the Semiconductor Climate Consortium (SCC)
website
|
|||||
Transparency – Publicly report progress and scope
1, 2 and 3 emissions annually
|
||||||
Ambition – Set near- and long-term decarbonization
targets with the aim of reaching net zero emissions
by 2040
|
||||||
Collaboration – Align on common approaches,
technology innovations and communication channels
to continuously reduce GHG emissions
|
||||||
On September 20, 2023, the SCC published its first report
providing an in-depth analysis of the semiconductor value
chain’s carbon footprint and priority-ranked carbon emission
sources for the industry to address. The main takeaways
include:
1.Baseline of value chain emissions: Semiconductor
devices produced in 2021 have a lifetime CO2e
footprint of 500 Mt – 16% from supply chain, 21%
from manufacturing and 63% from device use.
2.Low-carbon energy is a key lever: Bold and decisive
investments in low-carbon energy sources can
address more than 80% of industry emissions primarily
|
||||||
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
81 |
|
Energy efficiency and climate action (continued) |
||||||
Scope 1 and 2 emissions from our own operations – Manufacturing and buildings (continued) |
Looking ahead |
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
82 |
|
Energy efficiency and climate action (continued) |
||||||
Scope 1 and 2 emissions from our own operations – Manufacturing and buildings (continued) |
Reducing upstream and downstream scope 3 emissions |
Our overall target for 2025 is to reduce
the intensity of scope 3 emissions to
1,016 tonnes CO2e per € million gross
profit, in line with our SBTi commitment.
|
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
83 |
|
Energy efficiency and climate action (continued) |
||||||
Scope 3 emissions: An introduction |
How we’re managing
our impact
|
Our targets and performance
in 2023
|
Our actions in 2023 |
Looking ahead |
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
84 |
|
Energy efficiency and climate action (continued) |
||||||
Scope 3 emissions from our own operations – Business travel and commuting |
How we’re managing
our impact
|
Our targets and performance
in 2023
|
Our actions in 2023 |
Looking ahead |
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
85 |
|
Energy efficiency and climate action (continued) |
||||||
Scope 3 emissions from our supply chain (including logistics) |
How we’re managing
our impact
|
Reducing energy consumption by introducing sleep mode in our lithography systems |
||||||
Semiconductor manufacturing processes are designed
to maximize the utilization of the critical lithography
systems. However, there will be times when a system is
not in use. Up to now, the lithography system has
remained fully powered on to ensure the system is
perfectly conditioned at all times to deliver nanometer-
accurate performance.
In order to reduce energy consumption of our systems,
we have introduced a sleep mode, which allows for
powering down of subsystems to conserve energy.
This does affect thermal conditioning of the system,
which requires a few minutes of reconditioning to get
the system fully production-ready again.
|
The key here is to give our customers control over a
system's state. The customer has insight into when
these idle periods occur, which enables them to put
the lithography system into sleep mode without
impacting wafer output. Triggered by a command from
the fab automation system, the lithography system
temporarily powers down some subsystems and then,
again triggered by fab automation, returns them back
to production mode in time for the next lot.
|
Most of the energy of an EUV lithography system is
used by the CO2 drive laser, so this is a prime
candidate for introducing our sleep mode solution. In
the drive laser, CO2 gas is compressed and
subsequently exited (via nitrogen) by radio frequency
(RF) generators. A seed laser is used to trigger
stimulated emission of infrared light, which is
subsequently used to generate EUV light.
We will soon introduce sleep mode for the RF
generators. We have developed a software interface
that allows our customers to send sleep and wake-up
commands to the system, which power down the RF
generators via internal control software. This RF sleep
mode has been tested in-house, confirming the
energy-saving potential as well as fully meeting system
specifications immediately after the reconditioning
sequence.
RF sleep mode has the potential to reduce EUV
system energy consumption by approximately 2.5%,
averaged over time, when utilized in high-volume
manufacturing at our customers' sites.
The sleep mode interface will also act as a foundation
for implementing sleep mode in other sub-modules,
further increasing the energy-saving potential.
|
||||
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
86 |
|
Energy efficiency and climate action (continued) |
||||||
Scope 3 emissions from product use at our customers |
Our targets and performance
in 2023
|
The table below provides an overview of our systems' energy use, acceptance test protocol (ATP) throughput and
energy efficiency.
| ||||||||||
Platform |
DUV
immersion1
|
|||||||||
System type |
NXT:1980Di |
NXT:2000i |
NXT:2050i |
NXT:1980Ei |
NXT:1960B
i + PEP-B
|
NXT:2100i |
NXT:1980Fi |
|||
Year of energy measurement |
2015 |
2017 |
2020 |
2021 |
2021 |
2022 |
2023 |
|||
Energy consumption (in MW) |
0.16 |
0.15 |
0.16 |
0.16 |
0.15 |
0.16 |
0.17 |
|||
ATP throughput (in wph) |
275 |
275 |
295 |
295 |
250 |
295 |
330 |
|||
Energy use per wafer pass (in kWh) |
0.59 |
0.56 |
0.54 |
0.56 |
0.60 |
0.55 |
0.52 |
|||
Platform |
DUV
dry1
|
YieldStar |
HMI |
||||||||||
System type |
XT:860M |
XT:1460 |
NXT:1470 |
XT:860N |
NXT:870 |
XT:400M |
YS350E |
YS375F |
YS-380 |
YS385 |
eScan
1100
|
||
Year of energy
measurement
|
2017 |
2020 |
2020 |
2022 |
2022 |
2023 |
2017 |
2019 |
2020 |
2023 |
2023 |
||
Energy consumption
(in MW)
|
0.07 |
0.07 |
0.13 |
0.07 |
0.13 |
0.07 |
0.01 |
0.01 |
0.01 |
0.01 |
0.06 |
||
ATP throughput (in
wph)
|
240 |
209 |
277 |
260 |
330 |
250 |
n/a |
n/a |
n/a |
n/a |
n/a |
||
Energy use per wafer
pass (in kWh)
|
0.31 |
0.34 |
0.47 |
0.27 |
0.38 |
0.30 |
n/a |
n/a |
n/a |
n/a |
n/a |
||
Platform |
EUV
20 mJ/cm2
dose
|
EUV
30 mJ/cm2 dose
|
||||||
System type |
NXE:3350B |
NXE:3400B |
NXE:3400C |
NXE:3600D |
NXE:3600D |
|||
Year of energy measurement |
2015 |
2018 |
2020 |
2021 |
2023 |
|||
Energy consumption (in MW) |
1.2 |
1.4 |
1.3 |
1.3 |
1.2 |
|||
ATP throughput (in wph) |
59 |
107 |
136 |
160 |
160 |
|||
Energy use per wafer pass (in kWh)2 |
19.5 |
12.8 |
9.6 |
8.3 |
7.7 |
|||
1.Since 2023, when we measure the energy efficiency of our DUV immersion and DUV dry systems, the laser is included within the
measurement. The comparative figures have been revised.
2.The baseline figure of the NXE:3400B energy use per exposed wafer pass has been corrected, from 13.08 kWh to 12.8 kWh, due to an
incorrect rounding being used in the past.
|
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
87 |
|
Energy efficiency and climate action (continued) |
||||||
Scope 3 emissions from product use at our customers (continued) |
Our actions in 2023 |
Looking ahead |
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
88 |
|
Energy efficiency and climate action (continued) |
||||||
Scope 3 emissions from product use at our customers (continued) |
Sustainability is a design
challenge that must be
solved in parallel with system
cost and performance –
that’s how we will make
the biggest difference.”
|
||
Ton van der Net |
||
Principal Architect, D&E |
||
25 years at ASML |
A sustainability mindset |
|
Ton van der Net specializes in
improving the energy efficiency and
overall sustainability of lithography
systems. He has been at the forefront
of ASML’s sustainability efforts as they
have grown from a team-led initiative to
a corporate-level commitment that is
becoming integral to how we develop
our systems.
|
ASML ANNUAL REPORT 2023 |
SMALL PATTERNS. BIG IMPACT. |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
89 |
ASML ANNUAL REPORT 2023 |
SMALL PATTERNS. BIG IMPACT. CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
90 |
|
Why it matters |
Our circular economy strategy is based on the
following four principles:
•Prevent waste
•Extend lifetime
•Reuse resources
•Recycle materials
|
||
How we’re managing
our impact
|
95% |
88% |
8,279 t |
300 kg |
55% |
||||
Systems sold in the past 30
years still active in the field
|
Reuse rate of parts returned
from field and factory
|
Total waste from operations |
Waste generated per €m
revenue
|
Recycling rate |
||||
(2025 target: >95%) |
(2025 target: 95%) |
(excl. construction) |
(2025 target: 209 kg) |
(excl. construction) |
||||
(2025 target: 90%) |
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
91 |
|
Circular economy |
||||||
We aim to maximize the value of our systems, reusing resources as much as possible, while
minimizing waste, decoupling our growth from resource consumption, and recycling materials.
|
By 2030, we aim to send zero waste from operations
to landfill or incineration1.
|
||
We have therefore developed a
strategy which includes the
following principles:
•Prevent waste from our assets,
systems and processes by
redesigning them, in collaboration
with our suppliers and customers,
to limit their environmental impact
•Extend the lifetime and productivity
of our systems and assets to
maximize their usage throughout
their life cycles
•Reuse resources, parts, tools,
packaging and goods across the
value chain
•Recycle materials if we can no
longer apply any of the previous
principles, avoiding incineration and
landfill
|
|
Our different types of waste |
||
We measure our impact in tonnes of waste, by
category (hazardous and non-hazardous) and by
material type (such as plastics, paper, wood and
hazardous liquids). We include data on the CO2e
impact of processing our waste in our scope 3
emissions. Within our operations, we divide our waste
into two broad categories:
Non-hazardous waste, such as packaging material,
product-related waste from parts resulting from
upgrades or defects, and general waste. This
category also includes construction waste from
building activities – the amount of construction waste
tends to fluctuate over the years.
Hazardous waste, such as the chemicals we use in
our manufacturing processes. This can include
everything from lamps, batteries and liquids to
cleaning wipes and filters. Most of our hazardous
waste is in the form of liquids, including acetone and
piranha acid.
|
||
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
92 |
|
Circular economy (continued) |
Our circular economy approach |
Progress tracking |
||||||||||
Topic |
Target 2025 |
Performance indicator |
2021 |
2022 |
2023 |
Status |
||||
Circular economy |
>95% |
% of lithography systems sold in the past 30 years still active in the field |
94% |
95% |
95% |
• |
||||
95% |
Reuse rate of parts returned from field and factory |
85% |
87% |
88% |
• |
|||||
No target |
Savings from reused parts (€, in millions) |
686 |
781 |
1,311 |
n/a |
|||||
No target |
Value of scrapped parts (€, in millions)1 |
269 |
146 |
206 |
n/a |
|||||
209 kg/€m |
Total waste from operations (excl. construction2) normalized to revenue |
305 |
315 |
300 |
n |
|||||
90% |
Recycling rate (excl. construction2) |
77% |
75% |
55% |
n |
|||||
No target |
Total waste from operations (excl. construction2) (in tonnes) |
5,679 |
6,675 |
8,279 |
n/a |
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
93 |
|
Circular economy (continued) |
||||||
On track •
Ongoing focus area n
|
How we’re managing
our impact
|
Our targets and performance
in 2023
|
Our actions in 2023 |
Looking ahead |
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
94 |
|
Circular economy (continued) |
||||||
Prevent waste |
How we’re managing
our impact
|
Our targets and performance
in 2023
|
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
95 |
|
Circular economy (continued) |
||||||
Extend the lifetime of our products |
Our actions in 2023 |
95% of all lithography systems sold in the past 30 years still active in the field |
||
Looking ahead |
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
96 |
|
Circular economy (continued) |
||||||
Extend the lifetime of our products (continued) |
How we’re managing
our impact
|
88% | |
reuse rate of defective parts,
up from 87% in 2022
|
Key improvement areas |
|
We focus on the following key improvement areas:
•Repair centers: Repair close to where parts are
needed to improve parts repair yields by reducing
cycle time of root-cause analysis and repairs.
•Predictable external repair flow: Simplify and
standardize return and repair flows to enable us to
scale activities.
•Circular supplier collaboration: Incentivize
suppliers to prioritize reuse over new materials.
•Return quality: Ensure that parts are returned with
reuse in mind – quality returns lead to quality repairs.
•Packaging and transportation tools: Increase
reuse of packaging, which is the main contributor to
our waste (from operations).
|
|
Our targets and performance
in 2023
|
Our actions in 2023 |
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
97 |
|
Circular economy (continued) |
||||||
Reuse resources |
Circular Innovation Program |
||
The circular innovation program (CIP) is a
collaboration with ImpactX and Brainport Industries. It
is a four-day tailor-made program focusing on
building a stronger relationship with our supply base
by creating circular competencies.
In 2023, we consolidated CIP with the participation of
eight suppliers divided into two cohorts. We run two
cohorts per year and four suppliers are invited each
time. Through the program we are able to close
business loops, boost supplier impact and
strengthen collaboration overall. The benefits are the
creation of a shared vision on the circular economy,
peer learning, and the joint building of competencies
and knowledge around reusing products, parts and
materials in the value chain.
The participants invited so far are first-tier suppliers;
however, we want to extend the program to other
tiers as well. Additionally, we have the ambition to
expand CIP beyond the Brainport Eindhoven region
in the Netherlands, to other locations around the world.
|
||
Looking ahead |
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
98 |
|
Circular economy (continued) |
||||||
Reuse resources (continued) |
How we’re managing
our impact
|
Understanding and managing our waste flows and impacts |
Distribution of waste streams | |
(Total: 8,932 tonnes) |
Non-hazardous waste recycling |
53% |
|||
Non-hazardous waste disposed of |
42% |
|||
Hazardous waste recycling |
4% |
|||
Hazardous waste disposed of |
1% |
|||
Distribution of non-hazardous waste | |
(Total: 8,474 tonnes) |
Wood |
29% |
||
General waste |
28% |
||
Paper and cardboard |
11% |
||
Electronics |
2% |
||
Metals |
11% |
||
Other non-hazardous waste |
1% |
||
Plastic |
6% |
||
Organic waste |
4% |
||
Construction waste |
8% |
||
Distribution of hazardous waste | |
(Total: 458 tonnes) |
Hazardous liquids |
83% |
||
Other hazardous waste (e.g. packaging, filters, lamps, etc.) |
12% |
||
Cleaning wipes |
4% |
||
Batteries |
1% |
||
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
99 |
|
Circular economy (continued) |
||||||
Recycle materials |
Our targets and performance
in 2023
|
Our actions in 2023 |
The full program, which covers plans for both
hazardous and non-hazardous waste, includes:
•Identifying where the waste comes from (inbound
versus operations) by organizing Gemba Walks
(opportunities for staff to walk the work floor) to see
the waste in the warehouse, factory and offices, and
also by visiting our waste haulers to understand
how our waste is processed
•Examining what the waste consists of through a
detailed sorting test (performed by one of our waste
haulers)
•Assessing the quantity of hazardous and non-
hazardous waste
•Identifying potentially large waste flows. The
Veldhoven campus non-product-related waste
flows are shown in the diagram on the next page
•Proposing actions and process optimizations to
achieve our targets
|
||
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
100 |
|
Circular economy (continued) |
||||||
Recycle materials (continued) |
Veldhoven 2023 insight current non-product-related (NPR) campus waste flows |
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
101 |
|
Circular economy (continued) |
||||||
Recycle materials (continued) |
Looking ahead |
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
102 |
|
Circular economy (continued) |
||||||
Recycle materials (continued) |
Why it matters |
How we’re managing
our impact
|
ASML ANNUAL REPORT 2023 |
ENVIRONMENTAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
103 |
|
Water management |
||||||
SOCIAL |
Responsible supply chain |
||||||||
Attractive workplace for all
Inspiring a unified culture
Providing the best employee experience
Enabling strong leadership
Ensuring employee health and safety
Responsible supply chain
Managing supplier capabilities
Innovation ecosystem
Partnerships for research and development
Supporting startups and scaleups
Valued partner in our communities
Attractive communities
Inclusive communities
Investing in STEM education
|
|||||||||
We depend on our suppliers to help deliver
our innovations. They are critical to
our value chain and our ambition to be
a sustainable leader in the
semiconductor industry.
|
|||||||||
57% |
|||||||||
% supplier spend
covered with a
commitment to
sustainability
|
|||||||||
Attractive workplace for all |
|||||||||
We need to empower our employees to
deliver our vision by ensuring they are proud
to be part of ASML and engaged with our
ambitions as a company.
|
|||||||||
80.3% |
|||||||||
employee engagement score |
|||||||||
Valued partner in
our communities
|
||||||||
We play an active role in the communities
where we operate, recognizing that when
the community thrives, we thrive.
|
||||||||
€413 |
||||||||
Community partnership program
and amount invested per
employee
|
||||||||
Innovation ecosystem |
||||||||
We never innovate in isolation because
developing technology in collaboration with
partners across the innovation ecosystem
maximizes our collective impact.
|
||||||||
€4.0bn |
||||||||
R&D investments |
||||||||
ASML ANNUAL REPORT 2023 |
SOCIAL |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
104 |
|
Social at a glance |
||||||
We aim to have a positive social impact by providing an attractive workplace, ensuring a responsible
supply chain, supporting an innovation ecosystem and being a valued partner in our communities.
|
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 |
||
8 years at ASML |
Making a difference |
|
Anya Kish moved from Russia to the
US for her graduate studies in plasma
physics. That willingness to take
opportunities however they present
themselves has seen her build a career
at ASML as a problem solver who
thrives under pressure. She now works
as project manager for the light source
for our next extreme ultraviolet
lithography system.
|
ASML ANNUAL REPORT 2023 |
SMALL PATTERNS. BIG IMPACT. |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
105 |
ASML ANNUAL REPORT 2023 |
SMALL PATTERNS. BIG IMPACT. CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
106 |
|
Why it matters |
How we’re managing
our impact
|
42,416 |
27% |
80.3% |
3.6% |
||||
Total employees (FTE) |
Gender diversity |
Employee engagement
score
|
Attrition rate |
||||
40,747 FTE excluding Berliner Glas (ASML Berlin
GmbH) (basis for the non-financial reporting)
|
(% inflow of women) |
(2025 target: -2% vs. top 25% performing
companies. Employee engagement score against
benchmark 2023 (1.3)%)
|
(2025 target: <7%) |
||||
(EMEA: 23,413 | Asia: 9,111 | US: 8,223) |
(2025 target: 24%) |
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
107 |
|
Attractive workplace for all |
||||||
We need to empower our employees to deliver our vision by ensuring they are proud to be part of
ASML and engaged with our ambitions as a company.
|
Our people strategy |
|||||||||
Our people strategy is our pathway to stay successful and meet our future goals |
|||||||||
Inspiring a
unified culture
Our values – challenge,
collaborate and care – guide
our decisions and behavior
to deliver on our strategy.
|
Providing the best
possible employee
experience
This will enable us
to attract, develop
and retain the best talent.
|
Enabling our leadership
to bring out the best
in people
We aim to lead through trust,
empowerment and
accountability.
|
|||||||
We empower each
other to thrive,
fueling our growth,
happiness and
business success.
|
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
108 |
|
Attractive workplace for all (continued) |
Progress tracking |
||||||||||
Topic |
Target 20256 |
Performance indicator |
2021 |
2022 |
2023 |
Status |
||||
Attractive
workplace for all
|
24% |
Gender diversity – % inflow of women |
21% |
24% |
27% |
• |
||||
24% |
Gender diversity – % inflow of women to job grade 9+1 |
n/a |
n/a |
25% |
• |
|||||
20% (2024) |
Gender diversity – % inflow of women to job grade 13+1 |
12% |
35% |
12% |
n |
|||||
12% (2024) |
Gender diversity – % representation of women in job grade 13+ |
8% |
10% |
11% |
• |
|||||
Target is relative
to the score of
the top 25% of
performing
companies by
+/-3%) (2024)
|
Inclusion index |
83.0% |
85.2% |
81.8% |
• |
|||||
NL top 5
Taiwan top 5
US top 75
China top 150
|
Attractiveness to talent (employer brand score)2 |
NL 6
Taiwan 6
S Korea3 14
US 177
China 148
|
NL 4
Taiwan 6
S Korea n/a
US 159
China 188
|
NL 1
Taiwan 5
S Korea n/a
US 167
China 189
|
n |
|||||
2% below
benchmark of top
25% performing
companies
|
Employee engagement score |
78.0% |
77.9% |
80.3% |
• |
|||||
n/a |
(2.9)%4 |
(1.3)% |
||||||||
<7% |
Attrition rate |
5.4% |
6.0% |
3.6% |
• |
|||||
0.16 |
Recordable incident rate5 |
0.17 |
0.18 |
0.21 |
n |
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
109 |
|
Attractive workplace for all (continued) |
||||||
On track •
Ongoing focus area n
|
||||||
1. The 2020 to 2023 FTEs in the chart above do not include the FTEs acquired through the acquisition of Berliner
Glas (ASML Berlin GmbH).
|
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
110 |
|
Attractive workplace for all (continued) |
||||||
How we’re managing
our impact
|
Our D&I approach |
||||||
Our D&I approach is integrated in our people strategy and focuses on three key areas,
as shown in the diagram below:
|
||||||
Talent
We aim to increase the
representation of under-
represented groups by
addressing our systems
and end-to-end people
processes, including talent
acquisition, and by
providing career
advancement programs,
that positively impact
under-represented groups.
|
Leadership
We are developing
inclusive leadership
programs and starting to
build accountability into
our performance and
development processes.
We engage leaders to
foster their commitment to
creating an inclusive
culture and building a
diverse workforce.
|
|||||
Culture
We strive to create an inclusive culture for
all in line with ASML's values by increasing
the capabilities of employees and leaders
to act inclusively and by empowering
our employee networks to expand their
impact and reach.
|
||||||
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
111 |
|
Attractive workplace for all (continued) |
||||||
Inspiring a unified culture |
Our targets and performance
in 2023
|
1 |
Reach 24% women new hires by 2025 |
|
2 |
Reach 24% inflow of women to leadership levels (job
grade 9+) by 2025
|
|
3 |
Reach 20% inflow of women to leadership levels (job
grade 13+) by 2024
|
|
4 |
Reach 12% women at leadership levels (job grade
13+) by 2024
|
|
5 |
Score on par +/- 3 percentage points for inclusion,
against the top 25% of top-performing global
companies
|
|
We are highly
motivated to
see more women
pursuing careers
in engineering
and science.
|
Women new hires |
|||||
Reach |
|||||
24% |
|||||
women new hires by 2025 |
|||||
We aim to create an inclusive environment by
proactively seeking out talented women from various
backgrounds and experiences to bring in fresh
perspectives and innovative approaches while
fostering a dynamic organizational culture.
In 2023, we increased the percentage of new women
hires to 27%, up by three percentage points over
2022.
We are highly motivated to see more women
pursuing careers in engineering and science to further
diversify the workforce at the heart of ASML. This
requires a variety of approaches, and the highly
specialized nature of our work means it will be a long-
term process. We acknowledge that the global
science, technology, engineering, and math (STEM)
talent pool is thinly populated with women. At the
same time, almost 90% of our job positions are
STEM-related. Therefore, taking a multifaceted
approach is crucial if we are to achieve our target of
24% in 2025. We believe we are well on track to
meet this target.
|
|||||
Women and inflow at leadership levels |
|||||
Reach |
|||||
12% |
|||||
women at leadership levels (job grade 13+) by
2024
|
|||||
The representation of women at leadership levels
plays a pivotal role in our commitment to D&I. We
recognize the importance that exemplary role models
have for our entire workforce and beyond, because
they inspire others to follow the same path. In line
with this target, we continue to support the
development and advancement of women within
ASML. This includes mentorship programs,
leadership training, as well as reviewing performance
and succession plans to ensure equal treatment and
unbiased decision-making.
Current representation of women at leadership level is
11%, while our ambition is to reach 12% by 2024.
Achieving our ambition will require a significant inflow
throughout our entire leadership pipeline, starting with
job grade 9+ and the more senior level of 13+. We
have significant gaps at the 13+ level, so we need to
strengthen our efforts throughout the entire pipeline
to meet this ambition of 20% inflow of women at
leadership levels (job grade 13+) – we are working on
specific plans to achieve this. In 2023, there was an
25% inflow of women to job grade 9+ (2025 target of
24%) and a 12% inflow of women to job grade 13+.
|
|||||
Inclusion index |
|||||
Score on par |
|||||
+/- 3 |
|||||
percentage points for inclusion, against the top
25% of top-performing global companies
|
|||||
We are dedicated to creating a global workplace
where every individual feels valued, respected, and
empowered, regardless of their background. By
comparing our inclusion score with the top-
performing global companies, we aim to drive
continuous progress.
In 2023, our inclusion score was 82% (women: 80%
and men: 83%), in line with the benchmark of top-
performing global companies (82%).
In 2023, we added additional questions to the
Inclusion Index portion of the we@ASML engagement
survey in order to better understand each employee's
experience and garner a sense of their level of belonging.
Therefore, this year's results cannot be compared
directly to the 2022 results.
Overall, we were pleased to see feedback from
employees and gained insight on areas of opportunity.
Our goal is to meet or increase this level of inclusion
among our employees on an ongoing basis.
|
|||||
Read more in Corporate Governance - Other Board-related
|
|||||
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
112 |
|
Attractive workplace for all (continued) |
||||||
Inspiring a unified culture (continued) |
Our actions in 2023 |
||
Women new hires |
||
•Engaged actively with educational programs to
grow the talent pipeline, deploying multiple initiatives
to promote STEM education among the future
female talent pool
•Collaborated with universities and organizations
dedicated to building diversity and creating
opportunities for professional development and
engagement. ASML is a sponsor of the GEM
Fellowship Program in the US, which provides
funding for graduate education through corporate
sponsorships and a partnership with universities.
Students selected for the GEM Fellowship Program
are required to complete a corporate internship
during the summer and attend graduate school
during the fall and spring semesters. In 2023, we
had seven GEM engineering Fellows on campus in
the US.
•Provided financial support to six young women
pursuing engineering or computer science degrees
|
||
Women and inflow at leadership levels |
||
•Launched a global sponsorship program for ASML
women, as well as a program to empower women
to amplify their unique style and voice
•Engaged new specialized recruiting agencies
focusing on recruiting senior leaders
•Sponsored the European Women in Tech Conference
for the first time, with women from our technology
employee network speaking on the main stage
•Organized and participated in global and regional
events to attract diverse technical profiles and
promote ASML as an attractive employer, especially
to increase women leadership inflow
|
||
Inclusion index |
||
•Added a module on inclusive leadership to all our
leadership programs and worked to ensure inclusive
language in all programs
•Organized a global D&I month consisting of
numerous panels and events
•Continued to build our D&I curriculum by delivering
awareness sessions and incorporating D&I in our
global and sector onboarding programs
•Continued to grow our employee networks,
establishing additional chapters in the US (Atypical,
Women @ CS Sites) and Germany (Green, Next)
Listening to our female workforce
After input and feedback from female employees, we
organized several female listening sessions to have an
open dialogue within the company on any issues and
concerns related to inclusion of female employees.
Based on the feedback that we received in those
sessions, we will follow up on those aspects to ensure
that we safeguard and improve the inclusion of female
employees from a behavioral perspective and in our
processes.
|
||
Looking ahead |
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
113 |
|
Attractive workplace for all (continued) |
||||||
Inspiring a unified culture (continued) |
How we’re managing
our impact
|
Our targets and performance
in 2023
|
1 |
Employer brand score – By 2025, maintain our
position in the Netherlands and Taiwan top 5, US top
75 and China top 150
|
|
2 |
By 2025 have an attrition rate (the percentage
of employees leaving our company) of < 7%
|
|
We have defined 2025 targets for our ranking in our different local labor markets: | ||||||
Country |
Target 2025 |
2022 Ranking |
2023 Ranking |
|||
The Netherlands |
Top 5 |
4 |
1 |
|||
Germany |
N/A |
N/A |
N/A |
|||
Taiwan |
Top 5 |
6 |
5 |
|||
South Korea |
N/A |
N/A |
N/A |
|||
US |
Top 75 |
159 |
167 |
|||
China |
Top 150 |
188 |
189 |
|||
87% | |
of new hires indicated that they
had a positive onboarding
experience in 2023, with good
support from their managers.
|
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
114 |
|
Attractive workplace for all (continued) |
||||||
Providing the best employee experience - Talent attraction and retention |
Our actions in 2023 |
Looking ahead |
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
115 |
|
Attractive workplace for all (continued) |
||||||
Providing the best employee experience - Talent attraction and retention (continued) |
How we’re managing
our impact
|
Onboarding and developing our people |
||||||||
A positive onboarding experience is vital to building a
sense of connection, and helping our employees add
value and quickly feel at home. Right from the start, we
want to unlock the potential of people and society by
pushing technology to new limits.
We measure the quality of our onboarding experience
through pulse surveys. On average, 87% of new
colleagues indicated that they had a positive experience
in 2023, with good support from their managers. 9% of
new colleagues had a neutral experience, while 4%
indicated that there is room for improvement in the
onboarding experience, particularly in the areas of
|
training and access to relevant tools and information.
We use learning solutions and knowledge
management to unlock people’s potential and foster a
culture of learning. Once employees are on board, we
continuously invest in them in response to evolving
business requirements and developments in the labor
market. Enabling employees to identify and pursue
opportunities for professional development is central to
our approach, and we offer a wide range of career
paths and tools to support our employees’ career
navigation.
|
The ASML Academy unites all learning and knowledge
management within ASML, enabling our employees to
easily access the knowledge, skills and expertise they
need to perform well in their roles. The new Learning
eXperience Platform (LXP) further enables people to
drive their own development and learn from each
other, and intuitively connects them to best-in-class
learning content created by ASML and external
providers.
We aim to provide the best possible employee
experience by enabling learning and knowledge
management to take place on the job, guided by the
70-20-10 approach for learning: 70% on-the-job
learning, 20% coaching and 10% training courses. We
are also focused on providing performance support to
employees when they need to learn while performing
on their job. Compared to 2022, the growth of our
workforce slowed significantly in 2023, and in some
areas we did not have nearly as many new roles as in
the previous year. We therefore shifted our focus
toward creating awareness and engagement. This
also allowed us to concentrate resources on
supporting programs and communications related to
internal mobility and development, and onboarding
the large number of people we hired in 2022 and 2023.
|
||||||
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
116 |
|
Attractive workplace for all (continued) |
||||||
Providing the best employee experience - Employee engagement and development |
Our targets and performance
in 2023
|
1 |
Employee engagement score – By 2025 to be
within a 2% range of the top 25% performing
companies benchmark for our we@ASML employee
engagement survey
|
|
2 |
Achieve 78% for well-being in our engagement
survey in 2023
|
|
Social protection and fair labor conditions and remuneration for our employees |
||||
Working practices and remuneration
ASML is committed to providing fair labor conditions
and social protection for all its employees, regardless
of their location and whether they are on fixed or
temporary contracts. We support the principles of the
International Labour Organization (ILO) and respect the
rights of all employees to form and join trade unions of
their own choosing, to bargain collectively and to
engage in peaceful assembly.
Freedom of association
We have no indication that we operate in countries
where the freedom of association and collective
bargaining for ASML employees is restricted. We strive
to comply with the relevant legislation in every country
where we operate.
In those countries where we have employee
representation, we engage in regular dialogue with the
different organizations representing our employees.
Topics are put forward and discussed by both the
company and the employee representatives. The
working conditions and terms of employment of
employees not directly covered by collective bargaining
agreements are influenced or determined based on
other collective bargaining agreements, labor market
developments and usage and habits in the specific
country.
|
Fair remuneration
Our approach to remuneration is to be fair and
balanced. In our Remuneration Policy, we are
committed to gender equality and we strive for global
consistency while respecting common practice in local
markets. We continuously review how our
remuneration compares with the market benchmark for
technology professionals in each region where we
operate and, where necessary, make changes to our
remuneration policies and levels.
ASML is committed to meeting adequate living-wage
requirements. This means that employees earn salaries
that meet their and their families’ basic needs to
maintain an adequate standard of life in the
circumstances of each country where we operate, and
we also provide some discretionary income. Our
company has a predominantly highly educated
workforce with relatively high levels of remuneration
and, on average, our salaries are significantly above the
local living wage.
In 2022, as part of a two-year cycle, we conducted an
analysis of how our lowest base salary compared with
the local minimum wage and local ‘living wage’ in the
countries and regions where we operate. We did not
detect any gaps. We also analyze paid salaries for
gender disparity annually. In 2023, as in previous
years, we found no major differences in these salaries.
However, we would like to further investigate this
domain in the future, to ensure that we do not have
any major challenges.
|
|||
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
117 |
|
Attractive workplace for all (continued) |
||||||
Providing the best employee experience - Employee engagement and development (continued) |
2019 |
2020 |
2021 |
2022 |
2023 |
|
Well-being |
74% |
77% |
69% |
77% |
81% |
~300 | |
well-being ambassadors |
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
118 |
|
Attractive workplace for all (continued) |
||||||
Providing the best employee experience - Employee engagement and development (continued) |
We focus on four well-
being dimensions –
mental, physical, social
and financial
|
Our actions in 2023 |
Looking ahead |
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
119 |
|
Attractive workplace for all (continued) |
||||||
Providing the best employee experience - Employee engagement and development (continued) |
How we’re managing
our impact
|
Leadership development |
||
In 2023, we evaluated our leadership development
curriculum with the aim to:
•Support our leaders with easier access to
development opportunities
•Increase the scalability of our leadership curriculum
•Improve the quality of our leadership program
materials
•Improve how we measure the impact (ROI
methodology) of the leadership training programs
•Improve the content of and the relationship between
our leadership programs
|
||
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
120 |
|
Attractive workplace for all (continued) |
||||||
Enabling strong leadership |
Our targets and performance
in 2023
|
Our actions in 2023 |
Looking ahead |
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
121 |
|
Attractive workplace for all (continued) |
||||||
Enabling strong leadership (continued) |
How we’re managing our
impact
|
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
122 |
|
Attractive workplace for all (continued) |
||||||
Ensuring employee health and safety |
Our targets and performance
in 2023
|
Our actions in 2023 |
Looking ahead |
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
123 |
|
Attractive workplace for all (continued) |
||||||
Ensuring employee health and safety (continued) |
Managing expansion in
high-stress situations means
focusing on your people
and their well-being.”
|
||
Mark Bergkotte |
||
Director, Logistics Operations |
||
13 years at ASML |
Helping our teams thrive |
|
Mark Bergkotte has worked at ASML
for 13 years managing our supply
chain and logistics in various roles. As
Director Logistics Operations, he
oversaw the ramp-up of our logistics
to meet increased customer demand
in the face of formidable internal and
external pressures.
|
ASML ANNUAL REPORT 2023 |
SMALL PATTERNS. BIG IMPACT. |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
124 |
ASML ANNUAL REPORT 2023 |
SMALL PATTERNS. BIG IMPACT. CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
125 |
|
€15.5bn |
5,100 |
57% |
||||
Total sourcing spend1 |
Total suppliers |
% supplier spend covered
by commitment
to sustainability
|
||||
(Netherlands: 40% | EMEA (excl. NL): 40%
North America: 13% | Asia:7%)
|
(Netherlands: 1,600 | EMEA (excl. NL): 750
North America: 1,350 | Asia: 1,400)
|
|||||
1 Reported for non-financial (GRI) reporting purposes |
(2025 target: 80%) |
Why it matters |
Building strong relationships
with suppliers
|
||
With around 5,100 suppliers in our total supplier base,
we aim to develop and maintain strong, collaborative
and transparent relationships. We distinguish between
two types of suppliers: product-related and non-
product-related.
|
||
Product-related suppliers provide materials,
equipment, parts and tools used directly to produce
our systems. This category comprises approximately
800 suppliers and represents the highest percentage
(69%) of our procurement volume. We define around
280 of these suppliers as ‘critical suppliers’,
accounting for roughly 94% of the product-related
spend. Critical suppliers are responsible for delivering
a unique part and/or are single sourced, involve a
switching time to an alternative supplier of more than
12 weeks, or supply parts with long production times.
|
||
Non-product-related suppliers are goods and
services suppliers, providing the products and
services that support our operations, from temporary
labor to logistics, and from cafeteria services to IT
services. With around 4,300 suppliers, this group
represents 84% of our total supplier base.
|
||
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
126 |
|
Responsible supply chain |
||||||
We depend on our suppliers to help deliver our innovations. They are critical to our value chain and
our ambition to be a sustainable leader in the semiconductor industry.
|
How we’re managing
our impact
|
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
127 |
|
Responsible supply chain (continued) |
||||||
1 |
Determine inherent risk level by screening our full
supplier base on ethics, labor, health and safety and
environmental practices and management systems
using the RBA Risk Assessment Platform
|
2 |
Apply supplier risk profiling to critical suppliers. For
these suppliers we conduct risk assessment of
GQLTCS capability elements
|
3 |
Apply an RBA SAQ to major product-related and non-
product-related suppliers, labor agents and onsite
service providers, in which we consider the type and
geographical location of the supplier, as well as our
leverage over them. We focus on our product-related
suppliers, covering 80% of our product-related annual
spend, business-critical suppliers including non-
product-related suppliers, labor agents and on-site
service providers, and suppliers deemed high risk from
our annual RBA risk screening
|
We work with our world-
class supplier network to
ensure our sustainability
principles are upheld
throughout the value chain.
|
Conflict minerals |
||||
Our products contain minerals and metals necessary to
the functionality or production of our products. Such
minerals and metals include tantalum, tungsten, tin and
gold. These are 3TG minerals, or so-called ‘conflict
minerals’. While we do not use a significant amount of
these in the manufacturing of our products, certain 3TG
minerals are necessary. Gold, for example, is used in
coating critical electronic connectors and tin is used for
welding electronic components and creating EUV light.
We have a conflict minerals policy for responsible
sourcing of materials in our supply chain. We support
international efforts to ensure the mining and trading of
3TG minerals from high-risk locations does not
contribute to conditions of armed conflict and/or serious
human rights abuses.
We have adopted a series of compliance measures
based on the legal requirements and guidelines of the
five-step framework set out by the OECD Due Diligence
Guidance for Responsible Supply Chains of Minerals
from Conflict-Affected and High-Risk Areas. As part of
our responsible sourcing program, we implement a
reasonable country of origin inquiry focusing on five
areas: a robust management system; risk identification;
risk mitigation; industry collaboration with the
Responsible Minerals Initiative (RMI); and public
reporting.
Despite our continuous efforts, we are unable to
determine the precise origin of the 3TG minerals
included in all our products.
|
This is due to several reasons: 3TG supply chain
complexity, the number of tiers of suppliers to trace
the source and the limited number of certified conflict-
free smelters for all conflict minerals. Obtaining correct
data from our supply chain is a challenge, and we
continue to encourage our suppliers to trace the
origins of the 3TG minerals within their supply chain in
accordance with applicable conflict minerals rules and
regulations. We also request our suppliers to report
smelters who are not listed or identified on the RMI
smelters list to the Responsible Minerals Assurance
Process (RMAP) audit for smelters.
In 2022, we expanded the scope of our conflict
minerals survey to global, reaching 319 suppliers in
total, with no non-compliances being recorded. We
received confirmation from 185 suppliers that their
sourced minerals were conflict-free, while 67 suppliers
confirmed there were no 3TGs in their product and 67
suppliers did not respond to the survey.
|
|||
Read more in our Conflict Minerals report available at
asml.com
|
||||
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
128 |
|
Responsible supply chain (continued) |
||||||
Progress tracking |
||||||||||
Topic |
Target 2025 |
Performance indicator |
2021 |
2022 |
2023 |
Status |
||||
Our supply chain |
80% |
% supplier spend covered by commitment to sustainability (LOI) |
n/a |
59% |
57% |
n |
||||
90% |
RBA self-assessment completed (in %) |
89% |
93% |
90% |
• |
|||||
100% |
Suppliers with high risk on sustainability elements evaluated and follow-up agreed (in %) |
100% |
100% |
98% |
• |
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
129 |
|
Responsible supply chain (continued) |
||||||
On track •
Ongoing focus area n
|
How we’re managing
our impact
|
We work with our suppliers to minimize adverse
environmental and social impact in the supply chain.
|
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
130 |
|
Responsible supply chain (continued) |
||||||
Managing supplier capabilities |
Our targets and performance
in 2023
|
1 |
To have 80% of our top 60 suppliers (based on
spend) covered with a commitment to sustainability
(via LOI or by providing us with their scope 1, 2 and
3 CO2e emissions data by 2025
|
|
2 |
For 90% of all suppliers in scope of the RBA self-
assessment to have completed it by 2025
|
|
3 |
For 100% of our suppliers identified by the RBA self-
assessment as having high-risk sustainability
elements to be evaluated and follow-up action
agreed by 2025
|
|
Performance-driven scenarios |
||||||||
Total supplier base |
||||||||
€15.5bn |
||||||||
Total spend |
||||||||
% of total spend |
||||||||
800 Product-related suppliers |
69% |
|||||||
4,300 Non-product-related suppliers |
31% |
|||||||
2025 LOI target
is 80%
|
||||||||
suppliers |
||||||||
2023 |
||||||||
In 2023, 57% of the top 60 supplier spend
was covered with the LOI commitment to
sustainability
|
||||||||
We apply due diligence screening to the total supplier base using the RBA Risk Assessment Platform.
Suppliers in scope are determined by prior year total spend.
|
||||||||
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
131 |
|
Responsible supply chain (continued) |
||||||
Managing supplier capabilities (continued) |
ASML suppliers |
5,100 |
|
Suppliers |
|
€15.5bn |
|
Total spend |
Supplier base geographic split by percent spend | |||||||||
1,600 suppliers |
750 suppliers |
1,350 suppliers |
1,400
suppliers
|
||||||
40% |
40% |
13% |
7% |
||||||
The Netherlands |
EMEA (excl. the Netherlands) |
North
America
|
Asia |
Supplier risk profiles, created for business-critical,
strategically important suppliers*
| ||||||
€10.6bn |
||||||
249 suppliers
represent 94%
of this spend
|
||||||
€4.9bn |
||||||
29 suppliers
represent 19%
of this spend
|
||||||
Product-related
spend
|
Non-product-related
spend
|
1 Major suppliers are those that account for 80% of PR spend and any business-critical NPR suppliers.
Suppliers in scope are determined by prior year total spend.
|
The Responsible Business Alliance (RBA) self-assessment
questionnaire completed by major suppliers1
| ||||||
€10.6bn |
||||||
71 suppliers
represent
90% of this
spend
|
||||||
€4.9bn |
||||||
57 suppliers
represent 42%
of this spend
|
||||||
Product-related
spend
|
Non-product-related
spend
|
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
132 |
|
Responsible supply chain (continued) |
||||||
Managing supplier capabilities (continued) |
Number of high risks identified from RBA SAQ |
|||||
Standard |
RBA commitment |
2021 |
2022 |
20231 |
Main findings
2023
|
Labor |
To uphold the human rights of all workers (direct and indirect), and to treat
them with dignity and respect as understood by the international
community, including the International Labour Organization’s (ILO) eight
fundamental conventions
|
0 |
0 |
0 |
|
Health and safety |
To minimize the incidence of work-related injury and illness and to ensure a
safe and healthy working environment. Communication and education are
essential to identifying and solving health and safety issues in the workplace
|
0 |
1 |
1 |
Related to one supplier that is missing a Health and
Safety and Environmental policy and missing guidelines/
Code of Conduct related to Health and Safety towards
their suppliers.
|
Environment |
Environmental responsibility is integral to producing world-class products
and services. Adverse effects on the community, environment and natural
resources are to be minimized while safeguarding the health and safety of
the public
|
0 |
3 |
1 |
Related to one supplier that is missing a Health and
Safety and Environmental policy and missing guidelines/
Code of Conduct related to Health and Safety towards
their suppliers.
|
Ethics |
To meet social responsibilities and to achieve success in the industry, the
highest standards of ethics should be upheld, including but not limited to
business integrity, anti-bribery and corruption, antitrust and competition,
protecting privacy
|
0 |
1 |
0 |
|
Members and participants are committed to establishing a management system to ensure: | |||||
•Compliance with applicable laws, regulations and customer requirements
•Conformance with the code standards
•Identification and mitigation of operational risks
•Facilitation of continuous improvement
|
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
133 |
|
Responsible supply chain (continued) |
||||||
Managing supplier capabilities (continued) |
Our actions in 2023 |
Looking ahead |
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
134 |
|
Responsible supply chain (continued) |
||||||
Managing supplier capabilities (continued) |
The interaction among
supply chain partners
helps us all improve to
support faster growth.”
|
||
Manon Hendriks |
||
Senior Director, Sourcing & Procurement |
||
16 years at ASML |
Working together,
growing together
|
|
In 2023, after 15 years in finance at
ASML, Manon Hendriks stepped into
a new commercial role as Senior
Director Sourcing & Procurement.
The experience in building relationships
that she developed in her finance
career is now not only underpinning
the success of ASML, but also of
one of our key suppliers.
|
ASML ANNUAL REPORT 2023 |
SMALL PATTERNS. BIG IMPACT. |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
135 |
ASML ANNUAL REPORT 2023 |
SMALL PATTERNS. BIG IMPACT. CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
136 |
|
€4.0bn |
102% |
€16.4m |
€1.2m |
|||||
R&D investments |
R&D spend as %
growth from 2019
base year
|
Contribution to EU
research projects
|
Value startups
and scaleups
in-kind support
|
|||||
(2025 target: >4bn euro) |
(2025 target: >100%) |
Why it matters |
How we’re managing
our impact
|
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
137 |
|
Innovation ecosystem |
||||||
We never innovate in isolation because developing technology in collaboration with partners across
the innovation ecosystem maximizes our collective impact.
|
Progress tracking |
||||||||||
Topic |
Target 2025 |
Performance indicator |
2021 |
2022 |
2023 |
Status |
||||
Innovation
ecosystem
|
>4bn euro |
R&D investments |
€2.5bn |
€3.3bn |
€4.0bn |
• |
||||
>100% |
R&D spend as % growth from 2019 base year |
25% |
63% |
102% |
• |
|||||
>20% |
Startups reached Star level from total startups (in %) |
15% |
12% |
12% |
n |
|||||
14 |
Number of scaleup companies supported (cumulative in numbers) |
7 |
10 |
13 |
• |
|||||
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
138 |
|
Innovation ecosystem (continued) |
||||||
On track •
Ongoing focus area n
|
How we’re managing
our impact
|
Our targets and performance
in 2023
|
1 |
Reach more than €4 billion R&D investments by
2025
|
|
2 |
Grow R&D spend over 100% from 2019 base year |
|
Pushing the boundaries of physics and chemistry |
||||||
We continue to strengthen our collaboration with
ARCNL, which conducts fundamental research focused
on the physics and chemistry that are important in
current and future technologies within nanolithography,
and its application within the semiconductor industry. In
recent years, we have established a unique
collaboration model in which scientists from ARCNL can
explore the research questions they would like to focus
on and, at the same time, create value for ASML.
Our joint interest in the areas of EUV source, metrology
and materials is well established and our work is yielding
results. Examples include new insights into optimal drive
laser wavelengths for EUV plasma generation,
interferometric metrology techniques for improved wafer
analysis and detailed understanding of tribology for
wear-resistant coatings on wafer tables. Experimental
data with higher resolution provided by ARCNL in non-
product-like configurations with higher optical NA yields
new insights and influences design and model
development of the next generation of scanners.
In 2023, the fundamental understanding of the future
challenges connected to the relentless enabling of
Moore’s Law led to new joint projects in the areas of
new light sources for lithography and metrology, and
growth and patterning of 2D materials for
semiconductor applications. In particular, it led to a
better understanding of the interaction of plasma with
surfaces, and of corrosion effects, giving new insights in
coating designs of wafer tables.
|
||||||
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
139 |
|
Innovation ecosystem (continued) |
||||||
Partnerships for research and development |
Developing the next generation of lithography technology |
||||
Our longstanding and extensive technical collaboration with imec
aims to identify and mitigate challenges in introducing High NA
EUV for our customers. These include choices of resist and their
stochastic (randomly variable) effects, reticle absorber materials
and the necessary metrology and inspection tools to examine the
quality of the printed features on a chip.
As an indication of the impact of our collaboration, more than
30% of the oral paper presentations we submitted to the 2023
international society for optics and photonics (SPIE) Advanced
Lithography and Patterning conference (SPIE ALP 2023) were
derived from our collaboration with imec.
Using 0.33 NA EUV systems, imec and ASML have had an
intense technical collaboration to prepare for the introduction of
High NA lithography (see Phase 1 in the infographic on the right).
The collaboration identified the critical device layers on a
customer's roadmap most in need of the introduction of High NA.
Studies were undertaken to understand and mitigate High NA
scanner-related foreseen challenges, for example through studies
on depth of focus and field stitching. Parallel studies addressed
the ecosystem challenges, such as choices of resist and their
stochastic effects, reticle absorber materials, and required
massive metrology.
Phase 2 started in 2022 by creating the infrastructure of the joint
High NA Lab using the first High NA EUV scanner (TWINSCAN
EXE:5000). Metrology equipment and wafer processing
equipment were installed and logistical wafer flow was tested. In
addition, the IT infrastructure to enable imec, ASML and volume-
manufacturing customers to use the lab while protecting their
respective IP and data was implemented. The EU has provided
approval for the state aid requested by ASML for the continuation
of the High NA collaboration with imec.
|
In June 2023, we strengthened the collaboration by agreeing a
Memorandum of Understanding with imec. Together, we aim to
develop (see Phase 3 in the infographic on the right) a state-of-
the-art High NA EUV lithography pilot line at imec in Leuven
(TWINSCAN EXE:5200).
In addition to these activities, collaboration with imec is ongoing
on edge placement error (EPE) measurements and control,
supporting the fundamental developments of new metrology
concepts, 3D advanced packaging, and micro-electromechanical
systems (MEMS) technology. In general, imec’s input on the
device roadmap has become an integral part of the ASML
roadmap process.
Our intensified collaboration is in line with the ambitions and plans
of the European Commission and its member states (e.g.,
European Chips Act, Important Projects of Common European
Interest – IPCEI) in order to strengthen innovation to tackle
societal challenges. Part of the collaboration between imec and
ASML is therefore captured in an IPCEI proposal which is
currently under review by the Dutch government.
|
|||
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
140 |
|
Innovation ecosystem (continued) |
||||||
Partnerships for research and development (continued) |
Our actions in 2023 |
Looking ahead |
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
141 |
|
Innovation ecosystem (continued) |
||||||
Partnerships for research and development (continued) |
How we’re managing
our impact
|
Strategic support platforms for startups and scaleups |
||||
We invest in three strategic platforms providing startup
and scaleup companies with access to highly qualified
resources, technologies, licenses, supply chain partners
and co-investors.
Make Next Platform
ASML founded the Make Next Platform (MNP) in 2016
together with Huisman, Vanderlande and the non-profit
Stichting Technology Rating (STR) to support young
innovative high-tech scaleups. Thales NL joined as a
co-founder in 2019. MNP supports emerging high-tech
ventures that have moved beyond the startup phase
and are ready to expand. Through the exchange of best
practices, business experience and coaching from
senior corporate experts, MNP partners support
scaleup companies to become global players by giving
them access to their internal and external networks.
|
HighTechXL
ASML is one of the main shareholders of HighTechXL,
together with other tech-minded partners such as
Philips, research institute TNO, Brabantse
Ontwikkelings Maatschappij (BOM) and High Tech
Campus Eindhoven. Through HighTechXL, we build
and accelerate impactful startups by combining high-
tech entrepreneurial talent and relevant technologies
from reputable tech partners such as ESA, CERN,
Fraunhofer, imec and TNO, with the goal of solving
major global societal challenges. ASML talents join
selected startups for 30% of their time for a period of
three months. They define their learning goals and
benefit from the development of enriched skills and
mindsets through this unique entrepreneurial
experience.
DeepTechXL
In 2022, we became a strategic investor and co-
initiator in DeepTechXL Fund I, a new Dutch deep-
tech fund of €85 million as a follow-up to HighTechXL.
Together with other strategic investors and co-
initiators – Philips, Brabantse Ontwikkelings
Maatschappij (BOM), research institute TNO, PME
Pension Fund and Invest-NL – the fund provides
deep-tech startups and scaleups with access to
knowledge, network, technology, licenses and
business development support.
|
|||
Our targets and performance
in 2023
|
1 |
More than 20% of startups to reach Star level by
2025
|
|
2 |
Support (at least) 14 scaleup companies by 2025 |
|
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
142 |
|
Innovation ecosystem (continued) |
||||||
Supporting startups and scaleups |
Our actions in 2023 |
Looking ahead |
VSParticle – Accelerating innovations to market through dry deposition of pure nanomaterials |
||||||
VSParticle (VSP) was founded in 2014 as a spin-off
from Delft University of Technology, with the mission to
unlock an unprecedented amount of new high-tech
materials. Why? Because today's society is transitioning
from a fossil fuel base to a mineral-intensive one. All
sustainable technologies such as solar, wind and
electrical vehicles, which are needed to keep global
warming below 1.5 degrees Celsius, are creating a
demand for new materials that society has never seen
before. The staggering amount of material innovation
required in the next 10 years is equal to what the best
material scientist could normally do in one hundred
years.
It would be beneficial if these energy applications could
make use of solid thin-film materials, because thin-film
deposition has been widely developed in the
semiconductor industry. But the problem is that most of
these energy applications require a unique nano-porous
material, for which there is no fully developed
manufacturing process.
In the past eight years, VSP has developed a unique
material synthesis and deposition process that is fully
optimized for making these nano-porous materials. This
technology is able to take any solid conducting bulk
material and convert it to very small and pure
nanoparticles. These nanoparticles are transported by a
carrier gas to the deposition stage, where a new nano-
porous material is constructed.
|
To unlock 100 years of material innovation in the next
10 years, VSP is introducing its technology into
materials R&D activities at top universities and
institutes around the world and industrial
manufacturing. By doing this, VSP is able to reduce
the overall development time from 15 years to one.
Today, VSP has already sold close to 50 R&D
systems globally and is accelerating the development
of the production tools. To industrialize the core
technology, VSP is able to leverage the unique supply
chain of ASML. Following detailed investigation, VSP
decided to first introduce its technology for the
manufacturing of next-generation MEMS-based gas
sensors and catalyst-coated membranes (CCMs) for
the production of green hydrogen. In addition to these
first two industrial markets, VSP sees plenty of
opportunity for further growth. Less than 1% of all
possible materials have been investigated so far, and
VSP expects to unlock the other 99% within the next
two generations.
VSP had already grown to become a talented team of
40 by the end of the year. But establishing a new
business of selling production tools will require more
aggressive growth in the years to come. This growth,
will present VSP with a multitude of challenges on
different domains. To get the best support from
leading original equipment manufacturer companies
such as ASML, VSP joined the Virtual Accelerator of
Make Next Platform in November 2022.
|
On a quarterly basis, the management team of VSP
meets with Marco Wieland (Fellow at ASML) and
Remko de Lange (VP strategy at Vanderlande) to
improve the overarching strategy of the company.
These meetings include a deep dive on topics such as
how to apply scrum in hardware development and
value-based pricing, for which various experts from
ASML are invited to contribute.
This support has successfully contributed to the
growth of VSP. Benefiting from the right insights from
leading companies such as ASML will be essential to
the success of VSP in the coming years.
|
||||
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
143 |
|
Innovation ecosystem (continued) |
||||||
Supporting startups and scaleups (continued) |
You can see the impact
of our collaboration in
the commercial results of
ASML and our customers.”
|
||
George Tao |
||
Director, Customer Support Applications |
||
16 years at ASML |
Impact through
collaboration
|
|
As a director of customer service
applications, George Tao works with
one of ASML’s leading customers to
bring the latest in chip technology to
market fast. His team works with the
customer and many other ASML
teams to ramp up the output of
wafers processed by our latest
generations of lithography systems,
so that our customers can meet their
commitments to their own customers
and that consumers can enjoy new
products, features and performance.
|
ASML ANNUAL REPORT 2023 |
SMALL PATTERNS. BIG IMPACT. |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
144 |
ASML ANNUAL REPORT 2023 |
SMALL PATTERNS. BIG IMPACT. CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
145 |
|
€413 |
25,650 |
4,800 |
€2.2m |
||||
Amount invested
per employee
|
Time investment in
volunteers – hrs
community
involvement
|
Time investment in
volunteers – hrs technology
promotion
|
Total cost of
volunteering
|
||||
(2025 target: €2,500 / employee) |
|||||||
Why it matters |
How we’re managing
our impact
|
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
146 |
|
Valued partner in our communities |
||||||
We play an active role in the communities where we operate,
recognizing that when the community thrives, we thrive.
|
ASML’s community outreach |
||||||||
Our community outreach is fundamental to our ESG
sustainability strategy. Just as we have set our ambition
to reduce our environmental footprint to zero, we also
aim to promote and improve access to local culture,
support inclusive economic opportunity, create
equitable access to education, and build a sustainable
future through innovation.
Developed and launched in 2023, our new Community
Partnership Program identifies four key areas of
investment and impact:
•Attractive communities: Mitigate the negative
impact of ASML’s growth and contribute to
improvements and positive experiences in the
community
•Inclusive communities: Remove obstacles that hold
back disadvantaged community members from
reaching their potential and unlock the potential of,
and create equal opportunities for, students
•STEM education: Help increase the STEM/technical
talent pool that society needs to solve some of its key
challenges
•ESG sustainability innovation: Support projects
with great societal returns with our knowledge and
expertise, and invest in ideation, startups and
scaleups in our communities to retain a diverse
innovation ecosystem that is attractive to the world’s
top technical talent
|
We have a strict selection and prioritization process and
projects have to primarily benefit ASML's community or
society and be in line with one of our key focus areas.
Within these areas, we have identified 17 potential
programs, including access to affordable housing, access
to basic needs for the underserved, providing opportunities
for students from disadvantaged backgrounds and
supporting community startups.
In 2023, we started projects in the first three of the four
areas – our ESG sustainability innovation area is still under
development.
Over the next few years, we will grow to reach our
ambition of investing €2,500 annually per employee
(amount invested per employee and employee
contribution matching combined), totaling more than
€100 million per year globally.
ASML's commitment to being a valued partner in our
communities, specifically through education, has also
been reflected in the mission and work of the ASML
Foundation for more than 20 years. In 2023, we initiated
the process for dissolving the ASML Foundation –
however, the scope of its activities will be adopted by
the new Community Partnership Program.
|
|||||||
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
147 |
|
Valued partner in our communities (continued) |
||||||
Progress tracking |
||||||||||
Topic |
Target 2025 |
Performance indicator |
2021 |
2022 |
2023 |
Status |
||||
Valued partner in our
communities
|
2,000 €/employee |
Community partnership program: amount invested per employee |
n/a |
n/a |
319 |
n |
||||
500 €/employee |
Employee contribution matching |
n/a |
n/a |
94 |
n |
|||||
2,500 €/employee |
Community partnership program: total amount invested per employee including contribution matching |
n/a |
n/a |
413 |
||||||
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
148 |
|
Valued partner in our communities (continued) |
||||||
On track •
Ongoing focus area n
|
How we’re managing
our impact
|
Our targets and performance
in 2023
|
Our actions in 2023 |
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
149 |
|
Valued partner in our communities (continued) |
||||||
Attractive communities |
Looking ahead |
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
150 |
|
Valued partner in our communities (continued) |
||||||
Attractive communities (continued) |
How we’re managing
our impact
|
Our targets and performance
in 2023
|
Our actions in 2023 |
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
151 |
|
Valued partner in our communities (continued) |
||||||
Inclusive communities |
Looking ahead |
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
152 |
|
Valued partner in our communities (continued) |
||||||
Inclusive communities (continued) |
How we’re managing
our impact
|
Our targets and performance
in 2023
|
Our actions in 2023 |
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
GOVERNANCE |
FINANCIALS |
153 |
|
Valued partner in our communities (continued) |
||||||
Investing in STEM education |
Looking ahead |
ASML ANNUAL REPORT 2023 |
SOCIAL CONTINUED |
STRATEGIC REPORT |
GOVERNANCE |
FINANCIALS |
154 |
|
Valued partner in our communities (continued) |
||||||
Investing in STEM education (continued) |
ESG integrated governance |
|
ESG sustainability is important for our
business and stakeholders, and we integrate
ESG into our everyday decision-making,
underpinned by responsible business conduct
and risk management.
|
|
Transparent reporting |
|
We are open and transparent, driving
progress while building trust with our
stakeholders. Our commitment to integrated
reporting reflects our view that our ESG-
related information is as important as our
financial information.
|
Engaged stakeholders |
|
We depend on strong, sustainable
relationships with stakeholders across the
value chain. We aim to create sustainable
value for all our stakeholders and benefit from
their input.
|
|
Read more in Engaging with our stakeholders |
|
ASML ANNUAL REPORT 2023 |
GOVERNANCE |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
155 |
|
Governance at a glance |
||||||
Strong corporate governance enables us to do business responsibly and meet the highest standards of integrity.
This is essential to create value for our stakeholders and to secure the long-term success of our company.
|
IN THIS SECTION |
||
ESG sustainability governance |
||
Business ethics and Code of Conduct |
||
Legal & Compliance |
||
• Anti-bribery and anti-corruption |
||
•Competition Law Compliance Policy |
||
Respecting human rights |
||
Information security |
||
•Privacy protection |
||
•Export control and sanctions |
||
•Intellectual property protection |
||
Product safety |
||
Why it matters |
How we’re managing
our impact
|
ASML ANNUAL REPORT 2023 |
GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
156 |
|
ESG integrated governance |
||||||
Integrated governance ensures a responsible ESG sustainability approach that considers the needs of
our stakeholders.
|
ESG sustainability governance |
Executive remuneration |
||
Performance against key sustainability topics forms part of
the long-term incentive plans of the Board of Management
and senior management.
|
||
Read more in Remuneration Report
|
||
Our ESG sustainability governance model |
ASML ANNUAL REPORT 2023 |
GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
157 |
|
ESG integrated governance (continued) |
||||||
ESG sustainability governance |
Business ethics and Code of
Conduct
|
RBA Code of Conduct |
||
As a member of the RBA, the world’s largest industry
coalition dedicated to corporate social responsibility, we
have adopted the RBA Code of Conduct. This
international standard is intended to ensure that working
conditions in the electronics industry and its supply
chains are safe, that workers are treated with respect and
dignity, and that business operations are environmentally
responsible and conducted ethically.
|
||
Read more in Social - Responsible supply chain
|
Our principles |
Our commitment |
||
We respect people |
ASML is committed to maintaining a safe and healthy working environment,
respecting human rights in line with international laws and regulations and industry
standards such as the RBA Code of Conduct. Diversity of cultures, education and
talent makes us a stronger, more creative and innovative company. By working
together and using these values to guide us, we create an environment based on
mutual respect – one that leads to better results than any of us can achieve alone.
|
||
We operate with
integrity
|
A strong culture of integrity and compliance underpins ASML’s business success.
We define ‘integrity’ as acting with honesty, sincerity, care and reliability. Compliance
not only means complying with laws and regulations, but also with our high ethical
standards. Our reputation for integrity is a valuable asset. It is essential for us to
demonstrate personal and business integrity at all times.
|
||
We commit to safety
and social
responsibility
|
Technology reaches all parts of society. By helping to make chips more affordable,
powerful and energy-efficient, ASML has an important role to play – not only by
reputation and results, but also in relation to the environment. This is why ASML is
committed to conducting business responsibly, enabling sustainable growth while
fulfilling legal and moral obligations. We aim to achieve our business objectives in a
caring and responsible manner, as outlined in the key principles.
|
||
We protect our assets |
ASML’s most valuable assets are its people and knowledge, both of which are highly
valued and protected. Our assets include intellectual property, trade secrets or other
proprietary information, which refers to intangible assets such as technical know-
how, products data, business data and personal data, as well as physical assets
such as products, tooling, funds and computers for conducting ASML business. Our
company expects anyone entrusted with ASML assets to keep them safe from loss,
damage, misuse or theft.
|
||
We encourage you to
communicate and
speak up
|
To fulfill our commitment to upholding the high standards of integrity described in this
Code, communication is key. We strive for a working environment that encourages open
dialogue among employees, as well as between employees and third parties, where
employees feel comfortable and respected, and that they can trust each other to do the
right thing. If you observe or suspect a violation, we encourage you to speak up.
|
||
Read more on our Code, which is available for all our stakeholders, at asml.com, our intranet and in our Employee app |
|||
ASML ANNUAL REPORT 2023 |
GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
158 |
|
ESG integrated governance (continued) |
||||||
Business ethics and Code of Conduct |
87% | |
of employees have completed Code of Conduct
training
|
Business ethics governance |
||||
Our ethics governance model comprises the following
roles and responsibilities:
1.The Ethics Board is chaired by our CEO and
reports to the Audit Committee and Board of
Management. It is responsible for policymaking and
supervision of ASML’s compliance with legal and
ethical requirements. The Ethics Board meets at
least quarterly to give guidance on relevant issues
and approve the relevant policies.
|
2.The Ethics Committee investigates significant
notifications of potential breaches of ASML’s Code
of Conduct worldwide.
3.The Ethics Office oversees and implements our
Ethics program. All reports of a possible breach of
ASML’s Code of Conduct are screened by one of
the Ethics Officers and significant reports are
discussed with the Ethics Committee.
4.The Ethics organization includes employees who
act as Ethics Liaisons in the countries in which we
operate. They serve as trusted representatives and
are the first local point of contact for employees
who have questions or concerns related to ethics.
|
|||
ASML ANNUAL REPORT 2023 |
GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
159 |
|
ESG integrated governance (continued) |
||||||
Business ethics and Code of Conduct (continued) |
ASML ANNUAL REPORT 2023 |
GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
160 |
|
ESG integrated governance (continued) |
||||||
Business ethics and Code of Conduct (continued) |
Legal & Compliance |
ASML ANNUAL REPORT 2023 |
GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
161 |
|
ESG integrated governance (continued) |
||||||
Legal & Compliance |
Competition Law: Control measures in place |
||||
We have general and specific control measures in
place to prevent, detect and disclose potential
competition law issues, including:
•Competition law compliance risk assessment:
We regularly perform risk assessments of relevant
competition law focus areas. This assessment
identifies and considers risks that may be present
from a competition law perspective, the controls that
have been put in place, the remaining risks and
measures to be taken to mitigate them. Assessments
cover new legal developments such as the recent
European Foreign Subsidies Regulation.
•Policy review: Our Competition Law Compliance
Policy demonstrates our commitment to ensuring
compliance with applicable competition laws and our
Code of Conduct. Any act of an employee or
business partner contrary to this policy will be
considered a significant breach of ASML’s Code of
Conduct and may lead to disciplinary measures,
including dismissal. We published a public version of
the policy in 2020. ASML reviews this policy
periodically and released an updated version of the
internal policy in 2021.
•Training and awareness: Competition law training
consists of a combination of methods, including
computer-based and in-person training sessions.
The in-person sessions are provided on a regular
basis by the Center of Excellence (CoE) Competition
and Regulatory team and are tailored to each
relevant stakeholder group.
|
Awareness of topics and issues relating to
competition law is also promoted through different
communication channels, such as presentations
and articles on the intranet or email communications.
The selection of topics is based on their relevance
to the semiconductor industry and current legal
developments and trends.
•Contacts with business partners: We expect our
business partners (such as customers, suppliers,
consultants, contractors and intermediaries) to
demonstrate high standards of ethical behavior
consistent with our own. We will not engage in
business or cooperate with business partners that
resort to anti-competitive behavior or suggest
entering into illegal conduct. We firmly condemn any
anti-competitive behavior by our business partners.
•Reporting and resolving an issue, violation or
complaint: We support employees and business
partners who refuse to enter into anti-competitive
conduct or who report potential violations of our
policy, as clearly stated in our Speak Up & Non-
Retaliation Policy. We do not tolerate any form of
retaliation or other forms of adverse consequences
against employees who practice strict adherence to
competition law rules or against those who speak
up, even if we lose business as a result.
We did not incur any fines for breaches of competition
law in 2023.
Read more in ASML’s public Competition Law Compliance
Policy
|
|||
ASML ANNUAL REPORT 2023 |
GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
162 |
|
ESG integrated governance (continued) |
||||||
Legal & Compliance (continued) |
Respecting human rights |
ASML ANNUAL REPORT 2023 |
GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
163 |
|
ESG integrated governance (continued) |
||||||
Respecting human rights |
ASML ANNUAL REPORT 2023 |
GOVERNANCE CONTINUED |
STRATEGIC REPORT |
GOVERNANCE |
FINANCIALS |
164 |
|
ESG integrated governance (continued) |
||||||
Respecting human rights (continued) |
Information security |
ASML ANNUAL REPORT 2023 |
GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
165 |
|
ESG integrated governance (continued) |
||||||
Information security |
Information security resilience framework |
Cyber defense center services |
Services overview and value streams; includes (mapping of) ASML Security Strategy |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Our vision is that security, including
cybersecurity, needs to be embedded in the
DNA of our people, processes and
technologies. We have accordingly created a
dedicated security function to ensure that we
manage security risks.
The security risk assessment process, which
includes cybersecurity, is part of ASML's
ERM process and follows the governance
structure, with Corporate Risk Committee
(CRC) as oversight committee mandated by
the Board of Management.
The CRC monitors risk prevention,
detection, mitigation and remediation related
to cybersecurity on a regular basis. We
believe each member of the CRC is qualified
to advise on the oversight of cybersecurity
risks through their employment experience
and /or educational background in risk
management. The CRC regularly reports to
the Audit Committee of the Supervisory
Board on prevention, detection, mitigation
and remediation of cybersecurity threats and
responses thereto as well as the internal
processes.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Services |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Global security
incident management
|
Digital forensics |
Threat intelligence
and reporting
|
Anomaly detection
information access
|
Threat hunting |
Security control
management
and engineering
|
Vulnerability
identification
|
||||||||||||||||||||||||||||||||||||||||||||||||
Capabilities |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Incident
response and
investigation
|
Threat
intelligence
and reporting
|
Data science
engineering and
threat hunting
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Read more in How we manage risk
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Threat detection |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Security response |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Threat intel and testing |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Continuity and recovery management |
ASML ANNUAL REPORT 2023 |
GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
166 |
|
ESG integrated governance (continued) |
||||||
Information security (continued) |
ASML ANNUAL REPORT 2023 |
GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
167 |
|
ESG integrated governance (continued) |
||||||
Information security (continued) |
Development of key security threats |
|||||||||||
Geopolitical tension |
Increased external collaboration
and reliance on suppliers
|
||||||||||
Increased protectionism of local markets
and stronger compliance requirements
on IP protection
|
|||||||||||
Increased IP and business continuity risks due
to less mature attention to security in our
interconnected and digitized supply chain
|
|||||||||||
Given the growth of the
company, and the complex
and dynamic threat
landscape, ASML requires
a best-in-class security
function with security
competences, governance
and capabilities in order
to manage the security
threats and risks.
|
|||||||||||
Ransomware |
Stakeholder and
customer compliance
requirements
|
||||||||||
Increased visibility and financial
footprint makes ASML more attractive
as a ransomware target for criminals
|
|||||||||||
Increasing demands to protect
(customer) data and IP due to
cascaded requirements along the
supply/value chain
|
|||||||||||
Industrial espionage |
Reverse engineering of IP |
||||||||||
Increased exposure to industrial
espionage due to the growing
geopolitical pressures and the position of
our unique technology in the world
|
Increasing portfolio share from software
development and commercialization of
software increases the risk of reverse
engineering of ASML IP
|
||||||||||
Insider threats |
Emerging technologies |
||||||||||
Risks of insiders maliciously or
unintentionally abusing or leaking key
company data
|
Increased use of emerging technologies such
as cloud computing, virtual reality and big data
analytics introduces new risks for ASML
|
||||||||||
ASML ANNUAL REPORT 2023 |
GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
168 |
|
ESG integrated governance (continued) |
||||||
Information security (continued) |
ASML ANNUAL REPORT 2023 |
GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
169 |
|
ESG integrated governance (continued) |
||||||
Information security (continued) |
Patent portfolio trend |
ASML ANNUAL REPORT 2023 |
GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
170 |
|
ESG integrated governance (continued) |
||||||
Information security (continued) |
Product safety |
Our product safety competences |
||||
The role of each of our D&E safety competence leads
is to provide thorough knowledge about background
legislation and standards applicable in their area, define
design rules, provide training and act as consultants to
mitigate specific safety hazards in our products.
Electrical: Making an electrical design safe and
protecting people from electrical shock. This involves
making conductors carrying hazardous voltage
inaccessible, ensuring that accessible conductors do
not carry hazardous voltages and that inaccessible
conductors are sufficiently insulated from accessible
ones through compliance with corresponding
regulations and standards.
Pressure: Interpreting and explaining local legislation
and standards, advising on testing and documentation
and maintaining the manufacturing record book which
is needed for a high-pressure permit in certain
countries.
Human factor engineering (including
ergonomics): Incorporating a human-centered design
approach to maintain access for maintenance and
servicing by laying down rules for issues such as
accessibility, posture, forces and the lifting of parts.
Mechanical: Keeping track of safety factors and
seismic requirements for our machines.
Lifting: Advising on special requirements (such as the
certification and training of crane operators) in
countries where we use lifting tools, and when
certification is needed. For example, in South Korea
certification is required for weights of 500 kg or more.
|
Working at height: A new area of expertise required
during the design of our EXE:5000 – our first EUV 0.55
NA (High NA) system – to guarantee good access to
the various system areas and components.
Radiation: Focusing mainly on lasers with intensities
that go beyond standard, as well as considering the
impacts of standard and special lamps and LEDs.
Dangerous goods: Preventing shipments being
stopped due to requirements for transport and the
importation of hazardous substances such as
chemicals, magnets and batteries.
Safety in procedures: Supporting the creation of
written safety procedures for complex operations.
Thermal: The use of tin at high temperatures requires
special precautions to protect people.
Dangerous gases: The use of gases requires safety
systems and procedures to protect machines and
people. For example, nitrogen is an asphyxiation
hazard and the use of hydrogen in EUV has additional
applicable legislations and standards.
Materials and substances: Monitoring worldwide
legislation to check the legal status of all materials used
on our products and ensuring that we do not use or
introduce hazardous materials.
|
|||
ASML ANNUAL REPORT 2023 |
GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
171 |
|
ESG integrated governance (continued) |
||||||
Product safety |
ASML ANNUAL REPORT 2023 |
GOVERNANCE CONTINUED |
STRATEGIC REPORT |
GOVERNANCE |
FINANCIALS |
172 |
|
ESG integrated governance (continued) |
||||||
Product safety (continued) |
Making progress with EUV 0.55 NA (High
NA) safety
|
||
Our latest product, EUV 0.55 NA (High NA), is the
next generation of EUV machines. The development
of the system presented new challenges for product
safety due to its larger overall size, height and weight
of modules and more complex accessibility.
To support the design, we placed extra focus on
ergonomics and working at height. Our ergonomic
experts use 3D simulations to enable people to
practice in various situations, such as working in an
awkward position for a longer period of time. The new
system features built-in service platforms, which led to
the new ‘working at height’ safety competence.
Due to the complexity of the system, we split the EU
Safety Directives and SEMI S2 review into an initial
design review followed by a second inspection of the
hardware. Having started the third-party safety design
review in 2022, we continued with hardware reviews
in 2023, leading up to a full review report by 2024.
|
||
ASML ANNUAL REPORT 2023 |
GOVERNANCE CONTINUED |
STRATEGIC REPORT |
GOVERNANCE |
FINANCIALS |
173 |
|
ESG integrated governance (continued) |
||||||
Product safety (continued) |
Why it matters |
Reporting in a balanced way |
ASML ANNUAL REPORT 2023 |
GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
174 |
|
Transparent reporting |
||||||
To build vital relationships of trust with our stakeholders, we show our commitment to act on our
responsibilities and progress toward achieving our goals in sustainable development via transparent
reporting.
|
Why it matters |
€2.6bn |
15.8% |
|||
Income tax paid 2023 |
Effective tax rate 2023 |
|||
(€1.7bn in 2022) |
(15.0% in 2022) |
|||
How we’re managing
our impact
|
Income tax paid in our five most significant
countries of operation
|
1. Netherlands |
€1,826m |
2. United States |
€513m |
3. Taiwan |
€88m |
4. South Korea |
€44m |
5. China |
€46m |
ASML ANNUAL REPORT 2023 |
GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
175 |
|
Our approach to tax |
||||||
Openness and transparency about our approach to tax is important and is supported
by our overall business and ESG sustainability strategy.
|
Our tax principles |
||
The following principles guide us in how we report
and pay tax in the countries where we operate.
|
||
Compliance |
||
•We respect the tax laws applicable in each country.
We are committed to act in accordance with the
letter, intent and spirit of tax laws and regulations
•We make tax disclosures in accordance with
reporting requirements, US GAAP and IFRS
•ASML’s profit allocation methods are based on
internationally accepted standards as published by
the OECD. We apply these consistently across our
business, contingent on the relevant rules and
regulations in the local jurisdictions we operate in
|
||
Support tax systems |
||
•We report taxable income in a jurisdiction
commensurate with the added value of the business
activities in that jurisdiction
•We do not use so-called tax havens (as defined by
the European Commission’s ‘blacklist’) for tax
avoidance
|
||
Relationships with authorities |
||
•We pursue an open and constructive dialogue with
the tax authorities, and other relevant authorities, in
the jurisdictions we operate in, based on mutual
respect, transparency and trust, disclosing all
relevant facts and circumstances. We do not use
tax structures intended for tax avoidance, nor will
we engage in the artificial transfer of profits to low-
tax jurisdictions
|
||
Our tax strategy |
|||||||||
ASML’s tax strategy is based on our tax
principles and is closely aligned to our business
strategy and our sustainability goals. The tax
strategy is approved by the Board of
Management. The tax strategy, tax principles and
overall tax risk management apply to all group
entities.
|
1 |
2 |
|||||||
Stakeholder management |
The future of taxation |
||||||||
Externally, we communicate on a regular basis with tax
authorities, regulators and investors, among others.
Internally, we support our business in managing risks,
staying in control and at the same time remaining
efficient in its administrative procedures and way of
working. We work in an integrated way with other
experts within ASML.
|
We closely monitor the developments in ESG (including
tax transparency) and tax technology in the world and
continuously translate these into potential requirements
or implications for ASML.
|
||||||||
3 |
4 |
5 |
|||||||
Compliance and control |
Tax and customs organization |
Projects |
|||||||
We develop, implement and continuously monitor
processes and controls for appropriate tax risk
management and reporting purposes. Furthermore, we
ensure timely and accurate fulfillment of tax compliance
obligations in line with applicable tax laws and
regulations, including the timely payment of taxes due.
|
In a fast-changing world, it is important to have a
diverse team which can handle change and consists of
more than just competent tax and customs experts.
Communication, digital and project management skills
have become increasingly important. We strive to work
together and develop each other in line with ASML’s
values – challenge, collaborate and care.
|
Our business and the regulatory environment in which
we operate change constantly. We work on projects
that deal with these changes to ensure the solutions
implemented are compliant and efficient. Likewise, we
continuously strive for simplification and review of
existing business models to ensure we remain tax and
customs compliant.
|
|||||||
ASML ANNUAL REPORT 2023 |
GOVERNANCE CONTINUED |
STRATEGIC REPORT |
GOVERNANCE |
FINANCIALS |
176 |
|
Our approach to tax (continued) |
Overview |
Corporate Governance |
Supervisory
Board Report
|
Remuneration
Report
|
||||||||||||||||||||||||||||
These pages provide
an overview of and a
brief introduction to
the Corporate
Governance section
of our Annual
Report.
|
|||||||||||||||||||||||||||||||
Read more on page 179 > |
Read more on page 196 > |
Read more on page 217 > |
|||||||||||||||||||||||||||||
In our Corporate Governance section we
report on ASML's corporate governance
structure and the way ASML applies the
principles and best practices of the Dutch
Corporate Governance Code.
|
–Governance structure
–Board of Management
–Supervisory Board
–Board-related matters
–AGM and share capital
–Financial reporting and audit
–Compliance with governance
requirements
|
This report outlines the activities of the
Supervisory Board and its committees, as
well as the key focus areas for 2023.
|
Here we explain the progress made during
the year regarding our commitment to fair
and balanced remuneration, including our
work to increase the level of transparency
around how we reward management
in order to attract the right talent.
|
||||||||||||||||||||||||||||
–Message from the Chair
–Supervisory Board
–Board focus in 2023
–Meetings and attendance
–Composition, training and evaluation
–Supervisory Board Committees
–Audit committee
–Technology committee
–Selection and Nomination Committee
|
–Message from the Chair
–Remuneration committee
–Board of Management remuneration
–Supervisory Board remuneration
|
||||||||||||||||||||||||||||||
Our strategy |
|||||||||||||||||||||||||||||||
Read more on page 30 > |
|||||||||||||||||||||||||||||||
1 |
Grow our holistic
lithography business
|
||||||||||||||||||||||||||||||
2 |
Secure unique supply
chain capabilities
to ensure business
continuity
|
3 |
Move toward
adjacent
business
opportunities
|
4 |
Deliver on our ESG
sustainability
commitments
|
||||||||||||||||||||||||||
Message from the Chair
of our Supervisory Board
|
Message from the Chair
of Remuneration
|
||||||||||||||||||||||||||||||
Read more on page 196 > |
Read more on page 217 > |
||||||||||||||||||||||||||||||
Our business model |
Stakeholder engagement |
||||||||||||||||||||||||||||||
Read more on page 33 > |
Read more on page 37 > |
||||||||||||||||||||||||||||||
Customers
Employees
Suppliers
Shareholders
Society
|
|||||||||||||||||||||||||||||||
ASML ANNUAL REPORT 2023 |
CORPORATE GOVERNANCE |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
177 |
|
Corporate Governance at a glance |
||||||
We champion integrated corporate governance to build a relationship of trust,
respect and mutual benefit with our stakeholders.
|
Sustainable long-term value creation |
||||||
Principles and best practice provisions |
Reference |
|||||
•In creating sustainable long-term value, the Board of Management takes into account the
effects of the company’s operations on people and the environment, and has concrete
sustainability targets.
|
||||||
•Pays a fair share of tax to the countries in which it operates. |
Page 175
|
|||||
•The annual report explains the effects of its products, services and activities on
people and the environment. How stakeholder interests have been taken into account,
and whether targets set have been achieved.
|
||||||
•The Supervisory Board oversees the above. |
Page 196
|
|||||
Diversity & Inclusion |
||||||
Principles and best practice provisions |
Reference |
|||||
•ASML has adopted a D&I policy for the Board of Management, a D&I policy for the
Supervisory Board, and a separate group D&I policy, applying to its workforce including
senior management. As part thereof, ASML has set concrete, appropriate and ambitious
goals on gender diversity and other relevant D&I aspects for the company with regard to the
composition of Board of Management, Supervisory Board and senior management.
|
Page 185
|
|||||
•The annual report explains the company’s D&I policy and application including results
achieved in the reporting year, and includes insights about inflow, promotion and retention of
employees to the extent relevant and possible.
|
Page 185
|
|||||
Dialogue with stakeholders and ASML's stewardship |
||||||
Principles and best practice provisions |
Reference |
|||||
•The company adopts a policy for effective dialogue with relevant
stakeholders to ensure the sustainability aspects of the strategy are taking their
interests into consideration.
|
||||||
•The company adopts an outline policy for bilateral contacts with stakeholders. |
||||||
•Both policies are put on the website. |
||||||
•The company is to facilitate the dialogue, but only where appropriate. |
Page 37
|
|||||
Other |
||||||
Principles and best practice provisions |
Reference |
|||||
•Supervisory Board report to set out the findings of the Board of Management and Supervisory
Board evaluations.
|
Page 196
|
|||||
•These evaluations are periodically required to take place under the guidance
of an external expert.
|
Page 204
|
|||||
•While the Code does not require a designated digital or sustainability director, every
Board of Management and Supervisory Board member has close involvement with these
topics, and it be a consideration in terms of composition and training.
|
||||||
•New additions to the code emphasizing the role of the internal audit. |
Page 194
|
|||||
•The remuneration report should explain how the policy contributes to sustainability
and sets out how the scenario analysis have been taken into consideration.
|
Page 219
|
|||||
ASML ANNUAL REPORT 2023 |
CORPORATE GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
178 |
|
Applying the 2022 Dutch Corporate Governance Code |
||||||
We have outlined the main changes of the new code in the table below and provided references to
where in the annual report we are addressing the principles and best practices provisions.
|
ASML corporate governance structure |
||||||||||||||||||||||
Shareholders |
||||||||||||||||||||||
Supervisory Board |
||||||||||||||||||||||
Audit
committee
|
ESG
committee
|
Remuneration
committee
|
Selection and
nomination
committee
|
Technology
committee
|
||||||||||||||||||
Board of Management |
||||||||||||||||||||||
Business
sectors
|
Business
functions
|
Corporate
functions
|
Employee
support
|
|||||||||||||||||||
ASML ANNUAL REPORT 2023 |
CORPORATE GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
179 |
|
Corporate Governance |
Our core strategy is to |
||
1 |
Grow our holistic
lithography business
|
|
2 |
Secure unique supply
chain capabilities to ensure
business continuity
|
|
3 |
Move toward adjacent
business opportunities
|
|
4 |
Deliver on our ESG sustainability
commitments
|
ASML ANNUAL REPORT 2023 |
CORPORATE GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
180 |
|
Board of Management |
Martin A. van den Brink
(1957, Dutch)
|
Christophe D. Fouquet
(1973, French)
|
Frédéric J.M. Schneider-
Maunoury (1961, French)
|
||||||||||||||||||||
President, Chief Technology
Officer and Vice Chair of Board
of Management
Term expires 2024
|
Executive Vice President
and Chief Business Officer
Term expires 2026
|
Executive Vice President
and Chief Operations Officer
Term expires 2026
|
||||||||||||||||||||
Christophe Fouquet was appointed
Executive Vice President EUV and member
of the Board of Management in 2018. In
2022, Christophe was appointed Executive
Vice President and Chief Business Officer.
Since joining ASML in 2008, he has held
several positions, including Senior Director
Marketing, Vice President Product
Management, and Executive Vice President
Applications, a position he held from 2013
until 2018. Prior to joining ASML, he worked
for semiconductor equipment peers KLA-
Tencor and Applied Materials. Christophe
holds a master’s degree in Physics from the
Institut Polytechnique de Grenoble.
|
Frédéric Schneider-Maunoury has been
Executive Vice President and Chief
Operations Officer since he joined ASML in
2009. He was appointed to the Board of
Management in 2010. Prior to joining ASML,
Frédéric was Vice President Thermal
Products Manufacturing at power generation
and rail transport equipment group Alstom,
having previously served as General Manager
of the worldwide Hydro Business of Alstom.
Before joining Alstom, Frédéric held various
positions at the French Ministry of Trade and
Industry. He is a graduate of École
polytechnique (1985) and École Nationale
Supérieure des Mines (1988) in Paris.
|
|||||||||||||||||||||
Martin van den Brink has been President and
CTO of ASML since 2013. He joined ASML
at its founding in 1984, and for the next 11
years held various positions in engineering. In
1995, he became Vice President Technology,
and in 1999 was appointed Executive Vice
President Product & Technology and
member of the Board of Management. Martin
holds a degree in Electrical Engineering from
HTS Arnhem (HAN University), as well as a
degree in Physics (1984) from the University
of Twente. In 2012, the University of
Amsterdam awarded him an honorary
doctorate in Physics.
|
||||||||||||||||||||||
Peter T.F.M. Wennink
(1957, Dutch)
|
Roger J.M. Dassen
(1965, Dutch)
|
|||||||||||||||||||||
President, Chief Executive Officer
and Chair of Board of Management
Term expires 2024
|
Executive Vice President
and Chief Financial Officer
Term expires 2026
|
|||||||||||||||||||||
Peter Wennink became President and CEO in
2013, having served as Executive VP, CFO and
member of the Board of Management since
1999. Peter was previously a partner at Deloitte
Accountants, focusing on the semiconductor
industry. He has an extensive background in
finance and is a member of the Dutch Institute
of Registered Accountants. Peter was a
member of the Advisory Board of the
Investment Committee of Stichting
Pensioenfonds ABP until December 31, 2021.
He serves as Vice Chair on the Board of the
FME-CWM. Peter is also a member of the
Board of Captains of Industry Eindhoven
Region and is Chair of the Eindhovensche
Fabrikantenkring and of the Supervisory Board
of the Eindhoven University of Technology.
Furthermore, Peter is council member of
Topconsortium voor ‘Kennis en Innovatie’ TKI
HTS&M, member of the Advisory Committee of
the Dutch National Growth Fund and a member
of the Circle of Influence of Startup Delta.
|
Roger Dassen joined ASML in June 2018 and
was appointed Executive Vice President and
CFO and member of the Board of
Management at the AGM the same year. He
previously served as Global Vice Chair and
member of the Executive Board of Deloitte
Touche Tohmatsu Limited, having been CEO
of Deloitte Holding BV. Roger holds a
master’s in Economics and Business
Administration, a post-master’s in Auditing
and a PhD in Business Administration, all from
the University of Maastricht. He is Professor of
Auditing at Vrije Universiteit Amsterdam, and
sits on the Supervisory Board of the Dutch
National Bank. He is also the Chair of the
Supervisory Board of Maastricht University
Medical Center+ and serves on the Board of
the Stichting Brainport.
|
Wayne R. Allan
(1967, American)
|
||||||||||||||||||||
Executive Vice President and
Chief Strategic Sourcing &
Procurement Officer
Term expires 2027
|
||||||||||||||||||||||
Wayne Allan was appointed Executive Vice
President, Chief Strategic Sourcing &
Procurement Officer and member of the
Board of Management in 2023. Wayne joined
ASML in 2018 as Executive Vice President of
Customer Support. Before he joined ASML,
Wayne served as Senior Vice President of
Global Manufacturing Operations and as Vice
President of Wafer Fabs at Micron
Technology, Inc, the company where he
began his career in 1987 as a production
operator. He continued to move into
operations roles of increasing leadership in
engineering, planning and production.
|
ASML ANNUAL REPORT 2023 |
CORPORATE GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
181 |
|
Board of Management (continued) |
Stage 1 |
Stage 2 |
Stage 3 |
Stage 4 |
Stage 5 |
||||||
Recommendation
right GM and
Works Council
|
Announcement of
nomination for
appointment by SB
|
Works Council has the
right to determine its
position
|
Formal nomination
for appointment
by SB
|
Appointment
SB member
by GM
|
||||||
ASML ANNUAL REPORT 2023 |
CORPORATE GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
182 |
|
Supervisory Board |
Antoinette (Annet) P. Aris
(1958, Dutch)
|
||||||||||||||||||||||
Member of the Supervisory
Board since 2015
(Third term expires in 2024)
|
||||||||||||||||||||||
Vice Chair of the Supervisory
Board, Member
of the Remuneration Committee, the
Selection and Nomination
Committee and the Technology
Committee
|
||||||||||||||||||||||
Annet Aris has been a member of the
Supervisory Board since 2015. She is Senior
Affiliate Professor of Strategy at INSEAD
business school, France, a position she has
held since 2003. From 1994 to 2003, she was
a partner at McKinsey & Company in
Germany. Annet also sits on the supervisory
boards of Jungheinrich AG and Randstad
Holding NV.
|
Alexander F.M. Everke
(1963, German)
|
|||||||||||||||||||||
Member of the Supervisory Board
since 2022
(First term expires in 2026)
|
||||||||||||||||||||||
Nils S. Andersen
(1958, Danish)
|
Nils Andersen joined the Supervisory Board
in 2023, and has been its Chair since his
appointment. Nils also serves as non-
Executive Director of Unilever Plc., a position
he has held since 2015, having served as
Unilever's Chair from November 2019 until
December 1, 2023. Nils is also Chair of the
Board of Scan Global Logistics A/S. From
2018 until April 2023, he was the Chair of the
Supervisory Board of Akzo Nobel NV and,
between 2007 and 2016, Group Chief
Executive of A.P. Møller –Mærsk. From 2001
until 2007, Nils served as President and Chief
Executive Officer of Carlsberg and Carlsberg
Breweries.
|
Member of the ESG Committee and
the Remuneration Committee
|
D. Mark Durcan
(1961, American)
|
Mark Durcan was appointed as a member
of the Supervisory Board in 2020. From
2012 to 2017, he was CEO of Micron
Technology, Inc., having joined the
company in 1984 and having held various
management positions before being
appointed as CEO. Furthermore, Mark was
director at Freescale Semiconductor, MWI
Veterinary Supply and Veoneer, Inc. Mark
is a Non-Executive Director at Advanced
Micro Devices, Inc., and Member of the
Board and Lead Independent Director at
Cencora. He is also a member of the
Board of Trustees for Rice University
(Texas), Director at St Luke’s Health
System (Idaho) and Director at Natural
Intelligence Systems CA private AI, Startup
Company.
|
||||||||||||||||||
Member of the Supervisory
Board since 2023
(First term expires in 2027)
|
Alexander Everke joined the Supervisory
Board in 2022. He is the former CEO of ams-
OSRAM AG, a position he held from 2016
until April 2023, after having joined ams AG in
October 2015. Prior to that, Alexander held a
range of positions in the semiconductor
industry including management roles at
Siemens and Infineon and various leadership
positions at NXP Semiconductors.
|
Member of the Supervisory
Board since 2020
(First term expires in 2024)
|
||||||||||||||||||||
Chair of the Supervisory Board,
Chair of the Selection and
Nomination Committee
|
Chair of the Technology Committee,
member of the Selection and
Nomination Committee
|
|||||||||||||||||||||
ASML ANNUAL REPORT 2023 |
CORPORATE GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
183 |
|
Supervisory Board (continued) |
Terri L. Kelly
(1961, American)
|
Birgit M. Conix
(1965, Belgian)
|
Jack P. de Kreij
(1959, Dutch)
|
Association of Listed Companies (VEUO).
From 2003 to 2018, Jack was CFO and a
member of the Executive Board of Royal
Vopak NV, being the Vice Chair of the
Executive Board of Royal Vopak NV since
2010. Prior to that, between 1986 and 2003
he worked at PricewaterhouseCoopers,
where he held various management
positions as (Senior) Partner and was
amongst others Managing Partner &
Territory Leader of the M&A focused
Transaction Services practice in The
Netherlands. Jack started his career in 1980
with the Dutch Ministry of Finance, where he
worked until 1986.
|
||||||||||||||||||||||
Member of the Supervisory
Board since 2018
(Second term expires in 2026)
|
Member of the Supervisory
Board since 2021
(First term expires in 2025)
|
Member of the Supervisory
Board since 2023
(First term expires in 2027)
|
|||||||||||||||||||||||
Chair of the Remuneration Committee,
member of the Selection and
Nomination Committee
|
Chair of the ESG Committee and
member of the Audit Committee
|
Chair of the Audit Committee
and member of the Remuneration
Committee
|
|||||||||||||||||||||||
Birgit Conix became a member of the
Supervisory Board in 2021. She has been
CFO and a member of the Management
Board of Sonova Holding AG since June
2021. From 2018 until January 1, 2021,
Birgit was a member of the Executive Board
and CFO of TUI AG. She was previously
the CFO of the Belgian media, cable and
telecommunications company Telenet
Group NV Prior to that, Birgit held various
management positions in finance at Johnson
& Johnson, Heineken, Tenneco and
Reed Elsevier.
|
|||||||||||||||||||||||||
Terri Kelly has been a member of the
Supervisory Board since 2018. Previously,
she was President and CEO at W.L. Gore &
Associates from 2005 until 2018, having
worked at Gore since 1983 in various
management roles. She also served on
Gore’s Board of Directors through July
2018. Terri is a Trustee of the Alfred I.
Dupont Charitable Trust, which provides
oversight of the Nemours Foundation. She is
the Chair of the Board of the University of
Delaware and she is a member of the Board
of Directors of United Rentals, Inc.
|
Jack de Kreij joined the Supervisory Board in
2023. Among other roles, he is currently the
Vice Chair of the Supervisory Board and
Chair of the Audit Committee at TomTom NV
and Wolters Kluwer NV. Jack is also a
member of the Supervisory Board, Chair of
the Audit Committee and member of the ESG
Committee at Royal Boskalis Westminster
NV. In addition, he is the Chair of the Board
of the Dutch
|
||||||||||||||||||||||||
An L. Steegen
(1971, Belgian)
|
|||||||||||||||||||||||||
Member of the Supervisory
Board since 2022
(First term expires in 2026)
|
|||||||||||||||||||||||||
D. Warren A. East
(1961, British)
|
Member of the ESG Committee
and the Technology Committee
|
||||||||||||||||||||||||
Member of the Supervisory
Board since 2020
(First term expires in 2024)
|
An Steegen joined the Supervisory Board in
2022. She is co-CEO and member of the
Board of Directors of Barco NV, a position
she has held since October 2021. Prior to
that, An was R&D director at IBM
Semiconductor and Executive Vice President
at the research institute imec in Belgium.
Furthermore, An was CTO and Executive
Vice President Electronic and Electro-Optical
Materials at Umicore.
|
||||||||||||||||||||||||
Member of the Audit Committee and
the Technology Committee
|
|||||||||||||||||||||||||
Warren East became a member of the
Supervisory Board in 2020 and is currently
also a Non-Executive Board member at
Tokamak Energy plc. Warren was CEO of
Rolls-Royce Group Plc from 2015 until
December 2022. He spent his early career at
Texas Instruments Ltd from 1985 to 1994
before joining ARM Holdings, Plc, where he
held various management positions and was
appointed CEO from 2001 to 2013.
|
|||||||||||||||||||||||||
ASML ANNUAL REPORT 2023 |
CORPORATE GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
184 |
|
Supervisory Board (continued) |
Board Diversity Matrix
(status per December 31, 2023)
| |||||||
Female |
Male |
Non-Binary |
Did not
Disclose
|
||||
Part I: Gender Identity |
|||||||
Directors |
4
(2022: 4)
|
5
(2022: 5)
|
0
(2022: 0)
|
0
(2022: 0)
|
|||
Part II: Demographic Background |
|||||||
Underrepresented Individual in Home
Country Jurisdiction
|
0
(2022: 0)
|
0
(2022: 0)
|
0
(2022: 0)
|
0
(2022: 0)
|
|||
LGBTQI+ |
0
(2022: 0)
|
0
(2022: 0)
|
0
(2022: 0)
|
0
(2022: 0)
|
|||
Did Not Disclose Demographic Background |
0
(2022: 0)
|
0
(2022: 0)
|
0
(2022: 0)
|
0
(2022: 0)
|
Country of Principal Executive Offices |
The Netherlands |
Foreign Private Issuer |
Yes |
Disclosure Prohibited under Home Country Law |
No |
Total Number of Supervisory Board members |
9 (2022: 9) |
Supervisory Board gender diversity |
Supervisory Board nationality |
||||||||||
55.6% |
|||||||||||
Leadership level men |
Dutch x2 |
German x1 |
American x2 |
||||||||
44.4% |
|||||||||||
Leadership level women |
British x1 |
Belgian x2 |
Danish x1 |
||||||||
ASML ANNUAL REPORT 2023 |
CORPORATE GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
185 |
|
Other Board-related matters |
ASML ANNUAL REPORT 2023 |
CORPORATE GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
186 |
|
Other Board-related matters (continued) |
12% |
||||
Target 2024 representation of
women at leadership level
|
||||
The key areas of our D&I approach are as follows: |
||||
•Leadership: we are developing inclusive leadership
programs and starting to build accountability into
our performance and development processes. We
engage leaders to foster their commitment to
creating an inclusive culture and building a diverse
workforce
|
||||
•Talent: we aim to increase the representation of
underrepresented groups by addressing our
systems and end-to-end people processes,
including talent acquisition, and by providing career
advancement programs, that positively impact
under-represented groups.
|
||||
•Culture: We strive to create an inclusive culture for
all in line with ASML's values by increasing the
capabilities of employees and leaders to act
inclusively and by empowering our employee
networks to expand their impact and reach.
|
||||
25% |
||||
Inflow of female
leaders in 2023
(9+)
|
||||
ESG sustainability powers
our innovation mindset
because it underpins
inclusivity and diversity.”
|
Christophe Fouquet |
Executive Vice President, Chief Business Officer and
member of the Board of Management
|
ASML ANNUAL REPORT 2023 |
CORPORATE GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
187 |
|
Other Board-related matters (continued) |
A General Meeting (AGM) is held at least once
a year and generally takes place in Veldhoven,
the Netherlands. In 2023, shareholders had the
option to attend the 2023 AGM in person
in Veldhoven or virtually. The agenda for the
AGM typically includes the following topics:
|
|||
In 2023, we engaged
with investors to
obtain their
perspectives and
understand their
expectations.”
|
|||
Item 1
Discussion of the management report and the adoption
of the Financial Statements over the past financial year;
Item 2
Discussion of the dividend policy and approval of any
proposed dividends;
Item 3
Advisory vote on the Remuneration Report over the past
financial year;
Item 4
The discharge from liability of the members of the Board
of Management and the Supervisory Board for the
performance of their responsibilities in the previous
financial year;
Item 5
The limited authorization for the Board of Management
to issue (rights to) shares in ASML’s capital, and to exclude
preemptive rights for such issuances, as well as to
repurchase shares and to cancel shares; and
Item 6
Any other topics proposed by the Board of Management,
the Supervisory Board or shareholders in accordance with
Dutch law and the Articles of Association.
|
|||
Nils Andersen |
|||
Chair of the Supervisory Board |
|||
ASML ANNUAL REPORT 2023 |
CORPORATE GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
188 |
|
AGM and share capital |
ASML ANNUAL REPORT 2023 |
CORPORATE GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
189 |
|
AGM and share capital (continued) |
ASML’s authorized share capital amounts to €126.0 million and is divided into: |
|||||||
Type of shares |
Number of shares |
Nominal value |
Votes per share |
||||
Cumulative preference shares |
700,000,000 |
€0.09 per share |
1 |
||||
Ordinary shares |
700,000,000 |
€0.09 per share |
1 |
||||
The issued and fully paid-up ordinary shares with a nominal value of €0.09 each were as follows: |
|||||||
Year ended December 31 |
2021 |
2022 |
2023 |
||||
Issued ordinary shares with nominal value of €0.09 |
402,601,613 |
394,589,411 |
393,421,721 |
||||
Issued ordinary treasury shares with nominal value of €0.09 |
3,873,663 |
8,548,631 |
6,162,857 |
||||
Total issued ordinary shares with nominal value of €0.09 |
406,475,276 |
403,138,042 |
399,584,578 |
||||
ASML ANNUAL REPORT 2023 |
CORPORATE GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
190 |
|
AGM and share capital (continued) |
ASML ANNUAL REPORT 2023 |
CORPORATE GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
191 |
|
AGM and share capital (continued) |
Shares |
% of Class4 |
|
Capital Research and Management Company1 |
40,615,837 |
10.32% |
BlackRock Inc.2 |
31,259,169 |
7.95% |
Members of ASML’s current Board of Management and Supervisory Board (7 persons)3 |
101,220 |
0.03% |
ASML ANNUAL REPORT 2023 |
CORPORATE GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
192 |
|
AGM and share capital (continued) |
Annual Reports |
||||
ASML publishes, among others, the following
annual reports regarding the financial year 2023:
•The statutory Annual Report, prepared in accordance
with the requirements of Dutch law. The Financial
Statements included therein are prepared in
accordance with Part 9 of Book 2 of the Dutch Civil
Code and EU-IFRS; and
•The Annual Report on Form 20-F, prepared in
accordance with the requirements of the Exchange
Act. The Financial Statements included therein are
prepared in conformity with US GAAP.
•Both reports have the same qualitative base and
describe the same risk factors that are specific to the
semiconductor industry, ASML and ASML’s shares.
We also provide sensitivity analyses by providing:
•A narrative explanation of ASML’s Financial
Statements;
•The context within which financial information should
be analyzed; and
•Information about the quality, and variability, of our
earnings and cash flow.
|
||||
ASML ANNUAL REPORT 2023 |
CORPORATE GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
193 |
|
Financial reporting and audit |
ASML ANNUAL REPORT 2023 |
CORPORATE GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
194 |
|
Financial reporting and audit (continued) |
Practices followed by ASML in lieu of Nasdaq rules | |
Quorum |
ASML does not follow Nasdaq’s quorum requirements applicable to meetings of ordinary shareholders. In accordance with Dutch law and generally accepted
Dutch business practice, ASML’s Articles of Association provide that there are no quorum requirements generally applicable to general meetings of shareholders.
|
Solicitation of
proxies
|
ASML does not follow Nasdaq’s requirements regarding the solicitation of proxies and the provision of proxy statements for general meetings of shareholders.
ASML does furnish proxy statements and solicit proxies for the General Meeting. Dutch corporate law sets a mandatory (participation and voting) record date for
Dutch listed companies at the 28th day prior to the date of the General Meeting. Shareholders registered at such a record date are entitled to attend and exercise
their rights as shareholders at the General Meeting, regardless of sale of shares after the record date.
|
Distribution of
Annual Report
|
ASML does not follow Nasdaq’s requirement regarding distribution to shareholders of copies of an annual report containing audited Financial Statements prior to
our AGM. The distribution of our annual reports to shareholders is not required under Dutch corporate law or Dutch securities laws, or by Euronext Amsterdam.
Furthermore, it is generally accepted business practice for Dutch companies not to distribute annual reports. In part, this is because the Dutch system of bearer
shares has made it impractical to keep a current list of holders of the bearer shares in order to distribute the annual reports. Instead, we make our Annual Report
available at our corporate head office in the Netherlands (and at the offices of our Dutch listing agent as stated in the convening notice for the meeting) no later
than 42 days prior to convocation of the AGM. In addition, we post a copy of our Annual Reports on our website prior to the AGM.
|
Equity
compensation
arrangements
|
ASML does not follow Nasdaq’s requirement to obtain shareholder approval of stock option or purchase plans or other equity compensation arrangements
available to officers, directors or employees. It is not required under Dutch law or generally accepted practice for Dutch companies to obtain shareholder approval
of equity compensation arrangements available to officers, directors or employees. The General Meeting adopts the Remuneration Policy for the Board of
Management, approves equity compensation arrangements for the Board of Management and approves the remuneration for the Supervisory Board. The
Remuneration Committee evaluates the achievements of individual members of the Board of Management with respect to the short- and long-term quantitative
performance and he full Supervisory Board evaluates the quantitative performance criteria. Equity compensation arrangements for employees are adopted by the
Board of Management within limits approved by the General Meeting.
|
ASML ANNUAL REPORT 2023 |
CORPORATE GOVERNANCE CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
195 |
|
Compliance with Corporate Governance requirements |
ASML ANNUAL REPORT 2023 |
SUPERVISORY BOARD REPORT |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
196 |
|
Message from the Chair of the Supervisory Board |
||||||
Another record performance, in challenging circumstances |
I am confident that we
benefit from a
management team,
workforce and
technological leadership
that will enable all our
stakeholders as well as
wider society to reap
long-term rewards.”
|
|||
Nils Smedegard Andersen |
|||
Chair of the Supervisory Board |
|||
The Supervisory Board supervises and advises the Board
of Management in performing its management tasks and
setting the direction for ASML, focusing on long-term and
sustainable value creation. The members of the
Supervisory Board are fully independent.
|
|||
ASML ANNUAL REPORT 2023 |
SUPERVISORY BOARD REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
197 |
|
Message from the Chair of the Supervisory Board (continued) |
6 |
44% |
||
Supervisory
Board
meetings
|
Female
members
|
||
(2022: 7) |
(2022: 44%) |
||
98% |
3.2 |
||
Attendance
rate
|
Years average
tenure
|
||
(2022: 95%) |
(2022: 4) |
Deep dive: Market and geopolitics |
||||
The Supervisory Board discussed with the Board of
Management the short-, medium- and long-term market
developments in the semiconductor industry and the
related growth opportunities for ASML. Aspects discussed
were the key end market drivers, the future of lithography
shrink and future affordability of lithography solutions,
potential opportunities in adjacent technologies and ASML's
competitive position. In terms of geopolitics, global forces
limiting ASML's options to do business in China were
extensively discussed and the Supervisory Board made
recommendations as to how to best navigate this situation.
|
||||
ASML ANNUAL REPORT 2023 |
SUPERVISORY BOARD REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
198 |
||
Supervisory Board focus in 2023 |
Alongside the annual
strategy review, the
Supervisory Board
addressed strategic topics
throughout the year via
deep dives, which enabled
focused, in-depth review.”
|
Nils Andersen |
Chair of the Supervisory Board |
Deep dive: Transformation |
||||
After a decade of strong growth, ASML anticipates
continued future growth with its usual cycles. In
consequence, we have to be able to respond to market
demand with increased flexibility and agility to maintain
our customer trust and technology leadership. In order to
respond to these challenges, the Board of Management
embarked on a journey to drive 3 strategic
transformation projects related to Customer Trust,
Robust Supply Chain, and Integrated Operating Model.
Ample time was spent by the Supervisory Board
discussing these programs in open dialogues with the
Board of Management, during which the Supervisory
Board challenged and advised the Board of
Management on how to organize for the future expected
growth towards 2030. The Supervisory Board is pleased
with the strengthening of our supply chain resilience as
well as with the reorganization of ASML's customer-
facing organization, which will be implemented in 2024.
|
||||
ASML ANNUAL REPORT 2023 |
SUPERVISORY BOARD REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
199 |
|
Supervisory Board focus in 2023 (continued) |
Deep dive: ESG Sustainability strategy |
||||
As a Supervisory Board we consider ESG
Sustainability an increasingly important topic. While
the Supervisory Board keeps the overall oversight of
ESG Sustainability, various ESG Sustainability
aspects are discussed at committee level, e.g.
reporting in the Audit Committee, diversity in the
Selection and Nomination Committee, ESG
Sustainability as part of the Board of Management's
incentive scheme in the Remuneration Committee
and product and technology aspects in the
Technology Committee. In 2023, we discussed
ASML’s updated ESG Sustainability strategy and
execution with the Board of Management. In deep
dive sessions specific attention was paid to EUV
energy efficiency, which is a key area of focus also
given ASML's CO2 reduction ambitions, and the
Diversity & Inclusion strategy and the implementation
thereof. To underline the importance of ESG
Sustainability, the Supervisory Board decided to
establish an ESG Committee in 2023.
|
||||
ASML ANNUAL REPORT 2023 |
SUPERVISORY BOARD REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
200 |
|
Supervisory Board focus in 2023 (continued) |
Strategy & sustainable long-
term value creation
|
||||
Q1 |
||||
•ESG strategy, including deep
dives on EUV energy efficiency
and Diversity & Inclusion
•Expansions beyond current
scope and M&A strategy
•Remuneration Board of
Management and Supervisory
|
||||
Q2 |
||||
•Deep dive: Future operating
model
•Deep dive: Tool allocation
policy
•Deep dive: Scenarios to ramp
the end-to-end supply chain
including industrial footprint
|
||||
Q3 |
||||
•Deep dive: value strategy and
service business model
•Deep dive: BPI
|
||||
Q4 |
||||
•Annual strategy review
•Deep dive: Semi & litho market
•Deep dive: Geopolitics &
market access
•Deep dive: Global footprint
•Deep dive: Cost & Flexibility
|
||||
Business
developments
|
||||
Q2 |
||||
•Market outlook and demand
drivers
•Update on business sectors:
EUV, DUV, Applications
|
||||
Q4 |
||||
•Transformation projects related
to sourcing & supply chain,
Customer and future operating
model
|
||||
Risk
management
|
||||
Q1 |
||||
•Update risk landscape & deep
dive: security
|
||||
Financial & operational
performance
|
||||
Q1 |
||||
•2022 Annual Results and
Annual Report
•2022 external audit report
•Final dividend 2022
•External auditor rotation
•Legal matters report
|
||||
Q3 |
||||
•2022 statutory interim report
•Cash return including dividend
policy and interim dividend
•Business Performance
Improvement initiative including
update on Our New Enterprise
(ONE) program
|
||||
Q4 |
||||
•Update of business plans of the
business sectors and functions
•Cash return including interim
dividend and share buyback
program
|
||||
People &
organization
|
||||
Q1 |
||||
•Composition of Supervisory
Board
•Composition of Board
of Management
•Remuneration Policy for
the Board of Management
|
||||
Q3 |
||||
•Human Resources &
Organization (HR&O) update
•Composition of Supervisory
Board
•Composition of Board of
Management
•HR&O, including deep dives on
Diversity & Inclusion and
Culture
|
||||
Q4 |
||||
•Composition of Supervisory
Board
•Composition of Board of
Management
•People Strategy
•Results of employee
engagement survey
|
||||
Governance and stakeholders |
||||
Q1 |
||||
•Outcome of Supervisory
Board evaluation
•AGM agenda
•New Dutch Corporate
Governance Code
•Amendment to the Rules
of Procedure Board of
Management and
Supervisory Board
|
||||
Q2 |
||||
•AGM update |
||||
Q3 |
||||
•ESG oversight by Supervisory
Board and Committees
|
||||
R |
||||
Q4 |
||||
•Implementation of the Dutch
Corporate Governance Code
•Amendment Rules of
Procedure Supervisory Board
and Board of Management
•D&I Policies
•Supplier deep dive: Zeiss
•Supplier visit: Zeiss
|
||||
ASML ANNUAL REPORT 2023 |
SUPERVISORY BOARD REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
201 |
|
Supervisory Board focus in 2023 (continued) |
Meetings of the Supervisory
Board
|
||||
Most Supervisory Board and Committee meetings
held in 2023 were in-person meeting, but the
Supervisory Board also met virtually on some
occasions. In addition to plenary discussions, break-
out sessions in smaller groups were organized for
discussing key strategic topics to optimize
interaction. We also used preview videos for meeting
preparation in addition to written meeting documents,
in order to allow as much time as possible for
discussion.
|
||||
Supervisory Board meeting attendance overview1 |
||||||||||||
98% |
||||||||||||
Attendance
rate
|
||||||||||||
Name |
Supervisory
Board
|
Audit
Committee
|
Remuneration
Committee
|
Selection and
Nomination
Committee
|
Technology
Committee
|
ESG
Committee
|
||||||
Nils Andersen (Chair)2 |
4/4 |
3/3 |
n/a |
4/4 |
n/a |
n/a |
||||||
Annet Aris |
6/6 |
n/a |
5/5 |
6/6 |
5/5 |
n/a |
||||||
Birgit Conix |
6/6 |
6/6 |
n/a |
n/a |
n/a |
2/2 |
||||||
Mark Durcan |
6/6 |
n/a |
n/a |
6/6 |
5/5 |
n/a |
||||||
Warren East |
6/6 |
6/6 |
n/a |
n/a |
5/5 |
n/a |
||||||
Alexander Everke |
6/6 |
n/a |
5/5 |
n/a |
n/a |
2/2 |
||||||
Terri Kelly |
6/6 |
n/a |
5/5 |
6/6 |
n/a |
n/a |
||||||
Jack de Kreij3 |
4/4 |
3/3 |
3/3 |
n/a |
n/a |
n/a |
||||||
An Steegen |
5/6 |
n/a |
n/a |
n/a |
1/2 |
1/2 |
||||||
Gerard Kleisterlee4 |
2/2 |
n/a |
1/1 |
2/2 |
3/3 |
n/a |
||||||
Rolf-Dieter Schwalb4 |
2/2 |
3/3 |
2/2 |
n/a |
n/a |
n/a |
||||||
1.This overview contains the attendance data as of the formal date of appointment of until the formal end date of the
appointment.
2.Appointed at the AGM on April 26, 2023; also appointed as chair of the Selection and Nomination Committee.
3.Appointed at the AGM on April 26, 2023; also appointed as chair of the Audit Committee and member of the
Remuneration Committee.
4.Stepped down per the AGM on April 26, 2023.
|
ASML ANNUAL REPORT 2023 |
SUPERVISORY BOARD REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
202 |
|
Meetings and attendance |
ASML ANNUAL REPORT 2023 |
SUPERVISORY BOARD REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
203 |
|
Meetings and attendance (continued) |
Supervisory Board skills |
|||||||||||||||||||||||||||||||||
Board member |
General skills |
ASML skills |
|||||||||||||||||||||||||||||||
Nils Andersen (Chair) |
• |
• |
• |
• |
• |
• |
• |
||||||||||||||||||||||||||
Annet Aris |
• |
• |
• |
• |
• |
• |
• |
• |
|||||||||||||||||||||||||
Birgit Conix |
• |
• |
• |
• |
• |
• |
|||||||||||||||||||||||||||
Marc Durcan |
• |
• |
• |
• |
• |
• |
• |
• |
• |
||||||||||||||||||||||||
Warren East |
• |
• |
• |
• |
• |
• |
• |
• |
• |
• |
|||||||||||||||||||||||
Alexander Everke |
• |
• |
• |
• |
• |
• |
• |
• |
• |
• |
|||||||||||||||||||||||
Terri Kelly |
• |
• |
• |
• |
• |
• |
|||||||||||||||||||||||||||
Jack de Kreij |
• |
• |
• |
• |
• |
• |
• |
• |
|||||||||||||||||||||||||
An Steegen |
• |
• |
• |
• |
• |
• |
• |
• |
|||||||||||||||||||||||||
(Former)
Executive
board
member
of (listed)
international
company
|
Finance /
governance
|
Remuneration |
Human
resources
/ employee
relations
|
IT / digital /
cyber
|
ESG |
Semiconductor
ecosystem
|
Deep
understanding
of semiconductor
technology
|
High-tech
manufacturing /
integrated
supply chain
management
|
Business
in Asia
|
||||||||||||||||||||||||
ASML ANNUAL REPORT 2023 |
SUPERVISORY BOARD REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
204 |
|
Meetings and attendance (continued) |
ASML ANNUAL REPORT 2023 |
SUPERVISORY BOARD REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
205 |
|
Meetings and attendance (continued) |
Supervisory Board |
|||||||||||||||||||||||||
Audit
Committee
|
ESG
Committee
|
Remuneration
Committee
|
Selection and
Nomination
Committee
|
Technology
Committee
|
|||||||||||||||||||||
Assisting in
overseeing the
integrity and quality
of our financial
reporting and the
effectiveness of risk
management and
controls
|
Overseeing the ESG
sustainability
strategy and
performance aimed
at sustainable, long-
term value creation.
|
Overseeing the
development and
implementation of
the Remuneration
Policies, in
cooperation with
the Audit and
Technology
Committee
|
Assisting with the
preparation of the
selection criteria
and appointment
procedures for the
Supervisory Board
and Board of
Management
|
Providing advice
with respect to our
technology plans
required to execute
the business
strategy
|
|||||||||||||||||||||
3 |
3 |
4 |
4 |
4 |
|||||||||||||||||||||
Members |
Members |
Members |
Members |
Members |
|||||||||||||||||||||
Read more on page 208 > |
Read more on page 210 > |
Read more on page 221 > |
Read more on page 212 > |
Read more on page 214 > |
|||||||||||||||||||||
ASML ANNUAL REPORT 2023 |
SUPERVISORY BOARD REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
206 |
|
Supervisory Board committees |
Audit Committee |
||||||
The Audit Committee assists the Supervisory Board in overseeing
the integrity and quality of our financial reporting and the effectiveness
of the internal risk management and internal control systems.
|
||||||
Main responsibilities: |
||||||
•Overseeing the integrity and quality of ASML’s Financial
Statements and sustainability disclosures and submitting
proposals to ensure such integrity;
•Overseeing the accounting, financial and sustainability
reporting processes and the audits of the Financial
Statements;
•Overseeing the effectiveness of our internal risk management
and control systems, including compliance with the relevant
legislation and regulations, and the effect of codes of
conduct;
•Overseeing the integrity and effectiveness of our system of
disclosure controls and procedures and our system of
internal controls over financial and sustainability reporting;
•Overseeing the External Auditor’s qualifications,
independence, performance and determining its
compensation; and
•Overseeing the functioning of Internal Audit.
|
||||||
Members: |
||||||
•Jack de Kreij (Chair)
•Birgit Conix
•Warren East
The members of the Audit Committee are all independent
members of the Supervisory Board.
The Supervisory Board has determined that both Jack De Kreij
and Birgit Conix qualify as Audit Committee financial experts
pursuant to section 407 of the Sarbanes-Oxley Act and Dutch
statutory rules, taking into consideration their extensive financial
backgrounds and experience.
|
||||||
A key area of focus for the Audit
Committee in 2023 was how to navigate
macroeconomic and semiconductor
industry cycle related challenges while
investing in future growth
|
||||||
Recurring agenda topics (quarterly) |
Attendance |
||||||||
•Financial update
•Review of the quarterly financial results and press release
•Accounting and Internal Control update
•Observations of External Auditor
•Risk update, incl. (IT) Security
•Internal Audit update
•Disclosure Committee report
•Legal matters report
•Ethics and compliance
|
In addition to the Audit Committee members, the Chair of the
Supervisory Board attends the Audit Committee meetings whenever
possible. The external auditor and the internal auditor have a standing
invitation for Audit Committee meetings and attended all Audit
Committee meetings in 2023. The CEO, CFO, EVP Finance, Corporate
Chief Accountant, the Head of Risk and Business Assurance are invited
to the meetings.
|
||||||||
The overview below provides a number of topics discussed during Audit Committee meetings in 2023,
in addition to the recurring agenda topics.
|
|||||||||
Q1 |
Q3 |
||||||||
•2022 Annual Report and Financial Statements US GAAP and EU-IFRS
•Accounting deep dive: Balance sheet review
•2022 External audit report
•Annual reporting process
•Capital return, incl. interim dividend Q1'23 and final dividend 2022
•Fraud-risk assessment
•Results of the external auditor evaluation 2022
•Results of the Audit Committee self-evaluation
•Annual plans of Risk and Internal Audit
•Compliance deep dives: Finance, ABC and Antitrust
•Appointment new head of Internal Audit
|
•Statutory Interim report 2023
•Capital return, incl. interim dividend Q3'23
•Compliance deep dive: Finance
•Audit Committee responsibilities in the area of ESG
|
||||||||
Q2 |
Q4 |
||||||||
•2023 SOX plan incl. materiality and scoping
•External audit plan 2023
•Audit on expense reporting Board of Management and Supervisory
Board 2022
•Update Internal Audit Charter
•Initial independence discussion with newly to be appointed external
auditor
|
•Financing
•Capital return including Q4 2023 interim dividend
•2023 Annual Report process
•Long-term financial plan
•Annual Plan 2024
•Internal Audit Plan 2024
•Compliance deep dive: legal compliance
•Annual tax update
•External audit update on 'hard close' procedures
•Review of Rules of Procedure for the Audit Committee
|
||||||||
ASML ANNUAL REPORT 2023 |
SUPERVISORY BOARD REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
207 |
|
Supervisory Board committees (continued) |
Audit Committee |
ASML ANNUAL REPORT 2023 |
SUPERVISORY BOARD REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
208 |
|
Supervisory Board committees (continued) |
Audit Committee |
ASML ANNUAL REPORT 2023 |
SUPERVISORY BOARD REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
209 |
|
Supervisory Board committees (continued) |
ESG Committee |
||||||
The ESG Committee advises the Supervisory Board in carrying out its
governance and oversight responsibilities with regard to sustainability,
environmental, social and governance matters.
|
||||||
Main responsibilities: |
||||||
•the ESG sustainability strategy, including the various sub-
themes of the ESG sustainability strategy;
•the integration of ESG in the Company and the ESG
sustainability strategy;
• the periodic assessment and evaluation of ASML’s ESG
sustainability performance and progress against its
objectives;
• the relationships and engagement with ASML’s
stakeholders; and
•the (impact of) external ESG matters and developments
which are relevant for ASML and the general evolution of the
ESG landscape.
|
||||||
Members: |
||||||
•Birgit Conix (Chair)
•Alexander Everke
•An Steegen
The ESG Committee may be supported by external experts
as well as experts from within ASML who act as advisers on
the subjects reviewed and discussed.
|
||||||
On April 26, 2023, the Supervisory
Board decided to establish the ESG
Committee to focus on ESG and
sustainability in recognition of their
importance to ASML.
|
||||||
Recurring agenda topics (quarterly) |
Attendance |
||||||||
•ESG Strategy and performance
•ESG Governance
•ESG Compliance
|
In addition to the ESG Committee members, the EVP & Chief Business
Officer, the EVP & CFO and the Head of ESG Sustainability have a
standing invitation to attend the ESG Committee meetings. Internal
experts and external advisers may is also invited to attend the ESG
Committee meetings when deemed necessary. The advisers do not
have voting rights.
|
||||||||
ESG Committee meetings in 2023 |
|||||||||
In general, the ESG Committee meets at least twice a year and more
frequently when deemed necessary. In 2023, the ESG Committee held
two meetings.
|
|||||||||
The overview below provides details on the topics discussed during ESG Committee meetings in 2023. |
|||||||||
Q1 |
Q3 |
||||||||
•No meetings |
•Performance on ESG KPIs and ESG targets for the Long-Term
Incentive (LTI)
•Feedback from ESG benchmarks
•Update on preparations for CSRD compliance
•Deep dive on Scope 1 & 2 emissions
•Human Rights Policy
•Formalities related to ESG Committee set-up
|
||||||||
Q2 |
Q4 |
||||||||
•No meetings |
•Performance on ESG KPIs and ESG LTI targets
•Feedback from relevant benchmarks and update on selection of
benchmarks
•ESG Strategy update
•Update on preparations for CSRD compliance
•Deep dive on EUV energy use per wafer pass
|
||||||||
ASML ANNUAL REPORT 2023 |
SUPERVISORY BOARD REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
210 |
|
Supervisory Board committees (continued) |
ESG Committee |
ASML ANNUAL REPORT 2023 |
SUPERVISORY BOARD REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
211 |
|
Supervisory Board committees (continued) |
Supervisory Board
Oversight over overall company strategy aimed at sustainable long-term value creation and
company performance, including ESG aspects
|
|||||||||||||||
Audit
Committee
|
ESG
Committee
|
Remuneration
Committee
|
Selection and
Nomination
Committee
|
Technology
Committee
|
|||||||||||
Non-financial
reporting, ESG
internal controls
and assurance
|
Oversight over
ESG strategy
(execution) &
performance
|
ESG metrics as
part of executive
remuneration
|
Corporate
Governance
Leadership
Development &
succession
including
diversity
|
Product &
Technology
roadmap related
ESG matters/
programs (e.g.
EUV energy
efficiency)
|
|||||||||||
Selection and Nomination Committee |
||||||
The Selection and Nomination Committee assists the Supervisory
Board in relation to its responsibilities over the composition and
functioning of the Supervisory Board and the Board of Management
and the monitoring of corporate governance developments.
|
||||||
Main responsibilities: |
||||||
•Preparing the selection criteria and appointment procedures
for members of the Supervisory Board and Board of
Management, and the supervision of the Board of
Management’s policy in relation to the selection and
appointment criteria for senior management;
•Periodically evaluating the scope and composition of the
Board of Management and the Supervisory Board, and
proposing the profile of the Supervisory Board;
•Periodically evaluating the functioning of the Board of
Management and the Supervisory Board, and their individual
members;
•Preparing the Supervisory Board’s decisions for appointing
and reappointing members of the Board of Management
and proposing (re)appointments of members of the
Supervisory Board; and
•Monitoring and discussing developments in corporate
governance.
|
||||||
Members: |
||||||
•Nils Andersen (Chair)
•Annet Aris
•Mark Durcan
•Terri Kelly
Each member is an independent, non-executive member of our
Supervisory Board, in accordance with the Nasdaq Listing
Rules.
|
||||||
In 2023, the Selection and Nomination
Committee's key area of focus was
Board of Management composition and
succession.
|
||||||
Recurring agenda topics |
Attendance |
||||||||
•Role, composition and functioning of the Board of Management
•Role, composition and functioning of the Supervisory Board
•Corporate governance
|
In addition to the Selection and Nomination Committee members, the
two presidents and the EVP HRO are regularly invited to attend (parts of)
its meetings. An external adviser is also invited to attend the Selection
and Nomination Committee meetings when deemed necessary.
|
||||||||
The overview below provides details on the topics discussed during Selection and Nomination Committee
meetings in 2023.
|
|||||||||
H1 |
H2 |
||||||||
•Composition of Board of Management, including succession and
transition pipeline
•Profile and composition of Supervisory Board and composition of its
committees
•Nominations for appointment of Supervisory Board members
•Induction program for new Supervisory Board members
•Amendment of Rules of Procedure Board of Management and
Supervisory Board
•Outcome of evaluation of Supervisory Board and committees
•Performance of the Board of Management and individual members
•Diversity policy of the Board of Management
•New Dutch Corporate Governance Code
•ESG Sustainability Committee set-up and composition
|
•Composition of Board of Management, including diversity aspects &
requirements, and succession pipeline
•End of appointment term, retirement of the Co-Presidents and
appointment of Christophe Fouquet as President and CEO per the
2024 AGM
•Intended appointment of Jim Koonmen as member of the Board of
Management per the 2024 AGM
•Profile and composition of Supervisory Board
•Nomination for appointment of Annet Aris, Mark Durcan and Warren
East as Supervisory Board members per the 2024 AGM
•Approach to the 2023 self-evaluation of the Supervisory Board and
Committees
•Implementation of the revised Dutch Corporate Governance Code,
including related governance documents,
•Responsibilities of the Selection & Nomination Committee in the area of
ESG
|
||||||||
ASML ANNUAL REPORT 2023 |
SUPERVISORY BOARD REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
212 |
|
Supervisory Board committees (continued) |
Selection and Nomination Committee |
ASML ANNUAL REPORT 2023 |
SUPERVISORY BOARD REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
213 |
|
Supervisory Board committees (continued) |
Technology Committee |
||||||
The Technology Committee advises the Supervisory Board
with respect to the technology plans required to execute
our business strategy.
|
||||||
Main responsibilities: |
||||||
•Advising on technology trends, the study of potential
alternative strategies, the technology strategy, product
roadmaps, required technical resources and operational
performance in R&D;
•Making recommendations to the Supervisory Board
on technology-related projects with respect to ASML’s
competitive position; and
•Discussing the technology targets set to measure short-
and long-term performance as well as the achievements
related to these, and advising the Remuneration Committee
on this topic.
|
||||||
Members: |
||||||
•Mark Durcan (Chair)
•Annet Aris
•Warren East
•An Steegen
The Technology Committee is supported by external experts
as well as experts from within ASML who act as advisers on
the subjects reviewed and discussed. External experts may
include representatives of customers, suppliers and partners
to increase the Committee’s understanding of the technology
and research required to develop our leading-edge systems.
|
||||||
In Q4 2023, the Technology Committee
visited ASML's facility in Wilton, CT,
USA.
|
||||||
Recurring agenda topics (quarterly) |
Attendance |
||||||||
•Role, composition and functioning of the Board of Management
•Role, composition and functioning of the Supervisory Board
•Corporate governance
|
In addition to the Technology Committee members, the Committee’s
external and internal advisers regularly attended committee meetings.
The advisers do not have voting rights.
|
||||||||
Technology Committee meetings in 2023 |
|||||||||
In general, the Technology Committee meets at least twice a year
and more frequently when deemed necessary. In 2023, the Technology
Committee held five meetings.
|
|||||||||
The overview below provides details on the topics discussed during Technology Committee meetings in
2023.
|
|||||||||
Q1 |
Q3 |
||||||||
•Review of Applications
•Technology Leadership Index performance review 2022 and
2020-2022 and target setting for 2023 and 2023-2025
|
•Review of DUV (including Installed Base and Service and Mature
Products)
•Device Roadmap
|
||||||||
Q2 |
Q4 |
||||||||
•Review of the Development & Engineering, System Engineering and
Research
|
•Review of EUV Low NA and High NA
•Visit to ASML's facility in Wilton, CT, USA
|
||||||||
ASML ANNUAL REPORT 2023 |
SUPERVISORY BOARD REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
214 |
|
Supervisory Board committees (continued) |
Technology Committee |
ASML ANNUAL REPORT 2023 |
SUPERVISORY BOARD REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
215 |
|
Supervisory Board committees (continued) |
ASML ANNUAL REPORT 2023 |
SUPERVISORY BOARD REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
216 |
|
Financial Statements and Profit Allocation |
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
217 |
|
Message from the Chair of the Remuneration Committee |
2023 was again a very dynamic, challenging
year for ASML and this translated into another
busy year for our committee as we continued
to evolve the ways in which we can support the
growth of the company.”
|
||
Terri Kelly |
||
Chair of the Remuneration Committee |
||
Outlook |
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
218 |
|
Message from the Chair of the Remuneration Committee (continued) |
Our remuneration principles for performance support long-term success and sustainable value |
|||
Competitiveness |
The remuneration structure and levels intend to be competitive in the relevant labor market,
while at the same time taking into account societal trends and perceptions.
|
||
Alignment |
The remuneration policy is aligned with the short-term and long-term incentive policies for ASML
senior management and other ASML employees and takes into account internal relativities.
|
||
Long-term
orientation
|
The policy and incentives focus on sustainable and long-term value creation. |
||
Compliance |
ASML adopts the highest standards of good corporate governance. |
||
Simplicity and
transparency
|
The policy and its execution are as simple as possible and easily understandable to all
stakeholders.
|
Linking remuneration to purpose and strategy |
||||||||||||
Purpose |
Strategy |
Incentive
measures
|
Pay for
performance
|
|||||||||
Unlocking the
potential of
people and
society by
pushing
technology to
new limits.
|
Grow our holistic
lithography business
|
Financial measures |
Remuneration
outcomes
|
|||||||||
Secure unique supply
chain capabilities to
ensure business
continuity
|
Customer Orientation |
|||||||||||
Move toward adjacent
business
opportunities
|
Technology leadership |
|||||||||||
Deliver on our ESG
sustainability
commitments
|
Leadership in
ESG sustainability
|
|||||||||||
How we performed in 2023 |
||||||||
Financial (based on US GAAP) |
Non-financial |
|||||||
€27.6bn |
€14.1bn |
€9.0bn |
7.8 |
|||||
Total sales |
Gross profit |
Income from operations |
Technology Leadership
Index score
|
|||||
(2022: €21.2bn) |
(2022: €10.7bn) |
(2022: €6.5bn) |
(2022: 8.1) |
|||||
€5.4bn |
€19.91 |
65.8% |
10.8% |
|||||
Net cash provided by
operating activities
|
Earning
per share
|
ROAIC (Non-GAAP
measure)1
|
Dow Jones Sustainability
Index (DJSI)2
|
|||||
(2022: €8.5bn) |
(2022: €14.14) |
(2022: 48.2%) |
(2022: 10.8%) |
Relative TSR - ASML vs PHLX |
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
219 |
|
Remuneration at a glance |
||||||
Remuneration is an essential tool to motivate the right talent to continue to achieve our technology
roadmap and business priorities.
|
We aim to align the total
remuneration for our Board of
Management to our business
strategy through a combination
of fixed pay and short- and long-
term incentives, underpinned by
stretching performance targets.
| |
€24.6m |
|
Total remuneration |
|
128.2% |
|
Achieved of STI target |
|
157.7% |
|
Achieved of LTI target |
|
43:1 |
|
CEO vs. average per FTE1 |
Board of Management |
|
Peter T.F.M. Wennink1 |
|
Total remuneration 2023 (€’000s) |
|
€5,941 |
|
Martin A. van den Brink1 |
|
Total remuneration 2023 (€’000s) |
|
€5,939 |
|
Frédéric J.M. Schneider-Maunoury |
|
Total remuneration 2023 (€’000s) |
|
€3,574 |
|
Roger J.M. Dassen |
|
Total remuneration 2023 (€’000s) |
|
€3,558 |
|
Christophe D. Fouquet |
|
Total remuneration 2023 (€’000s) |
|
€3,519 |
|
Wayne R. Allan2 |
|
Total remuneration 2023 (€’000s) |
|
€2,071 |
Remuneration summary (€’000s) |
Base salary and benefit |
STI |
LTI |
||||||||||
Stakeholder engagement in 2023 |
|||
During 2023, we consulted with our large
shareholders and other stakeholders. The
Remuneration Committee also consulted the
views of the Board of Management.
|
|||
Shareholders |
|||
Number of organizations met |
8 |
||
Number of meetings |
8 |
||
Percentage of issued share capital owned3 |
20% |
||
Shareholders representatives
and proxy advisers
|
|||
Number of organizations met |
3 |
||
Number of meetings |
3 |
||
Works Council |
|||
Number of organizations met |
1 |
||
Number of meetings |
>5 |
||
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
220 |
|
Remuneration at a glance (continued) |
Remuneration Committee |
||||||
The Remuneration Committee advises the Supervisory Board and
prepares the Supervisory Board’s resolutions with respect to the
remuneration of the Board of Management and the Supervisory Board.
|
||||||
Main responsibilities: |
||||||
•Overseeing the development and implementation of the
Remuneration Policy for the Board of Management and
preparing the Supervisory Board Remuneration Policy;
•Reviewing and proposing to the Supervisory Board
corporate goals and objectives relevant to the variable part
of the Board of Management’s remuneration;
•Carrying out scenario analyses of the possible financial
outcomes on the variable remuneration of meeting these
goals, as well as exceeding these goals, before proposing
these corporate goals and objectives to the Supervisory
Board for approval; and
•Evaluating the performance of the members of the Board of
Management in view of those goals and objectives, and –
based on this evaluation – recommending to the Supervisory
Board appropriate compensation levels for the members of
the Board of Management.
•Staying apprised of external pay practices and the
effectiveness of our remuneration policy and incentive
measures in attracting and retaining top talent.
|
||||||
Members: |
||||||
•Terri Kelly (Chair)
•Annet Aris
•Alexander Everke
•Jack de Kreij
Each member is an independent, non-executive member of our
Supervisory Board in accordance with the Nasdaq Listing
Rules. Ms. Kelly is neither a former member of our Board of
Management, nor a member of the management board of
another company. Currently, no member of the Remuneration
Committee is a member of the management board of another
Dutch listed company.
|
||||||
The Committee will continue to consider
what the optimal incentive measures are
to drive sustainable long-term value
creation.
|
||||||
Recurring agenda topics |
Attendance |
||||||||
•Remuneration of the Board of Management
•Remuneration of the Supervisory Board
•Update on performance on targets for short- and long-term incentive
|
In addition to the Remuneration Committee members, the Remuneration
Committee generally invites the CEO, the EVP HRO, the Head
of Compensation and Benefits and in some instances also the CFO or the
CBO, as BoM member responsible for ESG, to attend (parts of) its meetings.
The Remuneration Committee’s external adviser is also invited to attend the
Remuneration Committee meetings when deemed necessary.
|
||||||||
The below overview provides details on the topics discussed during
Remuneration Committee meetings in 2023.
|
|||||||||
Q1 |
Q3 |
||||||||
•Total remuneration BoM 2023, incl. base salary 2023, and STI and LTI
at-target levels
•Short-Term Incentive Plan: Performance 2022, pay-out 2022 and
targets 2023
•Long-Term Incentive Plan: share vesting performance period 2020-2022,
and conditional grant and targets performance period 2023-2025
•Compliance with share ownership requirements
•Remuneration Report 2022
•Self-evaluation of Remuneration Committee
•Supervisory Board Remuneration Policy review including stakeholder
outreach
|
•Progress STI and LTI targets and metrics
•Review of potential changes in STI or LTI metrics within limits of
Remuneration Policy
•Latest trends in policies and reporting
•Report on interaction with the Works Council, including discussion on
societal benchmark
•ESG related activities within scope of Remuneration Committee
|
||||||||
Q2 |
Q4 |
||||||||
•No meetings |
•Progress STI and LTI targets
•Board of Management remuneration 2024, including base salary, at-
target levels for STI and LTI, selection of STI and LTI metrics and
target levels
•Update on corporate governance developments: remuneration
•US Claw Back Policy
•Engagement of external auditor for agreed-upon procedures on
remuneration
•Draft Remuneration Report 2023
•Share planning for the period AGM 2024-2025
•Compliance of BoM members with share ownership requirement
|
||||||||
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
221 |
|
Remuneration Committee |
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
222 |
|
Remuneration Committee (continued) |
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
223 |
|
Remuneration Committee (continued) |
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
224 |
|
Board of Management remuneration |
The current reference group consists of the following
companies:
| |||
Current reference group
composition
|
|||
European
companies with
focus on long-term
technology/
industrial
engineering/R&D
|
Semiconductor
manufacturing
companies
|
Semiconductor
equipment
companies
|
|
ABB |
Broadcom |
Applied Materials |
|
Airbus |
Intel |
Lam Research |
|
Dassault Systèmes |
Qualcomm |
||
Infineon
Technologies
|
|||
Linde |
|||
Medtronic |
|||
Novartis |
|||
NXP
Semiconductors
|
|||
Philips |
|||
Roche |
|||
SAP |
|||
Schneider Electric |
|||
Shell |
|||
Siemens |
|||
Siemens
Healthineers
|
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
225 |
|
Board of Management remuneration (continued) |
Performance driven scenarios |
|
Retains high proportion of performance related by: |
|
2023 Levels
for maximum
performance
|
|||
Presidents |
|||
Other members |
|||
% Variable |
83% |
|
% Variable |
83% |
|
2023 Levels
for on target
performance
|
|||
Presidents |
|||
Other members |
|||
% Variable |
73% |
||
% Variable |
73% |
||
Threshold
performance
|
|||
Presidents |
|||
Other members |
|||
n |
Base salary |
|
n |
STI |
|
n |
LTI |
|
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
226 |
|
Board of Management remuneration (continued) |
Base
salary
|
+ |
STI
Cash bonus
|
+ |
LTI
Share-based
incentive
|
+ |
Pension and
other benefits
|
= |
Total
remuneration
|
Fixed remuneration (base salary) |
|||||
Link to strategy/rationale |
2022 policy |
||||
Attract, motivate and retain qualified industry professionals for the
Board of Management in order to define and achieve strategic goals.
|
Benchmark |
||||
•Consisting of 20 most relevant technology and R&D oriented
companies, including ASML’s talent competitors and business
peers and (indirect) customers
•Composition of companies in the reference group takes into
account ASML’s geographic location – it’s weighted toward
European companies (75% weighting), with some US companies
(25% weighting)
|
|||||
STI (cash bonus) |
|||||
Link to strategy/rationale |
2022 policy |
||||
Ensure a balanced focus on both the (financial) performance of
ASML in the short-term, and the sustained company future in terms
of technological advancement and customer satisfaction, fueling
long-term success.
|
•Maximum target STI: 120% of base salary for the presidents and
100% for the other BoM members
•2023 target STI: 105% of base salary for the presidents and 95%
for the other BoM members
|
||||
The weight of the individual STI performance metrics is as follows: |
|||||
•60% Financial
•20% Technology Leadership Index
•20% Customer Orientation
|
|||||
LTI (share-based incentive) |
|||||
Link to strategy/rationale |
2022 policy |
||||
Contribute to the strategy, long-term interests and sustainability of
ASML using performance measures which balance the direct interest
of ASML’s investors, the long-term financial success of ASML, the
long-term continuation of technological advancement and the
environmental and social dimensions of sustainability.
|
Maximum target LTI: capped at 200% of base salary
2023 target LTI: 170% of base salary
|
||||
The weight of the individual LTI performance metrics is as follows: |
|||||
•30% Relative TSR
•20-30% ESG measures; 2023 weight: 20%
•20-30% Technology Leadership Index; 2023 weight: 20%
•20-30% Strategic value drivers; 2023 weight: 30%
|
|||||
Other elements of fixed remuneration (pension and other benefits) |
|||||
Link to strategy/rationale |
2022 policy |
||||
Contribute to the competitiveness of the overall remuneration
package and create alignment with market practice.
|
•Pension arrangement based on the ‘excedent’ (supplementary)
arrangement for ASML employees in the Netherlands – a defined
contribution plan
•Expense reimbursements, such as company car costs, travel
expenses, representation allowances, housing costs (gross amount
before taxes), social security costs and health and disability
insurance costs
|
||||
Share ownership guidelines |
|||||
Link to strategy/rationale |
2022 policy |
||||
Requirement for a minimum share ownership by members of the
Board of Management. Ensure alignment between the interests of
the Board of Management members and ASML’s long-term value
creation.
|
•Presidents three times annual base salary, other Board members
two times annual base salary
•5-year period to comply for new members
•Supervisory Board has discretion to allow a temporary deviation in
extraordinary circumstances
•Any shortfall will be remediated through the next vesting of shares
|
||||
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
227 |
|
Board of Management remuneration (continued) |
Annual plan
2023
|
Performance
metrics selected
|
EBIT %
Customer
orientation
Technology
leadership
|
Performance
assessment
by SB
|
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
228 |
|
Board of Management remuneration (continued) |
Performance targets1 |
Actual
outcome
|
Pay-out2 |
||||
Weight |
Threshold |
Target |
Stretch |
% target |
||
EBIT Margin (%) (Non-GAAP measure) |
60% |
29% |
31% |
34% |
32.8% |
130.2% |
Customer Orientation |
20% |
127.8% |
||||
Consisting of the following equally weighted sub-targets: |
||||||
Applications market share |
5% |
* |
110.0% |
|||
DUV output (systems) |
5% |
* |
101.3% |
|||
EUV availability |
5% |
* |
150.0% |
|||
TechInsights survey |
5% |
Top 5 |
Top 3 |
Top 2 |
Top 2 |
150.0% |
Technology Leadership Index |
20% |
4 |
6 |
10 |
7.8 |
122.5% |
Total |
100% |
128.2% |
Weight |
|
EBIT Margin (%) (Non-GAAP measure) |
60% |
Customer Orientation |
20% |
Consisting of the following sub-targets: |
|
Applications: Adoption of Multi Beam |
2.5% |
DUV Cost and Competitiveness |
2.5% |
EUV Low NA Maturity |
2.5% |
EUV High NA Performance |
2.5% |
ASML Customer Trust Survey |
10% |
Technology Leadership Index |
20% |
Total |
100% |
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
229 |
|
Board of Management remuneration (continued) |
Target setting process | |||||||
Review company
strategy in line with
financial plan
|
Determine
business priorities
for upcoming
3-year performance
period
|
Determine
LTI performance
measures for
3-year performance
period
|
Finalize long-term
financial plan
|
||||
Step 1 |
Step 2 |
Step 3 |
Step 4 |
||||
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
230 |
|
Board of Management remuneration (continued) |
Performance metric |
Performance targets |
|||
Weight |
Threshold |
Target |
Maximum |
|
Relative TSR |
30% |
Lower quartile |
Median |
Upper quartile |
Normalized three-years average Cash
Conversion Rate %1
|
30% |
85% |
90% |
95% |
ESG Measures |
20% |
|||
Consisting of equally weighted sub-metrics: |
||||
Net zero emission (Scope 1+2) with minimum
compensation
|
<37kT
compensation
|
<30kT
compensation
|
<20kT
compensation
|
|
Employee engagement |
X2 – 4% point |
X2 – 2% point |
X2 |
|
Total and JG9+ Inflow of women |
22% |
24% |
26% |
|
Technology Leadership Index |
20% |
4 |
6 |
10 |
Total |
100% |
Grant
date
|
Vesting period
within 3 years
|
Vesting
date
|
Holding period
2 years
|
End of
transfer
restrictions
|
||||||||||
–In the period between the Grant date
and the Vesting date, Performance Shares
are conditional.
|
–Performance Shares are delivered to the
Participant. However, Transfer Restrictions
apply: acquired Performance Shares cannot
be transferred during the Holding Period
–Participant is allowed to sell sufficient
Performance Shares to cover tax obligations
|
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
231 |
|
Board of Management remuneration (continued) |
Performance targets |
Actual
performance
|
Pay-out %2 |
||||||
Performance metric |
Weight |
Threshold |
Target |
Exceed |
Stretch |
% of target |
||
Relative TSR |
30% |
(20%) |
0% |
n/a |
20% |
11.0% |
155.0% |
|
ROAIC1 |
40% |
27.0% |
30.0% |
33.0% |
36.0% |
65.8% |
200.0% |
|
Technology Leadership Index |
20% |
4 |
6 |
8 |
10 |
8.2% |
155.8% |
|
Sustainability |
10% |
≤10.0% |
≤9% |
n/a |
≤7% |
10.8% |
0.0% |
4 |
Total |
100% |
157.7% |
3 |
Performance targets |
||||
Performance metric |
Weight |
Threshold |
Target |
Maximum |
Relative TSR |
30% |
As per remuneration policy |
||
ROAIC (2024-2026)1 |
30% |
45% |
70% |
90% |
ESG measures |
20% |
|||
Consisting of the following sub-measures: |
||||
Employee engagement
(Relative benchmark target vs top 25% performing
companies)
|
6.7% |
-4 |
-2 |
0 |
Gender diversity: |
6.7% |
|||
•% Inflow of women all JG and JG 9+ |
24% |
26% |
28% |
|
•% Representation of women in JG 13+ |
12% |
14% |
16% |
|
Commitment of top-80% suppliers (based on
CO2e emissions) to reduce their CO2e footprint by
2030
|
6.7% |
65% |
75% |
85% |
Technology Leadership Index |
20% |
4 |
6 |
10 |
Total |
100% |
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
232 |
|
Board of Management remuneration (continued) |
Board of Management |
Ownership guidelines |
2023 base salary
(in € thousands)
|
Number of outstanding
vested shares
|
Ownership ratio1 |
P.T.F.M. Wennink |
3x base |
1,040 |
39,292 |
25.76 |
M.A. van den Brink |
3x base |
1,040 |
11,609 |
7.61 |
F.J.M. Schneider-
Maunoury
|
2x base |
725 |
20,685 |
19.45 |
R.J.M. Dassen |
2x base |
725 |
16,718 |
15.72 |
C.D. Fouquet |
2x base |
725 |
7,179 |
6.75 |
W.R. Allan |
2x base |
725 |
4,677 |
4.40 |
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
233 |
|
Board of Management remuneration (continued) |
Board of
Management
|
Financial
Year
|
Base salary |
Pension |
Other benefits |
Total fixed |
% Fixed |
STI |
LTI |
Total variable |
% Variable |
Total
Remuneration
|
Relative
proportion fixed
vs. variable
|
|
P.T.F.M. Wennink1 |
2023 |
1,040 |
248 |
61 |
1,349 |
22.7% |
1,400 |
3,192 |
4,592 |
77.3% |
5,941 |
0.29 |
|
2022 |
1,020 |
206 |
58 |
1,284 |
30.0% |
961 |
2,035 |
2,996 |
70.0% |
4,280 |
0.43 |
||
2021 |
1,020 |
206 |
57 |
1,283 |
26.6% |
1,098 |
2,439 |
3,537 |
73.4% |
4,820 |
0.36 |
||
M.A. van den Brink1 |
2023 |
1,040 |
248 |
59 |
1,347 |
22.7% |
1,400 |
3,192 |
4,592 |
77.3% |
5,939 |
0.29 |
|
2022 |
1,020 |
206 |
57 |
1,283 |
30.0% |
961 |
2,035 |
2,996 |
70.0% |
4,279 |
0.43 |
||
2021 |
1,020 |
206 |
56 |
1,282 |
26.6% |
1,098 |
2,439 |
3,537 |
73.4% |
4,819 |
0.36 |
||
F.J.M. Schneider-Maunoury |
2023 |
725 |
148 |
45 |
918 |
25.7% |
883 |
1,773 |
2,656 |
74.3% |
3,574 |
0.35 |
|
2022 |
694 |
141 |
36 |
871 |
30.6% |
619 |
1,354 |
1,973 |
69.4% |
2,844 |
0.44 |
||
2021 |
694 |
115 |
36 |
845 |
26.8% |
747 |
1,566 |
2,313 |
73.2% |
3,158 |
0.37 |
||
R.J.M. Dassen |
2023 |
725 |
121 |
56 |
902 |
25.4% |
883 |
1,773 |
2,656 |
74.6% |
3,558 |
0.34 |
|
2022 |
694 |
116 |
51 |
861 |
30.4% |
619 |
1,354 |
1,973 |
69.6% |
2,834 |
0.44 |
||
2021 |
694 |
115 |
51 |
860 |
22.6% |
747 |
2,193 |
2,940 |
77.4% |
3,800 |
0.29 |
||
C.D. Fouquet |
2023 |
725 |
82 |
56 |
863 |
24.5% |
883 |
1,773 |
2,656 |
75.5% |
3,519 |
0.32 |
|
2022 |
694 |
78 |
53 |
825 |
29.5% |
619 |
1,354 |
1,973 |
70.5% |
2,798 |
0.42 |
||
2021 |
694 |
78 |
52 |
824 |
26.3% |
747 |
1,566 |
2,313 |
73.7% |
3,137 |
0.36 |
||
W.R. Allan2 |
2023 |
492 |
82 |
38 |
612 |
29.6% |
599 |
860 |
3 |
1,459 |
70.4% |
2,071 |
0.42 |
Total Board of Management |
2023 |
4,747 |
929 |
315 |
5,991 |
24.4% |
6,048 |
12,563 |
18,611 |
75.6% |
24,602 |
0.32 |
|
2022 |
4,122 |
747 |
255 |
5,124 |
30.1% |
3,779 |
8,132 |
11,911 |
69.9% |
17,035 |
0.43 |
||
2021 |
4,122 |
720 |
252 |
5,094 |
25.8% |
4,437 |
10,203 |
14,640 |
74.2% |
19,734 |
0.35 |
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
234 |
|
Board of Management remuneration (continued) |
Former Board of Management |
Financial
Year
|
Base salary |
Pension |
Other benefits |
Total fixed |
% Fixed |
STI |
LTI |
Total variable |
% Variable |
Total
Remuneration
|
Relative
proportion fixed
vs. variable
|
F.J. van Hout1 |
2021 |
231 |
47 |
16 |
294 |
11.4% |
243 |
2,036 |
2,279 |
88.6% |
2,573 |
0.13 |
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
235 |
|
Board of Management remuneration (continued) |
Market-based element |
Non-market-based elements |
||||||||||||
Board of
Management
|
Grant date |
Status |
Full control |
Number of
shares at target
|
Fair value at
grant date
|
Number of
shares at target
|
Fair value at
grant date
|
Total number of
shares at target
|
Total number of
shares at
maximum (200%)
|
Vesting date |
Number of
vested shares
on publication
date
|
Year-end
closing share
price in year of
vesting
|
End of lock-up
date
|
P.T.F.M. Wennink |
1/27/23 |
Conditional |
No |
1,049 |
901.9 |
2,447 |
603.4 |
3,496 |
6,991 |
1/1/26 |
n/a |
n/a |
1/1/28 |
4/29/22 |
Conditional |
No |
709 |
596.0 |
1,655 |
533.5 |
2,364 |
4,727 |
1/1/25 |
n/a |
n/a |
1/1/27 |
|
1/22/21 |
Conditional1 |
No |
1,053 |
635.6 |
2,455 |
454.9 |
3,508 |
7,016 |
1/1/24 |
5,531 |
681.7 |
1/1/26 |
|
1/24/20 |
Unconditional |
No |
1,387 |
286.9 |
3,235 |
263.7 |
4,622 |
9,245 |
1/1/23 |
8,420 |
503.8 |
1/1/25 |
|
7/19/19 |
Unconditional |
No |
2,217 |
245.4 |
5,173 |
194.4 |
7,390 |
14,780 |
1/1/22 |
13,326 |
706.7 |
1/1/24 |
|
M.A. van den Brink |
1/27/23 |
Conditional |
No |
1,049 |
901.9 |
2,447 |
603.4 |
3,496 |
6,991 |
1/1/26 |
n/a |
n/a |
1/1/28 |
4/29/22 |
Conditional |
No |
709 |
596.0 |
1,655 |
533.5 |
2,364 |
4,727 |
1/1/25 |
n/a |
n/a |
1/1/27 |
|
1/22/21 |
Conditional1 |
No |
1,053 |
635.6 |
2,455 |
454.9 |
3,508 |
7,016 |
1/1/24 |
5,531 |
681.7 |
1/1/26 |
|
1/24/20 |
Unconditional |
No |
1,387 |
286.9 |
3,235 |
263.7 |
4,622 |
9,245 |
1/1/23 |
8,420 |
503.8 |
1/1/25 |
|
7/19/19 |
Unconditional |
No |
2,217 |
245.4 |
5,173 |
194.4 |
7,390 |
14,780 |
1/1/22 |
13,326 |
706.7 |
1/1/24 |
|
F.J.M.
Schneider-Maunoury
|
1/27/23 |
Conditional |
No |
731 |
901.9 |
1,706 |
603.4 |
2,437 |
4,874 |
1/1/26 |
n/a |
n/a |
1/1/28 |
4/29/22 |
Conditional |
No |
483 |
596.0 |
1,126 |
533.5 |
1,609 |
3,217 |
1/1/25 |
n/a |
n/a |
1/1/27 |
|
1/22/21 |
Conditional1 |
No |
717 |
635.6 |
1,670 |
454.9 |
2,387 |
4,774 |
1/1/24 |
3,763 |
681.7 |
1/1/26 |
|
1/24/20 |
Unconditional |
No |
858 |
286.9 |
2,001 |
263.7 |
2,859 |
5,718 |
1/1/23 |
5,208 |
503.8 |
1/1/25 |
|
7/19/19 |
Unconditional |
No |
1,371 |
245.4 |
3,198 |
194.4 |
4,569 |
9,137 |
1/1/22 |
8,239 |
706.7 |
1/1/24 |
|
R.J.M. Dassen |
1/27/23 |
Conditional |
No |
731 |
901.9 |
1,706 |
603.4 |
2,437 |
4,874 |
1/1/26 |
n/a |
n/a |
1/1/28 |
4/29/22 |
Conditional |
No |
483 |
596.0 |
1,126 |
533.5 |
1,609 |
3,217 |
1/1/25 |
n/a |
n/a |
1/1/27 |
|
1/22/21 |
Conditional1 |
No |
717 |
635.6 |
1,670 |
454.9 |
2,387 |
4,774 |
1/1/24 |
3,763 |
681.7 |
1/1/26 |
|
1/24/20 |
Unconditional |
No |
858 |
286.9 |
2,001 |
263.7 |
2,859 |
5,718 |
1/1/23 |
5,208 |
503.8 |
1/1/25 |
|
7/19/19 |
Unconditional |
No |
1,371 |
245.4 |
3,198 |
194.4 |
4,569 |
9,137 |
1/1/22 |
8,239 |
706.7 |
1/1/24 |
|
1/25/19 |
Unconditional |
No |
3,000 |
169.0 |
7,000 |
148.3 |
10,000 |
20,000 |
1/1/22 |
18,032 |
706.7 |
1/1/24 |
|
C.D. Fouquet |
1/27/23 |
Conditional |
No |
731 |
901.9 |
1,706 |
603.4 |
2,437 |
4,874 |
1/1/26 |
n/a |
n/a |
1/1/28 |
4/29/22 |
Conditional |
No |
483 |
596.0 |
1,126 |
533.5 |
1,609 |
3,217 |
1/1/25 |
n/a |
n/a |
1/1/27 |
|
1/22/21 |
Conditional1 |
No |
717 |
635.6 |
1,670 |
454.9 |
2,387 |
4,774 |
1/1/24 |
3,763 |
681.7 |
1/1/26 |
|
1/24/20 |
Unconditional |
No |
858 |
286.9 |
2,001 |
263.7 |
2,859 |
5,718 |
1/1/23 |
5,208 |
503.8 |
1/1/25 |
|
7/19/19 |
Unconditional |
No |
1,371 |
245.4 |
3,198 |
194.4 |
4,569 |
9,137 |
1/1/22 |
8,239 |
706.7 |
1/1/24 |
|
W.R. Allan2 |
1/27/23 |
Conditional |
No |
731 |
901.9 |
1,706 |
603.4 |
2,437 |
4,874 |
1/1/26 |
n/a |
n/a |
1/1/28 |
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
236 |
|
Board of Management remuneration (continued) |
Market-based element |
Non-market-based elements |
||||||||||||
Former Board of Management |
Grant date |
Status |
Full control |
Number of
shares at
target
|
Fair value at
grant date
|
Number of
shares at
target
|
Fair value at
grant date
|
Total number
of shares at
target
|
Total number of
shares at
maximum
(200%)
|
Vesting date |
Number of
vested shares
on publication
date
|
Year-end
closing share
price in year of
vesting
|
End of lock-up
date
|
F.J. van Hout |
1/22/21 |
Conditional1 |
No |
239 |
635.6 |
557 |
454.9 |
796 |
1,592 |
1/1/24 |
1,255 |
681.7 |
1/1/26 |
1/24/20 |
Unconditional |
No |
858 |
286.9 |
2,001 |
263.7 |
2,859 |
5,718 |
1/1/23 |
5,208 |
503.8 |
1/1/25 |
|
7/19/19 |
Unconditional |
No |
1,371 |
245.4 |
3,198 |
194.4 |
4,569 |
9,137 |
1/1/22 |
8,239 |
706.7 |
1/1/24 |
Instrument: |
Performance shares |
|
Grant |
Conditional grant on an annual basis based on maximum achievable opportunity. The number of performance shares to be conditionally awarded is calculated using the volume-weighted average share price during the last
quarter of the year preceding the conditional award.
|
|
Grant date |
Date on which the performance shares are conditionally granted. |
|
Performance period |
Period of three-years over which the achievement of the pre-defined performance targets is measured. |
|
Vesting |
The shares will become unconditional after the end of the performance period, depending on the level of achievement of the predetermined performance targets. |
|
Lock-up period |
The minimum holding period is two years after the vesting date. |
|
Upon termination of contract, the transfer restrictions will remain in place during the holding period except in case of decease. |
||
In case a tax payment is due by the members of the Board of Management over the retrieved variable income, performance shares may be partially sold at vesting (‘sell to cover’) in accordance with the law and internal
regulations.
|
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
237 |
|
Board of Management remuneration (continued) |
For the year ended December 31 (€, in thousands) |
2019 |
2020 |
Change (in %) |
2021 |
Change (in %) |
2022 |
Change (in %) |
2023 |
Change (in %) |
Net sales |
11,820,001 |
13,978,452 |
18% |
18,610,994 |
33% |
21,173,448 |
14% |
27,558,506 |
30% |
Net income based on US GAAP |
2,592,252 |
3,553,670 |
37% |
5,883,177 |
66% |
5,624,209 |
(4)% |
7,838,994 |
39% |
Net income based on EU-IFRS |
2,581,107 |
3,696,813 |
43% |
6,134,595 |
66% |
6,395,775 |
4% |
8,115,168 |
27% |
ASML share price (closing price on Euronext Amsterdam in €) |
263.7 |
397.6 |
51% |
706.7 |
78% |
503.8 |
(29)% |
681.7 |
35% |
Average number of payroll employees in FTEs |
22,192 |
24,727 |
11% |
28,223 |
14% |
33,071 |
17% |
38,805 |
17% |
Dow Jones Sustainability Index (DJSI)1 |
10.2% |
9.0% |
(11.8)% |
12.1% |
34.4% |
10.8% |
(10.7)% |
10.8% |
—% |
Remuneration P.T.F.M. Wennink (CEO)2 |
4,361 |
4,564 |
5% |
4,820 |
6% |
4,280 |
(11)% |
5,941 |
39% |
Remuneration M.A. van den Brink2 |
4,360 |
4,564 |
5% |
4,819 |
6% |
4,279 |
(11)% |
5,939 |
39% |
Remuneration R.J.M. Dassen |
2,956 |
3,804 |
29% |
3,800 |
—% |
2,834 |
(25)% |
3,558 |
26% |
Remuneration C.D. Fouquet |
2,203 |
2,975 |
35% |
3,137 |
5% |
2,798 |
(11)% |
3,519 |
26% |
Remuneration F.J.M. Schneider-Maunoury |
2,724 |
2,927 |
7% |
3,158 |
8% |
2,844 |
(10)% |
3,574 |
26% |
Remuneration W.R. Allan5 |
n/a |
n/a |
n/a |
n/a |
n/a |
n/a |
n/a |
2,071 |
n/a |
Average remuneration per FTE4 based on US GAAP |
114 |
120 |
5% |
122 |
2% |
125 |
2% |
138 |
10% |
Average remuneration per FTE4 based on EU-IFRS |
114 |
120 |
5% |
122 |
2% |
118 |
(3)% |
143 |
21% |
Internal pay ratio (CEO versus employee remuneration based on US GAAP)2,3 |
38 |
38 |
—% |
40 |
5% |
34 |
(15)% |
43 |
26% |
Internal pay ratio (CEO versus employee remuneration based on EU-IFRS)2,3 |
38 |
38 |
—% |
40 |
5% |
36 |
(10)% |
42 |
17% |
Ratio of the percentage increase in annual total compensation for CEO to the
percentage increase in average annual remuneration for all employees4 based on
US GAAP
|
n/a |
n/a |
n/a |
n/a |
n/a |
(5.5) |
n/a |
3.9 |
(171)% |
Ratio of the percentage increase in annual total compensation for CEO to the
percentage increase in average annual remuneration for all employees4 based on
EU-IFRS
|
n/a |
n/a |
n/a |
n/a |
n/a |
3.7 |
n/a |
1.9 |
(49)% |
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
238 |
|
Board of Management remuneration (continued) |
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
239 |
|
Board of Management remuneration (continued) |
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
240 |
|
Supervisory Board remuneration |
Fixed remuneration |
|||||||
Description in 2023 Remuneration Policy |
2022 |
2023 |
|||||
Fixed remuneration paid in cash |
Chair of Supervisory Board |
€130,000 |
€140,000 |
||||
including a base membership fee, committee fees and additional |
Vice Chair of Supervisory Board |
€94,000 |
€100,000 |
||||
c |
compensation contingent on SB members' activities and |
Member of Supervisory Board |
€75,000 |
€80,000 |
|||
responsibilities |
Chair Audit Committee |
€25,500 |
€27,000 |
||||
Member Audit Committee |
€18,000 |
€18,000 |
|||||
Chair of other Committees |
€20,000 |
€22,000 |
|||||
Member of other Committees |
€14,500 |
€16,000 |
|||||
Extra allowance for intercontinental meetings |
|||||||
Description in 2023 Remuneration Policy |
2022 |
2023 |
|||||
Extra, fixed allowance paid in connection with additional time
commitment for intercontinental travel
|
For each meeting that involves intercontinental
travel
|
€5,000 |
€5,000 |
||||
Expenses |
|||||||
Description in 2023 Remuneration Policy |
2022 |
2023 |
|||||
Expenses incurred in relation to meeting attendance are reimbursed.
In addition, a fixed net cost allowance is paid, covering certain pre-
defined out-of-pocket expenses
|
Fixed net cost allowance |
||||||
Chair of Supervisory Board |
€1,980 |
€1,980 |
|||||
Member of Supervisory Board |
€1,380 |
€1,380 |
|||||
Remuneration in special circumstances |
|||||||
The Supervisory Board may, upon recommendation of the
Remuneration Committee, grant additional remuneration in special
circumstances. This may concern granting increased Supervisory
Board and/or Committee fees, depending on the character of the
circumstances, for instance in case of a significant increase in time
investment by its members.
|
The additional annual remuneration per member will be capped at one
time the amount of the annual Supervisory Board membership fee
payable to such member.
The Supervisory Board considers an increase of at least 25% a
significant increase in time investment
|
||||||
Loans and guarantees |
||||||
Description |
Value |
|||||
No (personal) loans or guarantees or the like will be granted |
Not applicable |
|||||
Shares and share ownership |
||||||
Description |
Value |
|||||
No (rights to) shares are granted by way of remuneration. Any holding
of ASML shares is for the purpose of long-term investment. Any
trading activity is subject to ASML’s Insider Trading Rules
|
Not applicable |
|||||
Other arrangements |
||||||
Description |
Value |
|||||
(Re)appointment based on Dutch law and ASML’s Articles of
Association. No claw-back, severance or change in control
arrangements are in place
|
Not applicable |
|||||
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
241 |
|
Supervisory Board remuneration (continued) |
Membership fees
2023
|
Committee fees
2023
|
Allowances 20231 |
Proportion fixed vs.
variable 2023
|
Total remuneration
2023
|
Total remuneration
2022
|
Total remuneration
2021
|
Total remuneration
2020
|
Total remuneration
2019
|
|
T.L. Kelly |
79 |
37 |
21 |
100:0 |
137 |
126 |
107 |
88 |
101 |
A.P. Aris |
99 |
47 |
6 |
100:0 |
152 |
144 |
127 |
95 |
98 |
B.M. Conix |
79 |
29 |
1 |
100:0 |
109 |
99 |
63 |
n/a |
n/a |
D.M. Durcan |
79 |
37 |
21 |
100:0 |
137 |
126 |
112 |
57 |
n/a |
D.W.A. East |
79 |
34 |
6 |
100:0 |
119 |
99 |
93 |
59 |
n/a |
N.S. Andersen2 |
95 |
27 |
1 |
100:0 |
123 |
n/a |
n/a |
n/a |
n/a |
J.P. de Kreij3 |
55 |
29 |
1 |
100:0 |
85 |
n/a |
n/a |
n/a |
n/a |
A.F.M. Everke |
79 |
24 |
1 |
100:0 |
104 |
66 |
n/a |
n/a |
n/a |
A.L. Steegen |
79 |
24 |
6 |
100:0 |
109 |
66 |
n/a |
n/a |
n/a |
Total |
723 |
288 |
64 |
100:0 |
1,075 |
726 |
502 |
299 |
199 |
Membership fees 2023 |
Committee fees 2023 |
Allowances 20231 |
Proportion fixed vs.
variable 2023
|
Total remuneration 2023 |
Total remuneration 2022 |
Total remuneration 2021 |
|
G.J. Kleisterlee2 |
43 |
17 |
1 |
100:0 |
61 |
190 |
178 |
R.D. Schwalb2 |
24 |
13 |
— |
100:0 |
37 |
116 |
113 |
J.M.C. Stork |
n/a |
n/a |
n/a |
n/a |
n/a |
40 |
113 |
D.A. Grose |
n/a |
n/a |
n/a |
n/a |
n/a |
n/a |
36 |
C.M.S. Smits Nusteling |
n/a |
n/a |
n/a |
n/a |
n/a |
n/a |
31 |
Total |
67 |
30 |
1 |
100:0 |
98 |
346 |
471 |
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
242 |
|
Supervisory Board remuneration (continued) |
ASML ANNUAL REPORT 2023 |
REMUNERATION REPORT CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
243 |
|
Remuneration Report - Other Information |
Financials &
Non-financials
|
||||
IN THIS SECTION |
||||
Consolidated Financial Statements |
||||
Report of Independent Registered Public
Accounting Firm
|
||||
Consolidated Statements of Operations |
||||
Consolidated Statements of Comprehensive Income |
||||
Consolidated Balance Sheets |
||||
Consolidated Statements of Shareholders’ Equity |
||||
Consolidated Statements of Cash Flows |
||||
Notes to the Consolidated Financial Statements |
||||
Non-financial statements |
||||
Assurance Report of the Independent Auditor |
||||
About the non-financial information |
||||
Non-financial indicators |
ASML ANNUAL REPORT 2023 |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
244 |
Consolidated
Financial
Statements
|
||||
IN THIS SECTION |
||||
Report of Independent Registered Public
Accounting Firm
|
||||
Consolidated Statements of Operations |
||||
Consolidated Statements of Comprehensive
Income
|
||||
Consolidated Balance Sheets |
||||
Consolidated Statements of Shareholders’
Equity
|
||||
Consolidated Statements of Cash Flows |
||||
Notes to the Consolidated Financial
Statements
|
||||
ASML ANNUAL REPORT 2023 |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
245 |
ASML ANNUAL REPORT 2023 |
CONSOLIDATED FINANCIAL STATEMENTS |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
246 |
|
Report of Independent Registered Public Accounting Firm |
||||||
To the Shareholders and the Supervisory Board |
ASML ANNUAL REPORT 2023 |
CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
247 |
|
Report of Independent Registered Public Accounting Firm (continued) |
Year ended December 31 (€, in millions, except per share data) |
Notes |
2021 |
2022 |
2023 |
|
Net system sales |
13,652.8 |
15,430.3 |
21,938.6 |
||
Net service and field option sales |
4,958.2 |
5,743.1 |
5,619.9 |
||
Total net sales |
2, 3 |
18,611.0 |
21,173.4 |
27,558.5 |
|
Cost of system sales |
(6,482.9) |
(7,582.3) |
(10,151.0) |
||
Cost of service and field option sales |
(2,319.1) |
(2,891.0) |
(3,271.4) |
||
Total cost of sales1 |
(8,802.0) |
(10,473.3) |
(13,422.4) |
||
Gross profit |
9,809.0 |
10,700.1 |
14,136.1 |
||
Research and development costs |
(2,547.0) |
(3,253.5) |
(3,980.6) |
||
Selling, general and administrative costs |
(725.6) |
(945.9) |
(1,113.2) |
||
Other income |
10 |
213.7 |
— |
— |
|
Income from operations |
6,750.1 |
6,500.7 |
9,042.3 |
||
Interest and other, net |
16 |
(44.6) |
(44.6) |
41.2 |
|
Income before income taxes |
6,705.5 |
6,456.1 |
9,083.5 |
||
Income tax expense |
21 |
(1,021.4) |
(969.9) |
(1,435.8) |
|
Income after income taxes |
5,684.1 |
5,486.2 |
7,647.7 |
||
Profit from equity method investments |
9 |
199.1 |
138.0 |
191.3 |
|
Net income |
5,883.2 |
5,624.2 |
7,839.0 |
||
Basic net income per ordinary share |
23 |
14.36 |
14.14 |
19.91 |
|
Diluted net income per ordinary share |
23 |
14.34 |
14.13 |
19.89 |
|
Number of ordinary shares used in computing per share amounts: |
|||||
Basic |
23 |
409.8 |
397.7 |
393.8 |
|
Diluted |
23 |
410.4 |
398.0 |
394.1 |
ASML ANNUAL REPORT 2023 |
CONSOLIDATED FINANCIAL STATEMENTS |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
248 |
|
Consolidated Statements of Operations |
Year ended December 31 (€, in millions) |
Notes |
2021 |
2022 |
2023 |
|
Net income |
5,883.2 |
5,624.2 |
7,839.0 |
||
Other comprehensive income (OCI): |
|||||
Proportionate share of OCI from equity method investments |
22.0 |
37.7 |
0.2 |
||
Foreign currency translation, net of taxes: |
|||||
Gain (loss) on foreign currency translation |
93.3 |
66.0 |
(68.3) |
||
Financial instruments, net of taxes: |
|||||
Gain (loss) on derivative financial instruments |
25 |
16.6 |
57.6 |
(15.8) |
|
Transfers to net income |
25 |
22.2 |
(66.5) |
0.6 |
|
Other comprehensive income, net of taxes |
154.1 |
94.8 |
(83.3) |
||
Total comprehensive income, net of taxes |
6,037.3 |
5,719.0 |
7,755.7 |
||
Attributable to equity holders |
6,037.3 |
5,719.0 |
7,755.7 |
ASML ANNUAL REPORT 2023 |
CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
249 |
|
Consolidated Statements of Comprehensive Income |
As of December 31 (€, in millions, except share and per share data) |
Notes |
2022 |
2023 |
|
Assets |
||||
Cash and cash equivalents |
4 |
7,268.3 |
7,004.7 |
|
Short-term investments |
4 |
107.7 |
5.4 |
|
Accounts receivable, net |
5 |
5,323.8 |
4,334.1 |
|
Finance receivables, net |
6 |
1,356.7 |
1,379.2 |
|
Current tax assets |
21 |
33.4 |
1,001.2 |
|
Contract assets |
2 |
131.9 |
240.1 |
|
Inventories, net |
7 |
7,199.7 |
8,850.7 |
|
Other assets1 |
8 |
1,643.4 |
1,578.5 |
|
Total current assets |
23,064.9 |
24,393.9 |
||
Finance receivables, net |
6 |
— |
60.6 |
|
Deferred tax assets |
21 |
1,672.8 |
1,872.3 |
|
Loan receivable2 |
26 |
364.4 |
929.2 |
|
Other assets3 |
8 |
739.8 |
651.8 |
|
Equity method investments |
9 |
923.6 |
919.6 |
|
Goodwill |
11 |
4,555.6 |
4,588.6 |
|
Other intangible assets, net |
12 |
842.4 |
741.7 |
|
Property, plant and equipment, net |
13 |
3,944.2 |
5,493.2 |
|
Right-of-use assets |
14 |
192.7 |
306.6 |
|
Total non-current assets |
13,235.5 |
15,563.6 |
||
Total assets |
36,300.4 |
39,957.5 |
||
As of December 31 (€, in millions, except share and per share data) |
Notes |
2022 |
2023 |
|
Liabilities and shareholders’ equity |
||||
Accounts payable4 |
2,565.2 |
2,347.3 |
||
Accrued and other liabilities5 |
15 |
1,875.9 |
2,177.4 |
|
Current tax liabilities |
21 |
315.3 |
308.9 |
|
Current portion of long-term debt |
16 |
746.2 |
0.1 |
|
Contract liabilities |
2 |
12,481.0 |
11,441.0 |
|
Total current liabilities |
17,983.6 |
16,274.7 |
||
Long-term debt |
16 |
3,514.2 |
4,631.5 |
|
Deferred and other income tax liabilities |
21 |
267.0 |
372.2 |
|
Contract liabilities |
2 |
5,269.9 |
4,825.5 |
|
Accrued and other liabilities |
15 |
454.9 |
401.2 |
|
Total non-current liabilities |
9,506.0 |
10,230.4 |
||
Total liabilities |
27,489.6 |
26,505.1 |
||
Ordinary shares; €0.09 nominal value; |
||||
700,000,000 shares authorized at December 31, 2023 (2022: 700,000,000) |
||||
393,421,721 issued and outstanding at December 31, 2023 (2022: 394,589,411) |
||||
Issued and outstanding shares |
36.3 |
36.0 |
||
Share premium |
3,940.8 |
3,998.1 |
||
Treasury shares at cost |
(4,641.3) |
(3,306.2) |
||
Retained earnings |
9,046.7 |
12,379.5 |
||
Accumulated other comprehensive income |
428.3 |
345.0 |
||
Total shareholders’ equity |
22 |
8,810.8 |
13,452.4 |
|
Total liabilities and shareholders’ equity |
36,300.4 |
39,957.5 |
ASML ANNUAL REPORT 2023 |
CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
250 |
|
Consolidated Balance Sheets |
Notes |
Issued and Outstanding Shares |
Share Premium |
Treasury Shares
at Cost
|
Retained Earnings |
OCI1 |
Total |
|||
(€, in millions) |
Number |
Amount |
|||||||
Balance at January 1, 2021 |
416.5 |
37.6 |
3,780.1 |
(863.2) |
10,731.5 |
179.4 |
13,865.4 |
||
Components of comprehensive income: |
|||||||||
Net income |
— |
— |
— |
— |
5,883.2 |
— |
5,883.2 |
||
Proportionate share of OCI from equity method investments |
— |
— |
— |
— |
— |
22.0 |
22.0 |
||
Gain (loss) on foreign currency translation |
— |
— |
— |
— |
— |
93.3 |
93.3 |
||
Gain (loss) on financial instruments |
25 |
— |
— |
— |
— |
— |
38.8 |
38.8 |
|
Total comprehensive income |
— |
— |
— |
— |
5,883.2 |
154.1 |
6,037.3 |
||
Purchase of treasury shares |
22 |
(14.4) |
— |
— |
(8,560.3) |
— |
— |
(8,560.3) |
|
Cancellation of treasury shares |
22 |
— |
(1.2) |
— |
6,926.6 |
(6,925.4) |
— |
— |
|
Share-based payments |
20 |
— |
— |
117.5 |
— |
— |
— |
117.5 |
|
Issuance of shares |
20 |
0.5 |
0.1 |
(21.5) |
74.1 |
(3.7) |
— |
49.0 |
|
Dividend paid |
22 |
— |
— |
— |
— |
(1,368.3) |
— |
(1,368.3) |
|
Balance at December 31, 2021 |
402.6 |
36.5 |
3,876.1 |
(2,422.8) |
8,317.3 |
333.5 |
10,140.6 |
||
Components of comprehensive income: |
|||||||||
Net income |
— |
— |
— |
— |
5,624.2 |
— |
5,624.2 |
||
Proportionate share of OCI from equity method investments |
— |
— |
— |
— |
— |
37.7 |
37.7 |
||
Gain (loss) on foreign currency translation |
— |
— |
— |
— |
— |
66.0 |
66.0 |
||
Gain (loss) on financial instruments |
25 |
— |
— |
— |
— |
— |
(8.9) |
(8.9) |
|
Total comprehensive income |
— |
— |
— |
— |
5,624.2 |
94.8 |
5,719.0 |
||
Purchase of treasury shares |
22 |
(8.5) |
— |
— |
(4,639.7) |
— |
— |
(4,639.7) |
|
Cancellation of treasury shares |
22 |
— |
(0.3) |
— |
2,333.7 |
(2,333.4) |
— |
— |
|
Share-based payments |
20 |
— |
— |
68.9 |
— |
— |
— |
68.9 |
|
Issuance of shares |
20 |
0.5 |
0.1 |
(4.2) |
87.5 |
(1.6) |
— |
81.8 |
|
Dividend paid |
22 |
— |
— |
— |
— |
(2,559.8) |
— |
(2,559.8) |
|
Balance at December 31, 2022 |
394.6 |
36.3 |
3,940.8 |
(4,641.3) |
9,046.7 |
428.3 |
8,810.8 |
ASML ANNUAL REPORT 2023 |
CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
251 |
|
Consolidated Statements of Shareholders’ Equity |
Notes |
Issued and Outstanding Shares |
Share Premium |
Treasury Shares
at Cost
|
Retained Earnings |
OCI1 |
Total |
|||
(€, in millions) |
Number |
Amount |
|||||||
Balance at December 31, 2022 |
394.6 |
36.3 |
3,940.8 |
(4,641.3) |
9,046.7 |
428.3 |
8,810.8 |
||
Components of comprehensive income: |
|||||||||
Net income |
— |
— |
— |
— |
7,839.0 |
— |
7,839.0 |
||
Proportionate share of OCI from equity method investments |
— |
— |
— |
— |
— |
0.2 |
0.2 |
||
Gain (loss) on foreign currency translation |
— |
— |
— |
— |
— |
(68.3) |
(68.3) |
||
Gain (loss) on financial instruments |
25 |
— |
— |
— |
— |
— |
(15.2) |
(15.2) |
|
Total comprehensive income |
— |
— |
— |
— |
7,839.0 |
(83.3) |
7,755.7 |
||
Purchase of treasury shares |
22 |
(1.6) |
— |
— |
(1,000.0) |
— |
— |
(1,000.0) |
|
Cancellation of treasury shares |
22 |
— |
(0.3) |
— |
2,105.1 |
(2,104.8) |
— |
— |
|
Share-based payments |
20 |
— |
— |
134.8 |
— |
— |
— |
134.8 |
|
Issuance of shares |
20 |
0.5 |
— |
(77.5) |
230.0 |
(53.1) |
— |
99.4 |
|
Dividend paid |
22 |
— |
— |
— |
— |
(2,348.3) |
— |
(2,348.3) |
|
Balance at December 31, 2023 |
393.5 |
36.0 |
3,998.1 |
(3,306.2) |
12,379.5 |
345.0 |
13,452.4 |
ASML ANNUAL REPORT 2023 |
CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
252 |
|
Consolidated Statements of Shareholders’ Equity (continued) |
Year ended December 31 (€, in millions) |
Notes |
2021 |
2022 |
2023 |
|
Cash Flows from Operating Activities |
|||||
Net income |
5,883.2 |
5,624.2 |
7,839.0 |
||
Adjustments to reconcile net income to net cash flows from
operating activities:
|
|||||
Depreciation and amortization1 |
12, 13 |
471.0 |
583.6 |
739.8 |
|
Impairment and loss (gain) on disposal |
12, 13 |
(15.9) |
39.3 |
37.5 |
|
Share-based compensation expense |
18, 20 |
117.5 |
68.9 |
134.8 |
|
Gain on sale of subsidiaries |
10 |
(213.7) |
— |
— |
|
Inventory reserves |
7 |
180.7 |
278.5 |
485.3 |
|
Deferred tax expense (benefit) |
21 |
(419.6) |
(564.2) |
(133.6) |
|
Equity method investments2 |
9 |
(49.8) |
15.3 |
4.2 |
|
Changes in assets and liabilities: |
|||||
Accounts receivable, net |
5 |
(1,754.9) |
(2,338.0) |
959.9 |
|
Finance receivables, net |
6 |
542.3 |
212.2 |
(88.6) |
|
Inventories |
7 |
(483.2) |
(2,080.9) |
(1,646.9) |
|
Other assets |
8 |
(222.2) |
(864.3) |
(344.3) |
|
Accrued and other liabilities |
15 |
347.6 |
439.7 |
222.0 |
|
Accounts payable |
718.6 |
406.2 |
(261.7) |
||
Current tax assets and liabilities |
21 |
214.4 |
33.6 |
(939.4) |
|
Contract assets and liabilities |
2 |
5,529.8 |
6,632.7 |
(1,564.6) |
|
Net cash provided by operating activities |
10,845.8 |
8,486.8 |
5,443.4 |
||
Cash Flows from Investing Activities |
|||||
Purchase of property, plant and equipment3 |
13 |
(900.7) |
(1,281.8) |
(2,155.6) |
|
Purchase of intangible assets |
12 |
(39.6) |
(37.5) |
(40.6) |
|
Purchase of short-term investments |
4 |
(1,162.7) |
(334.3) |
(23.6) |
|
Maturity of short-term investments |
4 |
1,826.4 |
864.7 |
125.6 |
|
Loans issued and other investments |
26 |
(124.4) |
(240.0) |
(561.5) |
|
Proceeds from sale of subsidiaries (net of cash disposed of) |
10 |
329.0 |
— |
— |
|
Acquisition of subsidiaries (net of cash acquired) |
10 |
— |
— |
(33.6) |
|
Net cash used in investing activities |
(72.0) |
(1,028.9) |
(2,689.3) |
Year ended December 31 (€, in millions) |
Notes |
2021 |
2022 |
2023 |
|
Cash Flows from Financing Activities |
|||||
Dividend paid |
22 |
(1,368.3) |
(2,559.8) |
(2,348.3) |
|
Purchase of treasury shares |
22 |
(8,560.3) |
(4,639.7) |
(1,000.0) |
|
Net proceeds from issuance of shares |
20 |
49.0 |
81.8 |
99.4 |
|
Net proceeds from issuance of notes, net of issuance costs |
16 |
— |
495.6 |
997.8 |
|
Repayment of debt and finance lease obligations |
14, 16 |
(12.1) |
(516.2) |
(752.8) |
|
Net cash used in financing activities |
(9,891.7) |
(7,138.3) |
(3,003.9) |
||
Net cash flows |
882.1 |
319.6 |
(249.8) |
||
Effect of changes in exchange rates on cash |
20.3 |
(3.1) |
(13.8) |
||
Net increase (decrease) in cash and cash equivalents |
902.4 |
316.5 |
(263.6) |
||
Cash and cash equivalents at beginning of the year |
4 |
6,049.4 |
6,951.8 |
7,268.3 |
|
Cash and cash equivalents at end of the year |
4 |
6,951.8 |
7,268.3 |
7,004.7 |
|
Supplemental Disclosures of Cash Flow Information |
|||||
Unpaid portion of property, plant and equipment, excluded in
investing activities, included in Accounts payable
|
29.3 |
50.3 |
49.3 |
||
Interest received |
36.6 |
42.4 |
190.8 |
||
Interest paid |
(83.0) |
(82.2) |
(137.8) |
||
Income taxes paid, net of refunds |
(1,235.0) |
(1,734.6) |
(2,568.3) |
ASML ANNUAL REPORT 2023 |
CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
253 |
|
Consolidated Statements of Cash Flows |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
254 |
|
Notes to the Consolidated Financial Statements |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
255 |
|
Notes to the Consolidated Financial Statements (continued) |
Goods or services |
Nature, timing of satisfying the performance obligations, and significant
payment terms
|
|
New systems (established
technologies)
|
New systems sales include i-line, KrF, ArF, ArFi and NXE-related systems, along with
the related factory options ordered with the base system, as well as metrology and
inspection systems.
|
|
Prior to shipment, the majority of our systems undergo a Factory Acceptance Test (FAT)
in our cleanroom facilities, effectively replicating the operating conditions that will be
present on the customer’s site, in order to verify whether the system meets its standard
specifications and any additional technical and performance criteria agreed with the
customer.
|
||
A system undergoing FAT is shipped only after all contractual specifications are met or
discrepancies from agreed upon specifications are waived and customer sign-off is
received for delivery. Each system’s performance is re-tested through a Site
Acceptance Test (SAT) after installation at the customer site. We have never failed to
successfully complete installation of a system at a customer’s premises; therefore,
acceptance at FAT is considered to be proven for established technologies with a
history of successful customer acceptances at SAT (equal or better than FAT).
|
||
Transfer of control and recognition of revenue of a system undergoing a FAT and for
which customer acceptance at FAT is proven, will occur upon delivery of the system.
|
||
Transfer of control and recognition of revenue of a system not undergoing a FAT or for
which customer acceptance at FAT is not proven, will occur after successful installation
upon customer acceptance of the system at SAT.
|
||
New system sales do not meet the requirements for over time revenue recognition
because our customers do not simultaneously receive and consume the benefits
provided by our performance, or control the asset throughout any stage of our
production process, as well as the systems are considered to have alternative use.
|
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
256 |
|
Notes to the Consolidated Financial Statements (continued) |
Goods or services |
Nature, timing of satisfying the performance obligations, and significant
payment terms
|
|
Used systems |
We have no repurchase commitments in our general sales terms and conditions,
however we occasionally repurchase systems that we previously manufactured and
sold, in order to refurbish and resell the system to a different customer. This repurchase
decision is mainly driven by market demand expressed by other customers.
|
|
Transfer of control of a used system, and recognition of revenue, follow the same logic
as for our “New systems (established technologies)”.
|
||
Field upgrades and options
(system enhancements)
|
Field upgrades and options mainly relate to goods and services that are delivered for
systems already installed in the customer factories. Certain upgrades require significant
installation efforts, enhancing an asset the customer controls, therefore resulting in
transfer of control over the period of installation, measured using the cost incurred
method which is estimated using labor hours, as this best depicts the satisfaction of our
obligation in transferring control. For the options and other upgrades for which the
customer receives and consumes the benefit at the moment of delivery, the transfer of
control and recognition of revenue will occur upon delivery.
|
|
As long as we are not able to make a reliable estimate of the total efforts needed to
complete the upgrade, we only recognize revenue to cover costs incurred. Margin will
be realized at the earlier of us being able to make a reliable estimate or completion of
the upgrade.
|
||
New product introduction |
We sell new products and services, which are evolutions of our existing technologies. If
installation is determined not to be a separate performance obligation or if there is not a
sufficient established history of acceptance on FAT, the product is determined to be a
“new product introduction”.
|
|
New product introductions are typically newly developed options to be used within our
systems. Transfer of control and revenue recognition for new product introductions
occurs after successful installation and customer acceptance at SAT. Once there is an
established history of successful installation and customer acceptance, revenue will be
recognized consistent with other systems and goods after transfer of control.
|
||
Installation |
Installation is provided within the selling price of a system. Installation is considered to
be distinct as it does not significantly modify the system being purchased and the
customer or a third party could be capable of performing the installation themselves, if
desired. Transfer of control takes place over the period of installation from delivery
through SAT, measured on a straight-line basis, as our performance is satisfied evenly
over this period of time. Installation is not considered to be distinct when recognition of
revenue related to a system occurs upon customer acceptance of the system at SAT
after installation is complete.
|
|
Warranties |
We provide standard warranty coverage on our systems for 12 months, providing labor
and non-consumable parts necessary to repair our systems during these warranty
periods. These standard warranties cannot be purchased and do not provide a service
in addition to the general assurance the system will perform as promised. As a result,
no revenue is allocated to these standard warranties.
|
|
Both the extended and enhanced warranties on our systems are accounted for as a
separate performance obligation, with transfer of control taking place over the warranty
period, measured on a straight-line basis, as this is a stand-ready obligation.
|
Goods or services |
Nature, timing of satisfying the performance obligations, and significant
payment terms
|
|
Time-based licenses and
related service
|
Time-based licenses relate to software licenses and the related service which are sold
for a period of time. The licenses and the related service are not considered to be
individually distinct as the support services are integral to the customer’s ability to
continue to use the software license in the rapidly changing technological environment.
The transfer of control takes place over the license term, measured on a straight-line
basis, as our performance is satisfied evenly over this period of time. Payments are
generally made in installments throughout the license term.
|
|
Application projects |
Application projects are node transition and consulting projects which at times may be
provided as free service within a volume purchase agreement. Measuring satisfaction of
this performance obligation is performed through an input method based on the labor
hours expended relative to the estimated total labor hours as this best depicts the
transfer of control of these kind of services.
|
|
Service contracts |
Service contracts are entered into with our customers to support our systems used in
their ongoing operations during the systems life cycle, typically in the form of full-service
agreements, limited manpower agreements, other labor agreements, parts availability or
parts usage agreements. These services are for a specified period of time and typically
have a fixed price. Control transfers over this period of time, measured on a straight-line
basis, as these are stand-ready obligations. For service contracts where the price is not
fixed, the transaction price has a variable component that is based on the performance
of the system.
|
|
Billable parts and labor |
Billable labor represents maintenance services to our systems installed in the
customer’s factories while in operation, through purchase orders from our customer.
Control over these services is transferred to the customer upon receipt of customer
sign-off.
|
|
Billable parts represent spare parts including optical components relating to our
systems installed in the customer’s factories while in operation, through purchase
orders from our customer.
|
||
Billable parts can be: |
||
•Sold as direct spare parts, for which control transfers point in time upon delivery; or |
||
•Sold as part of maintenance services, where control transfers point in time upon
receipt of customer sign-off.
|
||
Field projects (relocations) |
Field projects represent mainly relocation services. Measuring satisfaction of this
performance obligation is performed through an input method based on the labor hours
expended relative to the estimated total labor hours as this best depicts the transfer of
control of our service.
|
|
OnPulse Maintenance |
OnPulse maintenance services are provided over a specified period of time on our light
source systems. Payment is determined by the number of pulses counted from each
light source system, which is variable. Invoicing is monthly based on the pulses
counted. Revenue is recognized in line with invoicing using the practical expedient in
ASC 606-10-55-18.
|
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
257 |
|
Notes to the Consolidated Financial Statements (continued) |
Year ended December 31 |
Net system sales
in units
|
Net system sales
in € millions
|
2023 |
||
NXE |
53 |
9,124.0 |
ArFi |
125 |
9,017.4 |
ArF dry |
32 |
780.2 |
KrF |
184 |
2,202.5 |
I-line |
55 |
278.4 |
Metrology & Inspection |
151 |
536.1 |
Total |
600 |
21,938.6 |
2022 |
||
NXE |
40 |
7,045.3 |
ArFi |
81 |
5,236.5 |
ArF dry |
28 |
623.7 |
KrF |
151 |
1,653.7 |
I-line |
45 |
211.5 |
Metrology & Inspection |
216 |
659.6 |
Total |
561 |
15,430.3 |
2021 |
||
NXE |
42 |
6,284.0 |
ArFi |
81 |
4,959.6 |
ArF dry |
22 |
431.9 |
KrF |
131 |
1,321.3 |
I-line |
33 |
142.3 |
Metrology & Inspection |
196 |
513.7 |
Total |
505 |
13,652.8 |
Year ended December 31 |
Net system sales
in units
|
Net system sales
in € millions
|
2023 |
||
Logic |
439 |
15,984.7 |
Memory |
161 |
5,953.9 |
Total |
600 |
21,938.6 |
2022 |
||
Logic |
357 |
9,977.6 |
Memory |
204 |
5,452.7 |
Total |
561 |
15,430.3 |
2021 |
||
Logic |
327 |
9,588.5 |
Memory |
178 |
4,064.3 |
Total |
505 |
13,652.8 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
258 |
|
Notes to the Consolidated Financial Statements (continued) |
Year ended December 31 (€, in millions) |
2022 |
2023 |
|||
Contract Assets |
Contract
Liabilities
|
Contract Assets |
Contract
Liabilities
|
||
Balance at beginning of the year |
164.6 |
11,160.9 |
131.9 |
17,750.9 |
|
Transferred from contract assets to accounts
receivables
|
(393.4) |
— |
(402.0) |
— |
|
Revenue recognized during the year ending in
contract assets
|
116.5 |
— |
135.1 |
— |
|
Revenue recognized that was included in contract
liabilities
|
— |
(6,326.6) |
— |
(11,106.1) |
|
Changes as a result of cumulative catch-up
adjustments arising from changes in estimates
|
— |
(118.0) |
— |
(24.9) |
|
Remaining performance obligations for which
considerations have been received, or for which we
have an unconditional right to consideration
|
— |
12,790.4 |
— |
9,416.3 |
|
Transfer between contract assets and liabilities |
244.2 |
244.2 |
375.1 |
375.1 |
|
Other |
— |
— |
— |
(144.8) |
|
Total |
131.9 |
17,750.9 |
240.1 |
16,266.5 |
Year ended December 31 (€, in millions) |
2021 |
2022 |
2023 |
|
New systems |
13,446.1 |
15,152.3 |
21,622.4 |
|
Used systems |
206.7 |
278.0 |
316.2 |
|
Net system sales |
13,652.8 |
15,430.3 |
21,938.6 |
Year ended December 31 (€, in millions) |
Total net sales |
Long-lived assets |
2023 |
||
Japan |
613.6 |
10.4 |
South Korea |
6,949.2 |
148.1 |
Singapore |
282.1 |
5.0 |
Taiwan |
8,074.6 |
354.5 |
China |
7,251.8 |
48.6 |
Rest of Asia |
3.9 |
0.2 |
Netherlands |
25.1 |
3,783.6 |
EMEA |
1,206.8 |
314.5 |
United States |
3,151.4 |
1,134.9 |
Total |
27,558.5 |
5,799.8 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
259 |
|
Notes to the Consolidated Financial Statements (continued) |
Year ended December 31 (€, in millions) |
Total net sales |
Long-lived assets |
2022 |
||
Japan |
1,008.6 |
7.9 |
South Korea |
6,045.6 |
85.4 |
Singapore |
475.5 |
5.5 |
Taiwan |
8,095.5 |
216.3 |
China |
2,916.0 |
40.8 |
Rest of Asia |
7.2 |
0.2 |
Netherlands |
9.2 |
2,748.5 |
EMEA |
624.5 |
228.5 |
United States |
1,991.3 |
803.8 |
Total |
21,173.4 |
4,136.9 |
2021 |
||
Japan |
459.3 |
5.5 |
South Korea |
6,223.0 |
61.2 |
Singapore |
126.2 |
7.3 |
Taiwan |
7,327.9 |
163.6 |
China |
2,740.8 |
17.0 |
Rest of Asia |
1.8 |
0.2 |
Netherlands |
14.2 |
2,048.1 |
EMEA |
134.6 |
124.0 |
United States |
1,583.2 |
555.8 |
Total |
18,611.0 |
2,982.7 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
260 |
|
Notes to the Consolidated Financial Statements (continued) |
Year ended December 31 (€, in millions) |
2022 |
2023 |
|
Deposits with financial institutions, governments and government-related bodies |
2,548.1 |
1,348.7 |
|
Investments in money market funds |
3,196.7 |
3,167.4 |
|
Bank accounts |
1,523.5 |
2,488.6 |
|
Cash and cash equivalents |
7,268.3 |
7,004.7 |
|
Deposits with financial institutions, governments and government-related bodies |
107.7 |
5.4 |
|
Short-term investments |
107.7 |
5.4 |
Year ended December 31 (€, in millions) |
2022 |
2023 |
|
Accounts receivable, gross |
5,327.9 |
4,334.1 |
|
Allowance for credit losses |
(4.1) |
— |
|
Accounts receivable, net |
5,323.8 |
4,334.1 |
Year ended December 31 (€, in millions) |
2022 |
2023 |
|
Finance receivables, gross |
1,356.7 |
1,439.8 |
|
Unearned interest |
— |
— |
|
Finance receivables, net |
1,356.7 |
1,439.8 |
|
Current portion of finance receivables, gross |
1,356.7 |
1,379.2 |
|
Current portion of unearned interest |
— |
— |
|
Non-current portion of finance receivables, net |
— |
60.6 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
261 |
|
Notes to the Consolidated Financial Statements (continued) |
(€, in millions) |
Amount |
2024 |
1,379.2 |
2025 |
60.6 |
2026 |
— |
2027 |
— |
2028 |
— |
Thereafter |
— |
Finance receivables, gross |
1,439.8 |
Year ended December 31 (€, in millions) |
2022 |
2023 |
|
Raw materials |
3,198.9 |
4,057.3 |
|
Work-in-process |
2,163.9 |
3,388.1 |
|
Finished products |
2,303.8 |
2,098.5 |
|
Inventories, gross |
7,666.6 |
9,543.9 |
|
Inventory reserves |
(466.9) |
(693.2) |
|
Inventories, net |
7,199.7 |
8,850.7 |
Year ended December 31 (€, in millions) |
2022 |
2023 |
|
Balance at beginning of year |
(418.0) |
(466.9) |
|
Additions for the year |
(278.5) |
(485.3) |
|
Effect of changes in exchange rates |
(1.1) |
2.4 |
|
Utilization of the reserve |
230.7 |
256.6 |
|
Balance at end of year |
(466.9) |
(693.2) |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
262 |
|
Notes to the Consolidated Financial Statements (continued) |
Year ended December 31 (€, in millions) |
2022 |
2023 |
|
Advance payments to Carl Zeiss SMT GmbH1 |
479.9 |
691.9 |
|
Prepaid expenses |
678.6 |
472.1 |
|
Derivative financial instruments2 |
17.3 |
19.8 |
|
VAT receivable |
201.2 |
302.2 |
|
Other assets |
266.4 |
92.5 |
|
Other current assets |
1,643.4 |
1,578.5 |
|
Advance payments to Carl Zeiss SMT GmbH1 |
620.4 |
490.8 |
|
Prepaid expenses |
32.4 |
40.9 |
|
Derivative financial instruments2 |
— |
11.3 |
|
Compensation plan assets |
71.1 |
95.2 |
|
Other assets |
15.9 |
13.6 |
|
Other non-current assets |
739.8 |
651.8 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
263 |
|
Notes to the Consolidated Financial Statements (continued) |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
264 |
|
Notes to the Consolidated Financial Statements (continued) |
Category |
Estimated useful life |
Brands |
20 years |
Intellectual property |
3–10 years |
Developed technology |
6–15 years |
Customer relationships |
8–18 years |
Other |
2–10 years |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
265 |
|
Notes to the Consolidated Financial Statements (continued) |
€, in millions |
Brands |
Intellectual
property
|
Developed
technology
|
Customer
relationships
|
Other |
Total |
Cost |
||||||
Balance at January 1, 2022 |
38.9 |
144.8 |
1,220.2 |
228.6 |
190.0 |
1,822.5 |
Additions |
— |
1.5 |
— |
— |
32.5 |
34.0 |
Disposals |
— |
— |
— |
— |
(1.6) |
(1.6) |
Effect of changes in exchange rates |
— |
0.8 |
— |
— |
1.6 |
2.4 |
Balance at December 31, 2022 |
38.9 |
147.1 |
1,220.2 |
228.6 |
222.5 |
1,857.3 |
Additions |
— |
— |
— |
— |
39.3 |
39.3 |
Disposals |
— |
— |
— |
— |
(0.3) |
(0.3) |
Effect of changes in exchange rates |
— |
— |
— |
— |
(1.4) |
(1.4) |
Balance at December 31, 2023 |
38.9 |
147.1 |
1,220.2 |
228.6 |
260.1 |
1,894.9 |
Accumulated amortization |
||||||
Balance at January 1, 2022 |
13.0 |
87.2 |
594.0 |
108.6 |
67.6 |
870.4 |
Amortization |
1.9 |
8.6 |
83.4 |
12.7 |
28.5 |
135.1 |
Impairment charges |
— |
— |
— |
— |
9.2 |
9.2 |
Disposals |
— |
— |
— |
— |
(1.4) |
(1.4) |
Effect of changes in exchange rates |
— |
— |
— |
— |
1.6 |
1.6 |
Balance at December 31, 2022 |
14.9 |
95.8 |
677.4 |
121.3 |
105.5 |
1,014.9 |
Amortization |
1.9 |
8.3 |
76.8 |
12.7 |
27.9 |
127.6 |
Impairment charges |
— |
— |
— |
— |
11.1 |
11.1 |
Disposals |
— |
— |
— |
— |
(0.3) |
(0.3) |
Effect of changes in exchange rates |
— |
— |
— |
— |
(0.1) |
(0.1) |
Balance at December 31, 2023 |
16.8 |
104.1 |
754.2 |
134.0 |
144.1 |
1,153.2 |
Carrying amount |
||||||
December 31, 2022 |
24.0 |
51.3 |
542.8 |
107.3 |
117.0 |
842.4 |
December 31, 2023 |
22.1 |
43.0 |
466.0 |
94.6 |
116.0 |
741.7 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
266 |
|
Notes to the Consolidated Financial Statements (continued) |
Year ended December 31 (€, in millions) |
2021 |
2022 |
2023 |
|
Cost of Sales |
107.8 |
105.9 |
102.7 |
|
R&D Costs |
14.5 |
18.2 |
19.5 |
|
SG&A |
10.7 |
11.0 |
5.4 |
|
Total Amortization |
133.0 |
135.1 |
127.6 |
€, in millions |
Amount |
2024 |
124.9 |
2025 |
122.8 |
2026 |
117.5 |
2027 |
114.3 |
2028 |
93.3 |
Thereafter |
168.9 |
Total |
741.7 |
Category |
Estimated useful life |
Buildings |
5–45 years |
Machinery and equipment |
1–7 years |
Leasehold improvements |
1–10 years |
Furniture, fixtures and other |
3–5 years |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
267 |
|
Notes to the Consolidated Financial Statements (continued) |
€, in millions |
Land and
buildings
|
Machinery
and equipment
|
Leasehold
improvements
|
Furniture, fixtures
and other
|
Total |
Cost |
|||||
Balance at January 1, 2022 |
2,803.7 |
2,028.7 |
368.6 |
414.1 |
5,615.1 |
Additions |
510.9 |
665.4 |
34.4 |
87.6 |
1,298.3 |
Disposals |
(1.3) |
(42.2) |
(1.0) |
(3.0) |
(47.5) |
Net non-cash movements to/from Inventories |
— |
129.2 |
— |
— |
129.2 |
Effect of changes in exchange rates |
0.7 |
(3.5) |
(1.2) |
(1.7) |
(5.7) |
Balance at December 31, 2022 |
3,314.0 |
2,777.6 |
400.8 |
497.0 |
6,989.4 |
Additions |
1,019.3 |
1,050.2 |
79.7 |
94.4 |
2,243.6 |
Disposals |
(1.6) |
(45.1) |
(0.8) |
(2.1) |
(49.6) |
Net non-cash movements to/from Inventories |
— |
(75.3) |
— |
— |
(75.3) |
Effect of changes in exchange rates |
(8.3) |
(17.4) |
(1.2) |
(1.4) |
(28.3) |
Balance at December 31, 2023 |
4,323.4 |
3,690.0 |
478.5 |
587.9 |
9,079.8 |
Accumulated depreciation and impairment |
|||||
Balance at January 1, 2022 |
947.7 |
1,115.6 |
311.0 |
258.1 |
2,632.4 |
Depreciation |
134.8 |
232.6 |
21.9 |
55.9 |
445.2 |
Impairment charges |
10.9 |
6.4 |
0.5 |
— |
17.8 |
Disposals |
(2.3) |
(29.5) |
(0.9) |
(2.4) |
(35.1) |
Net non-cash movements to/from Inventories |
— |
(10.9) |
— |
— |
(10.9) |
Effect of changes in exchange rates |
(0.5) |
(1.9) |
(0.6) |
(1.2) |
(4.2) |
Balance at December 31, 2022 |
1,090.6 |
1,312.3 |
331.9 |
310.4 |
3,045.2 |
Depreciation |
154.2 |
352.0 |
31.0 |
68.4 |
605.6 |
Impairment charges |
2.9 |
15.0 |
— |
— |
17.9 |
Disposals |
(0.6) |
(37.7) |
(0.7) |
(2.0) |
(41.0) |
Net non-cash movements to/from Inventories |
— |
(29.3) |
— |
— |
(29.3) |
Effect of changes in exchange rates |
(4.0) |
(6.7) |
(0.7) |
(0.4) |
(11.8) |
Balance at December 31, 2023 |
1,243.1 |
1,605.6 |
361.5 |
376.4 |
3,586.6 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
268 |
|
Notes to the Consolidated Financial Statements (continued) |
€, in millions |
Land and
buildings
|
Machinery
and equipment
|
Leasehold
improvements
|
Furniture, fixtures
and other
|
Total |
Carrying amount |
|||||
December 31, 2022 |
2,223.4 |
1,465.3 |
68.9 |
186.6 |
3,944.2 |
December 31, 2023 |
3,080.3 |
2,084.4 |
117.0 |
211.5 |
5,493.2 |
Year ended December 31 (€, in millions) |
2021 |
2022 |
2023 |
|
Cost of Sales |
188.6 |
248.2 |
330.4 |
|
R&D Costs |
101.4 |
163.7 |
236.2 |
|
SG&A |
31.6 |
33.3 |
39.0 |
|
Total Depreciation |
321.6 |
445.2 |
605.6 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
269 |
|
Notes to the Consolidated Financial Statements (continued) |
Year ended December 31 (€, in millions) |
2022 |
2023 |
|
Properties |
148.9 |
270.3 |
|
Cars |
5.1 |
5.4 |
|
Warehouses |
38.0 |
30.3 |
|
Other |
0.7 |
0.6 |
|
Right-of-use assets |
192.7 |
306.6 |
Year ended December 31 (€, in millions) |
2022 |
2023 |
|
Current |
47.6 |
46.7 |
|
Non-current |
151.5 |
181.2 |
|
Lease liabilities |
199.1 |
227.9 |
Year ended December 31 (€, in millions) |
2021 |
2022 |
2023 |
|
Properties |
52.2 |
52.3 |
40.4 |
|
Cars |
4.8 |
2.7 |
5.9 |
|
Warehouses |
3.0 |
4.0 |
5.9 |
|
Other |
2.4 |
1.4 |
0.8 |
|
Lease expenses |
62.4 |
60.4 |
53.0 |
Year ended December 31 (€, in millions) |
2021 |
2022 |
2023 |
|
Total cash flows |
68.9 |
57.9 |
148.2 |
Year ended December 31 (€, in millions) |
2021 |
2022 |
2023 |
|
Weighted average remaining lease term (months) |
62 |
67 |
365 |
|
Weighted average discount rate (%) |
1.9% |
2.2% |
2.5% |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
270 |
|
Notes to the Consolidated Financial Statements (continued) |
Year ended December 31 (€, in millions) |
2022 |
2023 |
|
Costs to be paid1 |
511.6 |
632.7 |
|
Personnel-related items |
1,070.9 |
1,328.5 |
|
Derivative financial instruments2 |
261.2 |
156.7 |
|
Operating lease liabilities3 |
196.7 |
227.2 |
|
Provisions |
90.5 |
76.7 |
|
Standard warranty reserve |
143.6 |
142.3 |
|
Other |
56.3 |
14.4 |
|
Accrued and other liabilities |
2,330.8 |
2,578.5 |
|
Less: non-current portion of accrued and other liabilities |
454.9 |
401.2 |
|
Current portion of accrued and other liabilities |
1,875.9 |
2,177.4 |
Year ended December 31 (€, in millions) |
2022 |
2023 |
|
Balance at beginning of year |
145.3 |
143.6 |
|
Additions for the year |
191.5 |
232.2 |
|
Utilization of the reserve |
(193.5) |
(233.3) |
|
Effect of exchange rates |
0.3 |
(0.2) |
|
Balance at end of year |
143.6 |
142.3 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
271 |
|
Notes to the Consolidated Financial Statements (continued) |
Year ended December 31 (€, in millions) |
2022 |
2023 |
|
€750 million 3.375% senior notes issued September 2013 and principal due
September 19th 2023 interest annually payable on September 19th
|
744.6 |
— |
|
€1,000 million 1.375% senior notes issued July 2016 and principal due July 7th 2026
interest annually payable on July 7th
|
893.9 |
936.8 |
|
€750 million 1.625% senior notes issued November 2016 and principal due May 28th
2027 interest annually payable on May 28th
|
666.8 |
701.3 |
|
€750 million 0.250% senior notes issued February 2020 and principal due February
25th 2030 interest annually payable on February 25th
|
742.7 |
743.7 |
|
€750 million 0.625% senior notes issued May 2020 and principal due May 7th 2029
interest annually payable on May 7th
|
747.5 |
747.9 |
|
€500 million 2.250% senior notes issued May 2022 and principal due May 17th 2032
interest annually payable on May 17th
|
440.3 |
472.1 |
|
€1,000 million 3.500% senior notes issued June 2023 and principal due December 6th
2025 interest annually payable on December 6th
|
— |
1,008.6 |
|
Debt acquired from Berliner Glas (ASML Berlin GmbH) |
22.3 |
20.5 |
|
Other |
2.3 |
0.7 |
|
Long-term debt |
4,260.4 |
4,631.6 |
|
Less: current portion of long-term debt |
746.2 |
0.1 |
|
Non-current portion of long-term debt |
3,514.2 |
4,631.5 |
€, in millions |
Amount |
2024 |
0.1 |
2025 |
1,004.2 |
2026 |
1,002.0 |
2027 |
752.0 |
2028 |
2.0 |
Thereafter |
2,011.0 |
Total debt maturities |
4,771.3 |
Year ended December 31 (€, in millions) |
2022 |
2023 |
|
Amortized cost amount |
4,479.0 |
4,731.7 |
|
Fair value interest rate swaps1 |
(243.2) |
(121.3) |
|
Carrying amount |
4,235.8 |
4,610.4 |
Year ended December 31 (€, in millions) |
2022 |
2023 |
|
Principal amount |
4,500.0 |
4,750.0 |
|
Carrying amount |
4,235.8 |
4,610.4 |
|
Fair value1 |
4,072.8 |
4,496.2 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
272 |
|
Notes to the Consolidated Financial Statements (continued) |
Payments due by period (€, in billions) |
Total |
1 year |
2 years |
3 years |
4 years |
5 years |
>5 years |
Long-term debt obligations, including
interest1
|
5.1 |
0.1 |
1.1 |
1.0 |
0.8 |
— |
2.1 |
Lease obligations2 |
0.2 |
0.1 |
— |
— |
— |
— |
0.1 |
Purchase obligations |
14.1 |
10.7 |
1.8 |
0.8 |
0.4 |
0.2 |
0.2 |
Total contractual obligations |
19.4 |
10.9 |
2.9 |
1.8 |
1.2 |
0.2 |
2.4 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
273 |
|
Notes to the Consolidated Financial Statements (continued) |
Year ended December 31 (€, in millions) |
2021 |
2022 |
2023 |
|
Wages and salaries |
2,842.7 |
3,502.5 |
4,447.0 |
|
Social security expenses |
249.8 |
300.7 |
410.5 |
|
Pension and retirement expenses |
229.2 |
255.9 |
348.9 |
|
Share-based payments |
117.5 |
68.9 |
134.8 |
|
Personnel expenses |
3,439.2 |
4,128.0 |
5,341.2 |
Average number of payroll employees in FTEs |
2021 |
2022 |
2023 |
|
Netherlands |
14,222 |
16,722 |
19,876 |
|
Worldwide (including Netherlands) |
28,223 |
33,071 |
38,805 |
Year ended December 31 (in FTE) |
2021 |
2022 |
2023 |
|
Customer Support |
7,485 |
8,901 |
9,851 |
|
Manufacturing and Supply Chain Management |
8,237 |
9,953 |
9,954 |
|
Strategic Supply Management |
707 |
1,541 |
2,033 |
|
General and Administrative |
2,761 |
3,768 |
4,035 |
|
Sales and Mature Products and Services |
766 |
742 |
939 |
|
Research and Development |
12,060 |
14,181 |
15,604 |
|
Total |
32,016 |
39,086 |
42,416 |
|
Less: Temporary employees |
2,155 |
2,974 |
2,107 |
|
Payroll employees |
29,861 |
36,112 |
40,309 |
Year ended December 31 (€, in millions) |
2021 |
2022 |
2023 |
|
Board of Management |
4.4 |
3.8 |
6.0 |
|
Former Board of Management |
0.2 |
— |
— |
|
Other employees |
423.5 |
629.6 |
712.6 |
|
Total STI bonus expenses |
428.1 |
633.4 |
718.6 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
274 |
|
Notes to the Consolidated Financial Statements (continued) |
Year ended December 31 (€, in millions) |
2021 |
2022 |
2023 |
|
Pension plan based on multi-employer union plan |
161.7 |
181.2 |
244.4 |
|
Pension plans based on defined contribution and other plans |
67.5 |
74.7 |
104.5 |
|
Pension and retirement expenses |
229.2 |
255.9 |
348.9 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
275 |
|
Notes to the Consolidated Financial Statements (continued) |
LTI performance plan criteria |
Market/Non-Market element |
Weight |
Relative TSR |
Market |
30% |
Strategic value drivers |
Non-Market |
30% |
Technology Leadership Index |
Non-Market |
20% |
ESG Measures |
Non-Market |
20% |
Total |
100% |
Year ended December 31 |
2021 |
2022 |
2023 |
|
Share price in € at grant date |
462.9 |
548.0 |
620.1 |
|
Expected volatility ASML |
38.5% |
41.8% |
46.2% |
|
Expected volatility PHLX index |
35.3% |
n/a |
n/a |
|
Average volatility of the peer group (market practice) |
n/a |
47.8% |
50.0% |
|
Vesting period |
2.9 years |
2.7 years |
2.9 years |
|
Dividend yield |
0.6% |
1.0% |
0.9% |
|
Risk free interest rate (Eurozone) |
(0.8)% |
0.5% |
2.4% |
|
Risk free interest rate (US) |
0.2% |
2.8% |
3.9% |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
276 |
|
Notes to the Consolidated Financial Statements (continued) |
Year ended December 31 (€, in millions) |
2021 |
2022 |
2023 |
|
Total incurred expenses |
117.5 |
68.9 |
134.8 |
|
Recognized income tax benefit (excluding excess income tax benefits) |
8.2 |
10.2 |
16.3 |
|
Total expected expenses in future periods |
125.4 |
113.0 |
187.2 |
|
Weighted average period in which these expected expenses are to be
recognized
|
1.7 years |
1.4 years |
1.6 years |
EUR-denominated |
USD-denominated |
|||||||
Year ended December 31 |
2021 |
2022 |
2023 |
2021 |
2022 |
2023 |
||
Total fair value at vesting date of shares vested during the year
(in millions)
|
156.9 |
120.6 |
175.5 |
164.0 |
149.6 |
127.0 |
||
Weighted average fair value of shares granted |
547.79 |
578.65 |
587.42 |
498.64 |
553.61 |
624.10 |
EUR-denominated |
USD-denominated |
|||
Number
of shares
|
Weighted
average
fair value at
grant date
|
Number
of shares
|
Weighted
average
fair value at
grant date
|
|
Conditional shares outstanding at January 1, 2023 |
292,765 |
434.10 |
238,394 |
542.22 |
Granted |
244,069 |
587.42 |
295,235 |
624.10 |
Vested |
(257,451) |
425.34 |
(167,746) |
515.96 |
Forfeited |
(3,812) |
557.77 |
(2,764) |
622.98 |
Conditional shares outstanding at December 31, 2023 |
275,571 |
576.37 |
363,119 |
620.31 |
EUR-denominated |
USD-denominated |
|||||||
Year ended December 31 |
2021 |
2022 |
2023 |
2021 |
2022 |
2023 |
||
Weighted average share price at the exercise date of stock options |
583.33 |
494.14 |
613.03 |
658.16 |
565.39 |
678.41 |
||
Aggregate intrinsic value of stock options exercised (in millions) |
5.7 |
4.4 |
8.1 |
4.1 |
1.6 |
4.8 |
||
Weighted average remaining contractual term of currently
exercisable options (in years)
|
2.81 |
2.08 |
1.48 |
2.93 |
2.09 |
1.43 |
||
Aggregate intrinsic value of exercisable stock options (in millions) |
36.7 |
20.3 |
19.7 |
24.9 |
14.6 |
15.9 |
||
Aggregate intrinsic value of outstanding stock options (in millions) |
36.7 |
20.3 |
19.7 |
24.9 |
14.6 |
15.9 |
EUR-denominated |
USD-denominated |
|||
Number
of options
|
Weighted
average
exercise price
per ordinary
share (EUR)
|
Number
of options
|
Weighted
average
exercise price
per ordinary
share (USD)
|
|
Outstanding, January 1, 2023 |
47,607 |
77.95 |
32,138 |
92.84 |
Granted1 |
— |
— |
— |
— |
Exercised |
(14,768) |
67.80 |
(8,175) |
89.40 |
Forfeited |
— |
— |
— |
— |
Expired |
— |
— |
(1) |
92.23 |
Outstanding, December 31, 2023 |
32,839 |
82.52 |
23,962 |
94.01 |
Exercisable, December 31, 2023 |
32,839 |
82.52 |
23,962 |
94.01 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
277 |
|
Notes to the Consolidated Financial Statements (continued) |
EUR-denominated |
USD-denominated |
||||
Range of exercise
prices (€)
|
Number of
outstanding options
|
Weighted average
remaining
contractual life of
outstanding (years)
|
Range of exercise
prices (USD)
|
Number of
outstanding options
|
Weighted average
remaining
contractual life of
outstanding (years)
|
50–60 |
1,936 |
0.30 |
50–60 |
— |
0.00 |
60–70 |
2,457 |
0.31 |
60–70 |
— |
0.00 |
70–80 |
8,444 |
1.34 |
70–80 |
— |
0.00 |
80–90 |
9,966 |
1.84 |
80–90 |
7,569 |
0.97 |
90–100 |
10,036 |
1.75 |
90–100 |
10,087 |
1.59 |
100–110 |
— |
0.00 |
100–110 |
6,306 |
1.73 |
Total |
32,839 |
1.48 |
Total |
23,962 |
1.43 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
278 |
|
Notes to the Consolidated Financial Statements (continued) |
Year ended December 31 (€, in millions) |
2021 |
2022 |
2023 |
|
Netherlands |
5,982.8 |
5,881.0 |
8,453.5 |
|
Foreign |
722.7 |
575.1 |
630.0 |
|
Income before income taxes |
6,705.5 |
6,456.1 |
9,083.5 |
|
Income tax (expense) / benefit current |
(865.0) |
(818.4) |
(1,211.7) |
|
Income tax (expense) / benefit deferred |
(28.6) |
(44.4) |
(58.4) |
|
Income tax (expense) / benefit Netherlands |
(893.6) |
(862.8) |
(1,270.1) |
|
Income tax (expense) / benefit current |
(523.5) |
(678.3) |
(441.3) |
|
Income tax (expense) / benefit deferred |
395.7 |
571.2 |
275.6 |
|
Income tax (expense) / benefit Foreign |
(127.8) |
(107.1) |
(165.7) |
|
Total income tax (expense) / benefit current |
(1,388.5) |
(1,496.7) |
(1,653.0) |
|
Total income tax (expense) / benefit deferred |
367.1 |
526.8 |
217.2 |
|
Total income tax (expense) / benefit |
(1,021.4) |
(969.9) |
(1,435.8) |
Year ended December 31 (€, in millions) |
2021 |
2022 |
2023 |
|
Current year tax (expense) / benefit |
(1,367.2) |
(1,440.9) |
(1,766.1) |
|
Prior year tax (expense) / benefit |
(21.3) |
(55.8) |
113.1 |
|
Total current tax (expense) / benefit |
(1,388.5) |
(1,496.7) |
(1,653.0) |
Year ended December 31 (€, in millions) |
2021 |
2022 |
2023 |
|
Changes to recognition of operating losses and tax credits |
(37.2) |
(41.2) |
3.0 |
|
Prior year tax (expense) / benefit |
(2.4) |
79.2 |
(85.2) |
|
Tax rate changes |
1.5 |
(1.1) |
13.5 |
|
Origination and reversal of temporary differences, operating losses and
tax credits
|
405.2 |
489.9 |
285.9 |
|
Total deferred tax (expense) / benefit |
367.1 |
526.8 |
217.2 |
Year ended December 31 (€, in millions) |
2021 |
%1 |
2022 |
%1 |
2023 |
%1 |
|
Income before income taxes |
6,705.5 |
100.0% |
6,456.1 |
100.0% |
9,083.5 |
100.0% |
|
Income tax expense based on ASML’s domestic rate |
(1,676.4) |
25.0% |
(1,665.7) |
25.8% |
(2,343.5) |
25.8% |
|
Effects of tax rates in foreign jurisdictions |
(4.6) |
0.1% |
13.0 |
(0.2)% |
14.7 |
(0.2)% |
|
Adjustments in respect of tax-exempt income |
— |
—% |
— |
—% |
1.4 |
—% |
|
Adjustments in respect of tax incentives |
727.3 |
(10.8)% |
741.2 |
(11.5)% |
941.9 |
(10.4)% |
|
Adjustments in respect of prior years’ current taxes |
(21.3) |
0.3% |
(55.8) |
0.9% |
113.1 |
(1.2)% |
|
Adjustments in respect of prior years’ deferred taxes |
(2.4) |
—% |
79.2 |
(1.2)% |
(85.2) |
0.9% |
|
Movements in the liability for unrecognized tax benefits |
(21.6) |
0.3% |
(9.9) |
0.2% |
(55.0) |
0.6% |
|
Tax effects in respect of acquisition/restructuring
related items
|
35.9 |
(0.5)% |
— |
—% |
— |
—% |
|
Change in valuation allowance |
(37.2) |
0.6% |
(41.2) |
0.6% |
3.0 |
—% |
|
Equity method investments |
(46.7) |
0.7% |
(38.3) |
0.6% |
(42.6) |
0.5% |
|
Effect of change in tax rates |
1.5 |
—% |
(1.1) |
—% |
13.5 |
(0.1)% |
|
Other (credits) and non-tax deductible items |
24.1 |
(0.4)% |
8.7 |
(0.1)% |
2.9 |
—% |
|
Income tax expense |
(1,021.4) |
15.2% |
(969.9) |
15.0% |
(1,435.8) |
15.8% |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
279 |
|
Notes to the Consolidated Financial Statements (continued) |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
280 |
|
Notes to the Consolidated Financial Statements (continued) |
Year ended December 31 (€, in millions) |
2021 |
2022 |
2023 |
|
Liability for unrecognized tax benefits |
(205.9) |
(215.5) |
(249.7) |
|
Deferred tax assets |
1,098.7 |
1,672.8 |
1,872.3 |
|
Deferred tax liabilities |
(34.7) |
(51.5) |
(122.6) |
|
Deferred and other tax assets (liabilities) |
858.1 |
1,405.8 |
1,500.0 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
281 |
|
Notes to the Consolidated Financial Statements (continued) |
Year ended December 31 (€, in millions) |
2021 |
2022 |
2023 |
|
Balance as at January 1 |
(138.0) |
(144.3) |
(160.0) |
|
Gross increases – tax positions in prior period |
(21.6) |
(11.7) |
(44.1) |
|
Gross decreases – tax positions in prior period |
8.9 |
2.0 |
12.6 |
|
Gross increases – tax positions in current period |
(18.8) |
(23.1) |
(27.7) |
|
Settlements |
2.5 |
6.8 |
2.2 |
|
Lapse of statute of limitations |
32.0 |
13.2 |
17.9 |
|
Effect of changes in exchange rates |
(9.3) |
(2.9) |
5.5 |
|
Total liability for unrecognized tax benefits |
(144.3) |
(160.0) |
(193.6) |
|
Balance of accrued interest and penalties |
(61.6) |
(55.5) |
(56.1) |
|
Total liabilities for unrecognized tax benefits including interest
and penalties
|
(205.9) |
(215.5) |
(249.7) |
Country |
Years |
Netherlands |
2020-2023 |
US |
2017-2023 |
Taiwan |
2018-2023 |
South Korea |
2019-2023 |
China |
2013-2023 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
282 |
|
Notes to the Consolidated Financial Statements (continued) |
Deferred taxes (€, in millions) |
January 1, 2023 |
Credits and other |
Consolidated Statements
of Operations
|
Effect of changes
in exchange rates
|
December 31, 2023 |
|
Deferred tax assets: |
||||||
Capitalized R&D expenditures |
592.1 |
— |
(54.5) |
(23.5) |
514.1 |
|
Goodwill |
— |
— |
65.0 |
— |
65.0 |
|
R&D & other tax credit carry forwards |
213.4 |
(28.1) |
39.5 |
(7.0) |
217.8 |
|
Inventories |
45.2 |
— |
17.6 |
(1.4) |
61.4 |
|
Contract liabilities |
820.8 |
— |
174.4 |
(35.4) |
959.8 |
|
Accrued and other liabilities1 |
113.9 |
— |
30.5 |
(4.9) |
139.5 |
|
Operating loss carry forwards |
4.5 |
— |
0.2 |
(0.8) |
3.9 |
|
Property, plant and equipment |
18.9 |
— |
10.7 |
(0.4) |
29.2 |
|
Lease liabilities |
27.4 |
— |
2.3 |
(1.0) |
28.7 |
|
Other intangible assets |
124.8 |
— |
(5.5) |
— |
119.3 |
|
Share-based payments |
11.4 |
— |
5.9 |
(0.5) |
16.8 |
|
Other temporary differences |
23.3 |
— |
(6.6) |
5.8 |
22.5 |
|
Total deferred tax assets, gross |
1,995.7 |
(28.1) |
279.5 |
(69.1) |
2,178.0 |
|
Valuation allowance2 |
(215.4) |
— |
3.0 |
5.7 |
(206.7) |
|
Total deferred tax assets, net |
1,780.3 |
(28.1) |
282.5 |
(63.4) |
1,971.3 |
|
Deferred tax liabilities: |
||||||
Other intangible assets |
(65.4) |
— |
10.9 |
2.5 |
(52.0) |
|
Goodwill |
(28.8) |
— |
(9.7) |
— |
(38.5) |
|
Inventories |
— |
— |
(4.1) |
0.3 |
(3.8) |
|
Right-of-use assets |
(27.4) |
— |
(2.3) |
1.0 |
(28.7) |
|
Property, plant and equipment |
(9.8) |
— |
(5.1) |
1.3 |
(13.6) |
|
Accrued and other liabilities |
— |
— |
(0.5) |
— |
(0.5) |
|
Contract liabilities |
(16.3) |
— |
(64.2) |
0.5 |
(80.0) |
|
Long-term debt |
(1.5) |
— |
(0.1) |
— |
(1.6) |
|
Other temporary differences |
(9.8) |
— |
9.8 |
(2.9) |
(2.9) |
|
Total deferred tax liabilities |
(159.0) |
— |
(65.3) |
2.7 |
(221.6) |
|
Net deferred tax assets (liabilities) |
1,621.3 |
(28.1) |
217.2 |
(60.7) |
1,749.7 |
|
Classified as: |
||||||
Deferred tax assets – non-current |
1,672.8 |
1,872.3 |
||||
Deferred tax liabilities – non-current |
(51.5) |
(122.6) |
||||
Net deferred tax assets (liabilities) |
1,621.3 |
1,749.7 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
283 |
|
Notes to the Consolidated Financial Statements (continued) |
Deferred taxes (€, in millions) |
January 1, 2022 |
Credits and other |
Consolidated
Statements
of Operations
|
Income tax recognized
in Other
Comprehensive Income
|
Effect of changes
in exchange rates
|
December 31, 2022 |
|
Deferred tax assets: |
|||||||
Capitalized R&D expenditures |
420.4 |
— |
151.2 |
— |
20.5 |
592.1 |
|
R&D & other tax credit carry forwards |
162.7 |
23.7 |
20.6 |
— |
6.4 |
213.4 |
|
Inventories |
31.5 |
— |
12.5 |
— |
1.2 |
45.2 |
|
Contract liabilities |
423.2 |
— |
400.8 |
— |
(3.2) |
820.8 |
|
Accrued and other liabilities1 |
109.4 |
— |
0.3 |
— |
4.2 |
113.9 |
|
Operating loss carry forwards |
7.4 |
— |
(2.8) |
— |
(0.1) |
4.5 |
|
Property, plant and equipment |
18.6 |
— |
1.7 |
— |
(1.4) |
18.9 |
|
Lease liabilities |
23.2 |
— |
3.1 |
— |
1.1 |
27.4 |
|
Other intangible assets |
143.5 |
— |
(18.7) |
— |
— |
124.8 |
|
Share-based payments |
9.6 |
— |
1.2 |
— |
0.6 |
11.4 |
|
Other temporary differences |
27.5 |
— |
3.7 |
(6.5) |
(1.4) |
23.3 |
|
Total deferred tax assets, gross |
1,377.0 |
23.7 |
573.6 |
(6.5) |
27.9 |
1,995.7 |
|
Valuation allowance2 |
(167.6) |
— |
(41.2) |
— |
(6.6) |
(215.4) |
|
Total deferred tax assets, net |
1,209.4 |
23.7 |
532.4 |
(6.5) |
21.3 |
1,780.3 |
|
Deferred tax liabilities: |
|||||||
Other intangible assets |
(79.9) |
— |
19.8 |
— |
(5.3) |
(65.4) |
|
Goodwill |
(20.9) |
— |
(7.9) |
— |
— |
(28.8) |
|
Right-of-use assets |
(23.2) |
— |
(3.1) |
— |
(1.1) |
(27.4) |
|
Property, plant and equipment |
(10.9) |
— |
1.5 |
— |
(0.4) |
(9.8) |
|
Contract liabilities |
(7.9) |
— |
(8.4) |
— |
— |
(16.3) |
|
Long-term debt |
(1.5) |
— |
— |
— |
— |
(1.5) |
|
Other temporary differences |
(1.1) |
— |
(7.5) |
(2.1) |
0.9 |
(9.8) |
|
Total deferred tax liabilities |
(145.4) |
— |
(5.6) |
(2.1) |
(5.9) |
(159.0) |
|
Net deferred tax assets (liabilities) |
1,064.0 |
23.7 |
526.8 |
(8.6) |
15.4 |
1,621.3 |
|
Classified as: |
|||||||
Deferred tax assets – non-current |
1,098.7 |
1,672.8 |
|||||
Deferred tax liabilities – non-current |
(34.7) |
(51.5) |
|||||
Net deferred tax assets (liabilities) |
1,064.0 |
1,621.3 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
284 |
|
Notes to the Consolidated Financial Statements (continued) |
Type of shares |
Number of shares |
Nominal value |
Votes per share |
Cumulative preference shares |
700,000,000 |
€0.09 per share |
1 |
Ordinary shares |
700,000,000 |
€0.09 per share |
1 |
Year ended December 31 |
2021 |
2022 |
2023 |
|
Issued ordinary shares with nominal value of €0.09 |
402,601,613 |
394,589,411 |
393,421,721 |
|
Issued ordinary treasury shares with nominal value of €0.09 |
3,873,663 |
8,548,631 |
6,162,857 |
|
Total issued ordinary shares with nominal value of €0.09 |
406,475,276 |
403,138,042 |
399,584,578 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
285 |
|
Notes to the Consolidated Financial Statements (continued) |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
286 |
|
Notes to the Consolidated Financial Statements (continued) |
Period |
Total number
of shares
purchased
|
Average
price paid per
Share (€)
|
Total number of
shares
purchased under
programs
|
Maximum value
of shares that may yet
be purchased
(€ millions)
|
January 1 - 31, 2023 |
57,478 |
609.46 |
57,478 |
11,765.0 |
February 1 - 28, 2023 |
294,059 |
611.28 |
351,537 |
11,585.2 |
March 1 - 31, 2023 |
337,136 |
589.74 |
688,673 |
11,386.4 |
April 1 - 30, 2023 |
239,865 |
589.92 |
928,538 |
11,244.9 |
May 1 - 31, 2023 |
283,210 |
617.07 |
1,211,748 |
11,070.1 |
June 1 - 30, 2023 |
263,635 |
663.39 |
1,475,383 |
10,895.2 |
July 1 - 31, 2023 |
144,745 |
657.99 |
1,620,128 |
10,800.0 |
August 1 - 31, 2023 |
— |
— |
1,620,128 |
10,800.0 |
September 1 - 30, 2023 |
— |
— |
1,620,128 |
10,800.0 |
October 1 - 31, 2023 |
— |
— |
1,620,128 |
10,800.0 |
November 1 - 30, 2023 |
— |
— |
1,620,128 |
10,800.0 |
December 1 - 31, 2023 |
— |
— |
1,620,128 |
10,800.0 |
Total |
1,620,128 |
617.23 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
287 |
|
Notes to the Consolidated Financial Statements (continued) |
Year ended December 31 (€, in millions, except per share data) |
2021 |
2022 |
2023 |
|
Net income |
5,883.2 |
5,624.2 |
7,839.0 |
|
Weighted average number of shares outstanding |
409.8 |
397.7 |
393.8 |
|
Basic net income per ordinary share |
14.36 |
14.14 |
19.91 |
|
Weighted average number of shares outstanding |
409.8 |
397.7 |
393.8 |
|
Plus shares applicable to options and conditional shares |
0.6 |
0.3 |
0.3 |
|
Diluted weighted average number of shares |
410.4 |
398.0 |
394.1 |
|
Diluted net income per ordinary share |
14.34 |
14.13 |
19.89 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
288 |
|
Notes to the Consolidated Financial Statements (continued) |
Year ended December 31 (€, in millions) |
2022 |
2023 |
|||
Impact on net
income
|
Impact on
equity
|
Impact on net
income
|
Impact on
equity
|
||
US dollar |
(7.2) |
65.3 |
4.2 |
78.3 |
|
Japanese yen |
(0.1) |
(16.6) |
(2.6) |
(3.8) |
|
Taiwanese dollar |
(12.8) |
— |
0.4 |
— |
|
Other currencies |
(1.3) |
— |
(10.0) |
— |
|
Total |
(21.4) |
48.7 |
(8.0) |
74.5 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
289 |
|
Notes to the Consolidated Financial Statements (continued) |
Year ended December 31 (€, in millions) |
2022 |
2023 |
|||
Impact on net
income
|
Impact on
equity
|
Impact on net
income
|
Impact on
equity
|
||
Effect of a 1.0% increase in interest rates |
43.8 |
— |
37.6 |
— |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
290 |
|
Notes to the Consolidated Financial Statements (continued) |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
291 |
|
Notes to the Consolidated Financial Statements (continued) |
Year ended December 31 (€, in millions) |
2022 |
2023 |
|||
Notional
amount
|
Fair Value |
Notional
amount
|
Fair Value |
||
Forward foreign exchange contracts |
158.5 |
(18.8) |
281.1 |
(6.8) |
|
Interest rate swaps |
3,000.0 |
(225.1) |
3,250.0 |
(118.8) |
Year ended December 31 (€, in millions) |
2022 |
2023 |
|||
Assets |
Liabilities |
Assets |
Liabilities |
||
Interest rate swaps — fair value hedges |
1.7 |
226.8 |
11.3 |
130.1 |
|
Forward foreign exchange contracts — cash flow
hedges
|
3.0 |
18.1 |
2.9 |
10.4 |
|
Forward foreign exchange contracts — no hedge
accounting
|
12.6 |
16.3 |
16.9 |
16.2 |
|
Total |
17.3 |
261.2 |
31.1 |
156.7 |
|
Less non-current portion: |
|||||
Interest rate swaps — fair value hedges |
— |
179.0 |
11.3 |
62.7 |
|
Total non-current portion |
— |
179.0 |
11.3 |
62.7 |
|
Total current portion |
17.3 |
82.2 |
19.8 |
94.0 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
292 |
|
Notes to the Consolidated Financial Statements (continued) |
Year ended December 31, 2023 (€, in millions) |
Level 1 |
Level 2 |
Level 3 |
Total |
|
Assets measured at fair value |
|||||
Derivative financial instruments1 |
— |
31.1 |
— |
31.1 |
|
Money market funds2 |
3,167.4 |
— |
— |
3,167.4 |
|
Short-term investments3 |
— |
5.4 |
— |
5.4 |
|
Total |
3,167.4 |
36.5 |
— |
3,203.9 |
|
Liabilities measured at fair value |
|||||
Derivative financial instruments1 |
— |
156.7 |
— |
156.7 |
|
Assets and Liabilities for which fair values are disclosed |
|||||
Loan receivable |
— |
— |
776.1 |
776.1 |
|
Long-term debt4 |
4,496.2 |
— |
— |
4,496.2 |
Year ended December 31, 2022 (€, in millions) |
Level 1 |
Level 2 |
Level 3 |
Total |
|
Assets measured at fair value |
|||||
Derivative financial instruments1 |
— |
17.3 |
— |
17.3 |
|
Money market funds2 |
3,196.7 |
— |
— |
3,196.7 |
|
Short-term investments3 |
— |
107.7 |
— |
107.7 |
|
Total |
3,196.7 |
125.0 |
— |
3,321.7 |
|
Liabilities measured at fair value |
|||||
Derivative financial instruments1 |
— |
261.2 |
— |
261.2 |
|
Assets and Liabilities for which fair values are disclosed |
|||||
Loan receivable |
— |
— |
307.9 |
307.9 |
|
Long-term debt4 |
4,072.8 |
— |
— |
4,072.8 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
293 |
|
Notes to the Consolidated Financial Statements (continued) |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
294 |
|
Notes to the Consolidated Financial Statements (continued) |
Year ended December 31 (€, in millions) |
2022 |
2023 |
Maximum
exposure to loss
|
|
Advance payments included in Other assets |
1,100.3 |
1,182.7 |
1,182.7 |
|
Advance payments included in Property, plant and equipment |
70.0 |
— |
— |
|
Loan receivable |
364.4 |
912.4 |
912.4 |
|
Investment agreement for 24.9% equity |
923.6 |
919.6 |
919.6 |
|
Accounts receivable |
— |
7.8 |
7.8 |
|
Accounts payable |
269.2 |
4.0 |
— |
|
Cost to be paid included in Accrued and other liabilities |
111.2 |
199.9 |
— |
Year ended December 31 (€, in millions) |
2021 |
2022 |
2023 |
|
Total purchases |
2,070.3 |
2,693.6 |
3,325.9 |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
295 |
|
Notes to the Consolidated Financial Statements (continued) |
ASML ANNUAL REPORT 2023 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
296 |
|
Notes to the Consolidated Financial Statements (continued) |
ASML ANNUAL REPORT 2023 |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
297 |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL STATEMENTS |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
298 |
|
Assurance Report of the Independent Auditor |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
299 |
|
Assurance Report of the Independent Auditor (continued) |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
300 |
|
About the non-financial information |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
301 |
|
About the non-financial information (continued) |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
302 |
|
About the non-financial information (continued) |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
303 |
|
About the non-financial information (continued) |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
304 |
|
About the non-financial information (continued) |
(Sub)section Annual Report |
Scope |
||
Supporting our customers |
ASML worldwide, excluding Cymer and Berliner Glas (ASML Berlin
GmbH)
NOTE: Techinsights ASML only
|
||
How we innovate |
ASML worldwide |
||
Financial performance |
|||
Financial PIs |
ASML worldwide |
||
Energy efficiency and climate action |
|||
Scope 1 and 2 emissions from our own
operations – Manufacturing and buildings
|
ASML locations above 250 FTE (based on assessment 2019/2020) |
||
Scope 3 emissions from our own operations –
Business travel and commuting and supply
chain (including logistics)
|
ASML worldwide: except categories 8, 9, 10, 13, 14 and 15 |
||
Scope 3 emissions from product use at our
customers
|
ASML products that reached a certain stage of maturity and have been
measured (excluding Cymer lasers sold with non-ASML lithography
systems)
|
||
Circular economy |
|||
Prevent waste |
ASML locations above 250 FTE (based on assessment 2019/2020) |
||
Extend the lifetime of our products |
ASML products, excluding YieldStar and SBI/MBI metrology tools |
||
Reuse parts |
ASML worldwide, excluding Cymer, HMI and Berliner Glas (ASML Berlin
GmbH)
|
||
Recycle materials |
ASML locations above 250 FTE (based on assessment 2019/2020) |
||
Water management |
ASML locations above 250 FTE (based on assessment 2019/2020),
except for Total ultrapure water consumption and Total water recycled
and reused, which is Veldhoven (NL), Linkou (TW) and HMI Tainan (TW)
only
|
Attractive workplace for all |
|||
Inspiring a unified culture |
ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH), except
for we@ASML results, which include ASML Berlin GmbH
|
||
Providing the best employee experience |
ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH)
NOTE: The scope for indicator Open positions filled by internal
candidates (in %) includes only open positions for which a formal
vacancy has been created. The scope for we@ASML survey results
includes ASML Berlin GmbH, except for male/female split
|
||
Enabling strong leadership |
ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH) except
for the we@ASML survey results, which includes ASML Berlin GmbH
|
||
Ensuring employee health and safety |
ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH) |
||
Responsible supply chain |
|||
Responsible supply chain |
ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH) except
for Responsible Business Alliance (RBA) risk assessment, where Cymer
and HMI is also excluded
|
||
Innovation ecosystem |
|||
Public-private partnerships |
ASML worldwide |
||
Partnerships with academia and research
institutes
|
ASML worldwide |
||
Supporting startups and scaleups |
ASML Netherlands |
||
Valued partner in our communities |
|||
Community engagement program |
ASML worldwide
-Volunteering hours for technology promotion (ASML Netherlands only)
-Volunteering hours for community engagement (excludes Berliner Glas
(ASML Berlin GmbH) and HMI)
|
||
ESG integrated governance |
|||
Business ethics and Code of Conduct |
ASML worldwide |
||
Product safety |
ASML worldwide, excluding HMI |
||
Rest |
ASML worldwide |
||
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
305 |
|
About the non-financial information (continued) |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL STATEMENTS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
306 |
|
About the non-financial information (continued) |
Supporting customers |
||||||
Description |
2021 |
2022 |
2023 |
Comments |
||
Overall loyalty score (customer feedback survey) |
n/a |
78.3% |
86.0% |
The survey takes place every year since 2023. A new weighting methodology has been applied in 2023. If
we apply the same methodology for the 2022 survey, the score would have been 78.8%.
|
||
TechInsights |
The yearly overall customer satisfaction rate compared to competitors and industry peers. |
|||||
Large suppliers of chipmaking equipment – score (scale 0 to 10) |
9.2 |
9.4 |
9.4 |
|||
Suppliers of fab equipment – score (scale 0 to 10) |
9.2 |
9.4 |
9.4 |
|||
Technical leadership for lithography equipment – score (scale 0 to 10) |
9.5 |
9.8 |
9.7 |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL INDICATORS |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
307 |
|
Non-financial indicators |
Energy efficiency and climate action – Energy |
||||||
Description |
2021 |
2022 |
2023 |
Comments |
||
Energy consumption (in TJ) |
1,689 |
1,633 |
1,729 |
|||
Energy savings worldwide through projects (in TJ) |
13 |
32 |
47 |
We started a new master plan period for 2021-2025 with a target to achieve 100 TJ annual energy savings by
the end of 2025. The savings are realized by projects resulting in improved technical installation or by projects
resulting in an improved production process. Types of energy included in savings: fuel and electricity.
The savings reported are cumulated compared with the base year; therefore, they are not comparable
between years.
|
||
Energy intensity (TJ per €m revenue) |
n/a |
0.08 |
0.06 |
The denominator is revenue and the numerator represents total energy consumption within the organization
made up of total electricity consumption (in TJ) and fossil fuels (natural gas) consumption (in TJ).
|
||
Energy consumption outside of the organization (in TJ) |
n/a |
94,053 |
115,420 |
The 2023 figure includes nine months of actual data and three months of estimates. The 2022 figure has
been adjusted with data for the entire year (93,962 TJ best estimate in the 2022 Annual Report) and excludes
indirect climate change effects of air travel (radiative forcing).
|
||
Electricity purchased per location (in TJ) |
||||||
Veldhoven |
881 |
837 |
899 |
|||
Wilton |
120 |
130 |
140 |
|||
Linkou |
34 |
34 |
35 |
|||
San Diego |
176 |
188 |
187 |
|||
San Jose |
28 |
25 |
27 |
|||
Tainan |
36 |
43 |
44 |
|||
Other |
47 |
50 |
53 |
Other includes the locations with more than 250 FTE combined (based on assessment 2019/2020). |
||
Total |
1,322 |
1,307 |
1,385 |
|||
Fossil fuels consumed from non-renewable sources (in TJ)1 |
Fossil fuels consumed consists of only natural gas. |
|||||
Veldhoven |
184 |
149 |
160 |
|||
Wilton |
127 |
121 |
125 |
|||
Linkou |
— |
— |
— |
No natural gas is used by this manufacturing location. |
||
San Diego |
43 |
43 |
44 |
|||
San Jose |
5 |
6 |
8 |
|||
Tainan |
— |
— |
— |
No natural gas is used by this manufacturing location. |
||
Other |
8 |
7 |
7 |
Other includes the locations with more than 250 FTE combined (based on assessment 2019/2020). |
||
Total |
367 |
326 |
344 |
|||
Fuels consumed from renewable sources (in TJ) |
— |
— |
— |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL INDICATORS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
308 |
|
Non-financial indicators (continued) |
Energy efficiency and climate action – CO2e emissions |
||||||
Description |
2021 |
2022 |
2023 |
Comments |
||
Scope 1 CO2 emissions (in kt) |
19.3 |
17.3 |
19.2 |
|||
Scope 2 CO2 emissions (in kt) – Market-based |
20.1 |
20.8 |
15.9 |
|||
Scope 3 - Category 1 Purchased goods and services |
3,305.0 |
3,928.0 |
4,459.9 |
|||
Scope 3 - Category 2 Capital goods |
463.0 |
482.0 |
621.1 |
|||
Scope 3 - Category 3 Fuel- and energy related activities |
8.0 |
8.0 |
8.8 |
|||
Scope 3 - Category 4 Upstream transportation and distribution |
254.0 |
354.0 |
367.3 |
|||
Scope 3 - Category 5 Waste generated in operations |
1.0 |
1.0 |
1.3 |
|||
Scope 3 - Category 6 Business travel |
20.0 |
69.0 |
69.8 |
Excluding indirect climate change effects of air travel (radiative forcing) and taking into account purchases of
SAF.
|
||
Scope 3 - Category 7 Employee commuting |
20.0 |
41.0 |
54.4 |
|||
Scope 3 - Category 11 Use of sold products |
7,355.0 |
7,053.1 |
9,442.4 |
|||
Scope 3 - Category 12 End-of-life treatment of sold products |
0.2 |
0.2 |
0.2 |
|||
Scope 3 CO2 emissions (in kt) |
11,426.2 |
11,936.3 |
15,025.2 |
The 2023 figure includes nine months of actual data and three months of estimates. The 2022 figure has
been adjusted with data for the entire year (11,900 kt best estimate in the 2022 Annual Report).
|
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL INDICATORS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
309 |
|
Non-financial indicators (continued) |
Energy efficiency and climate action – CO2e emissions |
||||||
Description |
2021 |
2022 |
2023 |
Comments |
||
Indirect climate change effects of air travel (radiative forcing) |
9.4 |
46.3 |
52.0 |
In previous years, this was reported as part of our scope 3 emissions. |
||
Reduction due to purchase of SAF (kt CO2e) |
0.0 |
0.0 |
10.2 |
SAF purchases reduce our total scope 3 emissions (from business travel). |
||
Emission intensity net scope 1+2+3 (in kt/€m revenue) |
0.62 |
0.57 |
0.55 |
The 2023 figure includes nine months of actual data and three months of estimates. Gases included is only
CO2, as the other gases are negligible. The 2022 figure has been adjusted with data for the entire year.
|
||
Net emission footprint change in % (scope 1+2) – Market-based |
156% |
(3)% |
(8)% |
|||
Scope 2 CO2e emissions (in kt) – Location-based |
n/a |
192.9 |
168.1 |
|||
Type of energy attribute certificates (in TJ) |
||||||
Guarantees of Origin (GOs) |
883 |
840 |
901 |
|||
Renewable energy certificates (RECs) |
331 |
351 |
361 |
|||
International renewable energy certificates (I-RECs) |
— |
3 |
3 |
|||
Total |
1,214 |
1,194 |
1,265 |
|||
Reduction in GHG emissions split by (in kt) |
||||||
Scope 1 - Savings worldwide through projects |
n/a |
0.16 |
0.39 |
|||
Scope 2 - Savings worldwide through projects |
n/a |
2.41 |
3.79 |
|||
Total |
n/a |
2.57 |
4.18 |
The savings reported are cumulated compared with the base year; therefore, they are not comparable
between years.
|
||
Significant air emissions - VOC (kg) |
n/a |
13,289 |
16,299 |
|||
Number of significant fines and non-monetary sanctions |
— |
— |
— |
|||
The monetary value of significant fines for non-compliance with environmental
laws and regulations (in € thousands)
|
— |
— |
— |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL INDICATORS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
310 |
|
Non-financial indicators (continued) |
Circular economy – Waste management |
||||||
Description |
2021 |
2022 |
2023 |
Comments |
||
Total waste generated (in 1,000 kg)1 & 2 |
||||||
Total non-hazardous waste |
5,284 |
6,295 |
7,821 |
|||
Total hazardous waste |
395 |
380 |
458 |
|||
Total construction waste |
199 |
238 |
653 |
|||
Total |
5,878 |
6,913 |
8,932 |
Total waste is treated offsite, no waste treatment onsite. |
||
Total waste by disposal (in 1,000 kg)1 |
||||||
Waste diverted from disposal |
4,544 |
5,186 |
5,125 |
|||
Waste directed to disposal |
1,334 |
1,727 |
3,807 |
Total waste has grown as the company has grown. This bucket has increased due to lower recycling rates
reported by our waste treatment suppliers who have used different definitions in the past, and due to the
improved quality of data shared with ASML. We are working with vendors and suppliers to improve the
recycling rate.
|
||
Total |
5,878 |
6,913 |
8,932 |
|||
Waste diverted from disposal: Recycling (in 1,000 kg)1 |
We apply recycling of waste. Other categories like preparation for reuse and composting are not applicable to
ASML.
|
|||||
Total non-hazardous waste |
4,028 |
4,719 |
4,171 |
|||
Total hazardous waste |
346 |
309 |
381 |
|||
Total construction waste |
170 |
158 |
573 |
|||
Total |
4,544 |
5,186 |
5,125 |
|||
Waste directed to disposal: Incineration (with energy recovery)
(in 1,000 kg)1
|
||||||
Total non-hazardous waste |
938 |
1,246 |
2,542 |
Total waste has grown as the company has grown. This bucket has increased due to lower recycling rates
reported by our waste treatment suppliers who have used different definitions in the past, and due to the
improved quality of data shared with ASML. We are working with vendors and suppliers to improve the
recycling rate.
|
||
Total hazardous waste |
16 |
37 |
33 |
|||
Total construction waste |
17 |
74 |
1 |
|||
Total |
971 |
1,357 |
2,576 |
|||
Waste directed to disposal: Incineration (without energy recovery)
(in 1,000 kg)1
|
||||||
Total non-hazardous waste |
51 |
66 |
316 |
|||
Total hazardous waste |
27 |
24 |
32 |
|||
Total construction waste |
0 |
0 |
0 |
|||
Total |
78 |
90 |
348 |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL INDICATORS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
311 |
|
Non-financial indicators (continued) |
Circular economy – Waste management |
||||||
Description |
2021 |
2022 |
2023 |
Comments |
||
Waste directed to disposal: Landfill (in 1,000 kg)1 |
||||||
Total non-hazardous waste |
267 |
264 |
792 |
|||
Total hazardous waste |
6 |
10 |
12 |
|||
Total construction waste |
12 |
6 |
79 |
|||
Total |
285 |
280 |
883 |
|||
Total waste disposed of (% of total waste from operations)1 |
||||||
Incineration (with energy recovery) |
17% |
19% |
31% |
|||
Incineration (without energy recovery) |
1% |
2% |
4% |
|||
Landfill |
5% |
4% |
10% |
|||
Total |
23% |
25% |
45% |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL INDICATORS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
312 |
|
Non-financial indicators (continued) |
Water management |
||||||
Description |
2021 |
2022 |
2023 |
Comments |
||
Water consumption (in 1000 m3), split by: |
||||||
Veldhoven |
728 |
834 |
856 |
|||
San Diego |
105 |
115 |
90 |
|||
Wilton |
95 |
90 |
101 |
|||
Linkou |
26 |
22 |
23 |
|||
San Jose |
21 |
32 |
28 |
|||
Tainan |
30 |
33 |
34 |
|||
Other |
36 |
36 |
42 |
Other includes the locations with more than 250 FTE combined (based on assessment 2019/2020). |
||
Total |
1,041 |
1,162 |
1,174 |
Municipal water supply. |
||
Total ultrapure water consumption (in 1000 m3) |
84 |
86 |
99 |
Only Veldhoven, Linkou and HMI Tainan are in scope for this indicator. The other locations are excluded from
the scope because the data to report on the indicator is not yet available.
|
||
Total water recycled and reused (in %) |
1.2% |
1.6% |
1.5% |
Only Veldhoven, Linkou and HMI Tainan are in scope for this indicator. The other locations are excluded from
the scope because the data to report on the indicator is not yet available.
|
||
Water intensity (in 1000m3/€m revenue) |
56 |
55 |
43 |
Water intensity is calculated as total water consumption (in m3) divided by total revenue (in millions). |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL INDICATORS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
313 |
|
Non-financial indicators (continued) |
Attractive workplace for all – Workforce indicators1 |
||||||||||||||||
Number of FTEs (payroll and temporary) |
Total ASML |
Asia |
EMEA |
US |
||||||||||||
2021 |
2022 |
2023 |
2021 |
2022 |
2023 |
2021 |
2022 |
2023 |
2021 |
2022 |
2023 |
|||||
Payroll employees (in FTE) |
28,747 |
34,719 |
38,656 |
7,404 |
8,840 |
9,083 |
15,444 |
18,660 |
21,512 |
5,899 |
7,219 |
8,061 |
||||
Female (in %) |
18 |
19 |
20 |
17 |
18 |
18 |
18 |
20 |
21 |
17 |
19 |
19 |
||||
Male (in %) |
82 |
81 |
80 |
83 |
82 |
82 |
82 |
80 |
79 |
83 |
81 |
81 |
||||
Unknown (in %) |
n/a |
— |
— |
n/a |
— |
— |
n/a |
— |
— |
n/a |
— |
— |
||||
Temporary employees (in FTE) |
2,095 |
2,924 |
2,091 |
26 |
31 |
28 |
1,786 |
2,607 |
1,901 |
283 |
286 |
162 |
||||
Female (in %) |
18 |
19 |
20 |
19 |
23 |
14 |
20 |
20 |
22 |
8 |
2 |
2 |
||||
Male (in %) |
82 |
73 |
73 |
81 |
71 |
86 |
80 |
80 |
78 |
92 |
18 |
8 |
||||
Unknown (in %) |
n/a |
8 |
7 |
n/a |
6 |
— |
n/a |
— |
— |
n/a |
80 |
90 |
||||
Total |
30,842 |
37,643 |
40,747 |
7,430 |
8,871 |
9,111 |
17,230 |
21,267 |
23,413 |
6,182 |
7,505 |
8,223 |
||||
Total number of FTEs (by age group) |
||||||||||||||||
<30 |
6,344 |
8,837 |
8,669 |
2,191 |
2,736 |
2,367 |
3,041 |
4,449 |
4,531 |
1,112 |
1,652 |
1,771 |
||||
30-50 |
19,058 |
22,736 |
25,488 |
4,933 |
5,778 |
6,316 |
11,007 |
13,170 |
14,801 |
3,118 |
3,788 |
4,371 |
||||
>50 |
5,158 |
5,792 |
6,430 |
305 |
355 |
425 |
3,182 |
3,647 |
4,074 |
1,671 |
1,790 |
1,931 |
||||
Unknown |
282 |
278 |
160 |
1 |
2 |
3 |
— |
1 |
7 |
281 |
275 |
150 |
||||
Total |
30,842 |
37,643 |
40,747 |
7,430 |
8,871 |
9,111 |
17,230 |
21,267 |
23,413 |
6,182 |
7,505 |
8,223 |
||||
Total number of FTEs (payroll and temporary) |
||||||||||||||||
Female (in %) |
18 |
19 |
20 |
n/a |
18 |
18 |
n/a |
20 |
21 |
n/a |
18 |
19 |
||||
Male (in %) |
82 |
80 |
80 |
n/a |
82 |
82 |
n/a |
80 |
79 |
n/a |
79 |
79 |
||||
Unknown (in %) |
n/a |
1 |
— |
n/a |
— |
— |
n/a |
— |
— |
n/a |
3 |
2 |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL INDICATORS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
314 |
|
Non-financial indicators (continued) |
Attractive workplace for all – Workforce indicators1 |
||||||||||||||||
Number of payroll FTEs (split into full-time and part-time) |
Total ASML |
Asia |
EMEA |
US |
||||||||||||
2021 |
2022 |
2023 |
2021 |
2022 |
2023 |
2021 |
2022 |
2023 |
2021 |
2022 |
2023 |
|||||
Full-time payroll FTEs |
||||||||||||||||
Female (in %) |
16 |
18 |
19 |
17 |
18 |
18 |
15 |
17 |
18 |
17 |
19 |
19 |
||||
Male (in %) |
84 |
82 |
81 |
83 |
82 |
82 |
85 |
83 |
82 |
83 |
81 |
81 |
||||
Unknown (in %) |
n/a |
— |
— |
n/a |
— |
— |
n/a |
— |
— |
n/a |
— |
— |
||||
Total |
26,847 |
32,635 |
36,292 |
7,401 |
8,835 |
9,078 |
13,560 |
16,594 |
19,166 |
5,886 |
7,206 |
8,048 |
||||
Number of payroll FTEs (split into full-time and part-time) |
||||||||||||||||
Part-time payroll FTEs |
||||||||||||||||
Female (in %) |
37 |
38 |
39 |
— |
28 |
12 |
37 |
38 |
39 |
27 |
30 |
28 |
||||
Male (in %) |
63 |
62 |
61 |
100 |
72 |
88 |
63 |
62 |
61 |
73 |
70 |
72 |
||||
Unknown (in %) |
n/a |
— |
— |
n/a |
— |
— |
n/a |
— |
— |
n/a |
— |
— |
||||
Total |
1,900 |
2,084 |
2,364 |
3 |
5 |
5 |
1,884 |
2,066 |
2,346 |
13 |
13 |
13 |
Attractive workplace for all – Workforce indicators |
||||||||||||||||
Number of new hires payroll employees (in FTE) |
Total ASML |
Asia |
EMEA |
US |
||||||||||||
2021 |
2022 |
2023 |
2021 |
2022 |
2023 |
2021 |
2022 |
2023 |
2021 |
2022 |
2023 |
|||||
Number of new hires |
4,373 |
7,130 |
4,129 |
1,848 |
2,057 |
648 |
1,737 |
3,306 |
2,556 |
788 |
1,767 |
925 |
||||
New hires as a % of the total payroll employees |
15 |
21 |
11 |
25 |
23 |
7 |
11 |
18 |
12 |
13 |
25 |
12 |
||||
Gender |
||||||||||||||||
Female |
896 |
1,724 |
1,105 |
313 |
415 |
179 |
432 |
903 |
711 |
151 |
406 |
215 |
||||
Male |
3,477 |
5,400 |
3,023 |
1,535 |
1,641 |
469 |
1,305 |
2,402 |
1,844 |
637 |
1,357 |
710 |
||||
Unknown |
n/a |
6 |
1 |
n/a |
1 |
— |
n/a |
1 |
1 |
n/a |
4 |
— |
||||
Total |
4,373 |
7,130 |
4,129 |
1,848 |
2,057 |
648 |
1,737 |
3,306 |
2,556 |
788 |
1,767 |
925 |
||||
Age group |
||||||||||||||||
<30 |
2,392 |
3,581 |
1,684 |
1,213 |
1,321 |
308 |
783 |
1,457 |
995 |
396 |
803 |
381 |
||||
30-50 |
1,789 |
3,241 |
2,185 |
627 |
730 |
333 |
848 |
1,708 |
1,395 |
314 |
803 |
457 |
||||
>50 |
190 |
308 |
260 |
6 |
6 |
7 |
106 |
141 |
166 |
78 |
161 |
87 |
||||
Unknown |
2 |
— |
— |
2 |
— |
— |
— |
— |
— |
— |
— |
— |
||||
Total |
4,373 |
7,130 |
4,129 |
1,848 |
2,057 |
648 |
1,737 |
3,306 |
2,556 |
788 |
1,767 |
925 |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL INDICATORS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
315 |
|
Non-financial indicators (continued) |
Attractive workplace for all – Workforce indicators |
||||||||||||||||
Employee attrition (in FTE) |
Total ASML |
Asia |
EMEA |
US |
||||||||||||
2021 |
2022 |
2023 |
2021 |
2022 |
2023 |
2021 |
2022 |
2023 |
2021 |
2022 |
2023 |
|||||
Number of involuntary employee attrition1 |
199 |
226 |
352 |
41 |
34 |
59 |
101 |
119 |
202 |
57 |
73 |
91 |
||||
Number of voluntary employee attrition |
1,234 |
1,678 |
981 |
421 |
530 |
249 |
341 |
503 |
429 |
472 |
645 |
303 |
||||
Total |
1,433 |
1,904 |
1,333 |
462 |
564 |
308 |
442 |
622 |
631 |
529 |
718 |
394 |
||||
Gender |
||||||||||||||||
Female |
258 |
372 |
320 |
78 |
107 |
87 |
89 |
129 |
159 |
91 |
136 |
74 |
||||
Male |
1,175 |
1,532 |
1,013 |
384 |
457 |
221 |
353 |
493 |
472 |
438 |
582 |
320 |
||||
Unknown |
n/a |
— |
— |
n/a |
— |
— |
n/a |
— |
— |
n/a |
— |
— |
||||
Total |
1,433 |
1,904 |
1,333 |
462 |
564 |
308 |
442 |
622 |
631 |
529 |
718 |
394 |
||||
Age group |
||||||||||||||||
<30 |
337 |
516 |
343 |
143 |
220 |
98 |
69 |
121 |
141 |
125 |
175 |
104 |
||||
30-50 |
806 |
1,063 |
718 |
292 |
326 |
193 |
257 |
383 |
353 |
257 |
354 |
172 |
||||
>50 |
290 |
325 |
272 |
27 |
18 |
17 |
116 |
118 |
137 |
147 |
189 |
118 |
||||
Total |
1,433 |
1,904 |
1,333 |
462 |
564 |
308 |
442 |
622 |
631 |
529 |
718 |
394 |
Attractive workplace for all – Workforce indicators |
||||||
Description |
2021 |
2022 |
2023 |
Comments |
||
Workers who are not employees (in FTE)1 |
n/a |
1,682 |
1,591 |
Attractive workplace for all – Employee engagement |
||||||
Engagement score we@ASML by gender |
2021 |
2022 |
2023 |
Comments |
||
Female |
78.0% |
77.3% |
79.5% |
This figure excludes Berliner Glas (ASML Berlin GmbH) |
||
Male |
78.0% |
78.1% |
80.7% |
This figure excludes Berliner Glas (ASML Berlin GmbH) |
||
Benchmark |
76.0% |
74.0% |
75.2% |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL INDICATORS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
316 |
|
Non-financial indicators (continued) |
Attractive workplace for all – Employee engagement |
||||||
Description |
2021 |
2022 |
2023 |
Comments |
||
Employee attrition (in %) |
5.4 |
6.0 |
3.6 |
|||
Open positions filled by internal candidates (in %) |
29 |
27 |
29 |
Attractive workplace for all – Employee engagement |
||||||
Description |
2021 |
2022 |
2023 |
Comments |
||
Total training expenses (in € millions) |
27 |
47 |
64 |
Out-of-pocket expenses for technical and non-product-related classroom trainings as recorded in MyLearning
(learning management system).
|
||
Average spend on training and development per FTE (€) |
1,020 |
1,491 |
1,724 |
|||
Total number of training hours per FTE |
Includes technical and non-product-related training hours (including nomination courses). |
|||||
Female |
25 |
41 |
53 |
|||
Male |
30 |
52 |
62 |
|||
Unknown |
n/a |
304 |
455 |
|||
Weighted average |
29 |
50 |
60 |
|||
Number of technical training hours per technical FTE |
The number of technical training hours per FTE is calculated as the total technical training hours divided by
the total payroll FTEs working in technical departments within Operations and R&D.
In 2023, a new categorization took place based on the academy structure, causing a shift between technical
training hours and non-product-related training hours.
|
|||||
Female |
22 |
41 |
34 |
|||
Male |
29 |
50 |
44 |
|||
Unknown |
n/a |
347 |
343 |
|||
Weighted average |
28 |
49 |
43 |
|||
Number of non-product-related training hours per FTE |
Excluding nomination courses (leadership development programs).
In 2023, a new categorization took place based on the academy structure, causing a shift between technical
training hours and non-product-related training hours.
|
|||||
Female |
8 |
11 |
25 |
|||
Male |
5 |
8 |
20 |
|||
Unknown |
n/a |
27 |
198 |
|||
Weighted average |
5 |
8 |
21 |
|||
Nomination courses: Leadership development programs |
||||||
Number of training hours |
6,264 |
47,454 |
143,960 |
In 2023, we saw an increase in the number of types of leadership development training. |
||
Number of employees attending (unique) |
48 |
322 |
2,517 |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL INDICATORS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
317 |
|
Non-financial indicators (continued) |
Attractive workplace for all – Diversity and inclusion |
|||||||||||||||||
Description |
Gender |
Gender ratio |
Age group |
Comments |
|||||||||||||
Male/female in managerial positions and on Supervisory
Board (in headcount)1
|
Female |
Male |
Unknown |
Total |
Female |
Male |
Unknown |
<30 |
30-50 |
>50 |
Unknown |
Total |
|||||
Supervisory Board |
4 |
5 |
— |
9 |
44% |
56% |
—% |
— |
— |
9 |
— |
9 |
|||||
Board of Management |
— |
6 |
— |
6 |
—% |
100% |
—% |
— |
1 |
5 |
— |
6 |
|||||
Senior management |
96 |
712 |
— |
808 |
12% |
88% |
—% |
— |
332 |
476 |
— |
808 |
|||||
Middle management |
607 |
3,318 |
— |
3,925 |
15% |
85% |
—% |
3 |
2,328 |
1,594 |
— |
3,925 |
|||||
Junior management |
387 |
1,785 |
— |
2,172 |
18% |
82% |
—% |
71 |
1,770 |
331 |
— |
2,172 |
|||||
Other |
6,781 |
25,489 |
3 |
32,273 |
21% |
79% |
—% |
8,024 |
20,344 |
3,905 |
— |
32,273 |
|||||
Total |
7,875 |
31,315 |
3 |
39,193 |
20% |
80% |
—% |
8,098 |
24,775 |
6,320 |
— |
39,193 |
|||||
Gender |
Gender ratio |
||||||||||||||||
Male/female split by sector (in FTE) |
Female |
Male |
Unknown |
Total |
Female |
Male |
Unknown |
||||||||||
Customer support |
1,434 |
8,304 |
8 |
9,746 |
15% |
85% |
—% |
||||||||||
Manufacturing and supply chain management |
1,602 |
7,140 |
58 |
8,800 |
18% |
81% |
1% |
||||||||||
Research and development |
2,544 |
12,682 |
74 |
15,300 |
17% |
83% |
—% |
||||||||||
General and administrative |
1,686 |
2,332 |
9 |
4,027 |
42% |
58% |
—% |
||||||||||
Sales and mature product services |
166 |
675 |
— |
841 |
20% |
80% |
—% |
||||||||||
Strategic supply management |
640 |
1,390 |
3 |
2,033 |
31% |
68% |
—% |
||||||||||
Total |
8,072 |
32,523 |
152 |
40,747 |
20% |
80% |
—% |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL INDICATORS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
318 |
|
Non-financial indicators (continued) |
Attractive workplace for all – Diversity and inclusion |
||||||
Description |
2021 |
2022 |
2023 |
Comments |
||
Number of nationalities working for ASML |
||||||
Asia |
33 |
40 |
40 |
|||
EMEA |
108 |
124 |
126 |
|||
US |
90 |
101 |
103 |
|||
Worldwide total |
122 |
143 |
144 |
|||
Foreign nationals working for ASML (in %) |
Foreign nationals working for ASML (in %) is the percentage of payroll and temporary employees with a
nationality other than the country in which the employee is working.
|
|||||
Asia |
5 |
5 |
4 |
|||
EMEA |
33 |
38 |
39 |
|||
US |
28 |
25 |
29 |
|||
Worldwide total |
26 |
28 |
29 |
Attractive workplace for all – Labor relations |
||||||
Description |
2021 |
2022 |
2023 |
Comments |
||
Percentage of employees covered by collective bargaining agreements |
52% |
53% |
60% |
Korea was added to the collective bargaining agreements in 2023, resulting in an increase in the %. |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL INDICATORS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
319 |
|
Non-financial indicators (continued) |
Attractive workplace for all – Fair remuneration2 |
||||||
Description |
2021 |
2022 |
2023 |
Comments |
||
Ratio of base salary of women to men total1 |
||||||
Senior management |
99% |
100% |
100% |
|||
Middle management |
99% |
99% |
98% |
|||
Non-management |
98% |
98% |
97% |
|||
Ratio of base salary of women to men Asia1 |
||||||
Senior management |
n/a |
102% |
95% |
|||
Middle management |
n/a |
98% |
96% |
|||
Non-management |
n/a |
95% |
95% |
|||
Ratio of base salary of women to men EMEA1 |
||||||
Senior management |
n/a |
99% |
100% |
|||
Middle management |
n/a |
98% |
98% |
|||
Non-management |
n/a |
98% |
98% |
|||
Ratio of base salary of women to men US1 |
||||||
Senior management |
n/a |
100% |
102% |
|||
Middle management |
n/a |
100% |
98% |
|||
Non-management |
n/a |
100% |
99% |
|||
Ratio of total cash of women to men total1 |
||||||
Senior management |
99% |
102% |
100% |
|||
Middle management |
99% |
98% |
98% |
|||
Non-management |
98% |
97% |
98% |
|||
Ratio of total cash of women to men Asia1 |
||||||
Senior management |
n/a |
110% |
100% |
|||
Middle management |
n/a |
92% |
98% |
|||
Non-management |
n/a |
96% |
97% |
|||
Ratio of total cash of women to men EMEA1 |
||||||
Senior management |
n/a |
101% |
100% |
|||
Middle management |
n/a |
98% |
98% |
|||
Non-management |
n/a |
98% |
98% |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL INDICATORS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
320 |
|
Non-financial indicators (continued) |
Attractive workplace for all – Fair remuneration2 |
||||||
Description |
2021 |
2022 |
2023 |
Comments |
||
Ratio of total cash of women to men US1 |
||||||
Senior management |
n/a |
96% |
100% |
|||
Middle management |
n/a |
100% |
98% |
|||
Non-management |
n/a |
100% |
99% |
|||
Internal pay ratio (CEO versus employee remuneration)3 |
40 |
34 |
43 |
For more information, see Remuneration Report. |
Attractive workplace for all – Benefits which are standard for full-time and part-time employees of the
organization but are not provided to temporary employees1
|
||||
Type of employee benefit |
Type of employee |
|||
Full-time employees |
Part-time employees |
Temporary employees2 |
||
i. Life insurance3 |
yes |
yes |
no |
|
ii. Healthcare3 |
yes |
yes |
no |
|
iii. Disability and invalidity coverage3 |
yes |
yes |
no |
|
iv. Parental leave3 |
yes |
yes |
no |
|
v. Retirement provision |
yes |
yes |
no |
|
vi. Stock ownership |
yes |
yes |
no |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL INDICATORS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
321 |
|
Non-financial indicators (continued) |
Attractive workplace for all – Employee health and safety |
||||||
Description |
2021 |
2022 |
2023 |
Comments |
||
ASML recordable incident rate1 |
0.17 |
0.18 |
0.21 |
Includes illness and injuries. |
||
Number of recordable incidents (employees) |
48 |
63 |
83 |
|||
Number of recordable incidents (contractors) |
n/a |
9 |
6 |
|||
Number of fatalities |
— |
— |
— |
This relates to both employees and workers who are not employees. |
||
Employees with work-related injuries split by: |
||||||
Rate of fatalities |
n/a |
— |
— |
|||
Number of recordable injuries |
n/a |
48 |
70 |
|||
Rate of recordable injuries |
n/a |
0.14 |
0.18 |
|||
Number of high-consequence injuries |
n/a |
2 |
4 |
|||
Rate of high-consequence injuries |
n/a |
0.006 |
0.010 |
|||
Main types of work-related injuries by employees (split by hazard group) |
||||||
Electrical |
n/a |
1 |
3 |
|||
Ergonomics |
n/a |
17 |
25 |
|||
Facilities |
n/a |
88 |
107 |
|||
Hazardous gases |
n/a |
— |
11 |
|||
Hazardous substances & materials |
n/a |
9 |
21 |
|||
Hoisting & lifting |
n/a |
10 |
10 |
|||
Mechanical |
n/a |
147 |
189 |
|||
Pressure systems |
n/a |
1 |
3 |
|||
Radiation |
n/a |
— |
2 |
|||
Thermal |
n/a |
2 |
10 |
|||
Travel |
n/a |
10 |
15 |
|||
Working at height |
n/a |
n/a |
1 |
|||
# hours worked |
n/a |
68,746,820 |
79,658,141 |
|||
Workers who are not employees with work-related injuries split by: |
||||||
Number of recordable injuries |
n/a |
8 |
6 |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL INDICATORS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
322 |
|
Non-financial indicators (continued) |
Attractive workplace for all – Employee health and safety |
||||||
Description |
2021 |
2022 |
2023 |
Comments |
||
Number of high-consequence injuries |
n/a |
— |
— |
|||
Main types of work-related injuries by workers who are not employees
(split by hazard group)
|
||||||
Electrical |
n/a |
1 |
1 |
|||
Ergonomics |
n/a |
3 |
1 |
|||
Facilities |
n/a |
18 |
19 |
|||
Hazardous gases |
n/a |
— |
2 |
|||
Hazardous substances & materials |
n/a |
1 |
4 |
|||
Hoisting & lifting |
n/a |
5 |
1 |
|||
Mechanical |
n/a |
29 |
41 |
|||
Pressure systems |
n/a |
2 |
— |
|||
Thermal |
n/a |
— |
3 |
|||
Travel |
n/a |
1 |
2 |
|||
Working at height |
n/a |
n/a |
1 |
|||
Employees with work-related ill health split by: |
||||||
Number of fatalities |
n/a |
— |
— |
|||
Number of recordable ill-health |
n/a |
15 |
13 |
|||
Main types of work-related ill health by employees (split by hazard group) |
||||||
Electrical |
n/a |
— |
— |
|||
Ergonomics |
n/a |
22 |
33 |
|||
Facilities |
n/a |
4 |
6 |
|||
Hazardous substances & materials |
n/a |
4 |
— |
|||
Hoisting & lifting |
n/a |
2 |
— |
|||
Mechanical |
n/a |
1 |
— |
|||
Pressure systems |
n/a |
1 |
— |
|||
Radiation |
n/a |
— |
1 |
|||
Workers who are not employees with work-related ill health split by: |
||||||
Number of fatalities |
n/a |
— |
— |
|||
Number of recordable ill-health |
n/a |
1 |
— |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL INDICATORS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
323 |
|
Non-financial indicators (continued) |
Attractive workplace for all – Employee health and safety |
||||||
Description |
2021 |
2022 |
2023 |
Comments |
||
Main types of work-related ill health by workers who are not employees
(split by hazard group)
|
||||||
Ergonomics |
n/a |
2 |
3 |
|||
Facilities |
n/a |
— |
1 |
|||
Hazardous gases |
n/a |
1 |
— |
|||
Hoisting & lifting |
n/a |
— |
1 |
|||
Mechanical |
n/a |
1 |
— |
|||
Travel |
n/a |
— |
1 |
|||
Working at height |
n/a |
n/a |
1 |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL INDICATORS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
324 |
|
Non-financial indicators (continued) |
Responsible supply chain |
||||||
Description |
2021 |
2022 |
2023 |
Comments |
||
Suppliers assessed on sustainability (in #), split by: |
||||||
Audits |
— |
2 |
16 |
In 2021, the audits were put on hold due to the COVID-19 restrictions.
Since October 2023, sustainability has become a full mature section in the supplier audits.
|
||
RBA self-assessment questionnaire (SAQ) |
56 |
59 |
128 |
Total number of suppliers |
4,657 |
4,984 |
5,126 |
|||
Number of suppliers per region |
||||||
Asia |
1,319 |
1,348 |
1,375 |
|||
EMEA (excl. Netherlands) |
702 |
745 |
758 |
|||
Netherlands |
1,459 |
1,584 |
1,638 |
|||
North America |
1,177 |
1,307 |
1,355 |
|||
Total |
4,657 |
4,984 |
5,126 |
|||
Number of suppliers, split by: |
||||||
Product-related |
772 |
789 |
813 |
|||
Non-product-related |
3,885 |
4,195 |
4,313 |
|||
Total |
4,657 |
4,984 |
5,126 |
The majority are Tier 1 suppliers. |
||
Number of suppliers, split by: |
||||||
Critical |
229 |
245 |
278 |
Critical suppliers are Tier 1 suppliers of strategic importance. |
||
Non-critical |
4,428 |
4,739 |
4,848 |
|||
Total |
4,657 |
4,984 |
5,126 |
|||
Number of critical suppliers, split by: |
||||||
Product-related |
197 |
216 |
249 |
|||
Non-product-related |
32 |
29 |
29 |
|||
Total |
229 |
245 |
278 |
|||
Number of suppliers in scope for risk management |
243 |
264 |
278 |
This includes 26 critical Tier 2 suppliers. |
||
Total sourcing spend (in million EUR) |
9,045 |
12,402 |
15,461 |
|||
Sourcing spend per supplier group (in %) |
||||||
Product-related |
70% |
69% |
69% |
|||
Non-product-related |
30% |
31% |
31% |
|||
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL INDICATORS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
325 |
|
Non-financial indicators (continued) |
Responsible supply chain |
||||||
Description |
2021 |
2022 |
2023 |
Comments |
||
Proportion of spending on local suppliers (in %) |
We define ‘local’ as the country in which a significant location of operation is located. The significant locations
of operations are the main manufacturing sites of ASML, which are located in Veldhoven, the Netherlands;
Linkou, Taiwan; San Diego and Wilton, both in the US. The manufacturing location in Tainan is immaterial for
this indicator.
|
|||||
Veldhoven |
45% |
45% |
47% |
A relatively large amount of the total supplier spend for Veldhoven relates to Carl Zeiss (non-local). |
||
Linkou |
50% |
53% |
64% |
|||
San Diego |
92% |
92% |
94% |
|||
Wilton |
64% |
71% |
70% |
ESG integrated governance – Business ethics |
||||||
Description |
2021 |
2022 |
2023 |
Comments |
||
Total number of Speak Up messages, split by: |
396 |
414 |
631 |
|||
Anti-bribery & Anti-corruption Speak Up messages |
37 |
31 |
121 |
One of the Speak Up messages indicated led to an indication of violation of anti-corruption laws. The matter
was reviewed and appropriate actions taken.
|
||
Human rights Speak Up messages |
187 |
165 |
244 |
The 244 reports include all the following topics: (i) discrimination (ii) harassment (iii) diversity (iv) freedom of
association (v) privacy (vi) work life balance (vii) forced and bonded labor (viii) health and safety (ix) other
human rights.
|
||
- of which discrimination and harassment |
n/a |
106 |
117 |
This covers different categories, including religious discrimination, age, gender, pregnancy and sexual
orientation.
|
ESG integrated governance – Product safety |
||||||
Description |
2021 |
2022 |
2023 |
Comments |
||
Number of (significant) fines for non-compliance with product design related laws
and regulations
|
— |
— |
— |
|||
Monetary value of significant fines for non-compliance with product design related
laws and regulations
|
— |
— |
— |
ASML ANNUAL REPORT 2023 |
NON-FINANCIAL INDICATORS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
326 |
|
Non-financial indicators (continued) |
ASML ANNUAL REPORT 2023 |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
327 |
Year ended December 31 |
2022 |
2023 |
|||||
(€, in thousands) |
KPMG
Accountants
NV
|
KPMG Network |
Total |
KPMG
Accountants
NV
|
KPMG
Network
|
Total |
|
Audit fees |
3,203 |
1,064 |
4,267 |
3,509 |
1,152 |
4,661 |
|
Audit-related fees |
150 |
— |
150 |
196 |
— |
196 |
|
Tax fees |
— |
— |
— |
— |
— |
— |
|
All other fees |
47 |
9 |
56 |
28 |
11 |
39 |
|
Principal accountant fees |
3,400 |
1,073 |
4,473 |
3,733 |
1,163 |
4,896 |
ASML ANNUAL REPORT 2023 |
OTHER APPENDICES |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
328 |
|
Appendix - Principal accountant fees and services |
ASML ANNUAL REPORT 2023 |
OTHER APPENDICES CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
329 |
|
Appendix - Property, plant and equipment |
ASML ANNUAL REPORT 2023 |
OTHER APPENDICES CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
330 |
|
Appendix - Dutch and US taxation |
ASML ANNUAL REPORT 2023 |
OTHER APPENDICES CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
331 |
|
Appendix - Dutch and US taxation (continued) |
ASML ANNUAL REPORT 2023 |
OTHER APPENDICES CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
332 |
|
Appendix - Dutch and US taxation (continued) |
ASML ANNUAL REPORT 2023 |
OTHER APPENDICES CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
333 |
|
Appendix - Dutch and US taxation (continued) |
ASML ANNUAL REPORT 2023 |
OTHER APPENDICES CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
334 |
|
Appendix - Dutch and US taxation (continued) |
Year ended December 31 (€, in millions) |
2022 |
2023 |
Deposits with financial institutions, governments and government-related bodies |
2,548.1 |
1,348.7 |
Investments in money market funds |
3,196.7 |
3,167.4 |
Bank accounts |
1,523.5 |
2,488.6 |
Cash and cash equivalents |
7,268.3 |
7,004.7 |
Deposits with financial institutions, governments and government-related bodies |
107.7 |
5.4 |
Short-term investments |
107.7 |
5.4 |
ASML ANNUAL REPORT 2023 |
OTHER APPENDICES CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
335 |
|
Appendix - Financing policy |
Cumulative cash returns
(Cash return is cumulative share buyback + dividend)
|
ASML ANNUAL REPORT 2023 |
OTHER APPENDICES CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
336 |
|
Appendix - Financing policy (continued) |
ASML ANNUAL REPORT 2023 |
OTHER APPENDICES CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
337 |
|
Appendix - Government regulation |
ASML ANNUAL REPORT 2023 |
OTHER APPENDICES CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
338 |
|
Appendix - Offer and listing details |
ASML ANNUAL REPORT 2023 |
OTHER APPENDICES CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
339 |
|
Appendix - Exchange controls |
ASML ANNUAL REPORT 2023 |
OTHER APPENDICES CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
340 |
|
Appendix - Documents on display |
ASML ANNUAL REPORT 2023 |
OTHER APPENDICES CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
341 |
|
Appendix - Controls and procedures |
ASML ANNUAL REPORT 2023 |
OTHER APPENDICES CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
342 |
|
Appendix - Financial calendar and investor relations |
ASML ANNUAL REPORT 2023 |
OTHER APPENDICES CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
343 |
|
Appendix - ASML contact information |
Item |
Form 20-F Caption |
Location in this document |
Page |
Part I |
|||
1 |
Identity of Directors, Senior Management
and Advisors
|
Not applicable |
|
2 |
Offer Statistics and Expected Timetable |
Not applicable |
|
3 |
Key Information |
||
B. Capitalization and Indebtedness |
Not applicable |
||
C. Reasons for the Offer and Use of Proceeds |
Not applicable |
||
D. Risk Factors |
Risk - Risk factors |
||
4 |
Information on the Company |
||
A. History and Development of the Company |
Cover Page |
||
At a glance |
|||
Appendix - Property, plant and equipment |
|||
Appendix - Documents on display |
|||
Appendix - ASML contact information |
|||
B. Business Overview |
At a glance |
||
Marketplace |
|||
Note 2 Revenue from contracts with customers |
|||
Note 3 Segment disclosure |
|||
Appendix - Government regulation |
|||
C. Organizational Structure |
Corporate Governance - Compliance with
Corporate Governance requirements -
Corporate Information
|
||
D. Property, Plant and Equipment |
Note 13 Property, plant and equipment, net |
||
Appendix - Property, plant and equipment |
|||
4A |
Unresolved Staff Comments |
Not applicable |
|
5 |
Operating and Financial
Review and Prospects
|
||
A. Operating Results |
Financial performance - Performance KPIs |
||
B. Liquidity and Capital Resources |
Financial performance - Performance KPIs |
||
Financing policy |
|||
Consolidated Statements of Cash Flows |
|||
Note 4 Cash and cash equivalents and
short-term investments
|
|||
Note 16 Long-term debt and interest and
other costs
|
Item |
Form 20-F Caption |
Location in this document |
Page |
Note 17 Commitments and contingencies |
|||
Note 25 Financial risk management |
|||
C. Research and Development, Patents and Licenses, etc. |
Q&A with the CTO |
||
How we innovate |
|||
Financial performance - Research and
development costs
|
|||
Innovation ecosystem |
|||
Information Security - Intellectual Property
protection
|
|||
D. Trend Information |
Long-term growth opportunities |
||
Risk - Risk factors |
|||
E. Critical Accounting Estimates |
Consolidated Financial Statements - Notes
to the Consolidated Financial Statements -
Note 1 General information / summary of
general accounting policies
|
||
6 |
Directors, Senior Management and Employees |
||
A. Directors and Senior Management |
Corporate Governance |
||
B. Compensation |
Remuneration Report |
||
C. Board Practices |
Corporate Governance |
||
Corporate Governance – Supervisory Board
Report – Supervisory Board committees
|
|||
D. Employees |
Social - Attractive workplace for all |
||
E. Share Ownership |
Corporate Governance - AGM and share
capital - Major shareholders
|
||
Remuneration Report - Board of
Management remuneration
|
|||
Note 20 Share-based compensation |
|||
F. Disclosure of a Registrant’s Action to Recover
Erroneously Awarded Compensation
|
Not applicable |
||
7 |
Major Shareholders and Related Party Transactions |
||
A. Major Shareholders |
Corporate Governance - AGM and share
capital - Major shareholders
|
||
B. Related Party Transactions |
Note 26 Related parties and variable
interest entities
|
||
C. Interests of Experts & Counsel |
Not applicable |
ASML ANNUAL REPORT 2023 |
OTHER APPENDICES CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
344 |
|
Appendix - Reference table 20-F |
Item |
Form 20-F Caption |
Location in this document |
Page |
8 |
Financial Information |
||
A. Consolidated Statements and Other Financial Information |
Consolidated Financial Statements |
||
B. Significant Changes |
Long-term growth opportunities |
||
Notes to the Consolidated Financial Statements |
|||
9 |
The Offer and Listing |
||
A. Offer and Listing Details |
Appendix - Offer and listing details |
||
B. Plan of Distribution |
Not applicable |
||
C. Markets |
Appendix - Offer and listing details |
||
D. Selling Shareholders |
Not applicable |
||
E. Dilution |
Not applicable |
||
F. Expenses of the Issue |
Not applicable |
||
10 |
Additional Information |
||
A. Share Capital |
Not applicable |
||
B. Memorandum and Articles of Association |
Corporate Governance |
||
C. Material Contracts |
None |
||
D. Exchange Controls |
Appendix - Exchange controls |
||
E. Taxation |
Appendix - Dutch and US taxation |
||
F. Dividends and Paying Agents |
Not applicable |
||
G. Statement by Experts |
Not applicable |
||
H. Documents on Display |
Appendix - Documents on display |
||
I. Subsidiary Information |
Not applicable |
||
J. Annual Report to Security Holders |
Not applicable |
||
11 |
Quantitative and Qualitative Disclosures About
Market Risk
|
Note 16 Long-term debt and interest and
other costs
|
|
Note 25 Financial risk management |
|||
12 |
Description of Securities Other Than Equity Securities |
Appendix - Offer and listing details |
|
Part II |
|||
13 |
Defaults, Dividend Arrearages and Delinquencies |
None |
|
14 |
Material Modifications to the Rights of Security
Holders and Use of Proceeds
|
None |
|
15 |
Controls and Procedures |
Appendix - Controls and procedures |
Item |
Form 20-F Caption |
Location in this document |
Page |
16A |
Audit Committee Financial Expert |
Supervisory Board Report - Supervisory
Board committees - Audit Committee
|
|
16B |
Code of Ethics |
Governance - ESG integrated governance -
Business ethics and Code of Conduct
|
|
16C |
Principal Accountant Fees and Services |
Appendix - Principal accountant fees and
services
|
|
16D |
Exemptions from the Listing Standards for Audit
Committees
|
Not applicable |
|
16E |
Purchases of Equity Securities by the Issuer and
Affiliated Purchasers
|
Note 22 Shareholders’ equity |
|
16F |
Change in Registrant’s Certifying Accountant |
None |
|
16G |
Corporate Governance |
Corporate Governance – Compliance with
Corporate Governance requirements – US
listing requirements
|
|
16H |
Mine Safety Disclosure |
Not applicable |
|
16I |
Disclosure Regarding Foreign Jurisdictions that
Prevent Inspections
|
Not applicable |
|
16J |
Insider Trading Policies |
Not applicable |
|
16K |
Cybersecurity |
Risk - Risk factors |
|
Governance - ESG integrated governance -
Information security
|
|||
Part III |
|||
17 |
Financial Statements |
Not applicable |
|
18 |
Financial Statements |
Consolidated Financial Statements |
|
19 |
Exhibits |
Exhibit index |
ASML ANNUAL REPORT 2023 |
OTHER APPENDICES CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
345 |
|
Appendix - Reference table 20-F (continued) |
ASML ANNUAL REPORT 2023 |
OTHER APPENDICES CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
346 |
|
Appendix - Special note regarding emission targets |
Name |
Description |
|
0-9 |
||
3TG |
Tin, tantalum, tungsten and gold |
|
3D NAND |
A type of non-volatile flash memory in which the memory cells are stacked vertically in multiple
layers.
|
|
A |
||
A&M |
Access & Mobility |
|
ABC compliance review |
Anti-bribery and corruption compliance review |
|
ADAS |
Advanced driver-assistance systems |
|
ADI |
After development inspection |
|
AFM |
The Dutch Authority for the Financial Markets (Autoriteit Financiële Markten) |
|
AGM |
Annual General Meeting |
|
AI |
Artificial intelligence |
|
AIoT |
Artificial intelligence of things |
|
Applied Materials Inc. |
Semiconductor equipment company |
|
ARCNL |
Advanced Research Center for Nanolithography |
|
ArF |
Argon fluoride |
|
ArFi |
Argon fluoride immersion |
|
ASC |
Accounting Standards Codification |
|
ASC 606 |
Accounting Standards Codification revenue recognition |
|
ASC 740 |
Accounting Standards Codification provision for income taxes |
|
ASML |
ASML Holding NV and/or any of its subsidiaries and associates |
|
ASML Foundation |
An independent charity with strong ties to ASML that supports educational initiatives for
disadvantaged 4- to 18-year-olds in regions where ASML operates.
|
|
ATP throughput |
Throughput of the measured system (in wph) according to the acceptance test protocol |
|
B |
||
BAPA |
Bilateral advance pricing agreements |
|
Big data |
Extremely large data sets that may be analyzed computationally to reveal patterns, trends and
associations.
|
|
Big Four accounting
firms
|
Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers |
|
BoM |
Board of Management |
|
BOM |
Brabantse Ontwikkelings Maatschappij |
Name |
Description |
|
Bradley Curve |
Illustrates the relationship between accidents and corporate culture |
|
Brainport Eindhoven |
A technology region in the south of the Netherlands comprising companies, educational
institutions and governmental organizations.
|
|
BREEAM |
Building Research Establishment Environmental Assessment Method |
|
Brion |
Brion Technologies, Inc. |
|
C |
||
CAGR |
Compound annual growth rate |
|
Canon |
Canon Kabushiki Kaisha |
|
CAPEX |
Capital expenditures, defined as additions in property, plant and equipment plus additions in
intangible assets plus additions in right-of-use assets (operating and finance).
|
|
Capital resources |
Financial, manufactured, intellectual, human, social and relationship, and natural elements
employed to produce goods and services.
|
|
Carl Zeiss SMT |
Carl Zeiss SMT GmbH |
|
Cash conversion rate |
An economic statistic in controlling that represents the relationship between cash flow and net
profit.
|
|
CBO |
Chief Business Officer |
|
CCIP |
Customer Co-investment Program |
|
CCPA |
California Consumer Privacy Act (US) |
|
CCR % |
Cash conversion rate percentage |
|
CD |
Critical dimension |
|
CDP |
The Carbon Disclosure Project |
|
CEO |
Chief Executive Officer |
|
CERN |
The European Organization for Nuclear Research |
|
CFO |
Chief Financial Officer |
|
CGU |
Cash-generating unit |
|
CGU ASML |
ASML excluding CGU Cymer Light Sources |
|
CHIPS and Science Act |
The Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 (CHIPS
Act), signed into law in August 2022, designed to boost US competitiveness, innovation and
national security.
|
|
CISO |
Chief Information Security Officer |
|
CIT |
Corporate income tax |
|
CLA |
Collective labor agreement |
|
Cleanroom |
The central part of a wafer fab where wafers are processed and the environment is carefully
controlled to eliminate dust and other contaminants.
|
ASML ANNUAL REPORT 2023 |
DEFINITIONS |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
347 |
|
Definitions |
Name |
Description |
|
CMD |
Capital Markets Day |
|
CMO |
Chief Marketing Officer |
|
CMOS |
Complementary metal–oxide semiconductor |
|
CO2(e) |
Carbon dioxide (equivalent) |
|
Code |
The Dutch Corporate Governance Code |
|
Code of Conduct |
Code of ethics and conduct |
|
Company |
ASML Holding NV |
|
Computational
lithography
|
The use of powerful algorithms and computer modeling of the manufacturing process to optimize
reticle patterns by intentionally deforming them to compensate for physical and chemical effects
that occur during lithography and patterning.
|
|
COO |
Chief Operations Officer |
|
COSO |
Committee of Sponsoring Organizations of the Treadway Commission |
|
COVID-19 |
Coronavirus disease 2019 |
|
CRC |
ASML’s corporate risk committee |
|
CRE |
Corporate Real Estate department of ASML |
|
CRMC |
Capital Research & Management Company |
|
CSPO |
Chief Strategic Sourcing & Procurement Officer |
|
CSRD |
Corporate Sustainability Reporting Directive |
|
CTO |
Chief Technology Officer |
|
Cyber
Weerbaarheidscentrum
Brainport
|
Foundation in the Brainport Eindhoven region that offers companies in the high-tech and
manufacturing industry the opportunity to enhance their protection against cybercrime.
|
|
Cymer |
Cymer Inc., Cymer LLC and its subsidiaries |
|
D |
||
D&E |
Development and engineering |
|
DEFRA |
Department for Environment, Food & Rural Affairs |
|
Deloitte |
Deloitte Accountants BV |
|
D&I |
Diversity and inclusion |
|
DJSI |
Dow Jones Sustainability Index |
|
DRAM |
Dynamic random-access memory |
|
DUV |
Deep ultraviolet |
Name |
Description |
|
DUV immersion fast
shipment
|
A process that reduces some of the testing in our factory. Customer acceptance after the
reduced factory acceptance test (FAT) is considered to be proven for established technologies
with a history of successful customer acceptances after the site acceptance test (SAT). Transfer
of control for these systems and recognition of revenue related to these systems has occurred
upon delivery of the systems.
|
|
E |
||
EAC |
Energy attribute certificates |
|
EBIT |
Earnings before interest and taxes |
|
EHS |
Environment, health and safety |
|
EHS Competence
Center
|
A group within ASML that defines EHS standards, gathers best practices and helps managers
implement them.
|
|
EIM |
External interface module |
|
EMEA |
Europe, the Middle East and Africa |
|
EMS |
Environmental management system |
|
EPE |
Edge placement error |
|
EPS |
Earnings per share |
|
ERM |
Enterprise risk management |
|
ERP |
Enterprise resource planning system |
|
ESA |
European Space Agency |
|
eScan |
ASML’s e-beam wafer inspection system family for targeted in-line defect detection. |
|
ESG |
Environmental, social and governance |
|
ESG score |
An integrated scoring system for environmental, social and governance (ESG) factors used in
credit rating decisions.
|
|
ETR |
Effective tax rate |
|
EU |
European Union |
|
EU-IFRS |
International Financial Reporting Standards as adopted by the European Union |
|
EXE - EUV 0.55 NA |
High numerical aperture, specifically a next-generation EUV lithography platform, also referred to
as EUV 0.55 NA.
|
|
Euribor |
Euro Interbank Offered Rate |
|
Eurobond |
A bond denominated in euros |
|
Euroclear Nederland |
The Dutch Central Securities Depository (Nederlands Centraal Instituut voor Giraal
Effectenverkeer BV)
|
|
Euronext Amsterdam |
Euronext Amsterdam NV |
ASML ANNUAL REPORT 2023 |
DEFINITIONS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
348 |
|
Definitions (continued) |
Name |
Description |
|
EUV |
A lithography technology that uses extreme ultraviolet (EUV) light with a wavelength of 13.5 nm –
this is currently the cutting edge of lithography, enabling technology nodes of 16 nm and beyond.
|
|
EVP |
Executive Vice President |
|
EVP HR&O |
Executive Vice President Human Resources & Organization |
|
Exchange Act |
US Securities Exchange Act of 1934 |
|
F |
||
Fab |
Semiconductor fabrication plant |
|
FAQ |
Frequently asked questions |
|
Farmout suppliers |
Our suppliers that we work with as co-investors |
|
Fast shipment |
A fast shipment process skips some of the testing in our factory and provides our customers with
earlier access to wafer output capacity. When customer acceptance at FAT is not proven, this
leads to a deferral of revenue recognition until SAT
|
|
FAT |
Factory acceptance test |
|
FDII |
Foreign-derived intangible income |
|
Feature |
The elements that make up the pattern for a given layer of a microchip. |
|
FFHA |
Foundation for Hospital Art |
|
Fitch |
A leading provider of credit ratings, commentary and research for global capital markets. |
|
Flash |
A type of non-volatile memory used for storing and transferring information |
|
Foundry |
A contract manufacturer of logic chips |
|
Fraunhofer |
Applied research organization in Germany |
|
FTEs |
Full-time equivalents |
|
FTSE4Good |
Series of ethical investment stock market indices launched in 2001 by the FTSE Group. |
|
G |
||
G-SEED |
Green Standard for Energy and Environmental Design |
|
GAAP |
Generally accepted accounting principles |
|
GDP |
Gross domestic product |
|
GDPR |
General data protection regulation |
|
Gemba Walk |
The Gemba Walk is an opportunity for staff to stand back from their day-to-day tasks to walk the
floor of their workplace to identify wasteful activities.
|
|
GeSI |
Global e-Sustainability Initiative |
|
GHG |
Greenhouse gas |
|
GPU |
Graphics processing unit |
Name |
Description |
|
GQLTCS |
General, quality, logistics, technology, cost and sustainability |
|
GRI |
Global Reporting Initiative |
|
GRI standards |
GRI sustainability reporting standards |
|
H |
||
H2 |
Molecular hydrogen |
|
HDD |
Hard disk drive |
|
HMI |
The brand name for ASML’s range of electron beam (e-beam) wafer inspection and metrology
systems
|
|
Holistic lithography |
Our approach to optimizing the entire microchip printing process and enabling affordable scaling
in chip technology by integrating lithography systems with computational modeling and wafer
metrology and inspection solutions to analyze and control the manufacturing process in real time
|
|
Horizon Europe
Program
|
A public-private partnership that facilitates collaboration and strengthens the impact of research
and innovation in developing, supporting and implementing EU policies while tackling global
challenges
|
|
HR&O |
Human Resources & Organization |
|
HTSC |
High Tech Systems Center |
|
Huisman |
Huisman Equipment BV |
|
HVAC |
Heating, ventilation and air conditioning |
|
I |
||
IAS |
International accounting standards |
|
IBM |
Installed base management |
|
IC |
Integrated circuit |
|
ICT |
Information and communication technology |
|
ID2PPAC |
Integration of processes and modules for the 2 nm node meeting Power Performance Area and
Cost requirements
|
|
IDM |
Integrated device manufacturer |
|
IEA |
International Energy Agency |
|
IFRS |
International financial reporting standards |
|
IIRC |
International Integrated Reporting Council |
|
i-line |
Light with a wavelength of 365 nm, generated by mercury vapor lamps and used in some
lithography systems.
|
|
ILO |
International Labor Organization |
|
Imaging |
The transfer of a pattern onto the photoresist on a wafer using light. |
|
imec |
Interuniversitair Micro-Elektronica Centrum |
ASML ANNUAL REPORT 2023 |
DEFINITIONS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
349 |
|
Definitions (continued) |
Name |
Description |
|
Immersion lithography |
A lithography technique that uses a pool of ultrapure water between the lens and the wafer to
increase the lenses numerical aperture (ability to collect and focus light). This improves both the
resolution and depth of focus for the lithography system.
|
|
Inclusion Index |
The overall score related to the questions included in the we@ASML survey that specifically relate
to ‘inclusion'.
|
|
Industrial site |
Industrial buildings and offices combined at one location |
|
Intel |
Intel Corporation |
|
Internal Control -
Integrated Framework
2013
|
Criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission. |
|
Internet of Things (IoT) |
A network of physical objects embedded with sensors, actuators, electronics and software that
allow the objects to collect and exchange data.
|
|
IP |
Intellectual property |
|
IPR |
Intellectual property rights |
|
IRA |
Inflation Reduction Act of 2022 |
|
I-REC |
International renewable energy certificate |
|
IRS |
Internal Revenue Service of the United States |
|
ISO |
International Organization for Standardization |
|
IT2 |
IC Technology for the 2 nm Node (EU project) |
|
J |
||
JG13+ |
Job grade 13 and higher |
|
JP Morgan Chase |
US-based holder of our New York share register |
|
K |
||
KLA-Tencor |
KLA-Tencor Corporation |
|
KPI |
Key performance indicator |
|
KPMG |
KPMG Accountants NV |
|
K-Reach |
Act on the Registration and Evaluation of Chemicals in South Korea |
|
KrF |
Krypton fluoride |
|
kt |
Kilotonne or 1,000 tonnes (1 tonne = unit of mass equal to 1,000 kilograms) |
|
kWh |
Kilowatt-hour |
|
L |
||
LED |
Light-emitting diode |
Name |
Description |
|
LEED |
Leadership in Energy and Environmental Design |
|
LGBTQIA+ |
Lesbian, gay, bisexual, transgender, queer, intersex, asexual and other identities |
|
LIBOR |
London Interbank Offered Rate |
|
Lithography |
Lithography, or photolithography, is the process in microchip manufacturing that uses light to
pattern parts on a silicon wafer.
|
|
Logic |
Integrated devices such as microprocessors, microcontrollers and GPUs. Also refers to
companies that manufacture such devices.
|
|
LTI |
Long-term incentive |
|
LXP |
Learning eXperience Platform |
|
M |
||
MBA |
Master of Business Administration |
|
Memory |
Microchips, such as NAND Flash and DRAM, that store information. Also refers to companies
that manufacture such chips.
|
|
Metalektro |
Multi-employer union plan is managed by PME (Stichting Pensioenfonds van de Metalektro). |
|
Metrology |
The science of weights and measures or of measurement. |
|
mm |
Millimeter (one thousandth of a meter) |
|
MNP |
Make Next Platform |
|
Moody's |
An American credit rating agency that provides corporate ratings. |
|
MPS |
Mature Products and Services |
|
MSCI |
Morgan Stanley Capital International |
|
Mt |
Megatonne, a metric unit equivalent to 1 million (106) tonnes, or 1 billion (109) kilograms |
|
MW |
Megawatt, a metric unit equivalent to one million (106) watt |
|
N |
||
NA |
Numerical aperture |
|
NAND |
A binary logical operator that gives an output when it receives one or no input; a composite of
‘NOT AND’.
|
|
Nanoscale |
The nanoscopic scale (or nanoscale) usually refers to structures with a length scale applicable to
nanotechnology, usually cited as 1–100 nanometers.
|
|
Nasdaq |
Nasdaq Stock Market LLC |
|
Net bookings |
Net bookings include all system sales orders and inflation related adjustments, for which written
authorizations have been accepted.
|
|
Net zero emissions |
Reaching a state of net zero emissions involves: (a) reducing scope 1, 2 and 3 emissions to zero
or to a residual level that is consistent with reaching net-zero emissions at the global or sector
level in eligible 1.5°C scenarios or sector pathways and; (b) neutralizing any residual emissions at
the net zero target date and any GHG emissions released into the atmosphere thereafter.
|
ASML ANNUAL REPORT 2023 |
DEFINITIONS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
350 |
|
Definitions (continued) |
Name |
Description |
|
NGO |
Nongovernmental organization |
|
NIIT |
Net investment income tax |
|
Nikon |
Nikon Corporation |
|
NL |
The Netherlands |
|
nm |
Nanometer (one billionth of a meter) |
|
Node |
A stepping stone in the chipmaking industry’s roadmap for smaller features and more advanced
microchips, describes and differentiates generations of semiconductor manufacturing
technologies and the chips made with them. Nodes with 'smaller sizes' refer to more advanced
technologies.
|
|
Non-GAAP |
A measure of a company’s historical or future financial performance, financial position or cash
flows that are not calculated or presented in accordance with the GAAP.
|
|
NPR |
Non-product-related |
|
NRE |
Non-recurring engineering |
|
NV |
Naamloze vennootschap, referred to as NV |
|
NXE - EUV 0.33 NA |
A dual-stage stepper based on the NXT platform powered by an extreme UV-based light source
at 13.5 nm wavelength to enable resolution of 13 nm half pitch and beyond, also referred to as
EUV 0.33 NA.
|
|
NXE fast shipment |
A process that reduces some of the testing in our factory. Final testing and formal acceptance
then takes place at the customer site. This leads to a deferral of revenue recognition for those
shipments until formal customer acceptance, but does provide our customers with earlier access
to wafer output capacity.
|
|
NXT |
An enhanced version of the original TWINSCAN system platform offering significantly improved
overlay and productivity.
|
|
O |
||
OCI |
Other comprehensive income |
|
ODM |
Original design manufacturer |
|
OECD |
Organization for Economic Co-operation and Development |
|
OEM |
Original equipment manufacturer |
|
ONE |
ASML’s Our New Enterprise program, which aims to improve our business processes and IT
enterprise management system.
|
|
Operations employees |
Customer support and Manufacturing and Supply Chain Management employees |
|
Overlay |
The layer-to-layer alignment of chip structures |
|
P |
||
P&L |
Statement of profit and loss |
|
PAS |
Philips Automatic Stepper |
Name |
Description |
|
Pattern fidelity |
A holistic measure of how well the desired pattern is reproduced on the wafer. |
|
Pattern fidelity control |
A holistic approach to controlling the whole process of manufacturing advanced microchips in
high volumes that aims to improve overall yields. It draws data from production equipment and
computational lithography tools, analyzing it with techniques such as machine learning to provide
real-time feedback.
|
|
Patterning |
The process of creating a pattern in a surface to build microchips. |
|
PCAOB |
Public Company Accounting Oversight Board |
|
PFAS |
Perfluoroalkyl chemicals |
|
PGP |
Product generation process |
|
Philips |
Health technology company, headquartered in the Netherlands |
|
PHLX Index |
Semiconductor sector index |
|
PIN3S |
Pilot Integration of 3 nm Semiconductor Technology |
|
PIs |
Performance indicators |
|
PME |
Bedrijfstakpensioenfonds Metalektro |
|
Preference shares
foundation
|
Stichting Preferente Aandelen ASML |
|
Preference share option |
An option to acquire cumulative preference shares in our capital. |
|
Q |
||
Q&As |
Questions and answers |
|
R |
||
R&D |
Research and development |
|
RBA |
Responsible Business Alliance |
|
RC |
ASML’s Remuneration Committee |
|
REACH |
Registration, evaluation, authorization and restriction of chemicals |
|
Recoverable amount |
The greater out of an asset’s fair value less costs to sell and its value in use. |
|
REMA |
EUV reticle masking module |
|
Remuneration Policy |
The remuneration policy applicable to the Board of Management of ASML Holding NV |
|
Reticle |
A plate containing the pattern of features to be transferred to the wafer for each exposure. |
|
ROAIC |
Return on average invested capital |
|
RoHS |
Restriction of hazardous substances |
|
S |
ASML ANNUAL REPORT 2023 |
DEFINITIONS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
351 |
|
Definitions (continued) |
Name |
Description |
|
Standard & Poor's |
A stock index of the United States that, due to its broad composition, gives a reliable picture of
developments in the American stock market.
|
|
Samsung |
Samsung Electronics Corporation |
|
SAQ |
Self-assessment questionnaire |
|
Sarbanes-Oxley Act |
The Sarbanes-Oxley Act of 2002 |
|
SAT |
Site acceptance test |
|
SB |
ASML’s Supervisory Board |
|
SBTi |
Science-Based Targets initiative |
|
Scope 1 CO2e
emissions
|
Direct carbon dioxide emissions from resources an organization owns or controls |
|
Scope 2 CO2e
emissions
|
Indirect carbon dioxide emissions due to the energy an organization consumes |
|
Scope 3 CO2e
emissions
|
All other indirect carbon dioxide emissions that occur in an organization’s value chain |
|
Scope 3 CO2e
emissions intensity
|
All other indirect carbon dioxide emissions that occur in an organization’s value chain expressed
as a percentage of revenue or gross profit.
|
|
SDGs |
United Nations' Sustainable Development Goals |
|
SEC |
The United States Securities and Exchange Commission |
|
SEMI |
Semiconductor Equipment and Materials International |
|
SEMI S2 |
SEMI S2 – Safety Guideline, Environmental, Health and Safety Guideline for Semiconductor
Manufacturing Equipment, a set of performance-based EHS considerations for semiconductor
manufacturing equipment.
|
|
SEMI S23 |
SEMI S23 – Guide for Conservation of Energy, Utilities and Materials Used by Semiconductor
Manufacturing Equipment, guidelines for collecting, analyzing, and reporting energy-consuming
semiconductor manufacturing equipment utility data.
|
|
SG&A |
Selling, general and administrative expenses |
|
Shrink |
The process of developing smaller transistors for more advanced chips. |
|
SMART Photonics |
Foundry for integrated photonic circuits |
|
SoC |
System on a chip |
|
SPE Shareholders |
A syndicate of three banks for the purpose of leasing ASML’s headquarters in Veldhoven. |
|
SPIE |
International society for optics and photonics |
|
S&P |
Sourcing and procurement |
|
SSD |
Solid-state drive |
|
Springplank 040 |
Social care organization in Eindhoven offering support and guidance to homeless people. |
|
SSRA |
Safety risk assessment |
Name |
Description |
|
Star level |
Startups accelerated by Eindhoven Startup alliance / HighTechXL that show a multiple of
investment of above 10 times.
|
|
STEM |
Science, technology, engineering and mathematics |
|
STI |
Short-term incentive |
|
STR |
Stichting Technology Rating, a non-profit organization |
|
Sub fab |
Located under the cleanroom floor, the sub fab contains auxiliary equipment such as the drive
laser.
|
|
SWOT |
Strengths, weaknesses, opportunities and threats |
|
T |
||
TAPES3 |
Technology Advances for Pilot line of Enhanced Semiconductors for 3 nm |
|
TC |
ASML’s Technology Committee |
|
TCC |
Total Cash Compensation |
|
TCFD |
Task Force on Climate-related Financial Disclosures |
|
TCJA |
Tax Cuts and Jobs Act |
|
Technical competence |
The capabilities and spread of technical expertise among our people, and the extent to which
they are embedded in our processes and operations.
|
|
Thales NL |
Dutch branch of the international Thales Group |
|
Throughput |
The number of wafers a system can process per hour |
|
Tier 1 (2, 3) supplier |
Tier 1 suppliers are direct suppliers, whereas Tier 2, 3 and beyond refer to suppliers of our
suppliers.
|
|
TJ |
Terajoule (one trillion joules) |
|
TNO |
Nederlandse Organisatie voor Toegepast Natuurwetenschappelijk Onderzoek (Netherlands
Organisation for Applied Scientific Research)
|
|
Transistor |
A semiconductor device that is the fundamental building block of microchips |
|
TSCA |
Toxic Substances Control Act |
|
TSMC |
Taiwan Semiconductor Manufacturing Company Ltd. |
|
TSR |
Total shareholder return |
|
TWINSCAN |
ASML’s unique lithography system platform, with two complete wafer stages to allow one wafer
to be mapped while another is being exposed, thereby enabling higher accuracy and throughput.
|
|
U |
||
UNGP |
United Nations guiding principles |
|
US |
United States |
|
US GAAP |
Generally accepted accounting principles in the United States of America |
|
US ITC |
United States International Trade Commission |
ASML ANNUAL REPORT 2023 |
DEFINITIONS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
352 |
|
Definitions (continued) |
Name |
Description |
|
V |
||
Vanderlande |
A material handling and logistics automation company based in the Netherlands |
|
VAT |
Value-added tax |
|
VIE |
Variable interest entity |
|
VLSI |
VLSI Research Inc. |
|
VNO-NCW |
The Confederation of Netherlands Industry and Employers |
|
VOC |
Volatile organic compound |
|
VP |
Vice president |
|
VPA |
Volume purchase agreement |
|
VPC |
Volume parts contract |
|
VR |
Virtual reality |
|
W |
||
WACC |
Weighted average cost of capital |
|
Wafer inspection |
The process of locating and analyzing individual chip defects on a wafer |
|
Wafer metrology |
The process of measuring the quality of patterns on a wafer |
|
Waste intensity |
The total waste in millions of kilograms (excluding construction waste) divided by revenue (in
millions of euros).
|
|
Wavelength |
The distance between two peaks of a wave such as light. The shorter the wavelength of light
used in a lithography system, the smaller the features the system can resolve.
|
|
Website |
www.asml.com |
|
WHT |
Withholding tax |
|
Works Council |
Works Council of ASML Netherlands BV |
|
wph |
Wafers per hour |
|
X |
||
XTAL |
XTAL, Inc. |
|
Y |
||
YieldStar |
ASML’s diffraction-based wafer metrology platform |
|
Z |
||
ZEISS |
Carl Zeiss AG |
ASML ANNUAL REPORT 2023 |
DEFINITIONS CONTINUED |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
353 |
|
Definitions (continued) |
ASML ANNUAL REPORT 2023 |
SIGNATURES |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
354 |
|
Signatures |
Exhibit No. |
Description |
|
1.1 |
||
2.1 |
||
4.1 |
||
4.2 |
||
4.3 |
||
4.4 |
||
4.5 |
||
4.6 |
||
4.7 |
||
4.8 |
||
4.9 |
||
4.10 |
10.14 and 10.15, Carl Zeiss AG (Incorporated by reference to the Registrant’s Annual Report on Form 20-F
for the fiscal year ended December 31, 2019)3
|
|
4.11 |
Exhibit No. |
Description |
|
8.1 |
||
12.1 |
||
13.1 |
||
15.1 |
||
19.1 |
||
97.1 |
||
101.INS |
XBRL Instance Document2 |
|
101.SCH |
XBRL Taxonomy Extension Schema Document2 |
|
101.CAL |
XBRL Taxonomy Extension Calculation Linkbase Document2 |
|
101.DEF |
XBRL Taxonomy Extension Definition Linkbase Document2 |
|
101.LAB |
XBRL Taxonomy Extension Label Linkbase Document2 |
|
101.PRE |
XBRL Taxonomy Extension Presentation Linkbase Document2 |
|
104 |
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)2 |
ASML ANNUAL REPORT 2023 |
EXHIBIT INDEX |
STRATEGIC REPORT |
CORPORATE GOVERNANCE |
FINANCIALS |
355 |
|
Exhibit index |
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) |
Type of shares | Amount of shares | Nominal value | Votes per share | ||||||||
Cumulative preference shares |
700,000,000 |
€0.09 per share |
1 |
||||||||
Ordinary shares |
700,000,000 |
€0.09 per share |
1 |
Year ended December 31 | 2021 | 2022 | 2023 | ||||||||
Issued ordinary shares with nominal value of €0.09 | 402,601,613 | 394,589,411 | 393,421,721 | ||||||||
Issued ordinary treasury shares with nominal value of €0.09 | 3,873,663 | 8,548,631 | 6,162,857 | ||||||||
Total issued ordinary shares with nominal value of €0.09 | 406,475,276 | 403,138,042 | 399,584,578 |
Quorum | ASML does not follow Nasdaq’s quorum requirements applicable to meetings of ordinary shareholders. In accordance with Dutch law and generally accepted Dutch business practice, ASML’s Articles of Association provide that there are no quorum requirements generally applicable to general meetings of shareholders. | ||||
Solicitation of proxies | ASML does not follow Nasdaq’s requirements regarding the solicitation of proxies and the provision of proxy statements for general meetings of shareholders. ASML does furnish proxy statements and solicit proxies for the General Meeting. Dutch corporate law sets a mandatory (participation and voting) record date for Dutch listed companies at the 28th day prior to the date of the General Meeting. Shareholders registered at such a record date are entitled to attend and exercise their rights as shareholders at the General Meeting, regardless of sale of shares after the record date. | ||||
Distribution of Annual Report | ASML does not follow Nasdaq’s requirement regarding distribution to shareholders of copies of an annual report containing audited Financial Statements prior to our AGM. The distribution of our annual reports to shareholders is not required under Dutch corporate law or Dutch securities laws, or by Euronext Amsterdam. Furthermore, it is generally accepted business practice for Dutch companies not to distribute annual reports. In part, this is because the Dutch system of bearer shares has made it impractical to keep a current list of holders of the bearer shares in order to distribute the annual reports. Instead, we make our Annual Report available at our corporate head office in the Netherlands (and at the offices of our Dutch listing agent as stated in the convening notice for the meeting) no later than 42 days prior to convocation of the AGM. In addition, we post a copy of our Annual Reports on our website prior to the AGM. | ||||
Equity compensation arrangements |
ASML does not follow Nasdaq’s requirement to obtain shareholder approval of stock option or purchase plans or other equity compensation arrangements available to officers, directors or employees. It is not required under Dutch law or generally accepted practice for Dutch companies to obtain shareholder approval of equity compensation arrangements available to officers, directors or employees. The General Meeting adopts the Remuneration Policy for the Board of Management, approves equity compensation arrangements for the Board of Management and approves the remuneration for the Supervisory Board. The Remuneration Committee evaluates the achievements of individual members of the Board of Management with respect to the short- and long-term quantitative performance and he full Supervisory Board evaluates the quantitative performance criteria. Equity compensation arrangements for employees are adopted by the Board of Management within limits approved by the General Meeting. |
Legal Entity | Country of Incorporation | ||||
Subsidiaries of ASML Holding NV1: |
|||||
ASML Belgium BV | Belgium (Essen) | ||||
Hermes Microvision Co., Ltd. (Beijing) | China (Beijing) | ||||
ASML (Shanghai) Electrical Equipment Co. Ltd. | China (Shanghai) | ||||
ASML (Beijing) Equipment Repair Company Limited | China (Beijing) | ||||
ASML (Shanghai) Lithography Facilities Science and Technology Co. Ltd. | China (Shanghai) | ||||
Cymer Semiconductor Equipment (Shanghai) Co. Ltd. | China (Shanghai) | ||||
Hermes Microvision (Shanghai) Co., Ltd | China (Shanghai) | ||||
Brion Technologies (Shenzhen) Co. Ltd. | China (Shenzhen) | ||||
ASML France S.a.r.l. | France (Bernin) | ||||
ASML Verwaltungs GmbH i.l. | Germany (Berlin) | ||||
ASML Berlin GmbH (formerly Berliner Glas GmbH) | Germany (Berlin) | ||||
ASML Germany GmbH | Germany (Dresden) | ||||
ASML Participations Germany GmbH | Germany (Dresden) | ||||
ASML Hong Kong Ltd. | Hong Kong SAR | ||||
ASML Ireland Ltd. | Ireland (Dublin) | ||||
ASML Israel (2001) Ltd. | Israel (Kiryat Gat) | ||||
ASML Italy S.r.l. | Italy (Avezzano) | ||||
ASML Japan Co. Ltd. | Japan (Tokyo) | ||||
Cymer Japan, Inc. | Japan (Tokyo) | ||||
ASML Equipment Malaysia Sdn. Bhd. | Malaysia (Georgetown, Pulau Pinang) | ||||
Cymer BV | Netherlands (Veldhoven) | ||||
ASML Netherlands BV | Netherlands (Veldhoven) | ||||
ASML Trading BV | Netherlands (Veldhoven) | ||||
Hermes Microvision Incorporated BV | Netherlands (Veldhoven) | ||||
ASML Singapore Pte. Ltd. | Singapore | ||||
Cymer Singapore Pte Ltd. | Singapore | ||||
ASML Korea Co. Ltd. | South Korea (Gyeonggi-Do) | ||||
ASML Repair Center Korea Ltd. | South Korea (Gyeonggi-Do) | ||||
Cymer Korea, Inc. | South Korea (Gyeonggi-Do) | ||||
ASML Taiwan Ltd. | Taiwan (Hsinchu City) | ||||
ASML Technology Taiwan Ltd. | Taiwan (Hsinchu City) | ||||
Cymer Southeast Asia Ltd. | Taiwan (Hsinchu City) | ||||
ASML (UK) Ltd. | UK (Edinburgh (Scotland)) | ||||
Cymer, LLC | US (Carson City, Nevada) | ||||
Hermes Microvision, LLC | US (Los Angeles, California) | ||||
EO Technical Solutions LLC | US (Vancouver, Washington) | ||||
ASML US, LLC | US (Wilmington, Delaware) | ||||
ASML US, LP | US (Wilmington, Delaware) |