Henk Scheepers ASML SVP Supply Chain Managementco-makers.com/gsls09/Buyers Breakfast GSLS09...
Transcript of Henk Scheepers ASML SVP Supply Chain Managementco-makers.com/gsls09/Buyers Breakfast GSLS09...
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Buyers BreakfastOctober 15th, 2009
Henk ScheepersASML SVP Supply Chain Management
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Sales decline due to global crisis
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Numbers have been rounded for readers’ convenience.
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Profitability under pressureConsolidated statement of operations M€
Q2 08 Q3 08 Q4 08 Q1 09 Q2 09
Net Sales 844 696 494 184 277
Gross profit Gross margin %
337 40.0%
265 38.1%
39 7.9%
12 6.7%
34 12.5%
R&D 130 130 127 118 118
SG&A 56 52 47 41 41
Income (loss) from operations Income from operations %
151 17.9%
83 12.0%
(135) -27.4%
(147) -80.0%
(125) -45.0%
Net income (loss) Net income %
192 22.7%
73 10.5%
(88) -17.8%
(117) -63.8%
(104) -37.6%
Units shipped 39 37 25 11 10
ASP New Systems 21.7 21.6 20.4 13.8 31.1
Net Bookings Units 33 31 13 8 15
Numbers have been rounded for readers’ convenience.
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Factors of Success: Research & Development
ASML’s R&D budget = total revenues of one of its competitorsSecond largest, non-government R&D investor in the Netherlands
Source: ASML
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Bottom-up scenario: Four engines of growthEven when assuming slow chip unit growth of 4%
More DRAM in expanding consumer electronics. Additional €1.2B Litho revenue over 6 years.
Emerging new Storage Class Memory makes computer servers perform 25% better, leading to 30% penetration by 2015, adding €1.8B Litho revenue in 2012-2015 period.
Middle class population growth expected, driven by Brazil, Russia, India and China (BRIC). Electronics spending in BRIC to more than double to $46/year, adding €6.4B in Litho revenueover 6 years.
NAND/ReRAMpenetration rises to 10% of hard disk drives storage capacity, versus 7% in slow-down scenario, adding €6.8B in Litho revenue over 6 years.
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Source: ASML ; data corrected for overlap
Factual until 2008 + forecast for 2009
IC trend-based simulation
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Our Supply Chain is organized to meet customer demand
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ASML Immersion Product Roadmap
Available
XT:1900GiResolution 40 nm
Tool CDU < 1.5 nm
SMO 6→5 nm
Throughput
131→140 WPH
XT:1950HiResolution 38 nm
Tool CDU < 1.1 nm
SMO 4 nm
Throughput
148 WPH
Available
NXT:1950iResolution 38 nm
Tool CDU < 1.1 nm
SMO 3 nm
Throughput
175 WPH
Q2-2009 Q2-2010
NXT:1950i+PEP
Resolution 38 nm
Tool CDU < 1.1 nm
SMO 3/5 nm
Throughput
200 / 220 WPH
Q2-2011
NXT:1950i+EXT
Resolution 38nm
Tool CDU < 0.8 nm
SMO 2 / 5 nm
Throughput
220 / 240 WPH
Preliminary Platform
extension specifications
to be field upgradeable
Extendibility
Performance enhancements
� Improved overlay using segmented wafer table
� Improved optics – “1950 lens”
� Improved productivity & defectivity using air drag immersion hood
� Faster stages
Platform enhancements
� New hi-acceleration stages
� Improved overlay using new stage position control
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Financial impact of shrink for our Customers
60nm
55nm
45nm
Design Rule
Die Area Die / Wafer300mm
Revenue / Wafer
$5 ASP / die
145mm2145mm2
120mm2120mm2
70mm270mm2
430430
520520
940940
$2,600
$2,150
$4,700
Source: ASML
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Customer’s needs:
Decrease Cost Cost Cost Cost Cost Cost Cost
Continue Shrink Shrink Shrink Shrink Shrink
Increase Output Output Output Output Output
ASML:
Customer FocusTechnology LeadershipOperational Excellence
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What we need How we should do it
Lower cost of goods
Lower cost of design
Lower cost of ramp
Lower cost of service
� Higher uptime
� Less (sub) system failures
Faster ramp up
Lower obsolescence value due to volume fluctuation and product changes
Use standard off-the-shelf components (COTS) and subsystems.
Use proven technology
Use design capacity of OEM suppliers
Involve suppliers in design
Re-use of existing modules and sub modules. Seek communality and backwards compatibility
Increased focus on industrial engineering
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Road to global leadership continues
1984Total market: > € 4 billion
GCAUltratech
Eaton
Nikon
ASET
HitachiPerkin ElmerCanon
ASMLNikon
Canon
2008Total market: > € 463 million
ASML
Technology leadership brings increased market share
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ASML Supply Chain strategy: Value Sourcing
Customer Focus and Growth in Market Share � Outstanding customer satisfaction� Most reliable product performance
Technology Leadership� Most advanced R&D roadmap� Highest product Value of Ownership
Operational Excellence� Financially strong throughout the market cycles� Agility and short cycle times
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Value SourcingAdding Value to the Customer, the Supply Base & ASML
ASML Customer acceptance by the Supply Chain
Long Term supplier relationships
QLTC Performance in all phases of the life cycle: � managed integral and cross functional� measured� Continuously improved
Securing World Wide competitiveness
Continuously adapting to changing customer
requirements
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ASML Customer acceptance by the Supply Chain
Quality-Logistics-Technology-total Cost
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Comparison YoY Growth Values between IC units, IC Revenues and Litho Revenues
WSTS YoY IC unit growth WSTS YoY IC Revenue growth Gartner YoY Litho Revenue Growth
ASML Market: Highly dynamical
Sources: IC Units: 1988-2007: WSTS; 2008: avg. VLSI, Gartner, IC Insights; Litho: Gartner
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B o o king s L itho W W3 M M A [M $ /M onth]
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Supplier Performance on QLTCFollowing the Semiconductor Market Cycles
12 months
Output x2 Output x½
4 months 6 months 12 months2 months
Output Capacity to Double in 4 monthsOutput Capacity to Double in 4 months
PROTO PILOT VOLUMESC
requirementsSc
Feasibility
PGPphase 0
PGPphase 1
Operationalphase
PGPphase 5
PGPphase 4
PGPphase 3
PGPphase 2
Prod.Life Ext.
R4V
Advance Warning of Upturn ~ 2 Months
Slide 17 | Public…we need a strong fleet to accompany us!
Market Pressure forces quick release into the water and steep speed pick-up...
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The Benefits of Outsourcing
ASML focuses on high value-added integration role� Total product competence� Shorten cycle times
Subsystem suppliers have specialized competencies� More efficient and dedicated operations� Focus on reducing cost, increasing capability and quality
Subsystem suppliers serve also other customers� Share and spread the risks of the market cycles� Increased flexibility and competitive cost structure
Creating access to the best competencies available� Time to Market� Most advanced technology
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Multi and Single Sourcing go Together
Multi Sourcing of Competencies� Create competition and independency� Q L T are pre-conditions, Cost is the differentiating factor
Single Sourcing of Products and Services� Optimizing investments and engineering resources� Best fit to the suppliers’ competencies
� Based upon the QLTC principles
� Speeding up the learning curve� Time to Market
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ASML offers to develop Virtual Integration for those Suppliers who prove to be QLTC competitive, world wide:
ASML is potentially willing to outsource more development and industrial integration activities
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Supply Chain is Key
The Supply BaseWorld Class - Globally Competitive - Globally Present
Value SourcingValue Sourcing
QualityQualityDesign Qualification (Product)Process Qualification (Supply Chain Manufacturing)Zero Defects
LogisticsLogisticsDelivery reliability and availabilityShort lead timesCapacity and Flexibility
TechnologyTechnologyTechnology roadmap fulfillment – “Time to Market”Development of and Access to key competenciesEfficient engineering change management
total Costtotal CostCompetitive pricing with open costingMeeting Value of Ownership requirementsSharing risks and benefits of market dynamics
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QLTC Performance in all phases of the life cycle
Key Performance Indicators� Quality� Logistics� Technology� total Cost
Continuously measured and managed through Improvement Initiatives
Contractually arranged in theLong Term Agreement
Managed by Cross Functional Teams
Documented in the Supplier Profile
- Confidential -
Supplier ProfileSupplier name + number
XYZ
1 2 3 4 5 Status
Material Quality Performance (MQP) - Q1
Introduction of new products - Q2
Process control of the production process - Q3 G
Supplier selection criteria throughout the supply chain - Q4 R
Version control and archiving - Q5
Complaint Handling - Q6 Y
FSD's exclusive DOA’s / DOI’s - Q7
DOA and DOI Parts at End-ustomers. - Q8
Environmental Performance - Q9
Health & Safety Performance - Q10
Corporate Social Responsibility (CSR) - Q11
Quality performance of 2nd tier - Q12
Customer focus and craftsmanship - Q13
- Q14
Order fulfilment flexibility & Delivery reliability - L1
Material Availability & Stock Out Ratio - L2 G
Just In Time replenishment - L3
Order Time - L4
Disturbance Information Flow Response Time (RT) - L5 G
Repair Cycle Time improvement - L6
Order management - L7 B
Flexibility Requirement - L8
Proto Flexibility - L9
Cycle Time Reduction - L10
Process Control: ERP-system - L11
Logistic performance of 2nd tier - L12
Customer focus and craftsmanship - L13 G
- L14
Module / Sub-system / Production Tooling Development - T1
The research and development process - T2
The structure of the technology development organization - T3
Technology Knowledge - T4
Investments on Technology Competence Development - T5
Engineering / Early Supplier Involvement - T6
Process Engineering - T7
Continuous Engineering Improvement - T8 G
Engineering Change (EC) Management - T9
Technical Support - T10
Technology roadmap alignment - T11
Contamination Control - T12 Y
Technology performance of 2nd tier - T13
Customer focus and craftsmanship - T14
- T15
Market Conformity (PP3) - C1
Open costing - C2
Cost Reduction Programs - C3
Dependency: ASML & Semicon Market - C4
Payment Terms - C5 B
Warranty according to ASML Customer expectation - C6
Delivery Conditions - C7
total Cost performance of 2nd tier - C8
Customer focus and craftsmanship - C9
- C10
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Revision Date:
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Securing World Wide competitiveness: our customers are world wide: about 70% of our sales is in Asia
Our Asian customers expect us to be local present
Sales: 69%Procured value: ca 4%
Sales: 9%Procured value: ca 82%
Sales: 22%Procured value: ca 14%
ASML 2008
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Local QLTC Supply Base enables ASML todevelop, integrate and test
ASML focus on development, integration and testing of systems, in NL, US and Taiwan.
Therefore we need a local competent infrastructure.
The Netherlands has a unique and very competent infrastructure
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Unique Technology & Manufacturing infrastructure around Veldhoven
Product related
And many more!
Non Product related
Knowledge
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ASML Taiwan: locally present; 150 employees
•Production
•CS
•Industrial engineering
•Logistics
•Procurement
•Development
Transfer the PAS Production to ACE•Free up capacity in Veldhoven to work on our new technologies•Improve our position in Asia and worldwide now and for the future•Have the flexibility to follow the fast changing PAS business
Refurbishment & Spare Parts
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Developing an Asian Supply Base
Asian Suppliers are QLTC:•Able to deliver complex parts•From less-complex parts to complex parts•From Built-to-Print to Virtual integration•From dual sourcing to single sourcing
Integration of 2nd Tier supply chain of our current suppliers•Our current suppliers have or start their own subsidiaries•Currently 20 ASML Asia Procurement people are ready to further expand ASML supply base as well to support our 1st tier suppliers to integrate the Asian Supply Base in their supply chain
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