ABOUT
VALUE CREATION
GOVERNANCE
FINANCIAL STATEMENTS
NON-FINANCIAL SUMMARY
GENERAL INFORMATION
1
NOTES TO THE READER
PDF/PRINTED VERSION
This document is the PDF/printed version of ASM International N.V.’s 2020 Annual Report and
has been prepared for ease of use. The 2020 Annual Report in European Single Electronic
Reporting format (the ESEF reporting package) is the official version. The ESEF reporting package
is available on the company’s website. In any case of discrepancies between this PDF version
and the ESEF reporting package, the latter prevails.
UNROUNDED FIGURES
Amounts in the Annual Report may not add up due to rounding differences. The total
amounts may therefore deviate from the sum of the parts. Percentage changes are based
on the unrounded figures.
ABOUT
VALUE CREATION
GOVERNANCE
FINANCIAL STATEMENTS
NON-FINANCIAL SUMMARY
GENERAL INFORMATION
2
IN A YEAR UNDERSCORED BY COVID-19, ASMI
DELIVERED A STRONG FINANCIAL PERFORMANCE
AND MADE IMPORTANT PROGRESS IN MANY
STRATEGIC AREAS.
Our focus on the health and safety of our people has always been
our key priority. The commitment and focus of our employees in
challenging operating conditions created by COVID-19 enabled
us to continue serving our customers in the best possible ways.
Demand remained strong as our customers continued to invest
in the most advanced technologies that will shape tomorrow’s
advances in trends such as 5G, cloud computing, and autonomous
driving. ASMI delivered its fourth consecutive year of double-digit
revenue growth. We further strengthened our position as we
significantly expanded our R&D engagements.
Looking ahead, we will continue to invest in the potential of
our company.
ABOUT
VALUE CREATION
GOVERNANCE
FINANCIAL STATEMENTS
NON-FINANCIAL SUMMARY
GENERAL INFORMATION
3
TABLE OF CONTENTS
ABOUT
MESSAGE FROM THE CEO
ASMI AT A GLANCE
STRATEGY
KEY PERFORMANCE
VALUE CREATION
Long-term value creation
Customers and products
Employees
Shareholders
Society and planet
Suppliers
Interview with the CFO
GOVERNANCE
Corporate governance
CSR governance
Risk management
Management Board
Supervisory Board
Supervisory Board report
Remuneration report
External auditor
Declarations
4
5
9
15
19
21
22
24
32
39
51
56
62
65
66
69
74
80
82
87
90
97
98
FINANCIAL STATEMENTS
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of profit or loss
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
ASM INTERNATIONAL N.V. FINANCIAL STATEMENTS
Company balance sheet
Company statement of profit or loss
Notes to the company financial statements
INDEPENDENT AUDITOR’S REPORT
NON-FINANCIAL SUMMARY
Environmental footprint results 2016 to 2020
Non-financial performance summary
GENERAL INFORMATION
Product description
Other information
ESG/CSR data glossary and information
Definitions and abbreviations
Locations worldwide
Safe harbor statement
99
100
100
101
102
103
104
105
147
147
148
149
155
162
163
164
166
167
169
171
174
176
178
About
ABOUT
4
In a year underscored by the COVID-19 pandemic, in which we
prioritized the health and safety of our employees, their families,
and our stakeholders, we also continued to help our customers
focus on building faster, cheaper, and increasingly powerful chips.
Message from the CEO
ASMI at a glance
Strategy
Key performance
5
9
15
19
PROPELLING DEMAND
Our R&D investment in new materials, new products, and new processes means we can
help our customers develop their technology roadmap and further extend Moore’s Law.
STRONG RESULTS
In 2020, we continued to further enhance our leading platforms and to grow the pipeline
of new ALD applications, which represented more than half of our equipment revenue.
Our spares & services business also delivered an outstanding performance, with
a double-digit revenue increase compared to 2019. Together with our equipment business
of our product lines, this contributed to a highly successful year, which included:
› Revenue of €1,328 million;
› Bookings of €1,314 million;
› Operating result of €327 million; and
› Free cash flow of €119 million.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Message from the CEO
Message from the CEO
5
MESSAGE FROM THE CEO
Benjamin Loh
President and Chief Executive Officer
In a year underscored by COVID-19, our first priority was the safety of our employees,
while we continued to serve our customers in the best possible ways. ASMI again
delivered strong financial results and achieved progress in key strategic areas.
“ OUR KEY PRIORITY IS
THE HEALTH AND SAFETY
OF OUR EMPLOYEES.”
INTRODUCTION
2020 was an unprecedented year as the COVID-19 pandemic severely affected our lives, our communities,
and world economies. The health and safety of our employees, their families, and of the employees
working for our customers and other business partners has always been our key priority. From the onset of
the pandemic, we implemented all necessary measures, government guidelines and industry best practices
to minimize the risks for our people and partners. Measures included working from home for our employees
wherever possible, implementation of split-shift work in essential areas, enhanced cleaning protocols, and
of course, restriction of non-essential travel. During the year, demand for our products remained strong
as our customers continued to invest in advanced node capacity and in new technology development.
I am impressed by the way ASMI’s employees, while putting the health of all of us first, showed their
commitment and creativity to make sure we continue to serve our customers in the best possible ways,
such as the use of smart technologies to work remotely on our customers’ tools. I want to thank all our
employees for their great commitment and teamwork during this unprecedented year.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 6
For me personally, it has also been a challenging time, having assumed the role of CEO in mid-May,
In terms of product lines, revenue was led by very strong double-digit growth in our ALD business,
in the midst of the pandemic. Though it was difficult, I have been able to adapt to an entirely new
which continued to represent more than half of our equipment revenue in 2020. After strong
way of working, meeting many ASMI colleagues remotely and also having most of my first customer
increases in previous years, momentum in our combined other products – epitaxy, PECVD and
interactions remotely. As vaccinations start to happen worldwide, I am cautiously optimistic that
vertical furnaces – slowed down in 2020. This is explained by the relatively higher exposure of these
the pandemic will be under control sometime this year and I look forward to being able to meet
product lines to the analog/power markets, which were in turn impacted by the weakness in the
our colleagues, shareholders, and partners in person.
automotive and industrial markets earlier in 2020. Recently, demand in analog/power has shown the
first signs of recovery.
MARKET DEVELOPMENT
As markets were upended by the impact of lockdown measures and border closures, the global
In 2020, our spares & services business delivered an outstanding performance, increasing revenue
by 29%. To a smaller extent, this growth was driven by customers increasing inventories in response
economy showed a sharp drop in 2020. Certain parts of the semiconductor market, such as the
to the COVID-19-related supply chain challenges, especially in the second quarter of the year. For
automotive and industrial end markets, were negatively affected, but the overall semiconductor
the most part, we benefited from the solid increase in our installed base in recent years as well as the
market showed a resilient performance. Key drivers were investments in for instance PCs, data
first contribution from our investments in new outcome-based services. Spares & services accounted
centers and communications infrastructure to support demand related to work-from-home and
for 21% of total revenue in 2020.
remote learning. In the broader society, the pandemic accelerated the trend of digitalization. We are
proud to be part of an industry that contributed to the key technologies that have helped people
stay connected with family and friends during these periods of lockdown, schools continuing online
lessons, and businesses maintaining operations.
“ A STRONG AREA OF GROWTH THIS YEAR
HAS BEEN THE CHINESE MARKET.”
The semiconductor market finished the year with a robust growth of 7%. The wafer fab equipment
(WFE) market grew at mid-to-high teens percentage year-on-year. Our customers continued to invest
CHINA
A strong area of growth this year has been the Chinese market, for the broader WFE market and
in leading edge manufacturing capacity. Logic/foundry demand showed a solid increase, driven by
for ASMI. Our sales in China grew strongly in 2020 and contributed for the first time a double-digit
spending on the most advanced nodes of 10nm and below. While the outlook for the memory market
percentage of our total revenue. We benefited from the investments we made in recent years to
was initially impacted by weakness and inventory corrections in parts of the end markets, equipment
strengthen our position in this market. In addition, the portion spent by domestic chip manufacturers
spending showed a healthy increase for the full year.
on the more advanced nodes, albeit still the smaller part of total spending in China, showed a strong
LOGIC/FOUNDRY AGAIN THE KEY DRIVER IN 2020
Our revenue increased by 18% in 2020, the fourth consecutive year of double-digit growth. The
US export restrictions, our sales in China remained solid throughout the year. More importantly, we
further broadened our customer base of domestic Chinese customers and booked new tool wins
increase in 2020, playing to the strengths of our company. Despite the uncertainty related to new
logic/foundry sector continued to be the key driver for us in 2020. Demand was geared towards the
which we expect to contribute in 2021 and beyond.
most advanced nodes. This benefited ASMI as the number of ALD layers in the most advanced logic/
foundry nodes has increased substantially compared to the previous nodes, fueling strong share of
wallet gains. By customer segment, revenue was again led by foundry, followed by logic. After already
NEW MANUFACTURING FACILITY IN SINGAPORE
An important highlight in 2020 was the completion of our new state-of-the-art manufacturing facility
doubling in 2019, our revenue in the foundry segment grew again strongly by double digits in 2020.
in Singapore. After a delay caused by COVID-19, the facility was completed in the fourth quarter.
In memory – the third largest segment – our revenue showed a healthy double-digit increase, driven
In December we shipped our first tool from this facility and in the first quarter of 2021 we continue to
primarily by a strong increase in our DRAM revenue, where we benefited from the first meaningful
further transfer production to the new facility. Using the first phase of the new facility will increase our
adoption of new non-patterning ALD solutions.
manufacturing capacity substantially. It will also provide us with increased flexibility to deliver on our
customer commitments.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 7
FINANCIAL PERFORMANCE
ASMI delivered strong financial results in 2020. Revenue (excluding the settlement proceeds in 2019)
in 2020 in this respect was the tool wins with leading memory customers for high-k metal gate
applications in CMOS peripheral transistors in DRAM. This is a logic-like process in which we can
increased 18% and reached a new record of €1.3 billion in 2020. For the fourth consecutive year, we
leverage our significant experience built over the years in the logic/foundry sector. In addition, we
increased our revenue by a double-digit percentage. Gross margins improved from 43% to 47%, in
successfully engaged many customers with new applications, enabling us to grow even more in the
part driven by efficiency improvements, and for another part due to positive mix effects, particularly
memory market in the coming years.
in the second and third quarters of the year. With operating expenses under control, operating result
increased by nearly 50% in 2020.
“ FOR THE FOURTH CONSECUTIVE YEAR,
WE INCREASED OUR REVENUE BY
A DOUBLE-DIGIT PERCENTAGE.”
In 2020, we stepped up our capital expenditures (capex) to €95 million. Similar to 2019, a significant
While growth in our epitaxy business slowed, we achieved solid progress in our R&D engagements
with customers, working towards new tool-of-record selections for our Intrepid tool, which we expect
will contribute to increased revenue and further market share gains in the coming years.
“ WE REALIZED SOLID PROGRESS IN OUR
R&D ENGAGEMENTS WITH CUSTOMERS.”
portion of spending was related to our new manufacturing facility in Singapore. In addition, we
In vertical furnaces and PECVD, we continue our strategy to invest in targeted niche opportunities,
increased our spending as part of the initiatives we announced earlier in the year to expand and
which we expect to drive additional revenue growth for our company in the coming years.
upgrade our lab capabilities. Free cash flow amounted to a healthy level of €119 million, even though
it was down from the level in 2019 due to the higher capex and an increase in working capital
In spares & services we intend to further expand our offering of new outcome-based services, which
requirements. Our financial position remained strong with €435 million in cash at the end of 2020.
will help us to further strengthen our customer relationships and to drive solid growth in this part of
Our policy to use excess cash for the benefit of our shareholder remained unchanged. In 2020,
the business.
ASMI distributed €165 million in cash to shareholders. Over the last three years we returned almost
To make sure that ASMI is well prepared to tap into all the new opportunities, we will continue to
€1 billion in cash to shareholders. During the AGM, we will propose a regular dividend of €2.00 per
invest in the growth of our company. After an increase of 14% in 2020, we will continue further
share to be paid over 2020, which is a 33% increase compared to the regular dividend of €1.50 per
spending on R&D to develop the many new ALD applications that are on the industry’s roadmap.
share paid over 2019.
We expect capex to remain at a relatively higher level in 2021 on the back of continued R&D-related
STRATEGIC DIRECTION UNCHANGED
After I took over as CEO last May, it did not take me a lot of time to confirm, together with the rest of
An important focus area is the reinforcement of our company culture. On the back of the recent
the management team, that the strategic direction of ASMI is the right one. However, we identified
substantial growth, approximately half of our workforce joined in the last three years. Nurturing our
a number of areas where we need to further step up, to make sure we can capture the opportunities
strengths such as our rich history, our technology focus and our global diversity, we will further build
investments such as lab tools and advanced metrology equipment.
in front of us.
a unified culture, unique to ASMI and based on our core values: ‘We care, We innovate, We deliver’.
We took the first actions last year, including a company-wide engagement survey, and we will take
ALD continues to be a key growth market for ASMI. On the back of a significant double-digit revenue
the next steps this year, including further strengthening our employee communications. Our people
increase, we believe we maintained a strong leading position in 2020. We further expanded our
are our key asset. We will only succeed when we create a workplace of inclusion and diversity in
R&D engagements with key logic/foundry customers. We expect the number of ALD layers and
which our employees have the opportunity to maximize their potential.
application in the upcoming nodes to grow again by double-digit percentages. In addition, we remain
strongly focused on expanding our position in the memory ALD market. An important achievement
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 8
ESG
Our focus is on long-term sustainable value creation for all our stakeholders. During 2020 we
LONG-TERM OUTLOOK
We believe that prospects for ASMI remain strong on a longer-term basis. Semiconductor demand
further stepped up our focus on environmental, social and governance (ESG). After many years
is expected to be driven by key secular growth trends such as 5G, artificial intelligence, cloud and
of engagement and commitment, ASMI officially became a member of the Responsible Business
edge computing, and autonomous driving. Advanced semiconductor devices play a crucial role in
Alliance (RBA) in 2020. We are a recognized leader in our industry in terms of our focus on health and
enabling these multi-year industry drivers. 5G, for example, is expected to drive renewed growth in the
safety. Over the last five years we significantly exceeded our targets for reduction in greenhouse gases
smartphone market and new apps, driving a higher semiconductor content as compared to the 4G
and water consumption, and, while falling short of the target, we also achieved a substantial increase
smartphones. Another example is artificial intelligence. With explosive growth in data, machine learning
in our diversion of landfill waste. We have also adopted a philosophy where our latest products have
algorithms are ever more eager for faster, more powerful and power-efficient processors.
been designed and developed with a reduction in consumption of gases and electrical power in
mind as part of the overall industry trend towards making the manufacture of semiconductors more
environmentally friendly. In addition to that we offer our customers refurbishment programs and
upgrade kits to extend the lifetime of the existing tools.
“ WE EXPECT ALD TO TURN EVEN MORE
INTO A CORE TECHNOLOGY.”
“ WE ARE A RECOGNIZED LEADER IN OUR
INDUSTRY IN TERMS OF OUR FOCUS ON
HEALTH AND SAFETY.”
OUTLOOK 2021
Our industry has started the year in good shape. General expectations are that the global economy
will show a recovery this year even though the pandemic continues to pose risks and may delay this
While ALD has already moved into the mainstream in recent years, we expect ALD to turn even
more into a core technology that will help our industry to keep pace with Moore’s Law. Increasing
device complexity, new materials, and ever thinner films with higher required conformality will drive
substantially higher demand for ALD in the medium term.
Although I am still new in the company, I have been very impressed and excited by the opportunities
that lie ahead and I am committed to continue to grow the company and build on the legacy that has
been left for me by my predecessor, Chuck del Prado.
recovery. In the semiconductor market, the strong momentum at the end of 2020 has continued into
At the coming AGM, Jan Lobbezoo, after having served for three terms at the ASMI Supervisory Board
the first part of 2021. The strength of the increase in demand has led to shortages in parts of the
will retire. I would like to thank him for his wisdom, guidance and continuous support in the past
market. Against this backdrop, WFE spending is again expected to show a mid-teens percentage
12 years.
increase in 2021. Solid spending is expected for the logic/foundry segment, supported by strong
demand for the current most advanced nodes. In addition, our customers in this segment continue
Finally, I want to thank Peter van Bommel for his excellent contributions to ASMI. After 11 years as
to show a healthy appetite for investing in the development of the next nodes. In the memory market,
CFO and Member of the Management Board, Peter will retire at the upcoming AGM. He provided
a further recovery in spending is expected. A recovery in key end markets such as smartphones,
our company with a robust financial framework and played an important role in driving the strategic
combined with the fact that capacity additions in recent years have generally been limited, are likely
direction of ASMI.
to result in improving supply-demand conditions in the memory segment.
March 4, 2021
ASMI has also started 2021 on a strong footing. With the publication of our fourth quarter results
at the end of February, we are on track for record revenue and bookings in the first quarter. Our
guidance for the first and second quarters combined implies year-on-year revenue growth of 14% to
20% in the first half year.
Benjamin Loh
President and Chief Executive Officer
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE ASMI at a glance
ASMI at a glance
9
ASMI AT A GLANCE
ASM International N.V. (ASMI) is a leading supplier of semiconductor wafer processing equipment and process solutions.
Our customers include all of the top semiconductor device manufacturers in the world. Semiconductor chips sit at the heart of
almost every electronic device we use today, and ASMI equipment is a key technology used to manufacture many of these chips.
WHAT WE DO
ASMI supplies wafer processing equipment to the leading semiconductor manufacturers. The total
LOGIC, FOUNDRY AND MEMORY MARKETS
The semiconductor market can be split into three primary segments: logic, foundry and memory.
market for wafer fab equipment (WFE) amounted to US$63 billion in 2020 (Gartner, December 2020).
Within wafer processing equipment, the major segments include lithography, etch & clean, deposition,
ASMI supplies equipment to the leading semiconductor manufacturers in all of these segments:
›› The logic market is made up of manufacturers that create chips, such as microprocessors, that are
and process diagnostics. Our focus is on deposition equipment, which comprises about a quarter of
used to process data and are used in smartphones, laptops and computers;
WFE. We are a key player in the deposition equipment segments for atomic layer deposition (ALD)
›› The foundry market consists of businesses that operate semiconductor fabrication plants
and epitaxy, and a focused niche player for PECVD and vertical furnaces.
to manufacture the designs of other so-called fabless semiconductor companies; and
WAFER FAB EQUIPMENT in %
11
25
29
11
24
Lithography
Etch & clean
Deposition
Process diagnostics
Other wafer processes
Source: Gartner, December 2020
›› The memory market covers manufacturers that make chips that store information either
temporarily, such as Dynamic Random Access Memory (DRAM), or permanently, such as NAND
non-volatile memory.
There are other smaller, yet still important market segments for which ASMI supplies equipment,
such as analog and power. Analog and power semiconductors are devices used in a wide range of
electronic systems for mobile products, automobiles, telecommunications, and other applications.
Wafer manufacturing is another relatively small segment that we participate in, for the processing of
bare silicon wafers before they are delivered to semiconductor fabs.
Our customers’ goal is to build faster, cheaper, and increasingly more powerful semiconductors
for each new technology node. We work closely with our customers to make this a reality, forging
mutually beneficial partnerships to help develop their technology roadmap. Through our intensive
R&D programs and customer co-development, we continuously improve and extend the capability
At ASMI we design, manufacture, sell and service our deposition tools to supply our customers
of our products and processes to meet these advanced technology roadmaps, increase productivity
with advanced technologies for the production of semiconductor devices, or integrated circuits (ICs).
and lower operating costs per wafer. The result is value creation for our customers. While doing so,
Semiconductor ICs, or chips, are a key technology enabling the advanced electronic products used
we work on the edge of what is technologically possible. This creates a very attractive professional
by consumers and businesses everywhere. Our tools are used by semiconductor manufacturers in
and learning environment for our employees and generates long-term value for all of our stakeholders.
their wafer fabrication plants, or fabs. Furthermore, we provide maintenance service, spare parts, and
We serve society by helping our customers to produce the chips needed for advanced electronics
process support to our customers globally at their fabs, which typically operate on a 24-hour basis.
that deliver a world of improvements and opportunities. The world around us shows an increasing
need for the use of more applications and lower energy usage. For example, increasingly complex
processor chips are used for artificial intelligence applications and advanced chips used in 5G mobile
phones require lower power usage, for which our high-k ALD process is beneficial.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE BASICS OF SEMICONDUCTOR MANUFACTURING
The process of making semiconductor chips at our customers' fabs is both highly complex and very
to remove material and thermal treatments. Our systems are designed for deposition processes when
thin films, or layers, of various materials are grown or deposited onto the wafer. Many different thin-film
costly. Semiconductor fabs house a large set of wafer-processing equipment which perform a series
layers are deposited to complete the full sequence of process steps necessary to manufacture a chip.
of process steps on round silicon wafers, which are typically 300mm in diameter. The equipment is
After testing the individual circuits to ensure correct performance, the chips on the wafer are separated
operated in cleanrooms, which filter the air to avoid contamination from small particles that could
and then packaged in a protective housing before ultimately becoming part of a set of semiconductor
negatively affect the circuitry on the chips.
chips on circuit boards within an electronic product.
Many individual steps are performed using various types of wafer processing equipment to create
ASMI is a key player in the ALD and epitaxy segments, and a niche player in vertical furnace and
a semiconductor chip, including photolithographic patterning, depositing thin-film layers, etching
PECVD. The characteristics of those activities are described in the following pages.
10
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 11
ALD
ASMI has a leading position in ALD, which is our largest product line and continued to account for
Atomic Layer Deposition
ASMI first started developing ALD in 1999 through the acquisitions of Microchemistry, and
more than half of our equipment revenue in 2020. ALD is the most advanced deposition method
later Genitech (ASM Korea). Around 2007 we had our first breakthrough in mainstream
available in the market and makes it possible to create ultra-thin films of exceptional material quality,
semiconductor applications when a leading player in the logic segment introduced ALD into
uniformity and conformality.
high-volume manufacturing for high-k metal gate technology. Since then, the use of ALD
has steadily increased to a multitude of different applications across the logic, foundry and
ALD is expected to be the fastest growing deposition market segment for at least the coming
memory segments. Over time, we have substantially expanded our position and we now
3-5 years. As the industry moves to smaller geometries, more complex device structures, and new
supply our ALD solutions to all of the top 10 capital spenders in the semiconductor industry.
materials, the need for more precise and conformal film deposition will further increase, which is
expected to drive the growth of the ALD market.
In recent years we have introduced two new ALD products, the Synergis thermal ALD tool
and the XP8 QCM tool for plasma enhanced ALD applications. Both products offer a wide
We are the leader in the logic/foundry segment of the ALD market and serve nearly the whole
range of processes with high productivity.
addressable market. In 2020, the transition to the most advanced 10nm node in logic and 5nm
node in foundry has once more confirmed this position. At each new advanced technology node,
ALD is a leading edge technology capable of depositing ultra-thin films of exceptional flatness,
a substantially higher number of process steps use ALD, both for new applications and replacing
material quality and uniformity. ALD allows us to deposit thin films atom-by-atom, meaning
conventional deposition methods.
we can deliver atomic-scale thickness control, high-quality deposition film properties, and
large area uniformity, even on complicated features on the wafer, such as fins and deep
Because we entered the ALD memory market at a later stage, the part of the addressable market
trenches. Such precision enables us to use materials that previously could not be considered,
we are serving is smaller. Despite this, we have leading positions in selected parts of this market.
and develop 3D structures that are vital to the future of electronics. The ALD process is
In DRAM, ALD requirements have been expanding from multi-patterning to new non-patterning
a saturated surface-controlled layer-by-layer process where layers are formed during reaction
applications. For example, technology challenges require ALD high-k layers for the control transistors
cycles by alternately pulsing precursors and reactants, and purging with inert gas in between
in the most advanced DRAMs. In 3D-NAND, the device complexity is increasing as the industry
moves to higher stacks, such as the transition from 96 layer to 128 layers. This in turn will gradually
increase the need for ALD. We are strongly focused on expanding our position by broadening our
each pulse. Deposition thickness is precisely controlled by varying the number of cycles.
ATOMIC LAYER DEPOSITION
addressable market in ALD, including parts of the market that we previously did not address.
Precursor
ALD CYCLE
Byproduct
PURGE
1
4
PURGE
Byproduct
2
Oxidant
3
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 12
EPITAXY
We have a solid position in the market for epitaxy or Epi. Epitaxy is a process for depositing highly
In PECVD, our key position is on low-k for advanced logic interconnects. Our PECVD processes are
offered on our high-productivity XP8 platform and include a broad range of dielectric films for various
controlled silicon-based crystalline films. It is one of the fastest growing parts of the deposition
low temperature deposition applications such as interconnect layers, passivation layers, and etch
market, with the number of Epi steps increasing as logic/foundry customers move to smaller nodes.
stop layers.
From a solid position in the niche market for power devices, we have successfully broadened our
We invest selectively in the PECVD and vertical furnace markets. Combined with healthy development
position in recent years in advanced-node CMOS applications, which represents the larger part of
in the market segments that we address, we have seen solid revenue increases in recent years.
the Epi market. Our Intrepid ES 300mm epitaxy tool, for advanced-node CMOS logic and memory
applications, offers an innovative closed-loop reactor temperature control system enabling precise
process control, high productivity, and low cost per wafer.
THE WORLD AROUND US
The world around us is digitalizing quickly, with our way of living and working becoming more and
more dependent on technology. As society becomes increasingly automated and connected, we rely
Intrepid ES was selected by a leading foundry customer for an Epi layer at the 7nm node, and its
on a broad range of electronic devices to control our homes, offices, vehicles, and communications.
use has expanded for multiple layers at the 5nm node. For improved epitaxy film performance, we
Advanced semiconductors play a key role in creating this more digitized world. As a result, new end
introduced the Previum process module, which is integrated together with Intrepid Epi process
modules for pre-epi wafer surface cleaning. The surface clean process creates a pristine silicon
surface for defect-free Epi films, critical for achieving the most advanced node transistor performance
requirements.
Epitaxy, alongside ALD, is an important growth engine in our portfolio.
market products and applications are developing, including:
›› Mobile and cloud computing, and big data analysis;
›› Artificial intelligence;
›› Autonomous vehicles;
›› Internet of Things for smart connected devices; and
›› Ultrafast wideband communication networks (5G).
PECVD AND VERTICAL FURNACES
We hold niche positions in the PECVD and vertical furnace market segments. The relatively large size
This connected and automated world is leading to a growing demand for massive amounts of data,
requiring ever-greater computer processing power and storage, capable of analyzing and acting on the
of these markets makes this part of the market attractive to ASMI. Vertical furnaces utilize a batch
data quickly and effectively. Making this possible requires a constant increase in processing power of
configuration, meaning a large number of wafers are processed simultaneously for productivity and
semiconductor chips. And it is our technology that is playing a vital part in making it all possible.
cost savings. Our furnace tools are designed with dual batch reactors for even more productivity.
OUR POSITION IN THE INDUSTRY
University research/R&D institutes
Materials
suppliers
ASMI & other FAB
equipment suppliers
Semiconductor
suppliers
Semiconductor
industry
End
consumers
suppliErs
EMPLOYEES
INVESTORS
CUSTOMERS
SOCIETY
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 13
In 2020, the semiconductor industry was driven by a US$2.1 trillion global electronics industry (VLSI
The world is more focused than ever on Environmental, Social and Corporate Governance (ESG)
Research, December 2020) that required approximately US$381 billion of semiconductors ICs,
and the way companies conduct business. Expectations across our landscape of stakeholders are
which was up about 7% compared to 2019. The increased need for semiconductors was driven
increasing. From our customers and shareholders, to our employees, our ESG conduct is increasingly
by growing demand for data processing in the work-from-home economy, and by higher prices in
important. These topics have our full attention and we are engaged with external stakeholders so
memory devices, as the supply and demand of the memory market began to achieve a balance.
that we have understood and incorporated them appropriately into what we do.
In turn, the semiconductor industry supported the approximately US$90 billion semiconductor
capital equipment industry, which supplies the required production systems and services. Wafer fab
equipment spending was up about 18% in 2020, reaching US$62.7 billion (VLSI Research, December
2020), due to increased spending for advanced logic and foundry, as leading customers stepped up
OUR PURPOSE
It is our purpose to lead innovation for the semiconductor industry:
›› Our deposition technology helps our customers address their device and process development
their spending on the most advanced nodes. China, in particular, showed solid spending growth
challenges and as such is a key enabler of innovations in semiconductor technology;
in 2020.
›› By partnering with our customers to develop new materials, processes, and technologies that
support their roadmaps, we enable innovations in semiconductor technology which in turn help
The constant drive for smaller, more powerful and more energy-efficient devices puts further pressure
create new improved semiconductor devices;
on our industry at each new technology node. Moving to new nodes is increasingly difficult, with
challenges in new materials, new device architectures, and complex process steps, which are driving
›› By serving the leading chipmakers, we maintain an understanding of the important requirements
of the next generation of device roadmaps, enabling us to develop value-added solutions to
more ALD and epitaxy process steps.
the industry’s critical issues, creating an attractive professional and learning environment for
Consequently, we see that each new technology node requires increasing process equipment
›› Our key contribution to society at large is that our technology helps keep the industry roadmap
investments. Because the semiconductor production market is so capital intensive, only a limited
moving forward, driving innovation in the broader electronics markets; and
number of companies are able to participate, meaning that our customer base has become
›› We strive to achieve this in a responsible way, aligned with the priorities of our stakeholders.
smaller over time. It is only more recently that we have seen some new customers from China
enter the semiconductor space, albeit not yet in the most advanced nodes. Our customers are
This value creation benefits not only our customers and employees, but also businesses and
increasingly dependent on the R&D investments and performance of their equipment suppliers.
consumers that benefit from the resulting new products and available technologies used throughout
Accordingly, we maintain a close, mutually beneficial business relationship with our customers, which
society. And our value-added innovations create attractive possibilities for our suppliers and attractive
our employees;
includes a cooperative development environment, linking technology roadmaps and equipment
returns for our shareholders.
performance requirements.
While the market has evolved to a smaller number of large semiconductor manufacturers, it is still
highly global with major fabs, which we support throughout the US, Asia and Europe. Notably, the
China region has become a significant growth area for new fab investments, for both domestic
Chinese companies and also foreign companies building fabs there for the local market. To better
serve the growing China market, we continue to increase our investment in people and support
infrastructure in China. In 2020, our equipment revenue in China increased significantly, more than
doubling from 2019.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE THE WORLD IN WHICH WE OPERATE
For a complete overview of all our locations, please visit our corporate website: www.asm.com.
14
RESEARCH FACILITIES
Belgium - Leuven
Finland - Helsinki
BUSINESS UNIT AND
PRODUCT RESEARCH
AND DEVELOPMENT
FACILITIES
Japan - Tokyo
The Netherlands - Almere
South Korea - Dongtan
US - Phoenix
MANUFACTURING FACILITIES
The Netherlands - Almere
Singapore - Singapore
South Korea - Dongtan
CORPORATE, SALES
AND SERVICE OFFICES
China
France
Germany
Ireland
Israel
Japan
Malaysia
The Netherlands
Singapore
Taiwan
US
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
Strategy
Strategy
STRATEGY
15
We are an experienced innovation leader. This is the result of our focus on key issues and challenges within the semiconductor
industry, enabling us to make a difference to our customers, employees, and other company stakeholders. While challenges
and opportunities may change over time, we will continue to bring our breakthrough technologies into volume manufacturing,
benefiting our customers, other stakeholders, and society overall. This enables us to act as a responsible citizen.
MISSION
VISION
STRATEGY
We aim to delight our
customers, employees,
shareholders, and society by
driving innovation with new
technologies, and delivering
excellence with dependable
products. By doing this, we
will create new possibilities
for everyone to learn, create,
and share more of what
they are passionate about.
Our strategic objective
is to realize profitable,
sustainable growth
by capitalizing on our
innovative strength in
deposition technologies
and our strong relationships
with key customers.
We act thereby as
a responsible citizen.
Our mission is to provide
our customers with the
most advanced, cost-
effective, and reliable
products, service, and
global support network
in the semiconductor
industry and beyond.
We advance the adoption
of our deposition technology
platforms by developing
new materials and process
applications that support
our customers’ long-term
technology roadmaps.
OUR STRENGTHS
›› We are a focused deposition equipment player in the semiconductor wafer fab equipment market.
Our principal technologies are in ALD and Epi, in which we hold leading positions, and these play
a critical role for our customers in enabling the transition to new device generations. Since 2010,
we have increased our revenue by an annual average growth of 16%, ahead of the 7% compound
annual growth rate shown by the broader wafer fab equipment (WFE) market in the same period.
Our target is to continue outgrowing the WFE market over time, by leveraging our strong position in
advanced nodes. By growing our revenue, we can further increase investments in R&D and create
value for our stakeholders.
›› We have helped shape the industry by driving innovation through our collaborative R&D models,
successfully delivering advanced new materials, new products and new processes to our
customers. With R&D centers in six countries throughout the world, we are close to our customers
and we have access to world-class professionals working in the semiconductor sector today.
This R&D capability has resulted in a strong patent position, with 2,094 patents in force.
›› We have strong customer relationships with the leading semiconductor manufacturers. As we have
expanded and deepened our R&D engagements with the chipmakers, we further improved our
understanding of the key requirements of the next generation of device roadmaps, enabling us
to develop value-added solutions to the industry’s critical technology issues.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
16
CHALLENGES
›› One challenge is the rising cost of advanced chip technologies. The continuation of Moore’s Law,
whereby the number of transistors on a chip doubles every two years, is becoming increasingly
›› We need to strengthen our position in the memory market. While we have a strong position in
the logic/foundry market, our position in the memory market is weaker. We are working on solutions
difficult. Today, investments in new factories for the most advanced nodes amount to more than
to enable us to serve a larger part of this market.
US$10 billion. And the equipment costs for these advanced nodes are also increasing, which will
place greater pressure on equipment manufacturers to create innovative solutions. Remaining at
›› As we focus on growth, and expand our position in the industry and our operations, our
environmental footprint will grow. As a result, we are stepping up our efforts to increase the
the forefront of technology developments is essential if we want to stay successful.
efficiency of our products in terms of energy and chemical consumption, thereby supporting our
›› Another challenge are geopolitical risks. In the past, the success of the semiconductor industry
was strongly tied to the success of all parties along the value chain. Innovations by equipment
suppliers supported original solutions developed by chip manufacturers, which led to new
customers' aim to minimize their environment footprint.
›› While the average incomes of many developing countries are increasing and leading to higher
demands for end products that require semiconductors, we are aware that this will increase the
opportunities for customers to take full advantage of these advanced chips. Geopolitical
demand for more scarce resources and our obligation to responsibly source such resources.
developments put this model at risk. We carefully review any potential impact such developments
›› Being able to attract and retain talented employees remains a key challenge as we focus on
will have for us, while we seek to make use of any new opportunities such situations might offer.
growing and strengthening our organization.
100,000,000,000
10,000,000,000
1,000,000,000
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10,000
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Decades
ASMI’S TECHNOLOGIES ARE FOCUSED
ON HELPING ENABLE OUR CUSTOMERS
TO CONTINUE EXTENDING MOORE’S LAW
70’
80’
90’
00’
10’
20’
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
FIVE KEY ELEMENTS OF OUR STRATEGY:
17
INNOVATIVE
STRENGTH
OPERATIONAL
EXCELLENCE
EMPLOYEES
MAINTAIN
STRONG
BALANCE SHEET
RESPONSIBLE
GROWTH
We provide leading edge deposition equipment to the global semiconductor industry. As we further
Epitaxy has become a second growth engine in our product portfolio. Our Intrepid product has
expand our served available markets and expand on our positions in ALD and Epi, we aim to
enabled us to make successful inroads in the advanced CMOS part of the Epi market. We are
meaningfully outperform the broader WFE market in the 2021-2024 period.
working in R&D on new Epi applications with multiple customers for the next nodes, which should
contribute to further growth of our market share in the near future. In PECVD and vertical furnaces,
Growing our ALD business remains a key priority. ALD will continue to grow as a core technology
we want to further develop our current niche positions by addressing targeted growth opportunities.
as our customers transition to the next nodes. Smaller geometries, increasing complexity, and new
Vertical furnace applications for the analog market is an example of a niche position in which we have
materials will require additional ALD process steps. We expect the ALD market to be the fastest
been selectively investing.
growing segment in the deposition market in the coming years. While maintaining our leading position
in the logic/foundry segment, we are strongly focused on increasing our market share in the memory
We also aim to accelerate growth in our spares & services business through continued expansion
segment of the ALD market. Supported by a strong increase in our R&D engagements in DRAM and
of our installed bases and expanding our offerings to include differentiated outcome-based
3D-NAND applications for the next nodes, we aim to meaningfully increase the contribution of our
services. This will be in addition to our existing offering of spare parts, maintenance and support
memory business over time.
services. In this way, we aim to offer additional value to our customers and further strengthen our
customer relationships.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 18
THE FIVE KEY ELEMENTS OF OUR STRATEGY ARE:
INNOVATIVE STRENGTH
EMPLOYEES
The core element in our overall growth strategy is the continuous innovation which provides ASMI
Our employees are our key asset. We strive to create a safe, inspiring and motivating workplace where
with a leading technological competitive advantage. With R&D centers in six countries, we have
all our employees have the opportunity to use their talents, excel and develop their potential as we work
helped shape the industry by driving innovation through our collaborative R&D models, successfully
together to deliver the cutting edge technologies of tomorrow. Following the rapid expansion in our
delivering advanced new materials, new products, and new processes to our customers. Our R&D
workforce, we have taken steps to further strengthen and unify our culture in which care, innovation and
spending is targeted at the development of new materials and process solutions that enable
delivery are our core values. We are improving our organization and processes to ensure we attract, retain
additional applications, as well as continuous product improvements in performance, reliability and
and develop the talent to further support ASMI’s growth.
cost of ownership. We are also making capital investments in lab space and equipment to further
expand our development capabilities in next-generation technologies. In addition to our internal R&D
efforts, we are continuously expanding and deepening our strategic cooperation with key customers,
suppliers, chemical manufacturers, and research institutes. This approach enables us to remain
MAINTAIN STRONG BALANCE SHEET
innovative and swiftly meet the changing demands of our customers.
OPERATIONAL EXCELLENCE
continue using excess cash flow for the benefit of our shareholders. By consistently following this
policy, we have returned almost €1 billion to our shareholders over the last three years.
We strive to maintain a strong balance sheet that allows us to continue investing in R&D. To this end,
our target is to keep a minimum of €300 million in cash on our balance sheet. At the end of 2020,
we had €435 million. Our company generated a healthy free cash flow of €119 million. We intend to
While technology leadership remains crucial, operational excellence is essential to further strengthen
our future position. We aim to provide our customers with dependable, leading edge products
and services at a consistent performance level, while providing the best total cost of ownership.
We continuously focus on further improving the effectiveness and efficiency of our organization.
Following our strong growth in recent years, we need to strengthen our organization and business
RESPONSIBLE GROWTH
processes in specific areas. For example, we will continue to step up our capabilities in engineering,
ESG is an integral part of our growth strategy. Key focus areas are workforce diversity and inclusion,
product lifecycle management (PLM) and order fulfillment. We aim to strengthen our new product
further lowering the environmental footprint of our own operations, and promoting high ESG
introductions’ processes to provide our customers with additional on-site support as the pace of
standards among our suppliers. We are stepping up our efforts to increase the efficiency of our
technological change continues to accelerate.
products in terms of consumption of energy and chemicals, thereby supporting our customers in
their focus to minimize their environment footprint.
The next step in our company’s growth plans has been our investment in a new manufacturing
facility in Singapore, which was completed at the end of 2020. This new facility doubles our
production capacity, enables a more flexible manufacturing flow, and provides additional capacity for
growth opportunities.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Key performance
Key performance
KEY PERFORMANCE
FINANCIAL
KPIS IN 2020
Relative to 2019
19
BOOKINGS* EUR million
REVENUE* EUR million
GROSS MARGIN* in %
942
774
622
1,314
1,170
+12%
1,500
1,200
900
600
300
1,500
1,200
900
600
300
1,328
1,125
737
818
598
+18%
50
40
30
20
10
44.2
41.5
40.9
42.6
47.0
+4.4%
POINTs
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
OPERATING RESULT* EUR million
FREE CASH FLOW* EUR million
CASH RETURNED TO SHAREHOLDERS EUR million
400
300
200
100
82
113
124
327
219
250
200
150
100
50
31
32
23
206
119
750
600
450
300
150
607
281
140
199
165
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
* Excluding proceeds from patent litigation and arbitration settlement in 2019.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 20
KEY PERFORMANCE
NON-FINANCIAL
KPIS IN 2020
Relative to 2019
EMPLOYEES HEADCOUNT
PATENTS IN FORCE
Global Injury and RECORDABLE RatEs
2,583
2,337
2,181
1,900
1,670
+11%
3,000
2,500
2,000
1,500
1,000
500
2,500
2,000
1,500
1,000
500
2,094
1,959
1,604
1,692
1,480
0.9
0.6
0.3
+7%
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
0.63
0.62
0.55
0.34
0.26
0.42
0.18
0.17
0.58
0.23
2016
2017
2018
2019
2020
Recordable Injury Rate
Injury Rate
GREENHOUSE GAS (GHG) EMISSIONS
(Absolute and normalized per R&D investment)
WATER CONSUMPTION
(Absolute and normalized per R&D investment)
LANDFILL DIVERSION RATE
(in %)
171
174
158
181
156
196
240
250
159
145
250
220
190
160
130
100
179
178
1,760
1,559
200
160
120
80
40
0
200
160
120
80
40
0
129
1,031
123
121
813
707
2,000
1,600
1,200
800
400
0
100
80
60
40
20
0
79
78
72
82
84
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
Absolute Greenhouse Gas emissions
(mtCO2e - Scope 1 + 2, x100)
Intensity of mtCO2e/million EUR R&D investment
Absolute water consumption
(m3, x1,000)
Intensity of m3/million EUR R&D investment
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Value creation
VALUE CREATION
21
We realized strong growth in 2020, with annual sales increasing by
18% to €1.3 billion. By industry segment, sales for the full year were
led by the foundry segment, followed by logic and then memory.
ALD THE KEY DRIVER
Our ALD product lines enjoyed strong double-digit growth in 2020, with ALD continuing
to represent more than half of our equipment revenue over the year. Our spares & services
business increased by a solid 29%, while our other product lines, including epitaxy, were
partially held back by lower demand in the analog/power market.
MARKET DEVELOPMENT
In 2020, markets were upended by the impact of lockdown measures and border closures,
and the global economy showed a sharp drop. Certain areas of the semiconductor market,
such as the Automotive and Industrial end markets, were negatively affected. However,
the overall semiconductor market showed a resilient performance.
Long-term value creation
Customers and products
Employees
Shareholders
Society and planet
Suppliers
Interview with the CFO
22
24
32
39
51
56
62
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Long-term value creation
Long-term value creation
22
LONG-TERM VALUE CREATION
We create value through our technologies by enabling leading semiconductor and technology industry partners to deliver the
world of tomorrow through our innovative processing solutions and equipment. We partner with our customers and stakeholders
to develop new materials, processes, and technologies that support their technology roadmaps. The process solutions delivered
on our equipment enable a range of technologies, such as more powerful microprocessors and higher density memory devices,
all operating at lower power. Advancements that benefit society are increasingly dependent on capabilities derived from new
semiconductor technologies.
GREATER PERFORMANCE, REDUCED ENERGY CONSUMPTION
Our advanced deposition technologies support cost-effective products enabling the electronic
OUR BUSINESS MODEL
We strive to create value for our company and all of our stakeholders. Our technology enables
devices of the future – electronic devices that deliver ever-greater performance while using less
precision deposition of thin films in various steps in the fabrication of semiconductor chips, helping
energy. Higher performance translates into more processing power, while a lower energy requirement
our customers build the most advanced chips used in the electronics systems throughout society.
means smaller, longer-lasting, more efficient products. This means that electronics manufacturers
To achieve this, we are working with our customers to develop innovative solutions, while constantly
can further integrate smart technology into a wider range of products. For example, ASMI’s ALD and
looking at what is best for our investors, our employees, society, and other stakeholders. Our products
epitaxy tools are critical to creating high-performance transistors that can operate at lower power
and process solutions benefit society by helping to enable a wide range of advanced integrated
levels, a key enabler for products such as mobile phones, smart watches and fitness monitors, which
circuit logic and memory chips used in most of the world’s electronic systems. Fundamental to our
have substantial functionality in a small form factor with good battery life.
model is R&D investment, including basic chemical, materials, and feasibility research, followed by
This value creation benefits all of our stakeholders. Our employees enjoy the challenge of developing
semiconductor process and equipment technology fields. We cooperate with research institutes and
cutting-edge technology solutions, and the opportunity for career advancement. Our suppliers, in
our customers to understand the technology roadmap challenges and to develop the appropriate
addition to a higher activity level, also benefit from improved quality and efficiencies resulting from our
process and equipment solutions required. Our manufacturing facilities allow us to deliver high-quality
supplier process control program. Consumers benefit from the value added and the energy reduction
systems on schedule so that our customers can ramp their fabrication plants. We support our
possibilities provided by new electronic products that are enabled by advanced semiconductors.
customers globally with process and equipment services, and spare parts.
process and product developments. We aim to continuously recruit world-class technologists in the
The widespread use of smartphones is a great example of this. Continuous advancements in
microprocessors and memory chips empowers global consumers with extensive computing power
that increasingly drive their daily activities, all from the palm of their hand.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE HOW WE CREATE VALUE
23
INPUTS
HUMAN CAPITAL
Employees
2,583
INTELLECTUAL CAPITAL
R&D spending
(EUR million)
172
FINANCIAL CAPITAL
Equity
(EUR million)
1,855
MANUFACTURING
& SUPPLY CHAIN CAPITAL
Material spending
(EUR million)
555
CUSTOMERS
EMPLOYEES
INVESTORS
SOCIETY
SUPPLIERS
0.58
OUTPUTS
HUMAN CAPITAL
Injury rate
OUR
BUSINESS
ASMI designs,
manufactures, sells and
services complex wafer
processing equipment used
in various steps in the
fabrication of semiconductor
integrated circuit chips.
2,094
INTELLECTUAL CAPITAL
Patents in force
120
FINANCIAL CAPITAL
Operating & investing
cash flow (EUR million)
1,328
MANUFACTURING
& SUPPLY CHAIN CAPITAL
Revenue (EUR million)
NATURAL CAPITAL
Electric usage (KwH)
44,915,401
INNOVATIVE
STRENGTH
OPERATIONAL
EXCELLENCE
EMPLOYEES
MAINTAIN
STRONG
BALANCE SHEET
RESPONSIBLE
GROWTH
24,977
NATURAL CAPITAL
GHG emission scope 1&2
(mtCO2e)
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Customers and products
Customers and products
24
CUSTOMERS AND PRODUCTS
ASMI’s ALD, epitaxy, PECVD and vertical furnace systems are all used in the manufacturing process for the world’s
most advanced semiconductor chips. These chips are used in a broad range of applications, including the latest
smartphones, for servers in cloud computing, and to enable artificial intelligence algorithms. The semiconductor
industry finds it increasingly difficult to achieve each subsequent technology node, resulting in the need for more
advanced process steps and new materials. Our equipment is a key component in enabling the industry to advance
its technology roadmap.
SMALLER DEVICES
The industry’s relentless push to follow Moore’s Law leads to the continuous demand for smaller,
materials. Additionally, 3D-NAND non-volatile flash memory chips are today being manufactured
with 128 transistors stacked in one vertical string. Such chips can store up to 512Gb/chip, and
faster, and cheaper semiconductor components. The technologies required to achieve these
similar to DRAM, chips are combined in one package to memory modules that can store up to 2TB.
advancements are heavily dependent on equipment such as ASMI’s process tools.
Our customers are already working on taller 3D-NAND structures.
Today, our most advanced foundry customers manufacture semiconductor devices equivalent to the
5 nanometer node (one nanometer, or nm, is one billionth of a meter), typically in FinFET architecture
connected with down to 15nm metal lines. Our customers are already qualifying and testing new
critical processes to generate devices for the next nodes: 3nm and 2nm. While a new node is
generally introduced every 2 years, it can be introduced even faster.
In developing faster and smaller devices, our customers’ major technology requirements are:
›› Introduction of new thin-film materials and device designs needed for continued scaling;
›› Reliable manufacturing of taller and narrower 3D structures in devices;
›› Lithography of ever-smaller feature sizes, now much smaller than the wavelength of visible light; and
›› New manufacturing processes that reduce device variability and increase yield.
At the same time, even more advanced devices are being developed in our customers’ laboratories
and several collaborative research environments. These next-generation technology nodes are
DEVELOPING NEW MATERIALS
In order to meet our customers’ technology needs, we are developing many new materials, along
increasing the demand for new materials and more complex process integration methods, driving
with the deposition equipment capable of achieving performance specifications in high-volume
more ALD and epitaxy process steps at each new node.
manufacturing. For example, ALD technology is used to create ultra-thin films of exceptional material
Our memory customers manufacture devices such as DRAM and 3D-NAND. Today DRAM chips
quality, uniformity and conformality.
with a memory capacity of 1Gb/chip are being manufactured, with line widths as small as 15nm.
ALD of high-k dielectrics can improve the performance and reduce the power consumption of
Several of these chips are combined in one package to produce 4Gb or 8Gb DRAM modules. These
a device, thereby enhancing battery life. This same class of materials can also lead to larger charge
DRAM chips contain very advanced vertical access transistors, and very tall capacitors with new
storage in a smaller capacitor, critical for memories.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 25
In addition to the development of the high-k dielectric, there is a strong focus on new technologies
one central handling platform. Two wafers are moved simultaneously into dual chamber modules
and materials for the metal gate and capacitor electrodes, the gate sidewall passivation, and many
(DCM), which approximately doubles the throughput compared to single-wafer movements. Eagle
other applications.
XP8 PEALD tools and Dragon XP8 PECVD tools are currently in high-volume manufacturing at logic
and memory fabs worldwide, and demonstrate reliable advanced performance with high productivity.
Plasma enhanced ALD (PEALD) is an important technology that enables precise deposition at
very low temperatures. One application of PEALD is spacer defined multi-patterning, whereby the
The Synergis ALD tool also uses the proven XP8 platform, and leverages the core technologies from
deposition of a highly conformal oxide spacer enables the extension of existing optical lithography
our Pulsar and EmerALD ALD products for high productivity thermal ALD applications. Furthermore,
technology beyond its basic resolution limits. These spacers will continue to be used in combination
our XP8 QCM tool enables even higher throughput by incorporating four chambers in the quad
with EUV lithography, also to extend beyond its resolution limits.
chamber module (QCM). With four QCMs attached to the XP8 platform, a total of 16 process
OUR PRODUCTS
Our products include wafer processing deposition systems for CVD, ALD, epitaxy, and diffusion/
reactors are configured on the same system. Our wide range of ALD and PEALD tools allow us to
address more ALD applications, increasing the market we serve. These high productivity systems
add substantial value to semiconductor fabs by reducing the cost per wafer for each processing step
oxidation. We make two types of process tools: single-wafer and batch. The majority of our business
used in the tools.
comes from single-wafer tools, which are designed to process an individual wafer in each processing
chamber on the tool.
Our XP platform is a high-productivity, common 300mm single-wafer platform that can be configured
with up to four process modules. The XP platform enables high-volume multi-chamber parallel
In contrast, a batch tool is designed such that a large number of wafers are processed simultaneously
processing or integration of sequential process steps on one platform. The XP common platform
in a larger processing chamber. Batch tools typically achieve a higher throughput compared to single-
benefits our customers through reduced operating costs, as many of our products use the same
wafer tools. Our batch tools include the A412 vertical furnace for 300mm logic, foundry and memory
parts and consumables, and a common control architecture improves ease of use.
applications, and the A400 DUO vertical furnace for 200mm and smaller wafers, targeting power,
analog, RF, and MEMS applications.
On our XP platform, we offer Pulsar and EmerALD single chamber ALD process modules for high-k
dielectric and metal gate processes respectively. Also available on the XP platform is the Intrepid
Single-wafer tools typically achieve a higher level of process performance and control, especially for
epitaxy tool and the Previum process module for integrated pre-deposition surface cleaning. Previum
complex, critical applications, and a shorter cycle time. We work closely with our customers to meet
surface cleaning enables optimal quality epitaxial depositions for advanced node channel and source/
their demands, and in recent years we have developed single-wafer tools with multiple chambers
drain engineering applications.
configured together in a compact way on a single platform. This approach offers the best of both
worlds, combining high productivity and short cycle times, and a high level of performance.
Our XP8 platform follows the basic architectural standards of the XP, but provides even higher
productivity with up to 16 chambers integrated on a single-wafer platform with a relatively small
To address the technology needs of our customers, the industry’s relentless drive to reduce costs
footprint. The XP8 platform can be configured with four dual chamber modules (DCM) enabling up
corresponds to significant spending on development programs that further increase throughput,
to eight integrated chambers, or with four quad chamber modules (QCM) for up to 16 chambers on
equipment reliability, and yield in our customers’ manufacturing line, and further lower the cost per
the same platform.
wafer of the wafer processing systems. Without continuous productivity improvements, the price of
chips would continue to rise, driven by increasing capital intensity of each new technology node.
With the XP8 common platform architecture, we offer a wide range of systems for ALD, PEALD, and
PECVD applications. The Dragon XP8 for PECVD, Eagle XP8 for PEALD and Synergis for thermal
An excellent example of high productivity is our XP8 platform, on which we offer ALD, PEALD and
ALD all use DCM module configurations. Our XP8 QCM tool offers PEALD processing on quad
PECVD processes. The XP8 incorporates eight process chambers in a compact configuration around
chamber modules for very high productivity.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 26
CUSTOMER FEEDBACK
Our focus is on providing customers with the best products and services, which are critical for market
We do not allow our people to travel to areas where local policies fail to meet our own requirements,
while in areas where constraints may be more stringent, we ensure our compliance. By year-end,
success. During the year, we received awards from a number of key customers.
we were not aware of having had a direct work-related spread of the virus. We also participated in
SEMI’s COVID-19 workgroup with customers and peers in benchmarking and contributing efforts to
In March 2020, ASMI was recognized by Intel as a recipient of a 2019 Preferred Quality Supplier
drive improvements across the industry.
(PQS) award. The PQS award recognizes companies like ASMI that Intel believes have relentlessly
pursued excellence and conducted business with resolute professionalism. To qualify for the PQS
status, suppliers must exceed high expectations and achieve uncompromising performance goals.
BREAKTHROUGH TECHNOLOGIES
Innovation is the growth engine that drives us forward. Our innovative culture has enabled us
During the presentation, Intel highlighted our safe working environments and partnership, flexibility
to become and remain a leading supplier of ALD equipment and process solutions for the
and accountability in our support models.
semiconductor industry. Today, our ALD process technology delivers the highest performance
available to support the next generation of semiconductor devices. Our epitaxy products have also
In November 2020, ASMI received the Contribution Award from Samsung for recognition of 30 years
demonstrated solutions for our customers to achieve transistor channel performance at the most
of dedicated support. ASMI also received various appreciation plaques from Samsung during 2020,
advanced technology nodes. We are investing across our full product line spectrum to develop the
including:
›› Best cooperation in foundry manufacturing technology in February;
›› Outstanding support to improve productivity in memory in May; and
›› Dedicated support for defect improvement in foundry in July.
ASMI has also received an award for the #1 Safety Supplier in 2020 from a leading memory customer
in Taiwan.
CUSTOMER SAFETY – COVID-19 RESPONSE
We recognize that safety at our customer sites is a shared experience. We engage with our key
breakthrough technologies that drive growth for our company.
INCREDIBLE PRECISION
ALD allows us to deposit thin films atom-by-atom on silicon wafers, meaning we can deliver
atomic-scale thickness control, high-quality deposition film properties, and large area uniformity.
Such precision means we can use materials that previously could not be considered, and develop 3D
structures that are vital to the future of electronics. 3D technology provides a number of real benefits,
including saving space while delivering chips with higher performance that consume less power.
customers through an innovative engagement called ‘Safety Leadership Collaborations’ to share and
review data, including safety observations and incident reports. Through these engagements, we
ALD – A DRIVER OF FUTURE GROWTH
Our ALD technology is used to build integrated circuits for a wide range of leading edge products,
emphasize a shared approach to safety and foster an atmosphere of continuous improvement. For
including high-performance computers and smartphones. The results of ALD are visible everywhere
example, we used data to identify opportunities for ergonomic improvement, and a joint ‘ergonomic
in the world around us.
task force’ has realized the improvement of multiple situations. This has reduced the risk of injury for
staff using our equipment.
ALD is also our basic platform for the development of a wide range of new materials. Our research
centers across the globe are working on ALD, and we conduct joint research projects with the largest
From the onset of the COVID-19 pandemic, we took a number of steps to protect our employees and
independent research institute, imec. Taken together, this helps make ALD one of the principal drivers
customers, while enabling the performance of our systems at our customer sites. We developed and
for future growth in microelectronics.
continually refined our own employee exposure control policies and procedures, and implemented
approval processes for customer site visits, taking into account regional and customer fab-specific
Through ALD, we can deposit new materials several atoms thick on semiconductor wafers, producing
policies.
ultra-thin films of exceptional quality and uniformity.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 27
In PEALD, plasma is used to provide the reaction energy for the process, enabling us to use lower
Overall, we expect growth in our deposition technologies, including epitaxy for advanced transistors
temperatures for low-thermal budget applications. This technology was introduced in DRAM and
and PECVD for creating improved interconnects. Looking ahead, we will continue to develop
planar NAND flash manufacturing for spacer-defined double patterning (SDDP), a technique that can
the huge potential of our deposition technologies in support of the semiconductor industry, enabling
reduce device dimensions, thereby postponing the need for new lithography technologies.
the industry to support the future demands of consumers and businesses.
Using ALD technology, we can scale devices to smaller dimensions while reducing the power
consumption of transistors, all of which helps the industry follow Moore’s Law and create smaller,
more powerful semiconductors. For advanced 3D memory applications, where devices are stacked
vertically in high densities, ALD is critical for uniformly depositing films in deep trenches and over
complicated features. Many new applications are emerging where ALD is the technology of choice,
PRODUCT STEWARDSHIP
Developing tools and processes more efficiently helps reduce electricity usage and we are working to
achieve this in a variety of ways, including:
›› Designing our equipment to use less power when operating in our customers' fabs;
›› Developing process technologies that enable advanced semiconductor chips with lower power
and in a number of cases the only solution that meets the challenging technology requirements.
consumption; and
We expect ALD to be one of the principal drivers of growth in microelectronics over the coming
decade. We are seeing more ALD applications required by customers for each new technology node.
ASMI has focused on reducing energy usage in its equipment by incorporating innovative design
For example, compared to the 10nm node, there are more ALD layers used for 7nm processor
changes in its newest products that dramatically reduce energy consumption for our customers,
devices, and even more for 5nm.
measured on a per wafer basis.
›› Reducing power usage in our own manufacturing and lab facilities.
EPITAXY
Epitaxy is a critical process technology for creating advanced transistors and memories. The epitaxy
We have reduced energy consumption in our plasma-based equipment by improving plasma
generation efficiency and decreasing plasma power leakage. We have also made improvements to
process is used for depositing precisely controlled crystalline silicon-based layers that are important
the insulation of gas lines, reactor walls and transfer chambers, resulting in lower thermal energy
for semiconductor device electrical properties. In some cases, the epitaxy films incorporate dopant
losses. We have reduced energy usage during system idle mode by reducing the power of vacuum
atoms to achieve specific material properties.
pumps. These efforts are ongoing, and together would result in a 16% reduction in power usage per
wafer. So far, we have realized a power reduction of about 7% and the remainder will be achieved
Epitaxy process temperature control is extremely important. We have developed new methods
progressively as customer testing and validation takes place.
of temperature control in our Intrepid ES epitaxy tool that enable improved film performance and
repeatability in volume production. Furthermore, Intrepid’s closed-loop reactor temperature control
Furthermore, we have designed new reactor technology that has led to a 27% energy reduction per
enables enhanced stability in production.
wafer in PECVD products. Our epitaxy reactor innovations have resulted in significant productivity
enhancements in the process, generating a 30% reduction in energy usage per wafer.
For enhanced epitaxy film performance, we introduced a pre-deposition wafer surface clean
technology which is performed in our new Previum process module, integrated together with Intrepid
Given the prevalence of semiconductor devices in today’s products, lower energy usage is a key
epitaxy process modules. The surface clean process is used prior to the epitaxy deposition to
achievement. Cloud data centers need to reduce their substantial power usage, while consumers
create a pristine silicon surface for defect-free epitaxy film deposition, critical for achieving the most
want to reduce the charging time of their mobile devices and see battery size continue to shrink.
advanced node transistor performance requirements.
ASMI’s technologies support these energy reduction goals. For example, our ALD high-k metal gate
and epitaxy process technologies contribute towards reducing the operating voltage of advanced
transistors, saving power on a wide scale as advanced devices proliferate globally.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 28
PRODUCT GOVERNANCE AND LIFECYCLE MANAGEMENT
Focusing on product stewardship and product life cycle (PLC) management involves taking
EXTENDING THE PRODUCT LIFE OF OUR SYSTEMS
The market for our new systems continues to grow rapidly, driven primarily by customers' needs for
responsibility to reduce the product’s environmental impact along its entire life cycle, from cradle-to-
the latest technologies. While our primary focus is to serve and enable this market, many of our older
grave. Ultimately, this approach enables us to make products more efficient and productive for our
systems remain in full or partial use today.
customers, while extending the products' useful life.
Our product life cycle process follows the well-established construct of phase-gate product
our customers. It is a market that we have been participating in selectively. Since the health of our
development guided by several key inputs:
›› Our collective industry knowledge/experience and subject matter experts;
›› Industry/customer requirements and frameworks (such as customer purchase specifications and
customers, in part, relies on the re-use of these assets, this is an area that we intend to increase
our focus on. As we know our systems’ configuration details, applicability and ability to upgrade,
we intend to take a more active position, with the aim of increasing our customers' success in the
For systems no longer in use, an aftermarket exists in which these systems are re-used amongst
business requirements); and
›› Industry regulations, standards, and guidelines.
system aftermarket.
Product-specific requirements realized from these inputs are documented in market requirement
upgrade solutions for our installed base. We are actively working with customers to understand
specifications (MRS), which are held as the objectives we need to meet through the product
and implement improvement opportunities. In 2020, we saw a significant amount of system level
development process. The MRS are updated continuously to capture changes to market conditions,
refurbishment business and expect this to continue to grow in the future.
For those systems not operating optimally, we have a group that works on refurbishment and
regulations and standards, and related specifications.
Governance is provided through key technical meetings (architecture reviews, design reviews and
challenging aspect of this is supplying all the necessary parts to keep the systems running. While we
validation reviews) and phase exit meetings through the various life cycle stages of the product.
generally have a healthy supply of frequently used parts, there is typically not enough volume of less
commonly used parts to sustain a supply chain. Additionally, parts tend to evolve to meet the more
A key component of our customer service is ensuring older systems continue to operate. The most
We maintain a global Quality Management certification, ISO9001-2015 relating to the scope:
stringent needs of today's processes.
Design, Sell, Make, Install, and Customer Support of Front-end Semiconductor Processing
Equipment. This was re-certified on August 1, 2019.
To help prevent this, we track parts that are becoming obsolete within our supply chain, actively seek
to enable and qualify replacement parts that are available, and purchase and make available original
parts to prevent disruption to our customers.
REQUIREMENTS
• Safety
& Compliance
• Functionality
• Cost
• Reliability
CONCEPT
& DESIGN
VALIDATION
• FMEA/what-if’s
• Design for X
(X=safety,
functionality,
cost, etc.)
• Internal
• 3rd party
• Customer
PRODUCT DEVELOPMENT
RELEASE
• Continuous
improvement
• Operations
End oF LIFE
• Asset
disposition
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 29
SUSTAINABLE PARTS LIFE CYCLE
Customers want parts that are long-lasting, increasing the output and lifetime of the system and
reduce the cost of ownership. We have integrated technologies, such as soft remote plasma
cleaning in place of in situ plasma cleaning, which help to extend the life of these parts. We have also
The following are some of the key accomplishments in 2020 that have helped ensure the continued
advancement in our programs:
›› Expanded product safety education: We launched new, customized ASMI product safety
engineering introduction training classes to provide awareness of the latest compliance regulation
created a team in our services organization that is focused on improving the intrinsic lifetime of parts.
changes. We made a significant expansion to reach other cross-functional groups, resulting in
This group focuses on expanding our supply footprint, both in terms of enabling replacement parts,
305 employees trained in 2020. Additionally, we expanded ASMI’s custom SEMI S2 training
with customizable, low-volume suppliers of components that go obsolete, and in terms of repairing
courses with over 70 real-life ASMI equipment examples on how to ensure proper design
and refurbishing to extend the usable lifetime of the original components. These efforts help ensure
compliance with the written regulations;
the longevity of our systems, reduce the cost of ownership, and increase our competitiveness in the
market, enabling us to achieve sustainable production and consumption.
›› Successful third party virtual safety audits during COVID-19 restrictions: We performed
multiple first-of-a-kind ‘virtual’ third party audits in all regions globally, which required significant
additional preparation and coordination as travel was restricted. Furthermore, the number of audits
PRODUCT SAFETY AND GOVERNANCE
Product safety is a core element of ASMI’s innovation process, and it is realized through the design,
manufacturing, and ongoing support of our products. The requirements are defined and championed
globally increased markedly due to rapid new product developments across all KPUs; and
›› Semiconductor industry product safety engineering leader: We developed and presented
innovative new safety interlock design methodologies to the international semiconductor industry
by the Product Safety Council, which includes engineers representing all of our design centers.
forum (SESHA). We provided clear guidance on how to allow proper component selection if no
These requirements are established in the PLC during the requirements phase, and include legislation
component exists, meeting all design requirements. The virtual presentation was viewed by over
and standards defined by the semiconductor industry and its customers. We verify that safety
300 professionals from semiconductor end users (ASMI customers), third party evaluators,
requirements are met during the concept and design phases as part of safety risk assessments,
sub-system and component suppliers, government agencies, universities, and even by ASMI’s
and through independent third-party validations during the product validation phase. In addition,
competitors.
we integrate the identification of opportunities for safety design improvements into our global safety
reporting system. This system enables our engineers and technicians who work with our equipment
on a daily basis to report incidents, areas of concern, or opportunities for improvement. Corrective
actions and lessons learned are captured, providing an invaluable link between the end user and
the design process. Our stakeholders working with our equipment rely on this process of continual
assessment, integration and improvement, to make sure they can safely work with our products.
Driving innovationsRESEARCHINSTITUTIONS &UNIVERSITIES ASMITECHNOLOGYANDPRODUCTSCOMPUTINGSMARTCARSINTERNETOF THINGSARTIFICIALINTELLIGENCEADVANCEDIC CHIPSCHIPMANU-FACTURERSFINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 30
GLOBAL RESEARCH
As a global company, we carry out research and development (R&D) across different continents,
A corporate R&D group consisting mainly of resources in Leuven, Belgium and Helsinki, Finland
addresses common needs for advanced process and materials development, and process integration
giving us access to the smartest professionals working in the semiconductor sector today, and
work for the advanced nodes that are 4-8 years out from initial production. Driving part of our new
bringing our R&D closer to our customers. In our research centers in Belgium, Finland, Japan, the
chemistry developments and initial selection in a lab on coupons in R&D systems rather than on full
Netherlands, South Korea, and the United States, we are active at all stages of our innovations’
wafers in 300mm manufacturing systems, as well as extensive use of statistical methods and data
life cycle, from developing the basic chemistry and materials to implementing improvements on our
sciences, minimizes the number of experimental trials that are needed to conclude a development.
equipment at our customers’ production sites. We also work with specialists across a wide array of
This reduces energy and chemicals consumption, as well as silicon wafer usage. In addition we
disciplines to develop our future products, including scientists from research institutes, universities
improved the rigor in our R&D process with an improved tollgate (or stage gate) process, and various
and suppliers.
pipeline controls. This improves the effectiveness and efficiency of our R&D process, decreasing
REGIONAL EXPERTISE WITH GLOBAL REACH
Since our R&D activities are chiefly conducted in the principal semiconductor markets of the world,
we are able to draw on innovative and technical capabilities internationally. Each geographical
INITIATIVES WITH CUSTOMERS, INSTITUTES AND UNIVERSITIES
We work with our customers to co-create and jointly develop technology roadmaps, to timely
center provides expertise for specific products or technologies, and interacts with customers on
develop the new processes and materials our customers need for their next-generation products.
a global scale. This approach, combined with structured and managed interactions between the
The diversity in collaborations, ranging from early research to pilot production, helps us reduce risk as
individual centers, enables the efficient allocation of resources during product development and new
early as possible in the innovation life cycle.
waste in chemicals, materials, and test wafers.
product introductions.
Guided by our global product development policies, our local activities are directed towards
arrangements with customers, suppliers, research institutes and universities.
expanding and improving existing product lines to incorporate technology improvements and reduce
product costs and total cost of ownership, as well as developing new products for existing and new
We have specific bilateral research activities with several key academic groups at universities in
markets. These activities require the application of physics, chemistry, materials science, electrical
Asia, Europe, and North America, typically centered around our core R&D focus on new equipment,
engineering, precision mechanical engineering, software engineering, and systems engineering.
materials, and process developments.
As part of our R&D activities, we are engaged on a global scale in various formal and informal
GLOBAL PLATFORM ENGINEERING GROUP AND CORPORATE R&D
A global platform engineering group addresses the needs for common platforms and software for the
We contribute to several process and equipment development projects at the major Dutch technical
universities through the Dutch NWO* funding organization in the domain TTW** (covering Applied
various products in our product portfolio and across different key product units. This helps us drive
and Engineering Sciences). And in Belgium, we participate in the industrial users group for several
standardization of hardware and software through the organization. Standardization is helpful in
projects supported by the Flemish funding organization VLAIO*** (Agency for Innovation and
reducing costs and lead time as well as reducing waste. A broader use of common components
Entrepreneurship).
reduces the risk of inventory obsolescence.
* NWO: Nederlandse Organisatie voor Wetenschappelijk Onderzoek
** TTW: Toegepaste en Technische Wetenschappen
*** VLAIO: Vlaams Agentschap Innoveren & Ondernemen
We participate in select publicly-funded programs to research and develop ‘More than Moore’
technologies, a strongly growing market of various types of analog chips which are not driven by the
same Moore’s Law technology scaling inflections of mainstream logic and memory chips. We are
also a member of AENEAS (Association for European NanoElectronics Activities), and participate in
roadmap activities.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 31
And finally, we occasionally cooperate with other semiconductor capital equipment suppliers
strengthening our IP generation process to be more efficient and improving interaction with the R&D
in complementary fields in order to gain knowledge on the performance of our own deposition
effort to capture opportunities earlier.
processes, in cooperation with other processes, either in bilateral or consortia projects.
We were engaged in several formal joint-development programs (JDPs) with customers for 300mm
equipment are manufactured and/or sold. Our vision is to increase our value to our customers and
applications of our products and were active in evaluations of our most advanced technologies with
shareholders by using our IP in a way that differentiates our products, influences the market, and
selected customers. The scope of these JDPs span many nodes, from the 5nm node currently in
provides additional monetization opportunities.
Our patents are usually registered in the principal countries where semiconductor devices or
production, to well beyond the 2nm node for foundry, and the equivalent DRAM and 3D-NAND
technology nodes.
Intellectual property managers work at all of our major global R&D sites, where they capture
patentable material resulting from our R&D activities. We now have 2,094 patents in force worldwide
In 2017, we renewed our strategic R&D partnership with the Interuniversity Micro-Electronics Center
protecting our various products.
(imec) in Leuven, Belgium, extending into 2022. Essentially all of our 300mm products are involved in
this partnership. From 2013 through 2020, we significantly expanded our partnership with additional
PATENTS IN FORCE
ALD, PEALD, epitaxy, and LPCVD capability. This gives us the opportunity to investigate, both jointly
and independently, the integration of individual process steps in process modules and electrically
active devices. We have partnered with imec since 1990, with significant on-site representation
since 1994.
2,400
2,000
1,600
1,480
1,604
1,692
1,959
2,094
In December 2003, we commenced a five-year partnership with the University of Helsinki that aims to
further develop ALD processes and chemistries. This partnership was extended in 2018 for a fourth
five-year period extending into 2023.
PATENTS & TRADEMARKS
We expect new deposition technologies and chemistries to be a major driver for new intellectual
1,200
800
400
2016
2017
2018
2019
2020
property (IP) in the future. Patents give us a right to protect our products or aspects thereof, and
We have registered a number of trademarks covering our product portfolio in the principal countries
enable us to speak more openly about our inventions and share ideas in the marketplace that benefit
our customers.
We understand that a failure to adequately protect our IP and/or leakage of our IP could result in the
loss of our competitive advantage and adversely impact our financial performance.
We have therefore implemented a program that protects IP for us, our customers, our suppliers
and our partners. We train all employees not only on the importance of IP protection, but also on
how to recognize and report possible IP infringements. This training is provided to all new hires,
and employees are given regular refresher trainings. In addition, and on an ongoing basis, we are
where we do business:
›› ASM, the ASM International logo, Advance, Aurora, Axis, Dragon, Eagle, EmerALD, Epsilon,
Intrepid, Previum, Pulsar, Silcore, XP, XP8 and Synergis are our registered trademarks.
›› The ASM Qualified Licensed Supplier logo, A400, A412, Loadstar, and NCP are our trademarks.
›› Drive Innovation. Deliver Excellence is our service mark.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Employees
Employees
EMPLOYEES
32
ASMI is focused on attracting, engaging, retaining, and developing talented people with targeted
capabilities to achieve our longer-term strategic direction. Our people are part of an inclusive and
diverse workforce, supported by a culture that is caring, innovative and driven to deliver.
MISSION / VISION
EMPLOYMENT BRAND
STRATEGY
Employee engagement
& brand ambassadors
PEOPLE
• Behaviors
• Knowledge
• Skills
Foster a
collaborative
and engaging
culture
Build and
improve
upon ASMI's
diversity
At ASMI, our team focuses on advancing technologies and unlocking possibilities to make the world
a better place. Our people are our power, and we want to create a culture and workplace where
everyone is inspired, is always developing, and is empowered to perform at their best. We want to be
an employer of choice in our industry. To achieve this, we are continually focused on strengthening a
number of areas. First, we are redefining our culture and reinforcing our leadership. Second, we are
optimizing our organizational design and workforce planning. And finally, we ensure our people are
kept informed through consistent and robust employee communications.
Our main focus areas are: culture and leadership, organizational development and workforce
planning, talent recruitment, retention and total rewards, and employee communications.
CULTURE
We aspire to be the employer of choice within the semiconductor industry. To achieve this, we are
creating a distinct culture at ASMI, differentiating ourselves from our competitors. We are a global
company with a diverse workforce, reflecting the locations where we are based, as well as our diversity
in experience, positions, and backgrounds.
ASMI is working to create a unified view of who we are and the way we work. To create a unique
culture, we have taken many steps towards defining our employer brand: 'the Power of an Open Mind'.
This unified culture will drive our behavior and differentiate ASMI by building on our unique strengths.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 33
GROWTH
Opportunities for personal development are key to the success of the company and each individual
EMPLOYEE COMMUNICATIONS
We aim to provide a transparent, open, and engaging approach to our employee communications.
employee. ASMI invests in its people and their ambitions. Sustainable long-term career prospects
and development is reflected in the 10% jump in internal promotions in the last two years.
In 2020, we increased employee communications further. In November, our internal CEO video
In 2020, over 75% of our managers took part in virtual courses to help them advance their leadership
experience between management and employees. The questions raised during these events help us
skills and strengthen areas of professional interest. Collaboration, diversity, leadership, customers,
to identify key themes and focus areas for future proactive communications.
and teams are just some of the areas covered in these learning programs.
The COVID-19 pandemic meant that all learning had to move online and we introduced a new
EMPLOYEE BRANDING
In 2020, we introduced 'the Power of an Open Mind', our employee value proposition (EVP). The EVP
employee toolkit that complements the existing manager toolkit. Both toolkits are designed to help
is designed to encompass ASMI’s ambitions, what we believe, who we are, and what we stand for.
employees achieve success.
It helps us to attract the best talent by building an employer brand that people aspire to work for.
messages were relaunched in a new interactive digital format, allowing for a more interactive
ASMI provides a clear view on career advancement in key technical job families. In 2020, we
introduced global services & spares to our existing portfolio of defined job families. We have clear
The concept was co-created with 120 employees, covering multiple geographies and business areas
progression tracks for global products, research and development, and manufacturing. We aim to
reflecting the diverse global structure of ASMI.
provide clear paths for career progression for all roles for both managerial and technical positions,
which will create a transparent, attractive proposition for present and potential talent.
It was launched via an internal campaign, followed by training for all managers to cascade the
And it also helps us to engage with our current employees.
ENGAGEMENT SURVEY
In 2020, we conducted a global employee survey to learn more about the engagement of all
our employees.
concept deeper into the organization.
INCLUSION AND DIVERSITY
In 2020, we conducted an internal inclusion and diversity health check. This study highlighted
our current strengths, as well as areas for improvement. We are using these outcomes to further
The response rate was high, illustrating how motivated our employees are to actively participate in
prioritize initiatives, looking into creating a more inclusive company culture, and improving our talent
shaping the future of ASMI.
processes and people policies that will positively influence the attraction and retention of female
A key outcome of the survey was that our employees recognize the strengths of ASMI: a strong
customer focus and a results-driven culture. The survey also highlighted the need to further build
internal communications, something that will be developed considerably in 2021 and which is further
explained below.
technical employees.
SUSTAINABILITY: DIVERSITY PROGRAMS
In accordance with the best practice provision 2.1.5 of the Dutch Corporate Governance Code,
ASMI has formulated a Diversity Policy, which is published on our website. Diversity is considered
in any event to consist of gender, specific knowledge, work background, nationality, age and ethnic
The survey highlighted strengths and improvement areas of our current culture. We use the outcomes
diversity, (technical) experience and skills. In 2020, more than 75% of ASMI’s people managers were
to improve and strengthen our culture in 2021.
trained as part of ASMI’s ‘the Power of an Open Mind’ EVP program. A key element of this training is
ASMI’s focus on diversity.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 34
ASMI has a proven track record when it comes to equal pay – a common issue within the industry
but a key component to any successful, fair, inclusive and diverse workforce. To be transparent
ORGANIZATIONAL DESIGN AND WORKFORCE PLANNING
Our process of succession and talent reviews is used to identify internal talent and current organization
about the impact of our compensation programs, we assess the difference in gender compensation
capabilities. Workforce planning reflects current and future growth expectations, enabling us to plan
between our female and male employees. We look at the compensation ratio at management and
towards a future-proof workforce for ASMI.
non-management levels. The analysis is done by comparing the median compensation as a function
of gender per job grade and per country, excluding the impact of job scope and country-specific
compensation levels.
HEADCOUNT DEVELOPMENT
We recruited 545 people during the year, ranging from technicians building our products, service
engineers delivering high-quality support to our clients, and people in R&D driving our innovations.
In line with our previous findings in 2018 and 2019, our 2020 results did not show any significant
Our total workforce, including temporary external workers, grew from 2,444 to 2,689, a total increase
disparity between female and male compensation based on relative salary position (RSP) at the
of 10%.
different levels in our organization. ASMI pays its people in line with market expectations, a true
living wage.
Across 2020, our voluntary attrition rate was 8.3%. Our voluntary attrition rate has declined for the past
Senior management / executives
Middle management
Non-management
Total
Median RSP 2019
(female/male)
Median RSP 2020
(female/male)
108%
99%
102%
100%
103%
102%
100%
99%
3 years.
WORKFORCE
Employees
Employees including temporary workers
% Temporary workers
Number of workers under CLA
2016
1,670
1,770
5.6%
207
2017
1,900
2,043
7.0%
224
TALENT RECRUITMENT, RETENTION AND TOTAL REWARD
In 2020, we stepped up our activities to identify internal and external talent pipelines for our
immediate workforce needs, whilst also looking to our future strategic workforce requirements.
During succession and talent reviews, we identify the most talented leaders and experts who are
% Workers under CLA
12.4%
11.8%
Nationalities
Male
Female
29
85%
15%
29
85%
15%
potential successors for critical positions and to staff new organizational capabilities. Externally, ASMI
Voluntary attrition rate
7.1%
10.4%
focuses on managing and maintaining relationships with promising candidates; when key positions
2018
2,181
2,327
6.3%
260
9.1%
29
85%
15%
9.9%
2019
2,337
2,444
4.4%
278
2020
2,583
2,689
3.9%
328
10.8%
11.7%
29
85%
15%
8.7%
40
85%
15%
8.3%
are identified or become available, we are in a prime position as the employer of choice. This future-
In 2020, our workforce continued to showcase our global nature, with 40 nationalities working at ASMI.
forward focus on candidates allows us to build a steady talent pipeline.
This diversity is reflected at site levels, meaning that it is normal to work with people from different
nationalities on a daily basis. This international dimension is one of the reasons why people appreciate
Next to our succession and talent review process, ASMI has a structured performance appraisal
working for ASMI. As part of gender diversity, 15% of our workforce was female at year-end.
and development process. This process supports management and employees in having ongoing
key objectives and competencies discussions on a regular basis, resulting in concrete career
development-related decisions.
LIVING WAGE
Our employees are paid above the local minimum wage. ASMI is actively engaged with outside organizations
In 2020, we updated our set of ASMI leadership capabilities and profiles. This framework provides a
to benchmark living wage best practices in line with the Anker methodology, which is a relevant survey
common language when identifying leaders that potentially fill future requirements as defined by our
practice for corporate organizations. The scope of the living wage survey includes most countries where we
business strategy. For employees, it provides aspirational roles, ensures career development, and
have ASMI employees or contractors. In 2020, we covered 13 countries, and we did not identify any cases
creates future opportunities.
across these countries where employee wages were below the agreed living wages.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 35
As a member of the Responsible Business Alliance (RBA), the world’s largest industry coalition
dedicated to corporate social responsibility in global supply chains. In 2020, we co-sponsored an
BUSINESS ETHICS
As a follow-up to the Ethics Committee summits started in 2019, the Code of Business Ethics
amendment to include living wage in the RBA Code of Conduct. Working with other RBA member
was refreshed into the Code of Business Conduct (COBC) in 2020. ASMI’s COBC management
companies, we proposed the formation of a living wage working group to study living wage best
system includes 18 underlying policies including fair competition, gifts entertainment and hospitality,
practices for use in complex, global supply chains. The working group proposal will go forward to the
corruption and improper advantages and anti-fraud, and corruption.
Board for review in 2021.
WORKING HOURS AND DAYS
The standard working week varies by region and country and is often dictated by local regulations
and norms. One standard that is consistent across ASMI is aligned with the fundamental principle
The refreshed COBC is more comprehensive and comes with trainings for all employees in
multiple languages. The trainings are set to effectively influence desired conduct rather than merely
reinforce rules.
in the RBA Code of Conduct which limits working hours to 60 hours per week, or the local limit,
At the same time, it further defines the consequences of such violations through our newly introduced
whichever is lower, and working days to one day off in every seven, for hourly employees involved in
disciplinary policy. All training is supported by a wealth of resources including a dedicated webpage
the production of goods and services. There is allowance for emergency situations, such as when
on ASMI’s intranet, reference material and tools for specific areas such as gifts and entertainment,
COVID-19 impacted the globe and disrupted schedules with lockdowns and quarantines. ASMI
the Whistleblower program and SpeakUp!.
was able to perform within the RBA limits for both working hours and days despite the challenges
presented by the crisis. We were able to achieve this because of our existing management framework
The COBC continues to apply to our Supervisory Board and Management Board, as well as all our
around the control of working hours. The performance to this criteria is a part of a corporate-level
employees, consultants, contractors, temporary employees, and critical suppliers.
dashboard and is monitored and reported closely to ensure compliance.
GLOBAL EMPLOYMENT STANDARDS
ASMI is dedicated to creating a safe and inclusive workspace for every individual. Our Global
Our Global Employment Standards (GES) summarize our approach to respecting human rights
throughout our global operations and supply chain. They are written with everyone in our value chain
in mind. The GES reflect the principles laid out by the United Nations in the Guiding Principles on
Employment Standards (GES) summarize our approach to respecting human rights throughout our
Business and Human Rights, and support the RBA Code of Conduct framework, including prohibiting
global operations. They are written with everyone in our value chain in mind. The GES reflect the
the use of forced or involuntary labor, prohibiting the employment of child labor, and prohibiting
principles laid out by the United Nations in the Guiding Principles on Business and Human Rights,
discrimination or harassment.
and support the RBA Code of Conduct framework, including the following:
›› Prohibit the use of forced or involuntary labor, including fees of any type to secure employment;
›› Prohibit the employment of child labor; ASMI policy specifically does not allow anyone under the
age of 18 to be employed at ASMI;
›› Prohibit corporal punishment, threats of violence, or other forms of physical or verbal coercion or
harassment. We believe that everyone deserves to work in an environment free of any threats to
their human rights; and
SPEAKING UP
The SpeakUp! program enables employees, suppliers, customers, and any other stakeholder to
report ethics issues, concerns or complaints anonymously and in their own language. Potential
violations of our COBC can be reported through the SpeakUp! process, or directly to management,
HR, or the Compliance Officer. When we receive complaints, these are investigated by the Ethics
Committee. Independent of the way of reporting, our COBC includes a non-retaliation policy that
›› In 2020, we had no reports or evidence of any human rights violations or abuses within our global
applies to any person making use of this process.
hiring or employment practices.
In 2020, five concerns were reported through our SpeakUp! system, while four cases were reported
via other channels to the Ethics Committee. All incidents were fully investigated and, in those cases
involving violations to the COBC, appropriate actions were taken.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 36
PRIVACY
We have adopted and rolled out policies and privacy codes, and entered into agreements (including
Across our operations, we have implemented proactive measures to reduce the risk of injury or
incident, with our employees, our customers, and contract manufacturers and other suppliers.
with third party processors) in our effort to protect the integrity and confidentiality of the data of our
We instill this into our safety philosophies and culture, starting with our 6Es of Safety Leadership
employees. The same applies with respect to the privacy of our customers and suppliers.
framework, which empowers everyone to lead by example and through prevention.
HEALTH & SAFETY
ZERO HARM! is our safety objective and we review our incidents thoroughly to identify new
The framework emphasizes empowering everyone for safety, proactive measures like education,
and eliminating hazards, and evaluates performance through key performance indicators and
risks and introduce mitigation plans to prevent future exposure. We have a robust Occupational
employee surveys. Employees who demonstrate notable and scaled contributions for their role,
Health & Safety management system in reference to leading international and regional standards.
positive attributes, and leadership in safety can be nominated by peers for a global quarterly Safety
Our management system is comprehensive in all aspects of policy, hazard identification, controls,
Leadership Award.
objectives and targets, training, communications, monitoring and measurement, reporting, corrective
& preventive actions, strategic planning, and management reviews. The safety management system
and programs for our Singapore manufacturing facility are certified to the Singapore bizSAFE Level 3
QUARTERLY SAFETY AWARD WINNERS
accreditation. Our structured safety management system is approved by senior management, who
not only set out our commitment to safety, but are actively engaged in and continuously informed on
the progress and the priorities we must focus on toward ZERO HARM!
BE SAFE SAFETY LEADERSHIP FRAMEWORK
Q1
Q2
Technical Trainer
For sustained commitment to safety education
and setting expectations.
Corporate R&D
For exemplary safety leadership and dedication.
Q3
Q4
Engineering Lead
For exemplifying safety leadership in words and
actions and proactively focusing on safety.
Taiwan Service Team
Exemplifying safety leadership with ASMI
and customers.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 37
Our safety policy includes our commitment to engage in safety across our value chain.
In 2020, our total injury rate showed an increase from 0.42 cases per 100 employees to 0.58 cases
“ Aligned with our core value ‘Safety First and Everywhere’ and our guiding principle
while many of the cases we saw in 2020 were minor injuries, such as a splinter or bumped knuckle,
‘Drive Innovation. Deliver Excellence.’, ASMI is committed to conducting business,
we treat every one with the same resolve to eliminate. Our recordable injury rate, the measure of
both in our own operations and throughout our supply chain, in a manner consistent
more serious injuries, increased by two cases, resulting in a rate of 0.23 cases per 100 employees
with the Responsible Business Alliance (RBA) principles to protect our employees,
compared with a rate of 0.17 in 2019. We are strongly committed to reduce this in the years to
customers, communities, shareholders and the environment.”
come, and are setting appropriate objectives and taking active steps to enhance our overall Safety
per 100 employees. This is the first substantial increase in 10 years. Our goal is ZERO HARM! and
Management System toward that goal.
We engage with customers and across the industry to strengthen safety partnerships. We are
members of SESHA, an industry consortium focused on safety, health, and the environment, and are
Global Injury and RECORDABLE RatEs
(Case rate per 100 employees)
working with key stakeholders toward improving industry shared learnings and safety improvements.
0.8
In addition, we have continued our innovative Safety Leadership Collaborations with key customers.
This has led to the implementation of an ergonomic task force with one of our customers. After
our safety observation data started showing opportunities for improvement, we worked with the
customer to form the joint task force and by year-end, we had implemented 14 ergonomic projects,
designs, and improvements.
Contractors are critical to ASMI’s success, and their safety on our site is vital. Our Contractor Safety
Programs include contractor company screening, individual contractor training and orientation to
our sites and requirements, and administrative controls such as safety plans and work permits. We
work with contractors while on our sites to ensure close coordination through Pre-Task Planning and
Site Incident Prevention programs to minimize the risk of our operations impacting their tasks, and
subsequently their safety, and vice-versa.
0.63
0.62
0.56
0.56
0.34
0.30
0.30
0.26
0.6
0.4
0.2
0.55
0.45
0.21
0.18
0.42
0.42
0.19
0.17
0.58
0.37
0.23
0.17
Our safety key performance measures are aligned with industry and peers and allow us to benchmark
our performance year-on-year. The key measures include an overall injury rate indicator and a
2016
2017
2018
2019
2020
recordable injury rate indicator, which is an indicator of serious injuries requiring medical attention
or days away from work. We have chosen to place emphasis on a total injury rate consistent with
our goal of ZERO HARM! Placing emphasis on lost time or days-away rate, restricted time rates, or
other measures of serious injury only is not consistent with our ambition to eliminate all injuries. We
Recordable injury rate
Injury rate
Recordable target
Injury target
have found that transparently sharing even the mildest first aid injuries is the right approach for our
As of year-end, there have been no work-related employee or contractor fatalities in 2020 at ASMI
ambition.
sites or relative to ASMI operations.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 38
EMPLOYEE COVID-19 RESPONSE
The COVID-19 pandemic strongly impacted our way of working in 2020. ASMI banned travel to those
regions initially affected by the end of January. Hygiene and screening measures were introduced
across all sites globally in February, and a global travel restriction was issued in March.
As we learned more about the spread of the virus, we maximized work from home globally,
improved hygiene and control measures, and mandated social distancing at our sites for designated
employees in March. To help with the work-from-home efforts, our IT organization held a series of
training sessions on remote applications and tools in April and May. Our employees have responded
with a demonstrated care for others throughout the entire pandemic period, following protocols at
every step and reporting potential symptoms and close contacts, and staying at home until cleared
to return.
Throughout the progression of this pandemic, taking care of our employees has been at the front of
our efforts. By April, we had developed and rolled out global human resources guidelines to managers
and employees to help navigate these unprecedented times. ASMI focused on doing what was right
for our employees. Policies allowed for employees to take time off when there was a need to care
for a family member. When border crossing and travel were restricted, we established temporary
housing for employees near our factories.
Recruiting was not interrupted and we focused on virtual recruitment and onboarding. In Singapore,
we implemented measures for our workers who have their homes in Malaysia but who, despite
border closures due to country lockdowns, chose to continue to work in Singapore. Support
measures included financial support for daily expenses, providing local accommodation, and
assistance for foreign workers in finding local housing. ASMI worked to obtain all local ministry, trade,
and industry approvals. Initially, employees were given hotel accommodation in safe spaces. As the
pandemic progressed, we sourced more permanent housing. Smaller services, such as providing
our employees with local SIM cards, were also swiftly rolled out, making communication with friends,
family and colleagues easier.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Shareholders
Shareholders
SHAREHOLDERS
39
Our strategy aims to create sustainable value for all our stakeholders. As part of this strategy,
we are committed to creating long-term shareholder value. This chapter provides information
that is particularly relevant for shareholders and investors, including information related to the
share listing and share price performance, dividends and share buybacks. Also discussed is
the financial performance in 2020.
Global economic growth turned negative in 2020, impacted by COVID-19 lockdown measures.
Our company’s healthy financial performance has contributed to a strong share price performance
However, wafer fab equipment spending increased as our customers continued to invest in leading
in recent years. We continued to execute our policy of using excess cash for the benefit of
edge semiconductor manufacturing capacity. 2020 was a strong growth year for ASMI.
shareholders. During the 2010-2020 period, we returned close to €2 billion through dividends, share
buybacks, return of capital, and buyback of convertible bonds. Alongside the excess cash generated
Total revenue increased by 18%, excluding the settlement proceeds in 2019, driven by solid increases
by our operations in 2017/2018, we also used approximately €0.7 billion proceeds of our reduced
in our ALD business and our spares & services revenue. This marks the fourth consecutive year of
shareholding in ASMPT from 39% to 25% in 2017 for share buybacks and a tax-efficient return
double-digit top-line growth.
of capital to shareholders. For 2020, we have increased the proposed regular dividend by 33% to
€2.00 per share.
ASMI has strongly outperformed the wafer fab equipment industry in recent years. In 2020, our
gross margin improved to 47%, and with operating costs remaining under control, operating profit
increased by 49% last year. We stepped up our investments as we completed our new manufacturing
facility in Singapore and invested in the strengthening and expansion of R&D operations. Despite
increased investments and higher working capital requirements, we generated a healthy free cash
flow of €119 million in 2020.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE FINANCIAL RESULTS
The following table shows the operating performance for 2020, versus 2019:
The following table shows certain consolidated statement of profit or loss data as a percentage of
net revenue for our operations for 2019 and 2020:
40
(EUR million)
New orders
Backlog
Book-to-bill
Revenue
Gross profit
Gross profit margin %
Selling, general and administrative expenses
Research and development expenses
Operating result
Operating margin %
Financing income / (expense)
Income taxes
Net earnings before share in income of
investments in associates
Share in income of investments in associates
Net earnings
Net earnings per share, diluted
Net earnings per share excluding amortization
from the sale of ASMPT shares in 2013
2019 1)
1,328.9
351.2
1.0
1,283.9
638.5
49.7%
(148.9)
(110.8)
378.7
29.5%
(0.3)
(53.7)
324.8
4.2
329.0
€6.58
€6.86
2020
1,313.6
323.6
1.0
1,328.1
623.6
47.0%
(157.4)
(139)
327.1
24.6%
(25)
(48.7)
253.4
32.0
285.4
€5.78
€6.04
Change
(1%)
(8%)
3%
(2%)
6%
25%
(14%)
(24.7)
5.0
(71.3)
27.8
(43.6)
€(0.80)
€(0.82)
1 Including proceeds from patent litigation and arbitration settlement in 2019.
Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Research and development expenses
Operating result
Net interest income (expense)
Foreign currency exchange gains (losses)
Share in income of investments in associates
Earnings before income taxes
Income taxes
Net earnings from operations
2019 1)
100.0%
(50.3%)
49.7%
(11.6%)
(8.6%)
29.5%
–
–
0.3%
29.8%
(4.2%)
25.6%
2020
100.0%
(53.0%)
47.0%
(11.9%)
(10.5%)
24.6%
(0.1%)
(1.7%)
2.4%
25.2%
(3.7%)
21.5%
1 Including proceeds from patent litigation and arbitration settlement in 2019.
REVENUE
The revenue cycle from quotation to shipment for our Front-end equipment generally takes several
months, depending on capacity utilization and the urgency of the order. On average, acceptance is
obtained four months after shipment. The revenue cycle is longer for equipment that is installed at
the customer’s site for evaluation prior to sale. The typical trial period ranges from six months to two
years after installation.
Our revenues are concentrated in Asia, the United States and Europe. The following table shows the
geographic distribution of our revenue for 2019 and 2020:
(EUR million)
United States
Europe
Asia
Total
Year ended December 31,
2019 1)
2020
339.5
126.2
818.2
26.4%
9.8%
63.7%
333.0
141.3
853.8
25.1%
10.6%
64.3%
1,283.9
100.0%
1,328.1
100.0%
1 Including proceeds from patent litigation and arbitration settlement in 2019.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
A substantial portion of our revenue is earned by equipping new or upgraded fabrication plants where
Following recent strong growth, the performance of our other product lines, including epitaxy, was
device manufacturers are installing new fabrication lines. As a result, our revenue in this segment
partially held back by lower demand in the analog/power market. While representing a smaller part
tends to be uneven across customers and financial periods. Revenue from our ten largest customers
of ASMI’s total revenue, the analog/power market is more exposed to industrial and automotive
accounted for 82.2% and 85.1% of revenue in 2019 and 2020, respectively. The composition of our
segments, which were negatively impacted by COVID-19 in 2020.
ten largest customers changes from year to year. The largest customer accounted for more than
10% of revenue in 2019 and 2020.
Year ended December 31,
Spares & services revenue increased by 29%. This was driven by growth in the installed base of
equipment in recent years as well as initial results from our increased focus on new value-added
services. To a smaller extent, this growth was driven by customers increasing inventories in response
41
(EUR million)
Equipment revenue
Spares & service revenue
Patent litigation & arbitration settlement
2019
909.5
215.2
159.2
1,051.5
276.6
–
Total
1,283.9
1,328.1
2020
% Change
to the COVID-19-related supply chain challenges, especially in the second quarter of the year. Spares
16%
29%
n.a.
3%
& services represented 21% of total revenue in 2020.
Currency changes led to a 1% decrease in revenue compared to 2019, mainly due to the depreciation
of the US dollar.
Revenue growth driven by continued strong demand for leading
edge technologies
In terms of customer segments, revenue for the full year was led by the foundry segment, followed
by logic and then memory. Revenue in the combined logic/foundry segment showed a healthy
At slightly over €1.3 billion, our net revenue increased 18% compared to €1.1 billion in 2019,
increase, driven by solid investments throughout the year in leading edge manufacturing capacity. We
excluding the €159 million proceeds from patent litigation & arbitration settlements in that year. While
continued to benefit from the significant increases in the number of ALD layers in the most advanced
global economic growth turned negative in 2020, impacted by COVID-19 lockdown measures, the
nodes compared to the previous nodes, supporting strong share of wallet gains for ASMI with the
total wafer fab equipment market amounted to US$63 billion (Gartner, December 2020) compared to
leading logic and foundry customers. Sales in the memory segment also showed a solid increase in
US$54 billion in 2019 (Gartner, December 2019). This increase was particularly driven by continued
2020, led by DRAM customers. Aside from some recovery in overall spending, ASMI benefited from
investments in leading edge semiconductor manufacturing capacity. As demand for advanced
a first meaningful contribution from high-k ALD penetrations for the most advanced DRAM devices
technologies remained strong throughout the year, the pandemic only had a limited impact on
with multiple customers.
ASMI’s revenue. In the second quarter, we faced bottlenecks in our manufacturing and logistical
operations, especially in Malaysia and Singapore, due to lockdown measures, which impacted
By geography, our revenues were led by the Asia region, with a growth of approximately 30% in 2020,
several of our suppliers and led to shortages and delays for certain parts. In the third quarter, supply
excluding the settlement proceeds in 2019. This was partially due to a solid increase in revenue from
chain conditions returned largely to normal. Revenue in the second half was only modestly lower
China which, for the first time, accounted for more than 10% of total revenue.
compared to the level in the first half. Excluding the impact from currencies, revenue in the second
half increased. Fourth quarter revenue reached a new record, at €347 million.
Equipment revenue grew by 16% in 2020. This was driven by strong double-digit increases in our
ALD product line, reflecting investments by our customers in the leading edge technology nodes.
ALD continued to account for more than half of our total equipment revenue in 2020.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 42
The following table shows new orders levels and the backlog for 2019 and 2020:
GROSS PROFIT MARGIN
Total gross profit developed as follows:
(EUR million)
Backlog at the beginning of the year
New orders
Revenue
FX-effect
Backlog as per reporting date
Book-to-bill ratio (new orders divided
by net sales)
Year ended December 31,
2019 1)
301.5
1,328.9
(1,283.9)
4.7
351.2
2020
351.2
1,313.6
(1,328.1)
(13.1)
323.6
% Change
16%
(1%)
3%
(8%)
1.0
1.0
1 Including proceeds from patent litigation and arbitration settlement in 2019.
(EUR million)
Front-end
Front-end, excluding patent
litigation & arbitration
settlement in 2019
Year ended December 31,
Gross profit
Gross profit margin
2019
638.5
2020
623.6
2019
49.7%
2020
47.0%
Increase
(decrease)
percentage
points
(2.7)
479.3
623.6
42.6%
47.0%
4.4
The gross margin increased in 2020 from 42.6% (excluding patent litigation & arbitration settlement)
to 47.0%. The gross margin was in part driven by an exceptionally strong revenue mix in second
quarter and third quarter, which boosted the margin in those quarters to 48.3% and 49.9%,
The backlog includes orders for which purchase orders or letters of intent have been accepted,
respectively. In addition, the gross margin increased due to the effects of cost reduction programs
typically for up to one year. Historically, orders have been subject to cancellation or rescheduling by
and efficiency improvements. For instance, while we continued to incur costs related to new growth
customers. In addition, orders have been subject to price negotiations and changes in specifications
initiatives and product introductions, the related gross margin impact lessened compared to previous
as a result of changes in customers’ requirements. Due to possible customer changes in delivery
years on the back of the increased revenue level.
schedules and requirements, and to cancellations of orders, our backlog at any particular date is not
necessarily indicative of actual revenue for any subsequent period.
Currency changes led to a decrease of 1% in gross profit compared to 2019.
For the year in total, our new bookings increased by 12% in 2020 to €1,314 million, excluding the
proceeds from the settlements in 2019. The book-to-bill, as measured by orders divided by revenue,
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Total selling, general and administrative expenses developed as follows:
was 1.0 in 2020. Equipment bookings were led by the foundry segment, followed by memory and
logic. Bookings increased by 8% from the first half to the second half, reaching a new record quarterly
high (excluding settlement gains) in the fourth quarter of 2020 at €379 million. We finished the year
with an order backlog of €324 million compared to €351 million at the end of 2019.
(EUR million)
Front-end
Year ended December 31,
2019
148.9
2020
157.4
% Change
6%
Selling, general and administrative (SG&A) expenses increased by 6% in 2020 year-on-year. The
increase was explained by targeted investments to strengthen the organization and higher variable
compensation, and was partly offset by the absence of legal costs related to the patent litigation and
arbitration case, which were still included in 2019.
As a percentage of revenue, SG&A expenses in 2020 were 12%, down from 13% in 2019 (excluding
the patent litigation & arbitration settlement).
The impact of currency changes on SG&A expenses resulted in a decrease of 2% year-over-year.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 43
Year ended December 31,
2019
2020
% Change
224.4
159.2
(4.8)
(0.1)
378.7
337.2
–
(10.1)
–
327.1
50%
n.a.
n.a.
n.a.
(14%)
RESEARCH AND DEVELOPMENT EXPENSES
Total research and development (R&D) expenses, including impairment, capitalization and
OPERATING RESULT
The operating result developed as follows:
amortization of development expenses, increased by 25% in 2020 compared to the previous year
due to increased activities. As a percentage of revenue, R&D expenses were approximately stable at
10%. Currency changes resulted in a 1% decrease in R&D expenses year-over-year.
Total research and development expenses developed as follows:
(EUR million)
Front-end:
Before special items
Patent litigation & arbitration settlement
(EUR million)
Front-end:
Research and development expenses
Capitalization of development expenses
Research and development grants and credits
Amortization of capitalized development
expenses
Impairment of capitalized development expenses
Total
Year ended December 31,
Impairment charges
2019
2020
% Change
Restructuring expenses
Including special items
150.7
(60.2)
–
15.6
106.1
4.8
110.8
171.8
(64.1)
–
21.2
128.9
10.1
139.0
14%
6%
36%
21%
25%
Operating profit increased by 49% to €327.1 million, from €219.5 million in 2019 (excluding patent
litigation & arbitration settlement), resulting in an operating profit margin of 24.6% (2019: 19.5%,
excluding patent litigation & arbitration settlement).
Impairment charges in 2020 and 2019 are related to capitalized development expenditures and assets.
FINANCING COSTS
Financing costs are mainly related to translation results. The translation results are mainly related
Impairment of capitalized development expenses related primarily to the development of new
to movements in the US dollar in the respective periods. A substantial part of our cash position is
technology that is no longer in demand from customers.
denominated in US dollars.
We continue to invest strongly in R&D. As part of our R&D activities, we are engaged in various
development programs with customers and research institutes. These allow us to develop products
RESULTS FROM INVESTMENTS
Results from investments, which primarily reflect our shareholding in ASMPT, increased to
that meet customer requirements and obtain access to new technology and expertise. The costs
€44.9 million from €18.0 million in 2019. These results exclude the amortization of intangible assets
relating to prototypes and experimental models, which we may subsequently sell to customers, are
related to ASMPT. During the year, our stake in ASMPT decreased slightly from 25.19% to 25.07%.
charged to the cost of sales.
Our R&D operations in the Netherlands, Belgium, and the United States receive research and
Semiconductor Solutions increased 13.8% in 2020. Sales of SMT Solutions decreased by 4.2% for
Total sales as reported by ASMPT increased by 6.3% to US$2.2 billion in 2020. Sales of the
development grants and credits from various sources.
the full year, and Materials increased 18%. ASMPT decreased gross margins from 34.8% to 32.5%
in 2020. On a 100% basis, ASMPT increased net profits by 162%. For further information on ASMPT,
please visit the website www.asmpacific.com.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 44
INCOME TAX
The income tax expense of €48.7 million (2019: €53.7 million) reflects an effective tax rate of 14.6%
STATEMENT OF FINANCIAL POSITION
Working capital as at December 31, 2020 was €242.8 million (2019: €160.2 million). Working capital
(2019: 14.0%). For further information on tax, see Note 22 to the consolidated financial statements.
consists of: inventories, accounts receivable, other current assets, accounts payable, provision for
NET EARNINGS
Net earnings developed as follows:
(EUR million)
Front-end:
Before special items
Patent litigation & arbitration settlement
Impairment charges
Restructuring expenses
Total
Back-end:
Investment in ASMPT
Amortization other intangible assets from
purchase price allocation
Total
Net earnings from operations
Year ended December 31,
warranty and accrued expenses and other payables. The number of outstanding days of working
capital, measured against quarterly revenue, increased from 36 days as at December 31, 2019 to
63 days as at December 31, 2020. While our inventories decreased year-on-year from €173 million
at the end of 2019 to €162 million at the end of 2020, our accounts receivable position increased
from €200 million to €280 million. The percentage of overdue in accounts receivables decreased
2019
2020
Change
year-on-year, reflecting the healthiness of this position.
170.5
159.2
(4.8)
(0.1)
324.8
18.0
(13.8)
4.2
329.0
263.5
–
(10.1)
–
253.4
44.9
(12.9)
32.0
285.4
93.0
(159.2)
(5.3)
0.1
(71.4)
26.9
0.9
27.8
(43.6)
LIQUIDITY
Our liquidity is affected by many factors, some of which are related to our ongoing operations
while others are related to the semiconductor and semiconductor equipment industries, and to the
economies of the countries in which we operate. Although our cash requirements fluctuate based on
the timing and extent of these factors, we believe that cash generated by operations, together with
the liquidity provided by our existing cash resources and our financing arrangements, will be sufficient
to fund working capital, capital expenditures and other ongoing business requirements for at least
the next twelve months.
On December 31, 2020, our principal sources of liquidity consisted of €435 million in cash and cash
equivalents and €150 million in undrawn bank lines.
For the most part, our cash and cash equivalents are not guaranteed by any governmental agency.
We place our cash and cash equivalents with high-quality financial institutions to limit our credit
risk exposure.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
45
CASH FLOW
The following table shows the cash flow statement:
We generated cash from operating activities of €264.4 million in 2020 (2019: €488.9 million). We
used €144.3 million cash in investing activities (2019: €79.2 million) and used €170.4 million in
(EUR million)
Net earnings from operations
Adjustments to cash from operating activities:
Depreciation, amortization and impairments
Income tax
Share in income of investments in associates
Share-based compensation
Non-cash financing costs
Changes in other assets and liabilities:
Accounts receivable
Inventories
Evaluation tools
Accounts payable and accrued expenses
Other assets
Income tax paid
Net cash from operating activities
Capital expenditures (net)
Capitalized development expenditure
Purchase of intangible assets
Dividend received from associates
Net cash used in investing activities
Payment of lease liabilities
Purchase treasury shares
Proceeds from issuance of treasury shares
Dividend paid to shareholders ASMI
Capital repayment
2019 1)
329.0
78.3
53.7
(4.2)
10.5
5.5
(23.9)
3.1
(13.7)
81.1
(24.3)
(6.2)
488.9
(48.7)
(60.2)
(2.3)
32.0
(79.2)
(12.0)
(99.9)
6.8
(99.3)
(1.1)
2020
285.4
89.0
48.7
(32.0)
12.8
11.0
(93.0)
0.5
(39.7)
(12.7)
2.4
(8.0)
264.4
(93.1)
(64.1)
(3.2)
16.1
(144.3)
(7.8)
(66.7)
2.8
(98.7)
–
Net cash used in financing activities
(205.7)
(170.4)
Foreign currency translation effect
Total net cash provided / (used)
8.0
212.0
(12.3)
(62.6)
financing activities (2019: €205.7 million).
DEBT
We were debt-free as at December 31, 2020.
The original maturity date of the credit commitment was December 16, 2021 and in 2018 and in
2019 we exercised the options to extend the date by one year. This means that the maturity date of
the credit commitment of €150 million is now December 16, 2023. As per December 31, 2020, this
facility was undrawn.
The credit facility of €150 million includes two financial covenants:
›› Minimum consolidated tangible net worth; and
›› Consolidated total net debt/total equity ratio.
These financial covenants are measured twice annually, on June 30 and December 31. We were in
compliance with these financial covenants as per December 31, 2020.
See Notes 11, 16, and 17 to the consolidated financial statements for more information on our
funding, treasury policies and our long-term debt.
ASMPT
The assembly and packaging segment of our business is organized in ASM Pacific Technology Ltd
(ASMPT). Net cash of our 25.07%-owned associate was €467.8 million on December 31, 2020.
The cash resources and borrowing capacity of ASMPT are not available to our Front-end segment.
Although two directors of ASMI are directors of ASMPT, ASMPT is under no obligation to declare
dividends to shareholders or enter into transactions that are beneficial to us. As a substantial
shareholder, we can participate in the shareholders' approval of the payment of dividends, but
cannot compel their payment or size. Cash dividends received from ASMPT during 2020 and 2019
were €16.1 million and €32.0 million, respectively.
The market value of our 25.07% investment in ASMPT was approximately €1,108 million as per
1 Including proceeds from patent litigation and arbitration settlement in 2019.
December 31, 2020.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 46
FINANCIAL RISK FACTORS
We are exposed to market risks (including foreign exchange rate risk), credit risk, liquidity risk, and
On December 31, 2020, we had 48,714,682 outstanding common shares excluding 1,082,712
treasury shares. This compared to 48,866,220 outstanding common shares and 2,431,174 treasury
equity price risk. We may use forward exchange contracts to hedge foreign exchange risk. We do
shares at year-end 2019. Besides the cancellation of 1.5 million treasury shares in July 2020, the
not enter into financial instrument transactions for trading or speculative purposes. See Note 17 to
change in the number of treasury shares in 2020 was the result of 508,685 repurchased shares and
the consolidated financial statements for financial risk factors.
357,147 treasury shares that were used as part of share-based payments.
OUTLOOK
We have developed forecasts and projections of cash flows and liquidity needs for the upcoming year.
On December 31, 2020, 48,438,605 of the outstanding common shares were registered with
our transfer agent in the Netherlands, ABN AMRO Bank N.V. and 276,077 were registered with our
These take into account the current market conditions, reasonable possible changes in trading performance
transfer agent in the United States, Citibank, NA, New York.
based on such conditions, and our ability to modify our cost structure as a result of changing economic
conditions and revenue levels. In the forecasts, we have also taken into account: the total cash balances
amounting to €435 million on December 31, 2020; the ability to renew debt arrangements and to access
SHARE LISTING
ASMI's shares are listed on Euronext Amsterdam under the symbol ASM. As of March 23, 2020,
additional indebtedness; and whether or not we will comply with our financial covenants. Based on this, we
ASMI has been included in the AEX Index. The AEX consists of the 25 largest companies listed on
believe that our cash on hand at the end of 2020 is adequate to fund our operations and our investments in
Euronext Amsterdam as measured by free float-adjusted market cap. Previously, ASMI was included
capital expenditures, and to fulfill our existing contractual obligations for the next twelve months.
in the AMX midcap index.
SHARE INFORMATION
On December 31, 2020, the total number of issued common shares of ASMI amounted to 49,797,394
compared to 51,297,394 at year-end 2019. The decrease was the result of the cancellation of
1.5 million treasury shares that was approved by the Annual General Meeting of Shareholders (AGM)
on May 18, 2020, and became effective on July 21, 2020.
As per January 1:
Issued shares
Treasury shares
Outstanding shares
Changes during the year:
Cancellation of treasury shares
Share buybacks
Treasury shares used for share-based performance programs
As per December 31:
Issued shares
Treasury shares
Outstanding shares
2019
2020
56,297,394
51,297,394
6,978,496
2,431,174
49,318,898
48,866,220
5,000,000
1,500,000
950,902
498,224
508,685
357,147
51,297,394
49,797,394
2,431,174
1,082,712
48,866,220
48,714,682
ASMI JOINED THE AEX INDEX IN 2020
Our NY Registry Shares have also been eligible since 2015 for trading on the over-the-counter (OTC)
market in the United States under the symbol ASMIY (further information can be found on
www.otcmarkets.com).
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 47
MARKET CAPITALIZATION
The market capitalization of ASMI at year-end 2020 was €8,766 million, based on the closing share
DIVIDENDS
ASMI aims to pay a sustainable annual dividend. Annually, the Supervisory Board, upon proposal
price of €179.95 at Euronext Amsterdam on December 31, 2020, and 48.7 million total outstanding
of the Management Board, assesses the amount of dividend that will be proposed to the Annual
shares per year-end. The market capitalization at year-end 2019 was €4,894 million.
General Meeting of Shareholders (AGM). The decision that a dividend be proposed to the AGM
SHARE PERFORMANCE
On December 31, 2020, the closing price of ASMI’s shares on Euronext Amsterdam was €179.95.
At the end of 2019, the closing price was €100.15. The highest closing share price during the year
will be subject to the availability of distributable profits as well as retained earnings, and may be
affected by our potential future funding requirements. Accordingly, dividend payments may fluctuate
and could decline or be omitted in any year.
was €179.95, on December 30, 2020, and the lowest was €59.18, on March 18, 2020. The average
The proposed dividend over 2020 will mark the eleventh consecutive year that ASMI has paid
daily trading volume of ASMI shares on Euronext Amsterdam in 2020 was 316,286. This compares
a dividend. Our dividend has steadily increased over time. For 2010, the dividend was €0.40 per
to an average daily volume of 224,790 in 2019. Euronext accounted for approximately 59% of total
common share. Over 2011, 2012 and 2013, we paid a dividend of €0.50 per common share.
trading in ASMI shares in 2020.
The dividend increased to €0.60 over 2014, €0.70 over 2015 and 2016, €0.80 over 2017 and €1.00
per common share over 2018. Over 2019, we paid total dividends of €3.00 per common share,
The graph below shows the performance of ASMI’s shares on Euronext. The total share return in this
consisting of a regular dividend of €1.50 per share, and an extra-ordinary dividend also of €1.50
graph is the performance of the share including dividends paid and capital returned over the period.
per share.
SHARE PRICE PERFORMANCE AND TOTAL SHARE RETURN in %
ASMI announced on February 25, 2021, that it would propose to the forthcoming Annual General
Meeting of Shareholders (AGM) 2021, to declare a regular dividend of €2.00 per common share over
2020. The regular dividend increased 33% compared to the dividend paid over 2019.
DIVIDEND PER SHARE IN EUR PAID OVER
2015
2016
2017
2018
2019
2020
Total return
Share price
performance
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.40
0.50
3.00
1.50
2.00
0.50 0.50 0.60 0.70 0.70 0.80
1.50
1.00
SHAREHOLDER RETURNS
Over time, ASMI has returned significant amounts of cash in different forms to our shareholders,
2010
2011
2012
2013
2014
2015 2016 2017 2018 2019 2020*
reflecting our policy to use excess cash for the benefit of our shareholders. In 2020, we returned
* Proposed
€165 million to our shareholders. This follows an amount of approximately €200 million returned to
our shareholders in the form of dividends and share buybacks in 2019. During 2018, we returned
€607 million to shareholders in the form of dividends, share buybacks, and a capital return. During
the last three years, we have returned more than €0.9 billion in cash to shareholders.
Extra-ordinary
dividend
Regular dividend
600
500
400
300
200
100
0
-100
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE DIVIDEND TIMETABLE
›› Ex-dividend date: May 19, 2021
›› Record date: May 20, 2021
›› Payment date: May 27, 2021
SHARE BUYBACK
On February 25, 2020, ASMI announced that its Management Board authorized a new repurchase
program of up to €100 million of the company's common shares within the 2020/2021 time frame.
This buyback program is being executed by intermediaries and will end as soon as the aggregate
purchase price of the common shares acquired by ASMI has reached €100 million. This repurchase
program is part of ASMI's commitment to use excess cash for the benefit of its shareholders. As at
January 29, 2021, the 2020/2021 program was 80% completed, with 559,197 shares repurchased
at an average share price of €143.06.
The 2020/2021 program is our seventh consecutive share buyback program. In addition to the
2019/2020 program the earlier programs included:
›› On June 5, 2018, ASMI announced the start of a share buyback program of ASMI’s common
shares up to €250 million. This program followed on ASMI’s announcement on February 28, 2018,
CUMULATIVE CASH RETURNED TO MARKET EUR million
2,000
1,750
1,500
1,250
1,000
750
500
250
0
48
Share buybacks
Dividends
Return of capital
Buyback convertibles
2010
2011
2012
2013
2014
2015
2016
2017 2018
2019
2020
CAPITAL REPAYMENT
In 2013 and 2018, ASMI distributed cash to its shareholder through two capital repayments:
›› In August 2018, ASMI distributed €4.00 per common share to its shareholders through
a tax-efficient repayment of capital, in addition to the regular dividend that year. The proposal
for this capital repayment was initially announced on February 28, 2018, and approved by the
AGM 2018; and
that it intended to use €250 million of the proceeds of the partial sale of a stake of approximately
9% in ASMPT for a new share buyback program. The 2018 program started on June 6, 2018, and
›› In July 2013, ASMI distributed €4.25 per ordinary share to its shareholders. This followed on the
sale of 12% of the total shares in ASMPT in March 2013. The extraordinary return of capital in 2013
ended on October 11, 2018. In total, 5,443,888 shares were repurchased at an average price of
was in addition to the dividend paid that year.
€45.92, including expenses, under the 2018 program; and
›› On April 24, 2017, ASMI announced that the proceeds of approximately €248 million of the partial
secondary placement of shares of ASMPT were intended to be used for a new share buyback
MAJOR SHAREHOLDERS
Pursuant to the Dutch Financial Supervision Act (‘Wet op het financieel toezicht’ or ‘WFT’), legal
program. The 2017/2018 €250 million program started on September 22, 2017, and ended on
entities as well as natural persons must immediately notify the Dutch Authority for the Financial
March 29, 2018. In total, we repurchased 4,353,292 shares at an average price of €57.43,
Markets (AFM) when a shareholding equals or exceeds 3% of the issued capital. The AFM must be
including expenses, under this program.
notified again when this shareholding subsequently reaches, exceeds or falls below a threshold. This
can be caused by the acquisition or disposal of shares by the shareholder or because the issued
Information about earlier share buyback programs is available on our website.
capital of the issuing institution is increased or decreased. Thresholds are: 3%, 5%, 10%, 15%, 20%,
25%, 30%, 40%, 50%, 60%, 75%, and 95%. The AFM incorporates the notifications in the public
register, which is available on its website. Failure to disclose the shareholding qualifies as an offense,
and may result in civil penalties, including suspension.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
49
The following table sets forth information with respect to the ownership of our common shares as of
The graph below provides an overview of the shareholders' structure.
February 1, 2021, by each beneficial owner known to us of more than 3% of our common shares:
ASM International N.V. 2)
Tokyo Electron Ltd. 3)
Acadian Asset Management LLC. 4)
Norges Bank 5)
Goldman Sachs Group, Inc. 6)
BlackRock, Inc 7)
Number of
Shares
1,166,601
2,699,000
1,584,172
1,544,287
1,502,758
1,500,180
Percent 1)
2.3%
Number of
voting
rights
–
5.4% 2,699,000
3.2%
825,936
3.1% 1,544,287
3.0% 1,502,758
3.0% 1,557,794
Percent 1)
–
5.4%
1.7%
3.1%
3.0%
3.1%
VOTING RIGHTS ASMI in %
5 2
3
3
3
1 Calculated on the basis of 49,797,394 issued common shares as of January 31, 2021, and without regard to options.
2 On January 31, 2021, ASMI held 1,166,601 ordinary shares in treasury. Treasury shares held by the company cannot
84
Tokyo Electron Ltd.
Acadian Asset Management LLC.
Norges Bank
Goldman Sachs Group Inc.
BlackRock, Inc.
Rest of shareholders
KEY FIGURES PER SHARE
The table below shows the key figures per share and other relevant share data for the last three years.
be voted on.
3 All of the 2,699,000 shares capital interest and voting rights of Tokyo Electron Ltd. are held directly actual.
Based on the notification filed with the AFM on July 1, 2013.
4 All of the 1,584,172 shares capital interest and 825,936 voting rights of Acadian Asset Management LLC. are held
directly actual. Based on the notification filed with the AFM on August 20, 2019.
5 All of the 1,544,287 shares capital interest and voting rights of Norges Bank are held directly actual. Based on the
notification filed with the AFM on December 11, 2020.
6 Of Goldman Sachs Group, Inc.’s capital interest and voting rights 517,236 shares are held indirectly potential and
985,522 shares are held indirectly actual. Based on the notification filed with the AFM on January 28, 2021.
7 Of BlackRock, Inc.’s capital interest 1,493,750 shares are held indirectly actual and 6,430 shares are held indirectly
potential. Of the voting rights, 1,551,364 are held indirectly actual and 6,430 indirectly potential. Based on the
notification filed with the AFM on December 22, 2020.
A 'beneficial owner' of a security includes any person who, directly or indirectly, through any contract,
arrangement, understanding, relationship, or otherwise has or shares (i) voting power which includes
the power to vote, or to direct the voting of, such security and/or (ii) investment power which includes
the power to dispose, or to direct the disposition, of such security. In addition, a person shall be
deemed to be the beneficial owner of a security if that person has the right to acquire beneficial
ownership of such security, as defined above, within 60 days, including but not limited to any right
to acquire: (i) through the exercise of any option, warrant or right; (ii) through the conversion of a
(EUR, except number of shares)
Net earnings per share, diluted
Normalized net earnings per share, diluted
Dividend per share paid over
Shareholders’ equity per share
Issued shares year-end (thousand)
Outstanding shares year-end (thousand)
Average outstanding shares basic (thousand)
Average outstanding shares diluted (thousand)
security; or (iii) pursuant to the power to revoke, or pursuant to the automatic termination of, a trust,
Closing share price Euronext Amsterdam
discretionary account, or similar arrangement.
Year-end
High
Low
Market capitalization year-end (EUR million)
2018
2.96
3.19
0.80
33.28
56,297
49,319
52,432
53,110
36.20
62.62
33.90
1,785
2019
6.58
6.86
2.00
37.22
51,297
48,866
49,418
49,999
100.15
104.40
33.96
4,894
2020
5.78
6.04
3.00
38.07
49,797
48,715
48,907
49,359
179.95
179.95
59.18
8,766
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 50
OPEN DIALOG AND TIMELY INFORMATION
We maintain an open dialog with our shareholders and investors. We provide the financial markets
with accurate and timely information through, among others, press releases, our annual reports,
quarterly earnings calls and webcasts, and investor meetings. As COVID-19 led to increased
uncertainty about the broader economic outlook in 2020, we continued to keep the markets up
to date through our press releases and maintained our active programs to meet with investors via
various online platforms such as virtual investor conferences & roadshows. In 2020, we also held an
increasing number of investor meetings focused on ESG-related topics. Investors can find up-to-date
and comprehensive information about the company and our shares on our website.
VICTOR BAREÑO
Almere, the Netherlands
T: +31 88 100 8500
E: victor.bareno@asm.com
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Society and planet
Society and planet
SOCIETY AND PLANET
51
Understanding our impact, increasing our value. We are aware of the impact we have as
a company, and how this effects our value and society. We focus on key areas, including
reducing greenhouse gases and water consumption, improving our recycling and reuse
of raw materials, and focusing on responsibly designed and operated facilities.
ENVIRONMENTAL FOOTPRINT: 2016 TO 2020
ASMI’s environmental policy is a key element of our corporate responsibility policy. It establishes our
The scope of these objectives was our primary Engineering and Manufacturing sites in the
Netherlands, Japan, South Korea, Singapore, and the US and is managed through our environmental
commitment to reduce our environmental impact by setting the right objectives and continuously
management system (EMS), which is ISO 14001 certified. This certification provides the assurance
improving our management systems. We also recognize the inherent value of a circular economic
to our stakeholders that we are committed to our goals. Our environmental targets are in support of
framework for product stewardship. Through our system improvements, refurbishments, and
UN Sustainable Development Goals (SDGs) 12 – Responsible Consumption and Production, and
upgrades to extend the useful working life of the equipment, these areas are all high-value elements
13 – Climate Change.
in the waste elimination hierarchy.
In 2016, we initiated a five-year target cycle for reducing our environmental footprint in key areas
annual assessment by the Carbon Disclosure Project (CDP), a non-profit
that are applicable to our business and aligned with industry standards, including the Sustainability
organization that runs the world’s leading environmental disclosure platform.
Accounting Standards Board (SASB) standard for the semiconductor industry.
We have reported through CDP since 2013 and our scores have improved as
We transparently disclose our environmental impact by participating in the
Our environmental targets for 2016-2020 were:
›› Reduce greenhouse gas emissions (Scope 1 and 2) by 5% per euro of research and development
(R&D) investment below 2015 levels by 2020;
we strive for greater transparency in our disclosures. In 2020, we disclosed
information to CDP on ASMI’s global renewable energy purchases at key sites
around the world as well as reporting on climate change and water security.
›› Reduce water withdrawn by 45% (up from initial target of 10%) per euro of R&D investment below
With reference to science-based targets, we normalized our greenhouse gas (GHG) emission
2015 levels by 2020;
›› Divert more than 90% of all waste from landfill through recycle or reuse by 2020; and
›› All new construction projects to exceed the energy efficiency standards of local jurisdictions.
reduction and our water consumption reduction objectives to the intensity of our research and
development (R&D) spend. Our R&D operations are responsible for the majority of our utility
consumption through equipment installations and supporting facility infrastructure, accounting for
more than 81% of electrical consumption and almost 76% of water consumption.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
52
Our environmental targets and results for 2016-2020 are summarized in the table below. More detailed results may be found in the Non-financial summary tab.
Objective
Results
Discussion
Reduce greenhouse gas
emissions by 5% per euro of
research and development (R&D)
investment below 2015 levels
Achieved with
17.9% reduction
Approximately 95% of our GHG emissions are a result of electrical consumption, and 81% of our electrical consumption is a result of
R&D activities, and thus defines our intensity measurement. As our R&D activities have increased dramatically the past 5 years, our
associated GHG emissions have not. Our efforts to maximize electrical efficiencies at our R&D sites, including cleanroom supporting
infrastructure, contributed to this progress.
Reduce water withdrawn by
45% (up from initial target of
10%) per euro of R&D
investment below 2015 levels
Achieved with
62.5% reduction
In 2016, we identified that our Phoenix site accounted for approximately 84% of our absolute global water consumption, and was in
a high risk area for water security. Water reuse to minimize effluents was not utilized like our other sites, and we built a wastewater reuse
system that brought the Phoenix consumption rate down to 50% of our global absolute consumption. This not only reduced water
consumption, but started reducing the overall water effluent to the treatment plant, placing a lower burden on utilities. We have received
two recognition awards since implementing the reuse plant in 2018.
Divert more than 90% of all
waste from landfill through
recycle or reuse
Fell short
Achieved
84% diversion
Our Singapore plant accounts for approximately 70% of our global solid waste generated, and a majority of that is a result of production
related packaging. Our packaging reuse program targeted a dramatic reduction in waste to landfill, and while we fell short of the 90%
goal, we did increase our waste diversion by 29%. In Q4 2020, we came very close to the overall objective, achieving our highest
quarterly diversion rate ever with 88% diversion. Our packaging reuse program will only continue to grow in the next few years.
All new construction projects
to exceed the energy
efficiency standards of local
jurisdictions
Achieved
Through the 5-year cycle, ASMI completed 2 significant construction projects in South Korea (2018) and Singapore (2020). In 2020,
after sustaining impacts to the construction schedule due to the COVID-19 pandemic, we completed construction of, and commenced
operations in, a new facility built to the BCA Green Mark Gold Plus certification standard in Singapore. The design and construction
project exceeded the energy efficiency requirements.
ENERGY AND EMISSIONS
As approximately 95% of our Scope 1 and 2 emissions are attributable to electrical energy
in our R&D labs globally, generates effluents that must be treated or removed from releasing to the
air. This includes non-GHG emissions such as particulates or volatiles. ASMI has stringent air quality
consumption, further conservation will not be enough. We will need to reduce the related emissions
permits and criteria that we meet, and are continuously driving initiatives to improve our performance.
through a combination of conservation and a greater use of renewable energy. In 2020, we engaged
We closely monitor emissions and efficiencies of the air abatement systems, which remove GHG
with leading external parties to find the right partner to further progress our GHG objectives, including
and non-GHG effluents from gas exhaust. We have engaged experts in air abatement technology
mapping and beginning to address Scope 3 emissions.
to not only specify the best equipment for our new processes, but in one case opportunities for
improvement were identified for approximately 10 abatement systems at one of our sites, further
In 2020, approximately 9.4% of our electrical consumption was from renewable resources, which is
reducing GHG and non-GHG emissions from existing processes.
equivalent to approximately 16% of the available renewables on the market. We recently switched
to using only renewable electricity at our corporate headquarters in Almere, the Netherlands, and
are developing plans to increase the use of renewable energy at other locations. We will continue to
WATER AND EFFLUENTS
Water is a valuable resource, both for clean drinking water and for industry, and its availability is
search for other ways to use renewable resources.
impacted not only by increased global consumption but also by climate change. We must conserve
and protect the security of water and for this reason ASMI strives to minimize its water consumption
Our electrical sourcing accounts for the majority of air emissions associated with our operations
and discharge wastewater responsibly so as not to contaminate water sources. Our corporate
through GHG emissions. Consistent with our environmental policy, we also place significant focus on
responsibility policy sets the commitment to minimize environmental impacts and strive toward ZERO
improving all emissions associated with our operations. ASMI equipment, which is installed and used
HARM!, which includes water conservation and controlling discharges and effluents.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 53
ASMI relies on good quality water for key functions in our equipment, both for cooling capacity as
A key measure in this achievement was the installation of a water reuse system in Phoenix in 2018,
well as for air emission abatement equipment, to predominantly support our R&D labs and activities.
which maximizes the reuse of wastewater in our abatement systems. The ASM America site is
The air abatement systems use water as a scrubbing mechanism to remove toxic, corrosive, and
located in the Sonoran Desert, where temperatures average over 38°C in the summer and water is
other process gases from being emitted to the air. This reduces the air emissions from our sites, both
a scarce resource. In the two years since the system was implemented, ASM America was able to
for greenhouse gases from process gases with warming potentials and for non-GHG air emissions
conserve 58 million gallons of water.
of other pollutants. The wastewater from the abatement systems is then managed according to local
wastewater effluent management methods, including the proper characterization, treatment, control,
and disposal. This method of control is adopted across the industry and protects the air while
providing a path for proper wastewater effluent and related chemical wastes to be safely managed.
There were no legal discharge violations for ASMI operations in 2020.
ASMI has conducted water security risk assessments and reports publicly through the CDP
water security disclosure report. According to the WRI aqueduct risk assessment, the baseline
water stress risk rankings for the following regions in which ASMI has engineering and manufacturing
operations are:
Location
Key Operations
WRI Water Stress Ranking
Almere, The Netherlands
Special Projects Manufacturing
Singapore
Manufacturing
Dongtan, South Korea
Engineering, Manufacturing
Tama, Japan
Engineering
Phoenix, Arizona, USA
Engineering
Low
Low
Medium-high
Medium-high
Extremely High
EXTERNAL RECOGNITION
ASMI’s water conservation efforts were
recognized externally in early 2020 with
the SRP Champions of Outstanding Water
Efficiency Award and a highly regarded
SEAL Environmental Initiative Award.
WASTE MANAGEMENT AND RESOURCE USE
We recognize our operations are dependent on natural capital and resources, and have assessed our
consumption to prioritize our response. A majority of our resources use and solid waste is associated
with the production of our products, and for that reason we have prioritized our focus on those
operations consistent with our corporate responsibility policy.
“ We are committed to conducting business, both in our own operations and throughout
our supply chain to protect our employees, customers, communities, shareholders
and the environment.
Based on a risk assessment from this data, as well as where ASMI predominantly consumes water,
in recent years we have prioritized our Phoenix facility for water reduction. As a result, over the
We are committed to an innovative framework during the design, manufacture,
distribution and support of our products that meets or exceeds all applicable
past three years we have reduced our global water withdrawals by 30% at the sites included in the
regulations in order to minimize environmental impact.”
2016-2020 environmental objective boundary. This reduction not only reduces the amount of water
consumed, but because a large percentage of the water is used in the abatement and treatment of
Following on from our successful 2018 pilot to reuse packaging materials with key suppliers, we
our R&D processes, it reduces the overall effluent that must be treated and further reduces the load
systematically grew the program to include 5 product platforms in 2020. Additionally, in 2020 we
on utilities and treatment plants. At our Singapore manufacturing plant, we seek to maximize our
successfully piloted the reuse of packaging materials with selected customers. This resulted in
use of the processed wastewater, NEWater, for our operations, accounting for approximately 56%
avoiding more than 41 metric tons of packaging waste in 2020. We continue to extend the program
of water use in 2020. By maximizing this reclaimed wastewater from the Singapore utilities, we are
to additional products, suppliers, and customers. Through 2020 we made steady progress toward
contributing to and helping Singapore maintain its current Low WRI water stress ranking.
our Landfill Diversion objectives, and although annually our achievement was 84%, throughout the
year we were steadily progressing upward toward the objective of 90% through the year.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Our R&D activities principally involve substances in gaseous form, and the reaction effluents of the
deposition process are treated with leading-edge abatement to minimize the amount and constituents
of resultant wastewater and air emissions. We ensure that our wastewater and air emissions are
fully permitted and compliant with all local regulations. The amount of hazardous waste otherwise
requiring disposal is minimal and managed responsibly and within compliance of all regulations
and requirements. For example, our largest R&D site in Phoenix is a Very Small Quantity Generator
(VSQG) under US waste management regulations, which indicates volumes generated are low
enough that reporting and storage conditions required of small and large quantity generators are not
applicable, nonetheless we maintain safe and secure storage of our wastes consistent with industry
best practices. Additionally, our manufacturing operations involve negligible levels of chemical waste,
which is properly managed per local regulatory requirements where they are generated. In 2020,
there were no incidents of non-compliance with regard to waste management.
RESPONSIBLE CONSTRUCTION
We believe in our responsible growth as an organization and commit to aligning the construction of
new facilities with a nationally recognized green building standards. In 2020, we opened a new facility
in the Woodlands area of Singapore which was constructed to the BCA Gold Plus Standard. This is
a building energy and environmental design standard, and is above the basic requirements of design
currently required in Singapore.
REUSE OF SHIPPING PACKAGING
54
LOOKING AHEAD: 2021 ONWARD
There is considerable change in the world around us, in our stakeholder expectations, and in our own
development. The ESG and our stakeholder landscapes and expectations have also changed and
increased considerably in topics such as:
›› Climate change;
›› Resource conservation;
›› Human and social capitals like diversity and inclusion;
›› The expectations of our employees; and
›› Reporting and transparency.
41
METRIC
TONS
Reuse of shipping packaging helped
avoid 41 metric tons of combined
packaging waste in 2020
We have the ambition to further our progress and impact in the different geographies we operate. We
aim to make meaningful contributions to our industry, to the communities where we operate, and to
preserving our planet. For the forthcoming years, we will focus on broadening our sustainability and
ESG goals to include:
›› Strengthening our connection to external stakeholders;
›› Growing our contributions to the safety of our industry;
›› Inspiring workplace of inclusion and diversity;
›› Offering our employees the opportunity to excel and to maximize their potential;
›› Contributing our share of progress to global society’s environmental challenges;
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 55
›› Developing our climate resilience;
›› Advancing responsible sourcing;
›› Ensuring ethical treatment of people in our supply chain;
›› Engaging our employees in all aspects of our plans;
›› Growing contributions to our communities and industry; and
›› Providing transparent and insightful ESG reporting.
sites, and have already converted our Almere headquarter building to 100% use of renewable
energy. We are looking to the future for our next set of environmental objectives as part of the climate
strategy and working to strengthen their alignment with global initiatives such as the UN Sustainable
Development Goals (SDGs), the Task Force on Climate-related Financial Disclosure (TCFD), the
Sustainability Accounting Standards Board (SASB), and the Science Based Target Initiative (SBTI).
We are seeking opportunities to help strengthen the renewable market, and will look for sources
that support future sources of renewables. As we develop our strategies, we are including all of our
CLIMATE CHANGE
Climate change is a significant issue facing the world today. During 2020, we have started to define
operations in scope.
a climate adaptation risk and opportunity assessment, complemented with external expert support,
to conduct a comprehensive review for our sector, regions where we do business, and our supply
COMMUNITY
Colleagues in China teamed up with an NGO to provide essential resources to a school in desperate
chain to identify the priority issues and opportunities that require further attention. The focus is not
need of help.
only on the physical risks of climate change, such as extreme weather and rising sea levels, but also
on climate-related risks (such as regulatory compliance, supply chain disruption). We are now in our
Over 50 employees of the ASM China team took part in the charitable project that saw over 2,000
process of the following:
books and broadcast equipment donated to a school in a small village in the Gansu province.
1. Map and understand our key sites and key suppliers’ exposure to the physical effects of climate
change, regulatory and financial impact of shifting to a low-carbon economy;
The project came to life following the success of several smaller charitable events and the desire to
2. Identify the climate risks and opportunities related to various economic, regulatory, and climate
contribute even further. The team collaborated with a local NGO to help children at Quanshui primary
change scenarios;
school in Baihe Town.
3. Develop methods to assess potential strategic, operational, and financial impacts; and
4. Identify and implement action plans to address these risks and opportunities.
The school is made up of eight classes of children ‘left behind’ as their parents are migrant workers in
big cities. Resources in the village are tight, despite several of the students receiving grants from the
The scope of the assessment is ASM key sites and critical or strategic suppliers. Understanding
government for their outstanding academic performance.
Climate Adaptation Risk and Opportunities for our operations and supply chain are key to achieving
After working with the headmaster, the following urgent needs were identified:
climate resilience.
1. The books in the school library were decades old, in poor condition and outdated. They urgently
We recognize that our climate strategy must also contribute to solving the climate change crisis, and
2. The school broadcast equipment had been in disrepair for many years and needed to be
not only mitigate the risks and impacts to our operations, and we have taken steps in recent years,
replaced, as the equipment is critical to learning.
including the following to contribute to the impact on it.
›› GHG reductions and energy efficiency in our operations, such as replacing aging equipment;
›› Reduced energy consumption of our tools helping our customer to reduce their GHG emissions;
and
Over a month-long period, books were donated and bookshelves were purchased to create reading
corners for each classroom, and monetary donations were collected. The books were delivered and
the broadcast equipment was installed just before the end of 2020. In addition, the ASM China team
›› Water reduction in Phoenix, one of our locations most exposed to the effects of climate change.
raised an extra RMB20,000 ($3,000) in funds for the school.
needed updating; and
With this view, we are developing our climate strategy to include transitioning to renewable energy. We
In 2020, we donated to Terre des Hommes Netherlands, a non-profit organization that fights child
have mapped the renewable electrical options available to us at our manufacturing and engineering
exploitation.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Suppliers
Suppliers
SUPPLIERS
The complexity and technology needs of ASMI’s products continues to increase. Yet the time to
market to introduce these products to our customers is continually shrinking. Engaging, developing
and growing a robust supply chain is critical to compete in this challenging market. ASMI continues
to drive a global, high-quality, technology-leading supply chain that can support business needs from
New Product Introduction (NPI) through High Volume Manufacturing (HVM) and the Aftermarket.
The focus on continuous improvement programs, new tools to improve processes, and adherence
to changing policies and regulations are all part of how ASMI engages suppliers to enable it’s success.
56
GLOBAL SUPPLY CHAIN
ASMI’s goal is to build a global, world-class supply chain that enables our company to produce
ASMI is migrating from a supply chain that was geographically clustered around our global
engineering centers to a more centralized supplier base that can support our technology, capacity
the most technically advanced equipment in the market and provide our customers with the most
and capability needs. This means driving our spend to suppliers who are in the right regions and
technologically advanced products, services, and global support network, at a competitive cost of
countries to support our cost and quality goals, are close to manufacturing centers, and can grow to
ownership.
keep pace with increasing demand.
ASMI production activities focus on final assembly and hence rely on hundreds of suppliers across
Part of our supply chain management strategy also includes consolidating our supply base so
the globe to support the parts and services needed to produce our high-tech products. Having
we have fewer suppliers to manage while building closer partnerships with targeted suppliers.
a healthy supply chain is key to ensuring that ASMI can continue to challenge technical barriers and
This strategy also supports our other goals of driving commonality of materials and parts across
deliver high-quality products on time.
our product groups, which will give us the ability to scale more easily, create leverage with suppliers,
and create more flexibility by stocking fewer part numbers, as we continue to grow. We are moving
With design centers and manufacturing sites spread over six countries and on three continents, it is
to common metal materials for common parts, such as showerheads and chambers. Having fewer
important to have suppliers who can support engineering locally as well as provide HVM parts and
suppliers will also allow us to more easily share technology needs and get suppliers to engage
services for manufacturing and spares. We focus on continuing to partner with the right suppliers who
up-front in design for manufacturability opportunities.
have the scope to meet our full range of support, capacity and technical needs. This includes using
our global footprint to source based on best cost, quality and capacity to meet our growing demand.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE THE DIVERSE NATURE AND COMPLEXITY OF ASMI’S SUPPLY CHAIN SYNERGIS ALD
We are making an effort to increase our responsible business commitment with critical/strategic suppliers
that acknowledge the RBA Code of Conduct and conduct their business in accordance with those principles.
For the Synergis product we achieved a 94% spend percentage with those suppliers.
57
SYNERGIS
part suppliers
113
Percent of supply
chain spend with
RBA Code of
Conduct suppliers
94%
Total number
of RBA Code of
Conduct suppliers
48
SYNERGIS
ALD
600
62%
Number of parts
sourced from
RBA Code of
Conduct suppliers
14
SYNERGIS
part countries
of origin
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE RESPONSIBLE SUPPLY CHAIN
We hold our suppliers to the same high standard as ourselves, by requiring that they follow and
comply with the Responsible Business Alliance’s (RBA) Code of Conduct. Critical and strategic
suppliers are asked to conduct a self-assurance process and set objectives for RBA Code
acknowledgment, self-assessment, auditing, and corrective action processes that are consistent with
RBA requirements. In 2020, 79% of suppliers completed the RBA Self-assessment questionnaire
(RBA SAQ). The RBA Online platform has strict criteria for scoring questionnaires for supplier risk
level. Suppliers that complete the RBA SAQ and self-assess as high risk will be audited to identify
and resolve issues.
Our critical and strategic supplier requirements include their commitment to:
›› The RBA Code of Conduct;
›› ASMI’s Corporate Responsibility policy;
›› ASMI’s Environmental Health and Safety policy;
›› ASMI’s Code of Business Conduct;
›› ASMI’s Intellectual Property policies;
›› Hazardous materials identification regulations;
›› Conflict materials identification and disclosure; and
›› Global trade compliance and export controls.
58
These requirements are outlined on our public supplier management web page:
www.asm.com/about/supplier-management.
SUPPLIER MANAGEMENT FOR THE LONG TERM
We continue to pay close attention to critical and strategic supplier performance and adherence
to quality-, environmental-, and RBA standards. We have increased the frequency of supplier
audits, grown the number of supplier quarterly reviews, and revamped our supplier scorecards.
Additionally, we have expanded our formal commodity management process by part families and
added cross-functional participation from engineering and supplier development to ensure that the
strategies put forth support the needs of the business units beyond the short term.
We are continuing to strengthen our long-term relationships we have and are engaging industry
leaders to further enable our growth trajectory. It is clear we can go faster together by partnering
with the best suppliers in a given commodity or technology and have been able to accelerate our
development through these supplier engagements.
We also go beyond the RBA Code to partner with customers to map our contract manufacturer labor
In 2020, ASMI held a virtual Supplier Day on December 9, 2020. We invited 70 suppliers from across
sourcing process to prevent forced and bonded labor (FLBL). In 2020, we updated supplier maps
the globe to join us for this event. We hold the Supplier Day annually with our key suppliers and it
to include COVID-19 impacts on the migrant labor sourcing practices of our contract manufacturers.
is an opportunity for us to share ASMI’s business strategies and priorities. This includes a focus on
We completed mapping of key strategic suppliers’ foreign migrant workforce, including development
key areas such as technology, quality expectations and growth that are important for suppliers to
of action plans where risks may still exist.
understand and support for ASMI to be successful. Through this event, suppliers were able to hear
from our leadership team including the CEO, CVP of Operations, GM for PEALD and CVP of Spares
SUPPLIER EXPECTATIONS
We communicate our expectations and measure conformance to our expectations with our critical
& services to foster better relationships between companies. Three supplier awards were presented
during the day to recognize the suppliers’ high performance standards and outstanding support
and strategic suppliers. This approach manages our supply chain risks by focusing on the areas
of ASMI.
where a majority of our materials come from and where spending occurs.
Self-assessment questionnaire (SAQ)PHASE 2PHASE 1RiskassessmentPHASE 3Auditing/corrective actionsCRITICAL SUPPLIER CR STRATEGYRBACODE OF CONDUCTFINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 59
RISK ASSESSMENT
We operate globally and have partnerships with suppliers from more than 20 countries across Asia,
The quality and supply chain teams continuously evaluate all suppliers and select partners who
demonstrate the right combination of technical ability and commercial commitment for our common
North America, and Europe. We place high expectations on our supply chain when it comes to
success. Technical capability assessments screen suppliers prior to selection, and process control
operational flexibility and responsiveness, and together we must be prepared to respond quickly to a
audits ensure that products are delivered to our requirements. ASMI has continued remotely auditing
wide range of unplanned events. This requires working proactively with our supply chain partners to
all of our supply base until COVID-19 restrictions allow on-site auditing to resume.
ensure they are able to assess and manage risks.
Our supply chain risk management process consists of a combination of critical and strategic
data reviews culminating in corporate scorecard feedback. The PCS training ensures that supplier
supplier risk assessments, supplier self-assessments, RBA audits, and training and capability-
manufacturing processes are stable and documented. PCS also includes the standardization of
building activities to help our supply chain be both resilient and responsible. In that process, we
inspection methods and deployment of fixtures to guarantee global consistency. For key technology
consider significant changes, challenges (such as COVID-19) or trends that are impacting our global
suppliers delivering process critical parts, ASMI trains suppliers in statistical process control (SPC) to
supply chain. Consideration is also given to other suppliers that we are actively developing or that
reduce part-to-part variation. Once supplier manufacturing processes are ‘frozen’, suppliers review
have key capabilities.
SPC data in real time against established control limits to ensure that no excursions escape to our
Suppliers are trained in process control systems (PCS) and have periodic quality performance and
In addition to the aforementioned RBA Code and SAQ compliance, we actively engage our critical
customers.
and strategic suppliers to drive:
›› Business continuity planning;
›› Financial risk assessment; and
›› Strategic business reviews.
In 2020, we increased the number of suppliers on our ASCENT program to further improve our
supplier forecasting, collaboration, purchase order management and delivery commits. This is a big
step forward for us in further automating and digitizing our supplier communication and setting in
place the tools and access to real-time data to allow us to dramatically scale our business without
significantly increasing resources while ensuring more access to real-time data.
SUPPLIER DEVELOPMENT AND PERFORMANCE MANAGEMENT
As geometries continue to shrink, the emphasis on key technology suppliers and process control
ASMI will continue to build on the platform and will be digitizing more of our supplier communications
becomes even greater. ASMI works cross-functionally to develop future product requirement
and interactions. Things we will soon start adding to the ASCENT program include: first article
roadmaps and develop supplier technical capabilities proactively. The focus on quality is to ensure
inspection reports; statistical process control (SPC) reporting; secondary process controls; inventory
that wafer processing environments satisfy our customers’ needs for greater process control, which
sharing and forecast improvements.
leads to higher yield rates.
The operations engineering team continues to grow as a reflection of ASMI’s investment and
(COVID-19 impact), make suppliers more accountable for quality and delivery performance, PCS
commitment to total quality. The supplier technology team has added subject matter experts (SMEs)
alignment, and ensure compliance to safety, environmental, RBA and other compliance items. The
to define roadmaps and develop suppliers in thermal, quartz, ceramic and other key technology areas.
scorecards also now account for long-term commercial and capacity commitments from suppliers.
The supplier development and supplier quality engineering teams also continue to expand globally
We have also segmented the scorecards by part families and are using the scoring to promote or
near supplier and customer sites in order to control manufacturing processes, resolve issues quickly
demote suppliers within our current segmentation and framework.
In 2020, we also revamped and revised our supplier scorecard process to increase BCP visibility
and communicate results. All three teams work with our engineering, manufacturing engineering and
NPI teams to ensure that quality first mindset is designed into our products at every phase.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 60
A.S.C.E.N.T.
ASMI SUPPLY CHAIN
ENABLEMENT
& TRANSFORMATION
SUPPLY CHAIN SPEND BY REGION
4%
EUROPE,
MIDDLE EAST,
AFRICA
21%
NORTH
AMERICA
Automating and
digitizing our supplier
communication
Develop tools and access to
real-time data to dramatically
scale our business
Functionalities:
Forecasting
Collaboration
Purchase order management
On-time delivery
First Article Inspection reports
Statistical Process Control (SPC) reporting
Secondary Process controls
Inventory sharing and forecast improvements
75%
ASIA
PACIFIC
BCP IN ACTION
With the global pandemic affecting all countries where ASMI and its suppliers do business, 2020
was a time for ASMI to put its Business Continuity Plans (BCP) into action. Through strong, up-
front planning and supplier engagement, we were able to absorb government-imposed restrictions
due to COVID-19 in relatively good shape. While some supply chain delays were felt, especially
from suppliers in countries which took shut down measures, overall ASMI was still able to meet its
commitments to its customers.
The ability to overcome this global phenomenon was largely due to our close relationship with
key suppliers, dual sourcing capabilities, and strong understanding of potential risk and gaps that
would put our tools at risk. Additionally, ASMI benefited from strong processes such as supplier risk
monitoring, BCP tracking and executive alignment with suppliers. Constant reviews of country and
supplier impacts for workers, continual review of priorities and supplier capabilities, and our focus
on developing new avenues to meet our supply needs allowed us to keep up with business needs.
The global pandemic also revealed some deeper levels of risk management to historical BCP.
ASMI reached deep into the supply chain to uncover risk areas for even the most standard items
and processes to ensure continuity of supply and put measures in place to secure – or mitigate –
New additions
these risks.
These learnings on improving supplier risk management are included in our updated processes that
govern supplier management and monitoring.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 61
CONFLICT MINERALS AND HUMAN RIGHTS
Our programs focus on communicating our policy, training and surveying our critical suppliers, and
collecting supply chain sourcing information on the sources of tin, tantalum, tungsten and gold
RESPONSIBLE MINERALS SOURCING
We require all of our suppliers to source tin, tantalum, tungsten and gold (3TGs) responsibly, and to
(3TG) using the industry-standard RMI template, known as the Conflict Minerals Reporting Template
(CMRT). We are looking for opportunities to apply responsible sourcing practices to other materials
use certified conflict-free smelters using recognized certification organizations. Our goal is to trace
that are critical to the semiconductor industry. We actively engage with critical suppliers and conduct
3TG sourcing by all of our critical and strategic suppliers, ensure they are using only certified conflict-
due diligence based on OECD guidance.
free smelters, and confirm that our sourcing funds do not finance conflict in the covered countries.
Through active participation with RMI and the Responsible Labor Initiative (RLI), we monitor
After we complete our due diligence survey, we carry out detailed data verification and analysis with
developments on human rights and support programs to ensure the ethical treatment of labor.
identified smelters, which our suppliers source from. This process establishes traceability to the
smelters and confirms that the smelters identified are on the validated conflict-free smelters (CFS)
ASMI was an early signatory of the Women’s Rights and Mining statement on gender-responsive due
list published by the RMI. This helps us ensure that the products and components we source are
diligence and human rights of women in mineral supply chains (womenandmining.org).
DRC mineral conflict-free. Conflict minerals are those minerals mined in the Democratic Republic of
Congo (DRC) or adjoining countries. Profits from the sale of these minerals may directly or indirectly
benefit those involved in rebel conflicts and human rights violations. These minerals and the metals
PLANNING FOR A BRIGHT FUTURE
In 2021, ASMI will continue to invest in its people, tools, and supplier partnerships. This continuous
created from them – tin, tantalum, tungsten, and gold – can make their way into the supply chains of
investment is needed to meet not only our product needs, but also customer expectations.
products used around the world, including the semiconductor industry. As a responsible member of
Having parts within tolerance is no longer good enough. We need to work closely with suppliers
the global community, we have a strong commitment to preventing human rights violations.
to understand variance control within those tolerances and its impact on product performance.
OUR APPROACH
Our conflict minerals policy communicates our commitment to responsible sourcing. To enforce this
Our focus will be on expanding variation control, improving our global footprint, and providing
policy, we developed, and have been executing, our supply chain Conflict Minerals due diligence
additional supply chain tools to increase automation and visibility. We will also continue to add to
process annually since 2014 (ASMI conflict minerals policy).
our growing supplier-facing technical teams, further evolve our part family strategies, improve
Automating this feedback through various hardware and software investments is part of that growth.
our new product engagement with suppliers, and update the strategies needed to support
We joined, and are participating in, the widely-recognized Responsible Minerals Initiative (RMI).
after-market growth.
The RMI brings together the electronics, automotive, and other industries to jointly improve conditions
in the extractives industry (www.conflictfreesourcing.org).
ASMI will also continue to drive key supplier partnerships and engage industry-leading suppliers to
help us achieve our technical and product needs. We ensure we have the right capabilities and
We will continue our active participation in, and contribution to, the RMI and our engagement with
capacities to support our future growth plans, putting the right supply chain structure and planning in
other relevant stakeholders. These include the European Parliament and other international non-
place now to allow for smooth future ramps. And of course, we will ensure we have the right process
governmental organizations (NGOs) through our engagement with CFSI. Current information on
controls to meet increasing customer and industry demands.
the due diligence process and our policy can be found on our website in the supply chain section
under corporate responsibility (www.asm.com/about/corporate-responsibility/supply-chain). In 2021,
the European Union will introduce a regulation establishing supply chain due diligence obligations
for importers, based in the EU, of tin, tantalum and tungsten, their ores, and gold originating from
conflict-affected and high-risk areas.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Interview with the CFO
Interview with the CFO
INTERVIEW WITH THE CFO
Peter A.M. van Bommel
Chief Financial Officer
62
In the following interview Chief Financial Officer Peter van Bommel
discusses some of the key financial topics that impacted the company
in 2020 and comments on the policy for the use of cash.
“ SALES INCREASED TO
A NEW RECORD LEVEL
OF 1.3 BILLION EUROS.”
WHAT HAS BEEN THE EFFECT OF COVID-19, HAS IT IMPACTED
ASMI’S FINANCIAL RESULTS IN 2020?
Our key priority has been and continues to be the health and safety of our employees. In terms of our
operations, the most significant impact of COVID-19 for us was in the second quarter. The lockdown
measures in particularly Malaysia and Singapore in that quarter impacted several of our suppliers and
led to shortages and delays for certain parts. In addition, the border closure with Malaysia prevented
some of our employees from coming to work in our facility in Singapore.
Despite these challenges, our team and our suppliers delivered a fantastic job and we succeeded
in meeting customer demands. Towards the end of the second quarter, supply chain and logistical
conditions started to improve as lockdown measures were gradually lifted across the globe. In the
third quarter, supply chain conditions had largely normalized again.
The lockdown measures in Singapore also led to a delay in the construction work on our new
manufacturing facility, which we completed in the fourth quarter of 2020.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 63
From a demand perspective, COVID-19 did not have a negative impact in 2020, as our customers
SG&A expenses increased 6% in 2020. The increase was driven by higher variable expenses. In
continued to invest in the most advanced node capacity. While global economic growth dropped
addition, we made investments in specific organizational processes, to prepare our company for the
sharply and specific parts such as industrial and automotive end markets were impacted, the overall
next phase of growth. We will continue these investments in 2021.
semiconductor market showed a healthy increase of 7% in 2020. This increase was supported by
work-from-home and learn-from-home related demand in areas such as PCs, data centers and
Our operating profit increased strongly by 49%, with the operating margin improving from 19.5%
network infrastructure.
to 24.6%.
HOW WOULD YOU DESCRIBE ASMI’S FINANCIAL PERFORMANCE
IN 2020?
While COVID-19 turned 2020 into a year with many challenges for all of us, our company again
delivered a solid performance last year. Revenue (exclusive the IP settlements in 2019) increased by
18% to a new record level of €1.3 billion.
We benefited in 2020 from strong investments in the most advanced nodes in logic/foundry, which
Financial results were also impacted by negative currency effects, €23 million negative in 2020
compared to zero in 2019. We hold a large part of our cash balances in US dollars and the translation
effects are included in the financial results.
“ DURING 2020 WE FURTHER STEPPED UP
OUR EFFORTS IN ESG REPORTING.”
remains the most important driver for ASMI. Our ALD product line again recorded strong double-digit
During 2020 we further stepped up our efforts in ESG reporting. In this Annual Report we expanded
growth and continued to account for more than half of equipment revenue. Of note was also the
on the initiatives we have taken in this field, such as on the projects to reduce our water consumption
strong increase of 29% in our spares & services revenue, driven by increases in our installed base
and to improve the energy efficiency of our tools. Further improvements in our ESG reporting will
and the first results of our expansion into new outcome-based services.
remain an important focus in the coming years.
Our revenue increased despite a negative impact from currency changes, especially the depreciation
of the US dollar. The impact from negative currency changes, to a large extent the depreciation of the
US dollar, impacted particularly the latter part of the year. In the fourth quarter it negatively impacted
revenue by 5% year-on-year. As our currency exposure is fairly similar for revenue and expenses, the
impact is limited to translation effects.
“ WE INCREASED R&D SPENDING
BY 14% IN 2020.”
THE GROSS MARGIN HAS STRONGLY INCREASED IN THE
LAST COUPLE OF YEARS – WHAT CAN BE EXPECTED FOR
THE COMING YEARS?
Our gross margins increased in 2020 from 42.6% to 47.0%. This increase was in part driven by
an exceptionally strong revenue mix in Q2 and Q3, which boosted the margin in those quarters to
48.3% and 49.9%, respectively. In addition, the gross margin was also supported by effects of cost
reduction programs and efficiency improvements. Since we started to guide the market on gross
margins, we only deviated a couple of times from our structural targets. At the end of 2017 and early
2018, our margins dipped below 40% due to the effects of new product introductions, including the
On the back of an improving margin gross profit increased 30%. Note that these comparisons with
launch of our Intrepid epitaxy tool that period.
the previous year exclude the €159 million one-off settlement proceeds that positively impacted our
results in 2019.
In 2020, as just explained, the margin exceeded our targets in the second and third quarters on the
back of an unusually strong revenue mix. We continuously focus on our efficiency programs. In 2020,
We increased R&D spending by 14% in 2020. We will continue to drive R&D spending as we grow
for instance, we took further steps to increase the efficiency of our supply chain. This should gradually
our company. Including IFRS effects (capitalization, amortization and impairment), reported R&D
lead to a further improvement in our average gross margin. At the same time it is important to stress
increased by 25%, and included higher impairment costs compared to 2019 and an increase in
that the leverage in our gross margin is relatively limited. We have a largely outsourced business
amortization.
model. We only do the final assembly and testing in-house and that means our fixed costs only
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 64
represent a smaller part of the total cost of goods sold. For the first quarters of 2021, we indicated to
€100 million program was 64% completed. With the publication of our fourth quarter results on
expect a gross margin of above the mid-40’s percentage on the back of a positive mix.
February 25, 2021, we announced the proposal of a dividend of €2.00 per share to be paid over
CAN YOU COMMENT ON THE DEVELOPMENT IN THE CASH FLOW
IN 2020?
Free cash flow was again healthy at €119 million, even though lower compared to €206 million in
2019. Improvements in profitability were largely offset by higher working capital requirements, an
increase in capital expenditures and higher investments in evaluation tools. We stepped up capex
from €49 million to €95 million. Similar to 2019 a significant portion of spending was related to our
2020. This is a 33% increase compared to the regular dividend of €1.50 paid over 2019 (excluding
the extraordinary dividend of €1.50 per share).
PETER, YOU WILL BE RETIRING AT THE UPCOMING AGM
– HOW DO YOU LOOK BACK AT 11 YEARS AS CFO
AT ASM INTERNATIONAL?
When I started as CFO at ASMI in 2010, the semiconductor industry was recovering from the slump
new manufacturing facility in Singapore. This has been an important investment. The facility was
caused by the financial crisis. In that period, ASMI had just embarked on a restructuring program to
completed in the fourth quarter and will substantially increase our manufacturing capacity. In addition,
recover from a series of losses. In the subsequent years, we implemented further efficiency programs,
we increased our spending as part of the initiatives we announced earlier in the year to expand and
which brought ASMI to structurally higher gross margins. At the same time, as the semiconductor
upgrade our R&D labs. For 2021, we will maintain capex at a higher level due to the lab-related
industry moved to more advanced nodes, we substantially expanded our position in the growing ALD
investments in measurement equipment and our own tools to facilitate new product opportunities.
market. In the years that followed, we solidified our leadership and achieved all of the top-10 capex
The working capital in 2020 showed a lower inventory development, despite the higher activity level.
healthy cash flow, freeing up funds to reinvest in the growth of our company. An important event has
While inventories increased in the second quarter, as we built up inventory of raw materials in view of
also been the reduction in our stake in ASMPT. We keep a minority stake for strategic reasons but
the COVID-19-related supply chain risks, by the end of the year our inventory levels were normalized
the reductions in 2013 and again in 2017 helped to bring attention to the strong improvements in our
again. The increase was due in full to higher accounts receivables. We expect this to reverse in the
Front-end operations, which in turn drove substantial increases in our company’s value.
spenders as customers. The increase in profitability and improvement in working capital generated a
first quarter of 2021. The underlying quality of accounts receivables remained healthy as illustrated by
the low percentage of receivables that are overdue at the end of the year.
“ OUR NEW FACILITY IN SINGAPORE
WILL SUBSTANTIALLY INCREASE
OUR MANUFACTURING CAPACITY.”
“ ASMI HAS SOLID OPPORTUNITIES FOR
FURTHER GROWTH AHEAD.”
Over the years, we built a strong financial framework and implemented significant improvements in
our risk management systems and processes. I’m pleased that ASMI in the last eleven years only
had to issue a profit warning once, and that was a positive one, in January 2020 when our order
intake substantially exceeded the guidance that we had provided to the market. I’m also proud of the
WHAT IS ASMI’S POLICY FOR THE USE OF EXCESS CASH?
Our policy has been very consistent. We used excess cash for the benefit of shareholders. Since
strong team we have built at ASMI over the years. We will only succeed when we all act together as
one team. ASMI has solid opportunities for further growth ahead. In the fast changing semiconductor
2010, we have returned more than €1.9 billion in different forms to the financial markets. In 2020,
sector, it is key to constantly strengthen our capabilities and drive investments in innovation to
we distributed €165 million to our shareholders. After an interim dividend payment of €50 million
tap into the tremendous opportunities ahead of us. I’m confident that ASMI is well positioned for
in November 2019, we paid out an additional €25 million as a normal dividend, as well as an
continued healthy growth.
extraordinary dividend of €74 million in 2020. Besides that, we spent €67 million on share buybacks.
In June 2020, we started our seventh share buyback program, and at the end of 2020, this
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE GOVERNANCE
65
CORPORATE GOVERNANCE
At ASMI, we believe good corporate governance is a vital part of our
culture, behavior and management, and aligns with our core values.
Our corporate governance is supported by a strong focus on integrity,
transparency, and clear and timely communication. At the same time,
we endeavor to ensure that our policies and procedures comply with
both applicable Dutch corporate governance requirements, and the
relevant laws.
TRANSPARENT PROCESSES
Our corporate governance framework supports our business and meets the needs
of our stakeholders. We achieve this by setting up transparent processes and
following internal policies and procedures that comply with applicable Dutch corporate
governance requirements.
Corporate governance
CSR governance
Risk management
Management Board
Supervisory Board
Supervisory Board report
Remuneration report
External auditor
Declarations
66
69
74
80
82
87
90
97
98
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Corporate governance
Corporate governance
66
CORPORATE GOVERNANCE
Good corporate governance is about applying sound business practices. At ASMI we do business in an ethical
and transparent manner. We achieve this by setting up transparent processes and following internal policies and
procedures that enable us to operate in the best interests of all our stakeholders, and which comply with applicable
Dutch corporate governance requirements.
Corporate governance-related documents are available on our website (www.asm.com/investors/
corporate-governance/policies), including:
›› Supervisory Board profile;
›› Supervisory Board rules;
›› Management Board rules;
›› Audit Committee charter;
›› Nomination, Selection and Remuneration
Committee charter;
›› Remuneration policy;
›› Code of Business Conduct;
›› Whistleblower policy;
›› Anti-fraud policy; and
›› Rules concerning insider trading.
HIGH STANDARD OF CORPORATE GOVERNANCE
ASMI aspires to high standards of corporate governance and ethics practices. Sound corporate
governance is a key component of our culture, behavior, and management, and this is consistent
with our core values. Our corporate governance is supported by a strong focus on integrity,
transparency, and clear and timely communication. We endeavor to ensure that our policies and
procedures comply with both applicable Dutch corporate governance requirements, and all relevant
laws. Furthermore, our corporate governance structure supports our business and meets the needs
of our stakeholders.
CORPORATE GOVERNANCE FRAMEWORK
The corporate governance framework describes how ASMI’s strategy, mission, vision and objectives
are embedded across the organization. Our Code of Business Conduct (COBC) sets clear standards
in different areas of business life. It’s purpose is to provide a clear, strong, and consistent culture of
ethics that applies to all who work at ASMI.
ASMI’s policies and regulatory framework guide how we work. Key components are our financial,
IT, product safety, environment, health and safety (EHS), compliance, corporate social responsibility,
and business continuity frameworks. These are supported by transparency and accountability
through our monthly business review cycle, our internal control framework, and our performance
management cycle.
Our risk management approach enables us to identify and manage the strategic, operational,
financial, and compliance risks to which ASMI is exposed. In addition, it helps us develop even more
effective and efficient operations and it promotes reliable financial reporting and compliance with laws
and regulations, increasing transparency and accountability.
missionOBJECTIVESVISIONSTRATEGY MANAGEMENT BOARD, SUPERVISORY BOARD AND COMMITTEESVALUES AND ETHICSPOLICIES & REGULATORY FRAMEWORKTRANSPARENCY ANDACCOUNTABILITY RISK AND PERFORMANCEMANAGEMENTMONITORING AND INTERNALCONTROLCORPORATE GOVERNANCE FRAMEWORKCORPORATEGOVERNANCEmissionOBJECTIVESVISIONSTRATEGY MANAGEMENT BOARD, SUPERVISORY BOARD AND COMMITTEESVALUES AND ETHICSPOLICIES & REGULATORY FRAMEWORKTRANSPARENCY ANDACCOUNTABILITY RISK AND PERFORMANCEMANAGEMENTMONITORING AND INTERNALCONTROLCORPORATE GOVERNANCE FRAMEWORKCORPORATEGOVERNANCEFINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 67
COMPANY STRUCTURE
ASMI is a publicly listed company established under Dutch law. The company’s management
ASMI SHARES
ASMI's common stock trades on the Euronext Amsterdam Stock Exchange (symbol: ASM) and
and supervision structure is organized in a two-tier system, comprising a Management Board,
ASMI is required to comply with the Dutch Corporate Governance Code (the Code). ASMI common
composed of executive directors, and a Supervisory Board, composed of non-executive directors.
shares, which are held in the United States as New York Registry Shares, are eligible for trading on
The company’s Management Board has ultimate responsibility for the overall management of ASMI.
the OTC Market.
The Management Board is supervised and advised by an independent Supervisory Board. The
Management Board and the Supervisory Board are accountable to ASMI’s shareholders.
ANNUAL GENERAL MEETING OF SHAREHOLDERS
ASMI shareholders exercise their rights through Annual and Extraordinary General Meetings of
FRONT-END OPERATIONS
We conduct our Front-end business through wholly-owned subsidiaries, the most significant being
Shareholders. ASMI is required to convene an Annual General Meeting of Shareholders (AGM) in
the Netherlands each year, no later than six months after the end of the company’s financial year.
ASM Front-end Manufacturing Singapore Pte Ltd (FEMS), located in Singapore; ASM Europe BV
Additional Extraordinary General Meetings of Shareholders may be convened at any time by the
(ASM Europe), located in the Netherlands; ASM America Inc (ASM America), located in the United
Supervisory Board or the Management Board.
States; ASM Japan KK (ASM Japan), located in Japan; and ASM Korea Ltd (ASM Korea), located in
South Korea. The location of our facilities allows us to interact closely with customers in the world’s
The convocation date is legally set at 42 days prior to the date of the AGM.
major geographical market segments: Europe, the United States, and Asia.
BACK-END OPERATIONS
Our investment in ASM Pacific Technology (ASMPT) represents the Back-end business. The
Back-end operations are conducted through facilities in Hong Kong, the People's Republic of China,
Singapore, Malaysia, and Germany. Our shareholding per December 31, 2020 in ASMPT is 25.07%.
ORGANIZATION STRUCTURE
ASM INTERNATIONAL N.V.
Headquarters: Almere, the Netherlands
The record date is legally set at 28 days prior to the date of the AGM. Those who are registered as
shareholders at the record date are entitled to attend the meeting and to exercise other shareholder
rights. Shareholders may be represented by written proxy.
PUBLICATION IN ENGLISH
The Annual Report, the Financial statements and other regulated information such as defined in
the Dutch Act on Financial Supervision ('Wet op het financieel toezicht'), will solely be published in
English on the company's website (www.asm.com).
The draft minutes of the AGM are available on the company's website no later than three months
after the meeting. Shareholders may provide their comments in the subsequent three months.
Thereafter, the minutes are adopted and published on the company's website (www.asm.com/
investors/investor-library).
FRONT-END
Wafer processing
BACK-END
Assembly & Packaging / 25.07% ownership
ASM Pacific Technology Ltd
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 68
2020 AGM OF ASMI
ASMI held its AGM on May 18, 2020. In relation to the COVID-19 outbreak, the health risks and the
STICHTING CONTINUÏTEIT AGREEMENT
ASMI is party to an agreement with Stichting Continuïteit ASM International (Stichting), pursuant
measures and restrictions imposed by the Dutch government, and on the basis of the Temporary Act
to which the Stichting is granted an option to acquire up to a number of our preferred shares
COVID-19, the meeting was virtual. Shareholders were given the opportunity to vote through two
corresponding with a total par value equal to 50% of the par value of our common shares issued and
means: (i) by providing – as in the previous AGMs – a power of attorney with voting instructions prior
outstanding at the date of the exercise of the option. The Stichting is a non-membership organization
to the AGM; and (ii) by voting electronically during the meeting. The attendance rate was 66.05%
organized under Dutch law. The objective of the Stichting is to serve the interests of the company.
of the total issued share capital of ASMI as per the registration date. In line with the ASMI Boards
For that objective, the Stichting may, among other things, acquire, own, and vote on preferred shares
recommendations, the shareholders approved all resolutions as proposed to the AGM. The voting
in order to maintain our independence and/or continuity and/or identity.
results and the minutes of the AGM are published on the company's website (www.asm.com/
investors/investor-library).
VOTING RIGHTS
In the AGM, each ordinary share with a nominal value of €0.04 entitles the holder to cast one vote,
each financing preferred share with a nominal value of €40.00 entitles the holder to cast one
The members of the Board of the Stichting are:
›› Dick Bouma (Chairman), Retired Chairman of the Board Pels Rijcken & Droogleever Fortuijn;
›› Rob Ruijter, former Chairman of the Supervisory Board Delta Lloyd; and
›› Rinze Veenenga Kingma, President Archeus Consulting BV.
thousand votes, and each preferred share with a nominal value of €40.00 entitles the holder to cast
The purpose of the above mentioned option is to protect the independence, the continuity and
one thousand votes. Treasury shares held by the company cannot be voted on. The authorized
the identity of ASMI against influences that are contrary to the interests of ASMI, its enterprise and
capital of the company amounts to 82,500,000 common shares of €0.04 par value, 88,500 preferred
the enterprises of its subsidiaries and all stakeholders.
shares of €40 par value and 6,000 financing preferred shares of €40 par value. Per December 31,
2020, there were 49,797,394 common shares issued and fully paid.
No preferred nor financing preferred shares were issued on December 31, 2020. Financing preferred
shares are designed to allow ASMI to finance equity with an instrument paying a preferred dividend,
linked to EURIBOR loans and government loans, without the dilutive effects of issuing additional
common shares.
PREFERRED SHARES
Preferred and financing preferred shares are issued in registered form only and are subject to transfer
restrictions. Essentially, a preferred or financing preferred shareholder must obtain the approval of the
company's Supervisory Board to transfer shares. If the approval is denied, the Supervisory Board will
provide a list of acceptable prospective buyers who are willing to purchase the shares at a cash price
to be fixed by consent of the Supervisory Board and seller within two months after the approval is
denied. If the transfer is approved, the shareholder must complete the transfer within three months,
POWERS
The powers of the AGM are defined in our Articles of Association. The main powers of the
shareholders are to:
›› Appoint, suspend, and dismiss members of the Management Board and Supervisory Board;
›› Approve the financial statements;
›› Declare dividends;
›› Discharge the Management Board and Supervisory Board from responsibility for the performance
of their respective duties for the previous financial year;
›› Appoint the external auditors;
›› Approve amendments to the Articles of Association;
›› Authorize the Management Board to issue shares and grant subscriptions for shares;
›› Withdraw preemptive rights of shareholders upon issuance of shares;
›› Authorize the Management Board to withdraw preemptive rights of shareholders upon issuance of
at which time the approval expires.
shares; and
›› Authorize the Management Board to repurchase or cancel outstanding shares.
Preferred shares are entitled to a cumulative preferred dividend based on the amount paid-up on
such shares. Financing preferred shares are entitled to a cumulative dividend based on the par value
and share premium paid on such shares.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE CSR governance
CSR governance
CSR GOVERNANCE
For over 50 years we have helped the industry create smaller and more powerful microchips. Our focus is on
continuing to help our customers achieve critical technology and productivity improvements and productivity
improvements responsibly, striving to reduce our impact on the environment, and positively contributing to society.
ASMI MISSION
CR VISION
CR STRATEGY
areas, which constitutes the majority of our non-financial reporting, is further supported by policies,
MANAGE ALL ASPECTS OF OUR BUSINESS RESPONSIBLY
Our corporate responsibility (CR) policy establishes our commitment to and expectations regarding
health and safety, the environment, labor, ethics, and supply chain management. Each of these
69
Our mission is to provide
our customers with the
most advanced,
cost-effective, and
reliable products,
services and global
support network in the
semi conductor industry,
and beyond.
As a truly global citizen,
our vision of ZERO HARM!
means we strive to reduce
our impact on the
environment, and positively
contribute to society.
››
››
››
Continue our strong focus on
R&D and innovation to create
value for society through
technology.
Manage all aspects of
our business responsibly
to meet or exceed
stakeholder expectations.
Hold our critical suppliers to
the same standards that we
hold ourselves to.
programs, systems, and metrics to ensure that we meet our long-term objectives. The full text of our
corporate responsibility policy is available on our website:
www.asm.com/about/corporate-responsibility.
The Management Board is responsible for the CR policy and is supported by the Corporate Vice
President of Operational Excellence, who has overall responsibility for corporate responsibility.
The CR team is responsible for establishing ASMI’s goals implementation plans, and monitoring the
progress of our internal targets.
We adopted the Responsible Business Alliance (RBA) Code as our code of conduct in 2012, and
made it our supply chain code of conduct in 2014. We became a member of the RBA in 2020,
further strengthening our commitment to ethical and responsible business practices. The RBA Code
evolves, typically every three years, to cover the most recent developments in responsible business
practices, and follows multiple international expectations and standards, including:
›› The OECD Guidelines for Multinational Enterprises;
›› The Universal Declaration of Human Rights; and
›› The ILO International Labor Standards and International Organization for Standardization (ISO).
In 2020, we co-proposed with three other companies to add Living Wage as an amendment to
the RBA Code of Conduct. While the proposed amendment was not adopted in the latest version
of the Code, we will continue to work with the RBA and its members on this and other important
topics affecting ESG across the industry. All key ASMI sites participated in the RBA Self-Assessment
Questionnaire (SAQ) and were assessed as low risk.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 70
MATERIALITY ASSESSMENT
Our materiality assessment process provides us with the opportunity to continually evaluate if our
R&D investment, which result in patents and intellectual property, are assets protected by legal
strategies and objectives are aligned with our stakeholders and overall importance to our business.
agreements and information security systems. Protecting these investments help drive company
Our process follows the sustainability materiality steps and matrix based on the Global Reporting
financial health through product development and customer confidence.
Initiative’s (GRI) G4 sustainability reporting framework. Our materiality assessment process engages
select customers, investors, all of our employees, and key non-governmental organizations (NGOs).
All aspects in the materiality assessment are monitored and rated with respect to current and future
risks and global trends. For example, we recognize that climate change, resource conservation, and
The aspects in the top-right of the chart below are referred to as ‘primary aspects’ in this report, and
water management are critical aspects of preserving natural capital. Their inclusion means that we
are considered strategic to our business.
continue to strive for improvements with a positive environmental impact.
8
1
10
5
11
9
17
7
2
15
13
24
6
3
18
20
19
4
21
S
R
E
D
L
O
H
E
K
A
T
S
R
U
O
O
T
E
C
N
A
T
R
O
P
M
I
12
22
14
16
23
ECONOMIC
SOCIAL
1 Company financial health
2 Innovation and
R&D investment
7 Stakeholder engagement
8 The Code of Business
Conduct (COBC)
3 Business risk and business
continuity (BCP)
4 Product life
cycle management
5 Protecting and using
intellectual property
6 Maximize shareholder ROI
9 Customer partnership
10 Attracting, developing
and retaining talent
11 Employee health and safety
12 Diversity
13 Employee relations and
workplace vitality
14 Community engagement
15 IT security
16 Corporate philanthropy
ENVIRONMENTAL
17 Product safety and
environmental compliance
18 Supplier responsibility and
RBA code of compliance
19 Supplier EHS (supply chain
responsibility)
20 Hazardous substance
management
21 Climate change (energy
use and GHG reduction)
22 Recycling/reuse
23 Water usage/recycling
24 Product services and
support
RELEVANT IMPACT TO OUR BUSINESS
Note: Those aspects in the top-right segment of the chart are referred to as ‘primary aspects’ in this report.
Our materiality and risk assessment processes have led us to focus on issues that we can influence the most.
Below are the five United Nation's Sustainable Development Goals (SDGs) that we have selected:
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
71
The table below provides an overview of the primary aspects and their related strategies.
Primary aspects
(reference chapter)
ECONOMIC
1 Company financial
health (Financial
statements)
2 Innovation and
R&D investment
(Breakthrough
technologies)
5 Protecting and using
intellectual property
(Risk management)
SOCIAL
8 The Code of Business
Conduct (COBC)
(Employees)
9 Customer partnership
(Customer feedback)
10 Attracting, developing,
and retaining talent
(Employees)
11 Worker health and
safety (Employees)
15 IT security
(Risk management)
ENVIRONMENTAL
ENVIRONMENTAL
17 Product safety
and environmental
compliance
Our strategies
Setting strategies,
steering and controls New in 2020
Result/stakeholders’ impact
›› Realize profitable, sustainable growth through innovation
›› Maintain technology leadership in deposition
›› Invest in and develop new applications to support our
customers with increasing technology requirements
›› Leverage our strong technology expertise to enhance
customer/stakeholder relationships
›› Create a company culture and environment for innovation
and patent creation with strong IP protection programs
›› Management meetings
›› Key customer meetings
›› Market assessments
›› Business unit/operational
reviews
›› Technical steering meetings
›› IP reviews
›› Enhanced R&D tollgate process
›› Additional R&D pipeline controls to increase
focus and ensure completeness of information
›› Further strengthened internal protection of
IP by strengthening need-to-know assignment
and controls
›› Improved marketing to better understand
customer investment plans and industry trends
›› Increased R&D effectiveness,
efficiency, and controls
›› Further improved IP protection
›› Customers able to meet their
technology and operational
objectives
›› We use performance evaluation, succession planning,
and employee learning and development programs
›› Establish leadership academy to ensure our leadership
pipeline and stay competitive in labor markets
›› We partner closely with select top universities globally
for technology development and recruitment
›› Conduct business according to ethical and professional
›› Global EHS and Product
Safety Leader teams
›› Global employee
engagement
›› Global Human Resources
›› Global IT
›› Ethics Committee
standards
›› Implement COBC, CR policy, and commitment to RBA
Code of Conduct
›› Secure IT systems
›› COVID-19 pandemic response management
›› Ensuring safety and business
to ensure safety and business continuity
›› Updated COBC and training to facilitate
implementation
›› Launched ‘the Power of an Open Mind’
program and employee engagement survey
›› Raised vigilance, employee awareness to, and
protections from phishing campaigns relating
to COVID-19 and work from home situations
›› Enhanced critical applications and cloud
security postures, and further improved
capability toward zero-day attacks
continuity
›› Strengthen business ethics and
the Code of Business Conduct
compliance
›› Meaningful further development
of Human Capital
›› Increased IT and Cyber security
and IP protection
›› Reduce overall risk of exposure with focus on high risk
activities and functions, including labs, manufacturing
and service
›› Product Compliance Team and embed requirements
in KPUs and PLC
›› Safety leadership collaborations
›› Safety Steering Committee
›› Global EHS and Product
Safety Leaders
›› Global Facilities teams
›› Product Life Cycle (PLC)
process and governance
›› Key Product Units (KPU)
engineering
›› Safety Incident Reporting
(SIR) feedback mechanism
›› Further R&D lab, manufacturing, and
service safety improvements
›› Further focus on product environmental
impact improvement
›› Strengthened product safety governance
›› 3rd party support for product content
screening
›› Recognized by key customers
as an industry safety leader
›› Customer environmental impact
reduction
›› Improved first-time-right product
development compliance to standards
›› Reduced occupational hazard
exposure
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 72
STAKEHOLDER ENGAGEMENT AND INDUSTRY ESG COLLABORATIONS
We regularly engage with appropriate stakeholders to improve and mature as a business. The table below provides examples of how we
consider stakeholder input and feedback to improve our strategies, objectives, and ultimately our performance.
KEY STAKEHOLDER ENGAGEMENT METHODS AND BENEFITS
Shareholder
Customers
Investors
Employees
Engagement method
Feedback
Outcome
Direct customer meetings and supplier
development sessions (recurring).
Systematic inputs to improve the structural maturity and
operational performance of the company.
Higher scores on supplier maturity scales with key customers.
Strengthens our policies, procedures, and activities.
Direct meetings (recurring).
Periodic surveys of all employees:
Safety and CR/ESG.
Increasing importance of CR/ESG.
Insight to their priorities.
Informing our current and future priorities and plans.
Safety survey of R&D lab, manufacturing, and service
personnel validates progress and identifies opportunities
to further improve.
Further improved safety culture dialogue.
Better visibility of safety improvement projects.
Increased action to address ergonomic risks.
NGOs
Direct meetings.
Insight to their future priorities.
Initiated Climate Adaptation Risk and Opportunity Assessment.
Informing our future focus areas.
Industry consortium and partners
R&D partnership with imec
University of Helsinki partnership.
Cooperation and bilateral research activities.
Additional ALD, PEALD, epitaxy and CVD capability.
CR/ESG survey engages employees to understand their
interests and priorities.
Employees stated CR/ESG very important to them, and
want to further engage.
We engage with sustainable development non-governmental organizations (NGO) such as the
As part of our transparency commitment within the RBA supply chain, in 2020 we hosted a customer
Carbon Disclosure Project (CDP), a non-profit organization that helps companies and cities
audit at our South Korea manufacturing and R&D site to assess site compliance to the RBA Code of
document and disclose their environmental impacts, and the VBDO (Dutch Association of Investors
Conduct. We passed the audit with no major findings.
for Sustainable Development). We have participated in the Transparency Benchmark, a bi-annual
assessment held amongst the largest companies in the Netherlands and aims to measure their
Additionally, we have completed multiple customer and other parties’ ESG questionnaires and shared
transparency in reporting on corporate social responsibility. The benchmark is used by the Dutch
our CDP results with our RBA and non-RBA customers.
Ministry of Economic Affairs to assess and drive adoption of sustainable investment best practices.
In addition, we engage with prominent ESG leaders on the most important issues to influence
collaborate with other organizations to broaden our influence and impact, and support our ambitions
positive change, starting in our own industry. We collaborate with our key customers in developing
to be an industry leader in sustainability.
We also became a member of BSR, a leading global nonprofit organization, to establish new ways to
our ESG roadmap, including being a select member of the key customer Corporate Responsibility
Leader program and identification and elimination of forced labor/bonded labor in our global supply
chain. In the past year, we partnered with both customers and competitors through the SEMI MOD
Work Group to encourage and grow diversity of supply for the semiconductor industry.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
73
TAX PRINCIPLE
We view tax as an integrated part of doing business and that tax should follow business. The
TAX STRATEGY
A tax control framework is in place. As part of this, we continuously monitor our tax positions and tax
respective taxes are determined and paid in the countries where the respective value is created,
developments. As part of ASMI’s tax strategy, the tax department recommends a balanced approach
in accordance with all relevant rules and regulations. Reference is made to Note 22 of this Annual
in the interest of all stakeholders, while adhering to ASMI’s tax policy and complying with all relevant
Report in which the total tax paid in the Netherlands and abroad is reflected. Tax is among the
tax laws and regulations. ASMI’s tax department is responsible for tax management and is supervised
elements that we take into account while doing business, including the locally available tax incentives
by the Management Board via the CFO, who discusses the tax strategy with the Audit Committee
and exemptions. We seek to establish and maintain an open and constructive relationship with tax
of the Supervisory Board. In line with our tax principles, we do not use artificial tax structures
authorities in the countries in which we operate. A tangible example thereof would be the bilateral
solely aimed at tax avoidance, nor do we use tax havens or non-cooperative jurisdictions to avoid
advance tax agreements (BAPA) that have been concluded with tax authorities in significant countries.
transparency on our tax position. ASMI proactively engages with tax authorities, and tax exposures
We do not use artificial tax structures aimed at tax avoidance. We aim to follow both the letter as well
(if any) are contained and under control. For specific transactions and/or a specific approach, for
as the spirit of the law.
example with respect to the application of the at arm’s length principle in transfer pricing matters, we
may seek upfront certainty by requesting a tax ruling from the respective tax authority, as we believe
We apply the arm’s length principle to determine transfer prices in accordance with domestic and
such certainty is valuable for our stakeholders, including the respective tax authority.
international rules and standards, such as the OECD guidelines for multinational enterprises. Our
disclosures are made in accordance with the relevant local and/or international regulations and
guidance, based on all the relevant facts and circumstances.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Risk management
Risk management
74
RISK MANAGEMENT
In 2020, COVID-19 pandemic has shown that not all risks can be foreseen, reiterating the importance of a robust and proactive
approach to risk management. Our internal risk management and control framework enables identification of risks that may
impact us and opportunities that could enable further growth, and the ability to take initiatives accordingly. In addition to instilling
a proactive methodology to monitor and act on key risks, we are more clearly aligning our top-down risk assessment to our
business processes to enhance our risk management intrinsically.
MANAGEMENT BOARD
FIRST LINE OF DEFENSE
SECOND LINE OF DEFENSE
THIRD LINE OF DEFENSE
OWNERSHIP & MANAGEMENT
RISK & CONTROL FUNCTIONS
INDEPENDENT OBJECTIVE
ASSURANCE
BUSINESS & OPERATIONS
MANAGEMENT
OVERSIGHT FUNCTIONS
INTERNAL AUDIT
RISK MANAGEMENT APPROACH
ASMI’s risk management approach is based on the Committee of Sponsoring Organizations’ (COSO)
reference model and is an integral part of our Corporate Governance Framework which, describes
how our strategy, mission, vision, and objectives are embedded across the organization.
The objective of the risk management approach is to identify and manage the strategic, operational,
financial, and compliance risks to which ASMI is exposed. In addition, it enables us to improve
effectiveness and efficiency in our operations and it promotes reliable financial reporting and
compliance with laws and regulations.
We assess the risks that could impact achievement of our strategic objectives annually at a
consolidated level (top-down approach) and on a process level (bottom-up approach). If necessary,
we implement countermeasures to mitigate the risks within the defined risk appetite, and integrate
these countermeasures in our risk management and control framework.
In addition, to proactively monitor and act on key risks as a result of COVID-19 in 2020, we further
strengthened the alignment between the top-down risk assessment and our primary processes. We
also continued our focus on enhancement of our bottom-up processes to identify process risks and
mitigating actions.
Business management provides the Management Board with an annual assurance letter regarding
the reliability of their financial reporting, the effectiveness of their internal controls, risk management,
and compliance with internal policies and laws and regulations.
RISKASSESSMENTRISKMANAGEMENT STRATEGY &OBJECTIVESETTING RISK MANAGEMENT APPROACHMONITORINGACTIVITIESCONTROLACTIVITIESRISKRESPONSEFINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 75
Our risk management and internal control activities are organized through the three lines of defense
The nature of the risk is a key determinant of our risk appetite:
model; the Management Board is ultimately responsible for risk management and compliance in line
with the risk appetite and is supported by:
›› First line of defense: Business and operations management owns and manages risk, which
includes identifying, assessing, controlling, and mitigating risks;
›› Second line of defense: Oversight functions support business and operations management and
help ensure that the risk and control procedures have effective metrics and are operating as
intended; and
›› Third line of defense: Internal Audit provides independent objective assurance on the
effectiveness of governance, risk management, and internal controls, including the manner in which
business and operations management and the oversight functions manage and control risk.
Internal Audit brings a systematic, disciplined approach to evaluate and improve the effectiveness
STRATEGIC RISKS
RISK APPETITE
Strategic risks and opportunities may affect
ASMI's strategic objectives. Strategic risks
include economic, environmental and
political developments, and the need to
anticipate and respond in a timely manner
to market circumstances.
We are willing to accept reasonable risks in
a responsible way to achieve our strategic
ambitions and priorities. Innovation will drive future
growth, and as a result we are willing to take
a higher risk in our longer-term growth areas,
such as ALD and epitaxy products.
of risk management, control, and governance processes.
OPERATIONAL RISKS
RISK APPETITE
RISK CULTURE
ASMI strives for a culture of openness and transparency in which identified risks are disclosed
proactively and unexpected events are reported as soon as they occur. Through the risk committee,
periodic control self-assessments, and a focus on aligning our top-down risk assessment to our
business processes, we are continually increasing risk awareness to make it an integral part of
the company culture and our primary processes. Our Code of Business Conduct (COBC) applies
to all ASMI employees and temporary staff, and describes how we work in an open, transparent,
honest, and socially responsible way. The COBC was updated in 2020 and the effectiveness of,
and compliance with, the Code is enabled through annual online training and assessed by actively
detecting and investigating any alleged misconduct and taking appropriate disciplinary action if
misconduct is substantiated.
RISK APPETITE
Undertaking business activity inevitably leads to taking risks. Each type of risk encountered is dealt
with in a manner that matches the risk appetite established by the Management Board. Risk appetite
is the level of risk we deem acceptable to achieve our objectives. ASMI’s risk appetite is primarily
determined based on the defined and agreed strategic plan and the individual objectives within this
plan. The risk appetite is further guided by our COBC as well as detailed policies and procedures.
The risk appetite is the total residual impact of the risks that ASMI is willing to accept in the pursuit of
its objectives. The risk appetite per objective or risk area is set annually by the Management Board
and is evaluated on an ongoing basis as events occur throughout the year.
Operational risks cover adverse
developments resulting from internal
processes, people, and systems, or from
external events related to our business.
We avoid risks that can negatively impact our
operational goals while ensuring that our
environmental, social, and corporate governance
(ESG) commitments are met. ASMI has a very low
risk tolerance related to people safety and product
safety, and associated compliance risks. We strive
for ZERO HARM!
FINANCIAL RISKS
RISK APPETITE
Financial risks include risks related to
accounting and reporting, tax, and other
elements that impact our financial position.
We avoid risks that could jeopardize the integrity
of our reporting, and/or the financial sustainability
of the company needed to achieve the objectives.
COMPLIANCE RISKS
RISK APPETITE
Compliance risks consist of unanticipated
failures to implement or comply with
relevant laws and regulations.
We strive for full compliance with our COBC and
national and international laws and regulations of
the markets in which we operate. We have a
zero-tolerance approach to bribery and corruption,
fraud, and all other forms of illegal misconduct.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
CONTROL EFFECTIVENESS STATEMENT
The Management Board is responsible for ASMI’s internal risk management and control framework.
All internal control systems, no matter how well designed and implemented, have inherent limitations.
This system is designed to manage the main risks that may prevent ASMI from achieving its objectives.
Even systems determined to be effective may not prevent or detect misstatements or fraud, and can
The internal risk management and control framework, and the evaluation of the effectiveness of our
only provide reasonable assurance with respect to disclosure and financial statement presentation
internal controls and areas for improvement, are regularly discussed with the Audit Committee and
and reporting. Additionally, projections of any evaluation of effectiveness to future periods are subject
KPMG Accountants, our external auditor. The Audit Committee reports on these matters to the
to the risk that controls may become inadequate due to changed conditions and that the degree of
Supervisory Board.
compliance with the policies or procedures may deteriorate.
The Management Board conducted an assessment of the design and operating effectiveness of the
In view of all of the above, the Management Board believes that it complies with the requirements of
internal risk management and control framework. Based on this assessment and the current state of
best practice provisions 1.2 and 1.4 of the Dutch Corporate Governance Code.
76
affairs, to the best of its knowledge and belief, the Management Board confirms that:
›› The internal risk management and control framework provides reasonable assurance for the
reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with Generally Accepted Accounting Principles;
›› The management report includes a fair review of the development and performance of the business,
and the position of the company and the undertakings, included in the consolidation as a whole, as
well as a description of the principal risks and uncertainties that the company faces;
›› There are no material risks or uncertainties that could reasonably be expected to have a material
adverse effect on the continuity of ASMI’s operations in the coming twelve months; and
›› There is a reasonable expectation that ASMI will be able to continue its operations and meet its
liabilities for at least twelve months, therefore it is appropriate to adopt the going concern basis in
preparing the financial reporting.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE RISK CATEGORIES AND FACTORS
The risks detailed below are material risks that could impact our ability to achieve our objectives. Some
apparent. Our risk management approach enables us to monitor risks and risk development and take
of these risks relate to our operational processes, while others relate to our business environment. It is
appropriate action. In 2020, COVID-19 impacted our business processes, yet our business processes
important to understand the nature of these risks, the impact they may have on our business, and the
and people proved to be resilient and flexible in resolving the operational challenges that we faced,
way these risks develop over time. These risks are not the only ones we face. Some risks may not yet
particularly within health and safety, customer support, supply chain, and logistics.
be known to us, and certain risks that we do not currently believe to be material could become material
Our risk universe is the basis for our annual top down risk assessment, on the next pages the key risks
in the future. In 2020, following the outbreak of the COVID-19 pandemic, this has become even more
in our risk universe as well as the mitigating measures are described.
77
RISK UNIVERSE
Changes in product demand & technology
Competition
7
1
2
Cyclical nature of
semiconductor market
Climate change
6
3
Acquisitions
International operations
5
4
Attract & retain
employees
STRATEGIC
OPERATIONAL
FINANCIAL
COMPLIANCE
Timeliness & quality of
delivered product
Supplier dependency
8
9
10
11
12
R&D program
execution
IT security breaches
13
Supplier
performance
Product
safety & EHS
Customer
dependency
Product life cycle
management
14
15
16
17
18
Business process
execution
Unfavorable changes
in tax laws/regulations
Manufacturing
disruption
Changes in valuation
of ASMPT
Outsourcing
Foreign
currency
Financial
reporting
Liquidity
19
20
21
22
23
24
Intellectual property
Compliance to laws
and regulations
25
26
Fraud
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 78
STRATEGIC RISKS
MITIGATING MEASURES
1
Inability to respond to changes in product demand and
technology change could result in decreased orders and
financial loss and/or reputation damage.
In addition to our continued focus on new product launches, our investments in R&D continues to increase. In order to ensure optimal
return on investment we have further improved our R&D processes and teams as well as optimal cooperation with key stakeholders.
COVID-19 has impacted demand from our end markets, and we successfully adopted to the changed demand.
2
Cyclical nature of the semiconductor market which leads to
abrupt changes in demand resulting in fixed overheads during
downturns or insufficient production capacity during upturns.
We are investing in new production facilities. In addition we outsource generic manufacturing and are optimizing our primary processes
to enhance scalability and elasticity.
Our financial structure, including cash and a standby credit facility, is set up to further reduce downsides of this risk.
4
Inability to attract and retain qualified management, technical,
sales and support employees could result in delayed product
development, production and diversity of management
resources.
We focus on competitive compensation & benefit packages tailored to the regions we operate in. We have talent management and
succession planning programs in place that consist of the leadership academy, talent succession reviews up to board level and help
our managers to assess and strengthen the leadership pipeline. In 2020 we launched our Power of an Open Mind program and
an engagement survey we strive to reach our talent and tend to their needs.
5
Failure to adequately identify and mitigate the risks arising from
operating in an international context such as the political
landscape, changes in legislation, instability, protectionism and
cultural differences could impact our business.
Our primary processes are set up to quickly understand, adapt to, and effectively apply international cultural and legal norms for doing
Our primary processes are set up to quickly understand, adapt to, and effectively apply international cultural and legal norms for doing
business. We have global reviews with each region specifically on these topics.
business. We have global reviews with each region specifically on these topics.
For example the geo political tensions have increased and may continue doing so. The US and other countries have imposed trade
For example the geo political tensions have increased and may continue doing so. The US and other countries have imposed trade
restrictions and specifically related to China. The US also took specific measures against certain Chinese specific parties. Some of these
restrictions and specifically related to China. The US also took specific measures against certain Chinese specific parties. Some of these
measures have as a result that for certain transactions – like deliveries of certain products and services – to certain customers now
measures have as a result that for certain transactions – like deliveries of certain products and services – to certain customers now
require an export license. Obtaining such licenses is not certain, may be difficult, and are time consuming. The implementation and
require an export license. Obtaining such licenses is not certain, may be difficult, and are time consuming. The implementation and
interpretation of these measures and regulations and future regulatory changes remains ongoing and the impact of the changes is not
interpretation of these measures and regulations and future regulatory changes remains ongoing and the impact of the changes is not
always certain, could affect the result of operations, and can increase compliance costs; although the impact is currently still regarded
always certain, could affect the result of operations, and can increase compliance costs; although the impact is currently still regarded
as relatively limited. Recently China also enacted several laws of which the consequences for the industry including ASMI are currently
as relatively limited. Recently China also enacted several laws of which the consequences for the industry including ASMI are currently
not yet known, but could in the future have an impact. Nonetheless ASMI strives to support and serve its worldwide customers to the
not yet known, but could in the future have an impact. Nonetheless ASMI strives to support and serve its worldwide customers to the
best of its ability while being compliant with laws and regulations set by the jurisdictions where we operate.
best of its ability while being compliant with laws and regulations set by the jurisdictions where we operate.
In 2020 we have have refreshed our COBC and the related e-learnings to further enhance understanding of how ASMI wants to achieve
In 2020 we have have refreshed our COBC and the related e-learnings to further enhance understanding of how ASMI wants to achieve
its business goals in an international context.
its business goals in an international context.
6
Climate change can have a physical impact on our operations
and can cause disruptions in our supply chain and markets.
Business interruption policies and procedures are in place. In addition, we have further enhanced our corporate responsibility agenda
based on the climate change risks with the aim to make a sustainable impact while leveraging our key strengths.
OPERATIONAL RISKS
MITIGATING MEASURES
9
Failure to deliver product of sufficient quality or on time
resulting in financial loss due to penalties, rework and/or
reduced future demand.
We are continuously improving our quality assurance processes and controls to ensure consistent product quality. In addition to
pro-actively managing the supply chain and logistical challenges, we have further enhanced our primary product development processes
based on clear objective setting, risk identification and control gate reviews. We are also centralizing our quality organization to report
directly to the CEO to bolster cross functional focus.
Failure of suppliers to deliver resulting in financial loss due
Failure of suppliers to deliver resulting in financial loss due
to penalties, rework and/or reduced future demand.
to penalties, rework and/or reduced future demand.
Recovery plans are in place, and are continuously assessed and improved. In addition, we are further improving primary processes
Recovery plans are in place, and are continuously assessed and improved. In addition, we are further improving primary processes
related to regional supplier sourcing, demand planning, and import/export risks.
related to regional supplier sourcing, demand planning, and import/export risks.
10
11
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
79
OPERATIONAL RISKS
MITIGATING MEASURES
12 Dependence on a small number of large customers.
Loss of a customer or significant reduction in demand
could result in significant downturn of our financial results.
We work pro-actively with our customers to respond to requests in a timely manner and strive to exceed expectations. We are
diversifying our customer base by continued investments in the More than Moore and China markets. We are also putting significantly
more focus on our large installed base business to help our customers get better long-term performance from our systems and diversify
our revenue streams into more annuity-based opportunities.
13 IT security breaches including cyber attacks resulting in loss
of technologies, innovations, IP and process data downtime
or disruption of critical business operations. Any breach of
our information systems could adversely affect our finances
and operating results as well as our reputation.
Our software development & production processes may
introduce viruses in our tools.
15 Incidents and accidents threatening our ability to operate.
An IT risk management framework including IT security management is in place in which we monitor threats and vulnerabilities, conduct
cyber drills, perform gap assessments, apply remediation and identify improvement projects. The frameworks are supported by policies,
processes and controls.
In 2020, we raised vigilance on employee awareness through increased phishing campaigns relating to the COVID-19 pandemic and
work from home situations, took steps to enhance the security posture of our critical applications, further improved our capability toward
zero-day attacks and strengthened our cloud security posture.
Our EHS organization is responsible for preventive and corrective action processes and the implementation of structural controls is driven
within the processes. Safety is discussed in all key meetings. Safety leadership collaborations have been set up with key customers.
Throughout the year 2020, our EHS team was instrumental in prioritizing health and safety.
17
Unsuccessful product life cycle management impacting
Unsuccessful product life cycle management impacting
margins, market share and inventory.
margins, market share and inventory.
We are driving continuous improvement across our product life cycle to ensure a smooth and integrated process. In 2020 we took
We are driving continuous improvement across our product life cycle to ensure a smooth and integrated process. In 2020 we took
important steps in our primary processes. We will continue to focus on this in 2021 to pro-actively meet or exceed (future) customer
important steps in our primary processes. We will continue to focus on this in 2021 to pro-actively meet or exceed (future) customer
needs and requests while improving internal process efficiency.
needs and requests while improving internal process efficiency.
FINANCIAL RISKS
MITIGATING MEASURES
21
Financial reporting and/or the disclosures are not complete,
inaccurate or not in accordance with laws & regulations resulting
in reputational damage and/or financial loss.
22 Changes in valuation of ASMPT as a result of ineffective strategy
definition and execution affecting our future financial position.
A financial control framework is in place and we perform an annual fraud risk assessment and take follow up actions based
on the outcome.
We have Board representation in ASMPT, as two executive directors are non-executive directors at ASMPT.
COMPLIANCE RISKS
MITIGATING MEASURES
24 Failure to adequately protect our intellectual property
and/or leakage of our IP.
We regularly monitor the market and take steps, when appropriate, to ensure compliance with our intellectual property rights which may
include various intellectual property related audits. In addition, control and governance frameworks are in place in our primary processes
to establish, maintain and protect our intellectual property rights and minimize the risk of data leakage as far as possible.
25 Non-adherence to laws and regulations resulting in reputation
damage and/or financial loss.
We prepare, roll out and make available relevant policies and procedures which are regularly reviewed and audited. Key controls are
embedded in our primary processes.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Management Board
Management Board
MANAGEMENT BOARD
The Management Board, supervised and advised by the Supervisory
Board, manages ASMI’s strategic, commercial, financial, and
organizational matters, and appoints senior managers.
The Supervisory Board supervises and advises the Management Board
in the execution of its tasks and responsibilities, and establishes their
individual remuneration within the boundaries of the remuneration
policies approved by the Annual General Meeting of Shareholders and
the recommendations by the Nomination, Selection and Remuneration
Committee.
Benjamin Loh
Peter A.M. van Bommel
80
COMPOSITION OF THE MANAGEMENT BOARD
BENJAMIN LOH – CEO
Mr. Loh was appointed as Chairman of the Management Board and President and Chief Executive
PETER A.M. VAN BOMMEL – CFO
Mr. van Bommel was appointed as a member of the Management Board on July 1, 2010, and
Officer on May 18, 2020, for a period of four years.
became Chief Financial Officer on September 1, 2010. Mr. van Bommel was reappointed on May 28,
2018 for a period of four years. Mr. van Bommel has more than twenty years of experience in the
Mr. Loh worked for Oerlikon Corporation from the late 1990s until 2005. He became senior vice
electronics and semiconductor industry. He spent most of his career at Philips, which he joined in
president in 2002 and was responsible for Asia until 2005. He then joined Veeco Instruments Inc.,
1979. From the mid-1990s until 2005, he acted as CFO of several business units of the Philips
an American thin-film process semiconductor equipment manufacturer, as senior vice president
Group. Between 2006 and 2008, he was CFO at NXP, formerly Philips Semiconductors. He was CFO
and general manager for Asia, before becoming executive vice president responsible for global
of Odersun AG, a manufacturer of thin-film solar cells and modules until August 31, 2010. He holds
field operations. In 2007, he moved to FEI Company as senior executive, holding various positions
a Master’s degree in Economics from the Erasmus University Rotterdam, the Netherlands.
responsible for sales and service, global business operations, and finally as chief operating officer.
In 2015, Mr. Loh joined VAT Vacuum Valves, based in Switzerland, as executive vice president and
Mr. van Bommel is a non-executive director of ASM Pacific Technologies, and until 2020 was
member of the Group Management Board, where he was responsible for, and led, worldwide sales
a member of the Supervisory Board of Royal KPN N.V. In 2019, Mr. van Bommel was re-appointed
and marketing until late 2017. Mr. Loh is a non-executive director of ASM Pacific Technologies and in
as a member of the Supervisory Board of Neways Electronics International N.V. Since May 2017,
the past also held positions as non-executive director in several companies (Schneeberger, Schweiter
Mr. van Bommel is an Executive Director of Stichting Bernhoven. Lastly, Mr. van Bommel was
Technologies AG, and Liteq BV). He also was an advisory board member of Semi China. Mr. Loh has
appointed a member of the Board of SES SA in April 2020. Mr. van Bommel is a Dutch national.
a wealth of experience working in the electronics and semiconductor industry and vast experience as
a leader. Mr. Loh has a bachelor's degree in electronic engineering from the Tohoku University in Japan.
Mr. Loh is of Singaporean nationality, but has spent the last 30 years living mostly outside of Singapore
in Japan, Hong Kong, China, the UK and the US. Mr. Loh is now based in Almere, the Netherlands.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 81
RESPONSIBILITIES
In addition to the duties of the Management Board stipulated by law and our Articles of Association,
CONFLICTS OF INTEREST
Each Management Board member shall immediately report any potential conflict of interest to the
the Management Board has the following responsibilities:
›› Achieving the aims, strategy, policy, and results of the company;
›› Managing the risks associated with the activities of the company;
›› Ensuring proper financing of the company;
›› Establishing and maintaining disclosure controls and procedures that ensure that all major financial
information is known to the Management Board in order to ensure that the external financial
reporting is achieved in a timely, complete, and accurate manner; and
Chairman of the Supervisory Board and to the other Management Board members. In such cases,
a Management Board member shall provide the Chairman of the Supervisory Board and the other
Management Board members with all information relevant to the conflict, and follow the procedures
as set out in the Management Board rules.
APPOINTMENT, SUSPENSION, AND DISMISSAL
The Annual General Meeting of Shareholders (AGM) appoints a Management Board member based
›› Determining relevant aspects and achieving aims relating to corporate social responsibility
on a binding nomination drawn up by the Supervisory Board. The AGM may set aside a binding
and sustainability.
nomination by a resolution taken with an absolute majority of the votes cast, representing at least one
third of the share capital. If such a binding nomination is set aside, a new binding nomination will be
The Management Board is guided by the interests of the company, taking the interests of all
drawn up by the Supervisory Board and submitted to a newly called General Meeting of Shareholders.
stakeholders into consideration. The members of the Management Board are collectively responsible
If this binding nomination is set aside, the General Meeting of Shareholders is free to appoint
for managing the company. They are collectively and individually accountable to the Supervisory
a Management Board member, but only with an absolute majority of the votes cast representing at
Board and the Annual General Meeting of Shareholders for executing the Management Board’s
least one third of our issued capital. A Management Board member may be suspended at any time
responsibilities. The Management Board has the general authority to enter into binding agreements
by the Supervisory Board. A Management Board member may, in accordance with a proposal by
with third parties. The Management Board held various meetings throughout the year 2020. At least
the Supervisory Board, be dismissed by the AGM through a majority vote. A resolution to suspend
once a month, the Management Board meets to discuss and review the performance of the company.
or to dismiss a member of the Management Board, other than in accordance with a proposal of
RISK MANAGEMENT AND CONTROL FRAMEWORK
The Management Board ensures that the company has an adequately functioning internal risk
management and control framework. A comprehensive risk management and control framework,
based on the ‘three lines of defense model’, has been established that allows the Audit Committee
the Supervisory Board, shall require the affirmative vote of a majority of the votes cast at a meeting.
The affirmative votes must represent at least one third of the issued capital.
REMUNERATION
For
information regarding the remuneration of the Management Board, please see the
and the Management Board a clear overview of the effectiveness of internal controls and risk
remuneration policy posted on our website (www.asm.com/investors/corporate-governance/
management. This is explained in more detail in the risk management chapter. The Management
supervisory-board/nomination-selection-and-remuneration-committee),
the remuneration report,
Board periodically discusses the internal risk management and control systems with the Supervisory
which is included in this report, and Note 25 to the consolidated financial statements.
Board and the Audit Committee. The Management Board provides the Supervisory Board with
all information required for the fulfillment of their obligations and the exercise of their powers.
The Management Board provides the Annual General Meeting of Shareholders with all information
required for the fulfillment of its obligations and the exercise of its powers in a timely fashion.
The Management Board is responsible for the quality and completeness of financial and other reports
that are publicly disclosed by or on behalf of the company, including all reports and documents the
company is required to file.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Supervisory Board
Supervisory Board
SUPERVISORY BOARD
The Supervisory Board oversees strategic and commercial
policymaking by the Management Board and the way in which it
manages and directs ASMI’s operations and affiliated/associated
companies. Members of the Supervisory Board are appointed by
the Annual General Meeting of Shareholders upon binding
nomination by the Supervisory Board.
82
Mr. Lobbezoo was Executive Vice President and Chief Financial Officer of the semiconductor
division of Royal Philips Electronics from 1994 to 2005. He was a member of the Board of Taiwan
Semiconductor Manufacturing Company (TSMC) for 12 years until 2007 and remains its adviser,
specifically in the areas of US corporate governance, international reporting, and financial review.
Currently, Mr. Lobbezoo is also on the Supervisory Board of a small start-up company named VPI,
which is active in development of medical software for surgery. He is furthermore Chairman of the
Supervisory Board of Point One Innovation Investment Fund.
He holds a Master’s degree in Business Economics from the Erasmus University Rotterdam, the
Netherlands, and is a Dutch Registered Accountant (RA) and a member of the Dutch NBA.
Mr. Lobbezoo is a Dutch national.
Term
Expires
2021
POSITION
Nationality
Year of
Birth
Initial
Appointment
Dutch
1946
2009
COMPOSITION
Name
Jan C. Lobbezoo
Martin C.J. van Pernis
Marc J.C. de Jong
Didier R. Lamouche
Monica de Virgiliis
Chairman of the
Supervisory Board
Member of the
Supervisory Board
Supervisory Board
Member of the
Supervisory Board
Member of the
Supervisory Board
Stefanie Kahle-Galonske Member of the
Dutch
1945
2010
2022
German
and Swiss
1969
2017
2021
Dutch
1961
2018
2022
French
1959
2020
2024
MARTIN C.J. VAN PERNIS
Member of the Supervisory Board
Member of the
Supervisory Board
Italian and
French
1967
2020
2024
Mr. van Pernis was elected as member of the Supervisory Board in May 2010 and was lastly
reappointed on May 18, 2020, for a period of two years.
JAN C. LOBBEZOO
Chairman of the Supervisory Board
Mr. van Pernis made a career at Siemens fulfilling several executive positions. He joined Siemens in
1971 and retired from the Siemens Group at the end of 2009 as Chairman of the Management Board
of Siemens Nederland NV.
Mr. van Pernis is currently Chairman of the Supervisory Boards of the Dutch listed companies Aalberts
NV and CM.com. He is furthermore a member of the Supervisory Board of Optixolar/Coolback BV,
and member of the Advisory Board of G4S Netherlands. Mr. Van Pernis was until May 2018 also
Mr. Lobbezoo was elected as a member of the Supervisory Board in May 2009. He became Chairman
Chairman of the Supervisory Board of Batenburg NV.
of the Supervisory Board in July 2013 and was lastly reappointed as member and Chairman on
May 22, 2017, for a period of four years.
Mr. van Pernis studied electrical engineering at the Technical University Delft and Technical High
School The Hague, the Netherlands, and law and economics at Erasmus University Rotterdam, the
Netherlands. Mr. van Pernis is a Dutch national.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 83
STEFANIE KAHLE-GALONSKE
Member of the Supervisory Board
Mr. de Jong is currently member of the Supervisory Boards of Nissens A/S based in Denmark,
Fiberline Composites A/S based in Denmark, and chairman of Sioux B.V., based in the Netherlands.
Mr. de Jong holds a Master’s degree in Physics and Mathematics from the VU University of
Amsterdam, the Netherlands, and a Master’s degree in Business Administration (executive program)
from the Erasmus University Rotterdam, the Netherlands and Rochester, USA. Mr. de Jong is
a Dutch national.
Mrs. Kahle-Galonske was elected as a member of the Supervisory Board on May 22, 2017, for a
period of four years.
Since April 2016, Mrs. Kahle-Galonske is Group CFO of Egon Zehnder International in Zurich,
Switzerland. From March 2013 till March 2016, she was CFO of Markem-Imaje at Dover Corporation
based in Geneva, Switzerland. Between January 2007 and February 2012, she held various senior
executive positions at NXP Semiconductors in France and the Netherlands.
DIDIER R. LAMOUCHE
Member of the Supervisory Board
Mrs. Kahle-Galonske in the past served as non-executive board member of Micronas Semiconductors
Mr. Lamouche was elected as a member of the Supervisory Board on May 18, 2020, for a period of
in Switzerland and Nu-Tune Singapore.
four years.
Mrs. Kahle-Galonske graduated in Economics at the Ruhr-University of Bochum, Germany and is
Mr. Lamouche was until the end of 2018 the CEO of IDEMIA (formerly Oberthur Technologies)
a Certified Public Accountant (CPA) since 2002. Mrs. Kahle-Galonske is a German and Swiss national.
which is the world leader in security and identity solutions. Prior to that he was the CEO of the
MARC J.C. DE JONG
Member of the Supervisory Board
Mr. de Jong was elected as a member of the Supervisory Board on May 28, 2018, for a period of
four years.
Mr. de Jong was CEO of LM Wind Power A/S until April 2018. Before that he was the executive
general manager of InnoMarket B.V. Prior thereto and until 2009 he was a member of the executive
management team of NXP Semiconductors, after which he was until 2013 responsible at Philips
Lighting for professional lighting solutions and at the same time member of the group management
committee of Philips.
Euronext listed Bull Group until 2010. And before that he had senior several executive positions in the
semiconductor industry; latest as COO of ST Microelectronics and CEO of ST-Ericsson.
Mr. Lamouche has been a non-executive at the Boards of Soitec and STMicoelectronics, and is
currently Chairman of the Supervisory Board of Utimaco, a leader in the cybersecurity space, and
non-executive Chairman of the Board at Quadient, a company listed on Euronext and active in
Enterprise communication systems. He is a member of the Supervisory Board of Adecco since 2011
(listed on the SIX in Zurich).
Mr. Lamouche graduated in 1981 from the Ecole Centrale de Lyon as an engineer, and has a PhD in
semiconductor technology. Mr. Lamouche is a French national.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE MONICA DE VIRGILIIS
Member of the Supervisory Board
Mrs. de Virgiliis was elected as member of the Supervisory Board on May 18, 2020, for a period of
four years.
84
THE IMPORTANCE OF DIVERSITY
The Supervisory Board recognizes the value of diversity amongst the members of the Supervisory
Board and the members of the Management Board. Diversity is considered in any event to consist
of gender, specific knowledge, work background, nationality, age and ethnic diversity, (technical)
experience, and skills.
With respect to gender, we strive to have a composition of both the Supervisory Board and
Management Board, representing at least 30% of the seats held by either gender at the same time.
RESPONSIBILITIES
The supervision over the policies of our Management Board and the general course of our business,
Mrs. de Virgiliis fulfilled until mid-2019 the role of chief strategy officer of CEA, the French Atomic &
and the related management actions, is entrusted to the Supervisory Board. In our two-tier structure
Alternative Energy Commission. Preceding that she had senior executive positions at Octo Telematics,
under applicable Dutch law, the Supervisory Board is a separate body independent from the
Infineon Technologies, and a long career within ST Microelectronics fulfilling several senior executive
Management Board.
roles. She has recently founded Chapter Zero France, under the auspices of the World Economic
Forum as a part of the global Climate Governance Initiative.
The Supervisory Board supervises and advises the Management Board in executing its
Mrs. de Virgiliis is currently a non-executive director at the Prysmian Group, a Milan listed company,
and at Geodis, which is part of the SNCF Group.
Mrs. de Virgiliis studied at the University of Turin (Politecnico di Torino) where she received her
master’s degree in electronic engineering summa cum laude. She holds a dual nationality: Italian
and French.
responsibilities, particularly regarding:
›› Achievement of the company’s objectives;
›› Corporate strategy and the risks inherent in the business activities;
›› Structure and operation of the internal risk management and control systems;
›› Financial reporting process;
›› Compliance with legislation and regulations;
›› Relation of the company to its shareholders; and
›› Relevant aspects of corporate social responsibility.
The Supervisory Board is responsible for monitoring and assessing its own performance.
CONFLICTS OF INTEREST
A Supervisory Board member facing a conflict of interest shall, in accordance with Article 13 of our
Supervisory Board rules, inform the Chairman of the Supervisory Board immediately. The Chairman
shall, if possible in consultation with the other members of the Supervisory Board, determine the
course of action to be taken.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 85
APPOINTMENT
In accordance with Dutch law and the Corporate Governance Code, the Supervisory Board has
COMMITTEES
In order to more efficiently fulfill its role and in compliance with the Corporate Governance Code, the
drawn up a profile for its own composition. This Supervisory Board Profile is available on our website
Supervisory Board has created two committees: the Audit Committee and the Nomination, Selection
(www.asm.com/investors/corporate-governance/supervisory-board). For the selection of future
and Remuneration Committee (NSR).
members of the Supervisory Board, we will actively seek for candidates that support the realization of
diversity on the earlier mentioned criteria. Any appointment or reappointment to the Supervisory Board
COMMITTEES STRUCTURE AND MEMBER INFORMATION
shall be based on the candidate’s match with the Supervisory Board Profile. For reappointment, the
candidate’s performance during the previous period shall be taken into account. A Supervisory Board
member who is available for reappointment must be interviewed by the Chairman of the Supervisory
Board and the Chairman of the Nomination, Selection and Remuneration Committee. The Chairman
of the Nomination, Selection and Remuneration Committee must be interviewed by the Chairman of
the Supervisory Board. All members of the Supervisory Board follow an introduction program after
Jan C. Lobbezoo
their first appointment, in which financial and legal aspects as well as financial reporting and specific
features of ASMI are discussed. Every year the training requirements are reviewed and discussed.
Martin C.J. van Pernis
Subsequently the training is organized. The Supervisory Board shall consist of at least three
Stefanie Kahle-Galonske
members. The members should operate independently of each other and within a good relationship
of mutual trust. They should be experienced in the management of an international, publicly listed
company, and have sufficient time available to fulfill the function of a Supervisory Board member. The
Supervisory Board members appoint a Chairman from among themselves. The Supervisory Board is
composed of six members.
Marc J.C. de Jong
Didier R. Lamouche
Monica de Virgiliis
Audit
Committee
Nomination,
selection and
remuneration
Committee
Supervisory
Board
All members of the Supervisory Board meet the required profile. Supervisory Board members
serve in principle a four-year term and may be re-elected in line with article 2.2 of the Corporate
Governance Code.
REMUNERATION
For information regarding the remuneration of the Supervisory Board, please see the remuneration
Chairperson
Member
Financial expert
AUDIT COMMITTEE
The Audit Committee assists the Supervisory Board in its responsibility to oversee ASMI’s financing,
financial statements, financial reporting process, and system of internal business controls and risk
management. The Audit Committee advises the Supervisory Board for the nomination of the external
report, which is included in our Annual Report 2020, and Note 25 to the consolidated financial
auditor of the company.
statements.
The Audit Committee consists of:
›› Stefanie Kahle-Galonske (Chairwoman);
›› Jan Lobbezoo;
›› Marc de Jong; and
›› Monica de Virgiliis.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 86
The Audit Committee supervises the activities of the Management Board with respect to:
›› The structure and operation of the internal risk management and control systems, including
NOMINATION, SELECTION AND REMUNERATION COMMITTEE
The Nomination, Selection and Remuneration Committee (NSR) advises the Supervisory Board on
supervision of the enforcement of the relevant legislation and regulations;
matters relating to the selection and nomination of the members of the Management Board and
›› The role and functioning of internal audit;
›› Policy on tax structure;
›› The applications of information and communication technology;
›› Financing of the company;
›› Compliance with recommendations and observations of internal and external auditors;
›› Release of financial information; and
›› Relations with the external auditor, including, in particular, its independence, remuneration, and any
non-audit services performed for the company.
The Audit Committee meets periodically to:
›› Consider the adequacy of the internal control procedures;
›› Review the operating results with management and the independent auditors;
›› Review the scope and results of the audit with the independent auditors;
›› Review the scope and results of internal audits with internal audit;
›› Review performance evaluations relating to the auditor’s independence;
›› Review performance and services of the external auditor; and
›› Review adequateness of the financing structure and tax structure of the company.
Supervisory Board. The NSR Committee further monitors and evaluates the remuneration policy for
the Management Board.
The NSR Committee consists of:
›› Martin van Pernis (Chairman);
›› Didier Lamouche; and
›› Jan Lobbezoo.
The NSR Committee ensures that a competitive remuneration structure is provided by benchmarking
with other multinational companies of comparable size and complexity operating in comparable
geographical and industrial markets. The NSR Committee evaluates the achievement of performance
criteria specified per Management Board member. After the evaluation, it recommends the level of
remuneration to the Supervisory Board.
On an annual basis, the NSR Committee reports to the Supervisory Board on the application of the
remuneration policy in the previous year and recommends the remuneration policy and remuneration
report for the following years.
The Chief Executive Officer, Chief Financial Officer, Director Internal Audit, Corporate Director
The Chief Executive Officer and the Corporate Vice President Global Human Resources are invited
Group Control, and representatives of the external auditor are invited to, and also attend, the Audit
to, and also attend, the NSR Committee meetings.
Committee meetings.
Mr. Lobbezoo, Chairman of the Supervisory Board, and Mrs. Kahle-Galonske, member of the
Supervisory Board, are both members of the Audit Committee and are the Supervisory Board’s
financial experts, taking into consideration their extensive financial background and experience.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Supervisory Board report
Supervisory Board report
87
SUPERVISORY BOARD REPORT
During the year under review, the Supervisory Board performed its duties in accordance with applicable legislation
and the Articles of Association of ASM International N.V., and supervised and advised the Management Board on
an ongoing basis.
FINANCIAL STATEMENTS
We present the ASMI 2020 Annual Report in accordance with IFRS, as prepared by the Management
Board and reviewed by the Supervisory Board. Our independent auditors, KPMG Accountants N.V.,
have audited these financial statements and issued an unqualified opinion. Their report appears on
pages 155 to 161.
All of the members of the Supervisory Board have signed the financial statements in respect of the
financial year 2020.
SUPERVISION
Supervision of the Management Board, its policy decisions and actions are entrusted to the
Supervisory Board. In accordance with Dutch law, the Supervisory Board is a separate body,
independent of the Management Board. The Supervisory Board supervises and advises the
Management Board in executing its responsibilities. The profile of the Supervisory Board describes
Attendance to meetings in 2020
Committee
Jan C. Lobbezoo
Martin C.J. van Pernis
Stefanie Kahle-Galonske
Marc J.C. de Jong
Didier R. Lamouche*
Monica de Virgiliis*
Ulrich H.R. Schumacher**
Supervisory
Board
Audit
Committee
Nomination,
Selection and
Remuneration
Committee (NSR)
8/8
8/8
7/8
8/8
3/4
4/4
3/4
4/4
n.a.
4/4
4/4
n.a.
2/2
n.a.
4/4
4/4
n.a.
n.a.
2/2
n.a.
1/2
Attendance is expressed as the number of meetings attended out of the number of meetings eligible to be attended.
* Appointed May 18, 2020.
** Stepped down at AGM 2020 on May 18, 2020.
the range of expertise that should be represented within the Board. The procedures of the Supervisory
In these meetings, the Boards discussed the strategy and the progress of implementation thereof,
Board and the division of its duties are laid down in the Supervisory Board rules. Both documents
the long-term and sustainable value creation, operations, business risks, and risk management,
are available on our website www.asm.com (www.asm.com/investors/corporate-governance/
product and market developments, geopolitical tensions and the potential impact, the company’s
supervisory-board).
organization, and culture program, management and financial structure, and performance, including
further profitability improvements. Other (recurring) topics were also addressed by the Supervisory
MEETINGS OF THE SUPERVISORY BOARD
During 2020, the Supervisory Board met with the Management Board on eight occasions. Jan
Board such as the annual budget, the review of quarterly financial results, COVID-19, reports from
the committees, and the preparation of the quarterly earnings press releases. The Supervisory Board
Lobbezoo, Marc de Jong and Martin van Pernis attended all Supervisory Board meetings with
also approved the dividend proposal as prepared by the Management Board and proposed (and
the Management Board, while Stefanie Kahle-Galonske attended all meetings except one. Ulrich
approved) at the AGM in 2020.
Schumacher attended three out of the four meetings that took place before the May 18, 2020 AGM,
when he retired from the Supervisory Board. After being appointed to the Supervisory Board at the
One of the meetings was specifically earmarked to discuss with the Management Board the long-term
May 18, 2020 AGM, Monica de Virgiliis attended all four meetings that took place since, while Didier
strategy of the company, the planned implementation of it, and the risks attached to its realization.
Lamouche attended three out of four meetings.
In the long-term strategy meeting the Board discussed the semiconductor and semiconductor
equipment market and outlook, the development of ASMI’s market share, the development of the
competitive environment, technology and market trends, the progress with ASMI’s strategic priorities
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 88
and ASMI’s long-term revenue and profit or loss forecasts. Also, strategic initiatives to be considered
was also proposed and approved to declare and pay an extra dividend of €1,50 per share; this as
to improve the company’s long-term value creation strategy were discussed. Certain topics
part of the company’s commitment to use excess cash for the benefit of its shareholders.
discussed during the long-term strategy discussion will be followed up in subsequent meetings of
In order to optimize the capital structure, it was proposed and agreed to decrease the issued share
the Board during 2021.
capital by withdrawing 1,500,000 (one and a half million) shares which the company holds in its own
capital, by way of cancellation of treasury shares.
In addition, the Supervisory Board reviewed and discussed the functioning of the Supervisory
A new share buyback program was announced on June 2, 2020 for a total of €100 million; at the end
Board, its committees, and its individual members through an internal assessment as conducted
of December 2020 63% of the total program had been repurchased.
by the members of the Supervisory Board. The composition, competencies and functioning of the
Supervisory Board, as also described in the Supervisory Board profile, and its committees were part
of the assessment, as well as the composition of the Management Board, their performance, and
SUPERVISORY BOARD COMPOSITION
The Supervisory Board is composed of six members. All six members are independent, in line with
the performance of its individual members, and the relationship between the Supervisory Board and
the Corporate Governance Code. During the AGM on May 18, 2020 Mr. Schumacher stepped down
the Management Board. The conclusion of the assessment was that both the Supervisory Board as
at the end of his final term and Mr. Lamouche and Mrs. de Virgillis were newly appointed. In addition,
the Management Board function properly and effectively.
at the forthcoming AGM on May 17, 2021, Mr Jan Lobbezoo, after having served for three terms of
four years at the ASMI Board, will retire from the Supervisory Board.
Due to COVID-19 and the travel restrictions, most Supervisory Board meetings in 2020 were held
through video conference. In some instances the Dutch based members of the Supervisory Board
gathered at the headquarters of ASMI using a video link to the foreign based members of the
MANAGEMENT BOARD COMPOSITION
The Management Board is composed of two members. During the May 18, 2020, AGM Mr. Chuck
Supervisory Board. In addition to these meetings there were several informal meetings and telephone
del Prado, retired as Chief Executive Officer, Chairman of the Management Board and President of
calls between the Supervisory Board members and/or Management Board members.
the company. On the same day, the AGM approved the nomination of Benjamin (G.L.) Loh as Chief
DUTCH CORPORATE GOVERNANCE
Included in the responsibilities of the Supervisory Board is to oversee the company’s compliance with
Executive Officer, Chairman of the Management Board and President of the company, to succeed
Chuck del Prado. On October 13, 2020, ASMI announced that Mr. Peter van Bommel, Chief Financial
Officer and Member of the Management Board of the company, had notified the Supervisory Board
corporate governance standards and best practices. The Supervisory Board is of the opinion that the
of his wish to retire from the company at the next Annual General Meeting to be held on May 17,
company complies with the Dutch Corporate Governance Code.
2021. On January 12, 2021, the Supervisory Board announced the nomination of Mr. P (Paul) A.H.
SHAREHOLDERS
In view of the restrictions caused by the COVID-19 pandemic, it was decided to change the set-up of
Verhagen as CFO and Member of the Management Board of ASMI, succeeding Peter van Bommel.
The shareholders will be asked to appoint Mr. Verhagen as Management Board member for
a four-year term – starting at June 1, 2021 – at the Annual General Meeting of Shareholders on May
the AGM of May 18 2020 into a complete virtual webcast meeting. This meant that shareholders could
17, 2021, after which the Supervisory Board will appoint Mr. Verhagen as the Chief Financial Officer.
not attend the meeting in person, but only via a virtual webcast connection. Voting could be done
by way of proxy before the meeting as well as voting during the meeting via the virtual application.
Shareholders for last year’s AGM could email questions up to 3 days prior to the AGM which were
DIVERSITY
The Supervisory Board recognizes the value of diversity amongst the members of the Supervisory
answered by ASMI and posted on our website prior to the AGM. Shareholders which had asked
Board and the members of the Management Board as stated in the ASMI diversity policy. Diversity
questions in this way were also entitled to ask follow up questions during the AGM. During the AGM,
is considered in any event to consist of gender, specific knowledge, work background, nationality,
the new amended company remuneration policy was approved and adopted by the shareholders.
age and ethnic diversity, (technical) experience, and skills. We strive to have a composition with at
A final regular dividend of €1,50 per common share was proposed and approved; of that, €1,00 per
least 30% of the seats in the Management Board and Supervisory Board held by either gender.
share was already paid as interim dividend in November 2019. In addition to the regular dividend it
At the same time we aim for the best candidate taking into account the realization on the diversity
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 89
criteria and match with the Supervisory Board profile. Currently we have a 33% female representation
in the Supervisory Board. In the case of open positions in the Supervisory Board or Management
NOMINATION, SELECTION AND REMUNERATION COMMITTEE
The role of the Nomination, Selection and Remuneration Committee (NSR) is described in its charter,
Board, the Supervisory Board prepares a profile based on the required educational and professional
which is available on the company’s website, www.asm.com. In general, the NSR Committee advises
background and in the search will actively look for candidates that support the realization of diversity
the Supervisory Board on matters relating to the selection and nomination of new Management Board
on the earlier mentioned criteria.
members, as well as the remuneration of the members of the Management Board. This Committee
EDUCATION AND TRAINING
As in every year, also in 2020 the Management Board and Supervisory Board discussed their
In 2020, the NSR Committee held four meetings and multiple conference calls. The topics included
education and training needs. Both boards – in addition to their regular meetings – committed one
the selection and nomination of a new Chief Executive Officer, which resulted in the nomination by
day to training. A focus for this year was on the latest developments in international remuneration
the Supervisory Board of Benjamin Loh as CEO, President and Chief Executive Officer, succeeding
for Supervisory Board and Management Board members, including the requirements of the
Chuck del Prado. The topics also included the selection and nomination of a new Chief Financial
Shareholder Rights Directive and the role of the Supervisory Board in the value creation process of
Officer, which resulted in the nomination by the Supervisory Board of Paul A.H. Verhagen as Chief
the organization. This training was given by legal experts in each of these fields.
Financial Officer and member of the Management Board, succeeding Peter van Bommel. The topics
discussed also included the remuneration of the individual members of the Management Board and
consists of Messrs. van Pernis (Chairman), Lamouche and Lobbezoo.
INDEPENDENCE
The Supervisory Board is of the opinion that its current members are all independent as defined
the succession planning of the Board.
by the Dutch Corporate Governance Code. Neither the Chairman nor any other member of the
The remuneration of the members of the Management Board is disclosed in Note 25 to the
Supervisory Board is a former member of ASMI’s Management Board, or has another relationship
consolidated financial statements of the Annual Report. The remuneration of the members of the
with ASMI which can be judged ‘not independent’ of ASMI.
Management Board during 2020 is fully in accordance with the remuneration policy.
SUPERVISORY BOARD COMMITTEES
AUDIT COMMITTEE
The role of the Audit Committee is described in its charter, which is available on the company’s
WORD OF THANKS
We extend our gratitude and appreciation to ASMI employees worldwide for their many contributions
and enduring commitment to the company. It is their commitment and determination that enabled us
website (www.asm.com). The number of members of the Audit Committee increased in 2020
to make substantial progress in 2020. We recognize that the cumulative efforts of our workforce are
from three to four, when Monica de Virgiliis joined the Audit Committee after her appointment to
truly creating real value for all of our stakeholders.
the Supervisory Board during the May 18, 2020 AGM. During the year, the Audit Committee met
with the Management Board and KPMG Accountants, the company’s independent auditors, on four
occasions. Audit Committee discussions included: the company’s financial reporting including the
SUPERVISORY BOARD
J.C. Lobbezoo, Chairman
application of accounting principles; the company’s financial position and financing programs, and
M.J.C. de Jong
tax structure; the company’s internal risk management systems; effectiveness of internal controls; the
S. Kahle-Galonske
audit performed and its findings, the Annual Report and financial statements; and the budget and the
D.R. Lamouche
quarterly progress reports prepared by the Management Board. The internal auditor participated in
M.C.J. van Pernis
all four Audit Committee meetings, presenting her own actions and findings. On several occasions,
M. de Virgiliis
the Audit Committee met with KPMG Accountants, without the members of the Management Board
present, to discuss several audit related topics. Furthermore, the Audit Committee discussed the
Almere, the Netherlands
auditor’s performance with the Management Board without KPMG Accountants present.
March 4, 2021
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Remuneration report
Remuneration report
90
REMUNERATION REPORT
This remuneration report is based on the remuneration policy of ASM International N.V. (ASMI), as presented to
and adopted by the 2020 Annual General Meeting of Shareholders.
INTRODUCTION
ASM International N.V. (ASMI) is a leading supplier of semiconductor wafer processing equipment
SHORT-TERM INCENTIVES (CASH BONUS)
Each year, a short-term incentive can be earned, based on achieving specific challenging targets.
and process solutions. Our customers include all the top semiconductor device manufacturers in
These targets are based for 75% on company financial targets and for 25% on non-financial targets.
the world.
The on-target bonus percentage for the CEO is 100% of annual base salary, with a maximum pay-
out of 150% of annual base salary. The on-target bonus percentage for the CFO is 75% of annual
ASMI’s strategic objective is to realize profitable, sustainable growth by capitalizing on our innovative
base salary, with a maximum pay-out of 125% of annual base salary.
strength in deposition technologies and our strong relationships with key customers. We act thereby
as a responsible citizen.
LONG-TERM INCENTIVES OR SHARE-BASED REMUNERATION
In the past, the members of the Management Board were eligible to receive stock options and
To realize our strategy, we focus on five key elements: innovative strength, operational excellence,
performance shares under the ASMI 2014 long-term incentive plan for members of the Management
employees, strong balance sheet, and responsible growth.
Board to focus on the long-term interest of the company. Stock options vest after three years subject
The remuneration report complies with the requirements of the Corporate Governance Code and is
subject to meeting certain conditions. The members of the Management Board are required to hold
aligned with the new Dutch legal requirements following the implementation of the EU Shareholders’
the vested performance shares for an additional two years; however, they are allowed to sell a part
Right Directive II. The remuneration policy 2020-2023 of ASMI was adopted by the Annual General
of the unconditional shares after three years for tax purposes. Since 2018, no new grants of stock
Meeting of Shareholders (AGM) on May 18, 2020, and was consistently implemented in 2020 with
options have taken place. The next grant of restricted shares will take place in April 2021. The revised
regard to all remuneration elements.
remuneration policy as approved by the AGM on May 18, 2020 no longer allows for stock option
to continued employment and expire after seven years. Performance shares vest after three years
grants moving forward.
The main changes of the Management Board remuneration policy compared to the previous version
have been explained during the 2020 AGM meeting and relate to: (1) the peer group change, due
The long-term incentive scheme has the following main features.
to AEX-listed peer companies being reviewed and expanded compared to High Tech and Semicon
companies in the US and Europe region (total of 21 peer companies); (2) switch to performance
shares as only remaining long-term incentive component (which had been in practice since 2018);
and (3) the change of the maximum level of long-term incentive awards, based upon an extensive
STOCK OPTIONS
›› Since 2018, stock options are no longer granted;
›› Options granted earlier are unconditional. 100% of the options which have been granted will
benchmarking.
become exercisable after three years; and
The 2020 remuneration report refers to the remuneration policy of ASMI which can be found at:
trading days preceding the granting of the option and including the date of granting.
›› The exercise price is equal to the average closing price on Euronext of ASMI shares during the five
www.asm.com/investors/corporate-governance/supervisory-board/nomination-selection-and-
remuneration-committee
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 91
OUTSTANDING OPTIONS
The following table shows the outstanding options to purchase ASMI common shares held by
current/former members of the Management Board, and changes in such holdings during 2020:
Year of grant
Vesting date
Outstanding
January 1, 2020
Granted in 2020
Exercised in 2020 2)
Outstanding
December 31, 2020
Exercise price
End date
P.A.M. van Bommel 1)
P.A.M. van Bommel 1)
P.A.M. van Bommel 1)
C.D. del Prado 1) 3)
C.D. del Prado 1) 3)
C.D. del Prado 1) 3)
C.D. del Prado 1) 3)
Total
2015
2016
2017
2013
2015
2016
2017
April 24, 2018
April 22, 2019
April 21, 2020
December 31, 2016
April 24, 2018
April 22, 2019
April 21, 2020
15,910
22,833
8,937
81,680
30,548
45,293
18,249
223,450
–
–
–
–
–
–
–
–
–
–
–
(81,680)
–
–
–
15,910
22,833
8,937
–
30,548
45,293
18,249
€40.62
€34.06
€47.33
April 24, 2022
April 22, 2023
April 21, 2024
€21.79
December 31, 2020
€40.62
€34.06
€47.33
April 24, 2022
April 22, 2023
April 21, 2024
(81,680)
141,770
1 Options are granted for a term of seven years and become exercisable after a three-year vesting period.
2 Options of C.D. del Prado were exercised on August 6, 2020 at an average share price of €130.13.
3 Former CEO till May 18, 2020.
PERFORMANCE SHARES
The CEO and CFO are eligible to receive performance shares under the ‘ASMI N.V. 2014 long-term
In order to show longer-term commitment to ASMI and align with shareholder interests, the CEO
and CFO are required to hold the vested performance shares for two years (‘Holding Period’) after
incentive plan for members of the Management Board’ to focus on the long-term interest of
the vesting date. At year-end 2020, the three-year performance period of the performance shares
the company.
granted to the members of the Management Board on April 20, 2018, was completed. Based on
the achievement of the performance criteria, the realization percentage is 150%. This leads to the
The number of performance shares granted for on-target performance will be determined after the
following vesting of the performance shares on April 21, 2021.
performance year by the Supervisory Board, and relates to revenue growth compared to market and
average EBIT percentage measured over a three-year performance period. ASMI applies a face value
approach to define the number of shares to be granted. The award date is immediately following
the date of announcement of the first quarter financial results in April for the year in which the award
G.L. Loh
P.A.M. van Bommel
takes place.
Performance Shares Vested
–
13,512
The target level of the LTI is set at 165% of the annual base salary for the CEO and 125% for the
In 2020 all outstanding conditional shares granted to the previous CEO in 2018, respectively 2019,
CFO. This change has been adopted in the new remuneration policy, applicable as of 2020 up
vested at grant level on retirement date (18,843 and respectively 15,582 shares).
to 2023. The maximum number of shares that will be granted in case of out-performance of the
predetermined performance indicators is 150% of the number at on-target performance. The number
of shares granted will be zero in case none of the targets are met.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
92
For 2020, the Supervisory Board awarded the following amounts:
›› The previous CEO, Mr. del Prado, decided to step down per May 18, 2020, and therefore no value
has been awarded in 2020; and
›› The Supervisory Board decided to award the following value to Mr. Loh, current CEO: €1,039,500
and Mr. van Bommel, CFO: €567,996, based on the renewed remuneration policy 2020.
OUTSTANDING PERFORMANCE SHARES
The following table shows the outstanding performance shares granted to members of the Management
Board in 2020 and held by members of the Management Board per December 31, 2020:
Grant date
Status
Number of shares
at grant date
Performance
adjustment
Vested in
2020
Outstanding
December 31, 2020
Fair value at
grant date
Vesting date
End of Holding
period
G.L. Loh 1)
July 29, 2020
Conditional
P.A.M. van Bommel
April 21, 2017
Unconditional
P.A.M. van Bommel
April 20, 2018
Conditional
P.A.M. van Bommel
April 25, 2019
Conditional
P.A.M. van Bommel
April 22, 2020
Conditional
C.D. del Prado 2)
C.D. del Prado 2)
C.D. del Prado 2)
Total
April 21, 2017
Unconditional
April 20, 2018
Unconditional
April 25, 2019
Unconditional
1 New CEO since May 18, 2020.
2 Former CEO till May 18, 2020. Holding obligation lapsed as of retirement.
8,087
6,234
9,008
7,343
5,559
12,730
18,843
15,582
83,386
–
1,790
–
–
–
3,656
–
–
–
(8,024)
–
–
–
(16,386)
(18,843)
(15,582)
8,087
–
9,008
7,343
5,559
–
–
–
€123.31
July 29, 2023
July 29, 2025
€47.52
April 21, 2020
April 21, 2022
€45.71
April 20, 2021
April 20, 2023
€57.84
April 25, 2022
April 25, 2024
€100.09
April 22, 2023
April 22, 2025
€47.52
April 21, 2020
May 18, 2020
€45.71
April 20, 2021
May 18, 2020
€57.84
April 25, 2022
May 18, 2020
5,446
(58,835)
29,997
The shares will become unconditional after three years, depending on the achievement of
predetermined targets. The financial targets to be achieved are measured over a three-year
PENSION ARRANGEMENT
As of 2015, the members of the Management Board no longer participate in the industry-wide pension
performance period and relate to revenue growth compared to market and an average EBIT
fund. They are offered participation in a defined contribution plan for their salary up to €110,111. For
percentage performance measure. The Management Board members will hold the unconditional
their salary above €110,111, the members of the Management Board are compensated with an
shares for at least an additional two years; however, they are allowed to sell a part of the unconditional
amount equal to the employer pension contribution. The members of the Management Board have
shares after three years for tax purposes.
the option to participate in a net pension plan offered by the company or to have the compensation
paid out in cash.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 93
TOTAL REMUNERATION OF MANAGEMENT BOARD
The following table provides an overview of the 2020 remuneration elements in € thousands of both
CEO and CFO as recognized by the company. During the year 2020, a CEO change was announced
and approved by the AGM on May 18, 2020.
1
2
3
4
5
6
Fixed Remuneration (K€)
Variable Remuneration (K€)
Base Salary
Fringe Benefits
Short-term cash
incentive (STI)
Share-based payment
expenses 3)
Other 4)
(K€)
Pension expense
(K€)
Total Remuneration
(K€)
NAME OF DIRECTOR, POSITION
2019
2020
2019
2020
2019
2020
2019
G.L. Loh 1)
P.A.M. van Bommel
C.D. del Prado 2)
Total
–
441
702
393
454
267
–
40
77
36
39
28
1,143
1,114
117
103
–
551
1,053
1,604
448
452
293
–
413
855
1,193
1,268
2020
141
505
1,158
1,804
2019
2020
2019
2020
2019
–
–
–
–
–
–
2,400
2,400
–
91
124
215
69
95
52
216
–
1,536
2,811
4,347
2020
1,087
1,545
4,198
6,830
Proportion of fixed
and variable
remuneration
2019
–%
59%
47%
2020
85%
61%
24%
1 New CEO since May 18, 2020, Annualized Base Salary 2020 €630.
2 Former CEO till May 18, 2020, Annualized Base Salary 2020 €702.
3 These amounts represent the vesting expenses related to the financial year.
4 Represents an additional payroll tax payable by the company due to vesting of granted shares in previous years related to the retirement of a member of the Management Board subject to article 32bb of the Dutch Wage Tax Act.
1. Fixed remuneration
The on-target bonus percentage for the CEO is 100% of the annual base salary, with a maximum
Base salary. This is the fixed annual gross base salary. A salary increase of 3% has been implemented
pay-out of 150% of the annual base salary. For the year 2020, the CEO realized overall an over-
as of January 1, 2020, in line with normal market movement in the Netherlands.
achievement on STI (mix of below target, above target and stretch on company financial targets and
Fringe benefits. This represents the value of benefits and perquisites awarded, such as company car,
representation and expense allowance, premium for health and disability insurance, as well as social
The on-target bonus percentage for the CFO is 75% of annual base salary, with a maximum pay-out
mix of at target and stretch on non-financial targets).
security contributions.
2. Variable remuneration
of 125% of annual base salary. For 2020, the CFO realized overall an over-achievement on STI (same
outcome as CEO on company financial targets and in addition stretch on non-financial targets).
Short-term cash Incentive (STI). Each year, a short-term incentive can be earned, based on achieving
Share-based payment or long-term incentives. This is a multi-year variable payment of which the
specific challenging targets. The short-term incentive recognizes three levels: threshold, on target,
value is the value of a performance share award that has become unconditional after a performance
and stretch. Threshold levels for both the CEO and CFO are set at 70% of the on-target level, while
period of three years. The unconditional award is the result of targets on revenue growth compared
stretch targets are set at 140% of the on-target level. If the actual realization is between threshold
to market and average EBIT.
and on-target or between on-target and stretch, the payout will be based upon the relative deviation
against these levels. The targets are 75% based on company financial targets (equally divided
3. Other items
between revenue, EBIT, and free cash flow) and 25% based on non-financial targets.
Non-recurring items, which represents in 2020 an additional payroll tax to the company due to
vesting of already granted shares in previous years related to the retirement of a member of the
Management Board subject to article 32bb of the Dutch Wage Tax Act.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 94
4. Pension expense
As is mentioned in the contracts of the members of the Management Board, in the case of termination
As of 2015, members of the Management Board no longer participate in the industry-wide pension
of the contract on behalf of the company, the members of the Management Board are eligible for a
fund. They opt to participate in a defined contribution plan for their salary up to €110,111. The
severance payment of a maximum one-year annual gross base salary.
company reimburses an amount equal to the employer pension contribution for their salary above
€110,111. The CEO and CFO opt either to participate in a net pension plan offered by the company
or to have the cost for participating paid out directly. The pension contributions vary from 7.2%
CLAW BACK AND ULTIMUM REMEDIUM
In exceptional circumstances, the Supervisory Board will have the discretionary authority to recover
to 28.4% of the pensionable salary, depending on age. The members of the Management Board
any amount of paid bonus and awarded shares, if evidence shows payments and awards have been
contribute 4.6% of the pensionable salary and ASMI pays the remaining part. There are no
awarded based on incorrect financial or other data (claw back).
arrangements regarding early retirement.
5. Total remuneration
If a variable component conditionally awarded in a previous financial year would, in the opinion of the
Supervisory Board, produce an unfair result due to extraordinary circumstances during the period
Value equals sum of 1, 2, 3 and 4 as described above.
in which the predetermined indicators have been or should have been achieved, the Supervisory
Board has the authority to adjust the value of bonus and shares downwards or upwards (ultimum
6. Proportion of fixed and variable remuneration
remedium).
Relative proportion of fixed remuneration: By dividing the sum of fixed components: column 1 and
the fixed part of pension expense presented in column 4 by the amount of total remuneration (column
The NSR Committee concluded for 2020 that no circumstances have been identified that result in
5), multiplied by 100%.
any adjustments or claw back of variable remuneration.
Relative proportion of variable remuneration: By dividing the sum of the variable components
(columns 2, 3 and the variable part of the pension expense in column 4, if any) by the amount of total
remuneration (column 5), multiplied by 100%.
EMPLOYMENT CONTRACTS / SERVICE AGREEMENTS
The CEO and CFO have a written contract with ASMI or one of its related subsidiaries, in accordance
with Dutch law, for four years:
›› Mr. C.D. del Prado, started May 18, 2006; in May 2018, Mr. del Prado was reappointed for a new
term of 4 years. Mr. del Prado decided to step down per May 18, 2020 and his employment with
ASMI ended on May 18, 2020;
›› Mr. G.L. Loh, started May 18, 2020, and was appointed for a term of 4 years based on a service
agreement; and
›› Mr. P.A.M. van Bommel, started July 1, 2010; in May 2018, Mr. van Bommel was reappointed for a
new term of 4 years. On October 13, 2020, it was announced that Mr. van Bommel informed the
company of his intention to step down from his role as of May 17, 2021.
COMPLIANCE TO REMUNERATION POLICY AND LONG-TERM
PERFORMANCE
The Supervisory Board reviewed the remuneration policy in 2020 leading to the presentation of the
revised policy to the Annual General Meeting of Shareholders on May 18, 2020, which approved the
proposal, as applicable as of 2020. An analysis of different scenarios was included in this review.
The purpose of the remuneration policy for the members of the Management Board of ASMI is to
provide compensation that:
›› Motivates and rewards executives in both the Management Board and Supervisory Board with a
balanced and competitive remuneration, in sync with role and responsibilities;
›› Allows ASMI to attract, reward and retain highly qualified executives with the required background,
skills and experience to implement the strategy of ASMI in a highly competitive global industry;
›› Ensures that short-term operational results and long-term sustainable value creation are balanced;
and
›› Is transparent, fair and reasonable, and aligns the interests of ASMI, shareholders and other
stakeholders in the medium- and long-term to deliver sustainable performance in line with the
For future new appointments to the Management Board, the term of the appointment will also be set
strategy, purpose and values of ASMI.
at four years.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 95
DEROGATIONS FROM REMUNERATION POLICY
The Supervisory Board has not derogated or deviated from the remuneration policy. ASMI does
not provide any loans, advanced payments, deposits or related guarantees to the CEO, CFO or
Supervisory Board.
COMPARATIVE INFORMATION ON THE CHANGE OF REMUNERATION
AND COMPANY PERFORMANCE
Annual Change
2016/2015
2017/2016
2018/2017
2019/2018
2020/2019
Information regarding 2020
Management Board Remuneration
G.L. Loh, CEO (as of May 18)
P.A.M. van Bommel, CFO
C.D. del Prado, CEO (until May 18)
Company Performance
Front-end Sales
Front-end EBIT
Free Cash flow
Qualitative/Non-Financial Strategic Objectives/Targets
–%
89%
93%
89%
79%
8%
96%
–%
107%
112%
123%
133%
463%
113%
–%
101%
105%
111%
119%
125%
103%
–%
123%
124%
157%
171%
488%
128%
–%
101%
64%
Former CEO retired May 18, 2020
103%
142%
53%
88%
Average remuneration on a full-time equivalent basis of employees (K€)
Average remuneration of employees
CEO pay ratio
2016
2017
2018
2019
2020
75
23
78
25
75
27
85
31
88
27
Increase % average remuneration: 14% and increase # of employees: 11%
The ratio of the CEO remuneration and the average remuneration of all other employees (the pay ratio)
The 2020 ASMI remuneration report considers the draft guidelines to specify the standardized
is calculated by dividing the remuneration of the CEO by the average remuneration of all employees.
presentation of the remuneration report as stated in the Directive 2007/36EC of the European
The remuneration of the CEO is the total of annualized base salary and bonus of the new CEO as
Parliament, and amended by Directive (EU) 2017/828, Article 9b (6).
well as share-based payment (extrapolated to regular annual accrual). The average remuneration of
all employees is calculated by dividing the total personnel costs (wage and salaries and share-based
This report is the remuneration report required in accordance with article 2:135b of the Dutch Civil
payments) minus the remuneration of the CEO, by the total number of employees. The pay ratio is in
Code and the Dutch Corporate Governance Code.
line with anticipated internal development of pay levels.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE REMUNERATION OF THE SUPERVISORY BOARD
The 2020 remuneration report refers to the remuneration policy of ASMI which can be found at:
www.asm.com/investors/corporate-governance/supervisory-board/nomination-selection-and-
Any recommended changes to the remuneration of the members of the Supervisory Board will be
submitted to the AGM for approval.
remuneration-committee
The remuneration of members of the Supervisory Board was most recently revised during the 2018
The following table sets forth information concerning all remuneration (base compensation, no
bonuses or pensions were paid) from the company (including its subsidiaries) for services in all
No stock options or performance shares have been granted to members of the Supervisory Board.
capacities to all current and former members of the Supervisory Board of the company:
Annual General Meeting of Shareholders.
96
Year ended December 31,
Annual fee
Committee fee
Total remuneration
2019
2020
2019
2020
2019
2020
70.0
50.0
50.0
50.0
50.0
–
–
70.0
50.0
19.1
50.0
50.0
31.0
31.0
13.5
8.5
6.0
10.0
7.5
–
–
13.5
8.5
2.3
10.0
7.5
3.7
4.7
83.5
58.5
56.0
60.0
57.5
–
–
83.5
58.5
21.4
60.0
57.5
34.7
35.7
270.0
301.1
45.5
50.2
315.5
351.3
Supervisory Board:
J.C. Lobbezoo
M.C.J. van Pernis
U.H.R. Schumacher 1)
S. Kahle-Galonske
M.J.C. de Jong
D.R. Lamouche 2)
M. de Virgiliis 2)
TOTAL
1 Period to May 18, 2020.
2 Period as of May 18, 2020.
Annual change
2016/2015
2017/2016
2018/2017
2019/2018
2020/2019
Supervisory Board Remuneration
J.M.R. Danneels
H.W. Kreutzer
J.C. Lobbezoo
M.C.J. van Pernis
U.H.R. Schumacher
S. Kahle-Galonske
M.J.C. de Jong
D.R. Lamouche
M. de Virgiliis
40%
100%
100%
100%
100%
–%
–%
–%
–%
–%
100%
100%
100%
100%
–%
–%
–%
–%
–%
41%
112%
107%
107%
183%
–%
–%
–%
–%
–%
106%
104%
105%
107%
169%
–%
–%
–%
–%
100%
100%
38%
100%
100%
–%
–%
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE External auditor
External auditor
97
EXTERNAL AUDITOR
In accordance with Dutch law, ASMI’s external auditor is appointed by the Annual General Meeting of Shareholders
and is nominated for appointment by the Supervisory Board upon advice from the Audit Committee and
the Management Board. Our current external auditor, KPMG, was reappointed as external auditor by
the 2020 Annual General Meeting of Shareholders (AGM) for the reporting year 2020.
The external auditor is present at our AGM to respond to questions, if any, from the shareholders
about the auditor’s report on the financial statements.
TAX SERVICES
The Audit Committee may pre-approve expenditures up to a specified amount per engagement and
in total for identified services related to tax matters. Additional services exceeding the specified pre-
The Audit Committee has determined that the provision of services by KPMG and its member firms
approved limits, or involving service types not included in the pre-approved list, require specific Audit
is compatible with maintaining KPMG’s independence. All audit and permitted non-audit services
Committee approval.
provided by KPMG and its member firms during 2020 were pre-approved by the Audit Committee.
AUDIT COMMITTEE POLICIES AND PROCEDURES
The Audit Committee has adopted the following policies and procedures for pre-approval of all audit
OTHER SERVICES
In the case of specified services for which utilizing our external auditor creates efficiencies, minimizes
disruption or preserves confidentiality, or for which management has determined that our external
and permitted non-audit services provided by our external auditor.
auditor possesses unique or superior qualifications to provide such services, the Audit Committee
AUDIT SERVICES
Management submits to the Audit Committee for pre-approval the scope and estimated fees for
specific services directly related to performing the independent audit of our statutory and consolidated
financial statements for the current year.
AUDIT-RELATED SERVICES
The Audit Committee may pre-approve expenditures up to a specified amount for services included
in identified service categories that are related extensions of audit services and are logically performed
by the auditors. Additional services exceeding the specified pre-approved limits require specific Audit
Committee approval.
may pre-approve expenditures up to a specified amount per engagement and in total. Additional
services exceeding the specified pre-approved limits, or involving service types not included in the
pre-approved list, require specific Audit Committee approval.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Declarations
Declarations
DECLARATIONS
98
COMPLIANCE WITH DUTCH CORPORATE GOVERNANCE CODE
The Dutch Corporate Governance Code was last amended on December 8, 2016. As of 2018,
CORPORATE GOVERNANCE STATEMENT
ASMI complies with the Corporate Governance Code. All required information is part of this Annual
Dutch listed companies are required to report on compliance with the revised Code. The full text of
Report.
the Dutch Corporate Governance Code can be found on the website of the Monitoring Commission
Corporate Governance Code (www.mccg.nl).
Corporate governance-related documents are available on our website. These include, amongst
ASMI applies the relevant principles and best practices of the revised Code applicable to
Committee charter, the Nomination, Selection and Remuneration Committee charter, the COBC,
the company, to the Management Board, and to the Supervisory Board, in the manner set out in
the whistleblower policy, the anti-fraud policy, the rules concerning Insider Trading, the remuneration
the Corporate Governance section, as long as it does not entail disclosure of commercially sensitive
policy, diversity policy, and policy regarding communications and bilateral contacts with shareholders.
others, the Supervisory Board profile, Supervisory Board rules, Management Board rules, the Audit
information, as accepted under the Code.
ASMI agrees with principle 3.2.3 of the Code that in most circumstances a maximum severance
ARTICLE 10 EU TAKEOVER DIRECTIVE DECREE
The Management Board states that the information required under Article 10 of the EU Takeover
payment of one year for Management Board members is appropriate. However, we want to reserve
Directive Decree is disclosed herein to the extent that it is applicable to ASMI.
the right to agree to different amounts in case we deem this to be required by the circumstances. Any
deviations will be disclosed.
RESPONSIBILITY STATEMENT
The members of the Management Board state that, to the best of their knowledge, the statutory
financial statements prepared in accordance with IFRS-EU and Title 9 of part 2 of the Dutch Civil
Code as included in this Annual Report 2020 provide a true and fair view of the assets, liabilities,
financial position, and results of the company and its subsidiaries included in the consolidated
statements, and that the management report provides a true and fair view of the position and the
business of the company and its subsidiaries, and the Annual Report 2020 provides a description of
the principal risks and uncertainties that the company faces.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE FINANCIAL STATEMENTS
99
FINANCIAL STATEMENTS
In 2020, revenue grew by 18% excluding the
settlement proceeds in 2019 and reached a new
record of €1.3 billion. ALD continued our key driver
and our spares & services business delivered an
outstanding performance. Operating result increased
to €327.1 million from €219.6 million in 2019 excluding
the settlement proceeds.
OTHER DEVELOPMENTS
New bookings increased by 12% in 2020 to €1,314 million, excluding
the proceeds from the settlements in 2019. Equipment bookings
were led by the foundry segment, followed by memory and logic.
Total research and development (R&D) expenses, including impairment,
capitalization and amortization of development expenses, increased
by 25% in 2020 compared to the previous year due to higher activities.
Consolidated financial statements
Consolidated statement of profit or loss
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
ASM International N.V. financial statements
Company balance sheet
Company statement of profit or loss
Notes to the company financial statements
Independent auditor’s report
100
100
101
102
103
104
105
147
147
148
149
155
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Consolidated financial statements
Consolidated statement of profit or loss
Consolidated financial statements
Consolidated statement of profit or loss
100
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
(EUR thousand, except per share data)
Revenue
Cost of sales
Gross profit
Operating expenses:
Selling, general and administrative
Research and development
Total operating expenses
Result from operations
Finance income
Finance expense
Foreign currency exchange loss
Share in income of investments in associates
Result before income taxes
Income taxes
Net earnings from operations, attributable to common shareholders
Per share data
Basic net earnings per share (EUR):
From operations
Diluted net earnings per share (EUR):
From operations
Weighted average number of shares (thousand):
Basic
Diluted
The notes on the following pages are an integral part of these consolidated financial statements.
Year ended December 31,
Notes
2019
2020
21
23
23
23
17
6
22
24
1,283,860
1,328,122
(645,396)
638,464
(148,929)
(110,846)
(704,553)
623,569
(157,424)
(139,002)
(259,775)
(296,426)
378,689
1,639
(1,766)
(146)
4,247
382,663
(53,650)
329,013
6.66
6.58
49,418
49,999
327,143
141
(2,008)
(23,157)
31,950
334,069
(48,673)
285,396
5.84
5.78
48,907
49,359
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
Consolidated statement of comprehensive income
Consolidated statement of comprehensive income
101
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(EUR thousand)
Net earnings from operations, attributable to common shareholders
Other comprehensive income, net of income tax
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit obligation
Share of other comprehensive income (loss) investments in associates
Items that may be subsequently reclassified to profit or loss:
Foreign currency translation effect
Other comprehensive income for the year, net of income tax
Notes
Year ended December 31,
2019
329,013
2020
285,396
13
6
(103)
(3,991)
(4,094)
31,427
31,427
27,333
374
(2,296)
(1,922)
(98,833)
(98,833)
(100,755)
Total comprehensive income, attributable to common shareholders
12
356,346
184,641
The notes on the following pages are an integral part of these consolidated financial statements.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
Consolidated statement of financial position
Consolidated statement of financial position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
102
(EUR thousand)
Assets
Right-of-use assets
Property, plant and equipment
Goodwill
Other intangible assets
Investments in associates
Deferred tax assets
Other non-current assets
Evaluation tools at customers
Employee benefits (pension assets)
Total non-current assets
Inventories
Accounts receivable
Income taxes receivable
Other current assets
Cash and cash equivalents
Total current assets
Total assets
Equity and liabilities
Equity
Accrued expenses and other payables (lease liabilities)
Deferred tax liabilities
Total non-current liabilities
Accounts payable
Provision for warranty
Income taxes payable
Accrued expenses and other payables
Total current liabilities
Total liabilities
Total equity and liabilities
The notes on the following pages are an integral part of these consolidated financial statements.
December 31,
Notes
2019
2020
2
3
4
5
6
22
7
13
8
9
22
10
11
12
22
14
22
15
27,547
164,863
11,270
189,224
778,268
3,064
7,780
47,247
579
23,387
213,967
11,270
209,924
742,714
196
6,590
69,474
1,431
1,229,842
1,278,953
173,189
199,535
1,220
73,479
497,874
945,297
162,199
280,061
553
72,945
435,228
950,986
2,175,139
2,229,939
1,818,651
1,854,724
15,774
20,136
35,910
119,712
16,424
34,599
149,843
320,578
356,488
13,045
21,892
34,937
124,507
18,987
67,857
128,927
340,278
375,215
2,175,139
2,229,939
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
Consolidated statement of changes in equity
Consolidated statement of changes in equity
103
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(EUR thousand except for share data)
Balance as of January 1, 2019
Net earnings
Other comprehensive income
Total comprehensive income
Dividend paid to common shareholders
Capital repayment
Compensation expense share-based payments
Exercise stock options out of treasury shares
Vesting restricted shares out of treasury shares
Purchase of common shares
Cancellation of common shares out of treasury shares
Other movements in investments in associates:
Dilution
Balance as of December 31, 2019
Net earnings
Other comprehensive income
Total comprehensive income
Dividend paid to common shareholders
Capital repayment
Compensation expense share-based payments
Exercise stock options out of treasury shares
Vesting restricted shares out of treasury shares
Purchase of common shares
Cancellation of common shares out of treasury shares
Other movements in investments in associates:
Dilution
Balance as of December 31, 2020
Notes
Number of common
shares outstanding
Common
shares
Capital in excess
of par value
Treasury
shares at cost
Retained
earnings
Other
reserves 1)
Total
equity
49,318,898
2,252
50,902
(328,010)
1,816,941
99,607
1,641,692
12
13
13
13
12
12
6
12
13
13
13
12
12
6
—
—
—
—
—
—
316,028
182,196
(950,902)
—
—
48,866,220
—
—
—
—
—
—
127,324
229,823
(508,685)
—
—
48,714,682
—
—
—
—
—
—
—
—
—
(200)
—
2,052
—
—
—
—
—
—
—
—
—
(60)
—
1,992
—
—
—
—
(1,144)
10,538
(8,056)
(8,564)
—
—
—
—
—
—
—
—
—
14,823
8,564
(100,131)
235,047
329,013
—
329,013
(99,299)
—
—
—
—
—
(234,847)
—
3,882
—
27,333
27,333
—
—
—
—
—
—
—
—
329,013
27,333
356,346
(99,299)
(1,144)
10,538
6,767
—
(100,131)
—
3,882
43,676
(169,707)
1,815,690
126,940
1,818,651
285,396
—
285,396
—
(100,755)
(100,755)
285,396
(100,755)
184,641
—
—
—
—
—
—
8,697
16,043
(67,505)
107,510
(98,688)
—
—
—
—
—
(107,450)
—
—
—
—
—
12,792
(5,923)
(16,043)
—
—
—
—
—
—
—
—
—
—
—
(98,688)
—
12,792
2,774
—
(67,505)
—
2,059
—
2,059
34,502
(104,962)
1,897,007
26,185
1,854,724
1 Other reserves consist of the currency translation reserve, remeasurement on net defined benefit and the reserve for proportionate share in other comprehensive income investments in associates. See Note 12.
The notes on the following pages are an integral part of these consolidated financial statements.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Consolidated statement of cash flows
Consolidated statement of cash flows
104
CONSOLIDATED STATEMENT OF CASH FLOWS
(EUR thousand)
Cash flows from operating activities
Net earnings from operations
Adjustments to reconcile net earnings to net cash from operating activities
Depreciation, amortization and impairments
Share-based compensation
Non-cash costs
Non-cash interest
Share in income of investments in associates
Income tax
Changes in assets and liabilities
Accounts receivable
Inventories
Evaluation tools
Other assets
Accounts payable and accrued expenses
Income tax paid
Net cash from operating activities
Cash flows from investing activities
Capital expenditures
Proceeds from sale of property, plant and equipment
Capitalized development expenditure
Purchase of intangible assets
Dividend received from associates
Net cash used in investing activities
Cash flows from financing activities
Payment of lease liabilities
Purchase of treasury shares ASMI
Proceeds from issuance of treasury shares
Dividends to common shareholders of ASMI
Capital repayment
Net cash used in financing activities
Foreign currency translation effect on cash and cash equivalents
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
The notes on the following pages are an integral part of these consolidated financial statements.
Year ended December 31,
Notes
2019
2020
329,013
285,396
2,3,5,7
13
6
22
7
3
3
5
5
6
2
12
13
11
11
78,321
10,538
4,884
593
(4,247)
53,650
(23,937)
3,058
(13,670)
(24,280)
81,134
(6,186)
89,029
12,792
10,435
561
(31,950)
48,673
(93,000)
498
(39,710)
2,379
(12,695)
(8,055)
488,871
264,353
(48,707)
28
(60,202)
(2,320)
31,960
(79,241)
(12,048)
(99,929)
6,767
(99,298)
(1,144)
(205,652)
7,989
211,967
285,907
497,874
(95,441)
2,348
(64,126)
(3,230)
16,142
(144,307)
(7,819)
(66,715)
2,774
(98,688)
—
(170,448)
(12,244)
(62,646)
497,874
435,228
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
Notes to the consolidated financial statements
Notes to the consolidated financial statements
105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. GENERAL INFORMATION/SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
BASIS OF PREPARATION
The consolidated financial statements have been prepared under the historical cost convention,
unless otherwise indicated. The company applies the going concern basis in preparing its
GENERAL INFORMATION
ASM International N.V. (ASMI, or the company) is a Dutch public liability company domiciled in
consolidated financial statements.
the Netherlands with its principal operations in Europe, the United States of America and Asia.
Historical cost is generally based on the fair value of the consideration given in exchange for goods
The company dedicates its resources to the research, development, manufacturing, marketing and
and services.
servicing of equipment and materials used to produce mainly semiconductor devices. The company
is registered at Versterkerstraat 8, 1322 AP Almere, the Netherlands.
A number of the company’s accounting policies and disclosures require the measurement of fair
values, for both financial and non-financial assets and liabilities.
The company's shares are listed for trading on the Euronext Amsterdam Stock Exchange (symbol ASM).
The accompanying consolidated financial statements
include
the financial statements of
transaction between market participants at the measurement date, regardless of whether that price
ASM International N.V. and its consolidated subsidiaries (together also referred to as ASMI, or the
is directly observable or estimated using another valuation technique.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
company). ASMI's subsidiaries are listed in Note 28 and associates are listed in Note 6.
BASIS FOR ACCOUNTING
The consolidated financial statements for the year ended December 31, 2020 have been prepared
party information, such as broker quotes or pricing services, is used to measure fair values, the
company assesses and documents the evidence obtained from the third parties to support the
in accordance with International Financial Reporting Standards (IFRS) as adopted by the European
conclusion that such valuations meet the requirements of IFRS, including the level in the fair value
Union and also comply with the financial reporting requirements included in Section 362(9) of Part 9,
hierarchy in which such valuations should be classified.
The company has an established approach with respect to the measurement of fair values. If third-
Book 2 of the Dutch Civil Code.
The consolidated financial statements have been prepared by the Management Board of the
company and authorized for issue on March 4, 2021 and will be submitted for adoption to the Annual
General Meeting of Shareholders (AGM) on May 17, 2021.
Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the
valuation techniques as follows:
›› Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
›› Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
The consolidated financial statements will be filed with the AFM and at the Trade Register of the
›› Level 3: inputs for the asset or liability that are not based on observable market data (unobservable
Chamber of Commerce in Almere, the Netherlands within eight days of adoption by the 2021 AGM.
inputs).
FUNCTIONAL AND PRESENTATION CURRENCY
The consolidated financial statements are presented in Euros (EUR), which is the company's
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair
value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the
functional currency. All amounts have been rounded to the nearest thousand, unless otherwise
fair value hierarchy as the lowest level input that is significant to the entire measurement.
indicated.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 106
Further information about the assumptions made in measuring fair values is included in the following
to events and conditions that may cast significant doubt on ASMI’s ability to continue as a
Notes:
›› Note 13 - Employee benefits; and
›› Note 17 - Financial instruments and financial risk management.
going concern.
CRITICAL ACCOUNTING POLICIES
A critical accounting policy is defined as one that is both material to the presentation of ASMI’s
USE OF ESTIMATES AND JUDGMENTS
In preparing these consolidated financial statements, management has made judgments, estimates
consolidated financial statements and that requires management to make difficult, subjective or
complex judgments that could have a material effect on ASMI’s financial condition or results of
and assumptions about the carrying amounts of assets and liabilities that are not readily apparent
operations. Specifically, these policies have the following attributes: (1) ASMI is required to make
from other sources. The estimates and associated assumptions are based on historical experience
assumptions about matters that are highly uncertain at the time of the estimate; and (2) different
and other factors that are considered to be relevant. Actual results may differ from these estimates.
estimates ASMI could reasonably have used, or changes in the estimate that are reasonably likely to
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are
occur, could have a material effect on ASMI’s financial condition or results of operations.
recognized prospectively.
Information about assumptions and estimation uncertainties that have a significant risk of resulting
certainty. ASMI bases its estimates on historical experience and on various other assumptions
in a material adjustment to the carrying amounts of assets and liabilities within the year ended
believed to be applicable and reasonable under the circumstances. These estimates may change
Estimates and assumptions about future events and their effects cannot be determined with
December 31, 2020 is included in the following Notes:
›› Notes 3, 5, 6 and 7 - Valuation of non-financial assets;
›› Note 8 - Valuation of allowance for obsolescence inventories; and
›› Note 22 - Valuation of deferred tax assets.
as new events occur, as additional information is obtained, and as ASMI’s operating environment
changes. These changes have historically been minor and have been included in the consolidated
financial statements as soon as they became known. In addition, management is periodically
faced with uncertainties, the outcomes of which are not within its control and will not be known
for prolonged periods of time. Based on a critical assessment of its accounting policies and the
COVID-19
As the COVID-19 outbreak started to expand over the world in the first quarter of 2020, various
underlying judgments and uncertainties affecting the application of those policies, management
believes that ASMI’s consolidated financial statements are fairly stated in accordance with IFRS,
countries took drastic measures like lockdowns and closure of borders. ASMI’s operations were
and provide a meaningful presentation of ASMI’s financial condition and results of operations. An
affected by this. It caused disruptions to our supply chain as borders were closed and goods and
analysis of specific sensitivity to changes of estimates and assumptions is included in the Notes to
people could not move. The lockdowns resulted in lower capacity at our suppliers but also at our
the (consolidated) financial statements.
own operations in Singapore. Towards the end of the second quarter, the situation started to improve
as lockdown measures and transport restrictions were gradually lifted in especially Asia Pacific and
Europe. During 2020, the performance of the company was not materially impacted by COVID-19.
Total revenue was 3% above the level of last year and excluding proceeds resulting from the patent
litigation & arbitration settlements (€159 million) in 2019 the revenue increased with 18% compared
to prior year.
Based on our impairments tests performed at year-end 2020, we concluded that even with a
significant negative scenario, the recoverable amounts for our non-current assets exceeded the
carrying amounts. Management has concluded that there are no material uncertainties related
Management believes that the following accounting policies are critical:
›› revenue recognition;
›› inventories;
›› evaluation of long-lived assets for impairment;
›› evaluation of investments in associates for impairment;
›› intangible assets for capitalization and for impairment; and
›› income taxes.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 107
CHANGES IN ACCOUNTING POLICIES
Application of new and revised International Financial Reporting Standards (IFRS)
Subsidiaries
Subsidiaries are entities controlled by the company. The financial statements of subsidiaries are
included in the consolidated financial statements from the date on which control commences until
New and amended IFRS Standards that are effective for the current year
the date on which control ceases.
Amendments to IFRS 3 ‘Definition of a Business', amendments to IFRS 9, IAS 39 and IFRS 7 ‘Interest
Rate Benchmark Reform', amendments to IAS 1 and IAS 8 ‘Definition of Material' and ‘Amendments
Interests in equity-accounted investees
to References to the Conceptual Framework in IFRS Standards' are effective on January 1, 2020.
The company’s interests in equity-accounted investees comprise investments in associates.
These changes have been assessed for their potential impact and do not have a material effect on
the company's consolidated financial statements.
Associates are those entities in which the company has significant influence, but not control or joint
ACCOUNTING POLICIES
The company has consistently applied the following accounting policies to all periods presented in
these consolidated financial statements.
Consolidation
control, over the financial and operating policies.
Interests in associates are accounted for using the equity method. They are initially recognized at
cost, which includes transaction costs. Upon acquisition of the investment in an associate, any
excess of the cost of the investment over the company’s share of the net fair value of the identifiable
assets and liabilities of the investee is recognized as goodwill, which is included in the carrying
The consolidated financial statements include the accounts of ASMI and all of its subsidiaries where
amount of the investment.
ASMI holds a controlling interest. Non-controlling interest is disclosed separately, where appropriate,
in the consolidated financial statements.
Control is achieved when ASMI has:
›› the power over an investee;
›› exposure, or rights, to variable returns from its involvement with the investee; and
›› the ability to use its power over the investee to affect the amount of the investor's returns.
Subsequent to initial recognition, the consolidated financial statements include the company's share
of the profit or loss and other comprehensive income (OCI) of equity-accounted investees, until the
date on which significant influence ceases.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealized income and expenses arising from intra-
group transactions, are eliminated. Unrealized gains arising from transactions with equity-accounted
ASMI reassesses whether or not it controls an investee if facts and circumstances indicate that there
investees are eliminated against the investment to the extent of the company’s interest in the investee.
are changes to one or more of the three elements of control listed above.
Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there
As from the date these criteria are met, financial data of the relevant subsidiary are included in the
consolidation and deconsolidated from the date on which ASMI's control ceases.
Foreign currency translation
is no evidence of impairment.
Loss of control
The individual financial statements of each group entity are presented in their local functional currency.
For the purpose of the consolidated financial statements, the results and financial position of each
Upon loss of control, ASMI derecognizes the assets and liabilities of the subsidiary. Any surplus
entity is expressed in euros, which is ASMI's functional currency and the presentation currency for
or deficit arising on the loss of control is recognized in profit or loss. If ASMI retains any interest
the consolidated financial statements.
in this subsidiary, then such interest is measured at fair value at the date on which control is lost.
Subsequently, it is accounted for as an equity-accounted investee or as an available-for-sale financial
asset, depending on the level of influence retained.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 108
Foreign currency transactions
The Back-end segment is still reported as a separate segment after the company ceased control on
In preparing the financial statements of the individual entities, transactions in foreign currencies
March 15, 2013, since the full results of the Back-end segment are continued to be reviewed by our
are recorded at the exchange rates on the date of the transactions. At each balance sheet date,
Chief Operating Decision Maker (CODM).
monetary items denominated in foreign currencies are translated at the rates prevailing on the balance
sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are
Accordingly, the asset and profit or loss information regarding the operations that comprise the
translated at the rates prevailing on the date when the fair value was determined.
segment are disclosed. The full financial results are reviewed by the CODM, the external reporting of
Exchange rate differences arising on the settlement of monetary items, and on the translation of
is reconciled to the corresponding amounts reported in the consolidated financial statements,
monetary items, are recognized in the consolidated statement of profit or loss in the period in which
eliminations are reflected in the reconciling column for amounts reported in excess of those amounts
the segment is on an equity method investment basis. The total of all segments' financial amounts
they arise. Exchange rate differences arising on the translation of non-monetary items carried at
reflected in the consolidated financial statements.
fair value are recognized in the consolidated statement of profit or loss for the period except for
differences arising on the translation of non-monetary items in respect of which gains and losses are
The Front-end segment manufactures and sells equipment used in wafer processing, encompassing
recognized directly in equity.
Foreign operations
the fabrication steps in which silicon wafers are layered with semiconductor devices. The segment
is a product-driven organizational unit comprised of manufacturing, service, and sales operations in
Europe, the United States, Japan, South Korea and Southeast Asia.
For the purpose of presenting consolidated financial statements, assets and liabilities of foreign
operations are translated into euros at the exchange rates at the reporting date. The income and
The Back-end segment manufactures and sells equipment and materials used in assembly and
expenses of foreign operations are translated into euros at the exchange rates at the dates of
packaging, encompassing the processes in which silicon wafers are separated into individual circuits
the transactions.
and subsequently assembled, packaged and tested. The segment is organized in ASM Pacific
Technology Ltd, in which the company holds a 25.07% interest, whilst the remaining shares are listed
Foreign currency differences are recognized in OCI and accumulated in the translation reserve,
on the Stock Exchange of Hong Kong.
except to the extent that the translation difference is allocated to non-controlling interest.
Property, plant and equipment
When a foreign operation is disposed of in its entirety or partially such that control or significant
Items of property, plant and equipment are measured at cost, less accumulated depreciation and any
influence is lost, the cumulative amount in the translation reserve related to that foreign operation is
accumulated impairment losses.
reclassified to profit or loss as part of the gain or loss on disposal. If the company disposes of part of
its interest in a subsidiary but retains control, then the relevant proportion of the cumulative amount
If significant parts of an item of property, plant and equipment have different useful lives, then they are
is reattributed to non-controlling interest. When the company disposes of only part of an associate
accounted for as separate items (major components) of property, plant and equipment.
while retaining significant influence, the relevant proportion of the cumulative amount is reclassified to
profit or loss.
Segment reporting
Depreciation is calculated to write off the cost of items of property, plant and equipment less their
estimated residual values using the straight-line method over their estimated useful lives, and is
generally recognized in profit or loss. The estimated useful lives, residual values and depreciation
The company organizes its activities in two operating segments, Front-end and Back-end.
method are reviewed at the end of each reporting period, with the effect of any changes in estimate
Operating segments are reported in a manner consistent with the internal reporting provided to
accounted for on a prospective basis.
the Chief Executive Officer (CEO), which is the CODM. Operating segments are in line with the
reporting segments.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 109
The estimated useful lives of property, plant and equipment for current and comparative periods are
Other intangible assets
as follows:
Building and leasehold improvements
Machinery equipment
Furniture and fixtures and other equipment
Other intangible assets include capitalized development expenses, software, purchased technology,
and remaining other intangible assets. Other intangible assets that are acquired by the company
with finite useful lives are measured at cost less accumulated amortization and any accumulated
impairment losses.
1-25 years
2-10 years
2-10 years
Expenditure on research activities is recognized in profit or loss as incurred.
An item of property, plant and equipment is recognized upon disposal or when no future economic
benefits are expected to arise from the continued use of the asset. Any gain or loss on disposal of an
In determining the capitalization of development expenses, the company makes estimates and
item of property, plant and equipment is recognized in profit or loss.
assumptions based on expected future economic benefits generated by products that are the result
Intangible assets
Goodwill
The company accounts for business combinations using the acquisition method when control is
transferred to the company. The consideration transferred in the acquisition is generally measured at
fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for
impairment. Transaction costs are expensed as incurred.
Goodwill represents the excess of the costs of an acquisition over the fair value of the amounts
assigned to assets acquired and liabilities incurred or assumed of the acquired subsidiary at the date
of these development expenses. Other important estimates and assumptions are the required internal
rate of return, the distinction between research, development and high-volume manufacturing, and
the estimated useful life.
Development expenses are capitalized when all of the following criteria are demonstrated:
›› the technical feasibility of completing the intangible asset so that it will be available for use or sale;
›› its intention to complete the intangible asset and use or sell it;
›› its ability to use or sell the intangible asset;
›› how the intangible asset will generate probable future economic benefits;
›› the availability of adequate technical, financial and other resources to complete the development
of acquisition. Goodwill on acquisition of subsidiaries is allocated to cash generating units (CGUs)
and to use or sell the intangible asset; and
for the purpose of impairment testing. The allocation is made to those CGUs that are expected to
›› its ability to reliably measure the expenditure attributable to the intangible asset during its
benefit from the business combination in which the goodwill arose. Goodwill is tested for impairment
development.
annually and whenever events or changes in circumstances indicate that the carrying amount of
the goodwill may not be recoverable. If the recoverable amount of the CGU is less than the carrying
The company capitalizes development expenses that meet the above-mentioned criteria in its
amount of the unit, the impairment loss is recognized. An impairment loss recognized for goodwill is
consolidated financial statements. Subsequent to initial recognition, internally-generated intangible
not reversed in a subsequent period. Goodwill is stated at cost less accumulated impairment losses.
assets are reported at cost less accumulated amortization and accumulated impairment losses, on
The company’s goodwill arising on the acquisition of an associate is described in Note 6 'Investments
in Associates'.
the same basis as intangible assets that are acquired separately.
Amortization of capitalized development expenses is calculated using the straight-line method over
the estimated useful lives of the developed product. Amortization starts when the developed product
is ready for its intended use. In the development cycle, this is when the product is transferred from
the validation (beta) phase to high-volume manufacturing.
Amortization method, useful life, and residual value are reviewed at each reporting date and adjusted
if appropriate.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 110
The estimated useful lives of other intangible assets for current and comparative periods are as
determination of whether an investment is impaired is made at the individual security level in each
follows:
Development cost
Software
Purchased technology and other intangible assets
5 years
3 years
5-7 years
Investments in associates
Investments in associates are investments in entities in which ASMI can exert significant influence
reporting period.
Evaluation tools at customers
Evaluation tools at customers are systems generally delivered to customers under evaluation and
include substantial customization by our engineers and R&D staff in the field. Evaluation tools are
recorded at cost and depreciated using the straight-line method over their estimated useful life of five
years, or their shorter economic life. The depreciation expenses are reported as cost of sales.
but which ASMI does not control, generally having between 20% and 50% of the voting rights.
On final written technical acceptance and purchase order from the customer, the purchase
These entities are accounted for using the equity method and are initially recognized at cost.
consideration is recognized as revenue at a point in time and the carrying value of the evaluation
Dividend income from the company’s associated companies is recognized when the right to receive
system is recognized as cost of sales. In the circumstance that the system is returned, at the end of
payment is established. Their carrying value includes goodwill identified upon acquisition, net of any
the evaluation period, a detailed impairment review takes place, and future sales opportunities and
accumulated impairment.
additional costs are identified. It is only when the fair value is below the carrying value of the evaluation
tool that an additional depreciation is recognized. The remaining carrying value is recognized as
When ASMI’s share of losses in an associate equals or exceeds its interest in the associate, including
finished goods in inventories.
any other receivables for which settlement is neither planned nor likely to occur in the foreseeable
future, ASMI does not recognize further losses, unless ASMI has obligations to or made payments on
Inventories
behalf of the associate.
Inventories are stated at the lower of cost or net realizable value. The cost of inventories is based
on the first-in, first-out principle. Costs include net prices paid for materials purchased, charges for
At each reporting date, the company determines if there is any objective evidence that the associate
freight and custom duties, production labor costs and factory overhead. Allowances are made for
is impaired. An impairment, being the difference between the recoverable amount of the associate
slow-moving, obsolete or unsellable inventory.
and its carrying value, is recognized in the consolidated statement of profit or loss.
ASMI does not separately test associates' underlying assets for impairment. However, ASMI
as the expected market value of the inventory. We regularly evaluate the value of our inventory of
recognizes its share of any impairment charge recorded by an investee and considers the effect, if
components and raw materials, work in progress, and finished goods, based on a combination of
any, of the impairment on the basis difference in the assets giving rise to the investee’s impairment
factors including the following: forecasted sales, historical usage, product end of life cycle, estimated
charge. A loss in value of an investment which is significant or prolonged will be recognized.
current and future market values, service inventory requirements, and new product introductions, as
Significant is defined as at least 20% over an uninterrupted period of nine months, or more than 40%
well as other factors. Purchasing requirements and alternative uses for the inventory are explored
on the reporting date. Prolonged is defined as measured below cost for more than a year.
within these processes to mitigate inventory exposure. We record write-downs for inventory based
on the above factors and take into account worldwide quantities and demand into our analysis.
Allowances for obsolescence of inventory are determined based on the expected demand as well
Equity method investments are tested for prolonged decline in value. If the fair value of an investment
is less than its carrying value, the company determines whether the decline in value is temporary
or prolonged. A prolonged decline in value is measured as of a balance sheet date. If after a prior
recognized impairment the fair value is more than its carrying value, this impairment is reversed. The
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 111
Financial instruments
condition. An allowance for doubtful accounts is maintained for potential credit losses based upon
The company classifies non-derivative financial assets into loans and receivables. The company
management's assessment of the expected collectability of all accounts receivable. The allowance
classifies non-derivative financial liabilities into other financial liabilities.
for doubtful accounts is reviewed periodically to assess the adequacy of the allowance. In making
Non-derivative financial assets and financial liabilities – Recognition
and derecognition
this assessment, management takes into consideration any circumstances of which we are
aware regarding a customer's inability to meet its financial obligations; and our judgments as to
potential prevailing economic conditions in the industry and their potential impact on the company's
The company initially recognizes receivables on the date when they are originated. Receivables
customers.
comprise account (trade) and other receivables and cash and cash equivalents. Receivables are
measured at amortized cost using the effective interest method, less any impairment. Financial
The allowance is based on historical experience, credit evaluations, specific customer collection
assets and financial liabilities are initially recognized on the trade date when the entity becomes a
history and any customer-specific issues ASMI has identified. Changes in circumstances, such as
party to the contractual provisions of the instrument.
an unexpected adverse material change in a major customer’s ability to meet its financial obligation
to ASMI or its payment trends, may require us to further adjust our estimates of the recoverability of
The company derecognizes a financial asset when the contractual rights to the cash flows from the
amounts due to ASMI, which could have an adverse material effect on ASMI’s financial condition and
asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which
results of operations.
substantially all of the risks and rewards of ownership of the financial asset are transferred, or it
neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain
Cash and cash equivalents
control over the transferred asset. Any interest in such derecognized financial asset that is created or
Cash and cash equivalents consist of deposits held at call with banks, investments in money
retained by the company is recognized as a separate asset or liability.
market funds that invest in debt securities of financial institutions, and other short-term highly liquid
investments with original maturity of three months or less. Bank overdrafts are included in notes
The company derecognizes a financial liability when its contractual obligations are discharged or
payable to banks in current liabilities.
cancelled, or expired.
Non-derivative financial liabilities – Measurement
Financial assets and financial liabilities are offset and the net amount presented in the statement of
Other non-derivative financial liabilities are initially measured at fair value less any directly attributable
financial position when, and only when, the company currently has a legally enforceable right to offset
transaction costs. Subsequent to initial recognition, these liabilities are measured at amortized cost
the amounts and intends either to settle them on a net basis or to realize the asset and settle the
using the effective interest method.
liability simultaneously.
Non-derivative financial assets – Measurement
Share capital
Ordinary shares
Loans and receivables are initially measured at fair value plus any directly attributable transaction
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary
costs. Subsequent to initial recognition, they are measured at amortized cost using the effective
shares are recognized as a deduction from equity, net of any tax effects.
interest method.
Accounts receivable
Preference share capital
Preference share capital is classified as equity if it is non-redeemable, or redeemable only at the
A significant percentage of our accounts receivable is derived from revenue to a limited number of
company’s option, and any dividends are discretionary. Discretionary dividends thereon are
large multinational semiconductor device manufacturers located throughout the world. In order to
recognized as distributions within equity upon approval by the company’s shareholders.
monitor potential credit losses, we perform ongoing credit evaluations of our customers' financial
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 112
Preference share capital is classified as a financial liability if it is redeemable on a specific date or
at the option of the shareholders, or if dividend payments are not discretionary. Non-discretionary
Impairment
Non-derivative financial assets
dividends thereon are recognized as interest expense in profit or loss as accrued.
Financial assets not classified as at fair value through profit or loss, including an interest in an equity-
accounted investee, are assessed at each reporting date to determine whether there is objective
Repurchase and reissue of ordinary shares (treasury shares)
evidence of impairment.
When shares recognized as equity are repurchased, the amount of the consideration paid, which
includes directly attributable costs, is recognized as a deduction from equity. Repurchased shares are
Objective evidence that financial assets are impaired includes default or delinquency by a debtor,
classified as treasury shares and are presented in the treasury share reserve. When treasury shares
restructuring of an amount due to the company on terms that the company would not consider
are sold or reissued subsequently, the amount received is recognized as an increase in equity and
otherwise, indications that a debtor or issuer will enter bankruptcy, adverse changes in the payment
the resulting surplus or deficit on the transaction is presented in a non-distributable capital reserve.
status of borrowers or issuers, the disappearance of an active market for a security because of
financial difficulties, or observable data indicating that there is a measurable decrease in the expected
Issuance of shares by an equity-accounted investee
cash flows from a group of financial assets.
The associate ASMPT yearly issues common shares pursuant to their employee share incentive
scheme. The effect of these issuances is a dilution of the company's ownership in ASMPT.
Loans and receivables
The company recognizes the impact of these issuances directly into equity.
The company considers evidence of impairment for these assets at both an individual asset and
Comprehensive income
a collective level. All individually significant assets are individually assessed for impairment. Those
found not to be impaired are then collectively assessed for any impairment that has been incurred
Comprehensive income consists of net earnings (loss) and other comprehensive income. Other
but not yet individually identified.
comprehensive income includes gains and losses that are not included in net earnings, but are
recorded directly in equity.
Provisions
The impairment method for account receivables is described at Note 9 Accounts Receivable.
Equity-accounted investees
Provisions are recognized when the company has a present obligation (legal or constructive) as a
An impairment loss in respect of an equity-accounted investee is measured by comparing the
result of a past event, it is probable that the company will be required to settle the obligation, and a
recoverable amount of the investment with its carrying amount. An impairment loss is recognized in
reliable estimate can be made of the amount of the obligation.
profit or loss, and is reversed if there has been a favorable change in the estimates used to determine
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money and the risks specific to the liability.
Non-financial assets
the recoverable amount.
The unwinding of the discount is recognized as finance cost.
At each reporting date, the company reviews the carrying amounts of its non-financial assets (other
than inventories and deferred tax assets) to determine whether there is any indication of impairment.
If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested
annually for impairment.
For impairment testing, assets are grouped together into the smallest group of assets that generates
cash inflows from continuing use that are largely independent of the cash inflows of other assets or
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 113
CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that
Revenue streams
are expected to benefit from the synergies of the combination.
The company generates revenue primarily from the sales of equipment and sales of spares & services.
The products and services described below by nature, can be part of both revenue streams. The
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less
revenue streams are disclosed in Note 21 Revenue.
costs to sell. Value in use is based on the estimated future cash flows, discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of
Nature of goods and services
money and the risks specific to the asset or CGU.
The following is a description of principal activities from which the group generates its revenue.
An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable
amount.
Products and
services
Equipment
Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying
amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other
assets in the CGU on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is
reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or amortization, if no impairment loss had been
Installation
recognized.
Commitments and contingencies
The company has various contractual obligations such as purchase commitments and commitments
Spares
for capital expenditure. These obligations are generally not recognized as liabilities on the company's
statement of financial position but are disclosed in the Notes to the consolidated financial statements.
Nature, timing of satisfaction of performance obligation
and significant payment terms
Revenue from equipment is recognized at a point in time when the
performance obligation is satisfied, when control transfers. This is usually upon
shipment depending on incoterms. The amount of revenue recognized is based
on the amount of the transaction price that is allocated to the performance
obligation. The total consideration of the contract is allocated between all
distinct performance obligations in the contract based on their stand-alone
selling prices. The stand-alone selling prices are mostly determined based on
other stand-alone sales that are directly observable or based on the expected
cost plus a margin approach. Any customer discounts and credits, within
volume purchase agreements or bundled agreements, are considered as a
reduction of the transaction price.
The customer simultaneously consumes and receives the benefits provided by
the performance of the installation. As such, transfer of control takes place over
the period of installation from delivery through customer acceptance, measured
on a straight-line basis, as our performance is satisfied evenly over this period
of time.
Revenue from spares is recognized at a point in time when the performance
obligation is satisfied, when the control transfers. This is usually upon shipment
depending on incoterms. The amount of revenue recognized is based on the
amount of the transaction price that is allocated to the performance obligation.
Any customer discounts and credits, within a volume purchase agreements,
are considered as a reduction of the transaction price.
Revenue recognition
Revenue is measured based on the consideration specified in a contract with a customer and
excludes amounts collected on behalf of third parties. The company recognizes revenue when it
transfers control over a product or service to a customer. Depending on the contract, we obtain
Revenue on royalties
and licenses for
technology included
in equipment and/or
spares
The fixed price royalty is a right to use the licenses and revenue is recognized
at a point in time that the license is transferred to the customer. For the
sales-based royalty, the performance obligation is satisfied when the license
is transferred to the customer. Given this is earlier than when the sales occur,
revenue should be recognized when the sales occur.
normally a right to payment for our equipment upon shipment and on completion of installation. Right
Support services
to payment for our spares and services occurs upon shipment or completion of the service unless
described otherwise.
The customer simultaneously consumes and receives the benefits provided by
the performance of the support. For the majority of support services transfer of
control takes place over the period of support.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 114
Cost of sales
reasonably certain to exercise such options impacts the lease term, which significantly affects the
Cost of sales comprises direct costs such as labor, materials, cost of warranty, depreciation, shipping
amount of lease liabilities and right-of-use assets recognized.
and handling costs, and related overhead costs. Cost of sales also includes depreciation expenses
of evaluation tools at customers, royalty payments, and costs relating to prototype and experimental
The company has applied the exception not to recognize right-of-use assets and lease liabilities for
products, which the company may subsequently sell to customers.
short-term leases (lease term of 12 months or less) and leases of low-value assets (up to the amount
Warranty
of €5 thousand asset value, such as water purifiers and air cleaners). The company recognizes
the lease payments associated with these leases as an expense on a straight-line basis over the
We provide maintenance on our systems during the warranty period, on average one year. Costs
lease term.
of warranty include the cost of labor and material necessary to repair a product during the warranty
period. We accrue for the estimated cost of the warranty on products shipped in a provision for
Income tax
warranty, upon recognition of the sale of the product. The costs are estimated based on historical
Income tax expense comprises current and deferred tax. It is recognized in the statement of profit
expenses incurred and on estimated future expenses related to current revenue, and are updated
or loss except to the extent that it relates to a business combination, or items recognized directly in
periodically. Actual warranty costs are charged against the provision for warranty. The actual warranty
equity or in other comprehensive income.
costs may differ from estimated warranty costs, and we adjust our provision for warranty accordingly.
Future warranty costs may exceed our estimates, which could result in an increase of our cost
Current tax
of sales.
Leases
The current corporate income tax charge recognized in the consolidated statement of profit or
loss is calculated in accordance with the prevailing tax regulations and rates, taking into account
non-taxable income and non-deductible expenses. The current income tax expense reflects the
The company leases many assets, including land, buildings, houses, motor vehicles, machinery and
amount for the current reporting period that the company expects to recover from or pay to the tax
furniture.
authorities. Current income tax related to items recognized directly in equity is recorded in equity
and not in the consolidated statement of profit or loss. ASMI’s management periodically evaluates
The company recognizes a right-of-use asset and a lease liability at the lease commencement date.
positions taken in the tax returns regarding situations in which applicable tax regulations are subject
The right-of-use asset is initially measured at cost, and subsequently at cost less any accumulated
to interpretation, and establishes provisions when deemed appropriate. The amount of current tax
depreciation and impairment losses, and adjusted for certain remeasurement of the lease liability.
payable or receivable is the best estimate of the tax amount expected to be paid or received that
reflects uncertainty related to income tax, if any. Measurement of the tax payable or receivable for
The lease liability is initially measured at the present value of the lease payments that are not paid at
uncertain tax positions is based on management’s best estimate of the amount of tax benefit that will
the commencement date, discounted using the company’s incremental borrowing rate. The lease
be lost. Current tax also includes any tax arising from dividends and royalties.
liability is subsequently increased by the interest cost on the lease liability and decreased by the
lease payment made. It is remeasured when there is a change in future lease payments arising from
Current tax assets and liabilities are offset only if certain criteria are met (IAS 12).
a change in a rate or changes in the assessment of whether a purchase or extension option is
reasonably certain to be exercised or a termination option is reasonably certain not to be exercised.
Deferred tax
The company has applied judgment to determine the lease term for some of the lease contracts
assets and liabilities and their carrying values in ASMI’s consolidated statement of financial position.
in which it is a lessee that includes renewal options. The assessment of whether the company is
Deferred tax assets are recognized for deductible temporary differences, the carry forward of unused
tax credits, and any unused tax losses. Deferred tax assets are recognized only to the extent that
Deferred income tax positions are recognized for temporary differences between the tax basis of
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 115
it is probable that future taxable profits will be available against which the temporary differences
The company's employees in Japan participate in defined benefit plans. Pension costs in respect to
can be utilized. Both the recognized and unrecognized deferred tax assets are reassessed at each
this defined benefit plan are determined using the projected unit credit method. These costs primarily
reporting date. Deferred tax assets are recorded for deductible temporary differences associated with
represent the increase in the actuarial present value of the obligation for pension benefits based on
investments in subsidiaries and are recorded only to the extent that it is probable that the temporary
employee service during the year and the interest on this obligation in respect to employee service in
differences will reverse in the foreseeable future, and taxable profit will be available against which the
previous years, net of the expected return on plan assets.
temporary differences can be utilized.
Deferred tax liabilities are recognized for taxable temporary differences except when they affect
position an asset or a liability for the plan's over funded status or underfunded status respectively.
neither the profit or loss reported in the consolidated statement of profit or loss nor the taxable profit
Actuarial gains and losses are recognized when incurred.
or loss. Also, no deferred tax liabilities are recorded for taxable temporary differences associated
Obligations for contributions to defined contribution plans are expensed as the related service is
with investments in subsidiaries when the timing of the reversal of the temporary differences can be
provided. Prepaid contributions are recognized as an asset to the extent that a cash refund or a
controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
reduction in future payments is available.
For the defined benefit plan, the company recognizes in its consolidated statement of financial
Deferred tax positions are stated at nominal value and are measured at the corporate income tax
Share-based payments
rates the company expects to be applicable in the year when the asset is realized or liability is settled
The costs relating to employee stock options and shares (compensation expense) are recognized
based on enacted or substantially enacted tax laws and reflects uncertainty related to income tax,
based upon the grant date fair value of the stock options or the shares. The fair value at grant date
if any.
of employee stock options is estimated using a Black-Scholes option valuation model. This model
Deferred income tax assets and liabilities are netted if there is a legally enforceable right to set off
requires the use of assumptions including expected stock price volatility, the estimated life of each
current tax assets against current tax liabilities, deferred income tax assets and deferred income tax
award, and the estimated dividend yield. The risk-free interest rate used in the model is determined,
liabilities related to income taxes levied by the same taxation authority on the same taxable entity, and
based on a euro government bond with a life equal to the expected life of the options. The estimated
there is an intention to settle on a net basis.
fair value at grant date of shares is based on the share price of the ASMI share at grant date minus
the discounted value of expected dividends during the vesting period.
Retirement benefit costs
The company has retirement plans covering substantially all employees. The principal plans are
The grant date fair value of the stock options and shares is expensed on a straight-line basis over the
defined contribution plans, except for the plans of the company's operations in the Netherlands
vesting period, based on the company’s estimate of stock options and shares that will eventually vest.
and Japan. The company's employees in the Netherlands participate in a multi-employer defined
The impact of the true-up of the estimates is recognized in the consolidated statement of profit or
benefit plan. Payments to defined contribution plans and the multi-employer plan are recognized as
loss in the period in which the revision is determined. The total estimated share-based compensation
an expense in the consolidated statement of profit or loss as they fall due. The company accounts for
expense, determined under the fair value-based method is amortized proportionally over the option
the multi-employer plan as if it were a defined contribution plan since the manager of the plan is not
vesting periods.
able to provide the company with the required company-specific information to enable the company
to account for the plan as a defined benefit plan.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE NOTE 2. RIGHT-OF-USE ASSETS
The company leases many assets, including land, buildings, houses, motor vehicles, machinery
and equipment. Leases typically run up to a period of 5 years, some with an option to renew the
lease after the end of the non-cancelable period. Lease payments are renegotiated on a periodic
basis; timing is dependent on the region and type of lease. The company has not entered into any
sub-lease arrangements.
Right-of-use assets
(EUR thousand)
Balance January 1, 2019
Additions
Transfer from property, plant and
equipment
Modifications and reassessments
Retirements
Land and
buildings
Motor
vehicles
Other
machinery and
equipment
23,579
6,475
459
75
–
1,488
1,588
–
31
–
Depreciation for the year
(6,057)
(1,008)
Foreign currency translation effect
Balance December 31, 2019
Additions
Modifications and reassessments
Retirements
Depreciation for the year
Foreign currency translation effect
Balance December 31, 2020
518
25,049
3,100
551
–
(6,285)
(1,337)
21,078
43
2,142
1,359
(158)
–
(1,159)
(36)
2,148
Total
25,687
8,079
459
82
–
(7,333)
573
27,547
4,459
378
–
(7,611)
(1,386)
23,387
620
16
–
(24)
–
(268)
12
356
–
(15)
–
(167)
(13)
161
Amounts recognized in profit or loss
(EUR thousand)
Leases under IFRS 16
Interest on lease liabilities
Depreciation expenses
Expenses relating to short-term leases
Expenses relating to low-value leases
Total
Amounts recognized in statement of cash flows
(EUR thousand)
Total cash outflow for leases
Extension options
116
2019
2020
586
7,333
329
16
8,264
561
7,611
254
16
8,442
2019
12,048
2020
7,819
The extension options held are exercisable only by the company and not by the lessors. The
company assesses at lease commencement date whether it is reasonably certain to exercise the
extension options. The company reassesses whether it is reasonably certain to exercise the options
at year-end for material lease components, if there is a significant event or significant changes in
circumstances within its control.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 117
NOTE 3. PROPERTY, PLANT AND EQUIPMENT
The changes in the amount of property, plant and equipment are as follows:
Buildings and leasehold
improvements
Machinery and
equipment
Furniture and fixtures
and other equipment
Assets under
construction
Total
At cost
Balance January 1, 2019
Capital expenditures
Disposals
Transfer from assets under construction
Transfer to right-of-use assets
Foreign currency translation effect
Balance December 31, 2019
Capital expenditures
Disposals
Transfer from assets under construction
Transfer to intangible assets
Foreign currency translation effect
Balance December 31, 2020
Accumulated depreciation and impairment
Balance January 1, 2019
Depreciation for the year
Impairment charges
Disposals
Foreign currency translation effect
Balance December 31, 2019
Depreciation for the year
Impairment charges
Disposals
Foreign currency translation effect
Balance December 31, 2020
Carrying amounts
December 31, 2019
December 31, 2020
Useful lives in years
46,629
492
(5)
39,238
–
995
87,349
411
(196)
51,287
–
(4,173)
134,678
29,033
3,936
–
(2)
892
33,859
4,406
–
(193)
(1,974)
36,098
53,490
98,580
1-25
208,404
2,667
(2,985)
23,460
–
3,474
235,020
3,528
(23,378)
34,317
–
(14,352)
235,135
137,347
27,090
–
(2,964)
2,307
163,780
25,647
–
(21,122)
(10,056)
158,249
71,240
76,886
2-10
24,977
1,126
(86)
4,139
–
625
30,781
1,752
(3,196)
5,705
(92)
(1,359)
33,591
19,283
2,303
–
(82)
518
22,022
2,974
–
(3,107)
(927)
20,962
8,759
12,629
2-10
54,402
44,422
–
(66,837)
(459)
(154)
334,412
48,707
(3,076)
–
(459)
4,940
31,374
384,524
89,750
–
(91,309)
–
(3,943)
25,872
–
–
–
–
–
–
–
–
–
–
–
95,441
(26,770)
–
(92)
(23,827)
429,276
185,663
33,329
–
(3,048)
3,717
219,661
33,027
–
(24,422)
(12,957)
215,309
31,374
164,863
25,872
213,967
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE NOTE 4. GOODWILL
The carrying amount of the goodwill is related to acquisitions in the following cash-generating units:
These estimates are consistent with the plans and estimated costs we use to manage the underlying
business. We expect the demand for these technologies to continue beyond a period of five years
ALD
PEALD
Total
December 31,
management concluded that as per December 31, 2020 the recoverable amount of the CGUs
and therefore we have included perpetuity growth rates in our assumptions. Based on this analysis,
2019
2,611
8,659
11,270
2020
2,611
8,659
11,270
exceeded the carrying value. The excess was over 100% for each of the CGUs. Sensitivity analysis
demonstrated that no reasonable possible change in estimated cash flows or the discount rate used
in calculating the fair value would cause the carrying value of goodwill to exceed the fair value.
For Back-end, goodwill is included in the investment value of ASMPT. For the impairment test,
We perform an annual impairment test in the fourth quarter of each year or if events or changes
reference is made to Note 6.
118
in circumstances indicate that the carrying amount of goodwill exceeds its recoverable amount.
For the Front-end impairment test and the determination of the recoverable amount, a discounted
future cash flow approach is used which makes use of our estimates of future revenues, driven by
assumed market growth and estimated costs as well as appropriate discount rates.
The material assumptions used for the discounted future cash flows of the cash-generating units
(CGUs) are:
›› An average discount rate of 12.6% (2019: 13.3%) representing the pre-tax weighted average cost
of capital;
›› External market segment data, historical data and strategic plans to estimate cash flow growth per
product line; and
›› Cash flow calculations are limited to four years of cash flow; after these four years, perpetuity
growth rates are set based on the market maturity of the products. For a maturing product, the
perpetuity growth rates used are 1% or less, and for enabling technology products the rate used is
3% or less.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
119
NOTE 5. OTHER INTANGIBLE ASSETS
Other
intangible assets
include capitalized development expenditure, software developed
or purchased (including licenses) for internal use, and purchased technology from third parties.
The changes in the amount of other intangible assets are as follows:
Development costs
Software
Purchased technology and
other intangible assets
Total
At cost
Balance January 1, 2019
Additions
Disposals
Foreign currency translation effect
Balance December 31, 2019
Additions
Transfer from property, plant and equipment
Disposals
Foreign currency translation effect
Balance December 31, 2020
Accumulated amortization and impairment losses
Balance January 1, 2019
Amortization for the year
Impairments
Disposals
Foreign currency translation effect
Balance December 31, 2019
Amortization for the year
Impairments
Disposals
Foreign currency translation effect
Balance December 31, 2020
Carrying amounts
December 31, 2019
December 31, 2020
231,944
60,202
–
3,722
295,868
64,126
–
–
(18,309)
341,685
91,562
15,597
4,755
–
1,458
113,372
21,187
10,126
–
(7,319)
137,366
182,496
204,319
31,144
2,320
–
187
33,651
3,230
92
(3,459)
(650)
32,864
22,574
4,521
–
–
133
27,228
3,863
–
(3,459)
(353)
27,279
6,423
5,585
8,915
272,003
–
–
62,522
–
(31)
3,878
8,884
338,403
–
–
–
67,356
92
(3,459)
(63)
(19,022)
8,821
383,370
7,940
670
–
–
122,076
20,788
4,755
–
(31)
1,560
8,579
285
–
–
(63)
149,179
25,335
10,126
(3,459)
(7,735)
8,801
173,446
305
189,224
20
209,924
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE We perform an annual impairment test in the fourth quarter of each year or if events or changes
in circumstances indicate that the carrying amount of development costs exceeds its recoverable
NOTE 6. INVESTMENTS IN ASSOCIATES
The location included below is the principal place of business of the specified associates. There is no
amount. A discounted future cash flow approach is used which makes use of our estimates of future
difference between the principal place of business and country of incorporation.
revenues, driven by assumed market growth and estimated costs as well as appropriate discount
rates. For the impairment test, reference is made to Note 4.
Impairment charges on capitalized development costs are included in operating expenses under
research and development. Impairment of capitalized development expenses primarily related to
Name
Associates
Levitech BV
development of new hardware for which customer demand has shifted out in time, new process
ASM Pacific Technology Ltd
technologies that were not successful, and purchased technology which became obsolete.
LOCATION
% Ownership December 31,
2019
2020
Almere, the Netherlands
Kwai Chung, Hong Kong,
People’s Republic of China
26.64%
26.64%
25.19%
25.07%
The impairment charges for 2019 and 2020 related to customer-specific projects.
Levitech BV is valued at nil (2019: nil).
120
Capitalized development costs are amortized over their estimated useful lives of five years.
Amortization starts when the developed asset is ready for its intended use. For the company, this
occurs when the application is transferred to high-volume manufacturing. Other intangible assets are
amortized over their estimated useful lives of three to seven years.
Estimated amortization expenses relating to other intangible assets are as follows:
2021
2022
2023
2024
2025
Years thereafter
Amortization estimated
Amortization not yet started
Total carrying amounts
Development
costs
21,318
20,464
18,008
12,966
4,942
–
77,698
126,621
204,319
Software
2,174
1,816
1,595
–
–
–
5,585
–
5,585
Purchased technology
and other intangible
assets
10
10
–
–
–
–
20
–
20
Total
23,502
22,290
19,603
12,966
4,942
–
83,303
126,621
209,924
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 121
The changes in the investment in associates are as follows:
Balance January 1, 2019
Share in net earnings of investments in associates
Other comprehensive income of investments in associates
Amortization recognized (in)tangible assets
Dividends
Dilution ASMPT share to 25.19%
Foreign currency translation effect
Balance December 31, 2019
Share in net earnings of investments in associates
Other comprehensive income of investments in associates
Amortization recognized (in)tangible assets
Dividends
Dilution ASMPT share to 25.07%
Foreign currency translation effect
Balance December 31, 2020
Net equity share
Other (in)tangible assets
ASMPT
343,655
18,035
(3,991)
–
(31,960)
3,882
5,249
334,870
44,813
(2,296)
–
(16,142)
2,059
(16,216)
347,088
58,061
–
–
(13,788)
–
–
1,479
45,752
–
–
(12,863)
–
–
(2,873)
30,016
Goodwill
387,872
–
–
–
–
–
9,774
397,646
–
–
–
–
–
(32,036)
365,610
Total ASMPT
789,588
18,035
(3,991)
(13,788)
(31,960)
3,882
16,502
778,268
44,813
(2,296)
(12,863)
(16,142)
2,059
(51,125)
742,714
On March 15, 2013, the company divested a controlling stake in its subsidiary ASM Pacific
The ASMPT investment is accounted for under the equity method on a go-forward basis. Equity
Technology Ltd (ASMPT). After the initial accounting of the sale transaction and related gains, future
method investments are tested for prolonged impairment. An investment is considered impaired if
income from ASMPT was adjusted for the fair value adjustments arising from the basis differences
the fair value of the investment is less than its carrying value.
as if a business combination had occurred under IFRS 3R, Business Combinations, i.e. a purchase
price allocation (PPA).
If the fair value of an investment is less than its carrying value at the balance sheet date, the company
determines whether the impairment is temporary or prolonged. The amount per share recognized
The purchase of the associate has been recognized at fair value, being the value of the ASMPT
as per December 31, 2020 under equity accounting amounts to HK$68.60, whereas the level 1
shares on the day of closing of the purchase transaction. The composition of this fair value was
fair value per share (being the market price of a share on the Hong Kong Stock Exchange) was
determined through a PPA. The PPA resulted in the recognition of intangible assets for customer
HK$102.30 as per December 31, 2020. Management concluded that based on quantitative analysis
relationship, technology, trade name, product names, and goodwill. For inventories and property,
no impairment of its share in ASMPT existed as per December 31, 2020.
plant & equipment, a fair value adjustment was recognized.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 122
In December 2020, 1,900,600 common shares of ASMPT were issued, for cash at par value of
Summarized 100% statement of financial position information for ASMPT equity method investment
HK$0.10 per share, pursuant to the Employee Share Incentive Scheme of ASMPT. The shares issued
excluding basis adjustments (foreign currency exchange rate per December 31, 2020, was 1 HK$:
under the plan in 2020 have diluted ASMI's ownership in ASMPT to 25.07% as of December 31, 2020.
€0.10511 for December 31, 2019: 1 HK$: €0.11432).
Per December 31, 2020, the book value of our equity method investment in ASMPT was €743 million.
The historical cost basis of our 25.07% share of net assets on the books of ASMPT under IFRS was
€347 million as of December 31, 2020, resulting in a basis difference of €396 million. €30 million of
this basis difference has been allocated to property, plant and equipment, and intangible assets. The
remaining amount was allocated to equity method goodwill. Each individual, identifiable asset will
periodically be reviewed for any indicators of potential impairment. We amortize the basis differences
allocated to the assets on a straight-line basis, and include the impact within the results of our equity
method investments. Amortization and depreciation are adjusted for related deferred tax impacts.
(HK$ million)
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Total equity
December 31,
2019
13,381
7,464
4,432
4,781
11,632
2020
14,799
8,365
5,336
4,634
13,194
Included in net income attributable to ASMI for 2020 was an after-tax expense of €13 million,
Shareholder’s equity of ASMPT per December 31, 2020 translated into euros at a rate of 0.10511
representing the depreciation and amortization of the basis differences.
was €1,384 million (our 25.07% share: €347 million).
The market value of our 25.07% investment in ASMPT on December 31, 2020 approximates
The ASMPT Board is responsible for ongoing monitoring of the performance of the Back-end
€1,108 million.
activities. The actual results of the Back-end operating unit are discussed with the ASMPT Audit
Committee, which includes the representative of ASMI. The ASMI representative reports to the ASMI
Summarized 100% earnings information for ASMPT equity method investment excluding basis
Management Board and the Audit Committee of ASMI on a quarterly basis.
adjustments (foreign currency exchange rate average 2020 1 HK$: €0.11272, for December 31,
2019: 1 HK$: €0.11387).
(HK$ million)
Net sales
Income before income tax
Net earnings
Other comprehensive income
Total comprehensive income
2019
15,883
976
622
(169)
453
2020
16,887
1,857
1,631
370
2,001
Our share of income taxes incurred directly by the associates is reported in result from investments
in associates and as such is not included in income taxes in our consolidated financial statements.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE NOTE 7. EVALUATION TOOLS AT CUSTOMERS
The changes in the amount of evaluation tools are as follows:
NOTE 8. INVENTORIES
Inventories consist of the following:
At cost
Balance at beginning of year
Evaluation tools shipped
Evaluation tools sold and returns
Foreign currency translation effect
Balance at end of year
Accumulated depreciation
Balance at beginning of year
Depreciation for the year
Evaluation tools sold and returns
Foreign currency translation effect
Balance at end of year
Carrying amount at beginning of year
Carrying amount at end of year
Useful lives in years:
December 31,
2019
2020
63,851
30,567
(22,327)
1,546
73,637
19,217
12,117
(5,431)
487
26,390
44,634
47,247
73,637
59,729
(26,420)
(6,172)
100,774
26,390
12,930
(6,401)
(1,619)
31,300
47,247
69,474
5
Components and raw materials
Work in progress
Finished goods
Total inventories, gross
Allowance for obsolescence
Total inventories, net
The changes in the allowance for obsolescence are as follows:
Balance at beginning of year
Charged to cost of sales
Reversals
Utilization of the provision
Foreign currency translation effect
Balance at end of year
123
December 31,
2019
111,609
53,673
20,434
185,716
(12,527)
173,189
December 31,
2019
(13,364)
(4,748)
915
4,994
(324)
2020
118,849
39,925
17,902
176,676
(14,477)
162,199
2020
(12,527)
(9,775)
830
6,200
795
(12,527)
(14,477)
Evaluation tools enable ASM to win new business and expand ASMI’s technological footprint by
On December 31, 2020, our allowance for inventory obsolescence amounted to €14,477, which is
penetration at new customers and with new applications. The year-on-year increase in evaluation
8.2% of total inventory. The major part of the allowance is related to components and raw materials.
tools shipped to customer sites in 2020 is indicative of ASMI’s market growth ambitions and is a key
The additions for the years 2019 and 2020 mainly relate to inventory items which ceased to be
component in ASMI’s growth strategy. The majority of evaluation tools shipped to customers result in
used due to technological developments and design changes which resulted in obsolescence of
the sale of the tool.
certain parts.
The cost of inventories recognized as costs and included in cost of sales amounted to €554.8 million
(2019: €510.2 million).
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
124
NOTE 9. ACCOUNTS RECEIVABLE
A significant percentage of our accounts receivable is derived from sales to a limited number of
Accounts receivable are impaired and provided for on an individual basis. As of December 31,
2020, accounts receivable of €31 million were past due but not impaired. These balances are still
large multinational semiconductor device manufacturers located throughout the world. In order to
considered to be recoverable because they relate to customers for whom there is neither recent
monitor potential expected credit losses, we perform ongoing credit evaluations of our customers’
history of default nor expectation that this will incur.
financial condition.
The carrying amount of accounts receivable is as follows:
Current
Overdue <30 days
Overdue 31-60 days
Overdue 61-120 days
Overdue >120 days
Total
For further information on credit risk see Note 17.
December 31,
NOTE 10. OTHER CURRENT ASSETS
Other current assets consist of the following:
2019
171,866
19,977
2,076
1,599
4,017
2020
249,032
23,063
4,283
1,727
1,956
199,535
280,061
Prepayments
VAT receivable
Amounts to be invoiced
Others
Total
December 31,
2019
14,795
15,067
37,679
5,938
73,479
2020
14,485
12,818
33,813
11,829
72,945
An allowance for doubtful accounts receivable is maintained for potential expected credit losses
based upon management’s assessment of the expected collectability of all accounts receivable. The
Amounts to be invoiced mainly relates to accrued revenue, reference to note 21 contract balances.
allowance for doubtful accounts is reviewed periodically to assess the adequacy of the allowance. In
making this assessment, management takes into consideration any circumstances of which we are
NOTE 11. CASH AND CASH EQUIVALENTS
Cash and cash equivalents at December 31, 2020 include investments in money market funds that
aware regarding a customer’s inability to meet its financial obligations, and our judgments as to potential
invest in debt securities of financial institutions that have good credit rating and governments of
prevailing economic conditions in the industry and their potential impact on the company’s customers.
€9 million (2019: €10 million) and interest-bearing bank accounts of €426 million (2019: €484 million).
COVID-19 did not have, and is not expected to have a significant impact on the customers in the
At the end of 2020, no cash deposits with financial institutions were included in our cash position
industry (see also note 1 COVID-19 paragraph), and hence on the allowance for doubtful accounts.
(2019: €4 million). Our cash and cash equivalents are predominantly denominated in US dollars, and
partly in euros, Singapore dollars, Korean won, and Japanese yen.
The changes in the allowance for doubtful accounts receivable are as follows:
Balance at beginning of year
Charged to selling, general and administrative expenses
Utilization of the provision
Foreign currency translation effect
Balance at end of year
December 31,
December 31, 2019). These guarantees mainly relate to lease and tax payments.
Bank guarantees exist for an amount of €2.4 million at December 31, 2020 (€9.7 million as per
2019
(155)
(154)
31
–
(278)
2020
(278)
(83)
–
–
(361)
Cash and cash equivalents have insignificant interest rate risk and remaining maturities of three
months or less at the date of acquisition. Except for an amount of €4.1 million (2019: €5.8 million),
no restrictions on usage of cash and cash equivalents exist. The carrying amount of these assets
approximates to their fair value. The company has not recognized a provision for expected credit loss
for cash and cash equivalents due to the insignificance of the amount.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 125
NOTE 12. EQUITY
Our Management Board has the power to issue ordinary shares and (financing) preference shares
Preferred shares are entitled to a cumulative preferred dividend based on the amount paid up on
such shares. Financing preferred shares are entitled to a cumulative dividend based on the par value
insofar as the Management Board has been authorized to do so by the Annual General Meeting of
and share premium paid on such shares.
Shareholders (AGM). The Management Board requires the approval of the Supervisory Board for
such an issue. The authorization by the AGM can only be granted for a certain period. In the case
As per December 31, 2020, no preferred shares and no financing preferred shares are issued.
that the AGM has not authorized the Management Board to issue shares, the AGM shall have the
power to issue shares.
COMMON SHARES, PREFERRED AND FINANCING PREFERRED SHARES
Following the amendment of the articles of association on August 3, 2018, the authorized capital of
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS
On May 18, 2020, the AGM authorized the company, for an 18-month period, to be calculated from
the date of the AGM, to repurchase its own shares up to 10% of the issued capital, at a price at least
the company amounts to 82,500,000 common shares of €0.04 par value, 88,500 preferred shares of
equal to the shares’ nominal value and at most a price equal to 110% of the shares' average closing
€40 par value and 6,000 financing preferred shares of €40 par value.
price according to the listing on the Euronext Amsterdam stock exchange during the five trading
The AGM of May 18, 2020 approved the cancellation of 1,500,000 treasury shares and this
cancellation became effective as per July 21, 2020.
days preceding the purchase date.
On July 23, 2019, ASMI announced a share buyback program to purchase up to an amount of
€100 million of its own shares within the 2019-2020 time frame. The 2019 program started on
As per December 31, 2020, 49,797,394 common shares with a nominal value of €0.04 each were
November 1, 2019, and was completed on February 17, 2020.
issued and fully paid up, of which 1,082,712 common shares are held by us in treasury. All shares
have one vote per €0.04 par value. Treasury shares held by the company cannot be voted on.
Of our 48,714,682 outstanding common shares at December 31, 2020, 48,438,605 are registered
Period
with our transfer agent in the Netherlands, ABN AMRO Bank N.V., and 276,077 are registered with
Share buyback program 2019-2020:
our transfer agent in the United States, Citibank, NA, New York.
Financing preferred shares are designed to allow ASMI to finance equity with an instrument paying
a preferred dividend, linked to EURIBOR loans and government loans, without the dilutive effects of
issuing additional common shares.
Preferred and financing preferred shares are issued in registered form only and are subject to transfer
restrictions. Essentially, a preferred or financing preferred shareholder must obtain the approval of the
company's Supervisory Board to transfer shares. If approval is denied, the Supervisory Board will
provide a list of acceptable prospective buyers who are willing to purchase the shares at a cash price
to be fixed by consent of the Supervisory Board and seller within two months after the approval is
denied. If the transfer is approved, the shareholder must complete the transfer within three months,
at which time the approval expires.
November, 2019
December, 2019
January, 2020
February, 2020
Total
Total number of
shares purchased
Average price
paid per share
(EUR)
Cumulative
number of shares
purchased
639,665
313,237
22,661
8,716
984,279
€100.95
€101.67
€112.32
€118.61
€101.60
639,665
952,902
975,563
984,279
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 126
TREASURY SHARES
On December 31, 2020, we had 48,714,682 outstanding common shares excluding 1,082,712
treasury shares. This compared to 48,866,220 outstanding common shares and 2,431,174 treasury
shares at year-end 2019. Besides the cancellation of 1.5 million treasury shares in July 2020, the
change in the number of treasury shares in 2020 was the result of 508,685 repurchased shares and
357,147 treasury shares that were used as part of share-based payments.
On February 25, 2020, ASMI announced a share buyback program to purchase up to an amount of
€100 million of its own shares within the 2020-2021 time frame. The 2020-2021 program started on
June 2, 2020.
Period
Share buyback program 2020:
June, 2020
July, 2020
August, 2020
September, 2020
October, 2020
November, 2020
December, 2020
Total
Total number of
shares purchased
Average price
paid per share
(EUR)
Cumulative
number of shares
purchased
57,700
21,648
66,086
140,736
34,118
102,020
58,500
480,808
€119.16
€144.31
€127.15
€121.74
€130.83
€135.72
€169.64
€132.63
57,700
79,348
145,434
286,170
320,288
422,308
480,808
As per January 1:
Issued shares
Treasury shares
Outstanding shares
Changes during the year:
Cancellation of treasury shares
Share buybacks
Number of shares
Balance at beginning of year
Purchase common shares
Exercise stock options out of treasury shares
Vesting restricted shares out of treasury shares
Cancellation treasury shares
Balance at end of year
Treasury
shares
Outstanding
shares
2,431,174
48,866,220
508,685
(127,324)
(229,823)
(1,500,000)
(508,685)
127,324
229,823
–
1,082,712
48,714,682
As per December 31:
Issued shares
Treasury shares
Outstanding shares
The following table shows the change in number of treasury shares and outstanding shares:
Treasury shares used for share-based performance programs
2019
2020
56,297,394
51,297,394
6,978,496
2,431,174
49,318,898
48,866,220
5,000,000
1,500,000
950,902
498,224
508,685
357,147
51,297,394
49,797,394
2,431,174
1,082,712
48,866,220
48,714,682
RETAINED EARNINGS
Distributions to common shareholders are limited to the extent the total amount of shareholders’
equity exceeds the amounts of nominal paid-in share capital (exclusive any share premium) and any
ASMI intends to use part of the shares for commitments under the employee share-based
reserves to be formed pursuant to law or the company’s Articles of Association. The amounts are
compensation schemes and the performance shares and option program for the Management Board.
derived from the Company financial statements of ASMI.
The share buyback programs were executed by intermediaries through on-exchange purchases
ASMI aims to pay a sustainable annual dividend. The Supervisory Board, upon proposal of the
or through off-exchange trades. ASMI updated the markets on the progress of the share buyback
Management Board, will annually assess the amount of dividend that will be proposed to the AGM.
programs on a weekly basis.
The decision that a dividend be proposed to the AGM will be subject to the availability of distributable
profits as well as retained earnings and may be affected by our potential future funding requirements.
The repurchase programs are part of ASMI's commitment to use excess cash for the benefit of its
Accordingly, dividend payments may fluctuate and could decline or be omitted in any year.
shareholders.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Over 2019, we paid in total a dividend of €3.00 per common share consisting of a regular dividend
NOTE 13. EMPLOYEE BENEFITS
of €1.50 and an extraordinary dividend of €1.50. A final dividend of €2.00 (€0.50 regular and €1.50
extraordinary) was paid after the 2020 AGM in May 2020, and an interim dividend of €1.00 was paid
in November 2019. We will propose to the forthcoming 2021 AGM to declare a regular dividend of
€2.00 per share over 2020.
PENSION PLANS
The company has retirement plans covering substantially all employees. The principal plans are
defined contribution plans, except for the plans of the company’s operations in the Netherlands
and Japan.
Results on dilution of investments in associates are accounted for directly in equity. For 2020 and
2019, these dilution results were €2,059 and €3,882, respectively.
Multi-employer plan
127
OTHER RESERVES
The changes in the amounts of other reserves are as follows:
Proportionate
share in other
comprehensive
income investments
in associates 1)
Remeasurement
on net defined
benefit
Translation
reserve
Total
other
reserves
Balance January 1, 2019
(6,217)
(10)
105,834
99,607
Proportionate share in other
comprehensive income
investments in associates
Remeasurement on net defined
benefit
Foreign currency translation
effect on translation of foreign
operations
(3,991)
–
–
–
(103)
–
–
(3,991)
(103)
–
31,427
31,427
Balance December 31, 2019
(10,208)
(113)
137,261
126,940
Proportionate share in other
comprehensive income
investments in associates
Remeasurement on net defined
benefit
Foreign currency translation
effect on translation of foreign
operations
(2,296)
–
–
Balance December 31, 2020
(12,504)
–
374
–
261
–
–
(2,296)
374
There are 142 eligible employees in the Netherlands. These employees participate in a multi-
employer union plan (Pensioenfonds van de Metalektro PME) determined in accordance with the
collective bargaining agreements effective for the industry in which we operate. The current collective
bargaining agreement ended on November 30, 2020, and there is no new collective bargaining
agreement yet. This multi-employer union plan, accounted for as a defined contribution plan, covers
approximately 1,390 companies and approximately 164,000 contributing members. Our contribution
to the multi-employer union plan was less than five percent of the total contribution to the plan. The
plan monitors its risks on a global basis, not by participating company or employee, and is subject to
regulation by Dutch governmental authorities. By law (the Dutch Pension Act), a multi-employer union
plan must be monitored against specific criteria, including the coverage ratio of the plan’s assets to
its obligations. As of January 1, 2015, new pension legislation has been enacted. This legislation
results in, amongst others, an increase of legally required coverage levels. The coverage percentage
is calculated by dividing the funds capital by the total sum of pension liabilities and is based on actual
market interest rates. The coverage ratio as per December 31, 2020, of 97.2% (December 31, 2019:
98.7%) is calculated giving consideration to the pension legislation and is below the legally required
level. We have however no obligation to pay off any deficits the pension fund may incur, nor do we
have any claim to any potential surpluses.
Every company participating in the PME contributes a premium calculated as a percentage of its
total pensionable salaries, with each company subject to the same contribution rate. The premium
1 Proportionate share in other comprehensive income investments in associates, remeasurement on net defined benefit
and translation reserve, items may be subsequently reclassified to profit or loss.
employee’s average salary during employment.
Our net periodic pension cost for this multi-employer union plan for any period is the amount of the
required employer contribution for that period minus the employee contribution.
(98,833)
(98,833)
38,428
26,185
can fluctuate yearly based on the coverage ratio of the multi-employer union plan. For 2020, the
contribution percentage was 26.412%. The pension rights of each employee are based upon the
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Defined benefit plan
The changes in defined benefit obligations and fair value of plan assets are as follows:
128
The company’s employees in Japan participate in a defined benefit plan. The company makes
contributions to defined benefit plans in Japan that provide pension benefits for employees
upon retirement. These are average-pay plans, based on the employees’ years of service and
compensation near retirement.
The most recent actuarial valuations of plan assets and the present value of the defined benefit
obligation were carried out on December 31, 2020. The present value of the defined benefit obligation
and the related current service cost and past service cost were measured using the projected unit
credit method. Significant actuarial assumptions for the determination of the defined obligation are
discount rate, future general salary increases, and future pension increases.
The net liability (asset) of the plan developed as follows:
Defined benefit obligations
Fair value of plan assets
Net liability (asset) for defined benefit plans
December 31,
2019
11,446
12,025
(579)
2020
11,083
12,514
(1,431)
Defined benefit obligations
Balance January 1
Current service cost
Interest on obligation
Remeasurement result
Benefits paid
Foreign currency translation effect
Balance December 31
Fair value of plan assets
Balance January 1
Interest income
Return on plan assets
Company contribution
Benefits paid
Foreign currency translation effect
Balance December 31
The defined benefit cost consists of the following:
Current service cost
Net interest cost
Net defined benefit cost
Remeasurement on net defined benefit for the year
Remeasurement on net defined benefit
Total defined benefit cost
December 31,
2019
2020
10,502
11,446
828
53
277
(552)
338
928
28
(437)
(470)
(412)
11,446
11,083
10,726
12,025
57
175
1,273
(552)
346
31
61
1,333
(470)
(466)
12,025
12,514
December 31,
2019
828
(4)
824
102
102
926
2020
928
(3)
925
(498)
(498)
427
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
129
The assumptions in calculating the actuarial present value of benefit obligations and net periodic
Retirement plan costs
benefit cost are as follows:
ASMI contributed €1,333 to the defined benefit plan in 2020 (€1,272 in 2019). The company expects
to pay benefits for years subsequent to December 31, 2020 as follows:
Discount rate for defined benefit obligations
Discount rate for defined benefit cost
2019
0.25%
0.50%
2020
0.50%
0.25%
Assumptions regarding life expectancy are based on mortality tables published in 2014 by the
Ministry of Health, Labour and Welfare of Japan.
2021
2022
2023
2024
2025
The main risk concerning the pension plan relates to the discount rate. The defined benefit obligation
Aggregate for the years 2026-2030
is sensitive to a change in discount rates, a relative change of the discount rate of 25 basis points
Total
would have resulted in a change in the defined benefit obligation of -2.4% to 2.5%.
Expected contribution defined
benefit plan
433
806
745
507
256
5,366
8,113
The allocation of plan assets is as follows:
Cash and cash equivalent
Equity instruments
Debt instruments
Assets held by insurance company
Total
The company does not provide for any significant post-retirement benefits other than pensions.
December 31,
2019
2020
147
1,938
1,279
8,661
1%
16%
11%
72%
191
1,904
1,276
9,143
2%
15%
10%
73%
MANAGEMENT BOARD AND EMPLOYEE AND LONG-TERM
INCENTIVE PLAN
The company has adopted various share plans (e.g. stock option plans, a restricted share plan,
and a performance share plan) and has entered into share agreements with the Management Board
and various employees. Under the stock option plans, the Management Board and employees may
purchase per the vesting date a specific number of shares of the company’s common stock at a
12,025
100%
12,514
100%
certain price. Options are priced at market value in euros on the date of grant. Under the restricted
share plan, employees receive per the vesting date a specific number of shares of the company’s
The investment strategy is determined based on an asset-liability study in consultation with
common stock. Under the performance share plan, the Management Board receives per the vesting
investment advisors and within the boundaries given by the regulatory bodies for pension funds.
date, and provided the performance criteria have been met, a specific number of shares of the
Equity instruments consist primarily of publicly traded Japanese companies and common collective
company’s common stock.
funds. Publicly traded equities are valued at the closing prices reported in the active market in which
the individual securities are traded (level 1). Common collective funds are valued at the published
Authority to issue options and shares
price (level 1) per share multiplied by the number of shares held as of the measurement date. Debt
By resolution of the Annual General Meeting of Shareholders (AGM) of May 18, 2020, the formal
instruments consist of government bonds and are valued at the closing prices in the active markets
authority to issue options and shares was allocated to the Management Board subject to the
for identical assets (level 1). Assets held by the insurance company consist of bonds and loans,
approval of the Supervisory Board. This authority is valid for 18 months and needs to be refreshed
government securities and common collective funds. Corporate and government securities are
by the 2021 AGM to allow the continued application of the long-term incentive (LTI) plans beyond
valued by third-party pricing sources (level 2). Common collective funds are valued at the net asset
November 18, 2021.
value per share (level 2) multiplied by the number of shares held as of the measurement date.
The plan assets do not include any of the company’s shares.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
130
The ASMI 2014 long-term incentive plan for employees (ELTI) is principally administered by the
The following table is a summary of changes in options outstanding under the 2011 and previous
Management Board and the ASMI 2014 long-term incentive plan for members of the Management
long-term incentive plan:
Board (MLTI) is principally administered by the Supervisory Board. This complies with applicable
corporate governance standards. However, the Supervisory Board has no power to represent
the company. For external purposes, the Management Board remains the competent body under
both LTI plans. The LTI plans envisage that the Supervisory Board, or in the case of the ELTI the
Balance January 1, 2019
Management Board with the approval of the Supervisory Board, will determine the number of options
and shares to be granted to the Management Board members and to employees.
Capital repayment
On August 10, 2018, ASMI distributed €4.00 per common share to its shareholders through a
Options forfeited
Options expired
Options exercised
Balance December 31, 2019
tax efficient repayment of capital. The ex-date of the distribution was August 7, 2018. This capital
Options forfeited
repayment was approved by the 2018 AGM. The Management Board of ASMI and the Supervisory
Options expired
Board of ASMI decided to apply a theoretical adjustment ratio of 0.91821713 to the outstanding
Options exercised
options and restricted shares granted to employees including members of the Management Board.
Balance December 31, 2020
Euro-plans
Number of
options
Weighted average
exercise price in €
451,170
(7,120)
(3,267)
(313,531)
127,252
–
–
(127,252)
–
21.48
21.39
21.79
21.36
21.79
–
–
21.79
–
2011 long-term incentive plan
The total intrinsic value of options exercised was €2,774 for the year ended December 31, 2020
In 2011, a stock option plan was adopted. In this plan to limit potential dilution, the amount
(2019: €6,767). In 2020, treasury shares have been sold for the exercise of 127,324 options.
of outstanding (vested and non-vested) options granted to the Management Board and to other
employees will not exceed 7.5% of the issued ordinary share capital of ASMI. The stock option plan
On December 31, 2020, no options were outstanding or exercisable.
2011 consists of two sub-plans: the ASMI stock option plan for employees (ESOP) and the ASMI
stock option plan for members of the Management Board (MSOP).
At December 31, 2020, the aggregate intrinsic value of all options outstanding and exercisable under
For employees and existing Management Board members, the grant date for all options granted
is December 31 of the relevant year. In each of these situations, the three-year vesting period starts
2014 long-term incentive plan
these plans is €0 (2019: €12,744).
at the grant date. The exercise price in euros of all options issued under the ESOP and the MSOP
In 2014, a new long-term incentive plan was adopted. In the new plan to limit potential dilution, the
is determined on the basis of the market value of the ASMI shares at (i.e. immediately prior to) the
amount of outstanding (vested and non-vested) options and shares granted to the Management
grant date.
The exercise period is four years starting at the third anniversary of the grant date.
Board and to other employees will not exceed 5% of the issued ordinary share capital of ASMI. The
new long-term incentive plan 2014 consists of two sub-plans: the ELTI and the MLTI.
Options and performance shares are issued to Management Board members and restricted shares
are issued to employees once per annum on the date following the publication of the first-quarter
results of the relevant year. Possible grant to newly-hired employees can be issued once a quarter,
on the date following the publication of the financial results of the relevant quarter. The number of
options and shares outstanding under the long-term incentive plans or under any other plan or
arrangement in aggregate may never exceed 5% of ASMI’s share capital. In accordance with the
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE ASMI remuneration policy, an exception is made for a transition period of four years, during which the
Options outstanding
dilution may exceed 5% but will not exceed 7.5%.
The following table is a summary of changes in options outstanding under the 2014 long-term
131
Performance and restricted shares outstanding
The following table is a summary of changes in performance shares and restricted shares outstanding
under the 2014 long-term incentive plan.
Balance January 1, 2019
Shares granted, employees
Number of
performance
shares
Number of
restricted
shares
64,949
341,188
Fair value at
grant date
(weighted
average)
Status
–
212,160
Unconditional
Shares granted, Management Board
22,925
–
Conditional
Shares vested
Shares forfeited
Balance December 31, 2019
(11,660)
(170,536)
(6,474)
(14,971)
69,740
367,841
Shares granted, employees
–
150,686
Unconditional
Shares granted, Management Board
Shares granted, Management Board
13,646
5,446
–
–
Conditional
Unconditional
Shares vested
Shares forfeited
(58,835)
(170,988)
–
(21,728)
Balance December 31, 2020
29,997
325,811
€58.47
€57.84
€105.37
€113.85
€51.75
incentive plan.
Balance January 1, 2015
Options granted, April 24, 2015
Balance December 31, 2015
Options granted, April 22, 2016
Balance December 31, 2016
Options granted, April 21, 2017
Balance December 31, 2017
Adjustment following capital repayment
Balance December 31, 2018
In 2020, no options were granted.
Number of
options
Exercise price
in €
Fair value at
grant date
–
42,659
42,659
62,555
105,214
24,963
130,177
11,593
141,770
44.24
€17.33
37.09
€12.64
51.55
€14.57
–
–
At December 31, 2020, the aggregate intrinsic value of all options outstanding under the 2014
long-term incentive plan is €25,512.
Share-based payments expenses
In 2020, treasury shares were sold for the vesting of 229,823 restricted shares.
expensed on a straight-line basis over the vesting period, based on the company’s estimate of stock
The grant date fair value of the stock options, the restricted shares and the performance shares is
options, restricted shares, and performance shares that will eventually vest. The impact of the true-up
of the estimates is recognized in the consolidated statement of profit or loss in the period in which the
revision is determined. We recorded compensation expenses of €12,792 for 2020 (2019: €10,538).
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE NOTE 14. PROVISION FOR WARRANTY
The changes in the amount of provision for warranty are as follows:
NOTE 15. ACCRUED EXPENSES AND OTHER PAYABLES
Accrued expenses and other payables consist of the following:
December 31,
December 31,
132
2019
45,318
32,146
3,912
7,002
47,601
2,175
1,365
1,109
9,215
149,843
2020
50,637
46,999
991
6,221
4,137
6,010
1,228
–
12,704
128,927
Balance January 1
Charged to cost of sales
Deductions
Releases of expired warranty
Foreign currency translation effect
Balance December 31
2019
7,955
26,301
(12,232)
(5,684)
84
16,424
2020
16,424
18,814
Personnel-related items
Deferred revenue
(14,115)
Financing-related items
(884)
(1,252)
18,987
Current portion lease liabilities
Advanced payments from customers
Supplier-related items
Marketing-related items
R&D projects
Other
Provision is made for estimated warranty claims in respect of products sold which are still under
warranty at the end of the reporting period. Costs of warranty include the cost of labor and materials
to repair a product during the warranty period. The main term of the warranty period is one year.
Total accrued expenses and other payables
The company accrues for the estimated cost of the warranty on its products shipped in the provision
for warranty, upon recognition of the sale of the product. The costs are estimated based on actual
Personnel-related items comprise accrued management bonuses, accrued vacation days, accrued
historical expenses incurred and on estimated future expenses related to current revenue, and
wage tax, social securities, and pension premiums. Deferred revenue consists of the revenue relating
are updated periodically. Actual warranty costs are charged against the provision for warranty.
to the undelivered elements of the arrangements, see Note 21 for more information. This part of
The assumptions made in relation to the current period are consistent with those in the prior year.
revenue is deferred at their relative selling prices until delivery of these elements. Other includes
Factors that could impact the estimated claim information include the success of the group’s
accruals for VAT, other taxes, and invoices to be received for goods and services.
productivity and quality initiatives, as well as parts and labor costs. The main part of the claims is
expected to be settled in the next financial year.
NOTE 16. CREDIT FACILITY
As per December 31, 2020, ASMI was debt-free. ASMI may borrow under separate short-term lines of
credit with banks under an unsecured €150 million standby credit facility with a consortium of banks.
Total short-term lines of credit amounted to €150 million on December 31, 2020. The amount
outstanding as at December 31, 2020 was nil, so the undrawn portion totaled €150 million.
The undrawn portion represents the company’s standby revolving credit facility of €150 million with
a consortium of banks. The facility will be available through December 16, 2023.
The credit facility of €150 million includes two financial covenants:
›› Minimum consolidated tangible net worth; and
›› Consolidated total net debt/total equity ratio.
These financial covenants are measured twice each year, on June 30 and December 31.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
133
The minimum level of consolidated tangible net worth for the year ended December 31, 2020
required was €450 million, the consolidated tangible net worth as per that date was €1,238 million.
NOTE 17. FINANCIAL INSTRUMENTS AND FINANCIAL
RISK MANAGEMENT
Consolidated tangible net worth is defined as the net assets, deducting any amount shown in respect
of goodwill or other intangible assets (including any value arising from any valuation of ASMPT).
FINANCIAL INSTRUMENTS
Financial instruments include:
Total equity is defined as the aggregate of:
›› the amounts paid up on the issued common shares;
›› share capital in excess of par value;
›› retained earnings;
›› accumulated other comprehensive income and loss; and
›› deducting any amount shown in respect of goodwill or other intangible assets.
Financial assets:
Cash and cash equivalents
Accounts receivable
Financial liabilities:
Accounts payable
December 31,
2019
2020
497,874
199,535
435,228
280,061
119,712
124,507
The net debt/total equity ratio should not exceed 1.5. For the year ended December 31, 2020, net
cash was €435 million and total equity amounted to €1,855 million. The company is in compliance
The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable
with these financial covenants as of December 31, 2020.
equal their fair values because of the short-term nature of these instruments.
ASMI does not provide guarantees for borrowings of ASMPT and there are no guarantees from
Gains or losses related to financial instruments are as follows:
ASMPT to secure indebtedness of ASMI. Under the rules of the Stock Exchange of Hong Kong,
ASMPT is precluded from providing loans and advances other than trade receivables in the normal
course of business, to ASMI or its non-ASMPT subsidiaries.
Interest income
Interest expense
Result from foreign currency exchange
Addition to allowance for doubtful accounts receivable
2019
1,639
(1,766)
(146)
(154)
2020
141
(2,008)
(23,157)
(83)
FINANCIAL RISK FACTORS
ASMI is exposed to a number of risk factors: market risks (including foreign exchange risk), credit
risk, liquidity risk, and equity price risk. The company may use forward exchange contracts to hedge
its foreign exchange risk. The company does not enter into financial instrument transactions for
trading or speculative purposes.
Foreign exchange risk
ASMI and its subsidiaries conduct business in a number of foreign countries, with certain transactions
denominated in currencies other than the functional currency of the company (euro) or one of its
subsidiaries conducting the business. The purpose of the company's foreign currency management
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
134
is to manage the effect of exchange rate fluctuations on income, expenses, cash flows, and assets
swaps, and non-derivative instruments, such as debt borrowings in foreign currencies. The gains
and liabilities denominated in selected foreign currencies, in particular denominated in US dollars.
or losses on these instruments provide an offset to the gains or losses recorded on receivables and
payables denominated in foreign currencies. The derivative instruments are recorded at fair value and
We may use forward exchange contracts to hedge our foreign exchange risk of anticipated sales or
changes in fair value are recorded in earnings under foreign currency exchange gains (losses) in the
purchase transactions in the normal course of business which occur within the next twelve months,
consolidated statement of profit or loss. Receivables and payables denominated in foreign currencies
for which we have a firm commitment from a customer or to a supplier. The terms of these contracts
are recorded at the exchange rate at the balance sheet date and gains and losses as a result of
are consistent with the timing of the transactions being hedged. The hedges related to forecasted
changes in exchange rates are recorded in earnings under foreign currency exchange gains (losses)
transactions are designated and documented at the inception of the hedge as cash flow hedges,
in the consolidated statement of profit or loss.
and are evaluated for effectiveness on a quarterly basis. The effective portion of the gain or loss on
these hedges is reported as a component of accumulated other comprehensive income (loss) net of
We do not use forward exchange contracts for trading or speculative purposes. Financial assets and
taxes in equity, and is reclassified into earnings when the hedged transaction affects earnings.
financial liabilities are recognized on the company's consolidated statement of financial position when
Changes in the fair value of derivatives that do not qualify for hedge treatment, as well as the
ineffective portion of any hedges, are recognized in earnings. We record all derivatives, including
To the extent that exchange rate fluctuations impact the value of the company’s investments in its
forward exchange contracts, on the statement of financial position at fair value in accrued expenses
foreign subsidiaries, they are not hedged. The cumulative effect of these fluctuations is separately
and payables. Should contracts extend beyond one year, these are classified as long-term.
reported in consolidated equity. Reference is made to Note 12.
the company becomes a party to the contractual provisions of the instrument.
Furthermore, we may manage the currency exposure of certain receivables and payables using
Per December 31, 2019 and December 31, 2020, there were no forward exchange contracts
derivative instruments, such as forward exchange contracts (fair value hedges) and currency
outstanding.
The foreign currency exchange results reported in 2020 are mainly translation results related to
movements in the US dollar. A substantial part of ASMI’s cash position is denominated in US dollar.
The following table analyzes the company’s exposure to currency risk in our major currencies.
(thousand)
Accounts receivable
Cash and cash equivalents
Accounts payable
Total
USD
170,904
412,773
(62,962)
520,715
2019
JPY
2,902,585
3,034,840
KRW
11,754,832
15,868,137
(3,347,833)
(13,215,657)
2,589,592
14,407,312
December 31,
SGD
357
45,262
(27,801)
17,818
USD
275,247
306,855
(72,087)
510,015
2020
JPY
4,019,525
2,142,789
KRW
1,551,385
35,060,828
(3,486,230)
(16,031,125)
2,676,084
20,581,088
SGD
134
42,710
(28,875)
13,969
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
135
The following table analyzes the company’s sensitivity to a hypothetical 10% strengthening and 10%
Our customers are semiconductor device manufacturers located throughout the world. We perform
weakening of the US dollar, Singapore dollar, Korean won and Japanese yen against the euro as of
ongoing credit evaluations of our customers' financial condition. We take additional measures to
December 31, 2019 and December 31, 2020. This analysis includes foreign currency-denominated
mitigate credit risk when considered appropriate by means of down payments or letters of credit. We
monetary items and adjusts their translation at year-end for a 10% increase and 10% decrease
generally do not require collateral or other security to support financial instruments with credit risk.
against the euro.
(EUR thousand)
10% increase of US dollar versus euro
10% decrease of US dollar versus euro
10% increase of Singapore dollar versus euro
10% decrease of Singapore dollar versus euro
10% increase of Korean won versus euro
10% decrease of Korean won versus euro
10% increase of Japanese yen versus euro
10% decrease of Japanese yen versus euro
Impact on financial instruments
exist for groups of customers or counterparties when they have similar economic characteristics
Concentrations of credit risk (whether on- or off-balance sheet) that arise from financial instruments
2019
46,351
(46,351)
1,179
(1,179)
1,109
(1,109)
2,123
(2,123)
2020
41,563
(41,563)
861
(861)
1,544
(1,544)
2,117
(2,117)
that would cause their ability to meet contractual obligations to be similarly affected by changes in
economic or other conditions.
We derive a significant percentage of our revenue from a small number of large customers. The ten
largest customers accounted for approximately 85.1% of net revenue in 2020 (2019: 82.2%). The
three largest customers accounted for approximately 59.1% of net revenue in 2020 (2019: 61.6%
excluding the proceeds of the patent litigation and arbitration settlement). In 2020, we had three
customers (2019: three customers) who contributed more than 10% of total net revenue. Revenue
to these large customers also may fluctuate significantly from time to time depending on the timing
and level of purchases by these customers. Significant orders from such customers may expose
A hypothetical 10% strengthening or 10% weakening of any other currency against the euro as
the company to a concentration of credit risk and difficulties in collecting amounts due, which could
of December 31, 2019 and December 31, 2020 could have a material impact on net earnings for
harm the company’s financial results.
certain currencies.
Interest risk
We invest our cash and cash equivalents in short-term deposits, money market funds, and derivative
instruments with high-rated financial institutions. We only enter into transactions with a limited
We are exposed to interest rate risk through our cash deposits. The company does not enter into
number of major financial institutions that have high credit ratings, and we closely monitor the
financial instrument transactions for trading or speculative purposes, or to manage interest rate
creditworthiness of our counterparties. Concentration risk is mitigated by not limiting the exposure to
exposure. As per December 31, 2020, the company had no debt and was not exposed to interest
a single counterparty.
rate risk on borrowings.
Credit risk
The maximum credit exposure is equal to the carrying values of cash and cash equivalent, and
accounts receivable.
Financial instruments that potentially subject the company to concentrations of credit risk consist
primarily of cash and cash equivalents, accounts receivable, and derivative instruments. These
Liquidity risk
instruments contain a risk of counterparties failing to discharge their obligations. We monitor
Our policy is to maintain a strong capital base so as to maintain investor-, creditor- and market
credit risk and manage credit risk exposure by type of financial instrument by assessing the
confidence and to sustain future development of the business.
creditworthiness of counterparties. We do not anticipate non-performance by counterparties, given
their high creditworthiness.
Our liquidity needs are affected by many factors, some of which are based on the normal ongoing
operations of the business, and others that relate to the uncertainties of the global economy and the
semiconductor industry. Although our cash requirements fluctuate based on the timing and extent of
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
136
these factors, we believe that cash generated from operations, together with our principal sources of
Equity price risk
liquidity, are sufficient to satisfy our current requirements, including our expected capital expenditures
The shares of ASMPT, our 25.07% equity investment, are listed on the Hong Kong Stock Exchange.
in 2021.
If the fair value of an investment is less than its carrying value at the balance sheet date, the company
determines whether the impairment is temporary or prolonged. The amount per share recognized
We intend to return cash to our shareholders on a regular basis in the form of dividend payments
as per December 31, 2020 under equity accounting amounts to HK$68.60, whereas the level 1
and, subject to our actual and anticipated liquidity requirements and other relevant factors, share
fair value per share (being the market price of a share on the Hong Kong Stock Exchange) was
buybacks.
HK$102.30. Management concluded that, based on quantitative analysis, no impairment of its share
The
following table summarizes the company’s contractual and other obligations as at
December 31, 2020.
Total
Less than
1 year
1-5 years
More than
5 years
Accounts payable
Income tax payable
124,507
124,507
67,857
67,857
Accrued expenses and other payables
122,706
122,706
Lease liabilities
Pension liabilities
Purchase obligations:
21,136
8,113
6,186
433
Purchase commitments to suppliers
186,119
183,949
Capital expenditure and other commitments
11,063
10,495
–
–
–
10,224
2,314
2,170
568
–
–
–
4,726
5,366
–
–
Total contractual obligations
541,501
516,133
15,276
10,092
in ASMPT existed as per December 31, 2020.
NOTE 18. COMMITMENTS AND CONTINGENCIES
Per December 31, 2020, the company entered into purchase commitments with suppliers in
the amount of €183,949 for purchases within the next 12 months and €2,170 after 12 months.
Commitments for capital expenditures and other commitments per December 31, 2020 were
€10,495 within the next 12 months and €568 after 12 months.
NOTE 19. LITIGATION
ASMI is, and may become, a party to various legal proceedings incidental to its business. As is the
case with other companies in similar industries, the company faces exposure from actual or potential
claims and legal proceedings. Although the ultimate result of legal proceedings cannot be predicted,
and in many events cannot be reasonably estimated, it is the opinion of the company’s management
that the outcome of any claim which is currently pending, either individually or on a combined basis,
will not have a material effect on the financial position of the company, its cash flows and result
of operations.
Total short-term lines of credit amounted to €150 million at December 31, 2020. The amount
outstanding at December 31, 2020 was nil and the undrawn portion totaled €150 million. The
NOTE 20. SEGMENT DISCLOSURE
The company organizes its activities in two operating segments, Front-end and Back-end. Operating
standby revolving credit facility of €150 million with a consortium of banks will be available through
segments are reported in a manner consistent with the internal reporting provided to the Chief
December 16, 2023.
Executive Officer (CEO), who is the Chief Operating Decision Maker (CODM).
For the majority of purchase commitments, the company has flexible delivery schedules depending
The Front-end segment manufactures and sells equipment used in wafer processing, encompassing
on the market conditions, which allows the company, to a certain extent, to delay delivery beyond
the fabrication steps in which silicon wafers are layered with semiconductor devices. The segment
originally planned delivery schedules.
is a product-driven organizational unit comprised of manufacturing, service, and sales operations in
Europe, the United States, Japan, South Korea and Southeast Asia.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE The Back-end segment manufactures and sells equipment and materials used in assembly and
Accordingly, the asset and result information regarding the operations that comprise the segment are
packaging, encompassing the processes in which silicon wafers are separated into individual circuits
disclosed. The full financial results are reviewed by the CODM, the external reporting of the segment
and subsequently assembled, packaged and tested. The segment is organized in ASM Pacific
is on an equity method investment basis. The total of all segments' financial amounts is reconciled
Technology Ltd, in which the company holds a substantial share of 25.07% interest, whilst the
to the corresponding amounts reported in the consolidated financial statements, eliminations being
remaining shares are listed on the Stock Exchange of Hong Kong. The segment’s main operations
reflected in the reconciling column for amounts reported in excess of those amounts reflected in the
are located in Hong Kong, the People’s Republic of China, Singapore, Malaysia and Germany.
consolidated financial statements.
The Back-end segment remains reported as a separate segment since the cease of control per
March 15, 2013. Since that date, the segment is reported as an equity method investment as the
CEO reviews this information as part of his CODM package.
137
Result from operations
378,689
143,402
(143,402)
Revenue
Gross profit
Interest income
Interest expense
Foreign currency exchange gains (losses), net
Result on investments in associates
Income tax expense
Net earnings
Year ended December 31, 2019
Front-end
Back-end
100%
Deconsoli-
dated
Total
Year ended December 31, 2020
Front-end
Back-end
100%
Deconsoli-
dated
Total
1,283,860
1,808,530
(1,808,530)
1,283,860
Revenue
1,328,122
1,903,447
(1,903,447)
1,328,122
638,464
628,979
(628,979)
2,694
(2,694)
1,639
(1,766)
(146)
–
(24,495)
(10,499)
–
24,495
10,499
4,247
40,235
638,464
378,689
1,639
(1,766)
(146)
4,247
Gross profit
Result from operations
Interest income
Interest expense
623,569
617,869
(617,869)
327,143
235,501
(235,501)
141
2,220
(2,220)
(2,008)
(19,163)
623,569
327,143
141
(2,008)
(23,157)
31,950
(48,673)
19,163
9,297
31,950
25,479
Foreign currency exchange gains (losses), net
(23,157)
(9,297)
Result on investments in associates
–
–
(53,650)
(40,235)
(53,650)
Income tax expense
(48,673)
(25,479)
324,766
70,867
(66,620)
329,013
Net earnings
253,446
183,782
(151,832)
285,396
Cash flows from operating activities
488,871
322,659
(322,659)
Cash flows from investing activities
(111,201)
(58,667)
90,627
488,871
(79,241)
Cash flows from operating activities
264,353
301,737
(301,737)
264,353
Cash flows from investing activities
(160,449)
35,149
(19,007)
(144,307)
Cash flows from financing activities
(205,652)
(220,373)
220,373
(205,652)
Cash flows from financing activities
(170,448)
(109,260)
109,260
(170,448)
Cash and cash equivalents
497,874
264,944
(264,944)
Goodwill
Other intangible assets
Investments in associates
Other identifiable assets
Total assets
Total debt
Headcount 1)
11,270
119,791
(119,791)
189,224
136,050
(136,050)
–
–
778,268
698,503
1,862,303
(1,862,303)
497,874
11,270
189,224
778,268
698,503
Cash and cash equivalents
435,228
467,781
(467,781)
Goodwill
Other intangible assets
Investments in associates
Other identifiable assets
11,270
121,821
(121,821)
209,924
119,762
(119,762)
–
–
742,714
830,803
1,725,311
(1,725,311)
435,228
11,270
209,924
742,714
830,803
1,396,871
2,383,088
(1,604,820)
2,175,139
Total assets
1,487,225
2,434,675
(1,691,961)
2,229,939
–
377,802
(377,802)
–
Total debt
–
513,938
(513,938)
–
2,337
13,900
(13,900)
2,337
Headcount 1)
2,583
9,600
(9,600)
2,583
1 Headcount includes employees with a fixed contract, and excludes temporary workers.
1 Headcount includes employees with a fixed contract, and excludes temporary workers.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 138
The accounting policies used to measure the net earnings and total assets in each segment are
Revenue stream
consistent with those used in the consolidated financial statements. The measurement methods
The company generates revenue primarily from the sales of equipment and sales of spares & services.
used to determine reported segment earnings are consistently applied for all periods presented.
The products and services described by nature in Note 1, can be part of all revenue streams.
There were no asymmetrical allocations to segments.
Geographical information is summarized as follows:
(EUR thousand)
Equipment revenue
Year ended December 31,
Spares & services revenue
2019
2020
Total
Year ended December 31,
2019
2020
1,068,645
1,051,463
215,215
276,659
1,283,860
1,328,122
(EUR thousand)
United States
Europe
Asia
Total
Revenue
339,463
126,203
818,194
1,283,860
Property, plant
and equipment
52,453
10,516
101,894
164,863
Revenue
332,981
141,300
853,841
1,328,122
Property, plant
and equipment
63,364
13,555
137,048
213,967
NOTE 21. REVENUE
Geographical information is summarized as follows:
(EUR thousand)
United States
Europe
Asia
Total
Year ended December 31,
2019
2020
Revenue
339,463
126,203
818,194
Revenue
332,981
141,300
853,841
1,283,860
1,328,122
The proceeds resulting from the patent litigation & arbitration settlements (€159 million) in 2019 are
included in the equipment revenue stream. We refer to our Annual Report of 2019 especially Note 19.
Litigation.
Total revenue increased by 18%, excluding the settlement proceeds in 2019, driven by solid increases
in our ALD business and our spares & services revenue.
Contract balances
Accrued revenue
Deferred revenue
2019
28,184
32,146
2020
33,813
46,999
The increase in the contract balances is the result of the higher activity level of the company.
For geographical reporting, the revenue is attributed to the geographical location in which the
to consideration for work completed and revenue recognized but not billed at the reporting date.
The accrued revenue included in the 'Amounts to be invoiced' primarily relate to the company’s right
customer's facilities are located.
The accrued revenue is transferred to accounts receivables when the rights become unconditional.
This usually occurs when the company issues an invoice to the customer.
Deferred revenue relates to the advance consideration received from customers for which revenue is
not yet recognized because the performance obligation has not been satisfied yet. Deferred revenue
consists of the revenue relating to undelivered elements of the arrangement with customers. This
part of the revenue is deferred at the transaction price allocated to the performance obligations until
shipment. An amount of €23 million included in the deferred revenue at December 31, 2019, has
been recognized in 2020.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
NOTE 22. INCOME TAXES
Reconciliation of effective tax rate
Amounts recognized in profit or loss
The provisions for income taxes as shown in the consolidated statements of profit or loss differ from
the amounts computed by applying the Dutch statutory income tax rate to earnings before taxes.
The components of the result before income taxes consist of:
A reconciliation of the provisions for income taxes and the amounts that would be computed using
the Dutch statutory income tax rate is set forth as follows:
139
The Netherlands
Other countries
Result before income taxes
The income tax expense consists of:
Current:
The Netherlands
Other countries
Deferred:
The Netherlands
Other countries
Income tax expense
Year ended December 31,
2019
261,942
120,721
382,663
2020
212,795
121,274
334,069
Year ended December 31,
2019
2020
(28,409)
(9,011)
(37,420)
(6,860)
(9,370)
(53,650)
(25,462)
(17,754)
(43,216)
(3,348)
(2,109)
(48,673)
Result before income taxes from
continuing operations
Income tax provision based on Dutch
statutory income tax rate
Non-deductible expenses
Foreign taxes at a rate other than the
Dutch statutory rate
Recognition of net operating losses
Utilization of net operating losses,
previously not recognized
Tax incentives and non-taxable income 1)
Adjustments in respect of prior years'
current taxes
Other 2)
Tax income / (expense)
Year ended December 31,
2019
2020
382,663
100.0%
334,069
100.0%
(95,666)
(1,527)
5,365
–
22,569
21,626
(307)
(5,710)
(53,650)
25.0%
0.4%
(83,517)
(1,892)
25.0%
0.6%
(1.4%)
5,575
(1.7%)
–
(5.9%)
(5.7%)
0.1%
1.5%
–
–
–
–
24,961
(7.5%)
4,525
1,675
(1.4%)
(0.5%)
14.0%
(48,673)
14.6%
1 Non-taxable income consists of revenues deriving from the share in income of investments and associates which are
exempted under the Dutch participation exemption.
2 Other mainly consists of tax credits, withholding taxes, changes in (enacted) tax laws and revaluation of certain assets.
Tax incentives relate to the Netherlands (Innovation Box), Singapore (Pioneer Certificate) and South
Korea. On June 8, 2009, the Singapore Economic Development Board (EDB) granted a Pioneer
Certificate to ASM Front-end Manufacturing Singapore Pte Ltd (FEMS), a principal subsidiary of the
Group, to the effect that profits arising from certain manufacturing activities by FEMS of Front-end
equipment will in principle be exempted from tax for a period of 10 years effective from July 1, 2008,
subject to fulfillment of certain criteria during the period. This exemption has been extended for
a period of five years, until July 2023.
The Dutch statutory tax rate is 25%. Taxation for other jurisdictions is calculated at the rates prevailing
in the relevant jurisdictions. During 2020, there was no significant change in the statutory tax rates of
the relevant jurisdictions. The company’s deferred tax assets and liabilities have been determined in
accordance with these statutory income tax rates.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
140
Movement in deferred tax balances
Right-of-use assets & lease liabilities
Property plant and equipment
Other intangible assets
Evaluation tools
Employee benefits
Inventories
Provision for warranty
Accrued expenses
Tax losses carried forward
R&D tax credits
Total deferred tax
Right-of-use assets & lease liabilities
Property plant and equipment
Other intangible assets
Evaluation tools
Employee benefits
Inventories
Provision for warranty
Accrued expenses
Tax losses carried forward
R&D tax credits
Total deferred tax
Net balance at
January 1, 2019
Consolidated statement
of profit and loss
Equity
Exchange
differences
Net balance at
December 31, 2019
Deferred tax assets at
December 31, 2019
Deferred tax liabilities at
December 31, 2019
–
362
(28,175)
3,815
(131)
1,343
1,349
(411)
6,990
14,004
(854)
46
415
(8,279)
(953)
(187)
(237)
1,889
1,782
(7,041)
(3,665)
(16,230)
–
–
–
–
–
–
–
(32)
–
–
(32)
(1)
(6)
(466)
131
(2)
37
(3)
(49)
51
352
44
45
771
(36,920)
2,993
(320)
1,143
3,235
1,290
–
10,691
(17,072)
–
(8)
2,896
–
–
114
–
62
–
–
3,064
45
779
(39,816)
2,993
(320)
1,029
3,235
1,228
–
10,691
(20,136)
Net balance at
January 1, 2020
Consolidated statement
of profit and loss
Equity
Exchange
differences
Net balance at
December 31, 2020
Deferred tax assets at
December 31, 2020
Deferred tax liabilities at
December 31, 2020
45
771
(36,920)
2,993
(320)
1,143
3,235
1,290
–
10,691
(17,072)
51
(146)
(8,065)
2,343
(131)
(61)
830
2,012
–
(2,290)
(5,457)
–
–
–
–
(112)
–
–
–
–
–
(112)
(5)
(72)
2,358
(136)
14
(81)
(231)
(54)
–
(848)
945
91
553
(42,627)
5,200
(549)
1,001
3,834
3,248
–
7,553
(21,696)
–
–
–
–
–
134
–
62
–
–
196
91
553
(42,627)
5,200
(549)
867
3,834
3,186
–
7,553
(21,892)
Deferred tax assets and/or liabilities for temporary differences are recognized in the Netherlands,
United States, Japan, South Korea and Singapore. ASMI and its individual subsidiaries fully utilized
the net operating losses during 2019.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
141
Year ended December 31,
2019
510,211
227,727
73,566
4,755
53,128
25,443
10,341
2020
554,829
255,814
78,903
10,126
51,661
24,397
25,249
905,171
1,000,979
Year ended December 31,
2019
150,745
(60,202)
15,597
(49)
2020
171,842
(64,126)
21,187
(27)
Unrecognized deferred tax assets
The credits concern R&D credits generated in the US, in the state of Arizona. However, ASMI does not
recognize these credits stemming from prior years due to the fact that utilization of prior-year credits is
only possible if and when the credits generated in the current year are fully utilized. Given the level of
R&D activity in the US, the company does not expect it could fully utilize the credits generated in the
current year and, hence, does not expect to benefit from the available credits generated in prior years.
NOTE 23. EXPENSES BY NATURE
Expenses by nature were as follows:
Materials and supplies
Personnel expenses
Credits
Unrecognized deferred tax assets
2020
Depreciation and amortization
Gross amount
Tax effect
Impairments
13,644
13,644
13,644
13,644
Other personnel-related expenses
Professional fees
Summary of open tax years
A summary of open tax years by major jurisdiction is as follows:
Jurisdiction
Japan
The Netherlands
Singapore
United States of America
South Korea
2015 - 2020
2014 - 2020
2015 - 2020
2001 - 2020
2015 - 2020
The calculation of the company’s tax liabilities involves dealing with uncertainties in the application
of complex tax laws. The company’s estimate for the potential outcome of any unrecognized tax
Other
Total cost of sales, selling, general and administrative
and research and development expenses
Research and development consists of the following:
Research and development expenses
Capitalization of development expenses
Amortization of capitalized development expenses
Research and development grants and credits
Total research and development expenses
106,091
128,876
benefits is highly judgmental. Settlement of unrecognized tax benefits in a manner inconsistent with
Impairment of research and development related assets
the company’s expectations could have a material impact on the company’s financial position, net
Total
earnings and cash flows. The company is subject to tax audits in its major tax jurisdictions, and local
tax authorities may challenge the positions taken by the company.
4,755
110,846
10,126
139,002
The impairment expenses in 2019 and 2020 are related to customer-specific projects.
Other taxes
The company has not provided for deferred foreign withholding taxes, if any, on undistributed
The company’s operations in the Netherlands, Belgium and the United States receive research and
earnings of its foreign subsidiaries. At December 31, 2020, the undistributed earnings of subsidiaries,
development grants and credits from various sources.
subject to withholding taxes, were approximately €85,604. These earnings could become subject
to foreign withholding taxes if they were remitted as dividends and/or if the company should sell its
interest in the subsidiaries.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
142
Personnel expenses for employees were as follows:
The number of employees, exclusive of temporary workers, by function at year-end was as follows:
Wages and salaries
Social security
Pension expenses
Share-based payment expenses
Restructuring expenses
Total
December 31,
December 31,
2019
191,459
17,214
8,408
10,538
108
2020
Per function
216,832
Research and development
17,200
8,948
12,792
Manufacturing
Marketing and sales
Customer service
42
Corporate and support functions
2019
612
484
275
779
187
2020
613
531
341
884
214
227,727
255,814
Total
2,337
2,583
Personnel expenses are included in cost of sales and in operating expenses in the consolidated
statement of profit or loss.
NOTE 24. EARNINGS PER SHARE
Basic net earnings per common share is calculated by dividing net income attributable to common
shareholders by the weighted average number of common shares outstanding for that period.
The number of employees, exclusive of temporary workers, by geographical area at year-end was
The dilutive effect is calculated using the treasury stock method. The calculation of diluted net income
as follows:
Geographical location
Europe:
- the Netherlands
- EMEA
United States
Japan
South Korea
Singapore
Asia, other
Total
December 31,
2019
2020
145
203
639
271
280
474
325
146
221
714
283
302
524
393
2,337
2,583
per share assumes the exercise of options issued under our stock option plans (and the issuance of
shares under our share plans) for periods in which exercises (or issuances) would have a dilutive effect.
The calculation of basic and diluted net income per share attributable to common shareholders
is based on the following data:
Net earnings used for purposes of calculating net income per
common share
Net earnings from operations
329,013
285,396
December 31,
2019
2020
Basic weighted average number of shares outstanding
during the year
Effect of dilutive potential common shares from stock options
and restricted shares
Dilutive weighted average number of shares outstanding
Basic net earnings per share:
from operations
Diluted net earnings per share:
from operations
49,418
580
49,999
6.66
6.58
48,907
452
49,359
5.84
5.78
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
143
NOTE 25. BOARD REMUNERATION
During 2020, the company considered the members of the Management Board and the Supervisory
Board to be the key management personnel. Total remuneration for key management personnel
NOTE 26. SHARE OWNERSHIP AND RELATED PARTY
TRANSACTIONS
The ownership or controlling interest of outstanding common shares of ASMI by members of the
in 2020 amounts to €7,181 (2019: €4,663). ASMI does not provide any loans, deposits or related
Management Board and Supervisory Board or members of their immediate family are as follows:
guarantees to the members of the Management Board or the Supervisory Board.
MANAGEMENT BOARD
The remuneration of members of the Management Board has been determined by the Supervisory
Board according to the following table that sets out information concerning all remuneration
from the company (including its subsidiaries) for services in all capacities to all current members
of the Management Board of the company. The remuneration of the Management Board consists of
the remuneration of current and former managing directors.
December 31, 2019
December 31, 2020
Shares
owned
Percentage of
common shares
outstanding
Shares
owned
Percentage of
common shares
outstanding
C.D. del Prado
(member of the Management Board) 1)
P.A.M. van Bommel
(member of the Management Board)
M.J.C. de Jong
(member of the Supervisory Board)
827,696
1.69%
–
22,137
4,050
0.05%
26,177
0.01%
4,050
–
0.05%
0.01%
1 This information is not disclosed for 2020 as Mr. del Prado had stepped down from the ASMI Board
December 31,
on May 18, 2020.
The company has a related party relationship with its subsidiaries, equity-accounted investees, and
members of the Supervisory Board and the Management Board. Related party transactions, if any,
are conducted on an arm’s length basis with terms comparable to transactions with third parties.
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payment 1)
Total Management Board remuneration before
additional payroll tax
Other 2)
Total Management Board remuneration
2019
2,864
215
–
–
1,268
4,347
–
4,347
2020
2,410
216
–
–
1,804
4,430
2,400
6,830
1 The amounts included for share-based payment in the total remuneration represent the vesting expenses related to
the financial year.
2 Represents an additional payroll tax to the company due to vesting of already granted shares in previous years related
to the retirement of a member of the Management Board subject to article 32bb of the Dutch Wage Tax Act.
SUPERVISORY BOARD
The total remuneration (base compensation, no bonuses or pensions were paid) from the company
(including its subsidiaries) for services in all capacities to all current and former members of the
Supervisory Board of the company in 2020 amounts to €351 (2019: €316). No stock options or
performance shares have been granted to members of the Supervisory Board.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
144
NOTE 27. PRINCIPLE AUDITOR'S FEES AND SERVICES
KPMG Accountants N.V. has served as our external auditor for the years 2020 and 2019. The
Audit-related services
The Audit Committee may pre-approve expenditures up to a specified amount for services included
table sets out the aggregate fees for professional audit services and other services rendered by the
in identified service categories that are related extensions of audit services and are logically performed
external auditors and its member firms and/or affiliates in 2020 and 2019. The fees mentioned in
by the auditors. Additional services exceeding the specified pre-approved limits require specific Audit
the table for the audit of the financial statements 2020 (2019) relate to the total fees for the audit of
Committee approval.
the financial statements 2020 (2019), irrespective of whether the activities were performed during
the financial year 2020 (2019). The following fees were charged by KPMG Accountants N.V. to the
Tax services
company, its subsidiaries and other consolidated companies, as referred to in Section 2:382a(1) and
The Audit Committee may pre-approve expenditures up to a specified amount per engagement
(2) of the Dutch Civil Code.
and in total for identified services related to tax matters. Additional services exceeding the specified
pre-approved limits, or involving service types not included in the pre-approved list, require specific
Audit fees
Audit-related
fees
Tax fees
Other fees
Total
2019
2020
Audit Committee approval.
KPMG
Accountants NV
KPMG
network
KPMG
Total
KPMG
Accountants NV
KPMG
network
KPMG
Total
489
211
700
623
245
868
Other services
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
489
211
700
623
245
868
In the case of specified services for which utilizing our external auditor creates efficiencies, minimizes
disruption, or preserves confidentiality, or for which management has determined that our external
auditor possesses unique or superior qualifications to provide such services, the Audit Committee
may pre-approve expenditures up to a specified amount per engagement and in total. Additional
services exceeding the specified pre-approved limits, or involving service types not included in the
pre-approved list, require specific Audit Committee approval.
AUDIT COMMITTEE PRE-APPROVAL POLICIES
The Audit Committee has determined that the provision of services by KPMG described in the
preceding paragraphs is compatible with maintaining KPMG’s independence. All audit and permitted
non-audit services provided by KPMG during 2020 were pre-approved by the Audit Committee.
The Audit Committee has adopted the following policies and procedures for pre-approval of all audit
and permitted non-audit services provided by our external auditor:
Audit services
Management submits to the Audit Committee for pre-approval the scope and estimated fees for
specific services directly related to performing the independent audit of our consolidated financial
statements for the current year.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
145
NOTE 28. SUBSIDIARIES
Unless otherwise indicated, these are, directly or indirectly, wholly-owned subsidiaries.
The location included below is the principal place of business of the specified subsidiaries. There is
no difference between the principal place of business and country of incorporation.
Name
Subsidiaries (consolidated)
ASM Europe BV 1)
ASM IP Holding BV 1)
ASM Pacific Holding BV 1) 2)
ASM Netherlands Holding BV 1)
ASM United Kingdom Sales BV 1)
ASM Germany Sales BV 1)
ASM France SARL
ASM Italia Srl
ASM Belgium NV
ASM Services and Support Ireland Ltd
ASM Services and Support Israel Ltd
ASM Microchemistry Oy
ASM America Inc
ASM NuTool Inc
ASM Japan KK
ASM Wafer Process Equipment Singapore Pte Ltd
ASM Front-End Manufacturing Singapore Pte Ltd
ASM Services & Support Malaysia SDN BHD
LOCATION
Almere, the Netherlands
Almere, the Netherlands
Almere, the Netherlands
Almere, the Netherlands
Almere, the Netherlands
Almere, the Netherlands
Crolles, France
Milano, Italy
Leuven, Belgium
Dublin, Ireland
Kiryat Gat, Israel
Helsinki, Finland
Phoenix, Arizona, United States of America
Phoenix, Arizona, United States of America
Tokyo, Japan
Singapore
Singapore
Kulim, Malaysia
ASM Korea Ltd
Dongtan, South Korea
ASM Front-End Sales & Services Taiwan Co Ltd
Hsin-Chu, Taiwan
ASM China Ltd
Shanghai, People’s Republic of China
ASM Wafer Process Equipment Ltd 3)
Kwai Chung, Hong Kong, People’s Republic of China
% Ownership December 31,
2019
2020
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
–%
1 For these subsidiaries, ASM International N.V. has filed statements at the Dutch Chamber of Commerce assuming joint and several liability in accordance with Article 403, Part 9 of Book 2 of
the Dutch Civil Code.
2 ASM Pacific Holding BV holds 25.07% of the shares in ASM Pacific Technology Ltd.
3 ASM Wafer Process Equipment Ltd was liquidated on October 9, 2020.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE NOTE 29. SUBSEQUENT EVENTS
Subsequent events were evaluated up to March 4, 2021, which is the issuance date of this Annual
SIGNING
Almere, the Netherlands
Report 2020. There are no subsequent events to report.
March 4, 2021
146
SUPERVISORY BOARD
J.C. Lobbezoo
M.C.J. van Pernis
M.J.C. de Jong
S. Kahle-Galonske
D.R. Lamouche
M. de Virgiliis
MANAGEMENT BOARD
G.L. Loh
P.A.M. van Bommel
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE ASM International N.V. financial statements
ASM International N.V. financial statements
Company balance sheet
Company balance sheet
COMPANY BALANCE SHEET (before proposed appropriation of net earnings for the year)
147
(EUR thousand)
Non-current assets
Right-of-use assets
Property, plant and equipment
Goodwill
Other intangible assets
Investments in subsidiaries
Loans to subsidiaries
Other non-current assets
Deferred tax assets
Total non-current assets
Current assets
Loans to subsidiaries
Amounts due from subsidiaries
Other current assets
Cash and cash equivalents
Total current assets
Total assets
Equity
Common shares
Capital in excess of par value
Treasury shares
Legal reserves
Translation reserve
Other legal reserves
Accumulated net earnings
Net earnings current year
Total equity
Non-current liabilities
Accrued expenses and other payables
Total non-current liabilities
Current liabilities
Accounts payable
Amounts due to subsidiaries
Income tax payable
Accrued expenses and other payables
Total current liabilities
Total liabilities
Total equity and liabilities
The notes on the following pages are an integral part of these company financial statements.
Notes
December 31,
2019
2020
2
3
3
3
6
4
170
250
11,270
3,691
1,662,442
45,377
6,354
5,709
1,735,263
2,123
73,098
526
21,192
96,939
172
148
11,270
197
1,831,446
39,689
6,166
—
1,889,088
2,071
71,562
685
—
74,318
1,832,202
1,963,406
2,052
43,676
(169,707)
126,940
932,105
554,572
329,013
5
1,818,651
6
7
52
52
428
4,034
—
9,037
13,499
13,551
1,992
34,502
(104,962)
26,185
908,910
702,701
285,396
1,854,724
69
69
295
49,950
52,714
5,654
108,613
108,682
1,832,202
1,963,406
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
Company statement of profit or loss
Company statement of profit or loss
COMPANY STATEMENT OF PROFIT OR LOSS
148
(EUR thousand)
Operating expenses:
Selling, general and administrative
Research and development
Total operating expenses
Result from operations
Finance income
Finance expense
Foreign currency exchange gain
Result before income taxes
Income taxes
Net earnings from holding activities
Net earnings from subsidiaries and associates
Total net earnings
The notes on the following pages are an integral part of these company financial statements.
Year ended December 31,
Notes
2019
2020
8
(33,361)
(2,122)
(35,483)
(35,483)
4,964
(1,405)
6,874
(25,050)
(5,400)
(30,450)
359,463
329,013
(26,408)
(4,074)
(30,482)
(30,482)
2,576
(1,211)
34,975
5,858
(2,325)
3,533
281,863
285,396
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Notes to the company financial statements
Notes to the company financial statements
149
NOTES TO THE COMPANY FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ASM International N.V. (ASMI or the company) is a Dutch public liability company. Statutory seat:
Corporate income tax
The company is the head of the Dutch fiscal unity. The company recognizes the portion of corporate
Versterkerstraat 8, 1322 AP Almere, the Netherlands.
income tax that it would owe as an independent taxpayer, taking into account the allocation of the
advantages of the fiscal unity.
The description of our activities and our structure, as included in the Notes to the consolidated
financial statements, also apply to the company financial statements.
Settlement within the fiscal unity between the company and its subsidiaries takes place through
The accompanying company financial statements are stated in thousands of euros unless otherwise
indicated.
current account positions.
Participating interests in group companies
Investments in subsidiaries are stated at net asset value as we effectively exercise influence of
ACCOUNTING POLICIES APPLIED
The financial statements of the company included in this section are prepared in accordance with
significance over the operational and financial activities of these investments. The net asset value is
determined on the basis of the EU-IFRS as applied in the preparation of the consolidated financial
Part 9 of Book 2 of the Dutch Civil Code. Section 362 (8), Book 2, Dutch Civil Code, which allows
statements. For a list of all subsidiaries, see Note 28 to the consolidated financial statements.
companies that apply IFRS as endorsed by the European Union in their consolidated financial
statements to use the same measurement principles in their company financial statements.
The company has prepared these company financial statements using this provision.
NOTE 2. GOODWILL
Reference is made to Note 4 of the consolidated financial statements.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE NOTE 3. INVESTMENTS AND LOANS TO SUBSIDIARIES
Investments in
subsidiaries
Loans to
subsidiaries
Total
NOTE 4. CASH AND CASH EQUIVALENTS
The amounts of cash and cash equivalents are mainly related to the cash pool and in-house bank
operated by the Company. At 31 December 2020, the cash pool and in-house bank arrangement
Balance January 1, 2019
1,602,871
48,762
1,651,633
resulted in a liability which is recorded in amounts due to subsidiaries.
150
Net result of subsidiaries and associates
Other comprehensive income investments
Dividend received
Repayment of loans
Dilution
Foreign currency translation effect
Balance December 31, 2019
Net result of subsidiaries and associates
Other comprehensive income investments
Dividend received
Repayment of loans
Dilution
Foreign currency translation effect
Balance December 31, 2020
Loans due from subsidiaries – non-current portion
Loans due from subsidiaries – current portion
Total
359,463
(3,954)
(330,399)
–
3,882
30,579
–
–
–
(2,164)
–
902
359,463
(3,954)
(330,399)
(2,164)
3,882
31,481
1,662,442
47,500
1,709,942
281,863
(1,922)
(16,961)
–
2,059
(96,035)
–
–
–
(2,071)
–
281,863
(1,922)
(16,961)
(2,071)
2,059
(3,669)
(99,704)
1,831,446
41,760
1,873,206
December 31,
2019
45,377
2,123
47,500
2020
39,689
2,071
41,760
The interest on the loans due from subsidiaries is based on the Bank of America's prime rate plus
two percent points. The repayment schedule of the loan is as follows: 24 annual installments of
US$2 million, started December 31, 2018, followed by a final installment of US$5.3 million on
December 31, 2043.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
NOTE 5. EQUITY
The changes in equity are as follows:
(EUR thousand)
Balance as of January 1, 2019
Appropriation of net earnings:
Components of comprehensive income
Net earnings
Other comprehensive income
Total comprehensive income (loss)
Dividend paid to common shareholders
Capital repayment
Compensation expense share-based payments
Exercise stock options out of treasury shares
Vesting restricted shares out of treasury shares
Purchase of common shares
Cancellation of common shares out of treasury shares
Change in retained earnings subsidiaries
Fair value accounting investments
Capitalized development expenses subsidiaries
Other movements in investments in associates:
Dilution
Balance as of December 31, 2019
Appropriation of net earnings
Components of comprehensive income:
Net earnings
Other comprehensive income
Total comprehensive income (loss)
Dividend paid to common shareholders
Capital repayment
Compensation expense share-based payments
Exercise stock options out of treasury shares
Vesting restricted shares out of treasury shares
Purchase of common shares
Cancellation of common shares out of treasury shares
Change in retained earnings subsidiaries
Fair value accounting investments
Capitalized development expenses subsidiaries
Other movements in investments in associates:
Dilution
Balance as of December 31, 2020
Common
shares
Capital in excess of
par value
2,252
50,902
Treasury
shares
(328,010)
–
–
–
–
–
–
–
–
–
–
(200)
–
–
–
–
–
–
–
–
–
(1,144)
10,538
(8,056)
(8,564)
–
–
–
–
–
–
–
–
–
–
–
–
–
14,823
8,564
(100,131)
235,047
–
–
–
–
2,052
43,676
(169,707)
–
–
–
–
–
–
–
–
–
–
(60)
–
–
–
–
–
–
–
–
–
–
12,792
(5,923)
(16,043)
–
–
–
–
–
–
–
–
–
–
–
–
–
8,697
16,043
(67,505)
107,510
–
–
–
–
1,992
34,502
(104,962)
Accumulated
net earnings
Net earnings
current year
Legal reserves
Translation
reserve
99,607
Other legal
reserves
886,151
773,657
157,133
–
–
–
(99,299)
–
–
–
–
–
(234,847)
(6,375)
2,535
(42,114)
3,882
554,572
329,013
–
–
–
(98,688)
–
–
–
–
–
(107,450)
(2,733)
47,772
(21,844)
2,059
702,701
157,133
(157,133)
329,013
–
329,013
–
–
–
–
–
–
–
–
–
–
–
–
–
27,333
27,333
–
–
–
–
–
–
–
–
–
–
–
329,013
(329,013)
285,396
–
285,396
126,940
–
–
(100,755)
(100,755)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
285,396
26,185
–
–
–
–
–
–
–
–
–
–
–
6,375
(2,535)
42,114
–
932,105
–
–
–
–
–
–
–
–
–
–
–
2,733
(47,772)
21,844
–
908,910
151
Total equity
1,641,692
–
329,013
27,333
356,346
(99,299)
(1,144)
10,538
6,767
–
(100,131)
–
–
–
–
3,882
1,818,651
–
285,396
(100,755)
184,641
(98,688)
–
12,792
2,774
–
(67,505)
–
–
–
–
2,059
1,854,724
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Changes in other legal reserves in 2019 and 2020 were as follows:
152
COMMON SHARES, PREFERRED AND FINANCING PREFERRED SHARES
Following the amendment of the articles of association on August 3, 2018, the authorized capital of
the company amounts to 82,500,000 common shares of €0.04 par value, 88,500 preferred shares of
€40 par value, and 6,000 financing preferred shares of €40 par value.
The AGM of May 18, 2020, approved the cancellation of 1.5 million treasury shares. This became
effective as per July 21, 2020.
Balance as of January 1, 2019
Retained earnings subsidiaries and
investments
Fair value accounting investments
As per December 31, 2020 49,797,394 common shares with a nominal value of €0.04 each were
Development expenditures
issued and fully paid up, of which 1,082,712 common shares are held by us in treasury. All shares
Balance as of December 31, 2019
have one vote per €0.04 par value. Treasury shares held by the company cannot be voted on. Of our
48,714,682 outstanding common shares at December 31, 2020, 48,438,605 are registered with
our transfer agent in the Netherlands, ABN AMRO Bank N.V., and 276,077 are registered with our
transfer agent in the United States, Citibank, NA, New York.
Retained earnings subsidiaries and
investments
Fair value accounting investments
Development expenditures
Balance as of December 31, 2020
As at December 31, 2020, no preferred shares and no financing preferred shares are issued.
Reserve for
participating
interests, regarding
retained earnings
Reserve for participating
interests, regarding
capitalized development
expenses
Other
legal
reserves
745,769
6,375
(2,535)
–
749,609
2,733
(47,772)
–
704,570
140,382
886,151
–
–
6,375
(2,535)
42,114
42,114
182,496
932,105
–
–
2,733
(47,772)
21,844
21,844
204,340
908,910
TREASURY SHARES
With respect to treasury shares, reference is made to Note 12 to the consolidated financial
statements.
OTHER LEGAL RESERVES
The other legal reserve for participating interests regarding retained earnings, which amounts to
€704,570 (2019: €749,609), pertains to participating interests that are accounted for according
to the equity accounting method. The reserve represents the difference between the participating
interest retained earnings and direct changes in equity, as determined on the basis of the company's
accounting policies, and the share thereof that the company may distribute. As to the latter share,
this takes into account any profits that may not be distributed by participating interests that are Dutch
limited companies based on the distribution tests to be performed by the management of those
For more detailed information, reference is made to Note 12 to the consolidated financial statements.
EMPLOYEE STOCK PLAN, OPTION PLAN AND EMPLOYEE RESTRICTED
SHARES PLAN
The company has adopted various stock option plans and restricted share plans, and has entered
into related agreements with various employees. For detailed information, reference is made to
Note 13 to the consolidated financial statements.
APPROPRIATION OF RESULT
It is proposed that net earnings for the year 2020 are carried to the accumulated net earnings.
NOTE 6. AMOUNTS DUE FROM / TO SUBSIDIARIES
The amounts due from subsidiaries are mainly related to the settlement of the income tax of the
companies. The legal reserve is determined on an individual basis.
Dutch fiscal unity.
In accordance with applicable legal provisions, a legal reserve for the carrying amount of €204,340
The amounts due to subsidiaries are mainly related to the cash pool and in-house bank operated by
(2019: €182,496) has been recognized for capitalized development costs.
the company.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 153
NOTE 7. INCOME TAX PAYABLE
The income tax payable reflects the amount due by the Dutch fiscal unity regarding the provisional
NOTE 10. COMMITMENTS AND CONTINGENCIES
With respect to certain Dutch subsidiaries, ASMI has assumed joint and several liability in accordance
tax assessments for the years 2020 and 2019 as the company is severally liable for the tax payables
with Article 403, Part 9 of Book 2 of the Dutch Civil Code. These Dutch subsidiaries are disclosed in
of the Dutch fiscal unity.
Note 28 of the consolidated financial statements.
NOTE 8. EXPENSES BY NATURE
Expenses by nature were as follows:
Salaries and wages
Depreciation and amortization
Other personnel-related expenses
Professional fees
Other
Total operating expenses
Year ended December 31,
2019
7,515
4,918
5,195
14,835
3,020
35,483
2020
8,903
3,736
6,011
8,247
3,585
30,482
ASMI forms a fiscal unity (tax group for corporate income tax purposes) together with its Dutch
subsidiaries for purposes of Dutch tax laws and is as such jointly and severally liable for the tax debts
of the unity. The tax unity consists of ASM International N.V. and the following subsidiaries:
›› ASM Europe BV (operational company);
›› ASM IP Holding BV (operational company);
›› ASM Pacific Holding BV (holding company);
›› ASM Netherlands Holding BV (holding company);
›› ASM United Kingdom Sales BV (operational company); and
›› ASM Germany Sales BV (operational company).
For VAT purposes in the Netherlands ASMI forms a fiscal unity together with ASM Europe BV and
ASM IP Holding BV.
NOTE 9. PERSONNEL EXPENSES
The average number of employees of ASMI during 2020 was 24 (2019: 22). All employees have
corporate and support functions and were based in the Netherlands.
NOTE 11. SHARE OWNERSHIP OF THE MANAGEMENT BOARD AND
SUPERVISORY BOARD
With respect to share ownership of the Management Board and Supervisory Board, reference is
Salaries
Social security charges
Pension expenses
Total
Year ended December 31,
made to Note 26 to the consolidated financial statements.
2019
6,616
290
609
7,515
2020
7,943
294
666
8,903
NOTE 12. AUDITOR'S FEES AND SERVICES
For information regarding auditor's fees and services we refer to Note 27 to the consolidated
financial statements.
Further information concerning the number of employees can be found in Note 23 to the consolidated
financial statements.
For information on the parent company's defined benefit pension plan, the remuneration of
the Management Board and the Supervisory Board, and the parent company's share-based
compensation plans, see Notes 13 and 25 to the consolidated financial statements.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE
NOTE 13. SUBSEQUENT EVENTS
Subsequent events were evaluated up to March 4, 2021, which is the issuance date of this Annual
SIGNING
Almere, the Netherlands
Report 2020. There are no subsequent events to report.
March 4, 2021
154
SUPERVISORY BOARD
J.C. Lobbezoo
M.C.J. van Pernis
M.J.C. de Jong
S. Kahle-Galonske
D.R. Lamouche
M. de Virgiliis
MANAGEMENT BOARD
G.L. Loh
P.A.M. van Bommel
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Independent auditor’s report
Independent auditor’s report
155
INDEPENDENT AUDITOR’S REPORT
To: the General Meeting of Shareholders and the Supervisory Board of ASM International N.V.
Report on the audit of the financial statements 2020 included in
the Annual Report
Basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing.
Our responsibilities under those standards are further described in the ‘Our responsibilities for
the audit of the financial statements’ section of our report.
Our opinion
In our opinion:
We are independent of ASM International N.V. in accordance with the ‘Verordening inzake de
onafhankelijkheid van accountants bij assurance-opdrachten’ (ViO, Code of Ethics for Professional
- The accompanying consolidated financial statements give a true and fair view of the financial
Accountants, a regulation with respect to independence) and other relevant independence
position of ASM International N.V. as at December 31, 2020 and of its result and its cash flows
regulations in the Netherlands. Furthermore, we have complied with the ‘Verordening gedrags-
for the year then ended, in accordance with International Financial Reporting Standards as
en beroepsregels accountants’ (VGBA, Dutch Code of Ethics).
adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code;
and
We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis
- The accompanying company financial statements give a true and fair view of the financial
for our opinion.
position of ASM International N.V. as at December 31, 2020 and of its result for the year then
ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.
Audit approach
What we have audited
We have audited the financial statements 2020 of ASM International N.V. (the company) based in
Almere, The Netherlands. The financial statements include the consolidated financial statements
Summary
Materiality
and the company financial statements.
The consolidated financial statements comprise:
1 The consolidated statement of financial position as at December 31, 2020;
2 The following consolidated statements for 2020: the statement of profit or loss, the
statements of comprehensive income, changes in equity and cash flows; and
3 The notes comprising a summary of the significant accounting policies and other explanatory
information.
The company financial statements comprise:
1 The company balance sheet as at December 31, 2020;
2 The company statement of profit or loss for 2020; and
3 The notes comprising a summary of the accounting policies and other explanatory information.
Materiality of EUR 15 million
4.5% of result before income taxes
Group audit
97% of total assets
93% of revenue
Key audit matters
Revenue recognition
Accounting for capitalized development costs
Opinion
Unqualified
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 156
Materiality
Based on our professional judgement we determined the materiality for the financial
- Sent detailed instructions to all component auditors, including the significant areas that should
be covered (which included the relevant risks of material misstatement detailed below) and set
statements as a whole at EUR 15 million which represents 4.5% of result before income taxes
out the information required to be reported to the group auditor. We performed file reviews of
(2019: EUR 10 million which represents 4.5% of prior year result before income taxes adjusted
components ASMPT (Hong Kong) and ASM Front-End Manufacturing Singapore Pte. Ltd.
for non-recurring gain resulting from the Kokusai Settlements). The materiality is determined with
(Singapore) and held various telephone calls with the auditors of the components, to discuss
reference to result before income taxes. The increase of the materiality is primarily the result of
the group audit, significant risks, audit approach and instructions, as well as the audit findings
increased business operations and profitability. We consider result before income taxes as the
and observations reported to the group auditor.
most appropriate benchmark because the company is a profit oriented company and the key
users of the financial statements are primarily focused on profit. We have also taken into account
In view of restrictions on the movement of people across borders, and also within significantly
misstatements and/or possible misstatements that in our opinion are material for the users of
affected countries, we considered changes to the planned audit approach to evaluate the
the financial statements for qualitative reasons.
component auditors’ communications and the adequacy of their work. According to our
original audit plan, we intended to visit the components in Hong Kong and Singapore to review
We agreed with the Supervisory Board that misstatements in excess of EUR 750,000 and
selected component auditor documentation. Due to the aforementioned restrictions, this was
classification misstatements in excess of EUR 3,750,000 which are identified during the audit,
not practicable in the current environment. As a result, we have requested those component
would be reported to them, as well as smaller misstatements that in our view must be reported
auditors to provide us with access to audit workpapers to perform these evaluations, subject to
on qualitative grounds.
Scope of the group audit
ASM International N.V. is at the head of a group of components. The financial information of this
local law and regulations. In addition, due to the inability to arrange in-person meetings with such
component auditors, we have increased the use of alternative methods of communication with
them, including through written instructions, exchange of emails and virtual meetings.
group is included in the financial statements of ASM International N.V.
By performing the procedures mentioned above at components, together with additional
procedures at group level, we have been able to obtain sufficient and appropriate audit evidence
Our group audit mainly focused on significant components where account balances are of
about the group’s financial information to provide an opinion about the financial statements.
significant size, have significant risks of material misstatement to the group associated with them
or are considered significant for other reasons.
For the residual population not in scope we performed analytical procedures in order to
corroborate that our scoping remained appropriate throughout the audit.
We have:
- Selected components for which an audit of the complete reporting package is performed and
components for which an audit of specific items is performed. Furthermore, we have
determined the nature and extent of the audit procedures that we perform at the group level
and at the company’s Shared Service Center (“SSC”);
- Performed procedures that cover the significant operations in Japan, Korea, the Netherlands,
Singapore and the United States of America, all mainly through our audit procedures at the
SSC, supplemented with local audits by KPMG member firms of specific items. In addition, we
have made use of the work of non-KPMG member firm auditors of ASM Pacific Technology
Ltd. (“ASMPT”) as part of our procedures that cover the (results from) investments in
associates. The remaining balances are covered by additional procedures at group level; and
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 157
Our procedures as described above can be summarized as follows:
The primary responsibility for the prevention and detection of fraud and non-compliance with
Total assets
79%
18%
3%
Audit of the complete
reporting package
Audit of specific items
Covered by additional
procedures at group level
Revenue
86%
7%
7%
Audit of the complete
reporting package
Audit of specific items
Covered by additional
procedures at group level
laws and regulations lies with the Management Board, with oversight by the Supervisory Board.
We refer to chapter Governance of the Annual Report where the Management Board included its
risk assessment and where the Supervisory Board reflects on this assessment.
Our risk assessment
As part of our process of identifying fraud risks, we evaluated fraud risk factors with respect to
financial reporting fraud, misappropriation of assets and bribery and corruption. We, together
with our forensics specialists, evaluated the fraud risk factors to consider whether those factors
indicated a risk of material misstatement due to fraud.
In addition, we performed procedures to obtain an understanding of the legal and regulatory
frameworks that are applicable to the company and we inquired the Management Board
as to whether the entity is in compliance with such laws and regulations and inspected
correspondence, if any, with relevant licensing and regulatory authorities.
The potential effect of the identified laws and regulations on the financial statements
Our focus on the risk of fraud and non-compliance with laws
and regulations
varies considerably.
Our objectives
The objectives of our audit with respect to fraud and non-compliance with laws and regulations are:
With respect to fraud:
- To identify and assess the risks of material misstatement of the financial statements due
Firstly, the company is subject to laws and regulations that directly affect the financial statements,
including taxation and financial reporting (including related company legislation). We assessed the
extent of compliance with these laws and regulations as part of our procedures on the related
financial statement items and therefore no additional audit response is necessary.
to fraud;
Secondly, the company is subject to many other laws and regulations where the consequences
- To obtain sufficient appropriate audit evidence regarding the assessed risks of
of non-compliance could have an indirect material effect on amounts recognized or disclosures
material misstatement due to fraud, through designing and implementing appropriate
provided in the financial statements, or both, for instance through the imposition of fines or
audit responses; and
litigation. We identified the following areas as those most likely to have such an indirect effect:
- To respond appropriately to fraud or suspected fraud identified during the audit.
- Trade sanctions and export controls laws and regulations (reflecting the company’s exposure
With respect to non-compliance with laws and regulations:
- Anti-bribery and corruption laws and regulations (reflecting the company’s significant and
- To identify and assess the risk of material misstatement of the financial statements due
geographically diverse operations).
to non-compliance with laws and regulations; and
- To obtain a high (but not absolute) level of assurance that the financial statements, taken
To obtain a detailed understanding of the risk of non-compliance related to trade sanctions and
as a whole, are free from material misstatement, whether due to fraud or error when
export controls we have performed certain risk assessment procedures.
considering the applicable legal and regulatory framework.
to international trading restrictions); and
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 158
In accordance with the auditing standard we evaluated the following fraud and non-compliance
- We obtained audit evidence regarding compliance with the provisions of those laws and
risks that are relevant to our audit, including the relevant presumed risks:
regulations generally recognized to have a direct effect on the determination of material
- Revenue recognition, in relation to completeness of equipment sales in the cut-off period
amounts and disclosures in the financial statements.
of the financial year (a presumed risk); and
- Management override of controls (a presumed risk).
We do note that our audit is based on the procedures described in line with applicable auditing
standards. In addition to the requirements of the auditing standards we have performed the
We communicated the identified risks of fraud throughout our team and remained alert to any
following additional procedures:
indications of fraud and/or non-compliance throughout the audit. This included communication
- We performed inquiries with management and inspection of documents related to country
from the group to component audit teams of relevant risks of fraud and/or non-compliance
specific sanctions and product lists to assess whether trade compliance and export controls
with laws and regulations identified at group level. We communicated our risk assessment and
are properly designed and implemented; and
audit response to management and the Audit Committee of the Supervisory Board. Our audit
- We obtained an understanding of the company’s assessment of cyber security business risks
procedures differ from a specific forensic fraud investigation, which investigation often has a more
and analyzed how the company respond to these cyber security business risks.
in-depth character.
Our response to the risks identified
We performed the following audit procedures (not limited) to respond to the assessed risks:
Our procedures to address identified risks of fraud resulted in a key audit matter. We refer to the
key audit matter related to Revenue recognition.
- We evaluated the design and the implementation of internal controls that mitigate fraud risks.
We do note that our audit is not primarily designed to detect fraud and non-compliance with laws
In case of internal control deficiencies, where we considered there would be opportunity for
and regulations and that management is responsible for such internal control as management
fraud, we performed supplemental detailed risk-based testing;
determines is necessary to enable the preparation of the financial statements that are free from
- We performed data analysis of high-risk journal entries and investigated journal entries debiting
material misstatement, whether due to errors or fraud, including compliance with laws and
revenue with an unexpected associated credit. Where we identified instances of unexpected
regulations.
journal entries or other risks through our data analytics, we performed additional audit
procedures to address each identified risk. These procedures also included testing of
The more distant non-compliance with indirect laws and regulations (irregularities) is from the
transactions back to source information;
events and transactions reflected in the financial statements, the less likely the inherently limited
- Assessment of matters reported on the company’s incident register/whistleblowing
procedures required by auditing standards would identify it. In addition, as with any audit, there
and complaints procedures with the entity and results of management’s investigation
remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery,
of such matters;
intentional omissions, misrepresentations, or the override of internal controls.
- With respect to the risk of fraud in revenue recognition we refer to the key audit matter
‘Revenue recognition’;
- We incorporated elements of unpredictability in our audit by, among others, 1) performing audit
procedures with specific focus on the equipment sales recorded in January 2021 to respond
on the fraud risk concerning the completeness of equipment sales in the cut-off period and
2) investigating journal entries debiting revenue with an unexpected associated credit;
- We considered the outcome of our other audit procedures and evaluated whether any findings
or misstatements were indicative of fraud or non-compliance. If so, we re-evaluated our
assessment of relevant risks and its resulting impact on our audit procedures; and
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 159
Our key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial statements. We have communicated the key audit
matters to the Supervisory Board. The key audit matters are not a comprehensive reflection of all
matters discussed.
These matters were addressed in the context of our audit of the financial statements as a whole
and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Revenue recognition
Description
As disclosed in note 1 to the consolidated financial statements, equipment sales is measured taking
into account multiple element arrangements, for example a single sales transaction that combines the
delivery of goods and rendering of (installation) services, as contracts with customers typically include
separately identifiable components that are recognized based on the relative selling price. Furthermore,
equipment sales is recognized when the customer obtains control of the products and services.
We identified a cut-off risk that equipment sales could be misstated as a result of recognition in the
Compared to last year the key audit matter with respect to the accounting for the investment
incorrect period. This risk inherently includes the fraud risk that management deliberately understates
in ASMPT (associate) is not identified. Based on our reassessment of the risk of material
revenue, as management may feel pressure to achieve planned results (risk of fraud). We consider
misstatement related to this account, we identified a limited degree of complexity and judgement
revenue recognition a key audit matter, due to the thereto related risk of management override of
required. Therefore we concluded to not identify the accounting for the investment in ASMPT
controls, as well as the fraud risk concerning the completeness of equipment sales in the cut-off period
(associate) as a key audit matter in the current year.
of the financial year.
Our response
Our audit procedures to address this key audit matter included, among others:
- Assessing the appropriateness of the company’s accounting policies relating to revenue recognition
and assessing compliance with IFRS 15;
- Evaluating the design and implementation of the company’s internal control in the sales process that
would identify a misstatement as a result of revenue recognition in the incorrect accounting period;
- Assessing the completeness of sales by selecting samples during the cut-off period, with specific
focus on the sales recorded in January 2021, to agree the timing of revenue recognition to
underlying supporting documents such as shipping documents;
-
Inquiring with management / those who have responsibilities for initiating, preparing or authorizing
journal entries at period end whether there was inappropriate or unusual activity relating to the
processing of journal entries and other adjustments during the period, identifying high-risk journal
entries (such as journal entries debiting revenue with an unexpected associated credit) from the
population of journal entries from the local ERP system with the involvement of our IT auditors and
verifying the appropriateness of the identified high risk journal entries through verification with
supporting documentation; and
- Assessing the adequacy of the revenue disclosures included in note 1 and note 21 of the financial
statements.
Our observation
The results of our procedures related to the revenue recognition of equipment sales are satisfactory.
We consider the disclosure in note 1 and note 21 of the financial statements as adequate.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 160
Accounting for capitalized development costs
Description
Capitalized development costs are deemed to be significant to our audit, given the significance
of the capitalized balance of EUR 204 million including additions of EUR 64 million in 2020, as
We have read the other information. Based on our knowledge and understanding obtained
through our audit of the financial statements or otherwise, we have considered whether the other
information contains material misstatements.
well as the specific criteria that have to be met for capitalization. This involves management
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the
judgement on capitalized development costs not in use including the additions for the year, with
Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is less
respect to technical feasibility, intention and ability to complete the intangible asset, the ability to
than the scope of those performed in our audit of the financial statements.
use or sell the asset, the generation of future economic benefits and the ability to measure the
costs reliably.
Our response
Our audit approach includes the following procedures over capitalized development costs:
- Assessing the appropriateness of the company’s accounting policies relating to internal and
external cost capitalization and assess compliance with IFRS;
- Evaluating the design and implementation of the company’s internal control in the R&D
process that would identify a misstatement as an incorrect capitalization of development
expense;
The Management Board of the company is responsible for the preparation of the other
information, including the information as required by Part 9 of Book 2 of the Dutch Civil Code.
Report on other legal and regulatory requirements and ESEF
Engagement
We were engaged by the Annual General Meeting of Shareholders as auditor of ASM
International N.V. on May 21, 2014, as of the audit for the year 2015 and have operated as
- Challenging the key assumptions used, or judgments made, in capitalizing development costs,
statutory auditor ever since that financial year.
such as the technical feasibility, intention and ability to complete the intangible asset, the
ability to use or sell the asset and generation of future economic benefits, the accuracy of
costs included and the useful economic life attributed to the asset based on development
plans, pre-orders and customer communications; and
- Assessing the adequacy of the Other intangible assets disclosures included in note 5 of
the financial statements.
Our observation
The results of our procedures related to the accounting for capitalized development costs are
satisfactory. We consider the disclosure in note 5 of the financial statements as adequate.
No prohibited non-audit services
We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU
Regulation on specific requirements regarding statutory audits of public-interest entities.
European Single Electronic Format (ESEF)
ASM International N.V. has prepared its Annual Report in ESEF. The requirements for this
format are set out in the Commission Delegated Regulation (EU) 2019/815 with regard to
regulatory technical standards on the specification of a single electronic reporting format (these
requirements are hereinafter referred to as: the RTS on ESEF).
Report on the other information included in the Annual Report
In addition to the financial statements and our auditor’s report thereon, the Annual Report
In our opinion, the Annual Report prepared in the XHTML format, including the partially tagged
consolidated financial statements as included in the reporting package by ASM International N.V.,
contains other information.
has been prepared in all material respects in accordance with the RTS on ESEF.
Based on the following procedures performed, we conclude that the other information:
Management is responsible for preparing the Annual Report including the financial statements in
-
Is consistent with the financial statements and does not contain material misstatements; and
accordance with the RTS on ESEF, whereby management combines the various components into
- Contains the information as required by Part 9 of Book 2 of the Dutch Civil Code.
a single reporting package. Our responsibility is to obtain reasonable assurance for our opinion
whether the Annual Report in this reporting package, is in accordance with the RTS on ESEF.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 161
Our procedures taking into consideration Alert 43 of NBA (the Netherlands Institute of Chartered
Accountants), included amongst others:
Our responsibilities for the audit of the financial statements
Our objective is to plan and perform the audit engagement in a manner that allows us to obtain
- Obtaining an understanding of the entity’s financial reporting process, including the preparation
sufficient and appropriate audit evidence for our opinion.
of the reporting package;
- Obtaining the reporting package and performing validations to determine whether the
Our audit has been performed with a high, but not absolute, level of assurance, which means we
reporting package containing the Inline XBRL instance document and the XBRL extension
may not detect all material errors and fraud during our audit.
taxonomy files have been prepared in accordance with the technical specifications as included
in the RTS on ESEF; and
Misstatements can arise from fraud or error and are considered material if, individually or in
- Examining the information related to the consolidated financial statements in the reporting
the aggregate, they could reasonably be expected to influence the economic decisions of users
package to determine whether all required taggings have been applied and whether these are
taken on the basis of these financial statements. The materiality affects the nature, timing and
in accordance with the RTS on ESEF.
extent of our audit procedures and the evaluation of the effect of identified misstatements on
Description of responsibilities regarding the financial statements
our opinion.
Responsibilities of the Management Board and the Supervisory Board
of the company for the financial statements
The Management Board is responsible for the preparation and fair presentation of the
financial statements in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code.
A further description of our responsibilities for the audit of the financial statements is
located at the website of de ‘Koninklijke Nederlandse Beroepsorganisatie van Accountants’
(NBA, Royal Netherlands Institute of Chartered Accountants) at: http://www.nba.nl/ENG_oob_01.
This description forms part of our independent auditor’s report.
Furthermore, the Management Board is responsible for such internal control as management
Amstelveen, March 4, 2021
determines is necessary to enable the preparation of the financial statements that are free from
KPMG Accountants N.V.
material misstatement, whether due to fraud or error.
F.A.M. Croiset van Uchelen RA
As part of the preparation of the financial statements, the Management Board is responsible for
Partner
assessing the company’s ability to continue as a going concern. Based on the financial reporting
frameworks mentioned, the Management Board should prepare the financial statements using
the going concern basis of accounting unless the Management Board either intends to liquidate
the company or to cease operations, or has no realistic alternative but to do so. The Management
Board should disclose events and circumstances that may cast significant doubt on the
company’s ability to continue as a going concern in the financial statements.
The Supervisory Board is responsible for overseeing the company’s financial reporting process.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE NON-FINANCIAL SUMMARY
162
NON-FINANCIAL SUMMARY
Environmental footprint results 2016 to 2020
163
Non-financial performance summary
164
Our focus is on continuing to help our customers achieve critical
technology and productivity improvements responsibly, and striving
to reduce our impact on the environment and positively contributing
to society while doing so.
ENVIRONMENTAL FOOTPRINT
Based on our environmental targets for 2016-2020, we managed to reduce our greenhouse
gas emissions by 17.9% per euro of research and development (R&D) investment,
compared to the baseline 2015 levels. We also reduced water withdrawn by 62.5% per euro
of R&D investment, and by 30% in absolute terms, compared to baseline 2015 levels.
FUTURE GOALS
We have the ambition to further our progress and impact in the different geographies
in which we operate. We aim to make meaningful contributions to our industry, to the
communities where we operate, and to preserving our planet. In the coming years,
we will focus on broadening our sustainability and ESG goals.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Environmental footprint results 2016 to 2020
Environmental footprint results 2016 to 2020
163
ENVIRONMENTAL FOOTPRINT RESULTS 2016 TO 2020
GREENHOUSE GAS
(GHG) EMISSIONS (per R&D investment)
WATER
CONSUMPTION (per R&D investment)
LANDFILL
DIVERSION RATE
177
168
145
1,886
Target
5 %
Below 2015
baseline
17.9%
Below 2015
baseline
1,037
Target
45%
Below 2015
baseline
707
62.5%
Below 2015
baseline
90%
65%
84%
Target
>90%
Diversion
84%
Diversion
2015
Baseline
2020
Target
2020
Completion
2015
Baseline
2020
Target
2020
Completion
2015
Baseline
2020
Target
2020
Completion
Figures are mtCO2e/R&D investment EUR millions
Figures are m3/R&D investment EUR millions
Figures are percent solid waste landfill diversion
GREENHOUSE GAS (GHG) EMISSIONS
(Absolute and normalized per R&D investment)
WATER CONSUMPTION
(Absolute and normalized per R&D investment)
LANDFILL DIVERSION RATE
(in %)
196
181
174
177
163
250
220
190
160
130
100
240
250
145
200
160
120
80
40
0
200
1,886
160
173
179
178
120
80
40
0
129
123
121
707
2,000
1,600
1,200
800
400
0
2016
2017
2018
2015
Baseline
2019
2020
Completion
2015
Baseline
2016
2017
2018
2019
2020
Completion
Absolute Greenhouse Gas emissions
(mtCO2e - Scope 1 + 2, x100)
Intensity of mtCO2e/million EUR R&D spend
Absolute water consumption
(m3, x1,000)
Intensity of m3/million EUR R&D spend
79
78
82
84
72
65
100
80
60
40
20
0
2015
Baseline
2016
2017
2018
2019
2020
Completion
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Non-financial performance summary
Non-financial performance summary
NON-FINANCIAL PERFORMANCE SUMMARY
164
CATEGORIES
EMPLOYEES
DIVERSITY &
INCLUSION
INDICATORS
Employees
Temporary workers
New hires
Employees
Supervisory Board
Management Board
Gender pay ratio
CEO pay ratio
Nationalities
Workforce split
Foreign nationals workforce split
OTHER
SEGMENTATION
Employees in R&D
Employees covered by collective bargaining
(only the Netherlands)
Voluntary turnover rate
Involuntary turnover rate
% Performance management completion
HEALTH AND SAFETY
Injury rate
TRAINING
Recordable injury rate
Lost Time Injury Rate (LTIR)
Fatality rate
Efforts to assess, monitor,
reduce exposures
Ethics training (bi-annual)
Ethics training
Technical training hours of
ASMI employees
Units or definition
Number
Number
Number
Male (% globally)
Female (% globally)
% Female/% Male
% Female/% Male
Female/Male (total)
Number
Asia
US
Europe
Asia
US
Europe
Percent
Number
Percent
Percent
Percent
per 100 employees
per 100 employees
per 100 employees
per 100 employees
2016
1,670
100
253
85%
15%
2017
1,900
143
487
85%
15%
0 / 100%
0 / 100%
20 / 80%
0 / 100%
n.a.
23
29
50%
32%
18%
65%
22%
13%
27%
138
7.1%
10.5%
88.3%
0.63
0.34
0.29
0.00
n.a.
25
29
54%
29%
17%
65%
24%
11%
26%
141
10.4%
13.9%
87.1%
0.62
0.26
0.21
0.00
Qualitative
See Health & safety, Employee section
All employees
New hire employees
Hours annually
92.5%
87.0%
8,649
99.8%
99.7%
17,784
27
29
58%
26%
16%
65%
25%
10%
25%
149
9.9%
13.9%
92.6%
0.55
0.18
0.05
0.00
99.9%
100.0%
37,836
2018
2,181
146
659
85%
15%
2019
2,337
107
407
85%
15%
2020
Reference
2,583
Employees
106
515
85% Employees
15% Employees
20 / 80%
0 / 100%
101%
20 / 80%
0 / 100%
100%
33 / 67% Supervisory Board
0 / 100% Management Board
Remuneration report
Employees
99%
27
40
58%
28%
14%
59% (SASB)
29% (SASB)
12% (SASB)
24%
142
Note 13 of Consolidated
statements
8.3% Employees
10.8%
98.8%
0.58
0.23
0.16
0.00
Employees
Employees
(SASB)
31
29
58%
27%
15%
60%
30%
10%
26%
143
8.7%
10.7%
98.0%
0.42
0.17
0.08
0.00
100.0%
100.0%
48,075
100.0%
99.2%
28,624
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE CATEGORIES
INDICATORS
Units or definition
2016
2017
2018
2019
2020
Reference
ENVIRONMENTAL
Electrical consumption
kWh
31,814,761
33,011,075
35,878,759
43,401,473
44,915,401
(SASB)
Grid electricity
Renewable electrical
Percent from grid
Percentage renewable
100%
11.2%
100%
10.8%
100%
10.7%
100%
9.2%
100% (SASB)
9.4% Corporate social responsibility
(SASB)
Greenhouse gas (Scope 1 and 2)
Absolute emissions
Gross Global Scope 1 GHG emissions
Gross Global Scope 2 GHG emissions
Greenhouse gas (Scope 1 and 2)
per R&D spend (Emission Intensity)
mtCO2e
mtCO2e
mtCO2e
mtCO2e/million EUR
17,371.1
18,083.2
19,562
24,031.9
24,976.9
339.8
17,031.3
169.2
419.2
17,664
158.5
508.4
920.8
987.0
(SASB)
19,053.6
23,111.1
23,989.9
156.1
159.5
145.4
Environment
Water withdrawn absolute
m3
178,670
177,913
129,243
122,505
121,434
Environment
(SASB)
165
84.3%
81.4%
72.8%
52.8%
50.4% (SASB)
Water withdrawn from water
stressed regions
Water intake per R&D spend
(Water Intensity)
Landfill diversion rate 1)
ETHICS COMPLIANCE
Reported confidential concerns
via Speakup!
Reported concerns from other channels
Ethics related communications
RBA Self Assessment rating
Supplier spend by region
Asia percent
North America percent
Europe percent
RBA Code of Conduct acknowledgement
Percentage
RBA Self Assessment (SAQ) with
low/medium risk
Percentage
RBA RISK
ASSESSMENT
SUPPLY CHAIN
SUPPLY CHAIN
(CRITICAL,
STRATEGIC
SUPPLIERS)
Percent from high or
extremely high water
stress regions
m3/million EUR
% solid waste recycle
or reuse
Number
Number
Number
RBA rating (corporate +
all applicable facilities)
813
82%
5
2
0
707
Environment
84% Environment
(SASB)
Business ethics
Business ethics
5
4
0
Low
Low
Low
1,760
1,559
1,031
72%
79%
78%
3
2
4
Low
68%
25%
7%
n.a.
86%
1
5
3
Low
74%
20%
6%
85%
78%
1
4
2
71%
22%
7%
100%
100%
75%
20%
5%
100%
40%
1,959
0
75% Suppliers
21%
4%
100% Suppliers
77% Suppliers
(SASB)
2,094
Customers and products
0
(SASB)
MATERIAL SOURCING
Description of the management of risks
associated with the use of critical materials
Qualitative
See conflict minerals discussion in supply chain section
INTELLECTUAL
PROPERTY
Patents in force
Number
Intellectual property protection
& competitive behavior
Monetary losses as a result of
legal proceedings associated
with anti-competitive behavior
regulations
1,480
0
1,604
0
1,692
0
1 ASMI manufacturing generates very negligible hazardous waste and we do not manufacture chips/wafers. Our manufacturing waste is predominantly non-hazardous solid waste, thus solid waste is our waste management indicator.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE GENERAL INFORMATION
166
GENERAL INFORMATION
Our products include wafer processing deposition systems for
single-wafer ALD, PECVD, epitaxy and batch diffusion/furnace
systems. We are active in two technology segments for atomic
layer deposition (ALD) tools: thermal ALD and plasma enhanced
ALD (PEALD). We are the leader in the logic/foundry segment of
the ALD market and serve nearly the whole addressable market.
Product description
Other information
167
169
ESG/CSR data glossary and information 171
Definitions and abbreviations
Locations worldwide
Safe harbor statement
174
176
178
Within chemical vapor deposition (CVD) we also offer two types of tools: single-wafer plasma
enhanced CVD (PECVD) and batch low pressure CVD (LPCVD). And we offer multiple types
of tools for single-wafer epitaxy and batch diffusion furnace applications.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Product description
Product description
167
PRODUCT DESCRIPTION
Our products include wafer processing deposition systems for ALD, CVD, epitaxy, and batch diffusion/oxidation
systems, and services and spare parts for these systems.
PRODUCT APPLICATIONS AND DESCRIPTIONS
ATOMIC LAYER DEPOSITION (ALD)
ASMI offers ALD tools in two technology segments: thermal ALD and plasma enhanced ALD (PEALD).
DEPOSITION
APPLICATION
ASMI
PRODUCT
PLATFORM
ASMI
PRODUCTS
PROCESS
APPLICATION
Pulsar XP ALD system
Pulsar XP is a 300mm thermal ALD tool designed for depositing extremely thin high-k dielectric
materials required for advanced transistor gates and other applications. Pulsar is the benchmark ALD
ALD
XP 1)
Pulsar XP ALD system
EmerALD XP ALD system
High-k gate dielectric
Metal gate electrodes
high-k gate dielectric tool for the industry. Up to four Pulsar process modules can be configured on
XP8 1)
Synergis ALD system
a Pulsar XP system.
EmerALD XP ALD system
EmerALD XP is a 300mm thermal ALD tool designed for depositing metal gate layers for advanced
high-k metal gate transistors and other applications. Up to four EmerALD process modules can be
configured on an EmerALD XP system.
Eagle XP8 PEALD system
Eagle XP8 is a high-productivity 300mm tool for PEALD applications. The system can be
configured with up to four dual chamber modules (DCM), enabling eight chambers in high-volume
production within a very compact footprint. The system is capable of a broad range of dielectric
PEALD processes, including low-temperature spacers for multiple patterning applications and low-
temperature silicon nitride.
Synergis ALD system
Synergis is a high-productivity 300mm tool for thermal ALD applications. The system can be
configured with up to four dual chamber modules (DCM), enabling eight chambers in high-volume
production within a very compact footprint. The system is capable of depositing a broad range of
thermal ALD films including metal oxides, metal nitrides, dielectrics, and pure metals.
PEALD
XP8 1)
Eagle XP8 PEALD system
XP8 QCM PEALD system
PECVD
XP8 1)
Dragon XP8 PECVD system
Metal oxides, Metal
nitrides, Metals
Multipatterning spacer
Gate spacer
Etch stop
Gapfill
Low-k and TEOS oxide
Silicon nitride
Diffusion
Oxidation
LPCVD
ALD
Epitaxy
Vertical
furnace
A412 batch vertical
furnace system
A400 DUO batch vertical
furnace system
Diffusion, oxidation
Polysilicon
Silicon oxide/nitride
Aluminum oxide
XP 1)
Intrepid ES epitaxy
Epsilon
Epsilon 2000 single-wafer
epitaxy system
Silicon channel
Strain layer
CMOS wafers
Analog/power
1 The XP is our standard single-wafer processing platform designed to accommodate multiple process application
modules with common platform standards. In 2012, ASMI launched the XP8 high-productivity platform for PECVD and
PEALD, based on our common XP platform standard with an expanded configuration that enables integration of up to
eight chambers on one wafer handling platform.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 168
XP8 QCM PEALD system
Intrepid epitaxy system
XP8 QCM is a 300mm tool for high-productivity PEALD applications. XP8 QCM allows for the
Intrepid ES is a 300mm epitaxy tool using our XP platform, and is designed for depositing critical
integration of up to four modules, each containing four process reactors, enabling 16 chambers
transistor strain and channel layers. Processes include silicon (Si), silicon-germanium (SiGe), silicon-
in high-volume production within a compact footprint. The system is capable of a broad range of
carbon (SiC), and other silicon-based compounds. Up to four Intrepid process modules can be
dielectric PEALD processes, including silicon oxide gapfill.
configured on an Intrepid ES system.
Batch vertical furnaces
The Previum process module, which can be integrated with epitaxy modules on the Intrepid platform,
is available for 300mm Epi applications that require pre-deposition surface cleaning, which improves
The vertical furnaces offer the A412 for 300mm wafer processing and the A400 DUO for 200mm
the performance of deposited films. Previum surface cleaning enables quality epitaxial depositions for
and smaller wafers, and focuses on applications in the markets for power, analog, RF, and MEMS
advanced node channel and source/drain engineering applications.
devices. Various thermal ALD films can be deposited with the batch furnaces for high productivity.
CHEMICAL VAPOR DEPOSITION (CVD)
We offer two types of CVD tools: single-wafer plasma enhanced CVD (PECVD) and batch low
pressure CVD (LPCVD).
Dragon XP8 PECVD system
Epsilon epitaxy system
The Epsilon series is a single-wafer, single-chamber tool that deposits silicon-based materials for
many applications, ranging from high-temperature silicon for wafer manufacturing, to low-temperature
silicon for analog and power applications. Epsilon is the market leader for epitaxy applications in the
analog and power devices market.
DragonXP8 is a high-productivity 300mm tool for PECVD applications. The system can be
configured with up to four dual chamber modules (DCM), enabling eight chambers in high-volume
DIFFUSION AND OXIDATION
We offer batch vertical furnace tools for diffusion and oxidation applications.
production within a very compact footprint. Processes include a broad range of dielectric PECVD
films for applications such as interconnect low-k dielectric layers, passivation layers, etch stop, and
Batch vertical furnaces
hardmask layers.
Batch vertical furnaces
The vertical furnaces offer the A412 for 300mm wafer processing and the A400 DUO for 200mm
and smaller wafers, and focuses on applications in the markets for power, analog, RF, and MEMS
devices. The new A400 DUO is compatible with the original A400, so existing process recipes can be
The vertical furnaces offer the A412 for 300mm wafer processing and the A400 DUO for 200mm
easily transferred, accelerating system acceptance for production. Atmospheric thermal applications
and smaller wafers, and focuses on applications in the markets for power, analog, RF, and MEMS
on the furnace include diffusion and activation of dopants, annealing to affect material properties by
devices. The new A400 DUO is compatible with the original A400, so existing process recipes can
heating to a specific temperature, and oxidation to form silicon oxide.
be easily transferred, accelerating system acceptance for production. LPCVD applications on the
furnace include polysilicon, silicon nitride, and silicon oxide.
EPITAXY
We offer two families of epitaxy tools: Intrepid and Epsilon.
SERVICES AND SPARE PARTS
Services and spare parts are important product offerings for our business. We provide service
support to our customers with technical service personnel that is trained to maintain our systems at
customers’ fabrication plants around the world. Our service teams are located at regional and local
service centers to assure prompt availability.
We sell spare parts for our equipment from parts stocks located at local distribution centers.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Other information
Other information
169
OTHER INFORMATION
The additional information below includes a brief summary of the most significant provisions
of our Articles of Association.
INFORMATION ON THE PROVISIONS IN THE ARTICLES OF
ASSOCIATION RELATING TO THE APPROPRIATION OF PROFIT
The Articles of Association of ASM International N.V. (the company) provide the following with regard
SPECIAL STATUTORY CONTROL RIGHTS
Article 27 of the Articles of Association provides that each common share gives the right to cast one
vote, each preferred financing share to cast one thousand votes, and each preferred share to cast
to distribution of profit and can be summarized as follows:
›› From the profits, distributions shall in the first place, if possible, be made on the preferred shares
equal to the EURIBOR rate for six months’ loans, increased by one and a half, on the paid-up
one thousand votes.
Article 29 of the Articles of Association provides that meetings of holders of preferred shares or
amount which had to be paid on the preferred shares, weighted to the number of days to which
of financing preferred shares shall be convened as often and insofar as a decision of the meeting
this was applicable. If profits are insufficient, the dividend will be paid from the reserves with priority
of holders of preferred shares or financing shares desires this, and furthermore as often as the
over any dividends. If the reserves are insufficient, the dividend deficit has to be made up in future
Management Board and or the Supervisory Board shall decide to hold such a meeting. At the
years;
meeting, resolutions will be passed with an absolute majority of the votes. In the event that there is a
›› Second, a dividend, if possible, is distributed on financing preferred shares. The dividend is a
percentage of the par value, plus share premium paid, on the financing preferred shares. The
tie of votes, no resolution will take effect.
percentage is determined by the Management Board, subject to approval of the Supervisory
The following resolutions and actions can only be taken on a proposal by the Management Board
Board. The percentage is related to the average effective yield on government loans with a
weighted average remaining term of no more than ten years, if necessary increased or decreased
by no more than three percent, subject to the then prevailing market conditions. If profits are
insufficient, the dividend shall be paid from the reserves. If the reserves are insufficient, the dividend
and the Supervisory Board:
›› The amendment of the Articles of the company; and
›› The dissolution of the company.
deficit has to be made up in future years;
For the complete text, please see our website
(www.asm.com/investors/corporate-governance/articles-of-association).
›› With the approval of the Supervisory Board, the Management Board will determine which part of
the profit remaining after adoption of the provisions of the previous paragraphs will be reserved.
The profit after reserving will be at the disposal of the Annual General Meeting of Shareholders;
›› The company may only make distributions to the shareholders and other persons entitled to profit
insofar as its equity exceeds the amount of the paid-up and called amounts of the share capital
increased with the reserves that must be kept by virtue of law; and
›› Article 33, paragraph 3 of the Articles of Association provides that dividend claims expire after the
lapse of five years.
For the full text, please see our website
(www.asm.com/investors/corporate-governance/articles-of-association).
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE STICHTING CONTINUÏTEIT ASM INTERNATIONAL
The objective of Stichting Continuïteit ASM International (Stichting) is to serve the interests of the
SUBSEQUENT EVENTS
Subsequent events were evaluated up to March 4, 2021, which is the issuance date of this Annual
company. To that objective, Stichting may, amongst others, acquire, own and vote on our preferred
Report 2020. There are no subsequent events to report.
shares in order to maintain our independence and/or continuity and/or identity.
The members of the Board of Stichting are:
›› Dick Bouma (Chairman), Retired Chairman of the Board Pels Rijcken & Droogleever Fortuijn;
›› Rob Ruijter, former Chairman Supervisory Board Delta Lloyd; and
›› Rinze Veenenga Kingma, President Archeus Consulting BV.
ANNUAL REPORT
The Annual Report, prepared in accordance with International Financial Reporting Standards (IFRS),
is available free of charge by writing to our corporate offices, sending an email to
investor.relations@asm.com or downloading the file via our website.
170
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE ESG/CSR data glossary and information
ESG/CSR data glossary and information
171
ESG/CSR DATA GLOSSARY AND INFORMATION
All boundary scopes are for ASMI Front-end unless noted.
Indicators
CDP
CLIMATE ADAPTATION
CLIMATE CHANGE
CMRT
CONFLICT MINERALS
Definitions
CDP is a not-for-profit charity running the global disclosure system for investors, companies, cities, states and regions to manage
their environmental impacts.
Section covered
Corporate responsibility
Changes in company processes, practices, and structures to moderate potential damages or to benefit from opportunities
associated with climate change.
Corporate responsibility
Climate change is a long-term change in the average weather patterns that have come to define Earth's local, regional and global
climates. These changes have a broad range of observed effects upon the earth.
Corporate responsibility
The Conflict Free Sourcing Initiative (CFSI) Conflict Minerals Reporting Template (CMRT) is an industry widely adopted standard
template used by companies to collect conflict minerals due diligence data.
Suppliers
Tin, Tantalum, Tungsten and gold (3TGs) containing mineral ores that originate in the Democratic Republic of the Congo or the 10
adjoining areas and are sold illicitly to fund armed conflict in the region.
Suppliers
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Corporate social responsibility (CSR) is a self-regulating business model that helps a company be socially accountable – to itself,
its stakeholders, and the public.
Corporate responsibility
CRITICAL AND STRATEGIC SUPPLIERS
Suppliers that are determined to be critical or strategic to our business either because the business spends, or critical
components or critical materials, or strategic technical partnership.
Suppliers
CRITICAL AND STRATEGIC SUPPLIER
COMMITMENT %
The percent of critical and strategic suppliers that have acknowledged their commitment to RBA code or whose code of conduct
is assessed to be acceptable as it covers the similar principles of the RBA Code of Conduct.
Suppliers
CRITICAL SUPPLIERS’ LOW MEDIUM RISK RANK
BASED ON SELF-ASSESSMENT QUESTIONNAIRE
(SAQ) RESULT
DATA NORMALIZATION
(AS A FUNCTION OF R&D SPEND)
The percent of critical supplies who completed the required Supplier Self-Assessment Questionnaire and resulted with
low or medium risks.
Suppliers
Total power or water purchases divided by total number of millions of dollars in R&D spend during that calendar year.
Corporate responsibility
DRC
The Democratic Republic of Congo.
EHS: ENVIRONMENTAL, HEALTH & SAFETY
Environmental, Health, and Safety is a general term used to refer to laws, rules, regulations, professions, programs, and workplace
efforts to protect the health and safety of employees and the public as well as the environment from hazards associated with the
workplace.
EMPLOYEES BASED ON NATIONALITIES
The number of nationalities of employees on the last reporting day of the period.
EMPLOYEES COVERED BY COLLECTIVE
BARGAINING AGREEMENTS
The percentage of employees that are covered by collective bargaining agreements per local labor requirement divided by the total
number of employees at reporting year-end.
Suppliers
Corporate governance
Employees
Employees
EMPLOYEES IN R&D
The number of employees on the last day of the reporting period whose work is directly related to the research and development
of the product during the reporting year.
Employees
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
(ESG)
The three primary factors for measuring the sustainability and societal impact of a company and/or business.
Corporate responsibility
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Indicators
Definitions
ETHICS CONCERNS REPORTED FROM
ANONYMOUS GLOBAL REPORTING PROGRAM
SPEAKUP!
The number of any ethics concerns reported by employees through our anonymous employee reporting channel SpeakUp!;
that may be related to a potential violation of the Code of Business Conduct and Business Principles or Policies in the
reporting year.
172
Section covered
Corporate responsibility
ETHICS CONCERNS REPORTED THROUGH
OTHER CHANNELS
The number of any ethics concerns reported by employees through other means including directly to management or the
Compliance Officer, that may be related to a potential violation of the COBC Business Principles or Policies in the reporting year.
Corporate governance
FLBL: FORCED LABOR/BONDED LABOR
Forced labor refers to situations in which persons are coerced to work through the use of violence or intimidation, or by more
subtle means such as accumulated debt, retention of identity papers or threats of denunciation to immigration authorities.
Bonded labor, also known as debt bondage and peonage, happens when people give themselves into slavery as security against
a loan or when they inherit a debt from a relative. The cyclical process begins with a debt, whether acquired or inherited, that
cannot be paid immediately.
Suppliers
FOREIGN NATIONAL
A foreign national is any person who is not a national of a specific country.
Employees
GREENHOUSE GAS (GHG) EMISSIONS
The number of metric tons of CO2 equivalent emissions including both the direct CO2 equivalent emissions (scope 1) and indirect
CO2 equivalent emissions (scope 2) in the reporting period.
Corporate responsibility
GRI
The Global Reporting Initiative is an international independent standards organization that helps businesses, governments and
other organizations understand and communicate their impacts on issues such as climate change, human rights and corruption
(www.globalreporting.org).
Corporate responsibility
HEALTH AND SAFETY
Regulations and procedures intended to prevent accident or injury in workplaces or public environments.
ILO: INTERNATIONAL LABOR ORGANIZATION
The International Labor Organization (ILO) is a United Nations agency responsible for dealing with employment-related issues
across the world, including employment standards and problems of exploitation.
INJURY RATE
ISO 14001
LANDFILL DIVERSION RATE
LIVING WAGE
The Injury Rate is a measure of all first aid or greater injuries per every 100 employees in reporting period.
The ISO 14001 Environmental Management System (EMS) standard is an internationally recognized environmental management
standard.
The percentage of solid waste diverted from landfill via recycling and reuse efforts in the reporting period as generated
at ASMI major Manufacturing, Engineering and R&D sites.
A living wage is defined as the minimum income necessary for a worker to meet the basic needs of an average sized family,
including food, housing, and other essential needs such as clothing.
Corporate responsibility
NGOS: NON-GOVERNMENT ORGANIZATIONS
A nonprofit organization that operates independently of any government, typically one whose purpose is to address a social
or political issue.
Corporate responsibility
NUMBER (#) OF EMPLOYEES COMPLETING
BI-ANNUAL ETHICS TRAINING
All employees completing the online compliance training courses bi-annually during our compliance month within the reporting
year. We track # of employees and % of the total that completed the training. It is applicable to all employees.
OECD
Organization for Economic Cooperation and Development is an international organization helping governments tackle the
economic, social and governance challenges of a globalized economy. It publishes guidance and frameworks such as
OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.
Employees
Suppliers
PATENT FILINGS
The total number of patent applications filed and applied with patent offices globally by ASMI for the invention described.
Customers and products
PRODUCT LIFECYCLE MANAGEMENT (PLM)
Product lifecycle management (PLM) refers to the handling of a good as it moves through the typical stages of its product life:
development and introduction, growth, maturity/stability, and decline. This handling involves both the manufacturing of the good
and the marketing of it.
Strategy
Corporate responsibility
Corporate responsibility
Corporate responsibility
Corporate responsibility
Corporate responsibility
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 173
Indicators
RBA
Definitions
Section covered
RBA: Responsible Business Alliance – Industry coalition seeking to create a industry-wide standards on social, environmental and
ethical issues in the industry supply chain. Rebranded from the Electronics Industry Citizenship Coalition (EICC) in October 2017.
Suppliers
RBA CODE OF CONDUCT
The RBA Code of Conduct is a set of social, environmental and ethical industry standards for governing how companies conduct
business. www.responsiblebusiness.org/code-of-conduct/
Suppliers
RBA SELF ASSESSMENT QUESTIONNAIRE
(RBA SAQ)
Self-Assessment Questionnaire is one of the RBA’s standardized risk assessment tools that is useful for assessing a companies
commitment to ethical business conduct and compliance with the RBA Code of Conduct.
Suppliers
RECORDABLE INJURY RATE
The Recordable Injury Rate measures cases that require a response greater than first aid (or serious injuries) per 100 employees
in reporting period.
Employees
REPORTED CONCERNS FROM ANONYMOUS
GLOBAL REPORTING PROGRAM SPEAKUP!
The number of questions, remarks and/or concerns reported to the Ethics Office related to a potential violation of
the ASMI Code of Business Conduct and Business Policies via reporting tool SpeakUp! in the reporting period.
RESPONSIBLE BUSINESS ALLIANCE (RBA)
We adopted the industry standard RBA Code of Conduct. More detail about the code can be find at
www.responsiblebusiness.org/standards/code-of-conduct/
RMI: RESPONSIBLE MINERALS INITIATIVE
Responsible Minerals Initiative provides companies with tools and resources to make sourcing decisions that improve regulatory
compliance and support responsible sourcing of minerals from conflict-affected and high-risk areas.
Society
Suppliers
Suppliers
SASB
The Sustainability Accounting Standards Board (SASB) is an independent nonprofit organization that sets standards to guide
the disclosure of financially material sustainability information by companies to their investors. www.sasb.org/about/
Corporate responsibility
SCOPE 1 AND SCOPE 2 EMISSIONS
Scope 1 covers direct emissions from owned or controlled sources. Scope 2 covers indirect emissions from the generation
of purchased electricity, steam, heating and cooling consumed by the reporting company.
Corporate responsibility
SELF-ASSESSMENT QUESTIONNAIRE (SAQ)
RISK RATING/RESULT
We adopted the RBA standard tool for risk assessment Self-Assessment Questionnaire (SAQ) to assess our own and supply
chain risk. This rate applies to our own operation SAQ results with our major sites.
Suppliers
SEMI
SEMI MOD
STAFF (EMPLOYEE)
SUPPLY CHAIN SPEND BY REGION
SUPPLY CHAIN SPENDS PER REGION
(IN EURO AND %)
TCFD
UN SDG
Global industry association representing the semiconductor manufacturing and design supply chain connecting over
2,400 member companies and 1.3M professionals worldwide.
Corporate responsibility
Semiconductor Manufacturing Ownership Diversity (SEMI MOD) is a special interest group dedicated to increasing the number
of diverse owned and led suppliers serving the semiconductor industry.
Corporate responsibility
Staff (employee) is a person with a fixed contract, excluding temporary labor. Definition may be varied by country per local and
country labor law. The number of employees at the last day of the reporting period.
Total amount of Euro spent with our global suppliers for the materials, components and services that are used to produce
our products and services for our customers and for non-product related products services that enable our operations globally
in the reporting period.
Employees
Suppliers
Total Euro amount we spent and equivalent to the % of total spends with suppliers by each region.
Suppliers
The Financial Stability Board Task Force on Climate-related Financial Disclosures (TCFD) is a market-driven initiative, set up
to develop a set of recommendations for voluntary and consistent climate-related financial risk disclosures in mainstream filings.
Corporate responsibility
United Nations Sustainable Development Goals.
Corporate responsibility
VOLUNTARY TURNOVER RATE
The percentage of employees in a workforce that leave voluntarily during this reporting period.
WATER CONSUMPTION
ZERO HARM!
The total amount of water consumption in cubic meters for the reporting period.
Refers to ASMI striving to prevent harm to people, reduce our impact on the environment, and make positive contributions
to society.
Employees
Society
Employees
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Definitions and abbreviations
Definitions and abbreviations
174
DEFINITIONS AND ABBREVIATIONS
AENEAS: AENEAS is an association, established in 2006, providing unparalleled networking
Epitaxy (Epi): Epitaxy is one of a portfolio of wafer processing technologies for which we provide
opportunities, policy influence & supported access to funding to all types of RD&I participants in the
equipment. The word comes from the Greek epi meaning above, and taxis meaning in an ordered
field of micro- and nanoelectronics enabled components and systems.
manner. It involves the deposition of silicon or silicon compounds to form layers that help to continue
and perfect the crystal structure of the bare silicon wafer below. Epitaxy improves the electrical
AGM: Annual General Meeting of Shareholders is the annual general meeting of shareholders.
characteristics of the wafer surface, making it suitable for highly complex microprocessors and memory
devices. Selective epitaxy is an epitaxy process that only deposits silicon or a silicon compound on
ALD: Atomic Layer Deposition is a surface-controlled layer-by-layer process that results in the
certain predetermined areas of the wafer.
deposition of thin films, one atomic layer at a time. Layers are formed during reaction cycles by
alternately pulsing precursors and reactants and purging with inert gas in between each pulse.
FinFET: A Field Effect Transistor (FET) architecture that uses a raised channel, referred to as a fin, from
source to drain. A finFET is considered a 3D transistor since the channel is in a vertical orientation.
BCP: Business Continuity Plan.
CONNECT: ASMI’s online internal communications platform.
COBC: Code of Business Conduct.
FMEA: Failure Mode Effects Analysis.
GES: ASMI’s Global Employment Standards.
IC: Integrated Circuit.
COSO: The Committee of Sponsoring Organizations of the Treadway Commission is a joint initiative
of five private-sector organizations that is dedicated to providing thought leadership through the
IFRS: International Financial Reporting Standards.
development of frameworks and guidance on enterprise risk management, internal control and fraud
deterrence.
imec: imec is an internationally renowned research institute that performs research in different fields of
nanoelectronics. It is headquartered in Leuven, Belgium, and has offices in the Netherlands, Taiwan,
CVD: Chemical vapor deposition is a chemical process used to produce high-quality, high-
US, China, India, Nepal and Japan.
performance, solid materials. The process is often used in the semiconductor industry to produce
thin films. In typical CVD, the wafer (substrate) is exposed to one or more volatile precursors, which
IoT: Internet of Things.
then react and/or decompose on the substrate surface to produce the desired deposit. Frequently,
volatile by-products are also produced, which are removed by gas flow through the reaction chamber.
IP: Intellectual Property.
DCM: Dual Chamber Module.
LPCVD and oxidation/diffusion: Low pressure chemical vapor deposition (LPCVD) is a thermal
process that deposits various films at low pressure. LPCVD processes include polysilicon, silicon
DFX: Term used interchangeably, where the X is a variable which can have one of many possible
nitride and silicon oxides. Diffusion (sometimes referred to as annealing) is a thermal treatment used
values, such as design for manufacturability, power, variability, cost, yield, reliability, or sustainability
to move dopants, or impurities, and make dopants introduced by ion implantation electrically active.
(DFS).
Oxidation forms a silicon oxide layer on the wafer’s surface, which acts as an insulating or protective
DRAM: Dynamic Random Access Memory.
layer over it.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE 175
NAND: A type of nonvolatile memory device technology which does not require power to retain its
PLC: Product Life Cycle.
data. NAND flash memory is used in mobile phones, USB memory drives, solid state drives and other
electronic products.
NCG: New College Graduate.
R&D: Research and Development.
SEMI: Semiconductor Equipment and Materials International is a global industry association of
companies that provide equipment, materials and services for the manufacture of semiconductors,
NWO: Nederlandse Organisatie voor Wetenschappelijk Onderzoek.
photovoltaic panels, LED and flat panel displays, micro-electromechanical systems (MEMS), and
PEALD: Plasma enhanced ALD uses specific chemical precursors just like in thermal ALD. However,
it also makes use of cycling an RF-plasma to create the necessary chemical reactions in a highly
TTW: Toegepaste en Technische Wetenschappen.
related micro- and nanotechnologies.
controlled manner.
VLAIO: Vlaams Agentschap Innoveren & Ondernemen.
PECVD: Plasma enhanced chemical vapor deposition is the CVD that utilizes plasma to enhance
chemical reaction rates of the precursors. PECVD processing allows deposition at lower temperatures,
which is often critical in the manufacture of semiconductors. The lower temperatures also allow for
the deposition of organic coatings, such as plasma polymers, which have been used for nanoparticle
surface functionalization.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Locations worldwide
Locations worldwide
LOCATIONS WORLDWIDE
EUROPE
THE NETHERLANDS
ASM International NV
(HEADQUARTERS)
Versterkerstraat 8
1322 AP Almere
T: +31 88 100 8810
F: +31 88 100 8820
ASM Europe BV
Versterkerstraat 8
1322 AP Almere
T: +31 88 100 8711
F: +31 88 100 8710
ASM IP Holding BV
Versterkerstraat 8
1322 AP Almere
T: +31 88 100 8810
F: +31 88 100 8820
BELGIUM
ASM Belgium NV
Kapeldreef 75
3001 Leuven
T: +32 16 28 1639
FINLAND
ASM Microchemistry Oy
Pietari Kalmin katu 3 F 2
00560 Helsinki
T: +358 9 525 540
FRANCE
ASM France SARL
223 Rue des Bécasses
38920 Crolles
T: +33 4 7692 2824
F: +33 4 3892 0472
GERMANY
ASM Germany Sales BV
Bretonischer Ring 16
85630 Grasbrunn
T: +49 89 462 36150
F: +49 89 462 36566
ASM Germany Sales BV
Hohenbusch Markt 1
01108 Dresden
T: +49 351 3238330
F: +49 351 3238332
176
NORTH AMERICA
IRELAND
ASM Services & Support Ireland Ltd
UNITED STATES
ASM America, Inc
Unit 23, Hills Industrial Estate
3440 East University Drive
Lucan, K78 P661
Co Dublin
T: +353 1 621 9100
F: +353 1 628 0206
ISRAEL
ASM Service & Support Israel Ltd
2 Hazaron St
Kiryat-Gat 82109
T: +972 8 612 3077
Phoenix, AZ 85034
T: +1 602 470 5700
Regional Sales/Service Office
2083 East Hospitality Lane
Suite 200
Boise, ID 83716
T: +1 208 424-9534
Regional Service Office
7235 NE Evergreen Parkway
Suite 200
Hillsboro, OR 97124
T: +1 503 629 1360
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE ASIA
CHINA
ASM China Ltd
Room 201A, Building D
Changtai Plaza 2889 Alley
Jinke Road, Pudong
Shanghai, China, 201203
T: +86 21 50 368 588
F: +86 21 50 368 878
JAPAN
ASM Japan KK
23-1, 6-chome Nagayama
Tama-shi
Tokyo 206-0025
T: +81 42 337 6311
F: +81 42 389 7555
177
ASM Front-End Sales &
Services Taiwan Co, Ltd
Lin-Kuo Office
2F, No 50, Fuxing 3rd Rd
Guishan Dist, Taoyuan City 333
T: +886 3 211 5279
F: +886 3 328 5358
ASM Front-End Sales &
Services Taiwan Co, Ltd
Tai-Chung Office
Yokkaichi Service Center
3F, Kosco-Yokkaichi-Nishiura Building
5-10, 1-chome, Yasujima, Yokkaichi-shi
SINGAPORE
ASM Front-End Manufacturing
Singapore Pte Ltd
4 Woodlands Height
Singapore 737860
T: +65 6512 2922
F: +65 6512 2966
SOUTH KOREA
ASM Korea Ltd
Head Office
Mie 510-0075
T: +81 59 340 6100
F: +81 59 340 6099
Hiroshima Service Center
402, Higashi-Hiroshima Sea Place
10-30, Saijosakae-machi
Higashi-Hiroshima-shi
Hiroshima 739-0015
T: +81 42 315 0195
MALAYSIA
ASM Services & Support Malaysia
Sdn Bhd
63-11, Dongtan Cheomdan Saneop 1-Ro
Unit 6A, 6F, 168 Guoan Rd
Hwaseong-Si
Gyeonggi-Do, 18469
T: +82 31-5176-0000
TAIWAN
ASM Front-End Sales &
Services Taiwan Co, Ltd
Hsin-Chu Office
2F-5, No 1, Jinshan 8th St
East Dist, Hsinchu City 300
T: +886 3 666 7722
F: +886 3 564 8899
Xitun Dist, Taichung City 407
T: +886 4 2465 1086
F: +886 4 2463 3707
ASM Front-End Sales &
Services Taiwan Co, Ltd
Tai-Nan Office
3F., No. 3, Nanke 3rd Rd.,
Xinshi Dist., Tainan City 744, Taiwan
T: +886 3 666 7722
F: +886 6 589 2710
Daini Technology Center
Suite 17 and 18, First Floor
Incubator Block, Kulim Techno Centre
Kulim Hi-Tech Park
09000, Kulim
Kedah Darul Aman
T: +604 408 0140
7-2, 2-chome, Kurigi
Asao-ku, Kawasaki-shi
Kanagawa 215-0033
T: +81 44 712 3681
F: +81 44 712 3682
Kumamoto Service Center
3F, Mayfair-Suizenji
21-30, 1-chome, Suizenji
Chuo-ku, Kumamoto-shi
Kumamoto, 862-0950
T: +81 96 387 7300
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE Safe harbor statement
Safe harbor statement
178
SAFE HARBOR STATEMENT
In addition to historical information, some of the information posted or referenced herein or on the website contains statements
relating to our future business and/or results, including, among others, statements regarding future revenue, sales, income,
expenditures, sufficiency of cash generated from operations, maintenance of interest in ASM Pacific Technology Ltd,
business strategy, product development, product acceptance, market penetration, market demand, return on investment
in new products, facility completion dates and product shipment dates, corporate transactions, restructurings, liquidity and
financing matters, outlooks, and any other non-historical information. These statements include certain projections and
business trends, which are ‘forward-looking’. We caution readers that no forward-looking statement is a guarantee of future
performance and that actual results could differ materially from those contained in the forward-looking statements.
You can identify forward looking statements by the use of words like ‘may’, ‘could’, ‘should’, ‘project’, ‘believe’, ‘anticipate’,
‘expect’, ‘plan’, ‘estimate’, ‘forecast’, ‘potential’, ‘intend’, ‘continue’, and variations of these words or comparable words.
Forward-looking statements do not guarantee future performance and involve risks and uncertainties. You should be aware
that our actual results may differ materially from those contained in the forward-looking statements as a result of certain
risks and uncertainties. These risks and uncertainties include, but are not limited to, economic conditions and trends in
the semiconductor industry and the duration of industry downturns, currency fluctuations, the timing of significant orders,
market acceptance of new products, competitive factors, litigation involving intellectual property, shareholder or other issues,
commercial and economic disruption due to natural disasters, terrorist activity, armed conflict or geopolitical tensions or
political instability, changes in import/export regulations, epidemics and other risks indicated in our most recently filed Annual
Report and other filings from time to time. The risks described are not the only ones. Some risks are not yet known and
some that we do not currently believe to be material could later become material. Each of these risks could materially affect
our business, revenues, income, assets, liquidity, and capital resources. All statements are made as of the date of posting
unless otherwise noted, and we assume no obligation to update or revise any forward-looking statements to reflect future
developments or circumstances.
FINANCIAL STATEMENTSNON-FINANCIAL SUMMARYGENERAL INFORMATIONVALUE CREATIONABOUTGOVERNANCE ASM International N.V.
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