Annual
Report
2021’21
1
ASML ANNUAL REPORT 2021
Contents
2021 at a glance
Message from the CEO
2021 Highlights
5
7
Who we are and what we do
Our company
Message from the CTO
How we innovate
Customer intimacy
Our products and services
Our position in the semiconductor value chain
Our markets
Semiconductor industry trends and opportunities
Our strategy
Our performance in 2021
How we create value
Financial
Message from the CFO
Financial performance
Long-term growth opportunities
Environmental
Climate and energy
Circular economy
Social
Our people
Community engagement
Innovation ecosystem
Responsible supply chain
Governance
Corporate governance
How we manage risk
Risk factors
Responsible business
9
14
16
20
22
27
28
32
38
41
43
48
51
60
68
78
84
88
95
110
115
125
Supervisory Board
Message from the Chair of our Supervisory Board
Supervisory Board report
Remuneration report
Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income
Consolidated Balance Sheets
Consolidated Statements of Shareholders’ Equity
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
Non-financial statements
Assurance Report of the Independent Auditor
About the non-financial information
Non-financial indicators
Materiality assessment
Stakeholder engagement
142
144
160
175
177
178
179
180
181
182
229
231
234
248
252
255
273
280
Other appendices
Definitions
Exhibit index
A definition or explanation of abbreviations, technical terms and other terms used throughout this Annual Report can be found in the chapter
Definitions. In some cases numbers have been rounded for readers' convenience.
This report comprises regulated information within the meaning of articles 1:1 and 5:25c of the Dutch Financial Markets Supervision Act (Wet
op het Financieel Toezicht).
In this report the name ‘ASML’ is sometimes used for convenience in contexts where reference is made to ASML Holding N.V. and/or any of its
subsidiaries, as the context may require.
References to our website in this Annual Report are for reference only and none nor any portion thereof are incorporated by reference in this
report.
© 2022, ASML Holding N.V. All Rights Reserved.
2
ASML ANNUAL REPORT 2021 Special note regarding forward-looking
statements
In addition to historical information, this Annual Report
contains statements relating to our expected business,
results projections, business trends and other matters that
are "forward-looking" within the meaning of the Private
Securities Litigation Reform Act of 1995. You can generally
identify these statements by the use of words like "may",
"will", "could", "should", "project", "believe", "anticipate",
"expect", "plan", "estimate", "forecast", "potential",
"intend", "continue" and variations of these words or
comparable words. They appear in a number of places
throughout this Annual Report and include statements
with respect to our expected trends and outlook,
strategies, corporate priorities, expected semiconductor
industry trends, R&D and capital expenditures and 2030
market opportunities and roadmap and revenue potential
and other statements under the section titled
“Semiconductor industry trends and opportunities”,
expected trends in markets served by our customers,
expected market growth and drivers of such trends and
growth, expected financial results, including expected
sales, service revenue, expected trends in working capital,
gross margin, expected capital expenditures, R&D and
SG&A expenses, cash conversion cycle, target and
expected effective annualized tax rate, sales targets and
outlook for 2022 and other statements under "-Trend
Information", annual revenue opportunity and potential and
growth outlook for 2025, expected growth in 2022, outlook
for 2025 and 2030 and other statements under the section
titled “Long-term growth opportunities”, expected
continued growth in free cash flow generation,
investments in the future and cash returned to
shareholders, our Strengths, Weaknesses, Opportunities
and Threats (SWOT), expected demand for upgrades,
semiconductor industry dynamics and industry
opportunities, expected trends in customer demand and
demand for particular systems and upgrades and
expected trends in end markets, including Memory, Logic
and Foundry, including the continuation of investment by
Logic customers in ramping new nodes and stronger
lithography demand from memory customers, expected
benefits of High-NA and planned target to start shipment
of High-NA systems and high-volume production of
systems using High-NA by 2025-2026, market
opportunities for semiconductor industry end markets,
expected innovation drivers, expected drivers of long-term
stakeholder value, expected trends in DUV systems
revenue, expected DUV sales and the expectation that
DUV will continue to drive value for our customers and be
used in production in most layers of their chips, expected
benefits of Holistic Lithography and expected installed
based management revenues, our supply chain strategies
and goals, customer, partner and industry roadmaps,
ASML’s applications business, expected development of
High-NA and its benefits, including the expected timing for
development of future generation EUV systems, expected
growth in EUV sales compared to sales of DUV, expected
benefits of the indirect interest in Carl Zeiss SMT GmbH
and the acquisition of Berliner Glas, expected EUV
adoption, expected EUV margins and margin
improvement in our systems and service via cost
reduction and value delivery, expected productivity and
benefits of our tools, systems, and projects, EUV
productivity targets and goals, potential future innovations
and system performance, expected shipments of our tools
and systems, including demand for and timing of
shipments, statements with respect to DUV and EUV
competitiveness, the development of EUV technology and
EUV industrialization, expected productivity upgrade
releases, enabling high-volume production of next
generation chips and expected designs of such chips and
their benefits, and revenue recognition, predicted growth
in wafer production, sustainability targets, goals and
strategies, shrink being a key driver supporting innovation
and providing long-term industry growth, lithography
enabling affordable shrink and delivering value to
customers, environmental, diversity and sustainability
strategy, ambitions, goals and targets, including circular
procurement goals, targeted greenhouse gas emission
and waste reduction, recycling and refurbishment
initiatives, investments and goals and energy-saving
strategies and targets, including statements on targeting
zero carbon emissions and indirect emissions from energy
use across operations and reducing intensity of all other
emissions in the value chain from the making and use of
ASML’s products by 2025, charity goals, the impact of the
fire at our facility in Berlin on our production, repair center
expansion and targets, our expectation of the continuation
of Moore’s Law and that EUV will continue to enable
Moore’s Law and drive long-term value for ASML well
beyond the current decade, tax strategy, capital allocation
policy, dividend policy, our expectation to continue to
return cash to our shareholders through share buybacks
and dividends including our proposed dividend for 2021
and statements relating to our share buyback program for
2021-2023, and statements with respect to the expected
impact of accounting standards.
These forward-looking statements are not historical facts,
but rather are based on current expectations, estimates,
assumptions and projections about the business and our
future financial results and readers should not place undue
reliance on them. Forward-looking statements do not
guarantee future performance, and actual results may
differ materially from projected results as a result of certain
risks, and uncertainties. These risks and uncertainties
include, without limitation, those described under How we
manage risk - Risk factors. These forward-looking
statements are made only as of the date of this Annual
Report. We do not undertake to update or revise the
forward-looking statements, whether as a result of new
information, future events or otherwise.
3
ASML ANNUAL REPORT 2021 2021 at
a glance
4
ASML ANNUAL REPORT 2021 Message
from the CEO
Dear Stakeholder,
2021 was a very challenging year, with strong growth in a
dynamic environment. The semiconductor industry has
reached new records of output and sales amid an ongoing
global pandemic while still being unable to satisfy the
demand for semiconductors. Industries around the world
are severely affected by this lack of supply. And despite
these challenging circumstances, I’m proud to say that at
ASML we continued to grow and have welcomed many
new colleagues. ASML reached €18.6 billion in net sales,
and we welcomed our 30,000th employee in Giheung,
South Korea. By now we’re at over 32 thousand people,
and we expect that growth to continue. This is all due to
the significant continued growth of our industry, driven by
the accelerated digital transformation, of course partly due
to the effects of the pandemic and the transition to
working from home. In addition to this, we are witnessing a
stronger-than-expected growth of Internet of Things (IoT)
applications fueling the need for more and more
distributed computing solutions. This global trend made
us take another look at our future potential scenarios and
as a result, we see an opportunity to achieve a step-up in
our previously communicated revenue potential, which is
now at €30 billion based on a high-market scenario in
2025.
None of this would be possible without the people at
ASML and our partners. First of all our people – with their
creativity, perseverance, resilience and ingenuity in difficult
times, they are crucial to the success of our business. In
addition, we rely on partnerships with our customers as
well as partnerships with our dedicated suppliers, despite
the setbacks they faced during the COVID-19 crisis. We
rely on national and local governments to facilitate a social
and economic infrastructure that allows us to be
successful. We value our partnerships with research
institutions who, like us, understand the importance of
innovation and education. And not to forget our
shareholders, who provide us with the backing to keep
executing our technology innovation roadmap, and finally,
our partnerships with the communities around us, without
whom we would not thrive.
Global megatrends are driving growth in the
semiconductor industry
There are several megatrends in the electronics industry
that are shaping our digital, connected world and are
expected to continue to fuel growth across the
semiconductor market, such as artificial intelligence, 5G,
virtual reality, gaming, simulation and visualization
Peter Wennink (President, Chief Executive Officer
and Chair of the Board of Management)
applications, and the intelligent cloud and edge. With a
growing number of mobile and sensor-enabled
applications and services, our society will rely more and
more heavily on distributed computing and storage
solutions. The electronics industry is booming – there are
around 40 billion connected devices in use today, and that
number is expected to grow to 350 billion in the next ten
years based on external source data.
The most important end markets driving ASML’s growth
are the smartphone market and the data center, server
and storage market, but at the same time we are also
seeing a huge increase in microchip demand in the
automotive and industrial electronics markets.
Mature solutions are in demand
Another aspect of the growth we’re seeing today is that it’s
not only in the most advanced nodes – a lot of the
distributed computing and storage solutions I mentioned
above require mature lithography technology to
manufacture. We expect that by 2025, about two-thirds of
our total system sales will be EUV and the rest will be DUV
and metrology and inspection. This expected EUV
percentage is lower than what we predicted in 2018, but
that doesn't mean that the EUV market has shrunk – as a
matter of fact, it is expected to grow. But the DUV and
metrology and inspection markets are expected to grow
even faster.
Countries are pushing for technological sovereignty
The global pandemic has alerted governments around the
world that global supply chains can create significant
geographical dependencies on services, raw materials
and end products. Governments increasingly realize that
this now also turns out to be true for semiconductors.
Since semiconductors play an increasingly important role
in the growth and continuity of large industrial complexes
and the importance of the semiconductor industry is likely
only going to increase, governments have turned their
attention to securing sufficient semiconductor supply to
support their local industries, creating higher levels of
5
ASML ANNUAL REPORT 2021 technological sovereignty and planning significant
investments in the semiconductor industry. The US, China
and the EU, as well as Japan and South Korea, are
expected to nearly double the industry’s (2021) annual
capital expenditures (CAPEX) of $150 billion based on
external source data.
We are aware that this has created concerns about
potential oversupply. However, we believe that the
significant growth prospects of the semiconductor
industry do require substantially more capacity and that
given the high levels of capital expenditure to support all
this, industry partners will apply sufficient effort to sustain
an accessible and efficient innovation ecosystem.
Growing into the next decade
We believe that the advantages of scaling as expressed by
Moore’s Law will continue throughout this decade and
beyond. We will therefore relentlessly invest in innovation.
In addition, we strive to ensure that ASML and its supply
chain will be able to fulfill the increasing demand for more
wafers to support advanced and mature technology. We
will do this by increasing the productivity of all our
machine types and by adding more manufacturing
capacity.
To increase our own production capacity, we will focus on
building more machines by driving down cycle time for
both EUV and DUV, on adding more people and tooling,
and on increasing our production space. Together with our
supply chain partners, we are actively adding capacity to
meet future customer demand.
Our product portfolio is very much aligned with our
customers’ roadmaps. We will continue to deliver cost-
effective solutions that provide value in EUV, in DUV, in
applications, metrology and inspection, and in installed
base management.
With great influence comes great responsibility
ASML operates in an industry that has considerable
innovation power. Digital technology itself can help drive
societal progress and has the potential to help cut global
greenhouse gas emissions. ASML’s increasingly advanced
lithography technology helps our customers to continue to
produce microchips – with fewer materials and less energy
consumption – that are three times more energy-efficient
every two years.
We clearly recognize that climate change is a global
challenge that requires urgent action by everyone,
including us. That is why we are stepping up our focus on
ESG (environmental, social and governance) sustainability,
which we have expanded from five focus areas to a nine-
part strategy aimed at contributing to the United Nations’
Sustainable Development Goals. We’re doing this because
we recognize ESG’s increasing importance to all our
stakeholders, but first and foremost because it’s simply
the right thing to do.
Driven by our values and commitment to corporate
responsibility, we want to have a positive role in society –
for our employees, the communities around us, and
everyone involved in our innovation ecosystem and supply
chain. We are expanding on our community engagement,
and with our new diversity and inclusion strategy, we want
to improve our performance in this regard.
Building on our achievements so far, we have increased
our environmental ambitions. Our climate goal is to strive
toward zero waste disposal by 2030 and net zero value
chain emissions by 2040, focusing on our manufacturing
and buildings, business travel and commuting, and on our
supply chain and product use.
Again, we won’t be able to achieve this alone, but will rely
on strong and successful ongoing collaboration with our
partners, suppliers and customers.
Thank you
The last couple of years have posed new challenges to all
of us that have required agility, patience and perseverance
to overcome. As a global society we are faced with
unparalleled challenges, but with its great workforce,
partnerships and innovative power, ASML is looking
toward the future with confidence, preparing for even more
sustainable growth. We can only do that by continuing to
be a trusted partner for all our stakeholders – we would
like to thank them for their commitment and support. As I
have said many times before, we are looking at a bright
future, but we cannot do this alone.
Peter Wennink
Chief Executive Officer
6
ASML ANNUAL REPORT 2021 2021 Highlights
Financial
Total net sales
€18.6bn
(€14.0bn in 2020)
Gross margin
52.7%
(48.6% in 2020)
R&D costs
€2.5bn
(€2.2bn in 2020)
Net income
€5.9bn
(€3.6bn in 2020)
Dividend per share
€5.50
(€2.75 in 2020)
(proposed)
Earnings per share
€14.36
(€8.49 in 2020)
(basic)
Share buyback
€8.6bn
(€1.2bn in 2020)
Lithography systems sold
309
(258 in 2020)
Environmental
Energy consumption EUV
-6%
(-6% in 2020)
compared to baseline
Energy use per
wafer pass EUV
-37%
(-26% in 2020)
compared to baseline
Value of parts re-used
€1.2bn
(€1.2bn in 2020)
Systems refurbished
23
(22 in 2020)
Reporting scope
57
(20 in 2020)
locations
Social
Total employees
32,016 FTE
(28,073 FTE in 2020)
emissions footprint Waste intensity
CO2
39.4 kt
(15.4 kt in 2020)
scope 1 & 2
305 kg
(360 kg in 2020)
per € m revenue
Material recycling rate
77%
(85% in 2020)
Engagement score
78%
(80% in 2020)
Attrition rate
5.4%
(3.8% in 2020)
Nationalities
122
(120 in 2020)
Contribution to EU
research projects
€30.3m
(€28.5m in 2020)
Community engagement
€10.4m
(€4.0m in 2020)
ASML Foundation
projects supported
22
(22 in 2020)
Governance
Supervisory Board
diversity
38%
(33% in 2020)
female members
Internal pay ratio
40
(38 in 2020)
CEO versus average per FTE
Speak-up reports
396
(229 in 2020)
7
ASML ANNUAL REPORT 2021
Who we are
and what we do
8
ASML ANNUAL REPORT 2021 Our company
We are a global innovation leader in the chip industry. We provide chipmakers with hardware,
software and services to mass produce patterns on silicon through lithography. What we do
increases the value and lowers the cost of a chip, which advances us all towards a smarter,
more connected world.
1984
Year founded
>60
Locations across
3 continents,
headquartered in
the Netherlands
32,016 FTE
Total employees
14,871 in operations
11,831 in R&D
4,140 in sales and support
1,174 Berliner Glas1
€18.6bn
Total net sales
€16.9bn Asia
€1.6bn US
€0.1bn EMEA
1 Berliner Glas (ASML Berlin GmbH), which we acquired in 2020, is reflected as part of our business throughout this report,
with the exception of non-financial reporting.
Our purpose
For all the ways we have moved forward as a society, the
world still faces crucial challenges for the future. We must
change how we think and act on themes that impact
everyone, such as energy use, climate change, mobility
and access to healthcare and nutrition.
At ASML, we believe that the microchip industry is in a
unique position to help tackle these challenges. From
artificial intelligence (AI) to a vast internet of things (IoT),
microchips are at the heart of modern technology. So
whether it’s transitioning to sustainable energy, improving
global health, increasing the safety and efficiency of
transport, tackling pollution, bridging the digital divide, or
feeding eight billion people without exhausting the earth’s
resources, our vision is that we will enable the
groundbreaking technology that will help solve some of
humanity’s toughest challenges.
As the innovation leader that makes vital systems for chip
manufacturing, we are proud to play our role as
technology enabler in the innovation ecosystem of the
semiconductor industry. We can only do this if we
continue to challenge the status quo, tap into the collective
knowledge of our global ecosystem and create an
environment where people can contribute, learn and grow.
At ASML, we believe our purpose is to unlock the potential
of people and society by pushing technology to new limits.
The long-term growth of the semiconductor industry is
based on the principle that the energy, cost and time
required for electronic computations can be reduced by
shrinking transistors on microchips. One of the main
drivers of shrink is the resolution that lithography systems
can achieve, which is mainly determined by the
wavelength of the light used and the numerical aperture of
the optics. A shorter wavelength – like a finer brush used
for painting – can print smaller features. A larger numerical
aperture can focus the light more tightly, which also leads
to better resolution. To enable shrink, what we do –
lithography – is key.
We are a focused supplier of holistic lithography solutions
to all of the world’s major chipmakers. Our mission,
together with our partners, is to provide leading patterning
solutions that drive the advancement of microchips.
Through our sustained investment in and dedication to
research and development, we seek to innovate at least at
the same pace as our customers. We put our innovations
in the hands of chipmakers as quickly as possible by
engineering in parallel, not sequentially, while ensuring
their quality, reliability, manufacturability, and serviceability.
Our core values
To help solve humanity’s toughest challenges while at the
same time addressing our own, we must continue to
amplify ASML's core values that created our success –
challenge, collaborate and care.
We challenge
We challenge boundaries, question the status quo and
stand up for the ideas we believe in. We’re comfortable
with discussion and debate, because it is often inherent to
9
ASML ANNUAL REPORT 2021 stress-testing and championing an idea. This is what
enables us to push technology forward, keep things
simple and do things with care and attention. We continue
to challenge ourselves to add value for our customers,
ensuring that we continually improve across key aspects,
such as safety, quality, efficiency and cost.
We collaborate
As a system architect and system integrator, we
collaborate to tap into our collective potential. Together
with our partners in our ecosystem, we expand our
knowledge and skills, learn from each other, and share
approaches to deliver the best results. What we do is
unique, and we need each other to make it possible. As
we continue to grow and our ecosystem of partners
expands, this collaborative mindset becomes even more
essential to success.
We care
As we push technology further together, we have to do so
with care. As an industry leader, we realize that our impact
extends from people, to society, to the planet. We care not
only for those we work with, but for our customers,
suppliers, the world we live in, and the communities where
we do business. We believe in integrity and respect for
people and their human rights. We take personal
responsibility to create a safe, inclusive and trusting
environment where people from all backgrounds are
encouraged and enabled to speak up, contribute, learn,
make mistakes, and grow. We also seek to be clear in how
we organize ourselves to achieve our goals, making sure
we have a clear framework for what we do and how we do
it.
We believe that these values will help our company and
our employees to make smart decisions that will benefit all
stakeholders. Our purpose and values, together with the
great responsibility we have as an industry leader, make
us optimistic for the future.
Where we come from
Our company was founded in 1984 in Eindhoven under the
name of ASM Lithography, a joint venture between Philips
and ASM International. As they moved into their new
space near the Philips factories at Strijp-T in Eindhoven,
our first employees could never have imagined that in just
three decades, ASML would be a global innovation leader.
We’ve grown from our humble beginnings to a global force
through relentless focus on innovation, sheer customer
focus through tough times, and a willingness to rely on
others to come to a better result.
Although we’re constantly looking to the future, where we
have come from is just as important to us as we evolve.
These pioneering behaviors have been key to our success
over the past 37 years, and they’ve become even more
important to us as we continue to define our purpose and
articulate the values that underpin everything we do.
Understanding what made us successful in the past will
help us maintain our success in the future.
What guides us
Innovation is rarely a straight line. We've always known
that it takes laser focus, multidisciplinary teamwork and a
keen eye for how we can best help our customers. And
even then, we've had to show grit. It took a decade of
tenacity to get our technology off the ground. We've all
cared for this company unconditionally and are proudly
committed to its success. We believed then as we do now
that even the biggest challenge can be overcome through
perseverance, if necessary with thousands of people over
many years.
We also learned to rely on others to come to a better result
– without losing focus. That meant expanding our own
knowledge and skills by building an ecosystem of expert
suppliers, strategic partners, academia and service
providers. We also acquired leading companies with
unique technologies that strengthened our ability to deliver
better solutions to our customers. We started to see
ourselves as architects and integrators, inspiring our
partners to innovate on the cutting edge of engineering
while sharing risk and reward. And like us, some of our
earliest customers are now leaders in the chip industry.
We are geared towards providing long-term value to our
customers and other stakeholders. Our direct value chain
consists of our R&D partners, supply chain and
customers, as well as our own manufacturing and service
activities. Together we enable product and service
manufacturers, so-called Original Equipment
Manufacturers (OEMs), and Original Design Manufacturers
(ODMs) to create end-use devices and services for the
consumer market.
10
ASML ANNUAL REPORT 2021 Our position in the semiconductor industry
Indirect supply
Mining and materials
manufacturing
Semiconductor
materials
Semiconductor design
Suppliers
R&D partners and
supply chain (direct)
Lithography equipment
manufacturer
Customers
Foundries and IDMs
(semiconductor manufacturers)
Manufacturers
Devices and software
(OEMs and ODMs)
Consumers
End-use products
and services
The role of lithography
Lithography is a driving force in the creation of more
powerful, faster and cheaper chips. Today’s most
advanced processors, based on the Logic N5 node,
contain billions of transistors. Shrinking transistors further
is becoming increasingly difficult, but we aren’t as close to
the fundamental limits of physics as some would think.
Next-generation chip designs will include more advanced
materials, new packaging technologies, and more
complex 3D designs, which will create the electronics of
the future.
design for optimized exposures, while the metrology and
inspection solutions help in analyzing and controlling the
manufacturing process in real time.
A lithography system is essentially a projection system.
Light is projected through a blueprint of the pattern that
will be printed (known as a ‘mask’ or ‘reticle’). With the
pattern encoded in the light, the system’s optics shrink
and focus the pattern onto a photosensitive silicon wafer.
After the pattern is printed, the system moves the wafer
slightly and makes another copy on the wafer.
The manufacturing of chips becomes increasingly
complex as semiconductor feature sizes shrink, while the
imperative to mass produce at the right cost remains. Our
holistic lithography product portfolio helps to optimize
production and enable affordable shrink by integrating
lithography systems with computational modeling, as well
as metrology and inspection solutions. Our computational
models enable our customers to optimize their mask
design and tape-out time (the time to send the final design
to the manufacturer for production). This works through
mask-correction software to prepare and modify the
This process is repeated until the wafer is covered in
patterns, completing one layer of the wafer’s chips. To
make an entire microchip, this process is repeated layer
after layer, stacking the patterns to create an integrated
circuit (IC). The simplest chips have around 40 layers,
while the most complex can have over 150 layers. The size
of the features to be printed varies depending on the layer,
which means that different types of lithography systems
are used for different layers – our latest-generation EUV
systems for the most critical layers with the smallest
features, and ArFi, ArF, KrF and i-line systems for less
critical layers with larger features.
Taking a closer look inside a fab
A semiconductor fabrication plant, commonly known as a ‘fab’, is a factory where microchips are manufactured. The making of a
microchip involves a multiple-step sequence including lithography to create a pattern in the photoresist and chemical processing
steps such as deposition, photoresist coating, ion implantation and etching, during which electronic circuits are gradually created
on a silicon wafer.
Microchips are made of layers about 50 to 150 nm thick that are built on the semiconductor substrate one layer at a time. Some
microchips can have up to 150 or more layers of varying complexity. Typically, the most complex layers are at the bottom and
the least complex at the top. The most advanced chips require EUV and DUV immersion lithography tools to make them. Simpler
microchips, such as sensors for IoT applications, can be produced using DUV dry machines.
After adding material for a new layer during deposition, the desired pattern is exposed onto it, which after development leaves lines
and geometric shapes positioned precisely in the desired locations. Then the layer is etched, making these designs permanent on
the wafer. The entire manufacturing process of microchips – from start to tested and packaged device, ready for shipment – can
take between 18 and 26 weeks, depending on their complexity.
The heart of a fab is the cleanroom. All fabrication steps take place here, so the environment is controlled to eliminate dust on a
nanoscale. Under the cleanroom floor is the so-called sub fab, which contains auxiliary equipment such as the drive laser. The
utility fab – where the pumping and abatement systems for vacuum and cooling are located – is usually found one floor below this.
11
ASML ANNUAL REPORT 2021 Semiconductor manufacturing process
Computational lithography
Lithography
Metrology & inspection
Optical proximity
correction
Source mask
optimization
Optical
E-beam
Reticle
Resist
Photoresist
coating
Wafer
slicing
Deposition
Metal
Heating
Baking and
developing
Etching
Packaging
Removing
photoresist
Ion implantation
1. Wafer slicing
Sand is purified to
99.99% pure silicon,
melted and cooled to
form a salami-shaped
ingot. This is then
sliced into wafers,
cleaned and polished to
extreme smoothness.
9. Packaging
Finally, the wafer is
diced into individual
chips, which are
encapsulated in
protective packages –
ready for use in any
electronic product or
service.
2. Deposition
The first step in
creating a microchip
is typically to deposit
thin films of (semi)-
conducting or isolating
materials onto the
silicon wafer.
3. Photoresist
coating
To print a layer of a
chip, the wafer is
first coated with a
light-sensitive layer
called a ‘photoresist’,
or ‘resist’, for short.
4. Lithography
Light is projected onto
the wafer through a reticle
(or 'mask'). Optics shrink
and focus the reticle
pattern. When the resist
layer is exposed to the light
pattern, chemical changes
'print' it onto the wafer.
8. Removing
photoresist
After the layer is
ionized, the remaining
sections of resist
that were protecting
areas that should
not be etched or
ionized are removed.
7. Ion implantation
The wafer may also be
bombarded with
positive or negative ions
to tune the semicon-
ductor properties of
parts of the pattern,
before the remaining
photoresist is removed.
6. Etching
Materials such as
gases are used to
etch away material
from the open spaces
created during the
developing phase,
leaving a 3D version
of the pattern.
5. Baking and
developing
The wafer is baked
and developed to
make the chip pattern
permanent. Some of
the photoresist is
washed away to
create a pattern of
open spaces in the
resist.
12
ASML ANNUAL REPORT 2021 The Rayleigh criterion that drives Moore’s
Law
Moore’s Law, a prediction made over half a century ago,
sets the pace for our industry. Gordon Moore predicted
that computing would dramatically increase in power, and
decrease in relative cost, at an exponential pace. In other
words, the number of transistors (tiny electrical switches)
on an integrated circuit will double every two to three
years at the same cost. This opens up two options to
make microchips faster and more powerful: by using the
same number of transistors on a chip at half the cost, or
by doubling the number of transistors at the same cost.
Even today, the power of this prediction is the fundamental
principle of the semiconductor industry and the driving
force for innovations that benefit our daily lives.
At ASML, our job is to help the industry continue Moore’s
Law. Our goal has always been to reduce the critical
dimension (CD) – the smallest structure that a lithography
system can print. This is defined by the Rayleigh criterion,
the equation on which all our innovations are based:
λ
CD = k1
CD = k1 x λ
x
NA
NA
• CD is the critical dimension, a measure of how small the
smallest structures are that the lithography system can
print.
• λ (lambda) is the wavelength of the light source used
λ
and the smaller the wavelength the smaller the
structures that can be printed. Our deep ultraviolet
(DUV) lithography systems, known as the industry
workhorse, dive deep into the UV light spectrum to print
the tiny features that form the basis of the microchip.
Over the years, ASML made several wavelength steps
and our DUV lithography systems range from 365 nm
(i-line), 248 nm (KrF) to 193 nm (ArF). With the extreme
ultraviolet (EUV) systems, we provide highest-resolution
lithography in high-volume manufacturing as these
systems make a major step in wavelength. With EUV tin
plasma, we generate EUV light which has a wavelength
of just 13.5 nm.
• NA is the numerical aperture, indicating the entrance
angle of the light – with larger NA lenses/mirrors, smaller
structures can be printed. Besides larger lenses, ASML
increased the NA of our ArF systems by maintaining a
thin film of water between the last lens element and the
wafer, using the breaking index of the water to increase
the NA (so-called immersion systems). After the
wavelength step to EUV, ASML is developing the next-
generation EUV systems, called EUV 0.55 NA (High-
NA) where we push the numerical aperture from 0.33 to
0.55.
• k1 is a factor relating to optical and process
optimizations. Together with our computational
lithography and patterning control software solutions,
we provide the control loops for our customers to
optimize their mask designs and illumination conditions.
ASML's goal has always been to reduce the critical
dimension. By reducing the wavelength and increasing the
numerical aperture, our systems can print IC structures in
increasingly smaller feature sizes. If our customers can
print smaller structures, the chips can be smaller and the
costs per transistor become cheaper, which in turn makes
it more profitable for our customers.
Extending Moore’s Law is becoming increasingly complex
and costly. What will always be needed is a way to mass
produce IC designs at the right cost. That’s where the full
scope of ASML’s product portfolio will continue to play a
big role to ensure affordable transistor shrink. We continue
to push our entire system portfolio to new productivity
levels and imaging performance. We believe that our EUV
0.33 and 0.55 NA lithography will help enable tomorrow’s
most advanced chips. In our computational lithography
solutions, we’re bringing machine learning and big data to
the forefront in predicting both lithography and metrology
processes, striving for 100% accuracy. We have
developed an entirely new class of e-beam inspection
systems to help our customers control defectivity in
manufacturing in next-generation chip nodes, as those
smaller structures can hardly be detected with optical
inspection.
13
ASML ANNUAL REPORT 2021 Message
from the CTO
Dear Stakeholder,
I’ve been asked the question many times, but let me
assure you: Moore’s Law is still alive and well. And we
believe it will stay with us for quite some time.
Over the past 40 years, we have gradually evolved from
the era of PCs and mobile devices into the cloud era,
where almost every aspect of our lives is now stored and
managed online. The next step of our digital future will be
about distributed intelligence, driven by the seamless
integration of communication, computation and artificial
intelligence (AI). All these trends require more computing
power, which in turn is accelerating the demand for more
powerful and energy-efficient microchips.
With our customers, we share a commitment to increase
the energy efficiency performance of microchips.
Together, we have a vision of the next 20 years to improve
energy efficiency three-fold every two years, through
system scaling including ongoing improvements in the
resolution of our lithography systems, and through
microchip device, material and transistor innovations.
Moore’s Law has evolved and it is not only about printing
the smallest lines.
System scaling is driving innovation
Over the last 15 years, the main driver of innovation in the
semiconductor industry has expanded from pure
lithography-enabled shrink (dimensional scaling) to
microchip system scaling. This is achieved through new
transistor structures and associated materials (device-level
scaling), optimized circuit designs (circuit scaling) and
innovative microchip architectures – such as 3D
structures (architectural scaling) – as well as shrinking the
microchip device footprint.
Advancing holistic lithography
ASML remains focused on enabling system scaling
through shrink. We are integrating our complete product
portfolio into a holistic lithography solution to optimize and
control the lithography process. We do this through
optimizing litho parameters, overlay, critical dimension
(CD) and optical proximity correction (OPC), and by
reducing the edge placement error (EPE) as well as
improving our defect inspection capabilities.
We are uniquely able to help our customers find, measure,
and correct for patterning variations. Our main focus is on
improving EPE (the difference between the intended and
Martin van den Brink (President, Chief Technology Officer and Vice
Chair of the Board of Management)
the printed feature edge of a microchip layout), which is
one of the keys to improving yield. This is because the
lithography systems at our customers not only measure
every single wafer that goes through the fab, but they also
expose every single field on every single wafer and die
individually. This allows our customers to set the actuation
values of all of the control knobs that they have on our
lithography systems in an optimal way.
How do we achieve that? We use scanner metrology,
optical metrology, e-beam metrology and inspection to
bring data from every relevant step in the process flow
together. By analyzing all data in a single framework, our
applications can then provide a feedback loop to the
lithography system to make the required corrections,
thereby delivering real value for our customers.
DUV innovation continues
Our deep ultraviolet (DUV) products are the industry
backbone, supporting all semiconductor market
segments. We keep innovating on all wavelengths. Our
immersion and dry systems lead the industry in
productivity, imaging and overlay performance for the
high-volume manufacturing of the most advanced Logic
and Memory chips.
We continue to systematically develop our product
portfolio to optimize the installed base for our customers,
while increasing our focus on productivity and
performance upgrades and additional services to support
our customers’ wafer demand.
Cost-efficient scaling with EUV
Our extreme ultraviolet (EUV) product roadmap will help us
drive affordable scaling well into the next decade. Our EUV
0.33 NA platform extends our customers’ Logic and
DRAM roadmaps.
Chip manufacturing with EUV helps reduce the amount of
critical lithography masks (-40%) and process steps
(-30%) when compared to non-EUV manufacturing. This
results in significant defect, cost and cycle time reductions
for our customers. We expect that adoption of EUV will
14
ASML ANNUAL REPORT 2021 continue to grow, with all advanced node chipmakers
expected to use EUV in production by 2024.
With our next-generation EUV 0.55 NA platform, we will
continue to enable cost-efficient scaling for future nodes.
The novel optics design with a higher numerical aperture
will enable 60% smaller features and increase microchip
density by a factor of almost 3 times. Our first early-
access system is expected to be available in 2023 and we
expect our customers will start their R&D in the 2024-2025
timeframe. High-volume manufacturing is projected to
start in 2025-2026.
Customers first
In everything we do, a trusted relationship with our
customers is key. Our comprehensive product portfolio is
therefore aligned with our customers' roadmaps to deliver
cost-effective solutions in support of all their applications,
from advanced to mature nodes. We are aware that
commonality across our DUV and EUV platforms allows
faster and more cost-effective innovation, production and
maintenance. That is why we increasingly focus on using
common technology across our portfolio.
We are investing in the energy efficiency of our products to
help reduce the energy needed to produce a wafer. In
addition, we have a strong roadmap to reduce waste. We
are committed to re-using parts, tools and packaging
whenever possible in our value chain. We are working
together with our customers and suppliers to
remanufacture used system parts, re-using them as new
parts to prevent unnecessary waste.
I strongly believe that we have a solid roadmap for the
coming 10 years that will drive the continuation of Moore’s
Law. Enabled by shrink, ongoing system scaling on all
levels – on device, circuit, dimensional and architectural
level – will require substantial innovation across our whole
portfolio. This will be key to increasing the circuit density
and energy efficiency of microchips while lowering their
cost for many years to come.
Martin van den Brink
Chief Technology Officer
15
ASML ANNUAL REPORT 2021 How we innovate
A tiny microchip, a global ecosystem
At almost every moment of every day, all of us make use of technology that contains microchips: small but mighty
devices. A microchip is a unique product – fabricating the layers on even the simplest chip requires an elaborate process
that few companies in the world have mastered.
During this process, which can take months from start to finished product, the silicon wafer travels through dozens of
different machines in a chipmaker’s fab (semiconductor fabrication plant), before it finds its way into electronic products.
This multifaceted production process has led, over decades, to the semiconductor industry becoming a global
ecosystem. This ecosystem includes companies specialized in chip design, equipment and infrastructure suppliers, and
chipmakers themselves.
As a crucial manufacturer of lithography equipment, ASML is a vital part of this ecosystem chain. A critical step in the
chip manufacturing process is the fabrication of the circuitry patterns on silicon wafers, made possible by our lithography
systems which can be found in the factories of every major chipmaker in the world.
But our systems are just one part of the process involving numerous suppliers and chip-making equipment. Every step
and every machine in the process is important. That’s why collaboration and innovation are key. From academics who
help us understand and bend the laws of physics, to customers who identify new possibilities and suppliers that
translate our ideas into products and technology – we collaborate to succeed. This huge collaborative network that we
call the semiconductor industry is at the cutting edge of our digital future.
Examples of our ecosystem partners
Customers
Intel
Micron
Samsung
SK hynix
TSMC
Suppliers
Aalberts
Prodrive
Trumpf
VDL
Zeiss
Research partners
TU/e
Heriot-Watt University
ARCNL
Imec
TNO
Peers
Applied Materials
JSR
KLA Tencor
LAM Research
TEL
Product development
Product development in the semiconductor industry is managed through so-called ‘roadmaps’, which is essentially
planning product development. When an idea has become a more specific definition, this transforms into a roadmap
giving guidelines on how the product development should proceed during the next couple of years. By combining the
roadmap of our customers and the technological feasibility, we design a product roadmap that outlines the specifications
and functionalities of new types of machines that are feasible for us to produce and that meet our customers’ demands.
Product development at ASML is exposed to multiple complexities. Some of our products consist of more than 300,000
parts delivered by more than 700 suppliers, and 50 unique functions that need to be integrated to create a fully
functioning system. We need more than 80 specialized disciplines to support successful product and process
development. Moreover, we are part of the semiconductor value chain, working closely together with numerous
customers, partners and suppliers.
16
ASML ANNUAL REPORT 2021 ASML's success depends on the timely delivery of
innovative and complex products. This brings uncertainty
and risk, and the positive and negative impact of decisions
made throughout product development can be huge.
Compare it to a sailing race: The goal is clear, but the route
is not. There are numerous variables to be managed, at
high speed. Every piece of information is crucial to plan
and reach the goal.
For more than a decade, we have applied our tailor-made
modular innovation and product development process,
which we call the Product Generation Process (PGP). PGP
describes the way we develop products at ASML, how we
introduce these products to the market, and eventually
how we phase them out. PGP is a decision-based
process. There are 15 sequenced Key Decisions that
determine the main stream of the product development.
This means that PGP enables decisions to be made as to
whether or not the development of a product should
continue.
The modular design of our products allows us to work out
solutions to technological challenges independently of
projects. This independent work enables us to consistently
improve our solutions and it leads to an efficiency in
development through reuse of system design and
architecture.
Our ecosystem partners
We innovate through partnerships. Our innovation
philosophy is one where we see ourselves as architects
and integrators, working with partners in an innovation
ecosystem. We develop our technology in close
collaboration with our customers to ensure we build today
what they need tomorrow. Our machines are developed
based on their input, and we engage closely with them to
help achieve technology and cost roadmaps. Read more in:
Customer intimacy.
In the same way, we work closely with our suppliers,
trusting them to manufacture parts and modules for our
systems. Many of them are deeply involved in developing
new technology and achieving the innovations we seek.
With some of these so-called ‘farmout suppliers’, we work
as co-investors. Read more in: Our performance in 2021 - Social -
Our supply chain.
We have been in a partnership with Carl Zeiss SMT
Holding GmbH & Co. KG for over three decades and we
also hold an interest in the company. This partnership runs
according to the principle of ‘two companies, one
business’ working together to drive operational excellence
in innovation and technology. Read more in: Our performance
in 2021 - Social - Our supply chain.
We co-develop expertise within a wide network of
technology partners, such as universities and research
institutions. Some of our partners include imec in Belgium,
the technical universities in Twente, Delft and Eindhoven in
the Netherlands, and the Advanced Research Center for
Nanolithography (ARCNL), also in the Netherlands. Read
more in: Our performance in 2021 - Social - Innovation ecosystem.
Managing innovation
Every day at ASML, more than 11,000 of the brightest
minds in R&D take on the exciting challenge to innovate
the most advanced lithography systems in the world. We
manage this process by balancing our customers’ needs,
product capabilities and technology solutions. To stay
ahead, we invest heavily in R&D. In 2021, we spent €2.5
billion on R&D, compared to €2.2 billion in 2020.
Our Research department’s focus is to generate and
explore ideas and demonstrate their feasibility in the long
term. The department also helps to find technological
solutions to challenges in our products and applications
that have moved into development.
Our researchers continuously scout for technological
innovations and solutions – within the semiconductor
industry and beyond – to assess if they can be applied in
ASML’s technology roadmap to support our customers to
drive the semiconductor device roadmap. We encourage
our experts to build a wide network in the broader
technology space.
The constant stream of new ideas is crucial to fill our
technology pipeline that flows through the so-called
‘innovation funnel’. Here we select new ideas that have the
potential to advance our products and customer
application. Ideas that successfully pass the ‘proof of
concept’ stage in our Research department are
transferred to the Development & Engineering (D&E)
department. D&E takes them on into our Product
Generation Process (PGP) for product development. We
then build and test system prototypes in the necessary
environments. Prototypes that pass these tests may
eventually lead to new product releases.
17
ASML ANNUAL REPORT 2021 Innovation funnel
Research department
D&E department
Ideation
Scout for ideas
Selection
Fill the research
pipeline
Research
Assess
feasibility
Development
Design and engineer
ASML
product
Integrate
and deliver
Our D&E engineers drive our machines forward by
creating new components or subsystems, integrating
them into the functional system, or developing new
applications to help move the industry forward.
In D&E, we work on a multitude of advanced optical and
mechatronic modules, along with application software,
data science and operating systems. D&E innovates with a
strong focus on time-to-market, often starting new system
development before the previous generation has even
reached the customer. Teams in D&E have extensive
contact with leading research institutes, keeping up to
date with the latest developments in their respective fields.
Innovation achievements
Every day, our teams take on the exciting challenge of
building and driving innovation forward to maintaining the
most advanced lithography systems in the world. To do
this, we apply concurrent engineering, often starting new
system development before the previous generation has
even reached the customer. At the same time we
continuously seek to improve our products capabilities,
while guarding our products’ reliability, manufacturability
and serviceability.
Berthold Leibinger Stiftung’s 2021
Innovation Prize
A prestigious honor granted every two years, the Berthold
Leibinger Innovation Prize is an international award that
recognizes excellence in research and development work
on the application or generation of laser light.
EUV technology is now the core technology for making
modern computer and smartphone chips. A team of ASML
scientists – Daniel Brown, Alexander Schafgans, and
Yezheng Tao from ASML, in the Netherlands and the US –
have been awarded the Berthold Leibinger Stiftung’s 2021
Innovation Prize for a “breakthrough in laser-produced
plasma source for Extreme Ultraviolet Lithography
scanner enabling high-volume manufacturing”.
The prize is for unprecedented advancement and
research in EUV light source power scaling using a
CO2 laser architecture. The team's work in the area of
laser-produced plasma physics aided greater stability
and robustness to EUV light source power, removing
performance limitations and enabling greater scaling in
high-volume manufacturing. This significant contribution
was recognized by a jury of experts from science and
industry across the globe.
For more information, please visit www.asml.com
18
ASML ANNUAL REPORT 2021 In 2021, our research and D&E teams showed great
achievements. A few examples are provided below.
Modular wafer clamp
We don’t say 'no' to a challenge. Our global research and
D&E teams were challenged to create a new wafer clamp
design that could be manufactured faster while meeting
tighter specifications. After two years of research, design
and engineering, our team launched the first full-scale
prototype of the modular wafer clamp, ready for
qualification in an EUV scanner. This achievement is a true
testimony of cross-continental challenge and
collaboration.
Wafer table coating
Unlike any other module in the scanner, the wafer table is
the only scanner part in direct contact with the wafer
during exposure. The requirements for flatness and
surface stability are therefore rigorous. Thousands of
wafers with different shapes and process characteristics
are clamped to it on a daily basis as it moves under high
acceleration forces, leading to unwanted drift and leaving
behind a clamping fingerprint which affects the overlay
performance.
Our teams sought a solution to these fundamental issues
affecting wafer table performance and found a more
effective coating solution which ensures stability and also
has substantial lifetime improvement benefits.
Water-cooled EUV mirrors
EUV systems use several mirrors instead of lenses to
guide the EUV light to the wafer, shrinking the reticle
pattern by a factor of four. When EUV light travels through
the machine, part of it is absorbed into each reflecting
mirror. This gives rise to so-called mirror heating, which
influences imaging and overlay performance.
Our researchers and engineers investigated new ways of
thermal conditioning for the mirrors. Simulation and
modelling showed good results on water-cooled mirrors.
Testing of bonded substrates with water channels is
underway, with encouraging results.
19
ASML ANNUAL REPORT 2021 Customer intimacy
As one of the world’s leading manufacturers of chip-
making equipment, we enable our customers to create the
patterns that define the electronic circuits on a chip. Our
customers are the world’s leading microchip
manufacturers, and our success is inextricably linked with
theirs.
We collaborate with our customers to understand how our
technology best fits their needs and challenges. For this
reason, we engage with our customers at all levels:
building partnerships, sharing knowledge and risks, and
aligning our investments in innovation. We develop our
solutions based on their input, engage in helping them
achieve their technology and cost roadmaps, and work
together, often literally in the same team, to make sure our
solutions match.
Despite continued travel restrictions and mandatory
quarantine and workforce constraints, thanks to our
collaborative efforts across the company and our business
partners, we were able to maintain a high level of
engagement with our customers and prevent any major
impact on their business requirements. Customers around
the world have recognized our additional support efforts
and interventions during the pandemic. We were
presented with several ‘customer awards’ in recognition of
our rapid response to their needs and good overall
customer service.
In 2021, the demand for chips substantially increased
driven by market fundamentals such as distributed
computing, sensor technology, 5G, AI and digitalization
accelerated by the pandemic. This also meant that the
need for our customers to increase their capacity was at a
record high. Rapidly increasing the number of systems
shipped is challenging in our business, requiring seamless
coordination with our suppliers who are also experiencing
their own supply constraints. While we still managed to
produce significantly more systems in 2021, we continued
to work in close collaboration with our customers to
weather the supply and delivery challenges by optimizing
the installed base productivity.
Achieving customer intimacy
To us, customer intimacy is about the entire customer
relationship across all channels, from the early stages of
innovation onwards. We aim to foster loyalty, advocacy
and continuous engagement with the goal of achieving
complete customer satisfaction.
We aim to leverage our innovation leading to more
sophisticated solutions and interactions with our
customers. As customer requirements become more
complex, it takes longer to align, so we need to start
earlier. Transparency is key in this process, and our
customer intimacy strategy supports this.
It’s crucial to be in a true partnership with our customers,
to share in the risks and rewards of what we do. Trust and
a shared vision are at the heart of this.
Staying close to our customers
To support and sustain our partnerships with customers,
we have a structure of customer interactions across
various channels in the organization, including, for
example, customer alignment meetings. Here, members of
our Board of Management, senior managers and
customer representatives come together to make sure our
product development plans are in line with our
customers' business goals and needs.
We run regular customer alignment meetings with our key
customers. These meetings include our Executive Review
Meetings, at which members of our senior management
team and Board of Management discuss business and
strategies with customers; Technology Review Meetings,
at which our senior technology experts and our Chief
Technology Officer discuss technology roadmaps and
requirements with customers; and Operational Review
Meetings, where we review topics related to our
customers’ operational activities.
We have a dedicated Sales and Customer Management
department, which is responsible for building and
maintaining our customer relationships and ensuring all
relevant ASML departments contribute to meeting their
needs. We market and sell our products directly to our
customers, without agencies or other intermediaries. Our
account managers, field and application engineers, and
service and technical support specialists are located close
to our customer locations throughout Asia, the US and
Europe.
Another focus area is training – boosting the capabilities of
the local customer service teams as well as enhancing
local technical expertise. The travel restrictions, among
others, highlighted just how essential the need is for well-
trained engineers in the regions where we operate. With
the help of remote control capabilities, we were able to
increase the self-sufficiency of the local field engineers.
Measuring our approach
Our Voice of the Customer program helps ensure our
employees hear firsthand about our customers’ needs and
challenges. This is especially important for employees
without direct access to customers. To reach as many of
our people as possible, the program makes use of
different channels of communication: live presentations
and Q&As with senior customer representatives, recorded
customer interviews, online articles, and personal
engagement with customer representatives.
20
ASML ANNUAL REPORT 2021 In 2021, travel restrictions and other mitigation measures
related to COVID-19 continued to limit our in-person
interactions to a large extent. Our account teams adapted
quickly, introducing alternative solutions such as more
local Voice of the Customer initiatives and remote
customer interviews. Local account and support teams
visited our customers at their locations, interviewed them
on video, and then shared feedback with teams at
ASML. Except for live presentations with large
audiences, we were able to adhere to our regular schedule
of interactions throughout the year.
Another valuable customer feedback tool is our biennial
Customer Feedback Survey, which asks our customers to
rate our performance. We also use this opportunity to
collect open feedback. The direct ratings and frank
comments provide valuable insight into customers’
successes and challenges. We carefully analyze the
results per customer, check our gained insights with the
customer, and then define targeted, continuous
improvement plans together with them, taking their
priorities into account. Key elements in this process are:
truly understanding what customers need from us,
validating that we are on the right track with the right
improvements, and updating our customers regularly on
progress being made. In 2021, we continued deploying the
improvement actions identified from the survey results of
2020. The next survey will be sent out in September 2022.
We also set ourselves a target of achieving a VLSI top-
three ranking among large suppliers of semiconductor
equipment. The VLSI research annual Customer
Satisfaction Survey benchmarks the performance of
suppliers across the semiconductor industry based on
three key factors: supplier performance, customer service
and product performance. We moved up to second place
in the 2021 VLSI research Customer Satisfaction ranking
of the ’10 Best Large Suppliers of Chip Making
Equipment’. We've maintained our position in the top
three overall ‘Large Suppliers of Chipmaking Equipment’
and also in the top three individual categories: number one
in ‘Best Suppliers of Fab Equipment’, ‘Wafer to Foundation
Chipmakers’, and ‘Wafer Fabrication Equipment to
Specialty Chipmakers’.
In line with our business strategy, we continued in 2021 to
work towards securing our full product portfolio that will
sustain our company into the future. This includes working
with our customers to increase the adoption of EUV in
high-volume manufacturing environment, engaging with
our customers to introduce EUV 0.55 NA platform,
securing our products in mature markets and optimizing
the installed base for our customers.
Our product portfolio is aligned with industry trends and
our customers’ detailed product roadmaps, which require
lithography-enabled solutions. Our customers are showing
their trust in us by investing in our newest technology,
supporting the industry driver of shrink beyond the current
decade.
21
ASML ANNUAL REPORT 2021 Our products and services
The semiconductor industry is driven by
affordable scaling (the ability to make smaller
more energy efficient transistors at the right
price). Our holistic lithography product
portfolio is geared toward lithography-enabled
shrink far beyond the current decade, to allow
our customers to generate the greatest value
per silicon wafer.
Our product offerings in our holistic product portfolio
provide patterning solutions for every possible wavelength
– from the most advanced 13.5 nm EUV wavelength to the
industry’s workhorse DUV wavelengths of 193 nm, 248 nm
and 365 nm. This comprehensive portfolio supports
customers across the semiconductor industry from mass-
producing advanced Logic and Memory chips to creating
novel ‘More than Moore’ applications or cost-effective
manufacturing of mature chip technologies.
To make sure that every individual pattern on an integrated
circuit is connected flawlessly, we provide advanced
process control solutions through our metrology and
inspection systems and computational lithography
solutions. In addition, we support our growing installed
base with best-in-class customer support. Our highly
differentiated solutions provide unique value drivers for our
customers and ASML, working together to enable
affordable shrink well into the next decade.
Extreme ultraviolet (EUV) lithography
systems
More than two decades ago, we started developing EUV
technology. It was "no walk in the park" and, since the
start, we have invested billions in R&D, acquired Cymer to
accelerate EUV source technology, and helped solve
several technical challenges to enable the EUV
infrastructure that our customers need for high-volume
manufacturing. We succeeded by innovating in close
cooperation with our customers and suppliers. This
partially explains why ASML is the world’s only
manufacturer of EUV lithography systems. Since its
introduction, our EUV installed based produced more than
59 million wafers by end of 2021, compared to 26 million
wafers produced by end of 2020.
EUV 0.33 NA
Our EUV platform extends our customers’ Logic and
Memory roadmaps by delivering resolution improvements,
state-of-the-art overlay performance and year-on-year
cost reductions. EUV lithography uses light with a
wavelength of just 13.5 nm and a numerical aperture of
0.33. This is a wavelength reduction of almost 15 times
compared to the next most advanced lithography solution
used in advanced chipmaking – deep ultraviolet (DUV)
argon fluoride (ArF) lithography with its 193 nm light. This
allows our customers to use EUV in a single exposure,
rather than complex multiple patterning strategies with ArF
immersion, and allows them to further shrink microchip
structures. Our EUV product roadmap is intended to drive
affordable scaling to 2030 and beyond.
The TWINSCAN NXE:3600D is our latest-generation EUV
0.33 NA lithography system. It combines the highest
resolution with 15-20% increased productivity and around
30% better overlay compared to its predecessor the
TWINSCAN NXE:3400C, while also improving system
availability.
TWINSCAN NXE:3600D
EUV 0.55 NA (High-NA)
After five years of engineering, we have started to build the
next generation of EUV lithography systems that further
improves resolution with a higher numerical aperture (NA)
of 0.55 compared to the 0.33 NA of our current EUV
platform. To reduce technological introduction risk and
R&D costs, the EUV 0.55 NA (High-NA) platform
maximizes commonality with the EUV 0.33 NA platform.
The capabilities of our EUV 0.55 NA system, called
EXE:5000, bring considerable benefits to our customers
by enabling lithography simplification for future nodes,
higher yield and decreased defect density for both Logic
and DRAM. With its larger optics, it can print smaller
features with higher density, reducing patterning costs for
customers significantly. EUV 0.55 NA helps our customers
to extend their shrink roadmap and minimize double or
triple patterning compared to 0.33 NA, leading to reduced
patterning complexity, lower risk of defects and a shorter
cycle time.
We believe this technology will enable affordable
geometric scaling well into the next decade as EUV 0.55
NA offers higher resolution that enables 1.7x smaller
features and 2.9x increased density compared to EUV
0.33 NA. EUV 0.55 NA is expected to enter high-volume
manufacturing at our customers in 2025–2026.
22
ASML ANNUAL REPORT 2021 Dry systems
Not every layer on a chip necessarily needs the latest and
greatest immersion lithography systems to produce them.
There may be more complicated layers that are made
using more advanced lithography systems, but the rest
can often be printed using ‘older’ technology such as dry
lithography systems. Our dry systems product portfolio
offers more cost-effective solutions for all types of
wavelengths for our customers.
The TWINSCAN NXT:1470 is our latest dry ArF lithography
system, offering a record productivity of 300 wafers per
hour with a 4 nm overlay capability. It is also the first dry
NXT system, building on our successful immersion
platform, and delivers improvements in matched machine
overlay, productivity and its fab space.
With an 0.80 NA, the TWINSCAN XT:860N is our new-
generation KrF system, supporting high-volume 200 mm
and 300 mm wafer production at and below 110 nm
resolution. The XT:860N features the new Large Range
Level Sensor that allows customers to measure high
topology 3D NAND wafers at increased productivity of 260
wafers per hour – up from the 240 wafers per hour
capability of the XT:860M. For more critical KrF layers, the
0.93 NA TWINSCAN XT:1060K is our most advanced KrF
lithography system, and offers best-in-class resolution at
and below 80 nm and overlay.
Deep ultraviolet (DUV) lithography
systems
DUV lithography systems are the workhorses of the
industry. Supporting numerous market segments, DUV
systems produce the majority of layers in a customer
device today and will remain important for future devices.
We offer immersion as well as dry lithography solutions for
all DUV wavelengths currently used in the semiconductor
industry – i-line using 365 nm wavelength, KrF using 248
nm and ArF using 193 nm. These systems help
manufacture a broad range of semiconductor nodes and
technologies, and support the industry’s cost- and
energy-efficient scaling.
Our DUV immersion and dry systems lead the industry in
productivity, imaging and overlay performance for high-
volume manufacturing of the most advanced Logic and
Memory chips in combination with EUV, while continuing
to deliver value for mature nodes and lower-volume
applications.
Immersion systems
ArF immersion lithography maintains a thin film of water
between the lens and the wafer, increasing NA and
improving resolution to support further shrink. Our
immersion systems are suitable for both single-exposure
and multiple-patterning lithography, and can be used in
seamless combination with EUV systems to print different
layers of the same chip.
The TWINSCAN NXT:2050i is our current state-of-the-art
immersion system and is being used in high-volume
manufacturing of the 5 nm Logic and fourth generation of
10 nm DRAM nodes. The NXT:2050i is based on a new
version of the NXT platform, which includes new
developments in the reticle stage, wafer stage, projection
lens, and exposure laser. Thanks to these innovations, the
system delivers better overlay control at higher
productivity than its predecessor.
TWINSCAN NXT:2050i
XT:860N
The TWINSCAN XT:400L is our latest i-line lithography
system, which can print features down to a resolution of
220 nm for 200 mm and 300 mm wafer production.
Mature products and services
Before EUV, before immersion, and even before our
TWINSCAN systems, there was the PAS. In 1991, seven
years after the company was founded, we launched the
PAS 5500, which turned out to be our breakthrough
platform. This system was able to dramatically reduce
manufacturing times for our customers, and its modular
design enabled them to produce multiple generations of
advanced chips using the same system.
23
ASML ANNUAL REPORT 2021 Our refurbished products business, known as Mature
Products and Services (MPS), refurbishes and upgrades
our older lithography systems to extend their lives and
offer associated services. MPS’s customer base is wide
and active in a variety of markets, especially in the 'More
than Moore' space.
ASML systems have a very long operational lifetime that
often exceeds their role at the initial customer. As a result,
many customers are able to generate value by selling off
systems that are no longer required. To support this
sustainable product use and ensure used systems deliver
the quality that ASML stands for, ASML is actively involved
in the used system market through our refurbishment and
associated services. Over 90% of the PAS systems ASML
has ever sold are still in use.
We offer refurbished systems of the PAS 5500 and first-
generation AT, XT and NXT systems. Through our
refurbishment and associated services, we extend the
lifespan of our customers' installed base, drawing value
from their capital and contributing to sustainable product
use. Read more in: Our performance in 2021 - Environmental -
Circular economy - Recycle mature products through refurbishment.
Metrology and inspection systems
Our metrology and inspection systems allow chipmakers
to measure the patterns that they actually print on the
wafer to see how well they match the pattern intended.
Our portfolio covers every phase of bringing a chip to
market, from R&D to mass production, and each step of
the manufacturing process – allowing them to assess the
performance of the entire process. The systems offer the
speed and accuracy to create automated control loops via
our process control solutions, optimizing the lithography
system settings for each exposure to reduce edge
placement error (EPE), enlarge the process window and
achieve the highest yield and best performance in mass
production.
Optical metrology
Our YieldStar optical metrology solutions allow
chipmakers to assess the quality of patterns on the wafer
in volume production, through fast and accurate overlay
measurements. Overlay, or how well one layer of a chip is
aligned with the previous one, is an important measure of
lithography performance and a key contribution to EPE. As
structures on microchips get smaller and smaller, overlay
and EPE become more and more important.
The YieldStar 385H offers the latest in-resist post-
lithography (pre-etch) overlay and focus metrology, with
enhanced throughput and accuracy. Compared to
previous systems, key enhancements include a faster
stage and faster wavelength changing. This enables highly
accurate overlay measurements and tool matching using
multiple wavelengths without impacting throughput.
Our latest model, the YieldStar 1385H, provides the ability
to measure after-etch device patterns enabling extended
yield control capability for our customers. The YieldStar
1385H delivers improved accuracy and around 50%
productivity improvement capability over the previous
model YieldStar 1375F. The YieldStar 1385H is the optical
tool on the market for fast, accurate in-device overlay and
metrology and has the capability of measuring multiple
layers at once which helps customers to improve yield
through post-etch process control.
YieldStar 1385H
E-beam metrology and inspection
Our HMI e-beam solutions allow customers to locate and
analyze individual chip defects amid billions of printed
features, extending the possibilities for process control.
Historically, e-beam solutions were too slow to monitor
volume production processes. However, ASML has made
progress in various methods for increasing the throughput
of e-beam systems.
ASML continues to extend market leadership in voltage
contrast inspection and physical defect inspection with
the widely adopted single-beam platform. The eScan 430
is our latest single-beam inspection system, delivering
more than 35% throughput improvement across various
applications in logic, DRAM and 3D NAND.
Our high-resolution e-beam metrology system eP5 offers
world-class 1 nm resolution with large field-of-view
capabilities at more than 10 times the speed of existing
technologies. It outputs critical dimension (CD) and edge
placement error (EPE) data in high volume with a quality
level that customers need for monitoring and control. EPE
is becoming more critical for device patterning and yield
with shrinking design rules and the adoption of EUV
lithography. We also released an EPE metrology
application software product on eP5. It is capable of local
and global EPE measurements on device, both intralayer
and interlayer.
24
ASML ANNUAL REPORT 2021 Our innovation did not stop after we launched our
breakthrough multibeam inspection tool HMI eScan 1000,
with a 3x3 image, a year ago. We added the next
generation HMI eScan 1100 to our product portfolio. With
a 5x5 image, it demonstrates successful multibeam
operation, simultaneously scanning with 25 beams. The
5x5 system has higher sensitivity for detecting voltage
contrast defects and physical defects while substantially
increasing inspection throughput. At this stage, our
customers are evaluating our multibeam systems.
Computational lithography
Our computational lithography solutions are used in the
development of new chips to optimize reticle patterns and
the setup of the lithography system to ensure robust,
manufacturable designs that deliver high yields. Insight
from computational lithography solutions is also
increasingly being used to guide metrology and
inspection, increasing throughput and enabling more
precise process monitoring and control in high-volume
manufacturing.
eScan 1100
System and process control
Our system and process control software products enable
automated control loops to keep lithography processes
operating optimally. Using powerful algorithms, they
analyze metrology and inspection data and calculate
necessary corrections for each individual exposure that
can be fed back to the lithography system to minimize
edge placement error in subsequent wafer lots. In this way
they enable the creation of ever more advanced
microchips with maximum yield and performance. Our
system and process control roadmap aims to take
increasing advantage of the huge flexibility of our
lithography systems and apply more powerful algorithms
with higher-order corrections to support our customers
own roadmaps for increasing EPE performance.
These products are based on accurate computer
simulations of the lithography system and process,
representing a wide variety of physical and chemical
effects. Machine learning techniques are also increasingly
used to further speed development. We are continually
developing our computational lithography offering to
increase the range and accuracy of models and reduce
the computational time and cost.
Visit www.asml.com for more product details and specifications.
Managing our installed base systems
The installed base of ASML systems continues to grow,
with many systems finding second or even third lives at
new owners in new markets and applications. To provide
all our customers with the best possible value proposition,
we offer an extensive installed base management
portfolio, including a wide range of service and upgrade
options.
We develop and sell product options and enhancements
designed to improve throughput, patterning performance
and overlay. Through field-upgrade packages, it is
possible to upgrade older systems to improved models in
the field. This enables customers to optimize their cost of
ownership over the system’s lifetime.
Customer support
We support our customers with a broad range of
applications, services, and technical support products to
maintain and enhance our systems' performance. We
have almost 7,000 customer support employees, who
work to ensure the systems in our customers’ fabs run at
the highest levels of predictability and availability. We offer
24/7 support, next-day parts delivery, an easy, centralized
customer portal, and training for customer engineers. In
2021, our customer support organization has provided
nearly 5,000,000 hours of customer support, up from
4,500,000 hours in 2020.
25
ASML ANNUAL REPORT 2021 Our position
in the
semiconductor
value chain
26
ASML ANNUAL REPORT 2021 Our markets
Our customers are the world’s leading
microchip manufacturers, and our success is
inextricably linked with theirs. We design our
machines based on their input, engage in
helping them achieve their technology and
cost roadmaps, and work together to make
sure our machines are running smoothly in
their fabs.
Our customers can be grouped into Memory and Logic
chipmakers.
Memory chips can store a large amount of data in a very
small area. They are used in an increasing variety of
electronic products like servers, data centers,
smartphones, high-performance computing, automotive
or personal computers, and other communication devices.
There are two main classes of Memory: NAND and
DRAM.
With NAND chips, data can be stored even when a device
is powered off. DRAM memory is used to efficiently
provide data to the processor. These DRAM and NAND
chips are typically made in dedicated Memory-chip
factories.
Logic chips, which process information in electronic
devices, are produced by two groups of manufacturers.
The first group, known as integrated device manufacturers
(IDMs), designs and manufactures Logic chips. The
second group comprises contract manufacturers known
as foundries. Foundry manufacturers produce chips for
‘fabless’ companies, which focus only on chip design and
distribution, but do not manufacture microchips
themselves.
Both Logic and Memory chips can vary greatly in
complexity and capability. For example, the most
advanced chips are powering leading-edge technology in
artificial intelligence (AI), big data and automotive
technology, while the simpler, low-cost chips are
integrating sensing capabilities in everyday technology to
create a vast IoT.
The chip market (worldwide semiconductor revenues) has
grown by 5% per year in revenue on average over the past
20 years, and is projected to grow even stronger. The
factors driving this growth have radically changed. In the
1990s, personal computers (PCs), both desktops and later
laptops, drove chip demand. In the 2000s, the market
driver evolved from PCs to smartphones. These in turn
produced new market drivers, data centers and (edge)
cloud solutions, where data from PCs and smartphones is
routed, processed and stored with the extensive use of
specialized Logic chips, in combination with DRAM,
NAND and HDD storage.
27
ASML ANNUAL REPORT 2021 Semiconductor industry
trends and opportunities
Technology is evolving fast, and the next level
of computing is dawning. The era of mobile
computing – where you bring the computer
with you – is evolving towards immersive
‘ubiquitous computing’, with computing power
available wherever you go.
average current internet connection speed would take one
person 1.8 billion years. This big data will need to become
fast data to allow for ubiquitous computing as we move
towards ‘edge’ computing, where processing is brought
as close to the source of data as possible, rather than in
the cloud.
The transition to ubiquitous computing is enabled by what
has been termed the ‘artificial intelligence of things’ (AIoT).
AIoT is a smart and connected network of devices that
seamlessly communicate over powerful 5G networks,
allowing us to unleash the power of data better and faster
than ever. This combination of artificial intelligence (AI)
technologies with the internet of things (IoT) infrastructure
will achieve more efficient IoT operations, improve human-
to-machine interactions, and enhance data management
and analytics. The potential of AIoT will gradually open up
as AI and IoT increasingly intertwine, facilitated by 5G. The
vast amount of data that people can access, and the
insights this provides, will fuel semiconductor business
growth and digital transformation.
There are around 40 billion connected devices currently in
use, with more being added every second. This number is
expected to increase to 350 billion devices by 2030.
Connected IoT devices are expected to create up to 175
ZB (zettabytes) of data per year by 2025 based on external
research. In other words, one zettabyte (1021 byte) equals a
trillion gigabytes, and to download 175 ZB of data with an
Semiconductor-enabled computing trends
Moore's Law is the guiding principle for the semiconductor
industry, the motor driving the industry to transit from
mobile computing to ubiquitous computing. This transition
continues to expand, facilitating three major trends in
computing: applications, data and algorithms.
Semiconductor industry market
opportunities
In 2020, more than 953 billion chips were manufactured
around the world, feeding a $440 billion industry. In 2021
the semiconductor industry increased the output to over
1.1 trillion chips, turning to a $590 billion market. Growth is
set to continue, with market analysts predicting the
industry could reach a nearly $700 billion market by 2025.
Semiconductor technology plays a crucial part in shaping
the interconnected and intelligent network future, and end
markets continue to grow. The overview below shows an
outlook on the current market size and market opportunity
for the entire industry based on external research.
Market
Smartphone
Key driver
Continued refresh of all semiconductor
content including image sensors
2020
market size
($bn)
116
2025 market
opportunity
($bn)
162
2030
estimation1
($bn)
210
Outlook
CAGR 2020-
2025 (%)
7.0%
Previous
outlook
CAGR
2019-2024
(%)
7.9%
Personal computing High-end compute and Memory, fast
100
121
Consumer
electronics
Automotive
Industrial
electronics
Wired and wireless
infrastructure
Servers, data
centers and storage
conversion to SSD
Legacy products and packaged ICs,
advanced ICs in add-ons
Strong IC content growth: GPU,
sensors, V2X communication sensing
High-end compute for AI on big data
and sensors
Devices for fast data processing,
modem, base-station infrastructure
refresh
High processor and Memory growth,
hardware accelerations including GPU
48
39
50
38
76
466
74
82
82
53
119
693
1.
ASML extrapolation of data to 2030 using ’15-’25 Compound Annual Growth Rate (CAGR)
132
98
131
119
63
187
940
3.9%
2.8%
8.8%
7.7%
16.3%
9.5%
10.5%
7.8%
7.0%
5.5%
9.2%
10.6%
8.2%
7.3%
28
ASML ANNUAL REPORT 2021 Applications
Applications
• Autonomous decisions
• Immersive resolution
• On-device artificial intelligence
• Virtual / augmented reality
Moore’s Law
Performance
Cost
Energy efficiency
Algorithms
Data
Algorithms
• From big data to value
• Enhanced processing
• Deep learning
Data
• Connectivity
• Real-time latency
• Growing data volumes
Smart home
Smart home devices such as thermo-
stats, lights and smart TVs learn a user’s
habits to provide automated support for
everyday tasks. Applications: energy
efficiency, safety, entertainment, access
control and well-being.
Smart cities
Cities that use technology and digital
networks to integrate services.
Applications: open data for better urban
planning, optimized energy consumption
and increased public safety through smart
traffic surveillance.
Smart industry
Smart industry devices use real-time data
analytics and machine-to-machine sensors
to optimize processes. Data generated
from these devices helps foresee bottle-
necks and prevent errors and injuries.
Applications: autonomous manufacturing
robots, automated supply chain
management, predictive sensors.
5G connectivity
5G enables a new kind of network that is
designed to connect virtually everyone
and everything together including
machines, objects, and devices. It
empowers new user experiences and
connects new industries.
Self-driving cars
These supercomputers on wheels are
enabled by electronics and semi-
conductors. Autonomous vehicles offer
advanced driver assistance systems
(ADAS) which help people to drive
more safely and reduce accidents.
Predictive healthcare
Predictive analysis of health data from
many sources is helping to improve
healthcare services and patient
outcomes. The combination of machine
learning and AI in healthcare can
increase the speed and accuracy of
diagnosis, prevent critical situations
and personalize care.
Autonomous robotics
A new generation of lightweight robots
fitted with smart sensors enables
humans and machines to collaborate
closely and safely. Smart robots that are
connected to a greater network can
benefit from big data and collective
learning, making it possible to reduce
manufacturing costs and improve
quality of products.
Mixed reality
Combining augmented reality and
virtual reality technology will bring
together the real world and digital
elements and create the next-level user
experience with potential applications
in education and training, healthcare
and entertainment.
Wearables
Wearable devices (such as fitness
trackers, and smart watches, jewelry
or glasses) are able to connect to the
internet and can continuously monitor,
track and transmit personal data.
Applications include fitness, health
monitoring and entertainment.
29
ASML ANNUAL REPORT 2021 Semiconductor industry dynamics
Several factors are shaping the semiconductor industry
landscape. These are some of the major trends driving
industry development, both today and tomorrow.
Rising consumer demand
The convergence of wireless communication, telecom,
media and cloud via connected devices continues to drive
demand for advanced semiconductors across the globe.
Growing populations and urbanization are creating
increasing demand for advanced consumer electronic
devices. Microchips are at the heart of these devices.
Significant growth drivers of the emerging technologies
are demanding new and advanced chips that are
specifically designed for a wave of new applications. Read
more in: Semiconductor industry trends and opportunities and
Customer intimacy.
Global race for talent
Highly skilled people with a technical background are
scarce in the labor market and competition is growing.
Top-tier talent select their employer of choice, not the
other way around. The global race for talent is becoming
more crucial as the industry competes for a small pool of
scientists, engineers and software developers with the skill
set to develop innovative solutions.
Companies are trying to staff up for growth, but the high-
tech resource pool is shallow. The number of STEM jobs is
projected to grow significantly, but it is challenging to fill
these given the shortage of qualified candidates. Retaining
talent has become crucial for tech companies. Read more
in: Our people.
Global geopolitics
The current trade environment presents significant
challenges for the global semiconductor industry, and
trade tensions and increased protectionism are likely to
continue. The global pandemic has alerted governments
around the world that global supply chains can create
significant geographical dependencies on services, raw
materials and end products. Semiconductors play an
increasingly important role in the growth and continuity of
large industrial complexes and the importance of the
semiconductor industry is likely only going to increase.
Governments have turned their attention to securing
sufficient semiconductor supply to support their local
industries, creating higher levels of technological
sovereignty and planning significant investments in the
semiconductor industry.
The industry is being forced to manage trading costs.
Ultimately, this could be passed on to the end market
resulting in an increase of prices of devices. Besides the
financial implication, trade tensions and protectionism also
introduce significant complexity throughout the supply
chain and its processes. This is forcing the industry to
relook at its global supply chain. Read more in: Our supply
chain, How we manage risk and Risk factors.
Expanding R&D investments
In the rapidly evolving semiconductor industry, access to
the latest technologies, chip designs and manufacturing
processes is the basis for competition. R&D is an ever
bigger priority and expense. Chipmakers are faced with
supporting applications and end markets that are
becoming increasingly complex. Traditional
semiconductor companies are challenged to diversify their
portfolio, due to the rise of tech platform companies
moving toward in-house chip design.
In addition, the incremental costs of executing innovation
are rising, requiring higher levels of R&D investments to
achieve the same goals. Getting products to the market
faster is essential – or the chipmakers risk missing the
boat. As a result, there is increased pressure to get
solutions to the customers early. Read more in: Innovation
ecosystem, Risk factors and Financial performance.
Changing landscape
To capitalize the convergence of megatrends such as AI,
IoT, 5G and autonomous vehicles, the industry is investing
significant amounts in assets that can unlock value across
the portfolio.
The global semiconductor industry has shown
tremendous growth in recent years and this is expected to
continue. The industry is refocusing on increasing scale
and proficiency in core competencies as well as
expanding into new capabilities and new markets.
Mergers, acquisitions and joint ventures are expected to
be key parts of the chip market strategy, with deals
focusing on emerging technologies. Read more in:
Semiconductor industry trends and opportunities, Our supply chain
and Risk factors.
Taking action on climate change
Climate change is an urgent matter around the world. It is
a global challenge that requires global responsibility to
limit a temperature rise to well below 2°C. The industry has
a role to play.
The semiconductor manufacturing process consumes
large volumes of energy and water resources. Driving
Moore’s Law in enabling shrink and, at the same time,
improving computing power and storage capacity, fuels
the demand for these resources. New architectures and a
new way of looking at the entire ecosystem will be
required to enhance energy and water resource
efficiency. To meet these challenges, the semiconductor
industry has to reduce power consumption. Read more
in: Climate and energy.
30
ASML ANNUAL REPORT 2021 SWOT analysis
Acting on the global trends and developments in the semiconductor industry and in society is an important factor in the
success of our business, as well as in creating value for our stakeholders. Using these external and internal factors, as
well as current and future potential, we have evaluated our company's competitive position in the environment we
operate in. The following table provides a brief overview of our strengths, weaknesses, opportunities and threats (SWOT).
More information on how we manage the topic can be found in the reference sections.
Strengths +
• Technology leadership
(Read more in: Our products and services, Innovation ecosystem)
• Market leadership
(Read more in: Our products and services, Our markets, Customer intimacy)
• Collaborative & enduring innovation
(Read more in: Innovation ecosystem)
• World-class workforce with 'can-do' mentality
(Read more in: Our core values, Our people)
• Strong financial position
(Read more in: 2021 Highlights, Financial performance)
Weaknesses –
• Maturity of resources and processes to support rapid
growth
(Read more in: Our people, How we manage risk)
• Limited cost leadership advantage
(Read more in: Operational excellence, CFO financial review, How we manage risk)
• Increasing complexity of our products and technology
(Read more in: How we manage risk)
Opportunities ä
• Riding the tech megatrends
(Read more in: Semiconductor industry trends and opportunities, Our strategy)
Threats æ
• Geopolitical tensions
(Read more in: Semiconductor industry dynamics, How we manage risk)
• Holistic lithography portfolio expansion
(Read more in: Our products and services, Our strategy)
• Supply chain disruption
(Read more in: Our supply chain, How we manage risk)
• Emergence of new customers in semiconductor industry
(Read more in: Semiconductor industry dynamics)
• IP technology leadership pressure
(Read more: in How we manage risk)
• Raising brand awareness
(Read more in: Our people)
• Intense competition in certain markets
(Read more in: How we manage risk)
• Increasing sustainability drive
(Read more in: Our strategy, Circular economy, Climate and energy)
• Competition for talent
(Read more in: Semiconductor industry dynamics, Our people, How we manage risk)
• Outbreaks and the consequences of climate change
(Read more in: How we manage risk, Climate and energy)
31
ASML ANNUAL REPORT 2021 Our strategy
The long-term growth of the semiconductor
industry is based on the principle that the
power, cost and time required for every
computation on a digital electronic device are
continuously reduced by a combination of
shrinking – increasing the density of
transistors on microchips – and system scaling
– improving microchip design, materials and
architecture.
For the next decade, we believe that Moore’s Law will
continue to evolve from cost of power and time, through
system scaling, to measuring energy and time efficiency
combined. This means that the semiconductor roadmap
will continue to drive scaling in four areas:
• Device-level scaling through new transistor structures
and associated materials
• Circuit scaling through optimizing microchip circuit
designs
• Dimensional scaling through shrink
• Architectural scaling through 3D-integrated circuits
Scaling fuels the need for advanced semiconductor
solutions, where dimensional scaling (shrink) is key to
improving circuit density and cost. To drive affordable
scaling into the next decade, chip manufacturers’
roadmaps require continued shrink. Lithography is the key
enabler for shrink, since it is the process used to pattern
the structures on a microchip.
We invest in a technology-based innovation roadmap that
enables the continued shrink of microchips by enhancing
resolution with EUV, together with the holistic scaling of
overlay and pattern fidelity control. Furthermore, we also
invest in continued innovations in DUV and metrology and
inspection technology, which supplement the power of
EUV-led shrink. This is how we pursue our long-term
strategic vision.
We innovate across our entire product portfolio at the
same pace as our customers through large and sustained
investment in research and development. To accelerate
our product development, we engineer in parallel, not
sequentially, all the while guarding the product’s quality,
reliability, manufacturability and serviceability. This
enables us to get our innovations into the hands of
chipmakers faster. We collaborate with chipmakers to
understand how our technology best fits their needs,
including their challenges and visions of the future. It is
through this collaboration and trust that we can build for
today and develop for tomorrow.
Five pillars of our core strategy
To realize our long-term strategic vision within the
semiconductor industry, we continue to drive our core
strategy, which we define around five major pillars:
strengthen customer trust, holistic lithography and
applications, DUV competitiveness, EUV 0.33 NA for
manufacturing and EUV 0.55 NA insertion.
Strengthen
customer trust
Enhance operational excellence capabilities, commonality
of parts and sustainability by focusing on the needs of our
customers. Drive improvements in product performance and
energy efficiency, re-use and reductions in costs and waste.
Holistic
lithography and
applications
Build a winning position in edge placement metrology and
control to support customer needs by delivering leading
solutions for in-device metrology. Integrate complete product
portfolio into a holistic lithography solution to optimize and
control lithography performance.
DUV
competitiveness
Continue our innovation leadership, enabling execution
of customer roadmaps by driving DUV to the highest level of
performance. Expand our installed base and support customer
needs through continuous improvement and operational excellence.
EUV 0.33 NA for
manufacturing
Secure high-volume manufacturing performance and
enhance the value of EUV technology by extending the product
portfolio for future nodes. Improve cost effectiveness for our
customers through system performance improvement and extend
the lifetime of the installed base through upgradability and service.
EUV 0.55 NA
insertion
Insert EUV 0.55 NA (High-NA) in Logic and DRAM for high-
volume manufacturing from 2025 onwards to support customer
roadmaps by simplifying patterning schemes and decreasing
defect density for Logic and DRAM.
32
ASML ANNUAL REPORT 2021 Our sustainability strategy
Through our sustainability strategy that comprises five strategic areas – Climate & energy, Circular economy, People,
Innovation ecosystem and Responsible supply chain – we continue to advance our corporate responsibility to create
long-term value for our stakeholders as well as contribute to the United Nations’ Sustainable Development Goals (SDGs).
We want to ensure sustainable impact while providing the best value for our stakeholders today and in the future. Staying
focused on what matters for our business and stakeholders, is the cornerstone of our strategy. Through a materiality
assessment, we identify and assess the topics that are most relevant to our stakeholders and sustain ASML's long-term
business growth. Read more in: Non-financial statements - Materiality assessment.
For more than a decade, we have been committed to sustainability through multifaceted sustainability programs. We aim
to address the issues that are most relevant to us and our stakeholders as part of our duty towards corporate
responsibility.
Climate
& energy
Circular
economy
People
Taking every step to lower our footprint to achieve zero
emissions across our operations. While increasing productivity
of our products, we are also working toward enhancing the
energy efficiency of our products.
Minimizing waste, maximizing resources to extract the
maximum value from the materials we use and repurpose
our products across their life cycles.
Empowering individuals for the collective good
to ensure our employees are proud to work for us
and engaged with our ambitions as a company.
Innovation
ecosystem
We don't innovate in isolation to ensure the fast pace
of innovation in our value chain. We develop technology
together with the help of our partners and collaborative
knowledge network.
Responsible
supply chain
Setting the bar higher for our world-class supplier
network to achieve the innovations we strive for,
by ensuring we conduct our business in a sustainable
and responsible manner.
Our current sustainability strategy was launched in 2018
for the time period 2019–2025, focusing on five strategic
sustainability areas. Over the past years, we have shown
continuous improvement and consistent performance
while gradually expanding our scope. However, the
evolution of our company and the increasing demand for
transparent reporting on environmental, social and
governance (ESG) aspects of sustainability have made us
re-assess our sustainability strategy in 2021.
To this end, we have updated our materiality assessment
for the remaining period of 2022–2025, based on major
sustainability topics and their relative importance to our
business operations. The outcome of this assessment
served as the basis for ASML to reshape and reformulate
our long-term sustainability ambition and targets for 2025
and beyond to strengthen the correlation between our
stakeholder expectations and our sustainability strategies.
Raising the bar on ESG sustainability
At ASML, we aim to make positive contributions to a
digital and sustainable future with lithography products
and services that enable further shrink. As a responsible
organization, we want to do more to become a leader in
sustainability, using our innovation strengths to get there.
We believe digital technologies are the cornerstone of a
sustainable society. Enabled by microchips, they form the
heart of tools and solutions that can help society make
progress and address global challenges, such as tackling
climate change by reducing energy consumption and
greenhouse gas (GHG) emissions.
Our products continue to support the continuation of
Moore's Law, which makes computation, communication
and countless aspects of our lives more energy efficient.
Pursuing our vision, we develop lithography technology to
33
ASML ANNUAL REPORT 2021 continue to produce microchips that are three times more energy efficient every two years. In addition, we are helping
our customers to minimize the use of materials and energy required to produce advanced microchips.
We have defined a roadmap to get us to net zero waste disposal to landfill by 2030 and net zero value chain emissions
by 2040. We aim to achieve this with a diverse, engaged and talented workforce and a strong network of innovation
partners, all with a keen eye for the needs of a more sustainable society. To be successful, we need to embed this ESG
ambition into our corporate culture, mindset and everyday operations.
Our ESG sustainability roadmap 2022–2025
Building on our current sustainability strategy and the progress we have made, we have re-assessed and are currently
enriching our roadmaps toward 2025. We look at our impact at various levels, from society at large to our own
operations. As a result of this extensive re-assessment, we have consolidated the material issues and our impact areas
to nine sustainability themes categorized by the environmental, social and governance (ESG) aspects of our company,
business and operations.
Category
Environmental
Social
Governance
Themes
Energy efficiency & climate action
Circular economy
Attractive workplace for all
Innovation ecosystem
Responsible supply chain
Valued partner for our communities
Integrated governance
Stakeholder engagement
Transparent reporting
Environmental
We develop lithography technology to continue to produce
microchips that are more energy efficient with each new
generation, replacing many energy-inefficient
technologies, products and services. Reducing our
environmental footprint and managing our waste – both
from our operations and the use of our products and
services – is key to our circular economy approach and
sustainability practices.
We maintain our ambition to achieve carbon neutrality with
net zero emissions in our operations (scope 1 and 2) by
2025. At the same time, we raise our ambition on scope 3
emissions. Through close collaboration with our tier-1
suppliers we aim to achieve net zero emissions in our
supply chain by 2030. In addition, through industry
collaboration on a joint roadmap, we strive toward net zero
emissions for our products’ use at our customers (scope
3) by 2040.
Social
As a multinational technology company, we impact many
people’s lives, both directly and indirectly. Driven by our
values and commitment to corporate responsibility, we
want to have a positive role in society – for our employees,
the communities around us, and everyone involved in our
innovation ecosystem and supply chain.
through trust, empowerment and accountability. We also
play an active role in the communities around us. We aim
to be a valued and trusted partner, improving the quality of
life for all, with a special focus on people in underserved
communities.
We strengthen innovation and nurture young
entrepreneurship in our industry and innovation ecosystem.
We collaborate closely with our customers and partners in
our value chain to help them achieve their goals and realize
new technology and applications. We strive to meet industry
social, ethical and environmental standards, and we require
our suppliers to meet them as well.
Governance
With the growth of the company, organizational structures
have become more complex. We champion good
integrated corporate governance, of which independence,
accountability and transparency are the most significant
elements. These are also the elements on which a
relationship of trust, respect and mutual benefit between
us and our stakeholders – shareholders, customers,
suppliers, employees and society – can be built.
Continuous stakeholder engagement, in which we
embrace open dialogue and knowledge-sharing through
various channels and at a variety of levels, is important in
our innovation-driven industry and helps us to identify
areas of improvement.
We aim to provide the best possible employee experience,
wanting the talent we need to choose to work for us and
want to stay with us for the long run. We foster a culture
where different identities, backgrounds, talents and
passions are valued and celebrated, and we enable our
leadership to bring out the best in people – leading
To achieve our ambitions within the timeframe set, we
focus on strengthening our organization’s governance
structure to ensure that each project on our ESG
sustainability roadmap is embedded in operational
business plans and is best-equipped to meet its targets.
34
ASML ANNUAL REPORT 2021 Reader’s guidance on ESG topics in this
annual report
The 2021 Annual Report outlines ASML’s strategy, programs
and performance during the 2021 calendar year. In terms of
sustainability performance, we refer to the five strategic
areas of sustainability – Climate & energy, Circular economy,
People, Innovation ecosystem and Responsible supply
chain – consistent with our disclosure since 2019.
While we have launched our updated ESG focus areas on
ASML’s Investor Day on September 29, 2021, the process
of defining the metrics to measure our performance and
success was underway and implementation will start in
2022. We will report on our updated ESG ambitions using
this set of metrics per our 2022 Annual Report.
35
ASML ANNUAL REPORT 2021 Our
performance
in 2021
36
ASML ANNUAL REPORT 2021 Resources
(actuals 2020)
Financial
Environmental
Social
Governance
(€4.6bn)
€10.8bn
Net cash provided by
operating activities
€4.6bn
(€4.7bn)
Long-term debt including
current portion
€10.1bn
Total shareholders’ equity
(€13.9bn)
(7)
7
Manufacturing sites
1,689 TJ
Energy consumption
(1,412 TJ)
30,842 FTE
Total employees
(26,481 FTE)
Two-tier
Board structure
122
(120)
Nationalities
€27m
Training and development
(€12m)
Code of Conduct
Applies to all employees
Challenge, Collaborate
and Care
Core values
Our purpose
Unlocking the potential of people and society by pushing technology to new limits
Our strategy
Strengthen
customer trust
Holistic lithography
and applications
DUV
competitiveness
EUV 0.33 NA
for manufacturing
EUV 0.55 NA
insertion
2021 outcome (actuals 2020)
Financial
Environmental
Social
Governance
€5.50
(€2.75)
Proposed annualized
dividend per share
€8.6bn
(€1.2bn)
Share buyback
€5.9bn
Net income
€14.36
Earnings per share
(€3.6bn)
(€8.49)
(85%)
(15.4 kt)
39.4 kt
CO2 scope 1 and 2 net footprint
77%
Material recycling rate
305 kg
Waste generated per
€m revenue
(360 kg)
(80%)
78%
Employee engagement score
5.4%
(3.8%)
Attrition rate
€41.7m
(€35.8m)
Support in the community
and ecosystem
(9)
396
(229)
Speak-up reports
6
Supervisory Board meetings
4
Number of SB Committees
(4)
Long-term stakeholder value
Financial
Environmental
Social
Governance
Shareholder
• Long-term organic growth
• Capital return
• Robust financing policy
Customer
• Enabling new technology
Supplier
• Strategic partnerships
Employee
• Sustainable campus
Customer
• Waste reduction
• Energy-efficient patterning
Supplier
• Waste reduction
• Sustainable production
Society
• Reduce environmental
footprint
Employee
• Positive employee experience
• Career opportunities
• Employee welfare
Society
• Affordable technology
• Community welfare
• Innovative ecosystem
Supplier
• Responsible sourcing and
production
• Employee creation
Shareholder,
Customer, Supplier,
Employee, Society
• Responsible business
partner
• Operate with highest
standard of ethics, integrity,
and respect
• Transparent reporting
• Fair tax payment
Sustainable impact
37
ASML ANNUAL REPORT 2021 How we create value
The success of our business depends on
strong, sustainable relationships with all
stakeholders in the value chain to achieve the
desired innovations in semiconductor
technology. We use input from stakeholders
and trends in our industry and society to
develop our strategy, our products and
services. We define our stakeholders as our
shareholders, customers, suppliers,
employees and the society we operate in.
We are committed to creating long-term value for our
stakeholders and generating broader impact towards the
UN's Sustainable Development Goals (SDGs). We base
our value creation model on the framework developed by
the International Integrated Reporting Council (IIRC), in
which we modeled the capital resources we use for our
business activities in the executing of our strategy, to the
financial, environmental, social and governance topics.
Each capital resource is interrelated, and business
activities often require a mix of capital. For each topic we
developed performance indicators that measure progress
on the outcomes against the capital resources used. We
aim to use our capital resources in the most effective way
by maximizing their potential value and minimizing their
negative impact as part of our continuous drive to improve
and to generate long-term value for all of our stakeholders.
Stakeholder value
Our purpose and strategy is aimed at creating both short-
and long-term value through our financial, environmental,
social and governance focus areas and topics. The short-
term value – time horizon of one year – is expressed in the
2021 outcome performance indicators. More information
on our progress can be found in subsequent sections of
this annual report. The long-term value – time horizon of
five to ten years – is described below, which is
categorized in the value created per stakeholder. Lastly we
have linked our long-term impact along the entire value
chain to the SDGs set by the United Nations. We focus on
five SDGs where we can make the greatest impact: SDG 4
Quality education, SDG 8 Decent work and economic
growth, SDG 9 Innovation and infrastructure, SDG 12
Responsible production and consumption, and SDG 13
Climate action.
Long-term stakeholder value
Our core values – challenge, collaborate and care – are a
key contributor to our culture aimed at long-term value
creation and as such an important enabler in the execution
of our strategy. We define our long-term value for all our
stakeholders as follows:
Shareholder value
Our large and sustained investments in research and
development to execute our business strategy enable us
to maintain our position as a leader in holistic lithography.
Our innovations contribute to the long-term growth of the
semiconductor industry, which contributes to our solid
financial performance and capital return policy.
Customer value
As one of the world’s leading manufacturers of chip-
making equipment, we invest in innovations that enable
the continued shrink of microchips. With EUV 0.33 NA and
the next-generation EUV 0.55 NA platform, we pursue the
continuation of Moore’s Law. This allows our customers to
develop ever-more powerful chips for new applications
and devices. At the same time, we help our customers to
reduce their costs and environmental footprint by
embedding circularity principles in our products.
Supplier value
As we grow and our innovations enter ever-higher levels of
complexity, we want our suppliers to grow with us. We
innovate together with our supplier network, sharing
knowledge and tapping into each other’s technology
expertise. Long-term relations, close cooperation and
transparency with our suppliers are key to our success.
Employee value
Our workforce has grown steeply in recent years, almost
doubling from around 16,500 FTE in 2016 to over 32,000
FTE in 2021. For example, with 16,727 employees at our
headquarters in Veldhoven, the Netherlands, we are a
major employer in the community. We are a proud
employer of 122 nationalities, allowing for diverse points of
view in our quest to develop the best ideas. Developing
our people is crucial to the sustained success of our
business, so we invest in their career development and
well-being.
Societal value
With our continuous innovations, we enable new
technology that supports the growth and transformation of
the semiconductor industry, using artificial intelligence to
offer new applications and services to address society’s
needs. Through our innovation ecosystem we nurture
innovation by giving back to society, such as by sharing
our expertise with universities and research institutes,
supporting young tech companies, and promoting STEM
education worldwide. We also develop groundbreaking
technology to reinforce our innovation footprint and
minimize our environmental footprint. We do this by
seeking to minimize waste and maximize the value of
material we use, and execute our carbon footprint strategy
and product energy efficiency strategy.
38
ASML ANNUAL REPORT 2021 Sustainable impact
We believe the chip industry is in a unique position to
tackle socioeconomic and environmental challenges. We
focus on the challenges and sustainability areas that are
most relevant to our stakeholders and where we believe
ASML can have the greatest impact in the long term. Read
more in: Non-financial statements - Materiality assessment
and Semiconductor industry trends and opportunities - SWOT
analysis). We focus on those United Nations Sustainable
Development Goals on which ASML can make a real
difference.
39
ASML ANNUAL REPORT 2021 Financial
Our performance in 2021
40
ASML ANNUAL REPORT 2021 Message
from the CFO
Dear Stakeholder,
Strong growth in semiconductor end markets, driven by
the acceleration of the digital infrastructure, and increasing
lithography intensity on future advanced nodes fuel
demand for our products and services. These dynamics
drive the growth of our company, in terms of sales, our
workforce and the investments we make to increase our
capability in support of our customers’ wafer demand.
With our continued investments in technology leadership
we have created significant value for all our stakeholders
and we have the right tools in place to achieve continued
sustainable growth for the years ahead.
Record net sales in 2021
This was another growth year for ASML, setting a record
with €18.6 billion in net sales, an increase of €4.6 billion.
The COVID-19 crisis has accelerated digitalization
worldwide, which has led to a strong increase in demand
from our customers across all market segments from both
advanced and mature nodes.
Logic system sales grew by €2.2 billion, or 30%. This was
due to customers continuing to see strong demand for
both advanced and mature nodes in support of the
ongoing digital transformation, which includes secular
growth drivers, such as 5G, AI, virtual reality, gaming,
simulation and visualization applications, and the
intelligent cloud and edge that will be an integral part of
the growing digital infrastructure. Memory system sales
grew by €1.1 billion, or 39%, as a result of strong end-
market demand for servers and smartphones.
In EUV we see an increased layer adoption by customers
in Logic and DRAM. Adoption is expected to continue to
grow to reduce patterning complexity and cost and
support our customers' surging demand. This led to EUV
system revenue of €6.3 billion in 2021, an increase of €1.8
billion compared to 2020. We successfully shipped and
recognized 42 EUV systems in 2021, including our first
NXE:3600D for use in high-volume manufacturing. In total
we shipped 26 NXE:3600Ds in 2021. Compared to the
NXE:3400C the NXE:3600D has around 30% better
performance in product overlay and offers 15% to 20%
increased throughput productivity.
Net service and field option sales grew by €1.3 billion, or
35%, driven by an increase in the sales of productivity,
overlay and focus upgrade packages, in combination with
a growing installed base. With the global chip shortage,
our customers have pulled forward demand for our
Roger Dassen (Executive Vice President and Chief Financial Officer)
productivity enhancement packages, which provide the
most effective and efficient way to increase wafer output
as they can be installed quickly.
Challenges in our supply chain
To meet the strong demand across our entire product
portfolio, we have been driving down our manufacturing
cycle times and we are working with our supply chain to
increase our output capability for EUV as well as DUV. In
the process of increasing capacity to meet the increased
demand, the after-effects of the COVID-19 crisis were felt
in the form of some materials shortages in our supply
chain. We worked closely with our suppliers and
customers to address the materials shortages to support
the increased worldwide demand across all our business
lines, but these shortages did result in the late start on the
assembly of a number of systems. In addition, we
experienced issues in the start-up of our new logistics
center. As a consequence of these factors and the high-
demand environment, our customers are more frequently
requesting fast shipments, where we expedite the delivery
of systems by shipping before completion of the normal
Factory Acceptance Tests (FAT), in order to bring systems
into production as quickly as possible. This resulted in
revenue recognition being delayed from shipment until
after formal customer acceptance tests are completed in
the field.
As a result of the start-up issues at our new logistics
center in Veldhoven and the materials shortages in our
supply chain, we experienced delays in shipments. In
order to address our customers' needs for additional wafer
capacity, we expedited delivery of productivity upgrades.
Overall, our capabilities to support the strong customer
demand has contributed to total net sales growing by 33%
in 2021.
Outlook
The ongoing digital transformation and current chip
shortage further fuel the need to increase our capacity to
meet the current and expected future demand. We expect
continued growth in our Logic business assuming that
customer demand remains strong for both advanced and
mature nodes. For Memory this year's growth is expected
to continue into 2022 as lithography tool utilization remains
41
ASML ANNUAL REPORT 2021 very high, while customers indicate they see strong
demand growth for DRAM and NAND. To meet demand
for this expected bit growth, customers will need to add
capacity as well as continue to make node migrations. As
customers migrate to more advanced nodes we also
expect to see an increase in EUV demand for Memory.
Our services and upgrades business will continue to scale
as our installed base grows, and we expect significant
demand for upgrades, with increasing contribution from
EUV service revenue as this technology ramps in volume
production.
Strong gross profit, net income and cash provided by
operating activities
Gross profit as a percentage of net sales increased from
48.6% in 2020 to 52.7% in 2021, mainly attributable to the
NXE 3600D and DUV immersion systems value
proposition and continued growth in our installed base
business. We continue to drive profitability of our EUV
systems, and as a result, we achieved 50% system gross
margin in 2021. Looking ahead, we will continue to seek
improvements in the margins in both systems and service
via cost reduction and delivering more value, leading to
higher selling prices.
Our effective tax rate increased to 15.2% mainly due to an
increase in the innovation box tax rate in the Netherlands
as of 2021. We expect our effective tax rate to be
approximately 16% in the coming years.
Our strong net income and continued working capital
improvement initiatives resulted in Net cash provided by
operating activities increasing by €6.2 billion in 2021. The
significant growth allowed us to return record amounts to
our shareholders through dividends and our share
buyback programs. In 2021 we repurchased shares for a
total consideration of €8.6 billion and paid dividends
totaling €1.4 billion. We expect continued strong cash
returns to shareholders for next year.
Overall, it was another record year for ASML, driven by the
ongoing digital transformation and current chip shortage.
The secular growth trends, as part of the digital
transformation to a more connected world, and countries
pushing for technological sovereignty are fueling future
demand across all market segments at both the advanced
and mature nodes.
Roger Dassen
Chief Financial Officer
42
ASML ANNUAL REPORT 2021 Financial performance
Leading the semiconductor industry by innovation, we have the right tools
in place to execute our long-term financial strategy and expect to achieve
continued sustainable growth for the years ahead.
€18.6bn
Total net sales
€16.9bn Asia
€1.6bn US
€0.1bn EMEA
52.7%
Gross margin
€10bn
Capital return
€8.6bn Share buyback
€1.4bn Dividend paid
€14.36
Earnings per share
(basic)
ASML operations update on key performance indicators
The following table presents the KPIs used by our Board of Management and senior management to measure
performance.
Year ended December 31 (€, in millions, unless otherwise indicated)
Sales
2020
%1
2021
%1
Total net sales
Year-over-year increase in total net sales (%)
Net system sales
Net service and field option sales
Sales of lithography systems (in units) 2
Immersion systems recognized (in units)
EUV systems recognized (in units)
Profitability
Gross profit
Income from operations
Net income
Liquidity
Cash and cash equivalents
Short-term investments
Net cash provided by operating activities
Free cash flow 3
13,978.5
18.3
10,316.6
3,661.9
258
68
31
6,797.2
4,051.5
3,553.7
6,049.4
1,302.2
4,627.6
3,626.8
18,611.0
33.1
13,652.8
4,958.2
309
81
42
48.6
29.0
25.4
9,809.0
6,750.1
5,883.2
52.7
36.3
31.6
6,951.8
638.5
10,845.8
9,905.5
1. As a percentage of total net sales.
2. Lithography systems do not include metrology and inspection systems.
3. Free cash flow is a non-GAAP measure and is defined as net cash provided by operating activities (2021: €10,845.8 million and 2020: €4,627.6 million) minus purchase of
property, plant and equipment (2021: €900.7 million and 2020: €962.0 million) and purchase of intangible assets (2021: €39.6 million and 2020: €38.8 million). We believe
that free cash flow is an important liquidity metric for our investors, reflecting cash that is available for acquisitions, to repay debt and to return money to our shareholders
by means of dividends and share buybacks. Purchase of property, plant and equipment and purchase of intangible assets are deducted from net cash provided by
operating activities in calculating Free cash flow because these payments are necessary to support the maintenance and investments in our assets to maintain the
current asset base.
43
ASML ANNUAL REPORT 2021 Operating results of 2021 compared to 2020
Year ended December 31 (€, in millions)
Net system sales
Net service and field option sales
Total net sales
Cost of system sales
Cost of service and field option sales
Total cost of sales
2020
10,316.6
3,661.9
%1
73.8
26.2
2021
13,652.8
4,958.2
%1
73.4
26.6
13,978.5
100.0
18,611.0
100.0
(5,169.3)
(2,012.0)
(7,181.3)
(37.0)
(14.4)
(51.4)
(6,482.9)
(34.8)
(2,319.1)
(12.5)
(8,802.0)
(47.3)
Gross profit
6,797.2
48.6
9,809.0
52.7
% Change
32.3
35.4
33.1
25.4
15.3
22.6
44.3
15.7
33.2
N/A
66.6
27.8
66.9
85.2
64.0
(2,200.8)
(15.7)
(2,547.0)
(13.7)
(725.6)
213.7
6,750.1
(3.9)
1.1
36.3
(44.6)
6,705.5
(0.2)
36.0
(1,021.4)
5,684.1
(5.5)
30.5
(544.9)
—
(3.9)
—
4,051.5
29.0
(34.9)
4,016.6
(551.5)
3,465.1
88.6
3,553.7
(0.2)
28.7
(3.9)
24.8
0.6
25.4
199.1
5,883.2
1.1
31.6
124.7
65.6
Research and development costs
Selling, general and administrative costs
Other income
Income from operations
Interest and other, net
Income before income taxes
Income tax expense
Income after income taxes
Profit from equity method investments
Net income
1. As a percentage of total net sales.
For a comparison of ASML’s operating results for the year ended December 31, 2020 with the year ended December 31,
2019, please see CFO financial review - Financial performance - Operating results of 2020 to 2019 of ASML’s annual
report on Form 20-F for the year ended December 31, 2020.
Total net sales and gross profit
We achieved another record year in 2021, with Total net sales increasing by €4,632.5 million, 33.1%, reflecting an
increase in Net system sales of 32.3%, and an increase in Net service and field options sales of 35.4% compared
to 2020.
Revenue growth from each of the Logic and Memory markets and our installed base
(€, in millions)
2021
2020
2019
€9,589
€4,064
€4,958
€18,611
€7,393
€6,565
€2,923
€3,662
€13,978
€2,431
€2,824
€11,820
Logic
Memory
Service and field options
We saw growth in both Logic and Memory markets, which is a reflection of our customers' drive to innovate and continue
to invest in future technology nodes to facilitate the acceleration of the digital infrastructure and the push for
‘technological sovereignty’, and increase manufacturing capacity to address the global chip shortage. Logic demand for
both advanced and mature nodes continues to be strong, driven by the digital transformation and distributed computing.
Memory demand continues to grow, fueled by end-market demand for servers and smartphones.
44
ASML ANNUAL REPORT 2021 Increase in net sales driven by strong demand across all technologies
(€, in millions)
€1,043
€309
€164
€1,296
€18,611
€1,821
€13,978
2020
EUV
ArFi
KrF
Metrology &
inspection
Service & field
options
2021
The increase in Net sales was driven by a strong increase in demand from our customers across all technologies. Our
DUV and EUV sales volumes increased to keep up with customer demand driven by the ongoing digital transformation
and current chip shortage. We recognized revenue for 42 EUV systems in 2021 compared to 31 EUV systems in
2020. Our system sales across our DUV technologies increased from 227 units in 2020 to 267 units in 2021.
In addition to the growth in EUV and DUV, Service and field options sales were also a key driver for our overall growth in
net sales. The increase is driven by an increase in the sales of productivity, overlay and focus upgrade packages, which
provide the most effective and efficient way to increase wafer output quickly, supported by a growing installed base. EUV
continues to contribute in a more meaningful way to net service and field option sales as our installed base continues to
grow and our customers continue to run more EUV systems in their high-volume production.
Gross profit
Gross profit increased as a result of both an increase in
sales and profitability. Gross profit as a percentage of net
sales increased from 48.6% in 2020 to 52.7% in
2021, mainly attributable to improvement in our EUV
profitability as we deliver more value to our customers,
DUV product mix and improved profitability in our installed
base business through a ramp in production and an
increase in the number of productivity upgrades.
Research and development costs
R&D costs were €2,547.0 million in 2021 as compared to
€2,200.8 million in 2020. The increase is across each of
our EUV, DUV and Applications programs supporting our
holistic lithography solutions, with the most significant
investments going toward our roadmap to continue
enhancing EUV high-volume manufacturing, as well as our
development of EUV 0.55 NA (High-NA). In 2021, R&D
activities mainly related to:
€6,797
48.6%
€9,809
52.7%
2020
2021
Gross profit (€, in millions)
Gross margin %
€2,201
15.7%
2020
€2,547
13.7%
2021
R&D costs (€, in millions)
% of net sales
• EUV – Continued investments in EUV high-volume manufacturing, finalizing the development of the NXE:3600D,
investments in the development of the NXE:3800E, and further improving availability and productivity of our installed
base systems. In addition, our roadmap includes High-NA, our next-generation EUV 0.55 NA systems, to support our
customers with future nodes for both Logic and DRAM.
• DUV – Ramp-up of our latest-generation immersion system NXT:2050i and introduction of the dry system XT:860N.
Continued developments for the next generation of scanners shipping in 2022, NXT:2100i for the most critical DUV
layers, and NXT:870 for break-through productivity in the KrF dry market. Productivity improvements continue to be
developed to boost wafer-per-day at customers' installed base.
• Applications – Continued investment in Single Beam Inspection, E-Beam Metrology and Optical Metrology (Yieldstar
ADI and IDM solutions). In addition, securing our Multibeam Inspection roadmap and continuously expanding our
investment in the holistic software applications space.
45
ASML ANNUAL REPORT 2021 Selling, general and administrative costs
SG&A costs increased by 33.2% from 2020 to 2021 due to
an increase in the number of employees, as well as
investments in digitalization and cybersecurity to support
our growth. Our selling, general and administrative costs
as a percentage of net sales in 2021 remained at 3.9% (in
2020 3.9%).
€545
3.9%
2020
€726
3.9%
2021
SG&A costs (€, in millions)
% of net sales
Income taxes
The effective tax rate increased to 15.2% in 2021,
compared to 13.7% in 2020. The higher rate is mainly due
to an increase in the innovation box rate in the Netherlands
changing from 7% to 9% as of 2021.
€552
13.7%
2020
€1,021
15.2%
2021
Income tax expense (€, in millions)
ETR %
Net income
Net income in 2021 amounted to €5,883.2 million,
or 31.6% of total net sales, representing €14.36 basic net
income per ordinary share, compared to net income in
2020 of €3,553.7 million, or 25.4% of total net sales,
representing €8.49 basic net income per ordinary share.
€8.49
418
2020
€14.36
410
2021
EPS (basic)
Weighted average # of shares
46
ASML ANNUAL REPORT 2021 Cash flow analysis
This year we achieved a record setting cash flow performance. Our Net cash provided by operating activities increased
to €10.8 billion (2020: €4.6 billion) driven by the strong worldwide demand from our customers and our working capital
initiatives. We also continued our efforts to return cash to our shareholders. We were able to return a record amount of
cash to our shareholders through our share buyback program and growing dividends. In 2021 we purchased €8.6 billion
(2020: €1.2 billion) of shares and paid out a total dividend of €1.4 billion (2020: €1.1 billion).
We continue to heavily invest in our next-generation technologies in order to secure future growth opportunities which
requires significant cash investment in net working capital, capital expenditures and R&D. However, our capital allocation
policy remains unchanged.
Year ended December 31 (€, in millions)
Cash and cash equivalents, beginning of period
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Effect of changes in exchange rates on cash
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, end of period
Short-term investments, end of period
Cash and cash equivalents and short-term investments
Purchases of property, plant and equipment and intangible assets
Free cash flow 1
2020
3,532.3
4,627.6
(1,352.2)
(753.0)
(5.3)
2,517.1
6,049.4
1,302.2
7,351.6
(1,000.8)
3,626.8
2021
6,049.4
10,845.8
(72.0)
(9,891.7)
20.3
902.4
6,951.8
638.5
7,590.3
(940.3)
9,905.5
1. Free cash flow is a non-GAAP measure and is defined as net cash provided by operating activities (2021: €10,845.8 million and 2020: €4,627.6 million) minus purchase of
property, plant and equipment (2021: €900.7 million and 2020: €962.0 million) and purchase of intangible assets (2021: €39.6 million and 2020: €38.8 million).
Net cash provided by (used in) operating activities
The significant increase in Net cash provided by operating activities of €6.2 billion compared to 2020, is mainly due to an
increase in Net income of €2.3 billion and increase in down payments from our customers in connection with our
continued working capital improvement initiatives.
Net cash provided by (used in) investing activities
The decrease in Net cash used in investing activities of €1.3 billion compared to 2020, is mainly due to the maturity of
most of our short-term investments offset with limited purchases of new short-term investments as significant cash was
used for our share buyback program. In 2021 we sold the non-core business acquired as part of the Berliner Glas
acquisition for €0.3 billion, while Berliner Glas was acquired for total consideration of €0.3 billion in 2020.
Net cash provided by (used in) financing activities
The significant increase in Net cash used in financing activities of €9.1 billion compared to 2020, is mainly due to an
increase of €7.4 billion in the shares purchased through our share buyback program resulting in a total of €8.6 billion
purchased shares. Additionally, we were able to increase our dividend by €0.3 billion to a total of €1.4 billion. In 2020, we
had net proceeds from issuances of notes of €1.5 billion, with no issuance in 2021.
As of December 31, 2021, management has determined that ASML has sufficient working capital for the company’s
present requirements.
47
ASML ANNUAL REPORT 2021
Long-term growth
opportunities
Trend information
We expect 2022 to be another growth year with an
expected net sales increase of around 20% compared to
2021 driven by healthy Logic demand and growth in the
Memory market. The expected growth is driven by
increasing sales on all platforms, as well as growth in our
installed base business. The positive industry momentum
around innovation and expanding new markets further
strengthen our confidence in the 2022 outlook and our
2025 growth scenarios.
In Logic, we see the digital transformation that is underway
as we move to a more connected world. The broadening
application space and secular growth drivers translate to
very strong demand for both advanced and mature nodes.
With this continued strong demand, we expect Logic
system revenue to be up more than 20% year-on-year.
In Memory, we also expect continued growth of our
business this year. Customers have indicated systems are
operating at higher utilization levels. As customers are
making the technology transition to support projected
growth, additional capacity additions are expected to be
required. Subsequently, this is expected to trigger
equipment demand. As a result, it seems likely that we will
see strong lithography equipment demand from the
Memory market in 2022 with a system revenue to be up
around 25% year-on-year.
Customers adopted EUV, and with increasing customer
confidence in EUV, this is translating into more layers in
their next nodes, for Logic production as well as the
adoption in Memory. We expect to ship around 55
systems of which we expect revenue from 6 systems to be
deferred to 2023 due to fast shipments. Despite this shift,
we expect 25 percent growth in our EUV system revenue
in 2022.
In our DUV and Applications business, we expect growth
in both immersion and dry systems, as well as continued
demand for metrology and inspection systems. We expect
revenue growth of over 20% for non-EUV shipment
revenue.
We expect further growth in our Installed Base
Management business to around 10% year-on-year as the
demand for services will continue to expand as our
installed base grows. Additionally, we anticipate an
increased contribution to service sales from EUV as more
and more systems start running wafers in volume
manufacturing, as well as expect significant demand for
upgrades, particularly in EUV, as customers utilize
upgrades as a quick way to increase capacity.
Our expectations and guidance for the first quarter of
2022 can be summarized as follows:
• Total net sales between €3.3 billion and €3.5 billion
• Gross margin of around 49%
• R&D costs of around €760 million
• SG&A costs of around €210 million
• Annualized effective tax rate between 15% and 16%
The trends discussed above are subject to risks and
uncertainties. Read more in: Special note regarding forward-
looking statements.
Outlook 2025 and 2030
This decade is all about distributed computing, bringing
the cloud closer to devices at the edge, and through
connectivity the computing power will be available to all of
us ‘on device’ enabling a connected world. These global
megatrends in the electronics industry, supported by a
highly profitable and fiercely innovative ecosystem, are
expected to continue to fuel growth across the
semiconductor market. This translates to increased wafer
demand at both advanced and mature nodes.
The push of countries around the globe for technological
sovereignty is expected to drive increased capital
intensity. This means that the industry is expected to make
significant investments in wafer capacity, with increasing
lithography spending. The semiconductor end markets,
such as automotive, data centers, industrial and consumer
electronics, are expected to grow more than 7% year on
year until at least 2025, fueling the strong growth of our
business based on an increased mix of EUV while the
demand for DUV is expected to remain strong across all
wavelengths. To achieve this, we and our supply chain
partners are actively adding and improving capacity to
meet future customer demand.
On September 29, 2021 we presented at our Investor Day,
our upward revised long-term growth opportunity for 2025
in which we re-modeled our previous sales scenarios in a
low and high market due to the rapid evolution of
digitalization we have seen in the past two years.
Customers’ strong capital expenditure growth is expected
to continue, translating to an expected lithography capex
CAGR of 13.8% (2017-2025). This compares to previous
expected CAGR estimate of 7.5% over the same period,
as shown at our Investor Day 2018.
48
ASML ANNUAL REPORT 2021 Based on the different market scenarios, we believe we have an opportunity to reach annual sales in 2025 between
approximately €24 billion and €30 billion, with a gross margin between approximately 54% and 56%.
2025 Low market
2025 High market
Total lithography systems demand
Total lithography systems demand
EUV 0.55 NA
EUV 0.33 NA
DUV immersion
DUV dry
Total
5
48
70
190
313
ASML sales
System sales
Installed base
management
Total
€18.0bn
€6.0bn
€24.0bn
EUV 0.55 NA
EUV 0.33 NA
DUV immersion
DUV dry
Total
5
70
87
290
452
ASML sales
System sales
Installed base
management
Total
€23.0bn
€7.0bn
€30.0bn
Gross margin: 54% - 56%
Moving beyond 2025, we also announced that we see that the growth opportunities will continue and that we expect our
Systems and Installed Base Management to provide an annual sales growth rate of around 11% for the period 2020-
2030, based on third-party research and our assumptions.
Our sales potential is primarily based on assumed organic growth. We continuously review our product roadmap and
have, from time to time, made focused acquisitions or equity investments to enhance the industrial synergy of our
product offering. Based on such reviews and the assessment of clear potential product and value synergies, we may
also evaluate and pursue focused merger and acquisition activities in the future. Within this growth ambition, we expect
to continue to return significant amounts of cash to our shareholders through a combination of growing annualized
dividends and share buybacks.
Lastly, we seek to continuously improve our performance on ESG Sustainability KPIs and upgrade the KPIs in 2022
based on our ESG Sustainability strategy roadmap update to accelerate progress in close collaboration with our
partners. Read more in: Our position in the semiconductor value chain - Our strategy.
49
ASML ANNUAL REPORT 2021 Environmental
We are committed to reducing our environmental footprint both
from our operations and the use of our products and services.
50
ASML ANNUAL REPORT 2021 Climate and energy
We are committed to lowering our carbon footprint wherever we can to achieve
net zero emissions across our operations. While increasing productivity of our
products, we are also working toward enhancing the energy efficiency of our products.
1,689 TJ
Energy consumption
92%
Renewable electricity
39.4 kt
Net emissions footprint
(scope 1 & 2)
per €m revenue
0.5 kt
Value chain emission intensity
(scope 3)
Carbon footprint strategy
Over the past years, we have made significant steps in our
performance and achievements with regard to reducing
our scope 1 and 2 carbon footprint and energy
consumption, as well as maturing our scope 3 calculation.
Although we see many positive results and are making
progress, we also realize that we are not there yet.
Our scope 1 and 2 carbon footprint strategy is built on
three principles: reducing energy consumption wherever
we can, using only green renewable energy, unless no
other solution is possible or reasonably feasible, and
compensating for the residual emissions.
Climate change is a global challenge that requires urgent
action by everyone, including us. The challenge to limit the
temperature rise to well below 2°C is a global
responsibility. At ASML, we’re committed to reducing our
carbon footprint. In terms of carbon footprint, we identify
three impact areas: the direct emissions from fossil fuels
(scope 1) used on our premises, the indirect emissions
from the electricity consumption (scope 2) on our
premises, and the indirect emissions in our value chain
(scope 3) from upstream supply chain and downstream
use of our products by customers.
In our carbon footprint strategy, we have determined our
ambition and set targets in all three areas. We are taking
direct responsibility over the CO2 emissions from our own
operations (scope 1 and 2), for which we aim to achieve
net zero CO2 emissions by 2025. We also recognize that
our footprint extends beyond this to our value chain (scope
3). Our main influence on scope 3 emissions is the carbon
footprint of our products which we aim to reduce by
enhancing their energy efficiency while increasing their
productivity.
We identify and assess the impact of climate-related risks
and opportunities using the assessment guidelines of the
Task Force on Climate-related Financial Disclosures
(TCFD). Read more in: Our TCFD Recommendations: climate-
related disclosure, available on www.asml.com.
51
ASML ANNUAL REPORT 2021 Our target is to achieve scope 1 carbon neutrality by 2025, we aim to do this by direct energy saving of 100 TJ (or 2.5 kt) by
executing the more than 25 projects we have defined in our master plan, adding renewable production of energy on our
sites, optimizing the use of our m2 and relocating our employees to more energy-efficient offices (BREEAM certified) and
implementing an off-setting strategy for the remaining emissions. The main components of the energy-saving master plan
are improving the energy efficiency of technical installations, improving energy management of our operations, and
increasing the production of our own renewable energy. The table below, includes the top three key projects.
Key projects
Energy grid
Implement adiabatic humidification and elimination of steam generation
Air change reduction (feasibility study)
Total estimated
energy saving -
annual (in TJ)
Estimated scope 1
reduction: neutral
gas (in TJ)
Estimated scope
2 reduction:
electricity (in TJ)
50
12
20
-40
-12
0
-10
0
-20
With regard to scope 2, our ambition is to increase the
share of direct green energy purchases (so-called bundled
renewable electricity) from renewable electricity produced
close to our premises in the Netherlands, and to reduce
the share of certificates. For the US and Asia, our ambition
is to purchase renewable energy attribute certificates
(respectively RECs and IRECs) and monitor the evolution
of renewable energy in those countries. Our scope 1 and 2
emissions reduction targets are consistent with reductions
required to keep warming to 1.5°C and are approved by
the Science Based Targets initiative (SBTi) – under
category 'near-term'.
We recognize that environmental impact goes beyond our
operations. In general, most of the environmental impact
of energy consumption in our value chain (scope 3) comes
from the greenhouse gas emissions of our suppliers
(upstream) and the use of our products at our customers
(downstream). Results show that the indirect emissions
(scope 3) from upstream and downstream value chains
account for around 98% of the total emissions footprint
(scope 1, 2 and 3). Of this, indirect emissions in the value
chain, the category ‘downstream' – use of sold products
at our customers’ sites – accounts for nearly 65%, and the
category ‘upstream' – emissions related to the goods and
services we buy – accounts for 30%. The remaining 5% of
our scope 3 emissions relates to, among other things,
activities linked to transportation, business travel, and
commuting.
Our scope 3 target for 2025 is to reduce the intensity level
compared to our 2019 baseline of 0.55. The intensity is
measured by the total scope 3 emissions (in kilotonnes)
normalized to the total revenues (in € million). Taking into
account the change in product mix (an increase in the
number of EUV systems sold) and the fact that our output
in terms of product units manufactured is expected to
increase, the overall emissions in the entire value chain are
expected to rise. Our supplier sustainability program is a
key enabler to reduce the upstream footprint. Read more in:
Our performance in 2021 - Social - Our supply chain. And by
executing our product energy efficiency strategy, we can
reduce our downstream footprint. Read more in: Product
energy efficiency strategy.
52
ASML ANNUAL REPORT 2021 Scope 1
Direct emissions
from our operations
Scope 2
Indirect emissions from
energy use across our
operations
Scope 3
All other indirect emissions
in the value chain from make
and use of our products
Status 2021:
19 kt
Target 2025:
Net zero
Status 2021:
20 kt
Target 2025:
Net zero
Status 2021:
8,800 kt
Target 2025:
Reduce intensity
winter and energy-efficient cooling in summer. This
project, together with the implementation of adiabatic
humidification in two of our cleanrooms, is expected to
lead to a reduction of around 1.7 million m3 of natural gas
which equals 52 TJ.
Energy savings
Energy savings are mainly achieved by using more energy-
efficient technical installations and improving our overall
production processes. Our efforts focused on recovery of
exhaust heat and reduction of the energy consumption of
our cleanrooms, where maintaining the right conditions is
energy intensive.
In 2021, we saved 13 TJ per year of energy thanks to
projects executed in the Netherlands and in Taiwan. In the
Netherlands, the largest project was completed and led to
nearly 8 TJ savings in 2021 and will lead to around 11 TJ
per year onwards. In Hsinchu, Taiwan, we managed to
save 3 TJ energy in 2021 by optimizing the use of air-
conditioning systems through time-outs.
What we achieved in 2021
In 2021, we expanded our environmental reporting scope
to 57 locations – covering more than 95% of our
worldwide CO2 emissions – up from the 20 locations in the
previous reporting scope, which covered around 90% of
our emissions. The extended scope gets us ready for
reporting against science-based targets principles in the
near future. The combination of our growth and increase in
reporting scope has resulted in an increase of our gross
scope 1 and 2 emissions by around 19% compared to
2020. In terms of using renewable electricity, we also need
to take the expanded environmental reporting scope into
account, therefore the share of renewable electricity
decreased to 92% compared to the 100% in 2020. Our
ambition remains unchanged – for emissions resulting
from our operations (scope 1 and 2), we aim to achieve
carbon net neutrality (scope 1 and 2) by 2025.
Scope 1 emissions
Compared to our peers in the semiconductor industry, our
energy consumption and related carbon footprint is
relatively low. As a manufacturer of lithography equipment,
our main direct CO2 emissions come from fossil fuels –
mainly natural gas. The vast majority of the natural gas
consumption is used for heating of our buildings and
humidification of the cleanroom to keep them at set
temperature and humidity levels. For more information,
see the scope 1 breakdown chart.
Over the 2010–2021 timeframe, we executed nearly 100
energy-saving projects that have resulted in a cumulative
reduction of over 260 TJ. Over the same period, our
natural gas consumption remained stable, despite
significant growth in the number of cleanrooms and
offices (over 10,000 m2 added since 2010).
Energy grid
In 2021 we started with a multi-year project to implement
an energy grid to re-use waste heat for offices on our site
in Veldhoven, the Netherlands. The energy grid is a two-
pipe loop that makes waste heat available for heating in
53
ASML ANNUAL REPORT 2021Scope 1 - Natural gasconsumption breakdown60%25%5%10%HeatingHumidificationAbatementGeneral ASML signs 10-year green power
purchase agreement with RWE
In 2020. ASML and RWE, one of the world’s leading
renewable energy companies and a major player
in global energy trading, signed a power purchase
agreement (PPA). Under the terms of the 10-year
agreement, ASML will be provided with 263 GWh of
green electricity per year from RWE. This agreement
brings ASML closer to its objective of carbon neutral
electricity by 2025.
The power will be delivered from a portfolio of various
renewable energy sources across different technologies:
three new RWE onshore wind farms in the Netherlands,
a Belgian offshore wind farm and a Dutch solar plant.
The two Dutch RWE wind farms Oostpolderdijk and
Westereems are located near Eemshaven. The offshore
wind farm Noordwester 2 is located off the coast of
Zeebrugge in Belgium. The third wind farm and the solar
plant are both situated near Borssele in the Netherlands.
Continuing our drive to reduce energy consumption even
further, we want to achieve direct energy savings of 100 TJ
by 2025 by executing around 25 projects in five different
sites worldwide, as defined in our energy savings master
plan.
Real-estate portfolio
As we grow as a company, we strive to optimize our real
estate portfolio. Optimizing the use of every square meter
in our portfolio contributes to reducing our environmental
footprint – each square meter saved is a square meter we
don’t need to heat, cool, ventilate or light up.
When building new offices and manufacturing sites, we
take the opportunity to make our buildings as
environmentally sound as possible. With an eye on future
growth, for example, our new campus in Veldhoven, the
Netherlands, is designed with a strong sustainability focus.
Its design and use of materials will be assessed on
sustainability performance using BREEAM guidelines with
score of ‘excellent’. For 2025, we strive to implement the
most suitable green building certifications in new
constructions – such as BREEAM, LEED and G-SEED – in
the countries where we operate.
Scope 2 emissions
Electricity accounts for nearly 80% of the energy we use
at ASML. Most of our electricity consumption relates to
the manufacturing of chipmaking equipment – from
assembly to testing lithography and other systems – and
maintaining consistent climate conditions, such as
constant temperature, humidity and air quality.
In 2021, we secured a 10-year purchase agreement for
green electricity for our installations in the Netherlands
which will enable us to achieve our goal of using 100%
renewable electricity in the Netherlands. For our electricity
consumption in the US, we also achieved 100% renewable
energy. The renewable market situation in Asia is slightly
different and more challenging – we are investigating
various options to meet our ambitions there as well.
In 2021, we operationalized the 3,700m2 solar panels
installed on our campus in Veldhoven, the Netherlands,
which are expected to provide the equivalent of around 2.3
TJ per year. We plan to expand the share of solar panels on
our sites in the coming years in Europe, the US and Asia.
54
ASML ANNUAL REPORT 2021Scope 2 - Overalldistribution of electricity80%5%15%Cleanroom facilitiesOffice buildingsOther Scope 3 emissions
We calculate our scope 3 emissions using guidance from the Greenhouse Gas Protocol – the organization that provides
widely used international standards for emissions reporting. We are continuously seeking to improve the data quality of
our scope 3 calculations. In 2021 we made another step by requesting CO2 emission data directly from our suppliers
through our Suppliers Sustainability program. Recognizing that we depend on our suppliers, we also encourage our
value chain partners to work with us to jointly reduce our carbon footprint. Read more in: Our performance in 2021 - Social - Our
supply chain.
Scope 3 emissions trend
i
)
t
k
n
i
(
n
o
s
s
m
e
G
H
G
i
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
3,900
400
2,200
Baseline 2019
5,300
700
2,400
2020
5,650
280
2,900
2021
7,600
600
3,300
2025 projection
Upstream (purchased goods & services)
Own operations related
Downstream (use of sold products)
Intensity rate
1.00
0.50
0.00
I
t
n
e
n
s
i
t
y
r
a
e
t
Our environmental management system
We have an environmental management system (EMS) in place that helps us monitor our energy and emissions, improve
performance, and enhance efficiency. Our EMS is integrated into our combined environmental, health and safety (EHS)
management system. All our facilities operate on the basis of this EHS management system – the former HMI locations in
Tainan (Taiwan) and San Jose (US) have been successfully integrated. Our EHS management system is ISO:14001
certified and structured in accordance with ISO:45001 requirements. This certification gives our stakeholders confidence
in our commitment to achieving our environmental goals.
We measure progress in our emissions reductions by monitoring our scope 1, 2 and 3 emissions, representing three key
performance indicators. Our participation in the annual assessment by the Carbon Disclosure Project (CDP), a non-profit
global disclosure program, also helps steer our environmental initiatives. Our score in the most recent CDP Climate
Change 2021 assessment is C, which is the same level as the sector average.
55
ASML ANNUAL REPORT 2021
Product energy efficiency strategy
With a growing demand for enhanced chip functionality,
the complexity and energy consumption of the overall
microchip patterning process, including from our
lithography systems, is also increasing. A major benefit of
the wider adoption of our EUV lithography systems is the
ability to simplify patterning schemes to create the most
critical layers of a microchip, which reduces the need for
applying difficult multiple patterning schemes – this
translates into less overall fab energy and materials use to
fully process a wafer when compared to a multi-patterning
process. However, the laser light plasma technology of
EUV requires high electrical power input, therefore our
product energy efficiency strategy is focused on EUV. Our
challenge is to increase the energy efficiency of our
products.
We have set ourselves the target to reduce the overall
energy consumption of our future-generation EUV
systems by 10% compared to the 2018 baseline model –
NXE:3400B – by 2025, in spite of a increasing productivity.
Our second target is at the same time to reduce the
energy use per exposed wafer pass by 60%, as compared
to the NXE:3400B (baseline 2018). To achieve this, we have
developed and are executing an EUV energy efficiency
roadmap.
Reducing overall energy use
The EUV light source is the key focus area of our current
engineering efforts to reduce energy consumption
because it requires the larger portion of an EUV system’s
total energy consumption. The roadmap includes
optimizing the sequence of the CO2 laser to produce the
plasma for creating EUV light, for example by turning the
CO2 fire off when the system is in idle mode and reducing
the CO2 firing between exposures. Our longer-term goal is
eventually to cut the CO2 fire between exposures
altogether. This requires a feasibility study from our
research team and our suppliers, to make sure that the
laser beam path remains stable.
Another area for energy reduction is the cooling water
strategy. We identified ways, together with our suppliers,
to use cooling water of a higher temperature to remove the
heat in the EUV source and electronics cabinets. This will
reduce the amount of energy needed to cool the system,
through recirculated process cooling water. To make this
happen, we need to make sure that modules such as the
drive laser can operate at a higher temperature, which we
are currently developing together with our suppliers.
Creating EUV light
The larger portion of an EUV system’s energy
consumption is used to operate the laser-produced
plasma source to create EUV light. Molten tin droplets
of around 25 microns in diameter are ejected from a
generator. As they move, the droplets are hit first by a
lower-intensity laser pulse. Then a more powerful laser
pulse vaporizes and ionizes the flattened droplet to
create a plasma that emits EUV light. This conversion
process from laser to EUV light using tin droplets takes
place 50,000 times per second, and is the most energy-
intensive step. By increasing conversion efficiency, we
can decrease an EUV system’s energy consumption at
constant wafer output. Making this happen, while making
sure that this will not negatively affect other functionalities
of the EUV system, is a key challenge for our R&D teams.
Other challenges include developing materials and
coatings that can deal with higher EUV intensities, and
improving the heat management of optical components –
this includes the wafer itself, which heats up through the
exposure to EUV light during the production process.
Tackling these challenges requires ongoing innovation and
collaboration within our innovation ecosystem of
customers, suppliers and knowledge institutions.
Reducing energy use per exposed wafer
By reducing the total energy consumption by 10% in
absolute terms and at the same time doubling the
productivity compared to the baseline model NXE:3400B,
we aim to reduce the energy use per exposed wafer pass
by 60%. To increase the productivity in number of wafers
produced, we are continuously working on improving the
conversion efficiency of wall-plug power to EUV light and
on optimizing sequences, control schemes and other
components, such as higher reflectivity mirrors and faster
stages.
Most of our product efficiency enhancements are also
offered as upgrades for the installed base of our
lithography systems. For our customers, this helps to
improve the economic value of the installed base, increase
productivity and reduce the lithography energy use per
wafer.
56
ASML ANNUAL REPORT 2021 Our progress in 2021
In 2021, we measured the energy efficiency of our NXE:3600D system. Power consumption compared to its predecessor
(NXE:3400C) was the same at 1.3 MW, but productivity at 30 mJ/cm2 dose increased from 136 wafers per hour (wph) to
160 wph. We achieved this higher throughput by improving the transmission of the optical column and by improving
wafer management, reducing the so-called scanner overhead. Compared to our baseline model, we achieved
6% reduction system energy consumption. At the same time, the energy use per exposed wafer pass has reduced by
37%. This shows that we are on track in achieving our target of 10% EUV system energy consumption reduction by 2025
and 60% reduction in energy use per exposed wafer pass.
In 2021, we installed dilution systems aimed at simplifying and reducing energy use of the hydrogen abatement system.
Our EUV systems need hydrogen for protecting the optics in the EUV scanner and source. For newer production cabins
we chose to dilute and vent hydrogen after use, instead of combusting it. This saves energy and emissions both from
methane combustion – for keeping the hydrogen flame stable – and from lowering cooling water needs.
In 2021, we continued our investigation on the use of warmer cooling water. We studied how it can be applied in the drive
laser and started to engage with our customers and with SEMI (the global industry association representing
semiconductor manufacturing supply chain), by taking the lead in an extensive update of the S23 energy standard. As
this involves significant changes to the hardware both of our suppliers and of the facility installations in our customers’
fabs, this project is part of our long-term plan to reduce the wall-plug power needed per wafer pass by 60% by 2025
(baseline year 2018).
The tables below provide an overview of the system achievements in terms of output and energy usage to achieve this
output.
Platform1
System
Year of energy measurement
Energy consumption (in MW)
Throughput (wph)
DUV
Immersion
NXT:1980Di
NXT:2000i
NXT:2050i
NXT:1980Ei
NXT:1960Bi +
PEP-B
2015
2017
2020
2021
2021
0.14 MW
0.14 MW
0.13 MW
0.14 MW
0.13 MW
275
275
295
295
250
Energy use per exposed wafer pass (in kWh)
0.51 kWh
0.51 kWh
0.45 kWh
0.48 kWh
0.51 kWh
Wafers per year
2,409,000
2,409,000
2,584,200
2,584,200
2,190,000
Platform1
System
Year of energy measurement
Energy consumption (in MW)
Throughput (wph)
Energy use per exposed wafer pass (in kWh)
Wafers per year
DUV
Dry
XT:1460
2020
XT:860M
2017
NXT:1470
2020
YS350E
2017
YieldStar
YS375F
2019
YS-380
2021
0.07 MW
0.06 MW
0.11 MW
0.01 MW
0.01 MW
0.01 MW
240
0.28 kWh
2,102,400
209
0.27 kWh
1,830,840
277
0.38 kWh
2,435,280
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Platform1
System
Year of energy measurement
Energy consumption (in MW)
Throughput (wph)
EUV
20 mJ/cm2
dose
EUV
30 mJ/cm2 dose
NXE:3350B
NXE:3400B
NXE:3400C NXE: 3600D
NXE:3600D
2015
2018
2020
2021
1.15 MW
1.40 MW
1.31 MW
1.32 MW
59
107
136
9.64 kWh
1,191,360
160
8.27 kWh
1,401,600
Energy use per exposed wafer pass (in kWh)
19.49 kWh
13.08 kWh
Wafers per year
516,840
937,320
1. Dose energy in mJ' refers to the energy required per expose per cm2. The number of 'wafers per year' calculated assumes 100% uptime and 100% utilization according
to the SEMI S23 standard.
57
ASML ANNUAL REPORT 2021 Advanced patterning with EUV helps to limit growth in energy and water use and GHG emissions
More advanced microchips mean smaller features, which need shorter wavelengths in lithography to manufacture them. With a
single exposure of DUV light at 193 nm, for example, the smallest feature of the image of a microchip pattern reaches its physical
limit around 40 nm. However, by using two or more exposures of the same pattern – so-called multiple patterning – it is possible to
image details at 20 nm with 2 or 10 nm by 4 exposures and additional process steps.
Over the past decades, multiple patterning with DUV has become mainstream in semiconductor manufacturing, at the cost of
having to go through the same process steps multiple times, which increases production cycle time and environmental impact.
As compared to DUV, EUV at 13.5 nm enables a more efficient chip-manufacturing process – because of the higher resolution of an
EUV system, several exposures and process steps can be replaced by a single exposure and fewer process steps to do patterning
of a chip. According to a study conducted by imec1, with EUV the number of non-lithography processing steps for some critical
layers can be reduced by up to three to five times – this reduces production cycle time significantly. The fab also benefits from
reduced energy and water usage, resulting from the lower number of deposition, etching and cleaning steps.
With increasing productivity of our EUV systems – which allows creating more advanced and more energy-efficient microchips
faster – the energy consumption of the total patterning process per wafer will thus be lower using EUV lithography, as compared to
complex multi-patterning strategies with DUV.
Our next-generation EUV systems, EUV 0.55 NA (High-NA), will enable further shrink and partly eliminate double exposure
schemes, again replacing multiple 0.33 NA exposures with a single 0.55 NA exposure. With EUV 0.55 NA, the number of non-
lithography processing steps can therefore again be reduced. This will effectively limit the total energy consumption of the
patterning process per wafer even further.
1 Source: M. Garcia Bardon et al, DTCO including Sustainability: Power-Performance-Area-Cost-Environmental score (PPACE) Analysis for Logic Technologies, IEDM2020
58
ASML ANNUAL REPORT 2021 Climate and energy KPIs
The table below shows the key performance indicators (KPIs) and the related 2025 targets. Read more in: Non-financial
statements - Non-financial indicators - Climate and energy for our performance indicators (PIs) and related results. The non-financial data
may include a degree of uncertainty, because of limitations in measurement method and assumptions applied. Read more
in: Non-financial statements - About the non-financial information - Reporting indicators.
KPI
System energy efficiency NXE:3x00 1
System
Energy consumption (reduction in % of baseline 2018)
Throughput (wph)
Energy use per exposed wafer pass (reduction in % of baseline
2018)
Wafers per year
Renewable electricity (of total electricity purchased)
Renewable energy attributes (in kton)
Fossil fuels consumed (in TJ) by location2
Veldhoven
Wilton
Linkou
San Diego
San Jose
Tainan
Other
Total
CO2 footprint (in kt) - Gross 3
Scope 1 - Direct emissions from fossil fuels in our operations
Scope 2 - Indirect emissions from energy consumption
Scope 3 - Indirect emissions from total value chain
Total footprint (in kt) - Gross
CO2 footprint (in kt) - Net 3
Scope 1 - Direct emissions from fossil fuels in our operations
Scope 2 - Indirect emissions from energy consumption
Scope 3 - Indirect emissions from total value chain
Total footprint (in kt) - Net
2019
2020
2021
Target 2025
-
-
-
-
-
97%
137
159
111
0
46
0
0
0
316
2019
16.9
141.4
6,500.0
6,658.3
2019
16.9
5.3
6,500.0
6,522.2
NXE:3400C
NXE:3600D
NXE: 3600D
-6%
136
-6%
160
-26%
-37%
1,191,360
1,401,600
100%
140
141
112
0
40
0
0
0
293
2020
15.4
139.8
8,400.0
8,555.2
2020
15.4
0
8,400.0
8,415.4
92%
145
184
127
0
43
5
0
8
367
2021
19.3
165.1
8,800.0
8,984.4
2021
19.3
20.1
8,800.0
8,839.4
Reduction 10%
from baseline 2018
(1.40 MW)
Reduction 60%
from baseline 2018
(13.1 kWh)
100%
Target 2025
Target 2025
Net zero
Net zero
Reduce intensity
rate from baseline
1. System-energy efficiency is measured according to the SEMI S23 standard and scaled to 100% productivity of our systems.
2. San Jose, Tainan and 'other' have been in scope for this indicator since 2021. 'Other' includes the locations with more than 250 FTE combined.
3. The guidance from the Greenhouse Gas Protocol – the organization that provides widely used international standards for emissions reporting – is used for the calculation
of the emission scope. Market-based conversion factors are used to calculate the scope 1 and scope 2 CO2 emissions in kt.
Contributing to the UN's Sustainable Development Goals
Our ambitions, commitments and programs as described in this chapter contribute to the following SDGs. For further
information on the performance, read more in: Non-financial statements - Non-financial indicators - Climate and energy.
SDG target
SDG target 13.1 - Strengthen resilience and adaptive capacity to climate-
related hazards and natural disasters in all countries
How we measure our performance
• Energy efficiency of our products measured per
wafer pass
• Renewable electricity strategy
• Scope 1 and 2 emissions
• Optimize real estate to enhance energy efficiency
59
ASML ANNUAL REPORT 2021
Circular economy
Minimizing waste and maximizing resources to extract the
maximum value from the materials we use and repurpose
our products across their life cycles.
305 kg
Waste generated
per €m revenue
77%
Material recycling rate
90%
ASML PAS 5500 systems still
in use (from total ever sold)
€1.2bn
Value of parts re-used
We are committed to a circular economy and ensuring that any materials we use retain and generate as much value as
possible for us and for our partners in the ecosystem. To minimize waste and maximize resources, we focus on three
core strategies:
• Reduce waste in our operations
• Re-use parts and materials from the installed base
• Recycle mature products through refurbishment
The cornerstone of our circular approach is the modular design of our products. It enables us to upgrade a system to a
higher performance level at a customer site rather than having to replace the entire product. We can further extend the
lifetime of our products by refurbishing systems after they have been used in the most advanced chipmaking factories,
repurposing them for other customers and semiconductor environments. As a result of our approach, nearly 94% of the
lithography systems we’ve ever sold across our whole portfolio, are still in use at customer sites, highlighting our ability to
contribute to a circular economy.
Our circular economy approach
Reduce
Re-use
Recycle
Re-use program
Waste recycling
As-New program
Extending life of ASML systems
Field upgrades
Field repair
Materials
Upstream
Parts supply
Upstream
ASML
Midstream
Customers
Downstream
Waste treatment
collectors
Downstream
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ASML ANNUAL REPORT 2021
Reduce waste in our operations
Within our operations, the main waste streams are:
• Non-hazardous waste, such as packaging material, product-related waste from parts resulting from upgrades or
defects, and general waste. This category also includes construction waste, which results from building activities.
• Hazardous waste, for example the chemicals we use in our manufacturing processes
We have set ourselves two targets to reduce our waste footprint. The first target is to reduce our waste intensity – the
amount of waste generated in kg per € million revenue – by 50% in 2025 compared to baseline year 2019. The second
target is to increase our material recycling to 85% by 2025. These targets include hazardous and non-hazardous waste.
To achieve these targets, we are focusing on circular procurement, driving awareness across our company, implementing
(process) efficiency and improvement projects and supporting employee initiatives. We prioritize solutions to reduce, re-
use and recycle our waste as much as possible, rather than sending it to an incineration plant or landfill.
Our results and progress
Managing waste from our operations is a complex issue and relies on having detailed and accurate insight into waste
streams to and from ASML. We manage our waste through proper classification, separation and safe disposal. Although
we’ve developed procedures to monitor and measure waste that leaves our premises, it’s much harder to gain insight on
the waste streams of our customers.
In 2021, we generated 5,878 tonnes of waste from the activities on our sites and 77% of this was recycled (from 85% in
2020). Compared to 2020, the total amount of waste increased by nearly 12% (from 5,257 tonnes), mainly due to both the
increase of our reporting scope from 20 locations in 2020 to 57 locations in 2021 and the growth of the company. Waste
reduction programs for the expanded scope need to be defined and implemented, aiming at 2022.
Distribution of waste streams (total: 5,878 tonnes)
1%
22%
6%
71%
Non-hazardous waste recycling
Hazardous waste recycling
Non-hazardous waste disposed
Hazardous waste disposed
Non-hazardous waste
Non-hazardous waste accounted for 93% (5,483 tonnes) of our total waste in 2021, of which the vast majority was
diverted through recycling. We reduced non-hazardous waste through several ongoing programs, such as:
• Circular IT life cycle: After four years of use, we give all functioning computers and laptops a second life. In the case of
defective computers, we recycle clean, separated streams of recycled plastic, iron, steel, copper, aluminum, glass and
precious metals. This has led to over 30,000 kg of materials recycled, which is a sharp increase of 25% compared to
24,000 kg recycled in 2020.
• Flexible cleanrooms: These are cleanrooms that can be moved between locations and assembled quickly, while
providing the same standards and performance as our current fixed cleanrooms. More than 95% of the materials used
in the flexible cleanroom set-up are re-usable with a lifespan of more than 30 years. In 2021 we used the flexible
cleanroom concept for five service warehouses.
• Other examples are local waste reduction initiatives initiated by our employees, such as plastic recycling and working
with re-usable gloves in cleanrooms.
61
ASML ANNUAL REPORT 2021 • Construction waste: As we expand our operations, we try to make sure that waste from construction activities are
recycled wherever we can. Construction waste accounted for 3% (199 tonnes) of our total waste generated in 2021
(compared to 4% in 2020), of which 85% was recycled. In 2021, we added three work centers and one logistics
warehouse to our Veldhoven campus. In our real-estate portfolio management we apply BREEAM standards which
emphasize sustainability through the circular use of materials. For example, almost all of the material from a
demolished sprinkler basin was re-used in our new buildings and we recycled ‘old’ cleanroom suits into acoustic wall
panels for our meeting rooms.
Hazardous waste
To produce and operate our products and systems, we need to make use of hazardous substances. In 2021, hazardous
waste accounted for nearly 7% (395 tonnes) of our total waste generated. Of this, nearly 88% was recycled. Hazardous
waste can include lamps, batteries, hazardous liquids, empty packaging from hazardous materials, and cleaning wipes
and filters. Liquids, including acetone and sulfuric acid, are the majority of our hazardous waste streams.
The use of hazardous substances makes us subject to a variety of governmental regulations relating to environmental
protection (as well as employee and product health and safety). These include transport, use, storage, discharge,
handling, emission, generation, and disposal of hazardous substances.
Distribution of hazardous waste (total: 395 tonnes)
2%
4%
1%
Hazardous liquids
Other hazardous waste (e.g. packaging, filters, lamps, etc.)
Cleaning wipes
Batteries
93%
62
ASML ANNUAL REPORT 2021Distribution of non-hazardous waste (total: 5,483 tonnes)35%25%12%6%6%5%4%3%4%WoodGeneral wastePaper and cardboardElectronicsMetalsOther non-hazardous wastePlasticOrganic wasteConstruction waste Re-use parts and materials from
installed base
We are committed to re-using system parts, tools,
packaging and other materials, whenever practical in our
value chain to reduce and prevent waste and reduce
costs. We believe that re-use is a learning opportunity for
all of us in the value chain, so we work closely on this with
our customers and suppliers. Our target is to increase our
rate of re-use to 95% of defective parts in ASML factories
and in the field by 2025.
Saving materials through reclaim
Our Reclaim program in San Diego (US) focuses on re-
using a constant flow of returned parts. This program
includes design for reclaim, improving the ability to re-
use and recondition the assemblies to enable further
increase of circularity of parts and materials, so that they
can either be re-used for spare parts or incorporated
into new system builds. This program has been running
successfully for more than a decade. In 2021, we achieved
To achieve this ambition, we focus on:
over 375,000 kg material savings.
• Design for re-use through more robust and repairable
designs at an early stage of development
• Return for re-use of transportation packaging and
materials for shipments to our customers
• Repair at local repair centers to improve parts repair
yields by reducing cycle-time of root-cause analysis and
repairs
• Remanufacture modules and parts that return from the
field to as-new quality
• Harvesting of end-of-life parts through disassembly to
re-use subcomponents
Progress and results in 2021
We accelerated our efforts on re-use, formalizing and
structuring many parts of the process. Our Re-use Board,
chaired by our Chief Operations Officer and Chief
Technology Officer, signed off on a field repair strategy
that promotes the repair of parts in local supply chains
where possible, driven by our local repair centers. We
extended our re-use policy to all product-related
packaging, parts, materials and tools, and created a
dedicated cross-sector Re-use department to drive this
change on a global scale. Whether parts returning from
the field are well-functioning, defective or unused, we are
working hard to get them back into action in as-good-as-
or better-than-new condition.
We further embedded our re-use commitment by
enhancing our Supplier Sustainability Program. Read more
in: Our performance in 2021 - Social - Our supply chain.
We have started a life cycle assessment of the NXE:3400
EUV system to gain relevant insights into designing,
developing and manufacturing our lithography systems
with a lower carbon footprint. In this assessment we
applied the life cycle assessment model for calculating the
impact of waste and waste-reduction activities, which we
developed in 2020. Similar assessment of our NXT and
EXE lithography systems is planned for 2022.
In 2021, our re-use rate of defective parts was 85% (from
around 86% in 2020).
Design for re-use
In 2021, we integrated re-use into our Product Generation
Process (PGP), as a key element of preventing waste that
will help us meet our long-term goals. Our design for re-
use methodology contains five elements – reliability,
accessibility, replaceability, repairability and re-
manufacturability – to enable the re-use of parts
throughout the entire product life cycle. This means that
re-use requirements are now part of the product design
strategy and specifications. For example, through the
modular design of our products and their components, we
make sure that future upgrades, wear parts and
components can be replaced as a single unit. Through
commonality in designing a part, it can be used in multiple
contexts in the product and even in future product
generations.
The Re-use department’s focus for 2021 was on
embedding re-use into our New Product Implementation
(NPI) programs and driving waste reduction in our ‘reverse
flows’ (materials coming back to us or to our suppliers
from the field). Work continues to resolve bottlenecks in
the execution of re-use and to clarify direction, guidelines
and ‘re-use rules’ across the business. We are also
looking to further mature our waste reporting data.
Return for re-use of transportation materials
When modules and systems are shipped, either from our
suppliers to our factories, or from our factories to our
customers, many transportation materials are used, such
as packaging, locking and parts, to ensure that the
products arrive safely. These so-called auxiliary parts
(plugs, caps, clamps, cover plates, flanges, auxiliary
brackets, etc.) are removed on arrival. Instead of throwing
them away, these are re-used at use level (the highest level
of re-use), so preventing them from ending up as waste.
Before sending these parts back for re-use, they go
through an identification process and quality check,
followed by logistic and financial processes required to
sell them back to the original module suppliers or to
ASML.
63
ASML ANNUAL REPORT 2021 We are improving the re-use of packing, locking and
transport materials from the field and factory, aiming to
return and re-use 80% or more in the next installation or
relocation. In 2021, over 4,300 tonnes of transportation
materials were re-used, up from nearly 4,000 tonnes in
2020.
Repair centers
We are extending local repair centers for service parts and
materials, and setting up global repair centers for factory
materials. There are currently local repair centers in South
Korea, Taiwan and China, with plans for all our customer
regions to eventually have one or more in place. Global
repair centers will also be set up at each of our factory
hubs in Wilton and San Diego (US), Linkou (Taiwan) and
Veldhoven (the Netherlands).
By enabling repair and re-use activities and taking
ownership of repairs in the field, we are able to reduce
logistics time, stocking of parts and our environmental
impact.
• Repair engineering and processes: Part of our new
focus is creating awareness on design for re-use, and
defining processes around how to include re-use in
redesigns and engineering changes.
In 2021, under configuration control we reduced the risk of
what we call ‘broken life cycles’ by improving the
traceability of parts. We intend to finish this improvement
by the end of Q2 2022, solving the broken life cycle issues
we now have in 4% of our parts. We also delivered some
new re-use execution processes, such as ‘harvesting at
the supplier’, enabling us to send purchase orders to
harvest parts to suppliers, embedded in our sourcing and
logistics process.
As next steps, we have defined five priorities. These
include planning of re-use before new, supplier re-use
incentives and autonomy, high-quality reverse logistics,
further embedding re-use in our Product Generation
Process (PGP), and launching re-use change and
communication campaigns across ASML and suppliers.
Remanufacture ‘As-New’ quality
When a part is re-used, our customers expect it to be as
good as, or better than, the original new part. We set high-
quality standards on ‘As-New’ parts and expect suppliers
to be involved to meet these standards. This qualification
standard and requirement is identical to the one for new
parts, meaning that the same specifications, performance
requirements, warranty, and so on, apply.
We now have over 75 ‘As-New’ release projects ongoing
at over 25 suppliers. Our ambition is to increase the use of
As-New modules in our systems to prevent unnecessary
scrapping of well-functioning parts and modules.
Re-use challenges and roadmap
We made good strides on re-use and are committed to
continuing to reduce waste streams. Building a re-use
mindset and adopting it into normal ways of working is
critical to achieving re-use and preventing scrap. For
example, by replacing scrap bins in our factories with what
we now call ‘re-use collection corners’, we encourage
employees to think of used parts as having potential rather
than being seen as waste.
To fully embed our re-use vision, however, there are
several challenges to overcome and processes to be
defined. These include:
Recycle mature products through
refurbishment
A well-maintained ASML lithography system can last for
decades and can be used by more than one fab. Many
ASML lithography systems start out in cutting-edge fabs –
once that fab needs to upgrade, the lithography systems
are given a new lease of life in a fab where the
manufacturer requires comparatively less sophisticated
chips, such as accelerometers or radio frequency chips.
Our Mature Products and Services (MPS) business
focuses on the refurbishment of the following product
families: the PAS 5500 (with around 1,800 systems at
customer sites worldwide), the TWINSCAN XT systems,
and, as of 2021, the NXT:1950-1980 systems.
Our refurbishment strategy focuses on buying back
systems that are not operational in the field, harvesting
parts from decommissioned systems, and managing the
continued availability of spare parts, which is key to the
extended lifetime service we offer for our systems. We
provide our customers with a guaranteed service roadmap
until at least 2030. This means that all support and the
necessary services and spare parts they need to maintain
their systems is expected to be available through at least
2030 and beyond.
• Configuration control: To re-use As-New parts in a
system requires traceability of those parts. This means
we need to be able to trace its history, where it comes
from, and know how many times it was used and
repaired.
• Organization: Across our operations, there are a variety
of separate processes related to return and re-use. We
need to align those to an overall end-to-end re-use
process flow.
For the TWINSCAN AT systems that are still in operation,
we focus on measures to proactively manage their end of
life by guaranteeing the availability of spare parts as long
as possible on a best-effort basis.
Our performance and progress in 2021
Thirty years after its introduction, ASML’s PAS 5500
platform is still alive and kicking. Currently, 90% of the
PAS 5500 systems we have ever built are still in use,
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ASML ANNUAL REPORT 2021 whether as refurbished tools or in its original configuration.
The PAS platform is used for a wide variety of niche
applications, from sensors to power chips and even life-
changing implantable medical devices.
coming years, we have identified and plan to execute more
than 100 redesign projects for nearly 300 parts. This is
especially relevant for electronic parts, for which the
evolution of technology has gone faster than in any other
field.
Until 2021, we have refurbished and resold well over 500
lithography systems. In 2021, we celebrated the 100th
refurbished TWINSCAN, which also marked the 20th
anniversary of our TWINSCAN refurbishment program.
New challenge – refurbishing and
upgrading first-generation NXTs
Roll-out of MPS Customer Portal in Asia
A web-based parts ordering portal has been instrumental
to the business model of Mature Products and Services
(MPS), keeping costs under control while providing an
optimal customer experience. In June 2021, following its
success in the US and Europe, the online MPS Customer
In 2021, the Mature Products and Services (MPS)
Portal went live in Asia.
business line embarked on a new challenge to refurbish
and upgrade first-generation NXT lithography machines,
The portal is designed to facilitate Billable and Volume
in addition to the PAS 5500 and XT systems. With the NXT
Parts Contract (VPC) parts sales for ASML. Paired with
platform having established its position as the workhorse
a regional hub-based logistical service, it creates an
of the semiconductor industry, there are more than 200
efficient and valuable sales channel for our customers that
first-generation NXTs still running production at customer
minimizes manual steps and potential delays. Depending
sites around the world.
on the location, customers can expect their parts to
be delivered within a few days or even – in the case of
To support the steep growth in semiconductor
expedited orders in Taiwan and South Korea – within a few
manufacturing capacity, especially in ‘More-than-
hours.
Moore’ markets with less advanced requirements,
ASML buys back these systems, refurbishes them to the
specifications of later-generation systems, and sells them
to customers that do not need the specs offered by more
advanced machines. This enables customers to purchase
an attractively-priced tool that will support their required
cost of ownership targets, while contributing to ASML’s
commitment to minimize waste and maximize resources.
Securing parts availability
We are making significant investments to ensure
continued supply of more than 2,000 service parts for our
PAS platform, either through redesigns, a parts harvesting
strategy or by finding an alternative with the same form, fit
and function. If this does not work, we are generally able
to secure components through Last Time Buy – a
supplier's 'last call' for a part or component before
production switches to its successor. Over time, when a
part is no longer available, we redesign parts.
We track the spare parts we have in our portfolio, see how
they are being used, and identify when we expect to run
out of these parts. For the PAS systems, we use this
information to update our priorities for redesigning parts.
For the AT systems, we try to continue supplying parts by
harvesting them from systems that are decommissioned
by our customers.
To secure the availability of spare parts into the next
decade, we need to replace many unavailable parts that
were designed with technology from the 1980s and 1990s
with parts based on state-of-the-art technology. This
involves a complete overhaul of these parts. For the
65
ASML ANNUAL REPORT 2021 Circular economy KPIs
The table below shows the key performance indicators (KPIs) and the related 2025 targets. Read more in: Non-financial
statements - Non-financial indicators - Circular economy for our performance indicators (PIs) and related results. The non-financial data
may include a degree of uncertainty, because of limitations in measurement method and assumptions applied. Read
more in: Non-financial statements - About the non-financial information - Reporting indicators.
KPI
Total waste generated normalized to revenue (kg/Million €) 1
Material recycling (% of total waste) 1
ASML PAS5500 systems sold still in use (in %) 2
Value of parts re-used (€, in millions)
2019
417
80%
90%
n/a
2020
360
85%
90%
1,151
Target 2025
-50% of 2019
baseline
85%
n/a
2021
305
77%
90%
1,236
1. Construction waste is excluded from the calculation of this indicator, because this waste is not resulting from the daily operations of ASML. The amount of construction
waste tends to fluctuate over the years and can therefore make the trend of the indicator unclear.
2. Due to a definition change in 2020, the KPI is based on PAS5500 systems sold. For other PAS systems it is not possible to determine the status of use mainly because
service contracts have been terminated.
Contributing to the UN's Sustainable Development Goals
Our ambitions, commitments and programs as described in this chapter contribute to the following SDGs. For further
information on the performance, read more in: Non-financial statements - Non-financial indicators - Circular economy.
SDG target
SDG target 12.2 - By 2030, achieve the sustainable management and efficient
use of natural resources
SDG target 12.4 - By 2020, achieve the environmentally sound management of
chemicals and all wastes throughout their life cycle, in accordance with agreed
international frameworks, and significantly reduce their release to air, water
and soil in order to minimize their adverse impacts on human health and the
environment
SDG target 12.5 - By 2030, substantially reduce waste generation through
prevention, reduction, recycling and re-use
How we measure our performance
• Material recovery
• Promote circular procurement
• RoHS / REACH compliance of parts used
• Waste reduction
• Increase re-use of parts and modules in our
products
• Lifetime extension of used systems
• Re-use of packaging
66
ASML ANNUAL REPORT 2021 Social
We aim to have a positive role in society – for our employees,
the communities around us and everyone involved in our innovation
ecosystem and supply chain.
67
ASML ANNUAL REPORT 2021 Our people
Empowering individuals for the collective good to ensure
our employees are proud to work for us and engaged
with our ambitions as a company.
30,842 FTE
Total employees1
17,230 Europe
7,430 Asia
6,182 US
78%
Employee engagement score
5.4%
Attrition rate
5
(listings)
Employer brand rank
6 Netherlands
6 Taiwan
14 South Korea
133 US
148 China
1 With Berliner Glas (ASML Berlin GmbH) included, which is not reflected yet in our non-financial reporting,
the total number of employees is 32,016 FTE.
Pushing the limits of technology would not be possible
without our engaged, diverse and highly competent
workforce. Our employees are critical to the performance
of our organization and our long-term success as a
company. As well as working hard to attract the world’s
top talent, we need to focus on helping them all reach their
full potential, in an environment where they are proud to
work for us and engaged with our ambitions as a
company.
We continue to experience strong growth at ASML. Our
workforce nearly doubled in size in the last five years. And
in spite of the ongoing pandemic, we had an extraordinary
year in 2021, with an over 16% increase in employees (in
FTE), a revenue increase of more than 30%, and over 20%
more product output. This rapid growth also brings
challenges. Our organization has become more complex,
our workforce is more diverse, and the expectations of our
customers and stakeholders are growing.
Our people vision
The needs of our growing workforce are changing, which
requires an environment and tools that support
collaboration, knowledge sharing and autonomy in more
diverse and interdependent teams. At the same time, we
must also continue to deliver on our commitments to our
stakeholders and manage our day-to-day challenges to
attract, onboard, develop and retain our talent.
We’ve already created a strong foundation by articulating
our purpose, vision, mission, values and leadership
expectations. To stay successful in the future, we
examined how our strengths translate to our current
reality. Hence, we define our people vision as follows: We
empower each other to thrive, fueling our growth,
happiness and business success. ASML’s people vision
sets out our ambition for the future, supporting our values
and what we stand for. Everyone throughout the
organization has an important role in this vision.
Our pathway to realizing our long-term people vision is
captured in our people strategy. For the next five years,
our roadmap focuses on three key areas:
• Inspiring a unified culture, with our values as our
compass to guide our decisions and behavior to deliver
on our strategy
• Providing the best possible employee experience,
enabling us to attract, develop and retain the best talent
• Enabling our leadership to bring out the best in people,
by leading through trust, empowerment and
accountability
Collaborating closely with the business on a day-to-day
basis, we drive several key programs, designed to provide
people with more autonomy in steering their development
and career aspirations and enabling our leaders to support
the growth of the company.
Unified culture
More than ever, we need to pay attention to anchoring
ASML’s identity deep in the organization, to help our people
embrace our values and provide a unified direction to
68
ASML ANNUAL REPORT 2021 familiarize themselves with our company strategy and
purpose.
Our company values – challenge, collaborate and care –
ensure we are all working from a commonly understood
base that can be applied across our organization, helping
us make choices that keep us true to ourselves. They also
allow teams to discuss the natural areas of friction where
these values overlap. For example, by ensuring that the
founders’ traits that brought us this far (persistence, a ‘can
do’ mentality and a belief that anything is possible), are
balanced by the right degree of care. Embedding our
values is an ongoing journey, but we aim to succeed by
applying them every day.
Building on our core values, we apply six people principles
– clarity and accountability, continuous learning, inclusion,
enabling environment, personal growth, and trust – to
guide and inspire us in our people decisions to bring the
best out of our employees.
Our progress
In addition to ongoing initiatives deployed earlier to make
our values tangible now and in the future, we launched the
‘Values in action’ program in 2021. As opposed to previous
independent annual events, such as ‘Have a safe day’,
‘Ethics week’, ‘Sustainability week’ and the ‘Volunteer fair’
we developed an ongoing program with a series of events
that explored the values through the lens of environmental,
social and governance (ESG) topics. At every event we ask
our senior leaders to outline their plans, ambitions and
commitments to ensure we live up to our values.
In 2021, we executed several 'Values in action' events
around the topics of mental health safety, the ASML
Foundation, 5 life-saving rules, Speak Up and green energy.
Employee experience
We believe a diverse and inclusive workforce provides the
necessary mix of voices and points of view required to
innovate and drive our business forward. We foster a culture
where different identities, backgrounds, talents and
passions are valued and celebrated. Therefore, we want to
offer our people the best possible employee experience at
all our sites, enabling them to develop their talent, feel
respected and work to the best of their abilities and allows
us to attract and retain the best talent.
Employee experience is the sum of all experiences an
employee gains through the interactions with the company
at each stage of the employee life cycle, from attracting and
onboarding talent to attrition. To this end we focus on
employer branding and employee engagement.
Employee engagement depends on a wide variety of factors
and activities, such as talent attraction and retention,
onboarding experience, learning and development, diversity
& inclusion, labor practices such as fair remuneration and
labor conditions, and leadership. The overall impact of these
programs on the total employee experience is measured by
we@ASML employee engagement survey.
our we@asml employee engagement survey.
Employer branding
With the demand for top-tier talent increasing year-on-year,
employer branding is a vital strategy to ensure ASML gets
its share of this talent. Our strong growth means we need to
hire large numbers of employees. Highly skilled people with
a technical background are scarce in the labor market and
competition is growing. We see that top-tier talent selects
their employer of choice, not the other way around. This is a
general development of employees choosing their future
employer, and it’s important for employees that a potential
employer has a proper value proposition.
69
ASML ANNUAL REPORT 2021 We view recruitment as an ongoing process, and
continuously seek to improve and professionalize how we
go about it. We use this information to fine-tune our target
audiences and recruitment efforts.
Our performance and progress
We measure our employer brand for the main locations
where we operate – the Netherlands, the US, China,
Taiwan and South Korea. We do this by measuring how
ASML is perceived by external audiences – and potential
employees in particular – by monitoring our position in an
independent external employer-branding ranking. We have
defined targets for the different local labor markets on our
positioning by 2025. We continue to improve our employer
brand and values on our corporate website, creating a
better understanding of what we do and what we stand for
as an employer.
In 2021, we saw good improvement in nearly every main
location compared to 2020, except for the US, which can
be explained by the mix of respondents in terms of field of
study, university and location. However, our operations in
the US were included in the 2021 Most Loved Workplaces
- top 100 ranking by Newsweek in collaboration with the
Best Practice Institute (BPI). The ranking is focused
squarely on the degree to which employees have a
positive feeling about their employer. We are pleased to
receive this recognition for our efforts to create best
possible employee experience for our employees. Read
more in: Our people KPIs
In 2021, restrictions on travel and large group gatherings
limited our ability to meet future talent in person. Various
planned activities were either postponed or adapted to a
virtual space. More than ever, the internet is the optimal
platform to communicate. Our labor market
communications team is continuously working to optimize
how we reach, inform and engage our target audiences
online. To leverage recruitment efforts, we facilitate job
postings and manage ASML’s presence on online social
network channels. We also promote the ASML employer
brand through online advertising.
Boosting recruitment and sharing
innovation in Taiwan
ASML continues to expand operations in Taiwan to
provide the best support services to a growing base of
customers and optimize R&D support capabilities of
measurement and inspection products. To enable ASML’s
ambitious roadmap, it’s crucial to attract the best talent
from the market.
In March and April 2021, ASML's Innovation Experience
Truck took to the road in a tour across major college
campuses of Taiwan to boost recruitment of engineers,
extending our client and research support team
capabilities. Through augmented reality technology
and interactive experiences, upcoming engineers
could familiarize themselves with advanced lithography
technology and high-tech EUV lithography machines.
Employee engagement
Employee engagement is critical to the performance of our
organization and our long-term success as a company.
We measure the overall impact of our activities on the total
employee experience using our we@ASML employee
engagement survey.
we@ASML survey
Our annual we@ASML survey is a crucial tool for collecting
and measuring employee feedback. It provides insights
that enable us to improve the employee experience and
work on our policies and processes. We set ourselves the
target of achieving an employee engagement score that is
at least on a par with our peers.
Throughout the COVID-19 pandemic, employees across
ASML have done admirable work to continue our
business, serve our customers and secure our roadmap.
We knew they experienced pressure from pandemic
fatigue, hybrid working and the rapid growth in our
employee base on top of increasing customer demand
and we expected this to impact our employee
engagement score.
To understand these effects and allow us to set
improvement actions, the 2021 survey featured additional
questions about well-being topics. To measure the degree
to which our values are embedded in the organization, the
survey also included questions about our culture and
values that go beyond the ‘what’ to the ‘how’.
Our performance and progress
We succeeded in creating a positive working environment
amid challenging circumstances, but did not make
measurable progress in our key improvement areas.
In our 2021 we@ASML employee engagement survey, we
again saw good results and received valuable feedback
70
ASML ANNUAL REPORT 2021 for improvement. The engagement survey score was 78% in 2021 (80% in 2020) – 2 percentage points above our
external global benchmark of 76%. Overall, we conclude that ASML still has a highly engaged population. People are
proud to work for ASML. Other areas where we score high are, for example, a good working environment, good team
spirit with respect and open communication, and opportunities to learn and grow. However, as expected the
engagement score decreased due to the dynamics of 2021. Defining action plans to prevent further decline is a priority
for us.
Despite our continuous focus and improvement actions executed, we still see the three areas from the 2020 and 2019
surveys, namely: enabling processes, cross-team collaboration and clarity of expectations are lagging behind as we still
score well below the external benchmark. The 2021 results also show that we need to pay more attention to well-being.
Addressing these four areas is our key priority in 2022.
Talent attraction and retention
We hired 4,373 new payroll employees in 2021, growing our workforce to 30,842 FTEs at year-end. Our workforce more
than doubled compared to the 14,681 FTEs we employed at the end of 2015.
While attrition can open up a knowledge gap in the company, we also view it as an opportunity to bring in new talent and
enhance existing talent. We strive for a healthy attrition rate (the percentage of employees leaving our company), aiming
for an annual attrition rate of 3.0–8.0%. For high performers, our target is to have a rate that is at least 50% lower than
the overall attrition rate target.
With the overall attrition rate of 5.4% and the attrition rate of our high performers of 2.6% in 2021, both are well within our
target range and is below the industry average in every country we operate in. In 2021, we saw an increase in the attrition
rate to 5.4%, from 3.8% in 2020, a year that was shaped by the COVID-19 pandemic, when people were less inclined to
look for other jobs. We attribute the increase to the effects of the pandemic, the global shortage of employees across
many industries, and the booming semiconductor industry that is providing plenty of job opportunities. Nevertheless, we
view that our efforts to create a unique employee experience, our employee engagement programs, and our onboarding
of new employees are paying off.
Our workforce trend
23,247
3,203
20,044
24,900
1,681
26,481
1,399
23,219
25,082
16,647
2,656
13,991
19,216
2,997
16,219
)
E
T
F
(
s
e
e
y
o
p
m
E
l
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
30,842
2,095
28,747
A
t
t
r
i
t
i
o
n
r
a
t
e
%
10
9
8
7
6
5
4
3
2
1
0
2016
2017
2018
2019
2020
2021
Payroll employees (FTE)
Temporary employees (FTE)
Total (FTE)
Attrition rate %
The 2020 and 2021 FTEs in the chart above do not include the FTEs acquired through the acquisition of Berliner Glas (ASML Berlin GmbH).
Onboarding
As our global workforce grows exponentially, onboarding is one of our key priorities. In 2021, we welcomed our 30,000th
employee. A positive onboarding experience builds a sense of connection, helps employees fit in quickly, and boosts
retention. We believe onboarding is a joint effort, driven by everyone.
With the COVID-19 pandemic continuing in 2021, our new employee onboarding remained virtual to give new colleagues
the best possible start. For example, the ASML onboarding event is a half-day introduction event organized by HR to
make new colleagues feel welcome, learn more about ASML and connect with other new colleagues. In small groups,
new colleagues work together to learn about ASML products, technology, organization, customers and programs.
Business sectors and functions continue to build on our global onboarding initiatives, making sure we’re providing one
consistent experience across the company, further tailored to the various departments.
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ASML ANNUAL REPORT 2021
To measure how new hires rate their onboarding
experience, we conduct pulse surveys in each phase of
their onboarding journey from feeling welcome, engaged,
equipped, to feel part of ASML. On average, 89% of new
hires indicated that they had a positive experience. They
also perceive the support they get from their manager
during onboarding as very positive. We are proud that our
managers took extra efforts to guarantee a positive
onboarding experience while working remotely.
Learning and development
In an innovative, high-tech, fast-changing industry, it’s vital
to strengthen and continuously invest in our talent pool to
anticipate evolving business requirements and
developments in the labor market. We empower our
employees to develop their talent, pursue their career
ambitions and to thrive. We strongly believe that personal
development works best when our employees can invest
in themselves. At ASML, we give employees the time,
opportunity and support, while they put in the effort,
passion and drive needed to enhance their development.
We offer tailor-made training and development programs
to help grow the highly skilled professionals we employ at
ASML.
Training
To maintain our technological leadership and pace of
innovation, we need to ensure the right knowledge is
available to our people at the right time. To do this, we
have our own technical development centers in-house for
our D&E, customer support, and manufacturing
employees to tailor training to the specific technical needs
of these departments.
Most of our trainings take place on the job, given the
nature of our collaborative innovative business. Overall, we
are promoting the 70-20-10 approach for learning
interventions, meaning that 70% is on-the-job learning,
20% is through coaching, and 10% is learning through
training courses. In 2021, the average number of training
hours in this last category, including development
programs, was 29 hours per FTE.
In 2021 we continued adding virtual trainings where
possible. We had to postpone some of the development
activities that have a strong networking component to
them with the need to bring different sectors and countries
together. Due to travel restrictions and different time
zones, these activities were not viable. In addition, we
continued working on redesigning specific development
programs to establish an effective mix between remote
and in-person training, bringing people from different
locations together, and making training more digestible for
online purposes.
and have various tools in place to support our employees’
career navigation.
Two years ago, we started the discussion and thinking
process around how our performance management
approach and philosophy can better align with our culture
and values. This forms part of a broader look at the future of
performance management in the company. Together with
our executive committee, we started defining how to do this
more fundamentally. In 2021, we worked hard on re-shaping
performance management processes and to embed them
in the new tooling, which went live as of January 2022.
Diversity and inclusion
We're proud to be a culturally diverse organization, with
employees from 122 different nationalities. Diversity and
inclusion enhance our ability to innovate, to be creative,
problem solve, and provide an environment where
employees feel valued, challenged to grow professionally,
and contribute to our common goals.
Since 2020, we have been developing and formalizing our
approach to diversity and inclusion. We assembled a Global
Diversity & Inclusion Council in 2021 that consists of senior
leaders who act on behalf of ASML to provide thought
leadership. The Council, chaired by a member of the Board
of Management, proposes the Diversity & Inclusion strategy
to the Board of Management, sets, promotes and monitors
diversity and inclusion initiatives, and drives company-wide
accountability towards its goals.
Our diversity and inclusion strategy includes the following:
• Engaging a larger talent pool by making opportunities
more visible and accessible
• Creating shared metrics to more clearly evaluate progress
• Ensuring inclusive leadership behaviors are embedded in
our culture
• Including diverse perspectives in our talent practices
• Providing employees more ways to engage and drive their
careers
Our aim is to be representative of the available skilled
workforce. Creating an environment where all feel welcome,
know they belong and see a career path in front of them
requires diversity at all levels of the organization.
We aim to increase the diversity of our workforce by
fostering a culture that is inclusive of all. We@ASML, our
employee survey, measures inclusion levels each year. In
2021 our Inclusion score was 83% compared to 82% of top
performing global companies. Our goal is to meet or
increase this level of inclusion among our employees on an
ongoing basis. To do this, we set a target to score on par
+/- 3% with the top 25% of this comparison company list in
2024.
Career development opportunities
We are continuously looking into ways to improve how we
can help employees identify opportunities for professional
development within ASML. We offer various career paths
In 2021, we made progress in gender diversity among all
employees and senior management. Female employees
now make up 18% of our workforce worldwide. This
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ASML ANNUAL REPORT 2021 improvement has increased by 1% compared to last year.
We aim to increase this trend as we move toward 2024.
We believe the most effective way to address this is by
focusing on the growth of our existing team members and
expanding the diversity of our talent pool. We’ve set goals
to increase the hiring of women from 20% in 2021 to 23%
by 2024.
We still have work to do in this area and have set specific
goals focused on female leadership levels. The current
representation of women at this level is 8% today and our
ambition is to reach 12% by 2024. To make this tangible,
we’ve set a goal to raise the hiring of female leaders, from
12% in 2021 to 20% in 2024. We believe this talented pool
will be role models, paving a path for more to follow. Our
ambition is to have more diversity in our workforce
because we believe it is one of the best ways to attract
and retain smart talented people to help us drive
technological innovations forward to meet our customers’
needs.
Overall, the global STEM (science, technology, engineering
and math) talent pool is scarce and it is even more
challenging to recruit female talent. Our R&D workforce is
15% female. Nearly 90% of job positions are STEM
related, whereas peers in the high-tech industry have
more diverse, non-STEM related job positions. ASML is
highly motivated to see more women pursuing careers in
engineering and science now and in the future. The highly
specialized nature of our industry means achieving this
balance is a long-term process. We are actively engaged
with multiple educational programs to grow the pipeline,
deploy multiple initiatives to promote STEM education
among the future female talent pool and continue to foster
an environment where our current workforce can thrive.
Achievements in the US
Established in 2020, the ASML US Diversity Council
serves as an advisory board and governs diversity and
inclusion (D&I) programs, such as employee networks,
diversity events, and recognition and education programs
across the US. In 2021, the Diversity Events and Education
Workstreams and US Diversity Council sponsored
numerous external speakers to generate broader
awareness and understanding of culturally significant
holidays and observances, including Black History Month,
PRIDE Month, Hispanic Heritage Month and Veteran’s
Day. Over 3,000 employees cumulatively participated
in over 15 diversity events. The Council also supported
the development of two new employee networks in the
US: SHADES for Black, Indigenous and People of Color
(BIPOC) and their allies, along with a new veteran’s group.
Fair remuneration
We want our remuneration to be fair and balanced. In our
remuneration policy, we are committed to gender equality
and we strive for global consistency while respecting what
is common practice in local markets. We continuously
review how our remuneration compares to the market
benchmark for technology professionals in each region
where we operate and, where necessary, make changes
to our remuneration policies and levels. Each year, we
analyze paid salaries for gender disparity. In 2021, as in
previous years, we found no major differences in these
salaries. Read more in: Non-financial statements - Non-financial
indicators - Our people.
Living wage
At ASML, we are committed to meeting adequate living-
wage requirements, meaning that employees earn salaries
that meet their and their families' basic needs, but also
provide some discretionary income. Our company has a
predominantly highly educated workforce with relatively
high levels of remuneration. In 2020, as part of a two-year
cycle, we conducted an analysis of how our lowest base
salary compared to the local minimum wage and local
‘living wage’ in the countries and regions where we
operate. We did not detect any gaps. On average, our
salaries are significantly above local living wage. An
update of the analysis is planned for 2022.
Labor relations
We want to provide fair labor conditions and social
protection for all our employees, regardless of their
location and whether they are on a fixed or temporary
contract. We support the principles of the International
Labor Organization (ILO) and we respect the rights of all
employees to form and join trade unions of their own
choosing, to bargain collectively and to engage in peaceful
assembly.
We strive to comply with the relevant legislations in every
country we operate in. In those countries where we have
employee representation, we engage in regular dialogue
with the different organizations representing our
employees. In these conversations, topics are put forward
and discussed by both the company and the employee
representatives.
We do not have operations in countries where the freedom
of association and collective bargaining for ASML
employees is restricted.
In the Netherlands, we have requested dispensation from
the Metalektro Collective Labor Agreement (CLA) in order
to develop our own CLA. Our unique position in the global
market, our size and growth as well as our very unique
group of employees and the large range of competencies
and activities we bring together to deliver our products
have created a need for our own direction in labor
conditions. The purpose of a future ASML CLA is to offer a
set of labor conditions that match the diversity and needs
of all our employees.
73
ASML ANNUAL REPORT 2021 In 2021, following an intensive period of consultations, the negotiations with the trade unions began. The new CLA will be
developed in close collaboration with the unions represented in the Metalektro. Once we have our new CLA in place, we
will continue to work with the unions regarding labor conditions within the framework of our own CLA and maintain our
active membership in various labor organizations, such as FME and PME.
Remote Working Policy
We want to have a positive impact on people’s well-being, their productivity and work-life balance. Working from the
office and meeting each other face-to-face stimulates innovation and optimal collaboration within and across teams, and
it is the starting point of our way of working. During the pandemic, teams expressed the need to meet in person to tackle
problems together and to stay aligned toward common goals. We also recognize that a busy office may not be the best
place for focused work, so quiet work in a remote office may be much better for some tasks.
Fundamentally, ASML is convinced that employees themselves can best manage their own work. On the other hand,
managers are responsible for efficiently organizing the way the team is working and the organization. This means that
both employees and managers have joint responsibility for the choices to be made under our Remote Working Policy.
We aim to provide ASML employees and their managers with clear guidance and help to make the right choices between
working remotely and working in the office. Remote working is neither mandatory nor an entitlement. As a global
guideline, employees may work up to two working days per week remotely, if the job allows. There may be exceptions for
certain jobs or departments.
Strong leadership
To remain a market leader, we must provide unified direction. This means we need authentic leadership to give our
people a clear picture of where ASML is heading. This offers great opportunities for all of us to contribute to ASML’s
success and make an impact, which is also quite a challenging job for our leaders. As our company grows, so does the
need for clarity around roles and expectations. Leaders need to play a part here in providing role clarity for employees,
as well as being clear about their own roles and responsibilities. We continue to strive to formulate and capture this more
clearly so our people can understand what is expected of them.
Launched in 2020, our Leadership Framework outlines and clarifies a leader’s role in business leadership, role-modeling
the values within the company, and what it means to be a people manager and coach for employees. Leadership is all
about people.
Leadership framework
Role
model
• Live the values
• Self-develop & renew
• Show courage
• Personal well-being
e l
o d
Role m
C
o
a
c
h
Coach
• Connect
• Enable
• Develop
• Trust
Challenge
Collaborate
Care
Business
leader
• Own your content
• Act end-to-end
• Build stakeholder relations
• Display business acumen
B
u
s
i
n
e
s
s
l
e
a
d
er
r
e
d
a
P e o ple le
People
leader
• Create the setting
• Adapt the situation
• Share vision & set direction
• Make it happen
In 2021, we continued deploying behavioral competencies training, coaching programs and a practical guide to inspire
and enable personal development. We have leadership programs where we fast-track the careers of our most promising
managers through our Potential Acceleration Program. These programs ensure our managers are aware of what’s
expected of them, and help them to develop the skills and competencies they need to become better leaders.
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ASML ANNUAL REPORT 2021
The effects of these programs are most visible in our
employees' responses from our 2021 we@ASML survey,
where 74% of our employees stated that they see their
manager role modelling the three ASML values –
challenge, collaborate, care – in a balanced way.
It’s impossible to completely eradicate risk, but we can work
proactively at all levels to identify potential issues or
concerns in the workplace and develop measures toward
reducing these. We do everything we can to minimize risk,
and it is our responsibility to provide our people with the right
protection, procedures and processes to keep them safe.
Ensuring employee safety
At ASML, safety is not just a priority – it is a prerequisite. It
is an integral part of our daily work and the way we lead
others. We do everything in our power to provide injury-
free and healthy working conditions for everyone on our
premises and ensure all our operations are safe and
secure. This includes employees, contractors, suppliers,
customers, and visitors. We count on each other – every
one of us working at and for ASML – to share this
commitment, because together, we keep each other safe.
In 2021, the persistent effects of the COVID-19 pandemic
still reached into every corner, affecting people globally
and across every aspect of our business. Our priorities
remained unchanged: Our primary focus has always been
to ensure our colleagues and their families around the
world stayed safe. Our second goal was to make sure we
upheld exceptional service to our customers.
We follow all government guidelines and safety measures.
The corporate crisis management team provides our
employees with frequent updates about the COVID-19
situation and our response to it. In 2021, we rolled out
numerous well-being programs worldwide to address the
physical, mental and emotional well-being of people
working from home.
Our employee safety strategy
We believe that all work-related injuries and occupational
illnesses are preventable. As such, we are working toward
a long-term ambition of zero injuries and work-related
illnesses.
Our goal is to prevent occupational health and safety
incidents. To benchmark our performance against industry
standards, we use a targeted recordable incident rate of
0.20, which represents world-class performance. But our
ongoing ambition is zero, and this drives our continuous
improvement in processes, working conditions and
employee behavior. To achieve this, we focus on an EHS
management system, safety culture and training. An
example is the ‘Safety Gemba Walks’, where managers visit
the employees’ workplace. This helps us to increase safety
performance and to strengthen a safety culture.
New global lifting training
Trend analyses and past lifting (near-miss) incidents and
good catches formed the foundation of a new, soft-skill-
focused, gamified training for future lifting team members
worldwide. This human-focused and effective trend-
based setup contributes to a safe work environment in
an efficient and attractive way, by using blended-learning
methodologies, timely workplace learning and modern
technology.
This EHS lifting training will be enriched with a more in-
depth specialist safety training framework of lifting tools
for lifting operators and awareness of lifting activities for
others involved in the lifting action. The outcomes of lessons
learned through incident reporting and incident investigation
improve the quality and impact of our EHS training solutions,
helping to take safety culture within ASML to the next level.
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ASML ANNUAL REPORT 2021 Managing a safe workplace
We are committed to a well-established EHS management
system. We use the highest possible professional
standards, and continuous improvement is a key principle
of our management system. Our EHS management
system is based on the ISO 45001 standards and
complies with its requirements.
We have established a Corporate EHS Committee, chaired
by our Chief Operations Officer, to oversee and approve
ASML’s EHS strategy and lead the EHS management
system. Our line managers are responsible for day-to-day
EHS management. Our EHS Competence Center gathers
best practices and defines the EHS standards for ASML,
helping our managers to implement these standards in the
workplace.
Our employee and product safety commitment is captured
in our Sustainability Policy, which applies to ASML
worldwide. In addition, our ASML EHS Guide aims to
provide practical, useful and essential information for our
employees, contractors, and any other parties working for
us. The guide – designed to create awareness and
ownership – explains our aims and objectives, and clearly
describes the rules and policies we follow.
Incident and risk management are key elements of our
EHS management system. We record and investigate all
incidents and near-misses to determine the root cause
and take corrective action to prevent them from recurring
or occurring in the future.
We conduct regular hazard and risk evaluations, with a
focus on preventing employees’ potential exposure to
hazards such as chemicals, fire, radiation, mechanical
handling, and ergonomic risks. These provide us with
further insights into the main hazard and risk areas at
ASML. We can then take appropriate action to mitigate
these risks. We ensure continuous improvement through
internal EHS audits.
Strengthening a safety culture
In 2020, we introduced five life-saving safety rules to
create a safer workplace and enhance our safety
performance. Respecting and adhering to these rules
could not only save lives, but also make us collectively
more aware of safety risks across our organization. Active
and consistent deployment of these rules in 2021 led to
increased awareness, better insights and actions for
improvement, such as improved procedures, tools and
education. At ASML, it is standard practice to inform our
employees and anyone else accessing our premises and
customer sites independently – including contractors and
suppliers – about our safety culture and to raise
awareness around these. Training is one of the ways we
prepare and inform our people about this.
Our results and progress
We register EHS-related incidents in line with the US
Occupational Health and Safety Act. Our recordable
incident rate decreased from 0.18 in 2020 to 0.17 in 2021,
outperforming the electronic industry benchmark of 0.20.
The recordable incident rate is the number of recordable
cases beyond first aid in a year per 100 FTE. As in
previous years, we did not record any work-related
fatalities or permanent disabilities.
Safety goes beyond procedures, rules and the right
equipment to human mindset, behavior, attitude and
habits. Following the five safety rules, we deployed various
department specific awareness programs. For example,
we have been rolling out the hein® safety campaign in
D&E which helps us develop a common safety language
and dialogue. Workshops and trainings took place in many
clusters with many interesting discussions and insights
into our safety behaviors.
In 2021, we extended the EHS Fundamentals program
with a new safety training module. As of September 2021,
new hires expected to work in a cleanroom will have to
complete EHS Cleanroom Fundamentals, a training
module designed to prepare new employees to safely
enter, leave and work in a cleanroom at ASML. By year
end 2021, 95% of eligible candidates had completed this
mandatory training. We are also planning a company-wide
reassessment of the safety culture in our company in early
2022, to validate if our safety culture transformation
program has the right effect, and to create insights into
where we need to step up.
To improve our EHS performance, we encourage our
employees to speak up whenever they encounter safety
risks. Every employee is empowered to stop working if
they feel unsafe. Together with their manager and EHS
expert, a safe way of working will be defined, so the work
can resume.
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ASML ANNUAL REPORT 2021 Our people KPIs
The table below shows the key performance indicators (KPIs) and the related 2025 targets. Read more in: Non-financial
statements - Non-financial indicators - Our people for our performance indicators (PIs) and related results. The non-financial data may
include a degree of uncertainty, because of limitations in measurement method and assumptions applied. Read more in:
Non-financial statements - About the non-financial information - Reporting indicators.
KPI
Engagement score We@ASML survey
Employer brand ranking1
Netherlands
US
China
Taiwan
South Korea2
2019
77%
10
—
—
—
19
2020
80%
10
99
168
22
24
2021
78%
6
133
148
6
14
Target 2025
Be on par with peers
Top 10
Top 75
Top 100
Top 20
Top 20
1. Employer brand ranking from Universum: engineering students.
2. As of 2021, overall ranking for South Korea is no longer conducted by Universum. The result reported for 2021 is based on a customized ranking report. The target 2025
refers to the overall ranking. Going forward we need to define our target based on the customized ranking.
Contributing to the UN's Sustainable Development Goals
Our ambitions, commitments and programs as described in this chapter contribute to the following SDGs. For further
information on the performance, read more in: Non-financial statements - Non-financial indicators - Our people.
SDG target
SDG target 4.3 - By 2030, ensure equal access for all women and men to
affordable and quality technical, vocational and tertiary education, including
university
SDG target 4.4 - By 2030, substantially increase the number of youth and
adults who have relevant skills, including technical and vocational skills, for
employment, decent jobs and entrepreneurship
SDG target 4.5 - By 2030, eliminate gender disparities in education and
ensure equal access to all levels of education and vocational training for the
vulnerable, including persons with disabilities, indigenous peoples and children
in vulnerable situations
SDG target 8.1 - Sustain per capita economic growth in accordance with
national circumstances and, in particular, at least 7% gross domestic product
growth per annum in the least developed countries
SDG target 8.2 - Achieve higher levels of economic productivity through
diversification, technological upgrading and innovation, including through a
focus on high value-added and labor-intensive sectors
SDG target 8.5 - By 2030, achieve full and productive employment and decent
work for all women and men, including for young people and persons with
disabilities, and equal pay for work of equal value
SDG target 8.6 - By 2020, substantially reduce the proportion of youth not in
employment, education or training
SDG target 8.8 - Protect labor rights and promote safe and secure working
environments for all workers, including migrant workers, in particular women,
migrants, and those in precarious employment
How we measure our performance
• Employee training and development indicators
• Diversity indicators
• Community involvement and technology
promotions
• Scholarships granted
• ASML Foundation projects
• Financial performance
• Human capital return on investment
• Employee engagement score
• Workforce data including diversity and inclusion
• Fair remuneration pay ratio
• Employee attrition rate
• New hires
• Employee safety indicators
77
ASML ANNUAL REPORT 2021 Community
engagement
As a global technology leader and employer, we play an active role in the communities
we operate in, because when the community thrives, we thrive. At the same time,
our ASML Foundation aims to improve lives through education and training.
ASML
Foundation
22 projects supported
€2.0m value of donations
Education
64 projects supported
€4.3m value of donations
Arts & culture
14 projects supported
€1.5m value of donations
Local
outreach
55 projects supported
€2.3m value of donations
The total amount of cash commitments and in-kind
support that ASML spent on charities, community
engagement, organizations, and our own ASML
Foundation in 2021 was approximately €10.4 million. Our
corporate citizenship activities stretch beyond community
support to in-kind contribution to startups and scaleups
aiming to nurture innovation by future young-tech. In
addition, we also support the European innovation
ecosystem through our R&D across public-private
partnerships. Read more in: Innovation ecosystem.
Being part of a community means not only caring for our
own employees, but also looking out for those beyond our
organization. We foster close community ties and
encourage our employees to get involved and do their part
as well. ASML needs the support of the community to be
successful and will earn that support if ASML lets the
community benefit from its presence and is considerate of
the community's needs.
We aim to be a valued and trusted partner in our
communities, improving the quality of life for all, with a
special focus on disadvantaged communities. We support
skills development for young people under the age of 18 to
prepare them for an increasingly digital future, as well as
community services for disadvantaged people, and local
arts and culture initiatives.
We benefit from each other’s presence and support each
other’s development. For ASML it is important to create a
healthy foundation for long-term sustainable strategy
execution by motivated employees. For the community,
success means that we are able to close the divide, so
that citizens and their environment thrive.
Our community engagement program, which falls under
our CEO's area of responsibility, is built on three pillars
where ASML has competence and can create impact:
1. Education
2. Arts & culture
3. Local outreach
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ASML ANNUAL REPORT 2021 Education
ASML recognizes the need to prepare people of all ages for an increasingly digital
future. STEM (science, technology, engineering and mathematics) competencies
are important in helping children to reach their potential, particularly in
disadvantaged communities. We organize and sponsor many initiatives that aim to
share our enthusiasm for and expertise in technology to inspire all generations. We
also partner with multiple organizations and educational events that promote
careers in technology. Our employees act as role models and guides for these
initiatives.
We contribute to SDG 4 Quality
education and SDG 5 Gender equality
We execute our education programs through the following:
1. The Education team works closely with schools and education programs in the communities where ASML has
operations. The Education team provides hands-on support and coordinates a network of ASML volunteers (our so-
called ASML ambassadors) who visit schools and events, and support children and schools in their curricula, some as
part-time ('hybrid') teachers, some as tutors of disadvantaged children, and some as technology and STEM promoters.
Our intensive STEM education program aims to boost interest in technology among young people and increase the
local and regional talent pool. We also raise awareness of career prospects in a sector offering many development
opportunities.
2. The ASML Foundation is an independent foundation, but has strong ties to ASML. It operates at arm’s length and has
its own board and budget. It aims to increase the self-sufficiency of disadvantaged children around the world through
educational initiatives that develop their talent and help unlock their potential. Read more in: ASML Foundation.
Projects supported in 2021
In 2021, we supported a total of 64 education projects across the regions where we operate (Netherlands, US and Asia). The total
value of these projects amounted to €4.3 million.
Below we provide examples of a few highlights. For more information, please visit www.asml.com - community engagement
TU/e (Netherlands)
As one of Eindhoven University of Technology’s (TU/e) most important partners, ASML took the opportunity to celebrate the
university’s 65th birthday by donating four high-tech presents with a value of around €3.5 million. These will mainly be used by
researchers of the university’s new Eindhoven Hendrik Casimir Institute. For more information, please see section Innovation
ecosystem - Partnerships with research institutes and universities.
Children’s Discovery Museum (US)
There was fun for the whole family to enjoy during Science and Engineering Day on Tuesday, July 20, 2021, put on by the San
Diego Children’s Discovery Museum. ASML sponsored the virtual event, which was free to the public and included multiple
interactive educational activities hosted on the Museum’s Facebook page. Activities included coding robots to follow a path, solving
environmental science challenges and experimenting with chemistry. ASML San Diego sponsored the event for $5,000.
Science education in Taiwan (Asia)
In Taiwan, ASML joined hands with Yuan T. Lee Science Education to implement a three-year seed teacher training program
called the 'Taiwan Science Rooting Project'. More than 70 seed teachers will be trained and 300 students will learn basic scientific
knowledge through hands-on experience. In addition to this project, ASML also sponsors four science experience camps each
year.
Wikimedia (Global)
ASML made a donation of €50,000 to the Wikimedia Foundation. This is the first of what will be an annual donation to the
organization behind Wikipedia, to ensure their continuity and support their cause to remain a resource for free and open knowledge
for everyone. This annual donation will increase over time with ASML's employee growth, in accordance with Wikimedia's
guidelines.
Partnerships
• Together with Spectrum Brabant, we launched the tutoring program ‘Equal opportunities’, a free program for secondary students
in the Brainport Eindhoven region aimed at tackling educational disadvantage.
• We entered a partnership with the National Foundation for the Elderly, VodafoneZiggo and Samsung to support digital inclusion
of older people through the Welcome Online digital educational program, which aims to help older people in the region become
digitally self-reliant.
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ASML ANNUAL REPORT 2021
Arts & culture
Culture is the invisible bond that ties the people of a community together,
whereas the arts are culture made visible. To strengthen that bond, ASML
supports initiatives and organizations that are vital for the community’s culture
and help open them up for newcomers and the underprivileged. We focus on
cultural icons in our communities – organizations and initiatives that have an
impact beyond the local community.
Projects supported in 2021
We contribute
to SDG 11
Sustainable cities
and communities
In 2021, we supported a total of 14 arts and culture projects across the regions where we operate (Netherlands, US and Asia). The
total value of these projects amounted to €1.5 million.
Below we provide examples of a few highlights. For more information, please visit www.asml.com - community engagement
Partnerships with the Van Gogh Museum and Van Gogh Brabant (Netherlands and global)
Uniting science and art, we have long-term partnerships with the Van Gogh Museum and Van Gogh Brabant to help ensure the
artist’s work and cultural heritage, rooted in the Dutch region of Brabant, can be enjoyed for many generations to come. Through
this partnership we support several programs, including:
• Preserve the paintings: In collaboration with the Cultural Heritage Agency of the Netherlands, the University of Amsterdam and
the conservators of the Van Gogh Museum, a team of ASML engineers is investigating how external factors, such as light, affect
the paint that Van Gogh used. By using this knowledge to optimize display conditions and minimize further degradation of the
collection, we help to preserve his masterpieces for future generations. For more information, please visit www.asml.com/en/
news/stories/2021/preserving-van-gogh.
• Vincent's Lightlab: We have initiated the realization of 'Vincent's Lightlab' within the planned expansion of Museum Vincentre in
Nuenen, the Netherlands. Visitors will be able to learn more about light and how Van Gogh experimented with it in his paintings.
The renewed Museum Vincentre will open its doors in 2023.
• ASML Gallery: We support the Van Gogh Museum's 2021 autumn exhibition 'The Potato Eaters: Mistake or Masterpiece'. This
exhibition is a tribute to Van Gogh's masterpiece, The Potato Eaters, as well as to his time in Brabant.
• Masterminds & Masterpieces: Together with the Van Gogh Museum, we developed educational materials for students in primary
and secondary schools. The artist’s curiosity was key to his craftsmanship, and together with the museum, we encourage
students to follow in his footsteps – and, like in our partnership, connect science with art. More than 200 online classes were
taught, reaching more than 8,000 children in Europe and Asia.
GLOW light art festival (Netherlands)
Light is key to our work, which is why we partner with the annual GLOW light art festival in Eindhoven, the Netherlands. In 2021,
we showcased a special art object at the festival, created in collaboration with local artist Gijs van Bon. The object was an ode to
ASML’s technology and was one of the highlights of the free festival, connecting art with science. More than 580,000 people visited
the festival.
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ASML ANNUAL REPORT 2021 Local outreach
As a responsible company, we want to play our part in the communities we operate
in. By partnering with businesses and organizations in the regions around the world
where ASML is located, we build trust and give back.
We support local initiatives and organizations that are vital for our communities and
that connect the people in our communities. Together with ASML employees, we
contribute and make these initiatives attractive and accessible, and we pay special
attention to stimulate integration, promote diversity and empower the underprivileged.
We contribute
to SDG 11
Sustainable cities
and communities
We are spread over 60 locations across Europe, the US and Asia. With such a widespread presence, it’s important that
we engage with and support the communities where we are based. Our passionate employees contribute to local
projects and organizations that make a difference in their community. And as a company, we provide sponsorship and
donate funds to local non-profit organizations.
Through our global volunteering program, we encourage employees to become more involved in their local communities.
Everyone is able to use one day a year as a paid volunteering day with the event, charity or activity of their choice.
Employees can also volunteer with ASML Foundation projects. The ASML Foundation is a key partner of our local
outreach activities, supporting many of these activities through programming and funding. Read more in: ASML Foundation.
Projects supported in 2021
In 2021, we supported a total of 55 local outreach projects across the regions where we operate (Netherlands, US and Asia). The
total value of these projects amounted to €2.3 million.
Below we provide examples of a few highlights. For more information, please visit www.asml.com - community engagement.
Partnership with PSV (Netherlands)
In 2019, together with five other partners from the region, we became the main sponsor of our local soccer club: PSV. This club
sits at the heart of our local community and is a uniting force for the health and social well-being of our local community. By joining
forces, we can collaborate and do more together. Through this partnership, we support several programs, including:
• ASML Community Lounge (in the Philips Stadium): This aims to make soccer accessible to everyone, to help newcomers find
their place in our region and to enable people lacking the means to enjoy an evening of top-class sport. We welcomed volunteers
and clients from groups like Food Bank, NEOS, Severinus, The Salvation Army and other aid agencies in the venue, totaling more
than 1,500 guests in 2021.
• Online vitality platform: Brainport Eindhoven and PSV jointly launched an online platform aimed at inspiring and motivating
everyone in the Brainport Eindhoven region in the area of health and well-being, creating a vital and healthy region for all. We
shared our knowledge and expertise around seven well-being themes.
• PSV Analytics: A collaboration project between PSV Sport performance and ASML BAS Big Data. The project was started with
the intent to help the Dutch premier top soccer club unlock, use and optimize the large amounts of data it has collected, and
translate them into dynamic images analyzing the game plan. The work inspires our ASML technologists as we collaborate and
support the club to compete with its much bigger (and richer) rivals.
Moores Cancer Center (US)
Every year, ASML San Diego employees surf for a cure at the Luau & Legends of Surfing Invitational, which raises funds to support
research and patient care at UC San Diego Moores Cancer Center. While the event looked a little bit different this year due to
COVID-19 precautions, it still raised $500,000. ASML was an event sponsor, donating $15,000 to help make it happen.
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ASML ANNUAL REPORT 2021 ASML Foundation
The ASML Foundation is our charity of choice
primarily focusing on impactful, inclusive
education and training programs for young
people in need. Improving lives through
inclusive and quality education and training, is
how we view our mission. We want to enable
inclusive and equitable participation in society
through lifelong learning and education in 21st
century and entrepreneurial skills. By doing
this, the Foundation aims to make a sustainable impact on SGD 4 (Quality Education), and contribute to SDG 5 (Gender
Equality), SDG 10 (Reduce Inequalities) and SDG 17 (Partnerships for the goals).
We contribute to SDG 4 Quality education, SDG 5 Gender equality, SDG 10
Reduced inequalities and SDG 17 Partnerships for the goals
We believe that all people deserve to receive a quality education, allowing them to be self-sufficient in our increasingly
digital world. Our goal is to help people who participate in the programs we support to improve their chances of a better
life. Through funding and partnerships, the ASML Foundation aims to unlock the potential of young people in need by
enabling inclusive and equitable participation in society through education. Diversity in terms of our project selection
does not only indicate the inclusion of women, but also the disadvantages our target groups may face: little access to
education, special education needs, or a lack of vocational training.
The ASML Foundation wants to make a difference in the community in the locations where ASML operates. As such, it
mainly supports projects and initiatives in Europe, the US and Asia that address specific needs in that region. In the
Brainport Eindhoven region in the Netherlands, for example, tackling illiteracy has become a key focus area for the ASML
Foundation in 2021. In the US, projects focus mainly on preventing school dropouts in less-privileged areas, and on
promoting science, technology, engineering and mathematics (STEM), especially for girls. Projects in Asia differ per
country. In developing areas in Asia, for example, there is a focus on education for girls to reduce inequality and also to
prevent child marriages. In China, the focus is on STEM for girls in rural areas.
In 2021, the Foundation donated around €2 million (€1 million in 2020), supporting 22 projects in 8 countries. With these
committed donations, the Foundation aims to reach about 775,000 young people.
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ASML ANNUAL REPORT 2021
Employee volunteering
ASML employees support the ASML Foundation financially when they purchase goods from the ASML employee store
and through donations. The ASML Foundation is also responsible for ASML’s volunteering program: It coordinates the
volunteering activities and keeps track of the volunteering hours that ASML employees contribute to education initiatives
and other causes. ASML employees are allowed to take eight hours per year to do volunteer work that aligns with the
volunteering policy; many volunteers also donate their own time.
Examples of projects supported in 2021
For more information, please visit www.asmlfoundation.org
Eindhoven Basic Skills City Plan (Netherlands)
In the Netherlands, the number of people with low literacy is increasing – for example, in the Eindhoven region, 7% of people aged
between 16–65 years is having trouble reading and writing. Overall, 25% of youth aged 15 does not have the literacy level required
to be able to function adequately in society. Eindhoven municipality, the local library, the local Area Health Authority (GGD) and
other partners have developed a plan to strengthen the basic skills – reading, writing, calculating and digital skills – of a total of
around 10,000 people with low literacy in the Eindhoven region by 2023. As part of this Eindhoven Basic Skills City Plan, the ASML
Foundation supports an initiative to prevent illiteracy in an early stage, aimed at children between 0–4 years old.
STEM - Girls Can Do It (Asia)
The STEM - Girls Can Do It project aims to promote more gender-balanced STEM education for young people, age between 10 to
14 years – especially girls – in rural China, near ASML’s offices in Chengdu and Xi’an. Employees from the local ASML offices have
been actively involved in the partnership as volunteers, hosting in-person events at ASML’s offices, and involving female engineers
as role models
Discovery Education (US)
The Equity & Access to Digital Educational Resources Initiative supports high-quality digital content and impactful on-demand
professional development for under-resourced schools throughout the US to combat the learning loss in the wake of COVID-19.
In Bridgeport near Wilton in the US, the ASML Foundation supports this initiative by providing funding for the National Afterschool
Association, which enables them to use digital learning materials from Discovery Education, Inc.
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ASML ANNUAL REPORT 2021 Innovation ecosystem
We don't innovate in isolation. We develop technology together
with the help of our partners and collaborative knowledge network.
121
Number of R&D
partner agencies
€1.0m
Support to high-tech
startups and scaleups
€30.3m
Contribution to EU
research projects
We innovate through partnerships. Our innovation
philosophy is one where we see ourselves as architects
and integrators, working with partners in an innovation
ecosystem. In our innovation ecosystem, long-term
collaboration is based on trust. We share both risk and
reward while driving innovation. While sharing our
expertise with the ecosystem, it also provides us with
access to a large leading-edge knowledge base across a
wide range of technologies. Together we build a strong
knowledge network to create technological solutions that
society can tap into. This collaborative approach allows us
to accelerate innovation.
Our progress and achievements
In 2021, imec demonstrated a breakthrough in printing
narrow 24 nm pitch lines in a single exposure. Using
ASML’s NXE:3400B system and combining advanced
imaging schemes, innovative resist and optimized settings
in its cleanroom, imec demonstrated how our system is
capable of printing lines at 24 nm pitch in a single
exposure step. This innovation will enable imec and its
partners that specialize in resist and patterning to help
develop and test resist materials that will support the
introduction of our next-generation EUV lithography
systems, our EUV 0.55 NA (High-NA) platform.
We innovate through partnerships. To this end, we focus
on collaboration with research centers, fueling the
innovation pipeline through partnerships with research
institutes and universities, and collaboration with R&D
partners through EU public-private partnerships. In
addition, we believe that we can create greater impact in
the ecosystem by nurturing future young tech by
supporting startups and scaleups.
Partnerships with research institutes
and universities
We co-develop expertise within a wide network of
technology partners, such as universities and research
institutions. Some of our partners include imec in Belgium,
the technical universities in Twente, Delft and Eindhoven in
the Netherlands, and the Advanced Research Center for
Nanolithography (ARCNL), also in the Netherlands. ARCNL
conducts fundamental research, focusing on the physics
and chemistry that are important in current and future key
technologies within nanolithography and its application
within the semiconductor industry.
In 2021, as in previous years, these partnerships delivered
positive results.
We collaborate with, among others, Tokyo Electron, a
fellow semiconductor equipment company in Japan to
further enhance scaling solutions for our EUV technology.
In 2021, Tokyo Electron joined our partnership with imec
and introduced its leading-edge Coater/Developer to the
imec-ASML joint High-NA EUV research laboratory (joint
High-NA lab). This Coater/Developer will feature advanced
capabilities that are not only compatible with widely used
chemically amplified resists and underlayers, but are also
compatible with spin-on metal-containing resists. Spin-on
metal-containing resists have demonstrated high
resolution and high etch resistance, and are expected to
enable finer patterning. Combined with the new process
modules, this will enable flexible fab operation, while also
realizing increased productivity and high availability.
We continued our close involvement in the High Tech
Systems Center (HTSC), set up by Eindhoven University of
Technology (TU/e) to facilitate fundamental research with a
focus on understanding the needs of the mechatronics
and mechanical engineering industry. Since its launch
three and a half years ago, the HTSC has supported the
start of several new projects broadening the scope of our
cooperation with TU/e toward electrostatic fundamentals
and new developments in optical design. To celebrate the
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ASML ANNUAL REPORT 2021 TU/e's 65th anniversary and our appreciation for the
collaboration, we donated a set of high-tech
nanotechnology machines and services for the new
institute and for the student labs, with a total value of €3.5
million.
In 2021, we joined forces with the Jheronimus Academy of
Data Science (JADS), based in 's-Hertogenbosch, the
Netherlands, to collaborate in the field of data science.
Data science is increasingly important for the
semiconductor industry as a whole and for ASML
technology in particular. This collaboration provides us
access to the latest academic knowledge and fresh
perspectives from young talent, while also helping us
develop the skills of our employees through professional
education programs.
New partnership with Heriot-Watt
University (UK)
We established a new partnership with a world-leading
academic team from the UK’s Heriot-Watt University
(HWU) to drive the advancement of new light source
technologies. The five-year collaboration aims to
accelerate the industrialization of fundamental physics
research and create a direct route from lab to market for
new laser technologies.
ASML has a long tradition of partnerships with
academia, while HWU is renowned for its pioneering
research informed by business and industry needs. This
partnership will address specific real-world engineering
challenges, such as the fact that the sensors in ASML’s
machines must work at multiple wavelengths due to the
various materials they encounter (each of which absorbs
light in different ways). The team’s current focus is on new
broad bandwidth light sources for optical metrology and
builds on their impressive track record of innovation.
Collaboration with R&D partners
We cooperate with private partners in research and
innovation projects subsidized by the European Union and
its member states. We run collaborative subsidy projects
aimed at advancing IC technology for the next node
connected to the industry roadmap following Moore’s law.
The Horizon Europe program, a public-private partnership,
facilitates collaboration and strengthens the impact of
research and innovation in developing, supporting and
implementing EU policies while tackling global challenges.
By collaborating in European projects, ASML and its
partners play a role in giving the region a degree of
sovereignty by driving and accelerating fundamental
research and groundbreaking innovation in Europe. This
collaboration also generates significant business value,
fuels job creation, and creates knowledge. This is borne
out of, for example, the increasing number of patent
requests per year, both for ASML and the other members
in the various consortia, which reflects the success of the
collaborations.
Our progress and achievements
In 2021, we continued coordinating the efforts in three EU
projects – TAPES3, PIN3S and IT2, all with a duration of
three years – securing timely reporting to the connected
public partners, as well as organizing online consortium
meetings to exchange ideas and knowledge.
Our own contribution in R&D across these public-private
partnerships in 2021 was €30.3 million, and the total value
of our investment for the full three-year duration of the
projects is €93 million of the total project funding of €448
million. In all of these projects, we work with universities,
research and technology institutes and other high-tech
companies across Europe – varying from 20 to 80 partners
from 10 different European countries – to help enable the
industry to move toward next-generation technology.
In 2021, ASML started coordinating a new EU
collaboration project, called ID2PPAC. In this three-year
project, the technology solutions for the 2 nm node, as
identified in the preceding IT2 project, will be consolidated
and integrated with the objective to demonstrate that
Performance Power Area and Cost (PPAC) requirements
for this next generation of leading-edge Logic technology
can be achieved.
To continue Moore’s Law trajectory to the 2 nm node,
while meeting PPAC requirements, further advancements
are required in EUV lithography and masks, 3D device
structures, and materials and metrology. The ID2PPAC
project brings together the R&D capabilities of 28 leading
expert partners to tackle these challenges – it is valued at
more than €107 million in R&D cost and unlocks €48.9
million in public funding for the ecosystem. In terms of
geography, the project connects people from Austria,
Belgium, the Czech Republic, France, Germany, Israel,
Spain and the Netherlands.
85
ASML ANNUAL REPORT 2021 Partnering in EU research projects
Solmates is a partner in the EU project ID2PPAC,
led by ASML. Matthijn Dekkers, CTO of Solmates:
"Solmates is a vibrant innovative company of 45 FTE
located in the Netherlands that supplies equipment to
the semiconductor market. Our thin-film Pulsed Laser
Deposition hard- and software is changing the future
of thin film materials. Within the ID2PPAC consortium,
Solmates is responsible for the development and
installation of a 300 mm Pulsed Laser Deposition system
at imec. The system will be used for semi-damascene
material development. Collaboration with project
partners imec and ASML, among others, helps Solmates
to test newly developed hardware in in a production-
relevant environment. The ID2PPAC consortium network
enables Solmates to tap into the expertise of partners
in the semiconductor market. The project significantly
contributes to the company's strategic roadmap and
ambition to become a relevant player in the high-tech
equipment segment.”
Supporting startups and scaleups
To nurture innovation by new generations of technological
talents, we also provide valuable expertise to support
entrepreneurs and startups. We make use of our experts’
in-depth competencies and knowledge to develop and
support startups and scaleups. By fostering
entrepreneurship, we aim to help these young enterprises
excel and grow. What we share is based on what we are
good at, such as building complex manufacturing
systems. This is where we can play a role and make a
difference.
Sharing our expertise is a way to strengthen our regional
high-tech ecosystem, particularly around our
headquarters in Veldhoven, the Netherlands. This region
has a competitive edge globally, and we need to make
sure we maintain this position. Building a strong regional
foundation benefits not just ASML and associated
partners, but also other companies and organizations. It
also helps attract a broad base of talent to the region.
Through HighTechXL, we build and accelerate impactful
startups by combining high-tech entrepreneurial talent
and relevant technologies. With the Make Next Platform,
we aim to support young innovative high-tech scaleups.
In 2021, ASML provided nearly €1 million in-kind support
to high-tech startups and scaleups. This amount consists
of 2,100 hours of support and €0.4 million in cash.
ASML as a venture builder
ASML is one of the main shareholders of HighTechXL,
together with other tech-minded partners in the region
such as Philips, TNO, the Brabant Development Agency
(BOM) and High Tech Campus Eindhoven. Through
HighTechXL, we build and accelerate impactful startups
by combining high-tech entrepreneurial talent and relevant
technologies from reputable tech partners such as ESA,
CERN, Fraunhofer, imec and TNO, with the goal of solving
main global societal challenges.
Through HighTechXL, a venture-building accelerator that
builds teams of entrepreneurs and tech talents around the
most advanced technology in the world, we have
supported startups and scaleups in their various stages
over the years in collaboration with other tech-minded
peers from our region. We monitor and assess their
maturity through objective assessment and a set of
deliverables per KPI, such as business model, finance,
technology, sustainability and execution skills.
Insights we’ve gained in recent years show that our past
successes were based on working with scaled-up
startups with a ‘deep tech’ component, and that these
were difficult to find. The solution was to build our own in
partnership with other technology providers. Since 2020,
we have further developed our involvement in accelerating
existing startups and mapped out a new focus area, which
is building our own deep-tech ventures.
Up to now, 18 new deep-tech ventures have completed
the program and are already getting global attention.
Moreover, five new ventures are currently still in the
accelerator program, making good progress, and new
cohorts are already planned for.
In 2021, most of HighTechXL’s activities still had to be held
online due to the COVID-19 pandemic. We had to organize
ourselves offline as well, with associated challenges
around communications and logistics. And while the
spend rate of startup companies is relatively low, some ran
into financial difficulty. ASML helped to arrange funding
and subsidies for some of these.
Another issue that became more apparent during the
COVID-19 crisis was the need for early-stage funding,
especially for deep-tech startups. Deep tech is often
perceived as complex, requires high-risk capital and is
therefore less attractive for typical early-phase venture
capital funds. ASML has committed financial contributions
to address the needs for startups, particularly in the early
phase of their existence, when there is a need for funding
the often relatively high costs associated with building
technology demonstrators, prototypes, etc. Together with
other HighTechXL shareholders, ASML intends to build a
deep-tech seed fund.
86
ASML ANNUAL REPORT 2021 Carbyon enables capture of CO2 from the
atmosphere
A sustainable solution to extract CO2 from the air has
been, until now, a crucial missing piece of the puzzle
for converting green hydrogen into clean fuels. Solving
this puzzle will make it possible to convert renewable
electricity into chemicals and fuels, closing the organic
fuel combustion cycle using only water, air and clean
electricity.
Technical experts from both ASML and Carbyon, a spin-
off company of TNO, joined forces to develop a technical
concept for a very complex machine to extract CO2 from
the air in an economically profitable way. In particular the
elaboration of a ‘gas-flushing’ concept for the transition
from air to CO2 and vice versa was developed in more
detail based on technical experience from ASML. With
ASML's active support, Carbyon has accelerated the
design and realization of its proof-of-concept. It is moving
toward becoming a scaleup company with €2.5 million
in financing raised, and is in talks with various venture
capitalists for capital growth. Thanks to Carbyon, we are
one step closer to creating a sustainable future.
Make Next Platform
To support young innovative high-tech scaleups, ASML
founded The Make Next Platform in 2016 together with
Huisman, Vanderlande and the non-profit Stichting
Technology Rating. Thales NL joined as a co-founder in
2019. The Make Next Platform puts the partners' network,
competencies, expertise, and experience to work in
answering questions that these scaleups encounter in
their development. We help them grow into a sustainable
company.
The Make Next Platform aims to help young technology
companies that have moved beyond the startup phase
and are ready to expand. These companies, so-called
scaleups, face challenges such as finding the funding
needed to grow, knowing how to target new customer
groups, and recruiting new employees with the right skills.
Through exchange of best practices, business experience
and coaching from corporate experts, the Make Next
Platform partners aim to support them in their
development to become global players by giving them
access to their inside networks.
Up to now, the Make Next Platform has screened more
than 200 companies and engaged with the management
teams of more than 50 of these. So far, seven scaleups
have been adopted and more than 10 are currently in the
pipeline.
Innovation ecosystem KPIs
The table below shows the key performance indicators (KPIs) and the related 2025 targets. The non-financial data may
include a degree of uncertainty, because of limitations in measurement method and assumptions applied. Read more in:
Non-financial statements - About the non-financial information - Reporting indicators.
KPI
R&D expenses (€, in billions)
Number of R&D partner agencies
Startups reached Star level from total startups supported (in %)
Number of scale up companies supported (in #)
Start-ups and scaleups in-kind support hours
2019
2.0
144
17%
5
1,300
2020
2.2
130
16%
7
1,550
2021
2.5
121
15%
7
2,100
Target 2025
n/a
n/a
> 20%
14
n/a
Contributing to the UN's Sustainable Development Goals
Our ambitions, commitments and programs as described in this chapter contribute to the following SDGs.
SDG target
SDG target 9.1 - Develop quality, reliable, sustainable and resilient
infrastructure, including regional and transborder infrastructure, to support
economic development and human well-being, with a focus on affordable and
equitable access for all.
SDG target 9.4 - By 2030, upgrade infrastructure and retrofit industries to make
them sustainable, with increased resource-use efficiency and greater adoption
of clean and environmentally sound technologies and industrial processes, with
all countries taking action in accordance with their respective capabilities.
SDG target 9.5 - Enhance scientific research, upgrade technological
capabilities of industrial sectors in all countries, in particular developing
countries. For developing countries, this includes, by 2030, encouraging
innovation and increasing the number of research and development workers
per one million people, as well as public and private research and development
spending.
How we measure our performance
• Supporting startups to Star level
• Supporting scaleup projects
• Collaboration in EU projects
• Collaboration with research partners
• Energy efficiency of our products measured per
wafer pass
• Investments in R&D
• Collaboration with R&D partner agencies
87
ASML ANNUAL REPORT 2021 Our supply chain
Setting the bar higher for our world-class supplier network to achieve
the innovations we strive for, by ensuring we conduct our business
in a sustainable and responsible manner.
€9.0bn
Total sourcing spend
39% Netherlands
42% EMEA (excl NL)
12% North America
7% Asia
4,700
Total suppliers
1,500 Netherlands
700 EMEA (excl NL)
1,200 North America
1,300 Asia
89%
Completion of
RBA self-assessment
questionnaire by
key suppliers
0
Suppliers with overall 'high risk'
score on sustainability (RBA)
and ASML assessment
At ASML, we rely heavily on our supplier network to
achieve the innovations we strive for. Our suppliers are a
critical extension of our value chain. With around
4,700 suppliers in our total supplier base, we distinguish
between product-related and non-product-related
suppliers.
Product-related suppliers provide materials, equipment,
parts and tools used directly to produce our systems. This
category comprises 800 suppliers and represents the
highest percentage of our procurement volume,
accounting for 70% of our total spend. From this total
number of product-related suppliers, around 200 suppliers
are critical suppliers, accountable for roughly 92% of the
product-related spend.
Non-product-related suppliers are goods and services
suppliers, providing products and services supporting our
operations, varying from temporary labor to logistics and
from cafeteria services to IT services. With around 3,900
suppliers, this group represents nearly 85% of our total
supplier base.
Sourcing and supply chain strategy
We invest considerable resources to develop and
introduce new systems and system enhancements, such
as EUV lithography and e-beam metrology. As these are
complex technologies involving thousands of specialized
parts, we focus on high value-added system integration.
ASML’s supply chain strategy is centered on long-term
relationships and close cooperation with our suppliers and
partners. Our goal is to ensure we get the products,
materials and services we need to meet our short- and
long-term needs, to support our operations from the
earliest moment of development to the end-of-life stages
of our systems. To make sure that this runs smoothly, we
bring in our suppliers at the earliest possible phase in the
Product Generation Process (PGP). This also enables us
to increase product performance and ensure
manufacturability and serviceability.
Operating in a niche market characterized by producing
high-value products in small quantities, fast development
cycles and business volatility requires several key
performance requirements for the supply base.
Continuously improving our suppliers’ capabilities and
performance is at the heart of our sourcing and supply
chain strategy. We require the following from our suppliers:
1. Enable our product roadmap through the development
and maintenance of best-in-class competencies and
capabilities to secure the most advanced technology
and fast time-to-market
2. Drive cost reductions, quality and capability
improvements through efficient and dedicated
operations
3. Build a sufficiently broad customer base and scale to
share and spread the risks of volatile market cycles and
to increase flexibility and cost competitiveness
4. Make active contributions to our sustainability strategy
To drive a sustainable and resilient supply chain, we
emphasize supplier performance management, supply
chain risk management, and a responsible supply chain.
88
ASML ANNUAL REPORT 2021 Future-proof business relationship ASML
and ZEISS
Since the 1990s, when ZEISS and ASML formed a
strategic partnership under the banner 'two companies
– one business', we have been incredibly successful
together. We mastered technical challenges: immersion
lithography was and continues to be a massive success,
we brought EUV 0.33 NA lithography into volume
chip production, and we now are developing the next
generation, EUV 0.55 NA (High-NA).
ASML and ZEISS have signed a new framework
agreement, taking a long and successful relationship to
the next level in collaboration and alignment. The new
framework agreement is based on three pillars. The first
reasonable time frame, ASML will take action to secure
reliable future supplies.
In addition, we have a structural audit program in place to
assess supply chain risks and identify areas of
improvements to mitigate or reduce those risks.
In 2021, we launched various suppliers improvement
initiatives, in areas such as N-tier (indirect) supplier change
management, product safety and repair. These cross-
sectoral improvement projects aim to accelerate learning
for our suppliers and improve overall supplier
performance.
Suppliers join the capacity drive
is a Behavior & Interaction Model that fosters mutual
As the chip shortage continues, customers are under
respect and understanding between ASML and ZEISS.
pressure to ramp up production, and all eyes are on ASML
The second is a Governance Model that enables both
to help them do that. But with the vast majority of ASML’s
companies to become more effective and aligned in their
products dependent on parts from suppliers, our eyes turn
decision-making and the execution of the strategy in the
to them to match the capacity increase needed. This was
business. The third pillar is a Commercial Model that
the focus of the virtual Supplier Ramp-Up Day on May 18,
covers the entire business relationship between the two
2021. It included two successful live streams with over 320
companies, allowing the product and engineering teams
suppliers participating from Asia, Europe and the US.
to now focus completely on collaborating to serve our
customers. Our mutual intent is to deliver better products
Key speakers included our CEO and senior management
to our customers faster, to grow the business, and to
from DUV and Operations. Their message was clear – with
share the overall responsibility of this business toward the
end customers.
Supplier performance management
ASML's continued growth, in combination with our
ambitions, requires us to significantly improve our key
business processes. Tight risk control and continuous
supply chain improvement are key to ensuring quality,
long-term business continuity and sustainability.
We invest in developing and monitoring our supply
landscape to help suppliers meet our requirements with
regard to quality, logistics, technology, cost and
sustainability (QLTCS). Our supplier profiling methodology
helps us to measure supplier performance, supplier
capability and risk profile in all of these fields.
We have a framework in place to communicate process
requirements and compliance expectations to our
suppliers. This framework outlines our approach to
supplier management and development toward the
desired ASML supplier landscape. It also provides an
enhanced knowledge base to improve our dialogue with
suppliers around their performance and development
potential. We conduct regular operational and
performance review meetings to ensure suppliers continue
to improve their performance and processes. When
supplier performance drops below annually set thresholds
and does not recover upon request and within a
every bit of ASML’s manufacturing capacity currently
utilized, we need our suppliers to ramp up quickly with us,
with quality and delivery performance being critical. It was
a positive call to action – working together, we can deliver
what our customers need and ensure the sustainability of
our industry, to the benefit of all.
Supply chain risk management
Due to the highly specialized nature of many of our parts
and modules, as well as the low volume, it is not always
economical to source from more than one supplier. Our
sourcing strategy therefore (in many cases) prescribes
'single sourcing, dual competence', which requires us to
proactively manage supplier performance and risk.
In our risk management framework, we asses six risk
domains – calamity, ownership, finance, intellectual
property and information security, and compliance. Since
suppliers operating in the same industry or market are
typically exposed to similar risks, we evaluate suppliers’
risk and performance within the context of their supply
market category. We will adjust our category strategies
where required to meet ASML's short- and long-term
business needs. In cases where risk exceeds the agreed
threshold, mitigation measures are taken. For example, we
have long-term supplier agreements (LTSAs) and/or
continuous supply agreements in place, or ensure the
availability of intellectual property in escrow. Read more in:
Our performance in 2021 - Governance - How we manage risk.
89
ASML ANNUAL REPORT 2021 Our performance and progress
We conduct continuous performance and risk
management of our supply base with the purpose to
assure and improve performance, and prevent
reputational damage. To this end, we deploy two key
programs: a suppliers business continuity program aimed
at securing continuity of supply and suppliers information
security, and an information security and cyber resilience
program to protect our intellectual property and maintain a
leading technology position.
Business continuity program
In 2021, we continued to focus on improving business
recovery capabilities through a review of business
continuity plans to be sure that suppliers can re-establish
deliveries within the shortest possible timeframe in case a
disruptive event occurs. We require suppliers to have
business recovery capabilities in line with the ISO 22301
standard. Supplier recovery plans are requested,
evaluated and, where needed, improved to prevent
potential business disruptions. For example, suppliers
might be required to put their inventory in separate
locations, implement fire prevention controls, or increase
buffer stock. In 2021, we included 197 business-critical
product-related suppliers in our business continuity
non-product-
program, and extended the scope with 32 non-product-
related suppliers.
Information security and cyber resilience program
We continued to expand our information security and
cyber resilience program in 2021, leading to a current
scope of 202 suppliers compared to 143 in 2020.
Suppliers with access to top-secret information or with
privileged access to our IT systems were asked to raise
their cyber resilience through the ISO 27001 standard. To
support our suppliers and other ecosystem partners in this
effort, we established a Security Circle of Trust together
with Cyber Weerbaarheid (resilience) Brainport in the
Netherlands. Read more in: Our performance in 2021 -
Governance - Responsible business - Information security.
Responsible supply chain
We actively pursue sustainable development of our supply
chain designed to ensure that our tier-1 suppliers and
contractors conduct their business in a caring and
accountable manner, and that they act as a responsible
business partner. As we seek to ensure a responsible
supply chain, we deploy several programs that focus on
Responsible Business Alliance (RBA) commitment and
standards, due diligence, and our Supplier Sustainability
Program.
RBA Code of Conduct commitment
We are a member of the Responsible Business Alliance
(RBA) and have adopted the RBA Code of Conduct, which
is a standard intended to ensure that working conditions in
the electronics industry, or industries in which electronics
is a key component, and its supply chains are safe, that
workers are treated with respect and dignity, and that
business operations are environmentally responsible and
conducted ethically.
We expect our key suppliers and their suppliers to
acknowledge and comply with the RBA Code of Conduct
as well. This requirement is included in our long-term
product-related suppliers’ contracts. We also encourage
our suppliers to develop their own sustainability strategies,
policies and processes, and we actively pursue our
suppliers’ adherence to this code.
Due diligence
With over 4,700 tier-1 suppliers in our supplier base, it is
important for us to identify and prioritize suppliers at risk.
We apply a risk-based approach to determine which
suppliers are in scope for our more detailed due diligence
process, which consists of three layers:
a. Determine inherent risk level by screening our full
supplier base on ethics, labor, health and safety and
environment risk using the RBA Risk Platform.
b. Apply supplier risk profiling to business-critical
suppliers. For these suppliers we conduct risk
assessment of QLTCS capability elements.
c. Apply an RBA self-assessment questionnaire (SAQ) to
major suppliers, in which we consider the type of
supplier, leverage and geographical location of the
supplier. We focus on our product-related suppliers
covering 80% of our annual spend, business-critical
suppliers including non-product-related suppliers, and
suppliers deemed high risk from our annual RBA risk
screening.
With regard to the suppliers in scope for these detailed
procedures, we expect them to complete the RBA SAQ
each year to validate their compliance with the RBA Code
of Conduct and to determine any potential gaps in relation
to the RBA Code of Conduct standards. We review all
RBA SAQ results, evaluate high risk findings (if any) and
determine severity of the finding. It is our policy to discuss
all high-risk findings with the supplier to evaluate the risk
and to determine if an improvement plan is needed.
A key performance indicator of our approach to ensuring a
sustainable supply chain is the percentage of suppliers in
scope who complete the RBA SAQ. Our target is to
achieve a 90% completion rate by 2025. Our second key
performance indicator is to have 100% improvement plans
in place for high-risk suppliers, as identified by the RBA
self-assessment.
90
ASML ANNUAL REPORT 2021 Our performance and progress
The graphic below provides an overview of the scoping resulted from our due diligence procedure.
Total supply base 2021
€9.0bn total spend
4,657 suppliers
Suppliers
Product-related (PR)
Suppliers
Non-product-related (NPR)
Due diligence
screening
Applied to total supply base
using RBA Risk Assessment
Platform
Supplier
risk profile
Applied to business-critical
suppliers of strategic
importance
RBA self-assessment
questionnaire (SAQ)
Applied to major suppliers
70% of total spend
772
Suppliers
92% of PR spend
197
Suppliers
30% of total spend
3,885
Suppliers
27% of NPR spend
32
Suppliers
79% of PR spend
38% of NPR spend
41
Suppliers
15
Suppliers
We have asked a total of 56 suppliers to complete the detailed RBA SAQ. In general, the RBA SAQ results show a
relatively low risk level in our supply base, as most of our suppliers operate in countries which we believe generally have
a strong rule of law. In 2021, 89% of the suppliers in scope have completed the RBA SAQ (88% in 2020). From this total,
the RBA SAQ indicated an overall high risk for two suppliers.
91
ASML ANNUAL REPORT 2021 We evaluated these potential gaps and we engaged with these suppliers. Based on our evaluation, we determined that
the risks did not relate to an actual breach or incident – we concluded that the high risks were overrated, that no
improvement plan was needed, and we adjusted the scoring. With regard to human rights risks, the RBA SAQ indicated
a high risk on labor for one supplier. Based on our evaluation, we concluded that this risk was related to management
systems rather than actual breaches of human rights. More details can be found in the table below.
Standard
Labor
Number of high risks identified from RBA SAQ
RBA Commitment
To uphold the human rights of all workers (direct and
indirect), and to treat them with dignity and respect as
understood by the international community, including the
International Labor Organization's (ILO) eight fundamental
conventions.
2020
1
2021 Main findings
0
• Own management system, but
not third-party verified
• No public reporting of labor
metrics
Health and Safety To minimizing the incidence of work-related injury
0
0
Environment
Ethics
and illness and to ensure a safe and healthy working
environment. Communication and education is essential
to identifying and solving health and safety issues in the
workplace.
Environmental responsibility is integral to producing
world-class products and services. Adverse effects on
the community, environment and natural resources are to
be minimized while safeguarding the health and safety of
the public.
To meet social responsibilities and to achieve success
in the industry, the highest standards of ethics should
be upheld, including but not limited to business integrity,
anti-bribery and corruption, antitrust and competition,
protecting privacy.
0
0
1
0
• Own management system, but
not third-party verified
• No public reporting of ethics-
related metrics
Members and participants are committed to establishing a management system to ensure:
• compliance with applicable laws, regulations and customer requirements
• conformance with the Code standards
• identification and mitigation of operational risks
• facilitation of continuous improvement.
Amid travel restrictions and other COVID-19
measurements, we have not conducted on-site supplier
audits. We view this as an area of improvement and have
reviewed our previous audit approach. We are considering
whether to involve third-party auditors. We will complete
the review and start implementation in 2022.
Supplier Sustainability Program
Our Supplier Sustainability Program addresses labor,
human rights, safety, ethics and environmental risks in our
tier-1 supply chain by focusing on seven building blocks –
Supplier Code of Conduct (RBA), RBA self-assessment,
responsible minerals sourcing, reducing carbon footprint,
increase re-use capabilities and reducing waste,
information security, and business continuity.
An important element in our Supplier Sustainability
Program is the ‘Letter of Intent’. By signing this Letter of
Intent, suppliers agree to continue adhering to the latest
version of the RBA Code of Conduct, measure and share
their CO2 emission data with ecosystem partners, set
ambitious targets to reduce CO2 emissions, and
collaborate with ASML and ecosystem partners to
remanufacture used system parts, tools, packaging and
other materials to maximize the re-use of materials.
Our performance and progress
By year end 2021, more than 50% of the suppliers in
scope for the first phase roll-out signed the Letter of
Intent, exceeding our initial target of onboarding 20%.
Through the Letter of Intent, our suppliers acknowledge
the joint responsibility and commitment to reduce the
collective environmental footprint, in particular on CO2
emissions contributing to our scope 3 reduction and waste
contributing to our re-use ambitions. Read more in: Our
performance in 2021 - Environmental - Circular economy - Re-use
parts and materials from installed base.
Reduction of CO2 emissions and waste
In 2021, we made a significant step up in our Supplier
Sustainability Program with the ambition to join forces to
achieve the global goal of net zero emissions by 2030. We
launched this program to our top 60 suppliers, with the
intent to gradually increase the scope over time. We
recognize that our suppliers are in different phases of
maturity with regard to CO2 emissions and waste
reduction ambitions, varying from advanced target setting
and performances to not having yet started to measure
their environmental footprint. Using the CO2 emissions
data from our suppliers, we aim to set a baseline in 2022
and agree on emission reduction targets with them.
92
ASML ANNUAL REPORT 2021 Conflict minerals
Like many companies in the electronics industry, our
products contain minerals and metals necessary to the
functionality or production of our products. Such minerals
and metals include tantalum, tungsten, tin and gold, which
are 3TG minerals, or so-called ‘conflict minerals’. We do
not use a significant amount of these 3TG minerals in the
manufacturing of our products. However, certain 3TG
minerals are needed to develop our products and for them
to function. Gold, for example, is used in coating critical
electronic connectors, and tin is used for welding
electronic components and creating EUV light.
We have adopted a series of compliance measures based
on the legal requirements and guidelines of the five-step
framework set forth by the OECD Due Diligence Guidance
from Responsible Supply Chains of Minerals from
Conflict-Affected and High-Risk Areas (OECD Guidance).
As part of our responsible sourcing program we conduct a
reasonable country of origin inquiry. To this end we focus
on five areas, covering a robust management system, risk
identification, risk mitigation, industry collaboration with
the Responsible Minerals Initiative (RMI) organization, and
public reporting.
Despite continuous efforts, we are unable to determine the
precise origin of all of the 3TG minerals included in our
products. This is due to several reasons: 3TG supply chain
complexity, the number of tiers of suppliers to trace the
source, and the limited number of certified conflict-free
smelters for all conflict minerals. To obtain correct data
from our supply chain is a challenge, but we continue our
efforts in this regard. We continue to encourage our
suppliers to trace the origins of the 3TG minerals within
their supply chain in accordance with applicable conflicts
minerals rules and regulations. Furthermore, we request
our suppliers to report smelters who are not listed or
identified on the RBA smelters list to the RBA for audit. For
more information, please see our Conflict Minerals report
available on www.asml.com.
Our supply chain KPIs
The table below shows the key performance indicators (KPIs) and the related 2025 targets. Read more in: Non-financial
statements - Non-financial indicators - Our supply chain for our performance indicators (PIs) and related results. The non-financial data
may include a degree of uncertainty, because of limitations in measurement method and assumptions applied. Read
more in: Non-financial statements - About the non-financial information - Reporting indicators.
KPI
RBA self-assessment completed (in %)1
Suppliers with high risk on sustainability elements evaluated and
follow-up agreed (in %) 2
2019
78%
25%
2020
88%
—
0%
2021
89%
100%
Target 2025
90%
100%
1. This indicator shows the percentage of major suppliers in scope that completed the annual RBA self-assessment questionnaire (SAQ).
2. Zero suppliers were identified with a high risk on sustainability elements.
Contributing to the UN's Sustainable Development Goals
Our ambitions, commitments and programs as described in this chapter contribute to the following SDGs. For further
information on the performance, read more in: Non-financial statements - Non-financial indicators - Our supply chain.
SDG target
SDG target 8.8 - Protect labor rights and promote safe and secure working
environments for all workers, including migrant workers, in particular women
migrants, and those in precarious employment
SDG target 12.2 - By 2030, achieve the sustainable management and efficient
use of natural resources
How we measure our performance
• Compliance with RBA Code of Conduct
• RBA self-assessment questionnaire completion
• Suppliers with high risk on sustainability
elements evaluated and follow-up agreed
• Promote circular procurement
93
ASML ANNUAL REPORT 2021 Governance
We champion integrated corporate governance to build
a relationship of trust, respect and mutual benefit with our stakeholders.
94
ASML ANNUAL REPORT 2021 Corporate governance
We endorse the importance of good corporate
governance, of which independence,
accountability and transparency are the most
significant elements. These are also the
elements on which a relationship of trust
between us and our stakeholders can be built.
ASML Holding N.V. is a public limited liability company
operating under Dutch law. ASML’s shares are listed on
Euronext Amsterdam and NASDAQ.
We have a two-tier board structure, consisting of a Board
of Management responsible for managing the company,
and an independent Supervisory Board which supervises
and advises the Board of Management. For the fulfillment
of their duties, the two Boards are accountable to the
General Meeting, the corporate body representing our
shareholders.
Our governance structure is based on ASML’s articles of
association, Dutch corporate and securities laws and the
Dutch Corporate Governance Code. Because we are
listed on NASDAQ, we are also required to comply with
applicable provisions of the Sarbanes-Oxley Act, the
NASDAQ Listing Rules, and the rules and regulations
promulgated by the US Securities and Exchange
Commission.
ASML corporate governance structure
We are subject to the relevant provisions of Dutch law
applicable to large corporations (structuurregime). These
provisions have the effect of concentrating control over
certain corporate decisions and transactions in the hands
of the Supervisory Board. Procedures for the appointment
and dismissal of Board of Management and Supervisory
Board members are based on the structuurregime.
This section of the Annual Report addresses our corporate
governance structure and the way ASML applies the
principles and best practices of the Dutch Corporate
Governance Code. It also provides information required by
the Decree adopting further rules related to the content of
the management report and the Decree implementing
Article 10 of the Takeover Directive.
In accordance with the Dutch Corporate Governance
Code (https://www.mccg.nl/english), other parts of this
Annual Report address our strategy and culture aimed at
long-term value creation, our values and Code of Conduct,
as well as the main features of our internal control and risk
management systems. Read more in: Who we are and what we
do - Our company, Our position in the semiconductor value chain -
Our strategy, Our performance in 2021 - How we create value and
Our performance in 2021 - Governance - How we manage risk.
Shareholders
Supervisory Board
Board of Management
Business sectors
Business functions
Corporate functions
Employee support
95
ASML ANNUAL REPORT 2021 Board of Management
ASML’s Board of Management is responsible for
managing ASML. Its responsibilities include establishing a
position on the relevance of long-term value creation for
ASML and its business, defining and deploying ASML’s
strategy, establishing and maintaining effective risk
management and control systems, managing the
realization of ASML’s operational and financial objectives
and the corporate social responsibility aspects relevant to
ASML. In fulfilling its management tasks and
responsibilities, the Board of Management is guided by
the interests of ASML and its business and takes into
consideration the interests of our stakeholders.
The current Board of Management is comprised of five
members. It has a dual leadership structure, under the
chairmanship of the President and Chief Executive Officer,
and the vice chairmanship of the President and Chief
Technology Officer. The Board of Management has
adopted a division of tasks, charging individual members
with a specific part of the managerial tasks, but the Board
of Management remains collectively responsible for the
management of ASML.
The Board of Management is supervised and advised by
the Supervisory Board. The Board of Management
provides the Supervisory Board with all the information, in
writing or otherwise, necessary for the Supervisory Board
to properly carry out its duties. Besides the information
provided in the regular meetings, the Board of
Management provides the Supervisory Board with regular
updates on developments relating to our business,
financials, operations, and industry developments in
general. Certain important decisions of the Board of
Management require the approval of the Supervisory
Board, see the Supervisory Board section of this
Corporate Governance chapter.
Further information regarding the general responsibilities of
the Board of Management, the relationship with the
Supervisory Board and various stakeholders, the decision-
making process within the Board of Management, and the
logistics surrounding the meetings can be found in the
Board of Management’s rules of procedure. These are
published in the Governance section on our website.
Appointments
Members of the Board of Management are appointed by the
Supervisory Board on the recommendation of the Selection
and Nomination Committee and upon notification to the
General Meeting. Members of the Board of Management are
appointed for a term of four years. Reappointment for
consecutive four-year terms is possible.
In line with Dutch law, all members of the Board of
Management are engaged by means of a management
services agreement for the duration of their appointment.
The management services agreements between ASML and
the Board of Management members contain specific
provisions regarding severance payments. If ASML
terminates the agreement for reasons which are not
exclusively or mainly found in acts or omissions of the Board
of Management member, a severance payment not
exceeding one year’s base salary will be paid. Furthermore,
current agreements stipulate that a member of the Board of
Management, when giving notice of termination pursuant to
a change of control, will be entitled to a severance amount.
Given that such a resignation is specifically linked to a
change of control, ASML does not consider this provision a
deviation from the Dutch Corporate Governance Code.
The Supervisory Board may suspend and dismiss members
of the Board of Management, but this can only be done after
consulting the General Meeting.
More information about changes to the Board of Management during
2021 can be found in the Supervisory Board Report included in this
Annual Report.
Peter T.F.M. Wennink (1957, Dutch)
President, Chief Executive Officer and Chair of Board of Management
Term expires 2022
Peter Wennink became President and CEO in 2013, having served as Executive VP,
CFO and member of the Board of Management since 1999. Peter was previously a
partner at Deloitte Accountants, focusing on the semiconductor industry. He has an
extensive background in finance and is a member of the Dutch Institute of Registered
Accountants. Peter was a member of the Advisory Board of the Investment Committee
of Stichting Pensioenfonds ABP until December 31, 2021. He serves as vice-chairman
on the board of the FME-CWM, Peter is also a member of the board of Captains of
Industry Eindhoven Region and is Chair of the Eindhovensche Fabrikantenkring and of
the Supervisory Board of the Eindhoven University of Technology. Furthermore, Peter
is council member of Topconsortium voor 'Kennis en Innovatie' TKI HTS&M, member
of the Advisory Committee of the Dutch National Growth Fund and a member of the
Circle of Influence of Startup Delta.
96
ASML ANNUAL REPORT 2021 Martin A. van den Brink (1957, Dutch)
President, Chief Technology Officer and Vice Chair of Board of Management
Term expires 2022
Martin van den Brink has been President and CTO of ASML since 2013. He joined
ASML at its founding in 1984, and for the next 11 years held various positions in
engineering. In 1995 he became Vice President Technology, and in 1999 was
appointed Executive Vice President Product & Technology and member of the Board
of Management. Martin holds a degree in Electrical Engineering from HTS Arnhem
(HAN University), as well as a degree in Physics (1984) from the University of Twente.
In 2012, the University of Amsterdam awarded him an honorary doctorate in physics.
Roger J.M. Dassen (1965, Dutch)
Executive Vice President and Chief Financial Officer
Term expires 2022
Roger Dassen joined ASML in June 2018 and was appointed Executive Vice
President and CFO and member of the Board of Management at the AGM the same
year. He previously served as Global Vice Chair and member of the Executive Board
of Deloitte Touche Tohmatsu Limited, having been CEO of Deloitte Holding B.V.
Roger holds a master’s in Economics and Business Administration, a post-master’s
in Auditing, and a PhD in Business Administration, all from the University of
Maastricht. He is Professor of Auditing at Vrije Universiteit Amsterdam, and sits on
the Supervisory Board of the Dutch National Bank. He is also the Chair of the
Supervisory Board of Maastricht University Medical Center+.
Christophe D. Fouquet (1973, French)
Executive Vice President EUV
Term expires 2022
Christophe Fouquet was appointed Executive Vice President EUV and member of
the Board of Management in 2018. Since joining ASML in 2008, he has held several
positions, including Senior Director Marketing, Vice President Product Management,
and Executive Vice President Applications, a position he held from 2013 until 2018.
Prior to joining ASML, he worked for semiconductor equipment peers KLA Tencor
and Applied Materials. Christophe holds a master’s degree in Physics from the
Institut Polytechnique de Grenoble.
Frédéric J.M. Schneider-Maunoury (1961, French)
Executive Vice President and Chief Operations Officer
Term expires 2022
Frédéric Schneider-Maunoury has been Executive Vice President and Chief
Operations Officer since he joined ASML in 2009. He was appointed to the Board of
Management in 2010. Prior to joining ASML, Frédéric was Vice President Thermal
Products Manufacturing at power generation and rail transport equipment group
Alstom, having previously served as General Manager of the worldwide Hydro
Business of Alstom. Before joining Alstom, Frederic held various positions at the
French Ministry of Trade and Industry. He is a graduate of Ecole Polytechnique (1985)
and Ecole Nationale Supérieure des Mines (1988) in Paris.
97
ASML ANNUAL REPORT 2021 Supervisory Board
Our Supervisory Board supervises the Board of
Management and the general course of affairs of ASML
and its subsidiaries. The Supervisory Board also supports
the Board of Management with advice. In fulfilling its role
and responsibilities, the Supervisory Board takes into
consideration the interests of ASML and its subsidiaries,
as well as the relevant interests of its stakeholders. In the
two-tier structure, the Supervisory Board is a separate and
independent body from the Board of Management and
from ASML. No member of the Supervisory Board
personally maintains a business relationship with ASML,
other than as a member of the Supervisory Board.
The Supervisory Board currently consists of eight
members, with the minimum being three.
In performing its task, the Supervisory Board focuses on,
inter alia, ASML’s corporate strategy aimed at long-term
value creation and the execution thereof, the staffing of
and succession planning for the Board of management,
the management of risks inherent to ASML's business
activities, the financial reporting process, compliance with
applicable legislation and regulations, ASML’s culture and
the activities of the Board of Management in that regard,
the relationship with shareholders and other stakeholders,
and corporate social responsibility issues important for
ASML.
Important management decisions, such as setting the
operational and financial objectives, the strategy designed
to achieve these objectives and the parameters to be
applied in relation thereto, major investments, budget and
the issue, repurchase and cancellation of shares, require
the Supervisory Board’s approval.
The Supervisory Board is governed by its rules of
procedure. Items covered in these rules include the
responsibilities of the Supervisory Board and its
committees, the composition of the Supervisory Board
and its committees, logistics surrounding the meetings,
the meeting attendance of members of the Supervisory
Board, the rotation schedule for these members and the
Committee charters. The Supervisory Board’s rules of
procedure and the committee charters are regularly
reviewed and, if needed, amended. The Audit Committee
charter is reviewed annually to confirm that the charter still
complies with applicable rules and regulations, especially
those relating to the Sarbanes-Oxley Act.
Read more information on the meetings and activities of the
Supervisory Board in 2021 in: Supervisory Board - Supervisory
Board report - Meetings and attendance.
Appointments
The members of the Supervisory Board are appointed by
the General Meeting based on binding nominations
proposed by the Supervisory Board. When nominating
persons for (re)appointment, the Supervisory Board
checks whether the candidates fit the Supervisory Board's
profile. The profile is available in the Governance section
of our website. The General Meeting may reject binding
nominations of the Supervisory Board by way of a
resolution adopted with an absolute majority of the votes
cast, representing at least one-third of ASML’s outstanding
share capital. If the votes cast in favor of such a resolution
do not represent at least one-third of the total outstanding
capital, a new shareholders’ meeting can be convened, at
which the nomination can be overruled by an absolute
majority.
The Supervisory Board generally informs the General
Meeting and the Works Council about upcoming
retirements by rotation at the Annual General Meeting of
Shareholders (AGM) in the year preceding the actual
retirement(s) by rotation. This ensures they have sufficient
opportunity to recommend candidates for the upcoming
vacancies. The Supervisory Board has the right to reject
the proposed recommendations. Furthermore, the Works
Council has an enhanced right to make recommendations
for one-third of the members of the Supervisory Board.
This enhanced recommendation right implies that the
Supervisory Board may only reject the Works Council’s
recommendations in limited circumstances: (i) if the
relevant person is unsuitable or (ii) if the Supervisory
Board would not be duly composed if the recommended
person were appointed as Supervisory Board member.
Members of the Supervisory Board serve for a maximum
term of four years or a shorter period as per the
Supervisory Board’s rotation schedule. Supervisory Board
members are eligible for reappointment for another
maximum term of four years. After that, members may be
reappointed again for a maximum period of two years.
This appointment may be extended for a final term of no
more than two years. The rotation schedule is available in
the Governance section on our website.
If the General Meeting loses confidence in the Supervisory
Board, it may, by an absolute majority of the votes
representing at least one-third of the total outstanding
capital, withdraw its confidence in the Supervisory Board.
This resolution shall result in the immediate dismissal of
the entire Supervisory Board. In such case, the Enterprise
Chamber of the Amsterdam Court of Appeal shall appoint
one or more members to the Supervisory Board at the
request of the Board of Management.
Supervisory Board committees
The Supervisory Board, while retaining overall
responsibility, has assigned some of its tasks and
responsibilities to four committees: the Audit Committee,
the Remuneration Committee, the Selection and
Nomination Committee and the Technology Committee.
Further information on the Supervisory Board committees
can be found in the Supervisory Board report and in the
charters of the committees as posted on our website.
98
ASML ANNUAL REPORT 2021 Gerard J. Kleisterlee (1946, Dutch)
Member of the Supervisory Board since 2015; second term expires in 2023
Chair of the Supervisory Board, Chair of the Selection and Nomination Committee and member of
the Technology Committee
Gerard Kleisterlee joined the Supervisory Board in 2015, and has been its Chair
since 2016. He was President and CEO of the Board of Management of Royal Philips
NV from 2001 until 2011, having worked at the company since 1974. From 2011 to
2022 Gerard was the Chairman of the Board of Vodafone Group Plc. From 2010 until
May 2020, he was a Non-Executive Director of Royal Dutch Shell Plc. Currently,
Gerard is an independent board member at IBEX Limited.
Antoinette (Annet) P. Aris (1958, Dutch)
Member of the Supervisory Board since 2015; third term expires in 2024
Vice Chair of the Supervisory Board since 2021, Member of Remuneration Committee, Technology
Committee and Selection and Nomination Committee
Annet Aris has been a member of the Supervisory Board since 2015. She is Senior
Affiliate Professor of Strategy at INSEAD business school, France, a position she has
held since 2003. From 1994 to 2003 she was a partner at McKinsey & Company in
Germany and until 2019 she was the Non-Executive Director of Thomas Cook
Group. She also sits on the supervisory boards of Jungheinrich AG, Randstad
Holding NV and the Cooperatieve Rabobank U.A.
Johannes (Hans) M.C. Stork (1954, American)
Member of the Supervisory Board since 2014; second term expires in 2022
Member of the Technology Committee and the Remuneration Committee
Hans Stork joined the Supervisory Board in 2014. He is Senior Vice President and
CTO of ON Semiconductor Corporation, a position he has held since 2011. Prior to
that, Hans held a range of senior positions, including Senior Manager at IBM
Corporation, Director of ULSI Research Lab at Hewlett Packard Company, Senior
Vice President and CTO of Texas Instruments, Inc and Group Vice President and
CTO of Applied Materials, Inc. He has also been a member of the Board of
Sematech, and currently sits on the Scientific Advisory Board of imec.
Mark. M.D. Durcan (1961, American)
Member of the Supervisory Board since 2020; first term expires in 2024
Chair of the Technology Committee, member of the Selection and Nomination Committee
Mark Durcan was appointed as a member the Supervisory Board in 2020. From
2012 to 2017, he was CEO of Micron Technology, Inc, having joined the company in
1984, and held various management positions before being appointed as CEO.
Furthermore, Mark was director at Freescale Semiconductor and MWI Veterinary
Supply. Mark is a Non-Executive Director at Advanced Micro Devices, Inc and
Veoneer, a member of the board of AmerisourceBergen Corporation, member of the
Board of Trustees for Rice University (Texas), director at St. Luke's Health System
(Idaho) and Director at Natural Intelligence Systems CA private AI. Startup Company.
99
ASML ANNUAL REPORT 2021 Terri L. Kelly (1961, American)
Member of the Supervisory Board since 2018; first term expires in 2022
Chair of the Remuneration Committee, member of the Selection and Nomination Committee
Terri Kelly has been a member of the Supervisory Board since 2018. Previously, she
was President and Chief Executive Officer at W.L. Gore & Associates from 2005 until
2018, having worked at Gore since 1983 in various management roles. She also served
on Gore’s Board of Directors through July 2018. Terri is a Trustee of the Nemours
Foundation, Vice-Chair of the University of Delaware, and a Trustee of the Unidel
Foundation. She is also a member of the Board of Directors of United Rentals, Inc.
Rolf-Dieter Schwalb (1952, German)
Member of the Supervisory Board since 2015; second term expires in 2023
Chair of the Audit Committee and member of the Remuneration Committee
Rolf-Dieter Schwalb has been a member of the Supervisory Board since 2015. He
was CFO and member of the Board of Management of Royal DSM NV from 2006 to
2014. Prior to that, he was CFO and member of the Executive Board of Beiersdorf
AG. He also held a variety of management positions in Finance, IT and Internal Audit
at Beiersdorf AG and Procter & Gamble Co.
Warren D.A. East (1961, British)
Member of the Supervisory Board since 2020; first term expires in 2024
Member of the Audit Committee
Warren East became a member of the Supervisory Board in 2020. Warren has been
CEO of Rolls-Royce Group Plc since 2015. He spent his early career at Texas
Instruments Ltd from 1985 to 1994. He then joined ARM Holdings, Plc, where he held
various management positions and was appointed as its CEO from 2001 to 2013.
Birgit Conix (1965, Belgian)
Member of the Supervisory Board since 2021; first term expires in 2025
Member of the Audit Committee
Birgit Conix became a member of the Supervisory Board in 2021. Birgit has been
CFO and a member of the Management Board of Sonova Holding AG since June
2021. From 2018 until January 1, 2021, Birgit was a member of the Executive Board
and CFO of TUI AG. Prior to that, she was the CFO of the Belgian media, cable and
telecommunications company Telenet Group NV. Prior to that, she held various
management positions in finance at Johnson & Johnson, Heineken, Tenneco and
Reed Elsevier.
100
ASML ANNUAL REPORT 2021 Other Board-related matters
The section below addresses a number of topics that apply to both the Board of Management and the Supervisory
Board.
Remuneration and share ownership
The remuneration of the Board of Management is determined by the Supervisory Board, on recommendation of the
Remuneration Committee, in accordance with the Remuneration Policy adopted by the General Meeting. The current
Remuneration Policy was adopted by the General Meeting in 2021.
The remuneration of the Supervisory Board is based on the Remuneration Policy. The current Remuneration Policy was
adopted by the General Meeting in 2021. The remuneration of the Supervisory Board is not dependent on our (financial)
results. The members of the Supervisory Board do not receive ASML shares, or rights to acquire ASML shares, as part
of their remuneration.
Board of Management and Supervisory Board members who acquire or have acquired ASML shares or rights to acquire
ASML shares must intend to keep these for long-term investment only. In concluding transactions in ASML shares,
members of the Board of Management and the Supervisory Board must comply with our Insider Trading Rules. Any
transactions in ASML shares performed by members of the Board of Management and the Supervisory Board are
reported to the Dutch AFM. No member of the Supervisory Board currently has any ASML shares or rights to acquire
ASML shares.
We will not and have not granted any personal loans, guarantees, or the like to members of the Board of Management
and the Supervisory Board.
Our Articles of Association provide for the indemnification of the members of the Board of Management and the
Supervisory Board against claims that are a direct result of their tasks, provided that such claims are not attributable to
willful misconduct or intentional recklessness of the respective member. We have also implemented the indemnification
of the members of the Board of Management and the Supervisory Board by means of separate indemnification
agreements for each member.
Detailed information on the Board of Management’s and the Supervisory Board’s remuneration can be found in Supervisory Board -
Remuneration report.
Diversity
On August 6, 2021, the US Securities and Exchange Commission approved the Nasdaq Stock Market’s proposal to
amend its listing standards to encourage greater board diversity and to require board diversity disclosures for Nasdaq-
listed companies. Pursuant to the amended listing standards, ASML, as a foreign private issuer, is required to have at
least two diverse Supervisory Board members or explain the reasons for not meeting this objective. Furthermore, a
Board diversity matrix is required to be included in the Annual Report on Form 20-F, containing certain demographic and
other information regarding members of the Supervisory Board. ASML currently complies with the diversity requirement,
as we currently have three female and five male members on our Supervisory Board. The Board diversity matrix is set
out below.
Board Diversity Matrix (status per December 31, 2021)
The Netherlands
Country of Principal Executive Offices
Foreign Private Issuer
Yes
Disclosure Prohibited under Home Country Law No
Total Number of Supervisory Board members
8 (2020: 9)
Female
Male
Non-Binary
Did Not Disclose
Part I: Gender Identity
Directors
Part II: Demographic Background
Underrepresented Individual in Home Country
Jurisdiction
LGBTQI+
Did Not Disclose Demographic Background
3 (2020: 3)
5 (2020: 6)
0 (2020: 0)
0 (2020: 0)
0 (2020: 0)
0 (2020: 0)
0 (2020: 0)
0 (2020: 0)
0 (2020: 0)
0 (2020: 0)
0 (2020: 0)
0 (2020: 0)
0 (2020: 0)
0 (2020: 0)
0 (2020: 0)
0 (2020: 0)
101
ASML ANNUAL REPORT 2021 On September 28, 2021, a gender diversity bill was
adopted by Dutch Parliament, introducing a quota for the
supervisory boards of Dutch listed companies pursuant to
which the composition of the supervisory board should
comprise at least one-third of both men and women. New
appointments will be declared null and void in the event of
non-compliance with this requirement. Also, the bill
introduced a requirement to set ambitious gender balance
targets for boards of management and senior
management of large listed and non-listed Dutch NVs and
BVs. This gender diversity bill has entered into force on
January 1, 2022. Annually, as of the 2022 reporting year,
companies will have to report on their progress made in
achieving the gender balance targets to the Dutch Social
and Economic Council and in the management report.
Currently, the Supervisory Board meets the gender
criterion of the Dutch gender diversity bill, since both men
and women are represented in the Supervisory Board with
at least three out of eight members.
We recognize the importance of diversity and inclusion: a
diverse and inclusive workforce provides the necessary
mix of voices and points of view required to continue to
innovate and drive our business forward. Ensuring
balanced gender representation has proven to be
challenging in a technology environment such as the one
ASML operates in. Overall, the global STEM (science,
technology, engineering and math) talent pool is scarce
and it is even more challenging to recruit female talent.
Our R&D workforce is 15% female. Nearly 90% of job
positions are STEM related, while peers in the high-tech
industry have more diverse, non-STEM related job
positions. ASML is highly motivated to see more women
pursuing careers in engineering and science now and in
the future, thereby increasing our future talent pool, so that
more women will be available in the future for technical
positions and (senior) management positions, including
the Board of Management. The highly-specialized nature
of our industry means achieving this balance is a long-
term process. We are actively engaged with multiple
educational programs to grow the pipeline, deploy multiple
initiatives to promote STEM education among the future
female talent pool and continue to foster an environment
where on our current workforce can thrive.
Since 2020, we have been developing and formalizing our
approach to diversity and inclusion. We assembled a
Global Diversity & Inclusion Council in 2021 that consists
of senior leaders who act on behalf of ASML to provide
thought leadership. The Council, chaired by a member of
the Board of Management, creates strategic accountability
for results, provides governance and oversight on diversity
and inclusion initiatives, and promotes company-wide
accountability to goals. Our diversity and inclusion
strategy includes the following:
• Engaging a larger talent pool by making opportunities
more visible and accessible
• Creating shared metrics to more clearly evaluate
progress
• Ensuring inclusive leadership behaviors are embedded
in our culture
• Including diverse perspectives in our talent practices
• Providing employees more ways to engage and drive
their careers
Our aim is to be representative of the available skilled
workforce. Creating an environment where all feel
welcome, know they belong and see a career path in front
of them requires diversity at all levels of the organization.
We aim to increase the diversity of our workforce by
fostering a culture that is inclusive of all. We@ASML, our
employee survey, measures inclusion levels each year. In
2021 our Inclusion score was 83% compared to 82% of
top performing global companies. Our goal is to meet or
increase this level of inclusion among our employees on
an ongoing basis. To do this, we set a target to score on
par +/- 3% with the top 25% of this comparison company
list in 2024.
In 2021, we made progress in gender diversity among all
employees and senior management. Female employees
now make up 18% of our workforce worldwide. This
improvement has increased by 1% compared to last year.
We aim to increase this trend as we move toward 2024.
We believe the most effective way to address this is by
focusing on the growth of our existing team members and
expanding the diversity of our talent pool. We’ve set goals
to increase the hiring of women from 20% in 2021 to 23%
by 2024.
We still have work to do in this area and have set specific
goals focused on female leadership levels. The current
representation of women at this level is 8% today and
our ambition is to reach 12% by 2024. To make this
tangible, we’ve set a goal to raise the hiring of female
leaders, from 12% in 2021 to 20% in 2024. We believe
this talented pool will be role models, paving a path for
more to follow. Our ambition is to have more diversity in
our workforce because we believe it is one of the best
ways to attract and retain smart talented people to help
us drive technological innovations forward to meet our
customers’ needs. Read more information on our diversity and
inclusion strategy, initiatives, women in leadership and performance
data in: Our performance in 2021 - Social - Our people - Employee
experience and Non-financial statements - Non-financial indicators
- Our people.
102
ASML ANNUAL REPORT 2021 Conflicts of interest and related party transactions
Conflicts of interest procedures are incorporated in both
the Board of Management’s and the Supervisory Board’s
rules of procedure. These procedures reflect Dutch law
and the principles and best practice provisions of the
Code with respect to conflicts of interest.
There have been no transactions in 2021, nor are there
currently any transactions, between ASML or any of
ASML’s subsidiaries, or any significant shareholder and
any member of the Board of Management, officer,
Supervisory Board member or any relative or spouse
thereof, other than ordinary course compensation
arrangements. Furthermore, ASML has not granted any
personal loans, guarantees, or the like to members of the
Board of Management or Supervisory Board.
Outside positions
Pursuant to Dutch legislation, a member of the Board of
Management may not be a Supervisory Board member in
more than two other large companies or large foundations,
as defined in Dutch law. A member of the Board of
Management may never be the Chairperson of a
Supervisory Board of a large company. Board of
Management members require prior approval from the
Supervisory Board before accepting a position of another
large company or foundation. Members of the Board of
Management are also required to notify the Supervisory
Board of other important functions held or to be held by
them.
Dutch law stipulates that a Supervisory Board member
may not hold more than five Supervisory Board positions
in large companies or large foundations as defined in
Dutch law, with chairmanships counting double.
During the financial year 2021, all members of the Board of
Management and the Supervisory Board complied with
the requirements described above.
General Meeting
A General Meeting (AGM) is held at least once a year and
generally takes place in Veldhoven, the Netherlands.
However, due to the COVID-19 pandemic and in
accordance with the Temporary Act COVID-19 Justice and
Safety, in 2021 the AGM was held fully virtually. The
agenda for the AGM typically includes the following topics:
• Discussion of the management report and the adoption
of the financial statements over the past financial year;
• Discussion of the dividend policy and approval of any
proposed dividends;
• Advisory vote on the Remuneration Report over the past
financial year;
• The discharge from liability of the members of the Board
of Management and the Supervisory Board for the
performance of their responsibilities in the previous
financial year;
• The limited authorization for the Board of Management
to issue (rights to) shares in ASML’s capital, and to
exclude preemptive rights for such issuances, as well as
to repurchase shares and to cancel shares; and
• Any other topics proposed by the Board of
Management, the Supervisory Board or shareholders in
accordance with Dutch law and the articles of
association.
Proposals placed on the agenda by the Supervisory
Board, the Board of Management, or by shareholders,
provided that they have submitted the proposals in
accordance with the applicable legal provisions, are
discussed and resolved upon. Shareholders representing
at least 1.0% of ASML’s outstanding share capital or
representing a share value of at least €50 million are
entitled to place items on the agenda of a General Meeting
at the latest 60 days before the date of the meeting.
Extraordinary general meetings may be held when
considered necessary by the Supervisory Board or Board
of Management. In addition, an extraordinary general
meeting must be held if one or more ordinary or
cumulative preference shareholders, who jointly represent
at least 10% of the issued share capital, make a written
request to that effect to the Supervisory Board and the
Board of Management. The request must specify in detail
the business to be dealt with.
Shareholders’ meetings are convened by public
announcement via the website of ASML no later than 42
days prior to the meeting, as stipulated by Dutch law. The
record date is set at the 28th day prior to the day of the
AGM. Persons who are registered as shareholders on the
record date are entitled to attend the meeting and to
exercise other shareholder rights.
The Board of Management and Supervisory Board
provide the shareholders with the information relevant to
the topics on the agenda by means of an explanation to
the agenda and other documents necessary or helpful for
this purpose. The agenda indicates which agenda items
are voting items, and which items are for discussion only.
All documents related to the General Meeting, including
the agenda with explanations, are posted on our website.
ASML shareholders may appoint a proxy who can vote on
their behalf at the AGM. We also use an internet proxy
voting system, facilitating shareholder participation without
having to attend in person. We also provide the option for
shareholders to issue voting proxies or voting instructions
to an independent civil law notary prior to the AGM. We do
not solicit from or nominate proxies for our shareholders.
103
ASML ANNUAL REPORT 2021 Virtual AGM
In view of the COVID-19 pandemic, we organized a fully virtual AGM in 2021, accommodating virtual attendance of the AGM by
enabling shareholders to follow the proceedings of the meeting via video webcast and to vote electronically during the meeting. The
opportunity to participate in the AGM virtually was offered in addition to the opportunity to vote in advance via written or electronic
proxy. As we highly value the interaction with our shareholders, we invited shareholders to submit questions about the agenda
items prior to the AGM and we provided holders of shares traded on Euronext Amsterdam the opportunity to ask live questions in
writing through the virtual meeting platform or verbally via a video connection. We received a total of 19 questions before and during
the meeting. All questions were answered during the AGM.
Resolutions are adopted by the General Meetings by an
absolute majority of the votes cast (except where a
different proportion of votes are required by the Articles of
Association or Dutch law), and there are generally no
quorum requirements applicable to such meetings.
Voting results from the AGM are made available on our
website within 15 days of the meeting. The draft report of
the AGM is made available on our website or on request
no later than three months after the meeting. Shareholders
have the opportunity to provide comments in the
subsequent three months, after which the report is
adopted by the Chairman and the Secretary of the
meeting. The adopted report is also available on our
website and on request.
Powers
In addition to the items submitted annually at the AGM, the
General Meeting also has other powers, with due
observance of the statutory provisions. These include
resolving:
• To amend the articles of association;
• To issue shares if and insofar as the Board of
Management has not been designated by the General
Meeting for this purpose; and
• To adopt the Remuneration Policies for the members of
the Board of Management and the Supervisory Board.
(Proposed) amendments of the Articles of Association
require the approval of the Supervisory Board. A quorum
requirement applies for the General Meeting at which an
amendment of the Articles of Association is proposed:
more than half of the issued share capital is required to be
represented; the proposal requires a voting majority of at
least three-fourths of the votes cast. If the quorum
requirement is not met, a subsequent General Meeting
shall be convened, to be held within four weeks of the first
meeting. At this second meeting, the resolution can be
adopted with at least three-fourths of the votes cast,
irrespective of the share capital represented. If a resolution
to amend the Articles of Association is proposed by the
Board of Management, the resolution will be adopted with
an absolute majority of votes cast irrespective of the
represented share capital at the General Meeting.
A brief summary of the most significant provisions of our
Articles of Association is included as Exhibit 99.1 to our
form 6-K furnished to the SEC on February 8, 2013 (the
‘Articles of Association’), which is incorporated by
reference herein.
104
ASML ANNUAL REPORT 2021 Share capital
ASML's authorized share capital amounts to €126.0 million and is divided into:
Type of shares
Cumulative preference shares
Ordinary shares
Ordinary shares B
Amount of shares
Nominal value
Votes per share
700,000,000
€0.09 per share
699,999,000
€0.09 per share
9,000
€0.01 per share
9
9
1
The issued and fully paid up ordinary shares with a nominal value of €0.09 each were as follows:
Year ended December 31
Issued ordinary shares with nominal value of €0.09
Issued ordinary treasury shares with nominal value of €0.09
Total issued ordinary shares with nominal value of €0.09
2019
2020
2021
419,810,706
416,514,034
402,601,613
5,848,998
2,983,454
3,873,663
425,659,704
419,497,488
406,475,276
82,915,935 ordinary shares were held by 286 registered
holders with a registered address in the US. Since certain
of our ordinary shares were held by brokers and
nominees, the number of record holders in the US may not
be representative of the number of beneficial holders, or of
where the beneficial holders are resident.
ASML and the relevant customer. The shares issued in the
CCIP were held by foundations which issued depository
receipts to participants in the CCIP. A total of 96,566,077
depository receipts for ordinary shares were issued at the
launch of the CCIP. This number has since decreased with
the sell-down by the relevant customers following expiry of
the lock-up.
Each ordinary share consists of 900 fractional shares.
Fractional shares entitle the holder thereof to a fractional
dividend, but do not give entitlement to voting rights. Only
those persons who hold shares directly in the share
register in the Netherlands, held by us at our address at
5504 DR Veldhoven, de Run 6501, the Netherlands, or in
the New York share register, held by JP Morgan Chase
Bank, N.A., P.O. Box 64506, St. Paul, MN 55164-0506,
United States, can hold fractional shares. Shareholders
who hold ordinary shares through the deposit system
under the Dutch Securities Bank Giro Transactions Act
maintained by the Dutch central securities depository
Euroclear Nederland or through the Depository Trust
Company cannot hold fractional shares.
No ordinary shares B and no cumulative preference
shares have been issued.
Special voting rights, limitation voting rights and
transfers of shares
There are no special voting rights on the issued shares in
our share capital.
There are currently no limitations, either under Dutch law
or in ASML’s Articles of Association, on the transfer of
ordinary shares in the share capital of ASML. Pursuant to
ASML’s Articles of Association, the Supervisory Board’s
approval shall be required for every transfer of cumulative
preference shares.
Issue and repurchase of (rights to) shares
Our Board of Management has the power to issue
ordinary shares and cumulative preference shares insofar
as it has been authorized to do so by the General Meeting.
The Board of Management requires approval of the
Supervisory Board for such an issue. The authorization by
the General Meeting can only be granted for a certain
period not exceeding five years and may be extended for
no longer than five years on each occasion. If the General
Meeting has not authorized the Board of Management to
issue shares, the General Meeting will be authorized to
issue shares on the Board of Management’s proposal,
provided that the Supervisory Board has approved such
proposal.
In 2012, we issued shares to three key customers – Intel,
TSMC and Samsung – as part of the customer co-
investment program (CCIP) to accelerate ASML’s
development of EUV. Under this program, the participating
customers funded certain development programs and
invested in ASML’s ordinary shares. Currently, only one
participating customer still holds (directly or indirectly)
ordinary shares. Certain voting restrictions apply in
respect of ordinary shares issued in connection with the
CCIP. These voting restrictions in respect of these ordinary
shares are set out in the underlying agreement between
Holders of ASML’s ordinary shares have a preemptive
right, in proportion to the aggregate nominal amount of the
ordinary shares held by them. This preemptive right may
be restricted or excluded. Holders of ordinary shares do
not have preemptive right with respect to any ordinary
shares issued for consideration other than cash or
ordinary shares issued to employees. If authorized for this
purpose by the General Meeting, the Board of
Management has the power, subject to approval of the
Supervisory Board, to restrict or exclude the preemptive
rights of holders of ordinary shares.
105
ASML ANNUAL REPORT 2021 2021 authorization to issue shares
At our 2021 AGM, the Board of Management was
authorized from April 29, 2021 through October 29, 2022,
subject to the approval of the Supervisory Board, to
issue shares and / or rights thereto representing up to a
maximum of 5% of our issued share capital at April 29,
2021, plus an additional 5% of our issued share capital
at April 29, 2021 that may be issued in connection with
mergers, acquisitions and / or (strategic) alliances. Our
shareholders also authorized the Board of Management
through October 29, 2022, subject to approval of the
Supervisory Board, to restrict or exclude preemptive
rights with respect to holders of ordinary shares up to a
maximum of 5% of our issued share capital in connection
with the general authorization to issue shares and/ or
rights to shares, plus an additional 5% in connection with
the authorization to issue shares and/ or rights to shares in
connection with mergers, acquisitions and / or (strategic)
alliances.
We may repurchase our issued ordinary shares at any
time, subject to compliance with the requirements of
Dutch law and our Articles of Association. Any such
repurchases are subject to the approval of the Supervisory
Board and the authorization by the General Meeting,
which authorization may not be for more than 18 months.
2021 authorization to repurchase shares
At the 2021 AGM, the Board of Management was
authorized, subject to Supervisory Board approval, to
repurchase through October 29, 2022, up to a maximum
of two times 10% of our issued share capital at April 29,
2021, at a price between the nominal value of the ordinary
shares purchased and 110% of the market price of these
securities on Euronext Amsterdam or NASDAQ.
Read more details on our share buyback program in: Consolidated
Financial Statements - Notes to the Consolidated Financial
Statements - Note 22 Shareholders’ equity.
ASML Preference Shares Foundation
The ASML Preference Shares Foundation (Stichting
Preferente Aandelen ASML), a foundation organized under
Dutch law, has been granted an option right to acquire
preference shares in the share capital of ASML. The
Foundation may exercise the Preference Share Option in
situations where, in the opinion of the Foundation’s Board
of Directors, ASML’s interests, ASML’s business or the
interests of ASML’s stakeholders are at stake. This may be
the case if:
• A public bid for ASML’s shares is announced or made,
or there is a justified expectation that such a bid will be
made without any agreement having been reached with
ASML in relation to such a bid; or
• In the opinion of the Foundation’s Board of Directors, the
(attempted) exercise of the voting rights by one
shareholder or more shareholders, acting in concert, is
materially in conflict with ASML’s interests, ASML’s
business or ASML’s stakeholders.
Objectives of the Foundation
The Foundation’s objectives are to look after the interests
of ASML and the enterprises maintained by and/or
affiliated in a group with ASML, in such a way that the
interests of ASML, of those enterprises and of all parties
concerned are safeguarded in the best possible way, and
that influences in conflict with these interests, which might
affect the independence or the identity of ASML and those
companies, are deterred to the best of the Foundation’s
ability, and everything related to the above or possibly
conducive thereto. The Foundation aims to realize its
objects by acquiring and holding cumulative preference
shares in the capital of ASML and by exercising the rights
attached to these shares, particularly the voting rights.
The Preference Share Option
The Preference Share Option gives the Foundation the
right to acquire such number of cumulative preference
shares as the Foundation will require, provided that the
aggregate nominal value of such number of cumulative
preference shares shall not exceed the aggregate nominal
value of the ordinary shares issued at the time of exercise
of the Preference Share Option. The subscription price will
be equal to their nominal value. Only one-fourth of the
subscription price would be payable at the time of initial
issuance of the cumulative preference shares, with the
other three-fourths of the nominal value only being
payable when ASML calls up this amount. Exercise of the
preference share option could effectively dilute the voting
power of the outstanding ordinary shares by one-half.
Cancellation of cumulative preference shares
Cancellation and repayment of the issued cumulative
preference shares by ASML requires authorization by the
General Meeting, on a proposal to this effect made by the
Board of Management and approved by the Supervisory
Board. If the Preference Share Option is exercised and as
a result cumulative preference shares are issued, ASML
will initiate the repurchase or cancellation of all cumulative
preference shares held by the Foundation on the
Foundation’s request. In that case, ASML is obliged to
effect the repurchase and respective cancellation as soon
as possible. A cancellation will result in a repayment of the
amount paid and exemption from the obligation to pay up
on the cumulative preference shares. A repurchase of the
cumulative preference shares can only take place when
such shares are fully paid up.
If the Foundation does not request ASML to repurchase or
cancel all cumulative preference shares held by the
Foundation within 20 months of issuance of these shares,
we will be required to convene a General Meeting for the
purpose of deciding on a repurchase or cancellation of
these shares.
106
ASML ANNUAL REPORT 2021 Board of Directors
The Foundation is independent of ASML. The Board of Directors of the Foundation is composed of four independent
members from the Netherlands’ business and academic communities. The Foundation’s Board of Directors is composed
per December 31, 2021 of the following members: Mr. A.P.M. van der Poel, Mr. S. Perrick, Mr. A.H. Lundqvist and Mr. J.
Streppel.
Other than the arrangements made with the Foundation as described above, ASML has not established any other anti-
takeover devices.
Major shareholders
The Dutch Act on the supervision of financial markets and US securities laws contain requirements regarding the
disclosure of capital interests and voting rights in listed companies. The following table sets forth the total number of
ordinary shares owned by each shareholder that reported to the Dutch AFM or the US SEC a beneficial ownership of
ordinary shares that is at least 3.0% (5.0%, in the case of the SEC) of our ordinary shares issued and outstanding. Also
included in the table below is the total number of ordinary shares owned by our members of the Board of Management
as of December 31, 2021. The information set out below with respect to shareholders is based on public filings with the
SEC and AFM as of January 31, 2022.
Capital Research and Management Company 1
BlackRock Inc. 2
Baillie Gifford & Co 3
Members of ASML’s current Board of Management (5 persons) 4,5
Shares
% of Class6
63,658,826
32,024,422
18,262,995
89,892
15.81%
7.95%
4.54%
0.02%
1. As reported to the AFM on February 28, 2020, Capital Research & Management Company ("CRMC") reports 572,929,434 voting rights, corresponding to 63,658,826
ordinary shares (based on 9 votes per share), but do not report ownership rights related to those shares. Capital World Investors reported on a Schedule 13-G/A filed
with the SEC on February 14, 2020, that it is the beneficial owner of 34,865,768 shares of our ordinary shares as a result of its affiliation with CRMC. Capital World
Investors, which is a division of Capital Research and Management Company, as well as its investment management subsidiaries and affiliates Capital Bank and Trust
Company, Capital International, Inc., Capital International Limited, Capital International Sarl and Capital International K.K. (reported on a Schedule 13-G/A filed with the
SEC on February 16, 2021) that it is the beneficial owner of 28,032,968 of our ordinary shares. We believe that some or all of these shares are included within the shares
reported to be owned by Capital Research and Management Company, as set forth above.
2. Based solely on the Schedule 13-G/A filed by BlackRock Inc. with the SEC on January 29, 2021; BlackRock reports voting power with respect to 28,755,630 of these
shares. A public filing with the AFM on May 10, 2021 shows an aggregate indirect capital interest of 5.95% and voting rights of 5.81%, based on the total number of
issued shares and voting rights at that time.
3. A public filing with the AFM on October 1, 2019 shows Baillie Gifford & Co have 147,694,140 voting rights, corresponding to 18,262,995 shares (based on 9 votes per
share), but no ownership rights related to those shares.
4. Does not include unvested shares granted to members of the Board of Management. For further information see Leadership and governance - Remuneration report.
5. No shares are owned by members of the Supervisory Board.
6. As a percentage of the total number of ordinary shares issued and outstanding 402,601,613 as of December 31, 2021, which excludes 3,873,663 ordinary shares which
have been issued but are held in treasury by ASML. The share ownership percentages reported to the AFM are expressed as a percentage of the total number of
ordinary shares issued (including treasury stock) and accordingly, percentages reflected in this table may differ from percentages reported to the AFM.
107
ASML ANNUAL REPORT 2021 Financial Reporting and Audit
ASML publishes, among others, the following annual
reports regarding the financial year 2021:
• The statutory Annual Report, prepared in accordance
with the requirements of Dutch law. The financial
statements included therein are prepared in accordance
with Part 9 of Book 2 of the Dutch Civil Code and EU-
IFRS;
• The Annual Report on Form 20-F, prepared in
accordance with the requirements of the Exchange Act.
The financial statements included therein are prepared
in conformity with US GAAP.
Both reports have the same qualitative base and describe
the same risk factors that are specific to the
semiconductor industry, ASML and ASML’s shares. We
also provide sensitivity analyses by providing:
• A narrative explanation of ASML’s financial statements;
• The context within which financial information should be
analyzed;
• Information about the quality, and variability, of our
earnings and cash flow.
With respect to the process of creating the Annual Report,
we have extensive guidelines for the content and layout of
our report. These guidelines are primarily based on the
applicable laws and regulations referred to above. With
respect to the preparation process of these and the other
financial reports, we apply internal procedures to
safeguard the completeness and accuracy of such
information as part of its disclosure controls and
procedures. The Disclosure Committee assists the Board
of Management in overseeing ASML’s disclosure activities
and ensures compliance with applicable disclosure
requirements arising under Dutch and US law, and other
regulatory requirements. These internal procedures are
frequently discussed by the Audit Committee and the
Supervisory Board. Read more in: Our performance in 2021 -
Governance - How we manage risk - Enterprise Risk Management
where ASML’s internal risk management and control systems are
discussed.
The Supervisory Board has reviewed and approved, and
all Supervisory Board members signed, ASML’s 2021
financial statements as prepared by the Board of
Management. KPMG has duly examined our financial
statements, and the Auditor’s Report is included in the
Consolidated Financial Statements.
External Audit
In accordance with Dutch law, our external auditor is
appointed by the General Meeting, based on a nomination
for appointment by the Supervisory Board. The
Supervisory Board bases its nomination on the advice
from the Audit Committee and the Board of Management,
who annually provide a report to the Supervisory Board on
the performance of and relationship with the external
auditor, as well as its independence. ASML’s current
external auditor, KPMG, was first appointed by the
General Meeting in 2015 for the reporting year 2016, and
has been reappointed on a yearly basis since then. At the
2020 AGM, KPMG was appointed as the external auditor
for the reporting year 2021.
The Audit Committee reviews and approves the external
auditor’s audit plan for the audits planned during the
financial year. The audit plan also includes, among others,
the activities of the external auditor with respect to their
limited procedures on the quarterly results other than the
annual accounts. Proposed services may be preapproved
at the beginning of the year by the Audit Committee
(annual pre-approval) or may be pre-approved during the
year by the Audit Committee in case of a particular
engagement (specific pre-approval). The annual pre-
approval is based on a detailed, itemized list of services to
be provided, which is designed to ensure there is no
management discretion in determining whether a service
has been approved, and to ensure the Audit Committee is
informed of each service it is pre-approving.
Dutch rules require strict separation of audit and advisory
services for Dutch public-interest entities and US
regulations restrict services that can be provided by an
auditor of a US listed company. Dutch law prohibits the
acceptance by the external auditor of other services when
an audit is performed. The Audit Committee monitors
compliance with Dutch and US rules on services provided
by the external auditor.
The remuneration of external auditor is approved by the
Audit Committee on behalf of the Supervisory Board, and
after consulting the Board of Management. As the Audit
Committee has the most relevant insight and experience
in this area, the Supervisory Board has delegated these
responsibilities to the Audit Committee. Read more
information on principal accountant fees and services in: Other
appendices - Appendix - Principal accountant fees and services.
In principle, the external auditor attends all the Audit
Committee meetings. The external auditor’s findings are
discussed at these meetings. The Audit Committee
reports to the Supervisory Board on the topics discussed
with the external auditor, including the external auditor’s
reports with regards to the audit of the annual reports as
well as the content of the annual reports. Furthermore, the
external auditor may attend the Supervisory Board
meeting in which the annual external audit report is
discussed. The external auditor may also attend
Supervisory Board meetings in which the quarterly
financial results are discussed.
The Audit Committee is informed by the external auditor
without delay in case the external auditor would discover
irregularities in the content of the audit of the financial
reports.
108
ASML ANNUAL REPORT 2021 The external auditor is present at our AGM to respond to questions, if any, from the shareholders about the auditor’s
report on the Consolidated Financial Statements.
Internal Audit
The role of our Internal Audit function is to assess our systems of internal controls by performing independent
procedures such as risk-based operational audits, IT audits and compliance audits. The Internal Audit department
reports directly to the Audit Committee and the Board of Management. The yearly Internal Audit plan is discussed with
and approved by the Audit Committee, the Board of Management and the Supervisory Board. The follow-up on the
Internal Audit findings and progress made compared to the plan are discussed on a quarterly basis with the Audit
Committee. The external auditor and Internal Audit department have meetings on a regular basis.
Corporate Information
ASML Holding N.V. is a holding company that operates through its subsidiaries. We have operating subsidiaries in the
Netherlands, the United States, Italy, France, Germany, the United Kingdom, Ireland, Belgium, South Korea, Taiwan,
Singapore, China, Hong Kong, Japan, Malaysia and Israel. Read more in: Exhibit index - Exhibit 8.1 - List of main subsidiaries.
US Listing Requirements
As ASML's New York Shares are listed on NASDAQ Stock Market LLC (‘NASDAQ’), NASDAQ corporate governance
standards in principle apply to us. However, NASDAQ rules provide that foreign private issuers may follow home country
practice in lieu of the NASDAQ corporate governance standards subject to certain exceptions. Our corporate
governance practices are primarily based on Dutch requirements. The table below sets forth the practices followed by
ASML in lieu of NASDAQ rules based upon the exception as described above.
Quorum
Solicitation of
proxies
Distribution Annual
Report
Equity compensation
arrangements
ASML does not follow NASDAQ’s quorum requirements applicable to meetings of ordinary shareholders. In
accordance with Dutch law and generally accepted Dutch business practice, ASML’s Articles of Association
provide that there are no quorum requirements generally applicable to general meetings of shareholders.
ASML does not follow NASDAQ’s requirements regarding the solicitation of proxies and the provision of
proxy statements for general meetings of shareholders. ASML does furnish proxy statements and solicit
proxies for the General Meeting. Dutch corporate law sets a mandatory (participation and voting) record
date for Dutch listed companies at the 28th day prior to the date of the General Meeting. Shareholders
registered at such record date are entitled to attend and exercise their rights as shareholders at the General
Meeting, regardless of sale of shares after the record date.
ASML does not follow NASDAQ’s requirement regarding distribution to shareholders of copies of an
annual report containing audited Financial Statements prior to our AGM. The distribution of our Annual
Reports to shareholders is not required under Dutch corporate law or Dutch securities laws, or by Euronext
Amsterdam. Furthermore, it is generally accepted business practice for Dutch companies not to distribute
annual reports. In part, this is because the Dutch system of bearer shares has made it impractical to keep
a current list of holders of the bearer shares in order to distribute the annual reports. Instead, we make our
Annual Report available at our corporate head office in the Netherlands (and at the offices of our Dutch
listing agent as stated in the convening notice for the meeting) no later than 42 days prior to convocation of
the AGM. In addition, we post a copy of our Annual Reports on our Website prior to the AGM.
ASML does not follow NASDAQ’s requirement to obtain shareholder approval of stock option or purchase
plans or other equity compensation arrangements available to officers, directors or employees. It is not
required under Dutch law or generally accepted practice for Dutch companies to obtain shareholder
approval of equity compensation arrangements available to officers, directors or employees. The General
Meeting adopts the Remuneration Policy for the Board of Management, approves equity compensation
arrangements for the Board of Management and approves the remuneration for the Supervisory Board. The
Remuneration Committee evaluates the achievements of individual members of the Board of Management
with respect to the short and long-term quantitative performance, the full Supervisory Board evaluates the
quantitative performance criteria. Equity compensation arrangements for employees are adopted by the
Board of Management within limits approved by the General Meeting.
Compliance with the Corporate Governance Code
We closely follow the developments in the area of corporate governance and the applicability of the relevant corporate
governance rules for ASML. Any substantial changes to ASML’s corporate governance structure or application of the
Corporate Governance Code will be submitted to the General Meeting for discussion.
We are of the opinion that ASML fully complies with the Dutch Corporate Governance Code.
The Board of Management and the Supervisory Board,
Veldhoven, February 9, 2022
109
ASML ANNUAL REPORT 2021 How we manage risk
ASML manages risks through an Enterprise Risk Management (ERM) framework that integrates
risk management into our daily business activities and strategic planning.
Enterprise Risk Management
We deploy our ERM framework through a well-defined governance structure and a robust ERM process. The Risk and
Business Assurance function drives the ERM process and associated activities across ASML and its affiliates. It takes a
systematic approach to identify, manage and monitor risks in pursuit of our business objectives by setting standards and
enabling management to make ASML's governance, risk management, internal control and compliance more efficient
and effective. The framework also helps to identify opportunities that allow us to achieve our objectives and enable
continuous sustainable growth.
ERM is a continuous process. Its related activities are periodically repeated to identify and address risks in a timely
fashion, and its results remain relevant for decision-making purposes. Our Vice President of Risk and Business
Assurance, reporting to ASML's CFO, is responsible for leading the development and maintenance of the ERM
framework and makes sure the ERM process is carried out. ASML has adopted the ISO 31000:2018 standard as the
foundation of its enterprise risk management. In addition, the Vice President of Risk and Business Assurance is
responsible for leading the security, and internal control function and for the development and maintenance of the
compliance process.
Risk management governance structure
Supervisory Board
Audit Committee
Request to investigate
specific risk topics
• Bi-annual risk review
• Risk topics feedback
• Assertion on control effectiveness
• Quarterly progress reporting
Board of Management
Corporate Risk Committee
Risk oversight
Disclosure Committee
Internal Control Committee
Assess internal control over financial reporting
Risk appetite •
Risk management policy •
CRC sub-committees (governance) •
• Risk assessment results
• Risk response progress
• Incidents
• Control effectiveness
Risk owners
Supervisory Board and Audit Committee
The Supervisory Board provides independent oversight on management’s response to identifying and mitigating critical
risk areas based on regular risk reviews. The Supervisory Board’s Audit Committee provides independent oversight on
the ERM process and the timely follow-up on priority actions based on quarterly progress updates.
Board of Management
The Board of Management is responsible for managing the internal and external risks related to our business activities
and for making sure we comply with applicable laws and regulations. The Board of Management has delegated its risk
oversight to ASML’s Corporate Risk Committee.
Corporate Risk Committee
The Corporate Risk Committee is a central risk oversight body that reviews, manages and controls risks in the ASML risk
universe, including information security. It also approves the risk appetite, risk-management policies and risk-mitigation
strategies. The Corporate Risk Committee is chaired by the CFO and comprises senior management representatives
from all sectors at ASML, including the CEO and COO.
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ASML ANNUAL REPORT 2021 Disclosure Committee
The Disclosure Committee assists the Board of Management in overseeing ASML’s disclosure activities and compliance
with applicable disclosure requirements arising under Dutch and US law and applicable stock exchange regulations, and
other regulatory requirements.
Internal Control Committee
The Internal Control Committee, which includes members of the Disclosure Committee, advises the Disclosure
Committee and the CEO and CFO in their assessment of our internal control over financial reporting and disclosures,
under section 404 of the Sarbanes-Oxley Act. The Chair of the Internal Control Committee updates the Audit Committee,
the CEO and CFO on the progress of this assessment. The Chair also includes this update in the report to the Audit
Committee.
Risk owners
Risk owners monitor the development of risks in the ASML risk universe and drive risk response across the ASML
organization according to requirements that are defined by the Corporate Risk Committee.
ASML risk universe
The ASML risk universe is a consolidated overview of the risks that may have a material adverse effect in achieving our
business objectives. It consists of 38 risk categories grouped into six risk types. This allows us to have a consistent
approach across ASML when assessing risks.
We take into account a broad range of internal and external information sources such as macroeconomic and industry
trends, relevant guidelines and legislation, and stakeholders’ needs and expectations in all areas. The risk universe is
reviewed, updated and approved on a yearly basis, or more frequently in case of significant internal and/or relevant
external developments.
ASML Risk Universe
Strategy and products
• Industry cycle risk
• Political risk
• Climate change risk
• Product portfolio risk
• Business model risk
• Merger & acquisition risk
• Competition risk
• Innovation risk
• Product stewardship risk
• Roadmap execution
• Intellectual property rights
Finance and
reporting
• Business planning risk
• Foreign exchange rate risk
• Liquidity risk
• Interest rate risk
• Capital availability risk
• Counterparty credit risk
• Shareholder activism risk
• Disclosure / external reporting risk
Partners
People
Operations
• Customer dependency risk
• Cost of ownership risk
• Product / service quality risk
• Supplier strategy &
performance risk
• Supply chain disruption risk
• Knowledge management risk
• Organizational effectiveness risk
• Human resource risk
• Labor condition risk
• Product industrialization risk
• Process effectiveness &
efficiency risk
• Safeguarding of assets risk
• Environment, health & safety risk
• Continuity of own operation risk
• Information security risk
• Information technology risk
Legal and compliance
• Legal liability risk
• Violation of laws & regulations risk
• Internal control / compliance risk
Enterprise Risk Management process
Our ERM process provides a holistic approach combining both top-down (company-level) and bottom-up (organization-
and process-level) perspectives. This helps us to ensure that risk identification, evaluation, and management are
performed at the right level. Our ERM process is subject to continuous improvement. For example, in 2021 we started to
implement key risk indicators.
The results of periodic risk assessments and the potential impact of external trends and emerging risks are captured in
the ASML risk landscape. As we operate in a dynamic environment, risk exposures are subject to change. The ASML risk
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ASML ANNUAL REPORT 2021
landscape is reviewed, updated and discussed by the Corporate Risk Committee each quarter. The execution of the risk
assessments is done according to the risk management plan and any additional engagement approved by the Corporate
Risk Committee. We define strategies to address relevant risks and take these into account when we define the corporate
priorities. ASML defines risk responses with the aim to mitigate the risks up to the level defined by the risk appetite.
Risk management process
Risk assessment
Risk response
Top-down risk assessment
Corporate Risk Committee / Risk owners / Emerging risks
Coordination and follow up
Risk owners
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Risk appetite
Risk analysis
Risk evaluation
Risk
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Risk treatment
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Bottom-up risk assessment
Country / sector management
Execution
Action owners
Risk appetite
Our risk appetite depends on the nature of the risk. ASML’s risk appetite – the level of risk ASML is willing to accept to
achieve its objectives – may vary based on the specific risk and is divided into five levels: Averse, Prudent, Moderate,
High and Extensive. Our approach is geared toward mitigating the risks to the level defined in our risk appetite.
Risk type
Averse
Prudent
Moderate
High
Extensive
Strategy and product
Partners
People
Operations
Finance and reporting
Legal and compliance
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ASML ANNUAL REPORT 2021
Risk developments
The table below presents examples of external developments that have affected the exposure of a series of risk
categories in 2021, including examples of our responses. The list of risks and risk responses below is not exhaustive.
Challenges to meet demand
There is an increasing demand across all market segments and our product portfolio which
is an opportunity for us that also brings challenges. Our systems are critical in this surge in
demand. We notice a stretch to increase production capacity in our end-to-end supply chain
to meet this demand. This is amplified by chip and material shortages.
In addition, stepping up in hiring and retaining the workforce in the current competitive
market is increasingly challenging. The growth in our business could also lead to well-being
issues, increasing use of workarounds and in some cases the risk of non-compliance
with internal processes and/or controls. Our processes and systems may not be able to
adequately support our growth and development.
Risk category
• Supplier strategy and performance
• Supply chain disruption
• Product industrialization
• Human resource
• Product and service quality
• Competition
• Industry cycle
• Political
• Legal liability
• Process effectiveness and efficiency
• Violations of laws and regulations
The demand increase we have been and are continuing to experience could change
customers' sourcing strategy to get less dependent on ASML. This can impact our market
share in certain segments.
Risk response
• Increase of manufacturing capabilities and utilization rate on short and long term
• Cycle time reduction
• Supplier support to increase move rate and mitigate chip- and material shortages
• Improve compensation offering and enhance recruiting activities
• Execute well-being program
• Increase training programs and onboarding experience
• Internal control framework and assessments
IP technology leadership pressure
There is increased pressure on know-how and IP protection for ASML and its open
innovation partners. ASML’s existence is based on people and knowledge. Unauthorized
disclosure of information of ASML, its customers or suppliers may benefit competitors,
negatively affect ASML’s ability to file patents or affect cooperation with customers and
suppliers.
Risk category
• Information security
• Intellectual property rights
• Competition
We are experiencing cyberattacks on our information technology systems and our suppliers,
customers and other service providers also experience such cyberattacks.
We are committed to protect our information assets and those of our partners.
We observe that risk exposure in 2021 remains high.
Risk response
• Information security function and information security policy to implement controls to ensure authorized use of information
• Significant increase of our information security investments (people, systems) and security roadmap to increase security of our
processes and systems
• Cyber Defense Center
• Security incident response procedure in place and tested at least annually
• Awareness and training programs
• IP rights management
• Patents and relevant technical publications monitoring
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ASML ANNUAL REPORT 2021 Geopolitical tensions
Export restrictions are rising, and global trade is shifting from globalization to regionalization,
particularly between China and the US and countries that strive for technological
sovereignty. This may lead to a decoupled ecosystem and - in the longer term –
overcapacity. Trade and export barriers have impacted our ability to sell and maintain
systems to certain customers and impact our business by limiting our ability to sell our
products and services in certain jurisdictions or to certain customers.
Risk category
• Political
• Continuity of own operations
• Human resources
• Business model
• Industry cycle
• Violations of laws and regulations
Geopolitical tensions also result in movement restrictions of the employees across
countries. Protectionism and bureaucracy are increasing, as well as restrictions impacting
international knowledge workers from certain countries, (e.g. restricted technology access,
visa/travel restrictions).
We aim to serve and support all our customers around the world to the best of our ability,
while being compliant with laws and regulations set by the jurisdictions where we operate.
Risk exposure with regard to political tensions, protectionism and restriction remains high in
2021.
Risk response
• Monitor geopolitical developments
• Apply for export licenses as required
• Comply with (existing and new) regulations
• Collaborate with peers in global advocacy
COVID-19 pandemic
COVID-19 has spread globally, leading to quarantines, travel and workplace restrictions,
business shutdowns and restrictions, supply chain interruptions, labor shortages, changes
of legislation and overall economic and financial market instability.
The pandemic has an impact on the global economy. Going forward, there is still uncertainty
on how the situation will develop, and what the impact on global GDP development, (end)
markets, and our manufacturing capability and supply chain will be.
Risk category
• Continuity of own operations
• Supply chain disruption
• Environment, Health and Safety
• Human resources
• Process effectiveness and efficiency
• Roadmap execution
• Information security
In 2021, the COVID-19 pandemic had limited impact on our operations – risk exposure is
more controlled compared to 2020.
Risk response
• Set health and safety of our employees as our first priority and implement preventive measures globally
• Strong financial capabilities to react to a downturn
• Activation of business continuity management plan
• Active engagement with our critical suppliers and increased inventory
• Implementation of virtual remote support solution on customer sites
• Implementation of measures to facilitate (secure) remote working and to support the well-being of our employees
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ASML ANNUAL REPORT 2021 Risk factors
In conducting our business, we face many
risks that may interfere with our business
objectives. It is important to understand the
nature of these risks. We assess our risks by
using the ASML risk universe, consisting of six
risk types (Strategy and Products, Finance and
reporting, Partners, People, Operations, Legal
and compliance). The risk factors below are
classified under these six risk types. Any of
these risks and events or circumstances
described therein may have a material adverse
effect on our business, financial condition,
results of operations and reputation. These
risks are not the only ones that we face. Some
risks may not yet be known to us, and certain
risks we do not currently believe to be material
could become material in the future.
Strategy and products
Our future success depends on our ability to respond
timely to commercial and technological developments
in the semiconductor industry
Risk category: Business model, Innovation
Our success in developing new technologies and
products, and in enhancing our existing products,
depends on a variety of factors. These include the
success of our and our suppliers’ R&D programs and the
timely and successful completion of product development
and design relative to competitors. Our business will suffer
if the technologies we pursue to assist our customers in
producing smaller and more energy-efficient chips are not
as effective as those developed by competitors, or if our
customers do not adopt technologies that we develop or
adopt new technological architectures that are less
focused on lithography products. The success of our EUV
0.55 NA (High-NA) technology, which we believe is critical
for keeping pace with Moore’s Law, remains dependent on
continuing technical advances by us and our suppliers.
We invest considerable financial and other resources to
develop and introduce new technologies, products and
product enhancements. If we are unsuccessful in
developing (or if our customers do not adopt) new
technologies, products and product enhancements such
as EUV 0.55 NA and multibeam inspection, or if
competitors successfully introduce alternative
technologies or processes, our competitive position and
business may suffer.
In addition, we make significant investments into
development of new products and product
enhancements, and we may be unable to recoup some or
all the investments that we have made. We may also incur
costs related to inventory obsolescence, as a result of
technological changes. Such costs may increase as the
complexity of technology increases.
Due to the highly complex nature and costs of our
systems, including newer technologies, our customers
may purchase existing technology systems rather than
new leading-edge systems, or may delay their investment
in new technology systems to the extent that such
investment is not economical or required given their
product cycles. Global economic conditions affect our
customers’ investment decisions, leading to uncertainties
on the timing around the introduction of and demand for
new leading-edge systems. Some of our customers have
experienced and may continue to experience delays in
implementing their product roadmaps. This increases the
risk of slowing down the overall transition period (or
cadence) for the introduction of new nodes, and therefore
new systems.
We are also dependent on our suppliers to maintain their
development roadmaps to enable us to introduce new
technologies on a timely basis. If they are unable to keep
pace, whether due to technological factors, lack of
financial resources, or otherwise, this could prevent us
from meeting our development roadmaps.
The success of new product introductions is
uncertain and depends on our ability to successfully
execute our R&D programs
Risk category: Roadmap execution, Innovation
Our lithography systems and applications have become
increasingly complex, and accordingly, the costs and time
period to develop new products and technologies have
increased. We expect such costs and time periods to
continue to increase. In particular, developing new
technology, such as EUV 0.55 NA (High-NA) and
multibeam, requires significant R&D investments from us
and our suppliers to meet our and our customers’
technology demands. Our suppliers may not have, or may
not be willing to invest the resources necessary to
continue the (co-)development of the new technologies to
the extent that such investments are necessary. This may
result in ASML contributing funds to such R&D programs
or limiting the R&D investments that we can undertake.
Furthermore, if our R&D programs are not successful in
developing the desired new technology on time or at all,
we may be unsuccessful in introducing new products and
unable to recoup our R&D investments.
We face intense competition
Risk category: Competition
The lithography equipment industry is highly competitive.
Our competitiveness depends upon our ability to develop
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ASML ANNUAL REPORT 2021 new and enhanced lithography equipment, related
applications and services that are competitively priced
and introduced on a timely basis, as well as our ability to
protect and defend our intellectual property rights. We
compete primarily with Canon and Nikon in respect of
DUV systems. Both Canon and Nikon have substantial
financial resources and broad patent portfolios. Each
continues to offer products that compete directly with our
DUV systems, which may impact our sales or business. In
addition, adverse market conditions, industry overcapacity
or a decrease in the value of the Japanese yen in relation
to the euro, could further intensify price-based
competition, resulting in lower prices, and lower sales and
margins.
We may also face competition from new competitors with
substantial financial resources, as well as from
competitors driven by the ambition of self-sufficiency in
the geopolitical context. Furthermore, we face competition
from alternative technological solutions or semiconductor
manufacturing processes, particularly if we are
unsuccessful in developing new EUV technology, products
and product enhancements in a timely and cost-
competitive manner.
We also compete with providers of applications that
support or enhance complex patterning solutions, such as
Applied Materials Inc. and KLA-Tencor Corporation. These
applications effectively compete with our Applications
offering, which is a significant part of our business. The
competition we face in our applications business may be
higher than for our systems, as there are more competitors
and potential competitors in this market.
The semiconductor industry can be cyclical and we
may be adversely affected by any downturn
Risk category: Industry cycle risk
As a supplier to the global semiconductor industry, we are
subject to the industry’s business cycles, of which the
timing, duration and volatility are difficult to predict. The
semiconductor industry has historically been cyclical.
Newer entrants in the industry, including Chinese
semiconductor manufacturers, could increase the risk of
cyclicality in the future. Certain key end-market customers
– Memory and Logic – exhibit different levels of cyclicality
and different business cycles. Sales of our lithography
systems, services and other holistic lithography products
depend in large part upon the level of capital expenditures
by semiconductor manufacturers. These in turn are
influenced by industry cycles, the drive for technological
sovereignty and a range of competitive and market
factors, including semiconductor industry conditions and
prospects. The timing and magnitude of capital
expenditures of our customers also impact the available
production capacity of the industry to produce chips,
which can lead to imbalances in the supply and demand
of chips. Reductions or delays in capital expenditures by
our customers, or incorrect assumptions by us about our
customers’ capital expenditures, could adversely impact
our business. In addition, industry trends that are currently
positively impacting our business such as increasing
capital expenditures by our customers may not continue.
Our ability to maintain profitability in an industry downturn
will depend substantially on whether we are able to lower
our costs and break-even level, which is the level of sales
that we must reach in a year to have positive net income. If
sales decrease significantly as a result of an industry
downturn and we are unable to adjust our costs over the
same period, our net income may decline significantly, or
we may suffer losses. Furthermore, as the value per
system increases and we have grown, and continue to
grow, in terms of employees, facilities and inventories, it
may be more difficult for us to reduce our costs to
respond to an industry downturn.
We derive most of our revenues from the sale of a
relatively small number of products
Risk category: Business model, Product portfolio
We derive most of our revenues from the sale of a
relatively small number of lithography systems (309 units in
2021 and 258 units in 2020). As a result, the timing of
shipments, including any delays, and recognition of
system sales for a particular reporting period from a small
number of systems may have a material adverse effect on
our business, financial condition and results of operations
in that period. This risk is increasing due to the higher
average sales price of EUV systems as compared to DUV
systems.
In addition, we derive significant revenue from servicing
and upgrading our installed base. However, we may not be
able to increase revenues to the extent we planned as, for
example, customers may perform more of these services
themselves or find other third-party suppliers for that
service.
Failure to adequately protect the intellectual property
rights, trade secrets or other confidential information
could harm our business
Risk category: Intellectual property rights
We rely on intellectual property rights such as patents and
copyrights to protect our proprietary technology and
applications. However, we face the risk that such
measures could prove to be inadequate, and we could
suffer material harm because, among other things:
• Intellectual property laws may not sufficiently support
our proprietary rights or may change in the future in a
manner adverse to us;
• Our confidentiality and licensing agreements with our
customers, employees and technology development
partners and others to protect our IP rights may not be
sufficient or may be breached or terminated;
• Patent rights may not be granted or interpreted as we
expect;
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ASML ANNUAL REPORT 2021 • Patents rights will expire which may result in key
technology becoming widely available that may harm
our competitive position;
• The steps we take to prevent misappropriation or
infringement of our proprietary rights may not be
successful;
• Intellectual property rights are difficult to enforce in
countries where the application and enforcement of the
laws governing such rights may not have reached the
same level as compared to other jurisdictions where we
operate; and
• Third parties may be able to develop or obtain patents
for similar competing technology.
In addition, legal proceedings may be necessary to
enforce our intellectual property rights and the validity and
scope may be challenged by others. Any such
proceedings may result in substantial costs and diversion
of management resources, and, if decided unfavorably to
us, could result in significant costs or have a significant
impact on our business.
We are subject to attempted misappropriation attacks,
including theft of our trade secrets, proprietary customer
data, intellectual property or other confidential information
by third parties or our own employees. It is also possible
that unauthorized third parties may obtain, copy, use or
disclose our proprietary technologies, our products,
designs, processes and other intellectual property despite
our efforts to protect our intellectual property.
In 2021, we became aware of reports that a company
associated with XTAL Inc., DongFang JingYuan Electron
(“DFJY”) was actively marketing products in China that
could potentially infringe on ASML's IP rights. Read more in:
Our performance in 2021 - Governance - Responsible business -
Intellectual Property protection.
Defending against intellectual property claims
brought by others could harm our business
Risk category: Intellectual property rights
In the course of our business, we are subject to claims by
third parties alleging that our products or processes
infringe upon their intellectual property rights. If
successful, such claims could limit or prohibit us from
developing our technology, manufacturing and selling our
products.
In addition, our customers or suppliers may be subject to
claims of infringement from third parties, alleging that our
products used by such customers in the manufacturing of
semiconductor products and / or the processes relating to
the use of our products infringe on one or more patents
issued to such third parties. If such claims are successful,
we could be required to indemnify our customers or
suppliers for some or all of any losses incurred or
damages assessed against them as a result of such
infringement.
We also may incur substantial licensing or settlement
costs to settle claims or to potentially strengthen or
expand our intellectual property rights or limit our
exposure to intellectual property claims of third parties.
Patent litigation is complex and may extend for a
protracted period of time, giving rise to the potential for
both substantial costs and diverting the attention of key
management and technical personnel. Potential adverse
outcomes from patent litigation may include payment of
significant monetary damages, injunctive relief prohibiting
our manufacturing, exporting or selling of products, and /
or settlement involving significant costs to be paid by us.
We are exposed to economic and political
developments in our international operations
Risk category: Political
Global trade issues and changes in and uncertainties with
respect to multilateral and bilateral treaties and trade
policies, and international trade disputes, trade sanctions,
export controls, tariffs and similar regulations, impact our
ability to deliver our systems and services internationally.
In particular, our ability to deliver systems in certain
countries such as China has been and continues to be
impacted by our ability to obtain required licenses and
approvals.
The US government has enacted trade measures,
including import tariffs, national security regulations and
restrictions on conducting business with certain Chinese
entities, restricting our ability to provide certain products
and services to such entities without a license. The list of
Chinese entities impacted by trade restrictions, as well as
the export regulation requirements and the implementation
and enforcement of such regulations are subject to
change. Our business involves the sale of systems and
services to customers in a number of countries, including
China, where our business has grown in recent years, and
includes sensitive technologies that may be the subject of
increased export regulations, policies or practices. These
and further developments in multilateral and bilateral
treaties, national regulation, and trade, national security
and investment policies and practices have affected and
may further affect our business, and the businesses of our
suppliers and customers. Such developments have
impacted and continue to impact our ability to obtain
necessary licenses, including permits for use of US
technology and for employees producing and developing
such technology. Such developments including the drive
for technological sovereignty could also lead to long-term
changes in global trade, competition and technology
supply chains, which could adversely affect our business
and growth prospects.
Certain of our manufacturing facilities as well as
customers are located in Taiwan. Customers in Taiwan
represented 39.4% of our 2021 total net sales and 33.8%
of our 2020 total net sales. Taiwan has a unique
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ASML ANNUAL REPORT 2021 international political status. The People’s Republic of
China asserts sovereignty over Taiwan and does not
recognize the legitimacy of the Taiwanese government.
Changes in relations between Taiwan and the People’s
Republic of China, Taiwanese government policies, and
other factors affecting Taiwan’s political, economic or
social environment could have a material adverse effect on
our business, financial condition and results of operations.
Furthermore, certain of our facilities as well as customers
are located in South Korea. Customers in South Korea
represented 33.4% of our 2021 total net sales and 29.7%
of our 2020 total net sales. There are tensions with the
Democratic People’s Republic of Korea (North Korea),
which have existed since the division of the Korean
Peninsula following World War II. A worsening of relations
between those countries or the outbreak of war on the
Korean Peninsula could have a material adverse effect on
our business, financial condition or results of operations.
We may be unable to make desirable acquisitions or
to integrate successfully any businesses we acquire
Risk category: Mergers & acquisitions
From time to time we may acquire, businesses or
technologies to complement, enhance or expand our
current business or products or that might otherwise offer
us growth opportunities. Any such acquisitions could lead
to failure to achieve our financial or strategic objectives, to
perform as we plan or disrupt our ongoing business and
adversely impact our results of operations. Furthermore,
our ability to complete such transactions may be hindered
by a number of factors, including potential difficulties in
obtaining government approvals.
Any acquisition that we make could pose risks related to
the integration of the new business or technology with our
business and organization. We cannot be certain that we
will be able to achieve the benefits we expect from a
particular acquisition investment. Such transactions may
also strain our managerial and operational resources, as
the challenge of managing new operations may divert our
management from day-to-day operations. Furthermore,
we may be unable to retain key personnel of acquired
businesses or may have difficulty integrating employees,
business systems, and technology. The controls,
processes and procedures of acquired businesses may
also not adequately ensure compliance with laws and
regulations, and we may fail to identify compliance issues
or liabilities.
In connection with acquisitions, anti-trust and national
security regulators have in the past and may in the future
impose conditions on us, including requirements to divest
assets or other conditions that could make it difficult for us
to integrate the businesses that we acquire. Furthermore,
we may have difficulty in obtaining or be unable to obtain
anti-trust and national-security clearances, which could
inhibit future desired acquisitions.
As a result of acquisitions, we have recorded, and may
continue to record, a significant amount of goodwill and
other intangible assets. Current accounting guidelines
require, at least annually and potentially more frequently,
assessment of whether there are indicators that the value
of goodwill or other intangible assets has been impaired.
We may not be able to achieve our Environmental,
Social, Governance (ESG) objectives or adapt and
respond timely to emerging ESG expectations and
regulations
Risk Category: Climate change, Product stewardship
Companies across all industries are facing increasing
scrutiny relating to their ESG policies. Investors and other
stakeholders are increasingly focused on ESG practices
and, in recent years, have placed increasing importance
on the implications and social cost of their investments. In
particular, within the semiconductor industry, there is
focus on contribution to society and minimizing
environmental and social impacts of products throughout
all life cycle stages. Failure to achieve our ESG objectives,
meet the emerging ESG expectations of our stakeholders
and/or timely respond to enhanced regulations could
negatively affect our brand and reputation.
Climate change contributes to increasing severity and
frequency of extreme weather events, rising sea levels and
droughts that can impact continuity of our operations and/
or our supply chain. Climate change concerns and the
potential resulting environmental impact may result in new
laws and regulations that may affect us, our suppliers, and
our customers. Such laws or regulations could cause us to
incur additional direct costs for compliance, as well as
increased indirect costs resulting from our customers and
suppliers. Furthermore, the ability to reduce our product-
related environmental performance (such as energy
efficiency) may be affected by the complexity of our
technology and products. We are also dependent on our
suppliers and their ability to reduce the ecological
footprint.
A global transition to a lower carbon economy has resulted
in the imposition of increased regulations that could lead
to technology restrictions, modification of product
designs, an increase in energy prices and energy or
carbon taxes, restrictions on pollution, required
remediation equipment, or other requirements. A variety of
regulatory developments have been introduced that focus
on restricting or managing the emission of carbon dioxide
and other greenhouse gases. This could result in a need to
redesign products and/or purchase at higher costs new
equipment or materials with lower carbon footprints.
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ASML ANNUAL REPORT 2021 Finance and reporting
We are exposed to treasury risks, including liquidity
risk, interest rate risk, credit risk and foreign
exchange risk
Risk category: Liquidity, Interest rate, Counterparty credit, Foreign
exchange
We are a global company and are exposed to a variety of
financial risks, including liquidity risk, interest rate risk,
credit risk foreign exchange risk, inflation risk.
Liquidity risk: We are exposed to liquidity risks. Negative
developments in our business or global capital markets
could affect our ability to meet our financial obligations or
to raise or re‐finance debt in the capital or loan markets. In
addition, we might be unable to repatriate cash from a
country immediately for use elsewhere due to legal
restrictions or required formalities.
Interest rate risk: We are exposed to interest rate risks.
Our Eurobonds bear interest at fixed rates. Our cash and
investments as well as our revolving credit facility bear
interest at a floating rate. Failure to effectively hedge this
risk could impact our financial condition and results of
operation. In addition, we could experience an increase in
borrowing costs due to a ratings downgrade (or
expectation of a downgrade), developments in capital and
lending markets or developments in our businesses.
Counterparty credit risk: We are exposed to
counterparty credit risks, in particular with respect to
financial counterparties with whom we hold our cash and
investments as well as our customers. As a result of our
limited number of customers, credit risk on our receivables
is concentrated. Our three largest customers (based on
total net sales) accounted for €3,855.2 million, or 83.7%, of
accounts receivable and finance receivables at
December 31, 2021, compared with €2,757.0 million, or
80.1%, at December 31, 2020. Accordingly, business
failure or insolvency of one of our main customers could
result in significant credit losses.
Currency risk: We are exposed to currency risks. Our
Financial Statements are expressed in euros. Accordingly,
our results of operations are exposed to fluctuations in
exchange rates between the euro and other currencies.
Changes in currency exchange rates can result in losses in
our Financial Statements. We are particularly exposed to
fluctuations in the exchange rates between the US dollar
and the euro, and to a lesser extent to the Japanese yen,
the South Korean won, the Taiwanese dollar and Chinese
yuan, in relation to the euro. We incur costs of sales
predominantly in euros with portions also denominated in
US and Taiwanese dollars. A small portion of our operating
results are driven by movements in currencies other than
the euro, US dollar, Japanese yen, South Korean won,
Taiwanese dollar or Chinese yuan.
In general, our customers run their businesses in US
dollars and therefore a weakening of the US dollar against
the euro might impact the ability or desire of our
customers to purchase our products at quoted prices.
Inflation risk: We are exposed to inflation for costs of
goods, transport and wages as a result of supply
shortages which may impact our profitability. Currently
supply chain constraints has resulted in higher-than-
normal inflation.
Partners
Our success is highly dependent on the performance
of a limited number of critical suppliers of single-
source key components
Risk category: Supply chain disruption, Supplier strategy and
performance
We rely on outside vendors for components and
subassemblies used in our systems, including the design
thereof. These components and subassemblies are
obtained from a single supplier or a limited number of
suppliers. As our business has grown, our dependence on
single suppliers or a limited number of suppliers has
grown, as the highly specialized nature of many of our
components, particularly for EUV systems, means it is not
economical to source from more than one supplier. Our
sourcing strategy therefore (in many cases) prescribes
'single sourcing, dual competence'. Our reliance on a
limited group of suppliers involves several risks, including
a potential inability to obtain an adequate supply of
required components or subassemblies, in a timely
manner or at all, additional costs resulting from switching
to alternate suppliers and reduced control over pricing and
quality. Delays in supply of these components and
subassemblies, which could occur for a variety of reasons,
such as disruptions experienced by our suppliers,
including work stoppages, fire, energy shortages,
pandemic outbreaks, flooding, cyberattacks, sabotage or
other disasters, natural and otherwise can lead to delays
in delivery of our products which would impact our
business. For example, certain of our suppliers
experienced disruptions in their operations as a result of
chip and material shortages. A prolonged inability to
obtain adequate deliveries of components or
subassemblies, or any other circumstance that requires us
to seek alternative sources of supply, could significantly
hinder our ability to deliver our products in a timely
manner, which could damage relationships with our
customers and materially impact our business.
The number of lithography systems we are able to
produce may be limited by the production capacity of one
of our key suppliers, Carl Zeiss SMT GmbH, which is our
sole supplier of lenses, mirrors, illuminators, collectors and
other critical optical components (which we refer to as
optics). We have an exclusive arrangement (see related
parties’ paragraph in our annual report) with Carl Zeiss
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ASML ANNUAL REPORT 2021 SMT GmbH and if they are unable to maintain and
increase production levels, we could be unable to fulfill
orders, which could have a material impact on our
business and damage relationships with our customers. If
Carl Zeiss SMT GmbH were to terminate its supply
relationship with us or if Carl Zeiss SMT GmbH is unable
to maintain production of optics over a prolonged period,
we would effectively cease to be able to conduct our
business.
From time to time, we experience supply constraints
which can impact our production, particularly during
periods of increasing demand as we have experienced in
2021 and which we continue to experience. In 2021, we
experienced some delays and shortages in our supply
chain, resulting in a late start on the assembly of a number
of systems. Also, in 2021, due to high demand, we have
been reducing cycle time in our factory to ship more
systems. One way to reduce cycle time is through a fast
shipment process that skips some of the testing in our
factory. Final testing and formal acceptance then takes
place at the customer site. This leads to a deferral of
revenue recognition for those shipments until formal
customer acceptance, but does provide our customers
with earlier access to wafer output capacity. We and our
suppliers are investing in additional capacity to meet this
demand however to increase capacity takes time and we
may be unable to meet the full demand of our customers
for a few years. Further, we face the risk that demand may
not continue to increase which could result in overcapacity
and loss of investment in increasing capacity.
In addition, some of our key suppliers, including Carl Zeiss
SMT GmbH, have a limited number of manufacturing
facilities, the disruption of which may significantly and
adversely affect our production capacity.
Lead times in obtaining components have increased as
our products have become more complex, and a failure by
us to adequately predict demand for our systems or any
delays in the shipment of components can result in
insufficient supply of components, which can lead to
delays in delivery of our systems and can limit our
capabilities to react quickly to changing market conditions.
Conversely, a failure to predict demand could lead to
excess and obsolete inventory.
We are also dependent on suppliers to develop new
models and products and to meet our development
roadmaps. To the extent our suppliers do not meet our
requirements or timetable in product development, our
business could suffer.
A high percentage of net sales is derived from a few
customers
Risk category: Customer dependency
Historically, we have sold a substantial number of
lithography systems to a limited number of customers.
Customer concentration can increase because of
continuing consolidation in the semiconductor
manufacturing industry. In addition, although the
applications part of our holistic lithography solutions
constitutes an increasing portion of our revenue, a
significant portion of those customers are the same
customers as those of our systems. Consequently, while
the identity of our largest customers may vary from year to
year, sales may remain concentrated among relatively few
customers in any particular year. The recognized total net
sales to our largest customer from each year accounted
for €6,881.1 million, or 37.0% of total net sales in 2021,
compared with €4,394.8 million, or 31.4% of total net sales
in 2020. In 2021, 66.3% of total net sales were made to
two customers. The loss of any significant customer or
any significant reduction or delay in orders by a significant
customer may have a material adverse effect on our
business, financial condition and results of operations.
People
Our business and future success depend on our
ability to manage the growth of our organization and
attract and retain a sufficient number of adequately
educated and skilled employees
Risk category: Human resources, Knowledge management,
Organizational effectiveness
Our business and future success significantly depends
upon our employees, including a large number of highly
qualified professionals, as well as our ability to attract and
retain employees. Competition for such personnel is
intense and has intensified in the last year. Despite our
ability to grow our employee base significantly, attracting
sufficient numbers of qualified employees to meet our
growing needs will remain a challenge. This risk of not
being able to attract and retain qualified personnel
increases as our business grows.
Our R&D programs require a significant number of
qualified employees. If we are unable to attract sufficient
numbers of qualified employees, this could affect our
ability to conduct our R&D on a timely basis. Also, the loss
of key employees for unexpected reasons like illness a
risk.
Moreover, as a result of the uniqueness and complexity of
our technology, qualified engineers capable of working on
our systems are scarce and generally not available (e.g.
from other industries or companies). As a result, we must
educate and train our employees to work on our systems.
Retention of those key employees is a critical success
factor for us as a company.
Furthermore, the increasing complexity of our products
results in a longer learning curve for new and existing
employees and suppliers leading to an inability to
decrease cycle times and may result in the occurrence of
significant additional costs. Our suppliers face similar risks
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ASML ANNUAL REPORT 2021 in attracting qualified employees, including attracting
employees in connection with programs that will support
our R&D programs and technology developments. To the
extent that our suppliers are unable to attract qualified
employees, this could impact our R&D programs or
deliveries of components to us.
In recent years, our organization has grown significantly.
As a result of this growth in a short period of time, we may
be unable to effectively manage, monitor and control our
employees, facilities, operations and other resources.
Consistent pressure on our organization and people as a
result of our growth may lead to wellbeing issues of our
employees.
Operations
We may face challenges in managing the
industrialization of our products and bringing them to
high-volume production
Risk category: Product industrialization
Bringing our products to high-volume production at a
value-based price and in a cost-effective manner,
depends on our ability to manage the industrialization of
our products and our ability to manage costs. Customer
acceptance of our products depends on performance of
our products in the field. As our products become more
complex, we face an increasing risk that products that we
develop may not meet development milestones or
specifications and that our products may not perform
according to specifications, including quality standards. If
our products do not perform according to specifications
and performance criteria or if quality or performance
issues arise, this may result in additional costs, reduced
demand for our products, and our customers being unable
to meet planned wafer capacity.
Transitioning our newly developed products to full-scale
production requires the expansion of our infrastructure,
including enhancing our manufacturing capabilities,
increasing supply of components and training qualified
personnel, and may also require our suppliers to expand
their infrastructure capabilities. If we or our suppliers are
unable to expand infrastructure as necessary, we may be
unable to introduce new technologies, products or
product enhancements or reach high-volume production
of newly developed products on a timely basis or at all.
In addition, when we are successful in industrializing new
products, it can take years to reach profitable margins, as
was the case for EUV.
New technologies might not have the same margins as
existing technologies and we might not be able to adjust
value-based pricing and or cost in an effective manner. In
addition, the introduction of new technologies, products or
product enhancements also impacts ASML’s liquidity, as
new products may have higher cycle times to produce
resulting in increased working capital needs. This impact
on liquidity increases as our products become more
complex and expensive.
The capability, capacity and costs associated with
providing the required customer support function to cover
the increasing number of shipments and servicing a
growing number of EUV systems that are operational in
the field could affect the timing of shipments, and the
efficient execution of maintenance, servicing and
upgrades, which is key to the systems continuing to
achieve the required productivity.
We are dependent on the continued operation of a
limited number of manufacturing facilities
Risk category: Continuity of own operation
All of our manufacturing activities, including subassembly,
final assembly and system testing, take place in
cleanroom facilities in Veldhoven, the Netherlands, in
Berlin, Germany, in Wilton, Connecticut, US and in San
Diego and San Jose, California, US, in Pyeongtaek, South
Korea, in Beijing, China, and in Linkou and Tainan, Taiwan.
These facilities may be subject to disruption for a variety of
reasons, including work stoppages, fire, energy shortages,
pandemic outbreaks, flooding, cyberattacks, sabotage or
other disasters, natural and otherwise. We cannot ensure
that alternative production capacity would be available if a
major disruption were to occur.
As our organization grows, we are not able to fully insure
our risk exposure. In addition, not all disasters are
insurable. As we are unable to duly insure against potential
losses, we are subject to the financial impact of uninsured
losses, which can have an adverse impact on our financial
condition and results of operation.
The nature of our operations exposes us to health,
safety, and environment risks
Risk category: Environment, health and safety
Hazardous substances are used in the production and
operation of our products and systems, which subjects us
to a variety of governmental regulations relating to
environmental protection, and employee and product
health and safety, including the transport, use, storage,
discharge, handling, emission, generation, and disposal of
toxic or other hazardous substances. In addition,
operating our systems (which use lasers and other
potentially hazardous systems) can be dangerous and can
result in injury. The failure to comply with current or future
regulations could result in substantial fines being imposed
on us, suspension of production, alteration of our
manufacturing and assembly and test processes, damage
to our reputation, and/or restrictions on our operations or
sale or other adverse consequences. Additionally, our
products have become increasingly complex. The
increasing complexity requires us to invest in continued
risk assessments and development of appropriate
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ASML ANNUAL REPORT 2021 preventative and protective measures for health and safety
for both our employees (in connection with the production
and installation of our systems and field options and
performance of our services) and our customers’
employees (in connection with the operation of our
systems). Our health and safety practices may not be
effective in mitigating all health and safety risks. Failing to
comply with applicable regulations or the failure of our
implemented practices for customer and employee health
and safety could subject us to significant liabilities.
Cybersecurity and other security incidents, or other
disruptions in our processes or information
technology systems, could materially adversely affect
our business operations
Risk category: Information security, Information technology, Process
effectiveness and efficiency, Safeguarding of assets
We rely on the accuracy, availability and security of our
information technology systems. Despite the measures
that we have implemented, including those related to
cybersecurity, our systems could be breached or
damaged by computer viruses and systems attacks,
natural or man-made incidents, disasters or unauthorized
physical or electronic access.
We are experiencing an increasing number of
cyberattacks on our information technology systems as
well as the information technology systems of our
suppliers, customers and other service providers, whose
systems we do not control. These attacks include
malicious software (malware), attempts to gain
unauthorized access to data, and other electronic security
breaches of our information technology systems. They
also include the information technology systems of our
suppliers, customers and other service providers that have
led and could lead, for us, our customers, suppliers or
other business partners - including R&D partners - to
disruptions in critical systems, unauthorized release,
misappropriation, corruption or loss of data or confidential
information (including confidential information relating to
our customers, employees and suppliers). Further, we
depend on our employees and the employees of our
suppliers to appropriately handle confidential and sensitive
data and deploy our IT resources in a safe and secure
manner that does not expose our network systems to
security breaches or the loss of data. However, there is
always a risk that inadvertent disclosure or actions or
internal malfeasance by our employees or those of our
suppliers could result in a loss of data or a breach or
interruption of our IT systems.
In addition, any system failure, accident or security breach
could result in business disruption, theft of our intellectual
property, trade secrets (including our proprietary
technology), unauthorized access to, or disclosure of,
customer, personnel, supplier or other confidential
information, corruption of our data or of our systems,
reputational damage or litigation. Furthermore, computer
viruses or other malware may harm our systems and
software and could be inadvertently transmitted to our
customers' systems and operations, which could result in
loss of customers, litigation, government investigation and
proceedings that could expose us to civil or criminal
liabilities and significant management attention and
resources to remedy the damages that result. We may
also be required to incur significant costs to protect
against or repair the damage caused by these disruptions
or security breaches in the future, including, for example,
rebuilding internal systems, implementing additional threat
protection measures, providing modifications to our
products and services, defending against litigation,
responding to regulatory inquiries or actions, paying
damages, or taking other remedial steps with respect to
third parties. Further, remediation efforts may not be
successful and could result in interruptions, delays or
cessation of service, unfavorable publicity, damage to our
reputation, customer allegations of breach-of-contract,
possible litigation, and loss of existing or potential
customers that may impede our sales or other critical
functions.
Cybersecurity threats are constantly evolving. We remain
potentially vulnerable to additional known or yet unknown
threats, as in some instances, we, our customers, and our
suppliers may be unaware of an incident or its magnitude
and effects. We also face the risk that we expose our
customers to cybersecurity attacks through the systems
we deliver to our customers, including in the form of
malware or other types of attacks as described above,
which could harm our customers. Furthermore, the
COVID-19 pandemic has increased the level of remote
working within our organization, which increases the risks
of cybersecurity incidents.
ASML visibility and importance for the semiconductor
industry keeps on growing. There is a risk that this may
lead to actions that may adversely impact the security of
ASML or the safety of its employees.
In addition, processes and systems may not be able to
adequately support the growth. From time to time, we
implement updates to our information technology systems
and software, which can disrupt or shutdown our
information technology systems. We may not be able to
successfully launch and integrate these new systems as
planned without disruption to our operations. For example,
we are currently implementing a new ERP system and
infrastructure (ONE program). As a result of this system
implementation or otherwise, we have and could continue
to experience disruptions in our operations. In 2021, we
experienced delays of operations after the launch of a new
logistics center, which resulted in a delay in production of
some products.
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ASML ANNUAL REPORT 2021 Legal and compliance
We are subject to increasingly complex regulatory
and compliance obligations
Risk category: Violation of laws and regulations
In recent years, our business has grown significantly in
terms of sales, operations, employees and our business
infrastructure. As a result, the complexity of complying
with rules and regulations has increased. Furthermore, as
we have expanded our business in countries where we did
not previously operate, we have become increasingly
subject to compliance with additional rules and regulations
in such jurisdictions, including but not limited to anti-
corruption, anti-bribery and anti-trust standards, which
can be complex. We are also subject to investigations,
audits and reviews by authorities in such jurisdictions
regarding compliance with rules and regulations, including
tax laws.
Furthermore, the existing rules and regulations that we are
subject to, including regulations relating but not limited to
trade, national security, tax, exchange controls, reporting,
product compliance, anti-corruption laws, anti-trust, data
protection, are becoming more complex and the trade and
national security environment has resulted in increasing
restrictions. We also face the risk that trade, and security
regulations could limit our ability to sell our products and
services in certain jurisdictions. We have experienced
delays in shipments permits and may experience
restrictions on shipping products to certain customers.
Such changes in the regulation that applies to our
business can increase compliance costs and the risk of
non-compliance. Non-compliance can result in fines and
penalties as well as reputational damages. Furthermore,
additional regulations could impact or limit our ability to
sell our products and services in certain jurisdictions.
Changes in taxation could affect our future
profitability
Risk category: Violation of laws and regulations
We are subject to income taxes in the Netherlands and the
other countries in which we are active. Our effective tax
rate has fluctuated in the past and may fluctuate in the
future.
Changes in our business environment can affect our
effective tax rate. The same applies for changes in tax
legislation in the countries where we operate,
developments as driven by global organizations as the
OECD, as well as the change in approach to tax-by-tax
authorities. All these initiatives have already resulted in and
may result in further increased compliance obligations for
ASML. Additionally, this may result in increase of our
effective tax rate in future years.
Changes in tax legislation of jurisdictions we operate in,
may adversely impact our tax position and consequently
our net income. Our worldwide effective tax rate is heavily
impacted by R&D incentives included in tax laws and
regulations in the countries we operate in. Examples in this
regard are the so-called innovation box tax legislation in
the Netherlands and the Foreign Derived Intangible
Income deduction / R&D credits we obtain in the US. In
case jurisdictions alter their tax policies in this respect, this
may have an adverse effect on our worldwide effective tax
rate. In addition, jurisdictions levy corporate income tax at
different rates. The mix of our sales over the various
jurisdictions in which we operate may vary from year to
year, resulting in a different mix of corporate income tax
rates applicable to our profits, which can affect our
worldwide effective tax rate and adversely impact our net
income.
Other risk factors
The COVID-19 or other pandemics may impact our
operations
The COVID-19 pandemic and the measures implemented
to address this pandemic globally continue to impact our
business and our suppliers and customers. The pandemic
has already had a significant impact on the global
economy, which can potentially impact our end markets.
The COVID-19 pandemic has increased the level of remote
working within our organization, which impacts
productivity, may delay our roadmap, increase the risks of
cybersecurity incidents and may impact our control
environment. In addition, we are dependent on our
suppliers, so disruptions to their operations as a result of
the COVID-19 pandemic impact us and our ability to
produce, deliver and service tools. Market demand for
semiconductors and therefore our products and services
can also be impacted by the COVID-19 pandemic and
measures taken to address it. Also, an important part of
our business involves installing and servicing tools at
customer premises around the globe, and travel
restrictions and vaccination requirements impact that
activity.
There is uncertainty about how the COVID-19 pandemic
will impact global GDP development, end markets, our
manufacturing capability and supply chain, and the longer
this pandemic lasts the greater are the risks. The
continuing impact of this pandemic on ASML will depend
on future developments, including continued severity of
the COVID-19 pandemic, and the actions from the Dutch
and other foreign governments to contain the outbreak or
address its impact which are outside of our control.
Restrictions on shareholder rights may dilute voting
power
Our Articles of Association provide that we are subject to
the provisions of Dutch law applicable to large
corporations, called 'structuurregime'. These provisions
have the effect of concentrating control over certain
corporate decisions and transactions in the hands of our
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ASML ANNUAL REPORT 2021 Supervisory Board. As a result, holders of ordinary shares
may have more difficulty in protecting their interests in the
face of actions by members of our Supervisory Board than
if we were incorporated in the US or another jurisdiction.
Our authorized share capital also includes a class of
cumulative preference shares and we have granted
Stichting Preferente Aandelen ASML, a Dutch foundation,
an option to acquire, at their nominal value of €0.09 per
share, such cumulative preference shares. Exercise of the
Preference Share Option would effectively dilute the voting
power of our outstanding ordinary shares by one-half,
which may discourage or significantly impede a third party
from acquiring a majority of our voting shares.
Read more in: Our performance in 2021 - Governance - Corporate
governance - Board of Management and Supervisory Board, and
Consolidated Financial Statements - Notes to the Consolidated
Financial Statements - Note 22 Shareholders’ equity.
We may not declare cash dividends and conduct
share buyback programs at all or in any particular
amounts in any given year
We aim to pay a semi-annual dividend that is growing (on
an annualized basis) over time, and we conduct share
buyback programs from time to time. The dividend
proposal and amount of share buybacks in any given year
will be subject to the availability of distributable profits,
retained earnings and cash, and may be affected by,
among other factors, the Board of Management’s views
on our potential future liquidity requirements, including for
investments in production capacity and working capital
requirements, the funding of our R&D programs and for
acquisition opportunities that may arise from time to time,
and by future changes in applicable income tax and
corporate laws. We may also suspend buyback programs
from time to time, which would reduce the amount of cash
we are able to return to shareholders. Accordingly, the
Board of Management may decide to propose not to pay a
dividend or pay a lower dividend and may suspend, adjust
the amount of or discontinue share buyback programs or
we may otherwise fail to complete buyback programs.
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ASML ANNUAL REPORT 2021 Responsible business
We are a global leader in the semiconductor
industry. As the innovator that makes vital
systems for the chip industry, we have a
responsibility to lead by example. Our purpose
is clear, "to unlock the potential of people and
society by pushing technology to new limits",
and we want our values to reflect in everything
we do to pursue our purpose.
Besides the material focus areas in our strategy, we need
to make sure that we conduct our business in a
responsible manner. Anywhere we operate, we believe
that conducting our business with honesty and acting with
the highest standards of integrity is essential to our value
creation for our stakeholder groups, and the long-term
success of our company.
We have corporate policies and procedures in place
detailing our principles and compliance, guiding us in
making the right decisions and living up to our values. In
the next sections, more information can be found on
topics such as our business ethics and Code of Conduct,
compliance, our responsibility to respect human rights,
protection of information, and tax.
Business ethics and Code of
Conduct
We are committed to conducting our business in
compliance with applicable laws and regulations in all the
countries we operate in. We promote and uphold ethical
behavior, fostering a culture where speaking up is
encouraged and appreciated.
We seek to continuously improve and professionalize our
Ethics and Compliance organization to the highest
standards. In 2021, we continued to grow our network of
Ethics Liaisons, updated our Speak Up & Non-Retaliation
Policy in line with the new requirements of the EU
Whistleblower Directive, and launched our refreshed Gifts
& Entertainment Policy as well as our internal Competition
Law Compliance Policy. We continued our training
programs and focused on raising awareness across our
entire organization. Our next Global Ethics Survey will take
place in 2022.
Our values – challenge, collaborate and care – guide us in
our everyday dealings with colleagues, customers,
suppliers, shareholders and the communities we serve.
These values are reflected in our Code of Conduct
(hereafter: Code). It sets clear expectations and guiding
principles for the way we conduct our business and serves
to foster a culture of integrity, ethics and respect. Together
with a set of practical guidelines, it puts integrity at the
center of what we do.
ASML relies heavily on the skills, commitment and
behavior of its employees for its continued success, and
for its positive contribution to society. That’s why we
expect all employees to fully live up to the company’s
values and to act with integrity and respect at all times. We
ask all our employees and our business partners to abide
by our Code.
For a decade, we have been a member of the Responsible
Business Alliance (RBA), the world’s largest industry
coalition dedicated to corporate social responsibility in
global electronics industry. As a member of the RBA, we
have adopted the RBA Code of Conduct, which is a
common set of social, environmental and ethical industry
standards. Our Code is in line with the RBA Code of
Conduct. To reinforce our commitment to the supplier
network, we expect our key suppliers (representing around
80% of our total spend) and their suppliers to comply with
the RBA Code of Conduct and to develop their own
strategies, policies and processes to follow it. This
requirement is included in our long-term product-related
suppliers’ contracts. Read more in: Our performance in 2021 -
Social - Our supply chain.
Our ethics governance consists of several
levels, which include:
1. Our Ethics Board, chaired by our CEO, is reporting to
the Audit Committee and Board of Management. The
Ethics Board is responsible for policy-making and the
supervision of ASML’s compliance with legal and ethical
requirements. The Ethics Board meets regularly to give
guidance on relevant issues.
2. Our Ethics Committee investigates significant
notifications about potential breaches of ASML's Code
of Conduct worldwide.
3. Our Ethics Office is responsible for overseeing and
implementing our Ethics program. All reports of a
possible breach of ASML's Code of Conduct are
screened by one of the Ethics Officers and all significant
reports are discussed with the Ethics Committee.
4. Our ethics organization includes employees who, in
addition to their regular roles at ASML, act as Ethics
Liaisons in all the countries we operate in. They serve as
trusted representatives, and act as the first local point
of contact for employees with questions and concerns
related to ethics.
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ASML ANNUAL REPORT 2021 Our Code of Conduct principles
We respect people
We operate with
integrity
We commit to
safety and social
responsibility
Our commitment
ASML is committed to maintaining a safe and healthy working environment, respecting human
rights in line with international laws and regulations and industry standards such as the RBA
Code of Conduct. Diversity of cultures, education and talent makes us a stronger, more creative
and innovative company. By working together and using these values to guide us, we create an
environment based on mutual respect – one that leads to better results than any of us can achieve
alone.
A strong culture of integrity and compliance underpins ASML’s business success. We define
‘integrity’ as acting with honesty, sincerity, care and reliability. Compliance not only means
complying with laws and regulations, but also with our high ethical standards. Our reputation for
integrity is a valuable asset. It is essential for us to demonstrate personal and business integrity at all
times.
Technology reaches all parts of society. By helping to make chips more affordable and more
powerful, ASML has an important role to play – not only by reputation and results but also in relation
to the environment too. This is why ASML is committed to conducting business responsibly, enabling
sustainable growth while fulfilling legal and moral obligations. We aim to achieve our business
objectives in a caring and responsible manner as outlined in the key principles.
We protect our assets ASML’s most valuable assets are its people and knowledge, both of which are highly valued and
protected. Our ‘assets’ include intellectual property (IP), which refers to intangible assets such as
technical know-how, products data, business data, and personal data, as well as physical assets
such as products, tooling, funds and computers for conducting ASML business. Our company
expects anyone entrusted with ASML assets to keep them safe from loss, damage, misuse or theft.
To fulfill our commitment to upholding the high standards of integrity described in this Code,
communication is key. We strive for a working environment that encourages open dialogue among
employees, as well as between employees and third parties, where employees feel comfortable
and respected, and that they can trust each other to do the right thing. If you observe or suspect a
violation, we encourage you to speak up.
We encourage you
to communicate and
Speak Up
Our Code is available for all our stakeholders on our website (www.asml.com), our intranet and in our Employee app.
Promoting ethical behavior
We provide a dedicated Ethics and Compliance Program,
which offers the necessary support, advice, training and
communication to enable employees and others to
understand and follow our Code. It does this by building
awareness through various communication channels to
foster a culture of high integrity. It also helps create an
open and honest culture that fosters compliance with the
law and ASML policies across the organization.
In 2021, we changed our approach from having a
dedicated Ethics Awareness Week to participating in a
series of various interactive topic discussions throughout
the year. We had two ‘Our values in action’ sessions,
during which leaders of a number of our Corporate
Functions explained how ASML’s values – challenge,
collaborate and care – connect to the work they're doing,
and employees around the company shared how they
have actually experienced the values in action.
In 2021, we continued to extend our ethics training
curriculum, by introducing two new modules – ‘We respect
people’ and ‘Gifts and entertainment’ – along with the
launch of updated policies. We aim to have all six modules
ready for all employees over the course of the coming
year.
In addition to generic modules, available to all employees,
the curriculum will include manager specific modules – to
be completed by 2022. The curriculum aims to support
management in decision-making and promoting our Code
and other compliance-related topics, and to raise
awareness around the importance of ethical behavior and
our Speak Up & Non-Retaliation Policy. It also provides
information and guidance on dealing with topics such as
personal relationships at work, conflicts of interest,
navigating cultural differences, and ethical aspects around
ancillary activities or other positions outside of ASML. In
our training program we particularly focused on all new
employees; within the first three months of starting at
ASML they receive an invitation to complete the first
module of the curriculum.
Encouraging people to speak up
A key insight gained from the last Global Ethics Survey
was that employees occasionally may feel reluctant to
report harmful, discriminatory or unethical behavior, due to
fear for the consequences of doing so. In 2021, we
therefore updated our Speak-up & Non-retaliation policy,
which was launched at the end of October 2021, and we
implemented amendments to address the requirements of
the EU Whistleblower Directive. In this process, our focus
was on integrating the concept of non-retaliation at the
core of the policy. We strongly believe that employees
should feel safe to express their concerns with the
company without apprehension due to the fear of
retaliation. These policies and procedures reassure
employees that they can report a breach without fear of
repercussions. ASML has zero tolerance for retaliation.
The policy includes, among others, our Ethics Investigation
procedure, which outlines the investigation phases of an
ethics complaints, from intake to remedy action and final
closure.
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ASML ANNUAL REPORT 2021 For more information on speaking up, non-retaliation, our
ethics investigation procedure, anonymity and privacy,
please see our Speak Up & Non-Retaliation Policy publicly
available on www.asml.com.
We encourage everyone, including external business
partners, such as suppliers, contractors and other
workers, to express any concerns they might have
regarding possible violations of our Code, our company’s
policies, the law and our values. We promote an open
culture of trust and honest communication where
violations of the Code are not tolerated. We have several
different channels within the Speak-Up service to report
such concerns including an online reporting tool(hosted by
an independent, external service company), phone
numbers for each country in which we operate, a
dedicated email address, and via our Ethics Liaisons. For
employees or external stakeholders who prefer to remain
anonymous, the Speak-Up service is available to report
breaches anonymously. The role of the Ethics Office is to
assess each Speak-Up report and take appropriate action
to address the report so that any appropriate remediation
actions can be taken by the appropriate body.
We review and assess all Speak-Up messages and follow
up on all of them by providing feedback to the reporting
party if possible. If necessary, we engage with the
reporting party and/or counterpart to understand the
nature of the Speak-Up message, and to conduct more
detailed analysis and/or investigation. When required, we
implement remedy actions to prevent recurrence.
We registered 396 ethics related reports in 2021 (229 in
2020). We view this increase as a sign that our employees
and external business partners feel comfortable and
protected to report their concern. We attribute this result
to the improvements implemented, but we also noted high
number of reports related to COVID-19, such as travel
restrictions, vaccination, quarantine and country specific
measurements. The vast majority of the number of reports
relates to questions, rather than concerns of potential
misconduct. Another area of increase relates to conflict of
interest questions.
Among these Speak-Up reports, ten complaints were
filed. These follow a formal investigation procedure. At the
time of publication of this annual report, the investigation
procedure of five complaints were completed. From this
total, four complaints were deemed unsubstantiated – no
violation with the Code – and for one complaint
disciplinary measure – termination of employment – was
taken. The remaining five complaints are still in formal
investigation process.
We did not incur any fines for breaches of ethical
regulations in 2021.
Legal Compliance
Our Legal Compliance function oversees adherence to a
wide variety of regulatory compliance-related areas and
advises management about the regulatory framework,
including changes in legislation and regulations, seeking to
ensure that we conduct business in compliance with all
relevant national and international laws and regulations, as
well as professional standards, accepted business
practices and our own internal standards. Examples of
such regulatory compliance areas are our securities and
insider trading, competition law (antitrust), and anti-bribery
and anti-corruption. When needed, our Legal Department
takes charge of any regulatory investigations.
Anti-bribery and anti-corruption
ASML does not tolerate bribery or corruption or any form
of improper influence on others or ourselves. We are
committed to the highest standards of personal and
business integrity. Our Anti-Bribery & Anti-Corruption
Policy, as updated in 2020, details our commitment to
strong ethics and integrity and the measures we take to
prevent bribery and corruption at ASML. It also requires
compliance with applicable anti-bribery and anti-
corruption laws as well as the ASML Code of Conduct. For
more information or to download of the policy, please visit
www.asml.com.
In April 2021, we launched our revised Gifts & Entertainment
Policy, which details the behavior expected of all ASML
employees with regard to giving and accepting gifts or
entertainment (including business meals) and supports our
commitment to doing business in a professional, ethical and
transparent manner. The policy is also a key element in our
compliance and anti-bribery & anti-corruption program. We
require our employees to always comply with this policy, use
common sense and, if needed, seek guidance or support as
outlined in this policy. An important new element of the
policy is the request for prior approval for certain categories
of third-party gifts or entertainment. This enables us to
capture registration of both given and accepted gifts and
entertainment in these categories, which supports us in
complying with the policy, as well as with laws and
regulations. Giving and accepting gifts and entertainment
should never influence, or appear to influence, the integrity
of our business decisions and transactions, or the loyalty of
the parties involved. ASML does not allow employees to
accept or provide facilitation payments or to make political
contributions on behalf of the company.
In 2021, we revised and updated our training curriculum
regarding anti-bribery and anti-corruption topics, mostly
as part of the updated ethics training curriculum and by
providing additional classroom trainings to specific
stakeholder groups. We are further strengthening our
global third-party due diligence program.
There were no regulatory fines or actions toward ASML in
the area of bribery and corruption in the reporting year
2021.
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ASML ANNUAL REPORT 2021 Competition Law Compliance policy
ASML considers compliance with competition law an
essential part of its business. Competition law (also known
as ‘antitrust law’) protects effective competition in order to
ensure the optimal functioning of the market. Competition
law impacts many areas of ASML’s day-to-day business. It
affects our dealings and interactions with customers,
suppliers, co-developers and other business partners.
We are committed to the principles of fair competition and
fairness in dealing with our business partners, including
suppliers, codevelopers, customers and other industry
peers. As such, ASML does not condone any form of
conduct that is considered illegal under applicable
competition laws or is contrary to our Code of Conduct,
and we will not engage in business or cooperate with
business partners who resort to anticompetitive behavior
or suggest entering into illegal conduct.
To this end, ASML has general and specific control
measures in place to prevent, detect and disclose
potential competition law issues, including the following:
Competition law compliance risk assessment:
ASML regularly performs risk assessments of relevant
competition law focus areas. This assessment identifies
and takes into account risks that may be present from a
competition law perspective, which controls have been
put into place, what the remaining risks are, and which
measures will be taken in order to mitigate any remaining
risks.
Policy review:
Our Competition Law Compliance Policy demonstrates
our ongoing commitment to ensuring compliance with
applicable competition laws and our Code of Conduct.
Any act of an Employee or business partner contrary to
this Policy will be considered a significant breach of
ASML’s Code of Conduct. Consequently, this may lead to
appropriate disciplinary measures, including dismissal.
ASML reviews this Policy periodically. We published a
public version of the Policy in 2020, and released an
updated version of the internal Policy in 2021.
Training and awareness:
ASML’s competition law training program consists of a
combination of different methods; computer-based
training sessions and in-person training sessions.
Awareness of relevant topics and issues relating to
competition law is also promoted by periodic
communications through, for example, presentations and
articles on ASML’s intranet or by email communications.
Contacts with business partners:
ASML expects its business partners (such as customers,
suppliers, consultants, contractors, intermediaries, etc.) to
demonstrate high standards of ethical behavior that are
consistent with our own. ASML will not engage in business
or cooperate with business partners that resort to
anticompetitive behavior or suggest entering into illegal
conduct. ASML firmly condemns any anticompetitive
behavior by its business partners.
Reporting and resolving an issue, violation or
complaint:
ASML will support its employees and business partners
who refuse to enter into anticompetitive conduct or who
report potential violations of our policy, as clearly stated in
our Speak Up & Non-Retaliation Policy. ASML does not
tolerate any form of retaliation or other form of adverse
consequences against employees who practice strict
adherence to competition law rules or against those who
Speak Up, even if ASML loses business as a result.
For more information or download of ASML’s public competition law
compliance policy, please visit www.asml.com.
Privacy protection
We are committed to respecting and protecting the
privacy rights of employees, customers, suppliers and
everyone we do business with. Personal data is managed
in a professional, lawful and ethical way, in line with our
Code of Conduct and in compliance with applicable laws
and regulations.
We have technical and organizational measures in place
to prevent the accidental or unlawful destruction, loss,
alteration, unauthorized disclosure of, or access to
personal data. Our Privacy Policy sets the minimum
requirements from the perspective of ASML as a global
organization. The policy is binding for all ASML employees
and applies to the processing of personal data of our staff,
job applicants and business partners such as customers,
suppliers, visitors and other individuals.
A dedicated privacy and personal data protection
program ensures we adhere to high personal data
protection standards. Our privacy program includes,
among others, the following elements:
• Governance: At the senior management level, the
Corporate Risk Committee is responsible for oversight
of the topic of privacy, while the Privacy Office manages
the privacy framework and provides assistance and
guidance. Each employee is responsible for reading and
understanding the content and implications of the
Privacy Policy.
• Systems and procedures: The Privacy Controls
framework consist of 130 privacy activities including
privacy impact assessments and data protection impact
assessments. The Privacy Controls framework is
included in our ERM process.
• Disciplinary actions: We investigate all incidents,
concerns and registered reports of potential breaches
that are registered in our Privacy portal as outlined in
our personal data breach procedure. We take
appropriate control measures and disciplinary actions to
prevent reoccurrence.
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ASML ANNUAL REPORT 2021 • Audit: Privacy is included in our internal audit program.
Our privacy notices for both business partners and
recruitment are derived from our Privacy Policy. They
explain why personal data is collected and how ASML
uses it.
In 2021, we updated our Global Privacy Notices for
workers, job applicant, business partners and visitors. The
new privacy notices reflect the latest processing of
personal data within ASML, and meet the requirements of
the applicable Privacy laws and regulations, for example
GDPR (EU) and CCPA (US).
Respecting human rights
We conduct business on the basis of fairness, good faith,
and integrity and we expect the same from all those we
work with. To this end, we also believe that we have the
responsibility to respect human rights and contribute to
positive impact.
We are committed to respecting universal human rights
and honoring the value of ethics as expressed in our Code
of Conduct. We support the principles laid down in the
OECD Guidelines for Multinational Enterprises, United
Nations Guiding Principles (UNGP) on Business and
Human Rights and those in the International Labor
Organization’s (ILO) Tripartite Declaration of Principles
concerning Multinational Enterprises and Social Policy. We
have established a Human Rights Policy, which is publicly
available on www.asml.com.
Our Human Rights Policy complements our ASML Code
of Conduct and the RBA Code of Conduct we adhere to. It
expresses our commitment to human rights and
responsible labor practice in our operations and our
supply chain. The Human Rights Policy applies to ASML
and its subsidiaries anywhere in the world. The overall
responsibility for identifying and managing human rights
issues in our direct operations falls under the remit of our
Executive Vice President HR. Responsibility for human
rights in our supply chain falls under the remit of our
Executive Vice President Sourcing and Supply Chain.
Defining salient human rights issues
Salient human rights issues are those human rights that
are at risk of the most severe negative impact through a
company's activities or business relationships. We
assessed possible impacts on people’s human rights
across our value chain. We focused our efforts on seeking
stakeholder input on the one hand and performing due
diligence in relation to our initial salient issues on the other
hand. Our commitments to address and engage actively in
our salient human rights issues are highlighted in our Code
of Conduct, Human Rights Policy and RBA Code of
Conduct for suppliers. We identify and manage human
rights issues in various ways, for example stakeholder
engagement, internal human rights assessment in our
operations, and suppliers' due diligence and sustainability
risk management. Read more in: Our supply chain.
We received no grievances about breaches of human
rights in 2021.
Our operations
In 2019, we conducted a risk assessment to identify the
inherent risks related to human rights within our own
operations. The results of our analysis showed that the
inherent risk of human rights vulnerabilities in ASML's own
operations are working hours and overtime, health and
safety, and workplace harassment. The vulnerable rights-
holder groups identified within ASML are contractors,
ethnic minorities and migrant workers. An update of this
assessment is planned for 2022. In addition, we also
conduct internal EHS audits regularly. Read more in: Ensuring
employee safety.
Working hours and overtime
The standard weekly working hours in the locations where
we operate are on average 40 hours. Our company
standards are based on the International Labor Standards
of the International Labor Organization (the Forty-Hour
Week Convention) and the RBA norms. A workweek must
not exceed the maximum set by local law and a workweek
should not be more than 60 hours per week, including
overtime, except in an emergency or unusual situation. We
pay constant attention to protecting our employees from
working overtime during peak periods. As overtime
remains an important attention point for management, we
keep monitoring the use of overtime and take appropriate
measures to manage the situation.
Health and safety
It is our obligation to provide safe and healthy working
conditions for all our employees and others working on
our premises. In our products and processes, we think
about how to make ASML a safe place to work. We put
significant effort into creating awareness and to have a
proactive safety culture within ASML. Read more in: Ensuring
employee safety.
Workplace harassment
We are a global company with operations in more than 60
locations in 16 countries and regions. We have a culturally
diverse workforce, employing 122 nationalities. This leads to
a higher inherent risk around the issue of workplace
harassment in human rights. Read more in: Business ethics and
Code of Conduct. Through our Ethics program, we raise
awareness around the importance of ethical behavior and
our Speak Up & Non-Retaliation Policy. It also provides
information and guidance on dealing with topics such as
personal relationships at work, conflict of interest, dealing
with cultural differences, and ethical aspects around
ancillary activities or other positions outside of ASML.
Our supply chain
We assess risks related to human rights in our supply
chain through a risk-based approach. In our due diligence
process, we use the RBA Risk Assessment Platform to
identify inherent risks in labor (including human rights),
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ASML ANNUAL REPORT 2021 ethics, health and safety and environmental standards
across our full supply base. In the event that a medium or
high risk relating to labor is identified, we engage with the
supplier and conduct a more detailed analysis. For
strategic suppliers covering around 80% of our product-
related spend, we expect them to complete the annual
RBA SAQ. This SAQ covers more than 400 risk elements
related to labor (including human rights), ethics,
environmental and safety factors, control elements and
management systems, including their performance. It
helps us to determine a supplier’s risk profile on
sustainability. When we identify compliance gaps, we
engage with the supplier to determine corrective action
plan(s).
The salient issues we have defined relate to working
conditions (forced and bonded labor), health and safety,
and trade union rights. However, operating in the high-tech
industry the majority of our suppliers operate in countries
with a strong rule of law and are law abiding. We view this
inherent risk as low. Read more in: Our supply chain.
Information security
Like other companies, ASML is increasingly subject to
cyberattacks. These attacks can potentially have an
adverse effect on our business, reputation, revenues,
operations or financial health, especially when they breach
data protection rules and jeopardize confidential
information of our customers or partners. With ASML’s
unique position and growing exposure in the
semiconductor industry, we see increasing security risk
trends, ranging from ransomware and phishing attacks to
insider threats and infiltration attempts to acquire our
leading intellectual property (IP) or disrupt business
continuity.
In 2021, ASML encountered around 20,000 security
incidents, most predominantly from phishing attacks with
minor impact. According to an external research report
'2021 Data Breach Investigations Report (DBIR)'
conducted by Verizon, the incidence of phishing attacks in
data breaches went up from 25% in 2020 to 36% in 2021.
With the increase of exposure to cyberattacks over the
past years, we have also strengthened our resources and
capabilities, coming from 10 FTEs around 10 years ago to
around 250 FTEs in 2021 dedicated to security matters.
Security – like safety and quality – is a prerequisite for trust
in the ASML brand. Our customers and partners must be
able to rely on the security, safety and quality of our
products and services. ASML's existence is based on
people and knowledge. Our specific knowledge and
intellectual property are what give us a leading edge over
our competitors and they are therefore vital to protect.
As ASML innovates together with its ecosystem partners,
these partners need access to our systems. As the chain
is as strong as the weakest link, we need to make sure
that our partners access our systems in a secure way.
ASML's Security Circle of Trust is intended to certify and
assist our ecosystem partners to increase their information
security maturity.
Our security governance consists of three
levels:
1. Our Corporate Risk Committee (CRC) is a central risk
oversight body, which reviews, manages and controls
risk in the ASML Risk Universe, including information
security. It also approves the risk appetite, risk
management policies and risk mitigation strategies.
The CRC, which reports to the Audit Committee and
the Board of Management on a regular basis, is chaired
by the Chief Financial Officer (CFO) and comprises top
senior management representatives from all sectors at
ASML.
2. Our Security Committee, a sub-committee of the
CRC, validates the risk appetite related to information
security and validated policies and roadmaps. It
closely monitors mitigation of security risks across the
company.
3. The central security department, led by the Chief
Information Security Officer (CISO) as the owner of
the information security risk, aided by security risk
management teams in the sectors. The CISO is in
the second line of defense, and is empowered to
drive policy through the security roadmap building
the controls, and monitors the effective execution of
controls in the sectors as the first line of defense.
Information security resilience framework
Our vision on security is that it needs to be embedded in
the DNA of our people, processes and technologies. To
ensure this, we have created a dedicated security function
in order to prevent and manage security risks. Our mission
is to enable ASML to have control over the protection of
information and assets of the company, its customers and
suppliers, by applying risk-based and efficient measures
for people, processes and technology that support our
business goals. To realize this vision and mission, we
pursue and deploy our security strategy to achieve the
highest level of maturity.
We developed our information security framework by
applying the ISO27001 Information Security Standard
across its 14 domains and by driving security maturity –
from policy setting, asset management and access control
to incident management and more. For each of these
domains, we have tailored controls in place, which are
assessed routinely to ensure compliance and
effectiveness. In addition, we have an incident reporting
tool in place to make sure that all IT and information
security issues can be reported, correlated, and
investigated.
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ASML ANNUAL REPORT 2021 People and knowledge are key to the business success of
ASML. Unauthorized disclosure of information of ASML, or
information of its customers or suppliers in its innovation
ecosystem, could benefit competitors, negatively affect
ASML’s ability to file patents, or negatively affect
cooperation with customers and suppliers. At the same
time, ASML’s operations are dependent on reliable
information processing, and unauthorized changes to the
information content of these assets can damage the ability
to perform business. Therefore, it is critical to guarantee
confidentiality and integrity of information. To make sure that
our employees understand the security policy and know
how to act, we provide mandatory security awareness
training and host an annual security awareness week, during
which we provide additional information and share
learnings.
In our supply chain network, we use a single model for risk
assessment of our partners, which they also use in order to
screen their suppliers. We are also in close contact with
peers, partners and best-in-class security solution
providers, and have our security solutions tested regularly
through penetration testing (ethical hacking) to identify
exploitable issues so that effective security controls can be
implemented.
Intellectual Property protection
Our company is based on people and knowledge. Our
specific knowledge gives us a leading edge and a head
start over competitors. To stay in business, it is key to
protect our own knowledge as well as information
entrusted to ASML by our customers and business
partners. Patents are a way to protect ASML's research
and development investments from use by ASML's
competitors, but also from exploitation by ASML's
customers, suppliers, and co-developers. We innovate
and develop our technology with our ecosystem partners
consisting of many different firms and institutions, each of
which requires a dedicated way of dealing with intellectual
property (IP) matters.
ASML's general intellectual property strategy has three
objectives:
• Build and maintain a solid intellectual property portfolio
by protecting ASML's inventions.
• Prevent situations where ASML infringes the intellectual
property rights of third parties.
• Prevent the disclosure of confidential information
including know-how and trade secrets to the outside
world, in accordance with ASML's Knowledge Protection
Program.
Our Corporate Intellectual Property department is tasked
to strengthen our global patent portfolio as well as
protecting our patents. The mission of this department is
to maximize ASML's intellectual property value to execute
and support ASML's overall objectives and to preserve
ASML's freedom of operation. To protect our technology
Creating Security Circles of Trust
At ASML, we develop our technology in close
collaboration with partners inside and outside our
company in an innovation ecosystem based on trust.
Innovating and collaborating in a connected ecosystem
requires secure information sharing beyond corporate
boundaries, as the vulnerability to cyberattacks is
extended to the perimeter of the total ecosystem.
Therefore, in 2021 ASML started the Security Circles of
Trust initiative to protect our innovation ecosystem in the
Brainport Eindhoven region in the Netherlands. The 'circle
of trust' is a network of suppliers who jointly embrace
the same information security standards and raise their
performance against these standards. The network also
drives the exchange of knowledge and best practices
between ASML, suppliers and ecosystem partners.
We share best practices and information about cyber
incidents to help our innovation partners develop and
reinforce security maturity. The goals are to protect
intellectual property and guard the industry and the region
against cybercrime such as ransomware, to share relevant
threat intelligence, to collaborate on security topics, and to
become more secure together.
In 2021, we held master classes with our top 10 key
suppliers and more than 50 of our neighbor companies to
increase information security awareness and knowledge
in the region, and to share practical tips, tricks and
strategies, for example about combating ransomware.
leadership and our R&D in leading-edge technology, the
Corporate Intellectual Property department is involved in
the product generation process with the aim of ensuring
that ASML's products are not at risk of infringing on third-
party intellectual property rights. The department
assesses new products to determine whether they would
potentially infringe any relevant rights of third parties.
Our significant investment in complex research and
development justifies a strong intellectual property
portfolio. We have developed an IP Rights management
mechanism to safeguard our IP rights and to respect the
IP of other parties. This includes, among others, a
dedicated knowledge protection program, restricted
access to Engineering Top Secrets, an information
security program, mandatory information classification,
and a training and awareness program. Read more in:
Responsible business - Information security.
Early in 2021, we became aware of reports that a company
associated with XTAL Inc., against which ASML had
obtained a damage award for trade secret
misappropriation in 2019 in the USA, was actively
marketing products in China that could potentially infringe
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ASML ANNUAL REPORT 2021 on ASML's IP rights. In response, we reached out to certain customers urging them not to aide or abet this company,
DongFang JingYuan Electron ('DFJY') in any such potential infringement. Furthermore, we shared our concerns with the
Chinese authorities. ASML is monitoring the situation closely and is ready to take legal action if appropriate.
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Product safety
We want to innovate, but always with safety at the top of
mind. It’s our duty to provide a safe work environment at
all times. We focus on safety at every stage of a product
lifecycle: research, development, production, transport,
installation, maintenance, upgrades and
decommissioning. And we make sure we cover all our
stakeholder groups, including employees, customers,
suppliers, contractors and visitors.
How we manage product safety
Safe products start with good design. The first step is to
eliminate risk by product design, and since human factors
play an important role in the safe operation of a product,
we try to guard against them becoming a risk factor as
much as possible. One example of this is the way we
interlock laser beam activities to limit our employees'
exposure to dangerous laser beams. This helps prevent
workplace activities from turning into potential accidents.
We focus on safety by design in hardware followed by
safety by procedure – prevention is key. We seek to ensure
all the products and tools we develop comply with the
world’s most stringent product safety regulations, and with
legislation applicable to the countries where we do
business. In cases where there are no safety precautions
available to address potential hazards, we develop our
own.
We have clear systems and processes in place to support
our approach to product safety. When we start designing
our systems, our safety engineers conduct an initial Safety
Risk Assessment (SRA). They take into account nine key
risk areas that we have identified, and alert risk experts if
they believe designs might pose a human safety risk. Our
product designers are trained to identify any safety issues
in the early stages of the design process. The SRA is
evaluated during the entire product development process.
In each subsequent stage of the product lifecycle, we
evaluate product safety. We track any reported product-
related incidents – including supply chain incidents –
through our incident-reporting system. Every year, we
provide management with a product-safety review, where
we report any product safety incidents of the past year. In
2021, as in previous years, we are proud to say that there
were no recordable incidents caused by our equipment.
Inside our in-house testing lab
As the technological complexity of our systems increases,
so does the need for testing to prevent field failures. Our
test labs provide hardware testing capabilities to root out
potential risks and flaws in design as early as possible.
Testing early in the design process prevents part failures
down the line, at customer fabs, and also supports D&E's
drive toward more robust product design, from risk to result.
Over the years, we have developed modular test platforms
to decrease the mean time between testing (MTBT) and to
standardize test lab equipment. In the Modular Vacuum Test
platform, for example, around 80% of vacuum-related part
risks can be characterized and tested, and additional test
environments can be flexibly added, such as gases, high
voltage and temperature, using standardized hardware and
software interfaces.
Our Veldhoven facility has 24 labs with a total lab space
of around 1,500 m2. These labs provide a high-tech test
environment for up to 100 test setups, ranging from standard
bolt friction tests to tailor-made actuator tests.
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ASML ANNUAL REPORT 2021
As we have grown, so has our product complexity and the
number of geographical locations we operate in, and
therefore it is becoming more complex to assess which
safety legislation and regulations apply to our products
and tools. At the same time, it is also more complex to
determine the rules and procedures we need to follow to
demonstrate this compliance. Some of our technology is
so innovative and new that it is not always immediately
clear which regulatory regime applies.
In 2021, we established a Corporate Regulatory and
Compliance Office, tasked to ensure that our products are
compliant with the product safety policy. The Regulatory
Board is responsible for the decision-making on ASML
product safety compliance and the strategy to eliminate
non-compliance, monitors compliance status and drives
risk mitigation. During its monthly meetings, the
Regulatory Board discusses the non-compliance cases
and takes decisions based on the mitigation plan
presented. This allows us to further improve our ability to
assess which legislation and regulations – including
Restriction of Hazardous Substances (RoHS) and
Registration, Evaluation, Authorization and Restriction of
Chemicals (REACH) – apply in each country we operate in,
how to interpret them, and whether our products and tools
comply. As always, we provide safety documents for our
machines – including the results of the safety tests of parts
and the machines’ functioning – taking regulatory
requirements into account.
In 2021, we investigated if the use of a Teflon coating on
our wafer stages is compliant with international regulations
with regard to persistent organic pollutants (POPs). Teflon
– the name of a synthetic chemical called
polytetrafluoroethylene (PTFE) – is considered a persistent
organic pollutant. Results of our analysis show that the
Teflon concentration is 0.027 ppb (worst-case scenario),
which is far below the 25 ppb limit.
Ensuring safety compliance
Our D&E safety competence leads are at hand to provide
thorough knowledge about the way of working and
design rules for specific safety hazards. The products and
tools we develop comply with the EU Safety Directives
and semiconductor industry guidelines (SEMI S2) to
ensure product safety is taken into account at all times.
These guidelines are incorporated in the Safety System
Performance Specification (Safety SPS). We also take into
account customer-specific safety guidelines.
We are SEMI S2 compliant for every product type
shipped. In 2021, a report confirming SEMI S2 compliance
was available for every product type we shipped. We also
have a CE declaration of conformity for all ASML products
and tools.
Increasing product safety in the supply chain
Ensuring product safety does not end at our facilities. A
large portion of our innovation and development happens
at our suppliers’ sites. Safety is a key priority for ASML,
and we want to be sure that all the products that we ship
comply with the most stringent legislation, including the
designs that are made by our customers and partners in
the value chain. That is why we have started the 'Product
Safety in the Supply Chain project’. Our goal is to ensure
that our colleagues and partners have the capability to
deliver a safe and compliant product, so that we can avoid
safety accidents or incidents, safety-related non-
compliance issues or delayed shipments.
In order to achieve these goals, we have defined an end-
to-end process in close cooperation with our suppliers to
ensure that the products and tools that we purchase
through them meet our safety requirements. We have
added product safety requirements and competencies to
the Supplier Profile, which is our methodology to
communicate with our suppliers and measure
performance. We screen suppliers to assess how they are
meeting specific safety requirements, starting with a
supplier self-assessment survey, followed by a site audit
as required and then a gap closure review. We expect our
suppliers to also provide safety-related data and
supporting documentation for the parts or tools they make
for us. This process enables supplier capability
assessments as a proactive approach to mitigating
possible safety risks.
Dangerous goods
We completed phase one of the 'Dangerous Goods'
project successfully in 2020, which resulted in, among
other things, the appointment of a specialist dedicated to
the technical competence handling ‘dangerous goods’,
and the adoption of best practices related to shipping of
dangerous goods. With the baseline in place in the
standing organization, in 2021 we focused on further
improving the process. The second phase of the project
will focus on three aspects – introducing relevant
(hazardous properties) attributes in Teamcenter (our
knowledge sharing database), connecting to the
processes with knowledge on hazardous properties at the
front end (materials database and hazardous substance
management), and including hazardous properties /
dangerous goods information in the vendor component
design process. By identifying at an early stage which
materials are hazardous, we can take measures for their
safe handling and transportation in time and with more
efficiency.
RoHS and REACH
We are committed to complying with EU guidelines for
handling hazardous materials and chemicals, the so-
called RoHS directive and the REACH regulation, even
though the products we manufacture are currently
excluded from the RoHS directive. Wherever possible, we
133
ASML ANNUAL REPORT 2021 aim to reduce and eliminate any use of hazardous
substances and replace non-compliant parts with RoHS-
compliant alternatives.
REACH regulations are ever changing, which presents a
potential challenge. Each year, new additions are made to
the hazardous substances list. As ASML machines consist
of thousands of parts not manufactured at ASML
locations, we need to keep in very close communication
with our suppliers to identify the Substances of Very High
Concern (SVHC) content of our products. However, our
huge supplier portfolio and six-monthly updates of the
SVHC list means this process is challenging. Currently,
there are 75 substances and groups of substances, of
which some contains more than 10 individual substances,
that need to be assessed.
In 2021, we have updated our REACH policy and further
embedded REACH compliance in D&E’s operations at all
our locations and in our global supply chain. In parallel, we
also aligned our procedures with the new EU legislation
and the EU ‘SCIP’ database of hazardous materials.
Water management
Semiconductor manufacturing processes use a lot of
water. Due to climate change, droughts have become
more extreme and more unpredictable, which may lead to
water becoming a scarce resource in specific locations.
Although water is an essential resource in our customers'
semiconductor manufacturing process, water use in our
own operations is limited. ASML’s products are designed
to use water according to a ‘closed-loop’ (recycling)
system. The aim of using water in our manufacturing
process is to keep the system cool against the heat
released during the exposure process.
Water consumption at ASML is only a fraction of the water
consumption of most companies in the semiconductor
industry. Nevertheless, we promote the responsible use of
water throughout our company. Our water consumption in
2021 increased to 1,041,000 cubic meters, up from
860,000 cubic meters in 2020, an increase that can be
attributed to the expansion of the manufacturing facility in
Veldhoven, an increase in product output and the
extension of our reporting scope from 20 locations
previously to 57 locations as of 2021. We use water from
the municipal water supply. In 2021, we implemented
separation of rain water from other types of waste water in
the Netherlands and we are exploring ways to re-use the
water.
While disruptions in access to water may represent a
significant risk for some of our customers, water-related
risk for ASML is limited. We have seven manufacturing
sites, of which the four main facilities are Veldhoven
(Netherlands), San Diego (US), Wilton (US) and Linkou
(Taiwan). Read more in: Our TCFD Recommendations: climate-
related disclosure, available on www.asml.com.
Operational excellence
ASML has achieved strong growth over the past few
years, thanks to groundbreaking innovations and
technology leadership. We’ve introduced several
generations of cutting-edge chipmaking systems and built
a strong market position in the semiconductor equipment
manufacturing industry. As we mature as a company and
build on this position, we are putting effort into ways to
continuously improve the customer experience and help
customers reduce the cost of ownership. Customers look
at both the cost of the systems and running costs. As
such, improving quality requires an end-to-end approach.
We need to look at the whole chain to identify the real
issues and find solutions. We seek to combine our
innovation power with operational excellence.
Our New Enterprise program
The strong growth in our business operations and the
evolution of the company drove us to review our work
practices and determine where we can increase efficiency
in our operational processes to improve the customer
experience and unlock business value. We put ample
effort into reshaping our processes and IT landscape. The
Our New Enterprise (ONE) program is centered on
improving our business processes and IT enterprise
management system. It builds on the steps taken in recent
years to improve our IT systems, which were built in the
1990s and were not optimized for tailored customer
solutions. This is a multi-year program, with the rollout
being done in phases.
The ONE program addresses the complex processes that
have resulted from a fragmented application landscape
with numerous customized applications. The aim is to
ensure flexibility while introducing standardization. ONE
will enable ASML to function in a more unified and efficient
way by simplifying processes to ensure a future-proof and
more sustainable system. The program adopts a cross-
sector, company-wide, and end-to-end approach that will
enable us to deliver higher business value for our
stakeholders, which we define as:
• Shareholders: Increased competitiveness of our
products and services
• Customers: Increased performance and reliable product
life-cycle management of our products and services
• Suppliers: Stable and clear requirements on parts, tools,
and timing through decoupled planning
• Employees: Empowered through simplified,
standardized, and cross-sector operations
134
ASML ANNUAL REPORT 2021 Quality culture
ASML is committed to providing a high level of customer
satisfaction by delivering top-quality, sustainable products
and services that consistently meet or exceed our
customers’ expectations. Quality and operational
excellence are essential elements of our technology
leadership. This leadership is reinforced by a company-
wide quality culture that creates an environment to excel.
Together with our suppliers and partners, we ensure high-
level performance for our products and services. As a
learning organization, we continuously improve our
offerings and processes.
The aim of our quality culture is to shorten Time to Mature
Yield and ensure end-to-end quality of our products and
services in several ways:
• First Time Right: Apply risk management processes on
products and execution to minimize the impact for our
customers.
• Zero defect: Embed controls to guarantee adherence to
our policies, processes and procedures.
• Zero repeat: Learn from failures and prevent
reoccurrence, driving structural improvement in our
products, services and processes.
We have established a Quality Program Review Board,
chaired by our Chief Operations Officer (COO), tasked with
steering and monitoring on quality. We are also committed
to internationally recognized quality management systems
and standards. Our quality management system complies
with the ISO 9001:2015 standard and is third-party
certified. This demonstrates our robust quality
governance, effective quality management system, and
quality compliance across the company.
Financing policy
We continue to hold on to our long-held prudent financing
policy, which is based on three foundational elements:
• Liquidity: Maintain financial stability with a target to keep
our cash and cash equivalents, together with short-term
investments, above a minimum range of €2.0 to €2.5
billion
• Capital structure: Maintain a capital structure that
targets a solid investment grade credit rating
• Cash return: Provide a sustainable dividend per share
that will grow over time, paid semi-annually, while
returning excess cash to shareholders through share
buybacks or capital repayment
Liquidity
Our principal sources of liquidity consist of cash and cash
equivalents, short-term investments and available credit
facilities. In addition, we may from time to time raise
Quality Day 2021: the power of learning
With a record number of over 7,500 participants
worldwide, the Quality Day's theme put the spotlight on
the habit of learning, by showing that 'Learning is caring'
– caring for our products, our customers, our colleagues
and our business partners. More than 150 workshops,
trainings, best practice sharing sessions, poster sessions
and simulations were held in online, live and hybrid
formats.
For example, in D&E, a Root Cause Analysis escape
room experience exposed the participants to contrast
thinking, a process that can be used to solve complex
technical problems. Another example was a simulation
of a cost decision meeting among several departments,
where engineers could experience, for instance, what it
is like to be a customer support manager in those given
circumstances.
In addition to these quality market programs, this year
we also introduced cross-sector HaQathons, organized
by the business lines, which tackled business quality
challenges in areas such as in re-use, diagnostics,
supplier workmanship, and the customer journey.
Colleagues from all sectors were invited to collaborate and
come up with new insights and ideas to address these
challenges and create value for the business and our
customers.
additional funding in debt and equity markets. We seek to
ensure that our principal sources of liquidity will be
sufficient to satisfy our liquidity requirements at all times.
Our liquidity needs are affected by many factors, some of
which are based on the normal ongoing operations of the
business, and others by the uncertainties of the global
economy, the bulky character of our business and the
specific characteristics of the semiconductor industry.
Although our cash requirements fluctuate based on the
timing and extent of these factors, we believe that cash
generated from operations, together with our other
sources of liquidity are sufficient to satisfy our expected
requirements, including our expected capital expenditures,
research and development expenses and debt servicing.
We invest our cash and cash equivalents and short-term
investments in short-term deposits with financial
institutions, governments and government-related bodies
that have investment grade credit ratings and in money
market and other investment funds that invest in high-
rated short- and medium-term debt securities. Our
investments are mainly denominated in euros and to some
extent in US dollars, Taiwanese dollars and Chinese Yuan.
135
ASML ANNUAL REPORT 2021 Year ended December 31 (€, in millions)
Deposits with financial institutions, governments and government related bodies
Investments in money market funds
Bank accounts
Cash and cash equivalents
Deposits with financial institutions, governments and government related bodies
Short-term investments
2020
1,545.3
3,841.9
662.2
6,049.4
1,302.2
1,302.2
2021
2,131.7
2,928.3
1,891.8
6,951.8
638.5
638.5
We maintain an available committed credit facility, with a group of banks, of €700.0 million, under which no amounts
were outstanding at the end of 2021 and 2020. This facility has a maturity date of July 2026. We further maintain a local
uncommitted credit facility with a bank in China ensuring local liquidity and operational requirements are met at all
times, also given existing regulatory restrictions regarding flexible intercompany funding.
Capital structure
Our objectives when managing our capital structure are to safeguard our ability to satisfy our capital providers by
maintaining a capital structure that ensures liquidity and supports a solid investment grade credit rating. The capital
structure includes both debt and the components of equity, in accordance with both US GAAP and EU-IFRS. The capital
structure is mainly altered by, among other things, adjusting the amount of dividends paid to shareholders, the amount of
share buybacks or capital repayment, and any changes in the level of debt. Our capital structure is formally reviewed
with the Supervisory Board each year in connection with our updated long-term financial plan and relevant scenarios.
The outcome of this year’s review confirmed to maintain our existing financing policy in relation to our capital structure.
Our current credit rating from Moody’s is A2 (Stable). This rating was upgraded in September 2021 from A3. Our current
credit rating from Fitch is A- (stable), which is consistent with the rating on December 31, 2020.
We have Eurobonds outstanding with an aggregate principal amount of €4.5 billion, having the following maturities:
Outstanding Eurobond Maturity Amounts
i
g
n
d
n
a
t
s
t
u
o
t
n
u
o
m
A
)
n
o
i
l
l
i
m
€
(
1.0
0.8
0.6
0.4
0.2
0.0
750
500
1,000
750
750
750
2022
2023
2024
2025
2026
2027
2028
2029
2030
Cash return policy
ASML aims to distribute a dividend that will be growing over time, paid semi-annually. On an annual basis, the Board of
Management, upon prior approval from the Supervisory Board, submits a proposal to the AGM with respect to the
amount of dividend to be declared with respect to the prior year, taking into account any interim dividend distributions.
The dividend proposal in any given year will be subject to availability of distributable profits, retained earnings and cash,
and may be affected by, among other things, our view of potential future liquidity requirements including for investments
in production capacity, working capital requirements, the funding of our R&D programs and acquisition opportunities
that may arise from time to time. In addition to dividend payments, we intend to return cash to our shareholders on a
regular basis through share buybacks or capital repayment, subject to our actual and anticipated level of liquidity
requirements and other relevant factors.
ASML intends to declare a total dividend in respect of 2021 of €5.50 per ordinary share. Recognizing the interim dividend
of €1.80 per ordinary share paid in November 2021, this leads to a final dividend proposal to the General Meeting
of €3.70 per ordinary share. The total 2021 dividend is a 100% increase compared to the 2020 total dividend of €2.75 per
ordinary share.
136
ASML ANNUAL REPORT 2021
On July 21, 2021 we announced a new share buyback program to be executed by 31 December 2023. As part of this
program, ASML intends to repurchase shares up to an amount of €9 billion, of which we expect a total of up to
0.45 million shares will be used to cover employee share plans. ASML intends to cancel the remainder of the shares
repurchased. The new program has replaced the previous €6 billion share buyback program 2020-2022 which has not
been completed for the full amount in light of the new share buyback program.
In 2021 we repurchased 14,358,838 shares (2020: 3,908,429 shares) for a total consideration of €8,560.3 million (2020:
€1,207.5 million) of which 6,601,699 shares for a consideration of €4,560.3 million were purchased under the new program.
Dividend per share history
(Dividend for a year is paid in the subsequent year, except interim)
)
€
(
d
n
e
d
i
v
i
d
d
e
z
i
l
a
u
n
n
A
5.5
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
3.70
Cumulative capital returns
(Capital return is cumulative share buyback + dividend)
0.46
0.53
0.61
0.70
1.05
1.20
1.40
2.75
2.40
2.10
1.80
n
o
i
l
l
i
B
€
24
20
16
12
8
4
0
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Up to
2011
Dividend paid
Dividend proposed
Share buyback
Dividend paid
137
ASML ANNUAL REPORT 2021
Our approach to tax
We consider the taxes that we pay a contribution to the communities in which
we operate and an integral part of our responsibility for social value creation.
Openness and transparency on how we operate and our approach to tax is important
to us, which is supported by our sustainability strategy and our overall business strategy.
15.2%
Effective tax rate
(13.7% in 2020)
€1,235m
Income tax paid
€818m Netherlands
€215m US
€93m Taiwan
€41m South Korea
€24m China
€44m Rest of the world
11,831 FTE
R&D located in:
72% Netherlands
21% US
3% Taiwan
0% South Korea
3% China
1% Rest of the world
14,935
IP portfolio patents owned:
95% Netherlands
0% US
5% Taiwan
0% South Korea
0% China
0% Rest of the world
This section in the Annual Report outlines the highlights from our Tax Policy. For more information and the full Tax Policy document, please
visit www.asml.com. Additionally please note that in below text 'tax' and 'taxes' include customs duties.
Our leading principle is that our tax position is a reflection
of our business operations, being the sale of lithography
systems and related products and services, supported by
our manufacturing and R&D activities. Since the start of the
company, ASML has a straightforward operating model,
with our campus in Veldhoven, the Netherlands, at the heart
of our global operations.
All our lithography machines are assembled in Veldhoven,
whereas a significant percentage of the parts are being
supplied by our ecosystem of suppliers in the Netherlands,
Europe and the US. Some modules and metrology
systems are manufactured by our factories in the US and
Taiwan. Generally our new lithography machines are
shipped directly from the Netherlands to our customers
once they are ready.
The operating model described below is critical in
understanding ASML’s tax position.
Of ASML’s global work force, 55% is located in the
Netherlands, 20% in the US region, 24% in Asia and 1% in
EMEA (excl. the Netherlands). Of all senior management
roles 70% is based in the Netherlands. This reflects the fact
that ASML Netherlands is actively leading and controlling
the group’s activities, performance and risks.
With regard to R&D activities, 72.5% of our R&D employees
are located in the Netherlands. The remaining part is mainly
employed by our legal entities in the US and the rest is
scattered over other locations. The costs of our US and
other foreign R&D organizations are borne by ASML in the
Netherlands, and 95% of our patents is owned by ASML
Netherlands. During the 2000-2020 period, ASML
Netherlands bore approximately €16.7bn of R&D costs, an
average of more than 15% of our yearly revenue in that
period.
Currently, our customers are mainly based in four
locations: Taiwan, South Korea, China and the US. Our
operations in those countries contribute to our sales and
customer service efforts. In general the leading roles for
our sales and customer services activities are based in
Veldhoven.
The compensation of the ASML activities in the countries
where we are active is a fair reflection of the operating
model in line with local laws and international standards.
Where possible we have agreed (or are in the process of
agreeing) the level of remuneration of our activities with
local tax authorities. Furthermore we have processes and
controls in place to monitor various taxes, such as
customs, value-added tax (VAT), corporate income tax
(CIT) and withholding tax (WHT). Our approach to tax is
regularly discussed with senior management. Training is
provided within ASML on a regular basis to emphasize the
importance of compliance with laws and regulations.
138
ASML ANNUAL REPORT 2021 Our tax principles
The following principles guide us in how we report and pay
tax in the countries we operate in:
1. We act in accordance with the letter and the spirit of tax
laws and regulations.
2. We report taxable income in a jurisdiction
commensurate with the added value of the business
activities in that jurisdiction.
3. ASML’s profit allocation methods are based on
internationally accepted standards as published by the
OECD, as well as relevant rules and regulations in the
local jurisdictions we operate in.
4. We pursue an open and constructive dialogue with the
tax authorities in the jurisdictions we operate in, based
on mutual respect, transparency and trust, disclosing
all relevant facts and circumstances. We do not use tax
structures intended for tax avoidance, nor will we
engage in the artificial transfer of profits to low tax
jurisdictions.
5. We do not operate in tax havens (as defined by the
European Commission’s ‘blacklist’) other than for ASML
business purposes.
6. We make tax disclosures in accordance with reporting
requirements, US GAAP and IFRS.
Our tax strategy
ASML’s tax strategy is based on our tax principles and is
closely aligned to our business strategy and our
sustainability goals. It is approved by the Board of
Management and is aligned with our accountability for
ASML’s Tax & Customs affairs.
We focus on:
• Our role in managing all our stakeholders. From an
external perspective with tax authorities and regulators,
but also investor communication. Internally, in
supporting our business in managing risks, being in
control and at the same time remain efficient in its
administrative procedures and way of working. We work
in an integrated way with other experts within ASML.
• The future of taxation, which includes developments in
ESG (including Tax Transparency) and Tax technology.
• Compliance & Control: This includes the development,
implementation and monitoring of processes and
controls for appropriate tax risk management and
reporting purposes. Furthermore through the timely and
accurate fulfillment of tax compliance obligations in line
with applicable tax laws and regulations (incl. timely
payment of taxes due).
• Projects: Every year our business changes and the
regulatory environment in which we operate changes.
We work on projects that deal with these changes to
ensure the solutions implemented are compliant and
efficient. Likewise we continuously strive for
simplification and review existing business models for
compliancy.
• The ASML Tax & Customs organization. In this fast
changing world it is important to have a diverse team,
which can handle change and are more than just good
tax and customs experts. Communication, digital and
project management skills are becoming increasingly
important. We strive to work together and develop each
other in line with the ASML values (Collaborate,
Challenge and Care).
Tax governance
Our globally organized tax department is responsible for
daily tax management. It falls under the supervision of our
Board of Management, which is ultimately responsible for
ASML's approach to tax. Our integrated global tax
department is spread across three regional hubs where
ASML operates and aligns on cross-border tax matters.
ASML’s global tax department is well connected to ASML’s
operations worldwide. This helps to ensure compliance
with applicable local tax laws and regulations. Tax filing
obligations are monitored via a central tax compliance
dashboard. Controls are implemented and executed via
our SOx and Internal Control Frameworks. Automation is
used in various areas to support operational tax
processes as well as tax risk management.
The Audit Committee of the Supervisory Board (SB)
reviews our tax strategy and annually confers with our tax
professionals to discuss tax policies and the impact of tax
laws and regulations on ASML.
Training programs are in place in order to ensure that
global tax department members stay aligned and up to
date with latest developments in the global tax landscape.
Additionally, tax department members regularly provide
tax awareness sessions for stakeholders from business
and other finance departments.
We aim to be clear about all aspects of our tax position
and to share these in a transparent manner, fostering a
relationship of honesty, transparency and trust with tax
authorities in the countries we operate in. ASML’s
approach to tax is aimed at maintaining a low tax-risk
appetite. This is reflected, for example, in the number of
bilateral advance pricing agreements (BAPA) we have with
the tax authorities in our significant jurisdictions.
Tax contribution
ASML’s technology is driving our profitability. Around 90%
of our income is taxable in the Netherlands as most of our
value creation through R&D, design and manufacturing
activities is based there. The income from other activities,
such as regional equipment sales and customer support
activities, is subject to taxation in the countries where
these activities take place – the main ones being Taiwan,
South Korea, China and the US.
139
ASML ANNUAL REPORT 2021 To foster innovation, we make use of incentives that have been introduced in the countries we operate in – the Dutch
innovation box and the US Foreign Derived Intangible Income regulation being the most significant ones. Use of these
incentives has beneficial impact on our consolidated effective tax rate. For more information on the financial impact of
these regulations we refer to note 21 in the Consolidated financial statements.
We pro-actively participate in discussions about the future development of these incentives as these significantly support
the level of R&D activities we are able to perform and the ability to create job opportunities for people in the countries in
which we operate. Abolishment or legislative changes on these or other tax regulations (e.g. Pillar 1 and Pillar 2
developments) could have impact on our consolidated future effective tax rate.
Disclosures are provided in our financial statements and cover tax payments/taxes collected in our main markets.
Income Taxes paid include withholding taxes that classify as an income tax under ASC 740. We provide country-by-
country tax reporting in a transparent and accurate manner to the tax authorities. Below we have included key data for
our most significant countries (which represent 97% of the total group).
Income tax profile per significant country
(€, in millions)
Total net external sales
Total net internal sales
Income before income taxes
Income tax expense (actual)1
Income tax paid2
Netherlands
69
19,388
5,983
894
818
US
1,635
2,213
297
(54)
215
Taiwan
South -Korea
7,355
1,651
56
17
93
6,256
571
183
60
41
China
2,673
266
39
14
24
1.
2.
Income tax expense (actual) concerns the total current & deferred tax expense/benefit accrued
Income tax paid concerns the actual income tax paid in 2021
Taxes paid / collected (€ in million)
Income Taxes
Value Added Taxes
Wage Taxes
Dividend Withholding Taxes
Customs Duties
€818
€(632)
(638) €
€215
€93
1,190 €
€569
€267
875 €
€203
203 €
11 €
(750) €
(500) €
(250) €
0 €
250 €
500 €
750 €
1,000 €
1,250 €
Netherlands
US
Taiwan
South-Korea
China
140
ASML ANNUAL REPORT 2021 Supervisory
Board
141
ASML ANNUAL REPORT 2021 Message from the Chair of
our Supervisory Board
year. However, with ASML’s typical ‘let’s just do it’
mentality, these issues have been addressed with the
highest priority.
Aligning with customers
In the context of being a trusted partner in the
semiconductor ecosystem, ASML has seen great
progress in dialogues with leading customers on EUV 0.33
NA and EUV 0.55 NA (High-NA). Particularly in EUV, it is
important for ASML to be totally transparent toward its
customers, because they have no alternative. Instead of
just selling equipment, ASML works with its customers
toward achieving a specific wafer output – this requires
total alignment with customers’ objectives, which may be
different depending on how they run their factories. ASML
always needs to adapt to that, thinking from its customers’
perspective and being fully aligned to address their needs
with its products and services.
Maintaining a well-functioning global semiconductor
ecosystem
ASML operates in a world that is getting more complex.
Also in 2021, with chips being at the core of modern digital
life, ASML has been a topic in the ongoing trade
discussions between the world’s superpowers. ASML
takes up a neutral position in this. The starting point here
has been and will be that ASML aims to work with its
customers in a way that allows the company to continue to
serve all of them, wherever they are, within all applicable
rules and regulations. We strongly believe that it is in the
interest of all stakeholders in the semiconductor and
electronics industry to avoid fragmentation and maintain a
well-functioning global ecosystem, based on cooperation,
fair competition and trust.
Increasing focus on ESG sustainability
ASML takes today’s increasing focus on ESG
(environment, social and governance) sustainability very
seriously. We take responsibility for what we do and can
control. On the social and governance aspects – we are
taking care of our employees and the communities that we
are in, and we are well governed. The environmental
aspect is primarily about addressing climate change,
which is a global challenge that requires urgent action by
everyone, including us. We have to take care of our own
environmental footprint, the footprint of our suppliers and
the potential negative effects of the products and services
that we supply. We ask our suppliers to show us their
environmental programs, and we work with them on joint
programs in areas such as re-use. On our side, it is our
responsibility to minimize the energy consumption,
142
Gerard Kleisterlee (Chair of the Supervisory Board)
Dear Stakeholder,
In 2021, ASML had stellar performance – driven by
strongly surging demand for microchips, it was a record
year, again under adverse circumstances. We still had to
cope with COVID-19 and some supply issues, but we saw
fantastic growth, making 2021 an even better year than
2020 with record turnover, cash flow and profitability.
Impressive technological progress
Success of the company starts with the success that
ASML has with its customers. We have seen great
progress with the wide adoption of ASML’s EUV 0.33 NA
platform in high-volume manufacturing, and growing
commitment to the next-generation EUV 0.55 NA (High-
NA) platform, where good technical advances have been
made. At the start of Q4, the Supervisory Board's
Technology Committee made a visit to ZEISS in Germany,
where preparations for assembly of the first new system
are being executed, and we were impressed by the great
achievements of the teams working on this.
Dealing with surging demand
We continue to see surging demand, not only for our
leading-edge EUV lithography systems, but also for DUV,
the workhorse of the semiconductor industry in mature
nodes. To meet this strong demand across our entire
product portfolio, we are first of all driving down our
manufacturing cycle times and are working with our
supply chain to increase our output capability across our
product portfolio. In 2021, we have seen some tension in
our operations as well as in ASML’s supply chain, which
caused some delays in system shipments at the end of the
ASML ANNUAL REPORT 2021 greenhouse gas emissions and use of materials of our
lithography solutions, for which we have programs in
place.
Strong growth comes with challenges
As a fast-growing organization, ASML’s focus on people
and leadership development is critical to its success.
Every new ASML employee should feel welcome, become
part of this dynamic environment quickly and be able to
contribute and develop their skills. This requires a well-
organized set of processes and controls as well as a
strong culture of caring. Hiring the numbers of people as
we did in 2021 comes with responsibility to foster their
talents. In addition, we need to prepare and adapt for the
future. With the broad range of advanced lithography
solutions and services, and with a strongly growing
installed base, we have to carefully balance our focus on
cost, quality and output in our mature business with our
continuous drive for innovation at the leading edge of
technology.
Confident outlook for 2022
The Supervisory Board proudly recognizes the great
efforts made by ASML’s workforce – at the end of the day,
the employees and their partners in the supply chain and
innovation ecosystem make it all happen under the
challenging circumstances that we are still in. ASML has
done an amazing job in managing its way through the
COVID-19 crisis while continuing to deliver outstanding,
advanced and mature products and services.
We are looking forward with confidence, and we strongly
believe that ASML is on a clear path to continue enabling
groundbreaking technology to solve some of humanity’s
toughest challenges. The company also has the right
strategy to support the global electronics ecosystem in a
sustainable way and deliver value to all its stakeholders.
Gerard Kleisterlee
Chairman of the Supervisory Board
143
ASML ANNUAL REPORT 2021 Supervisory Board
Report
The Supervisory Board supervises and advises the Board of Management in performing its
management tasks and setting the direction for ASML, focusing on long-term and sustainable
value creation. The members of the Supervisory Board are fully independent.
6
Supervisory Board meetings
38%
Female members
98.0%
Attendance rate
3.9
Years average tenure
The Supervisory Board supervises and advises the Board
of Management in performing its management tasks and
setting the direction for ASML. The Supervisory Board
focuses on long-term and sustainable value creation, with
the goal to ensure that the Board of Management pursues
a strategy that secures its leading position as a supplier of
holistic lithography solutions to the semiconductor
industry. As Supervisory Board, we uphold an appropriate
system of checks and balances, provide oversight,
evaluate performance and give advice where required or
requested. Through good governance, we help to ensure
that ASML acts in the best interests of the company and
its stakeholders. In this Supervisory Board Report, we
report on our activities in 2021.
During 2021, the semiconductor industry as a whole grew
by 17.3% worldwide, while the COVID-19 pandemic still
had impact. ASML continued to grow and welcomed new
colleagues, while safeguarding health, safety and business
continuity. Increasing customer demand and growth of the
company have resulted in additional challenges in 2021.
We are pleased to see that ASML has been able to realize
fantastic growth, making 2021 an even better year than
2020 with record turnover, cash flow and profitability.
Our activities in 2021
In exercising our task in 2021, the Supervisory Board
agenda was centered around the strategy and its
execution, financial and operational performance,
business developments, risk management, and people
and organization. Based on the strategic priorities for
ASML as agreed in the annual strategy review, several
topics were extensively discussed by means of deep
dives, allowing a focused and in-depth review.
Strategy and long-term value creation
During 2021, the Supervisory Board devoted a
considerable amount of time discussing strategic topics.
We performed the recurring annual review of ASML's
corporate strategy, the long-term financial plan and the
long-term plans of EUV, DUV and Applications. The
Supervisory Board fully supports ASML strategy, which
continues to be centered around the five pillars strengthen
customer trust, holistic lithography and applications, DUV
competitiveness, EUV 0.33 NA for manufacturing and EUV
0.55 NA (High-NA) insertion. With the strong demand for
ASML's products in combination with the company’s focus
on execution of its strategic priorities, the Supervisory
Board has confidence in ASML’s long-term growth
opportunities and the continued delivery of value to its
stakeholders.
As part of the annual strategy review, we held dedicated
workshops focused on long-term semiconductor market
developments and external global forces, including
geopolitics and ESG sustainability. Other workshops
concerned challenges related to strategy execution,
zooming in on the end-to-end supply chain and on the
installed base and services strategy. These workshops
enable an engaged and focused discussion between the
Supervisory Board and Board of Management on key
strategic matters, and as a Supervisory Board we highly
value this way of contributing to the strategic decision-
making process.
Besides the annual strategy review, strategic topics were
addressed throughout the year by means of deep dives,
allowing focused, in-depth review by the Supervisory
Board.
144
ASML ANNUAL REPORT 2021 DEEP DIVE: Strategic cooperation with Carl
Zeiss SMT
DEEP DIVE: Applications and holistic
lithography strategy
With respect to the strategic cooperation with Carl Zeiss
An in-depth review of the applications and holistic
SMT, the Board of Management and the Supervisory
lithography strategy was performed. We looked at the
Board discussed the new overall framework agreement
growth opportunities arising from technology shifts in key
covering the entire spectrum of the relationship between
market segments and the technological roadmap and how
the two companies. In the review, we looked in depth at
it can support ASML’s business. Key drivers of growth
the three – strongly interrelated and mutually supportive –
were looked into in detail, including applications such as
pillars of the agreement: behavior and culture, governance
multi-beam inspection, optical and e-beam metrology,
and commercial, as well as on the renewed arrangement
and computational litho and scanner application software.
with respect to IP. We consider the new framework
The Supervisory Board is pleased with the applications
agreement as a step forward, especially in the relationship
and holistic lithography strategy and is confident that
and cooperation between the two companies, as well as
ASML is well-positioned to create value by executing on
in the opportunities to simplify the operational execution.
its roadmap.
Financial and operational performance
We reviewed the annual and interim financial statements,
including non-financial information, the quarterly results
and accompanying press releases, as well as the
outcomes of the year-end US GAAP and EU-IFRS audits.
As part of the financial updates, the Supervisory Board,
assisted by the Audit Committee, reviewed ASML's
financing and capital return policies. The Supervisory
Board approved the Board of Management’s proposals for
the final and interim dividend to be paid in 2021.
Furthermore, the Supervisory Board approved the 2021-
2023 share buyback program and discussed the
execution of the program with the Board of Management
on a quarterly basis.
One special Supervisory Board meeting was held to
discuss the messaging around the 2021 Investor Day,
during which investors and other key stakeholders were
updated about our long-term strategy and financial model.
We are confident that ASML is well positioned to continue
to deliver long-term growth and stakeholder value in a
sustainable manner.
Business developments
In 2021 we witnessed increased wafer demand at both
advanced and mature nodes driven by global megatrends
in the electronics industry as well as countries pushing for
technological sovereignty. This surging demand came with
challenges both in our own operations and in our supply
chain. The Supervisory Board closely monitored the
developments in this regards and saw management
address these challenges with the highest priority.
As a technology leader in the semiconductor industry,
technological progress is one of ASML's top priorities. The
Supervisory Board is pleased to see the ever-wider
adoption of ASML’s EUV 0.33 NA scanner platform in high-
volume manufacturing, and growing commitment to the
next-generation EUV 0.55 NA (High-NA) platform, where
great progress has been made by the teams working on
this program.
People and organization
Given the significant growth of ASML in recent years, the
topics of people and organization continued to be an area
of focus for the Supervisory Board in 2021, as we believe
that these are of critical importance for the future success
of ASML. On several occasions, we were provided with
updates from Human Resources and Organization
(HR&O). Topics covered included the ASML leadership
framework and the results of the annual employee
engagement survey. Furthermore, the Supervisory Board,
assisted by the Selection and Nomination Committee,
extensively discussed and provided advice in respect of
ASML's talent management and people development
programs as well as succession planning for the Board of
Management and senior management. The Supervisory
Board is pleased to see the effort being put into the
onboarding of new employees, enabling them to develop
and contribute as quickly as possible.
Furthermore, it is important that business processes are fit
for growth. We oversaw various transformation programs
such as ONE. ONE is ASML’s transformation program
dedicated to securing configuration integrity over the life
cycle of our customer offerings while enhancing the
business processes and maintaining flexibility, with the
support of its upgraded backbone information system. We
paid special attention to the sub-roadmaps of the program
where progress had been less than planned, looking at the
challenges and mitigating actions. We will continue to
closely follow the developments.
145
ASML ANNUAL REPORT 2021 DEEP DIVE: ESG sustainability strategy
We discussed the step-up in focus on ESG sustainability
with the Board of Management and we reviewed ASML's
new ESG sustainability strategy based on nine themes
in the areas of environment, social and governance.
We are pleased with the further increasing focus within
ASML on ESG sustainability, which includes topics
such as the energy efficiency of our products, re-use,
diversity and inclusion and a responsible supply chain. We
intend to connect remuneration targets for the Board of
Management to the new ESG sustainability strategy and
to increase the weight of the ESG performance measure
as part of a revision of the Remuneration Policy for the
Board of Management, which we intend to submit to the
General Meeting in 2022.
Risk management
As risk management is a key element of the Supervisory
Board’s responsibilities, we received periodic risk
management updates during the year. Attention was paid
to the risk landscape and the developments in that area,
the risk appetite and the measures put in place by the
Board of Management to mitigate the critical risks.
Particular area of attention in 2021 were the challenges
created by the strong increase in demand for ASML's
products across the entire product portfolio, which
impacts multiple risks in ASML's risk landscape. Another
recurring point of attention was the risk related to rapid
growth of the organization. During the year, specific risk
areas were reviewed in deep dive sessions. Topics
covered in 2021 were IT and IT security risks, intellectual
property risks and political risks in light of the global trade
situation. For further information on ASML's risk management, read
more in: Our performance in 2021 - Governance - How we manage
risk.
Relationship with stakeholders
The Supervisory Board regularly discussed ASML’s
relationship with its shareholders and members of the
Supervisory Board engaged with shareholders throughout
the year on topics such as ASML’s strategy and
performance, governance and ESG. The Remuneration
Committee held engagement meetings with a variety of
ASML shareholders and other stakeholders regarding
Board of Management remuneration. More information
about this topic can be found in the Remuneration Report.
A Supervisory Board delegation held two formal meetings
with the Works Council in 2021. In the first meeting, time
was spent on getting to know each other, as the
composition of the Works Council changed significantly
after the Works Council elections held in December 2020.
We exchanged views on ASML's strategy and priorities,
ASML's performance and challenges, in particular related
to the growth and increased complexity of ASML's
business. Other topics of discussion were climate change,
leadership at ASML and the COVID-19 pandemic, and in
particular the challenges related to working from home
and the potential impact on innovation and on the mental
and physical health of ASML employees. The composition
of the Supervisory Board and the Board of Management
was discussed, in particular the changes which took effect
per the 2021 AGM. The Works Council and Supervisory
Board also discussed the Remuneration Policies for the
Board of Management and Supervisory Board.
In October 2021, the Technology Committee paid a visit to
one of our key suppliers, ZEISS, where the committee met
with ZEISS management and discussed the cooperation
between ASML and ZEISS, especially given the new
framework agreement concluded in 2021.
Additional topics
Other topics that were relevant during Supervisory Board
meetings in 2021 included:
• IT and Security: We reviewed the IT strategy, renewed in
Q4 2020, and looked into the key objectives centered
around the objectives Running IT as a Business,
Business Relevance, IT Art of the Possible and
Employee Engagement. Particular attention was paid to
the increased risk profile on security and business
continuity and how the comprehensive IT strategy
brings business relevance, value delivery and risk
management together.
• Divestment of the non-semiconductor activities of
Berliner Glas: The sale of the technical glass activities to
Glas Trösch Group in Q2 2021 and the medical
applications and SwissOptic activities to Jenoptik in Q4
2021.
• Compliance with rules and regulations: The Supervisory
Board monitored compliance with rules and regulations
including the Dutch Corporate Governance Code and
was kept informed on key legal matters.
• Supervisory Board composition, profile and functioning:
We extensively discussed our own composition, profile
and functioning, the composition and functioning of its
committees as well as the composition and functioning
of the Board of Management. More information can be
found in the report of the Selection and Nomination
Committee.
• Board of Management performance: We also monitored
the performance of the Board of Management and
decided on the Board of Management's remuneration
targets and target achievements. More information can
be found in the report of the Remuneration Committee.
146
ASML ANNUAL REPORT 2021 An overview of topics discussed during the year can be found in the table below.
Q1 • 2020 Annual Results and Annual Report
• 2020 external audit report
• Final dividend 2020
• Remuneration Board of Management and Supervisory
Q2 • Business priorities update
• Strategy deep dive: Geopolitics
• Strategy deep dive: Zeiss
• AGM update
Board,
• Risk Management incl deep-dive: IP risk
• Market & Customer deep-dive: logic segment
• Outcome Supervisory Board evaluation
• Legal update
• Composition Supervisory Board
• Legal Issues Report
• AGM agenda
Q3 • 2021 statutory interim report
• Share buyback program
• Business priorities update
• HR&O Update
• Risk Management: update Risk Landscape & deep-dive:
IT strategy and IT Security
• Strategy deep-dive: Applications and Holistic
Lithography incl. HMI lessons learned
• Strategy deep-dive: ESG
• Composition SPAA Board per January 1, 2022
• Capital Markets Day messaging
Q4 • 2021 Interim Dividend proposal
• Business priorities update 2021 and 2022
• Update geopolitical developments
• Semiconductor Market & Global Forces / ESG (incl.
breakout sessions)
• Factory Tour
• From technology trends to ASML product strategy
• Long-term end-to-end supply chain setup / Installed
Base Management & Services (incl, breakout sessions)
• Topline growth, Costs & Capital allocation 2020-2030
• Supply chain shortages
• Output capability challenges
• Physical security
• Long-term financial plan and Annual Plan 2022
• Financing policy incl. capital return & dividend policy
• HR&O update: Leadership framework
• ONE Program
147
ASML ANNUAL REPORT 2021 Meetings and attendance
The Supervisory Board meets at least four times per year in accordance with an annual meeting schedule and whenever
the Chairman, one or more of its members, or the Board of Management requests a meeting.
In 2021, the Supervisory Board held six meetings. Of these meetings, four were held virtually and two were held at
ASML's headquarters in Veldhoven. In addition to these meetings, there were several informal meetings and telephone
calls among Supervisory Board and/or Board of Management members.
The Supervisory Board meetings and the Supervisory Board committee meetings are held over several days, ensuring
there is time for review and discussion. At each meeting, the Supervisory Board members discuss among themselves
the goals and outcome of the meeting, as well as topics such as the functioning and composition of the Supervisory
Board and the Board of Management. Also discussed during each meeting are the reports from the different
Committees of the Supervisory Board.
Virtual and in-person meetings
Like in 2020, the majority of the Supervisory Board and Supervisory Board committees meetings in 2021 were held virtually due to
the COVID-19 pandemic. To address the challenges resulting from meeting virtually, we continued to apply various measures: we
planned shorter meeting sessions spread over more days, we held break-out sessions in smaller groups to optimize interaction,
and we also made use of video as a means for meeting preparation, in addition to providing written meeting documents. The
Supervisory Board is very positive about these new solutions and continued to use them during the meetings that were held in
person in 2021.
The Supervisory Board meetings and the meetings of the four Supervisory Board committees were well attended, as is
shown in the table below.
In addition to the Supervisory Board members, the members of the Board of Management are invited to the Supervisory
Board meetings. All Board of Management members were present for the Supervisory Board meetings in 2021.
Members of senior management are regularly invited to provide updates on topics within their area of expertise. This
gives the Supervisory Board the opportunity to get acquainted with a variety of ASML managers, which the Supervisory
Board considers very useful in connection with its talent management and succession planning activities.
Supervisory Board meeting attendance overview
Name
Gerard Kleisterlee (Chair)
Annet Aris
Birgit Conix1
Marc Durcan
Warren East
Terri Kelly
Rolf-Dieter Schwalb
Hans Stork
Douglas Grose2
Carla Smits-Nusteling3
Supervisory
Board
6/6
6/6
4/4
5/6
6/6
6/6
6/6
6/6
2/2
2/2
Audit
Committee
6/6
n/a
3/3
n/a
6/6
n/a
6/6
n/a
n/a
3/3
Remuneration
Committee
n/a
6/6
n/a
n/a
n/a
9/9
9/9
9/9
n/a
n/a
Selection and
Nomination
Committee
9/9
9/9
n/a
4/4
n/a
4/4
n/a
n/a
5/5
n/a
Technology
Committee
5/5
5/5
n/a
5/5
n/a
n/a
n/a
5/5
3/3
n/a
1. Appointed at the AGM on April 29, 2021 also appointed as member of the Audit Committee.
2. Stepped down per the AGM on April 29, 2021.
3. Stepped down per the AGM on April 29, 2021.
Composition
The Supervisory Board determines the number of Supervisory Board members required to perform its functions, the
minimum being three members. The Supervisory Board currently consists of eight members. The Supervisory Board
attaches great importance to its composition, independence and diversity and strives to meet all the associated
guidelines and requirements. To ensure an appropriate and balanced composition, the Supervisory Board spends
considerable time on an ongoing basis discussing its profile, composition and rotation schedule.
148
ASML ANNUAL REPORT 2021 Independence
In order to properly perform its tasks, the Supervisory Board considers it to be very important that its members are able
to act critically and independently of one another, the Board of Management and other stakeholders. The independence
of the Supervisory Board and its individual members is assessed on an annual basis. All current members of the
Supervisory Board are fully independent, as defined by the Dutch Corporate Governance Code, and have completed the
annual questionnaire addressing the relevant independence requirements.
Diversity
The current composition of ASML’s Supervisory Board is diverse in terms of gender, nationality, knowledge, experience
and background and has a suitable level of experience in the financial, economic, technological, social and legal aspects
of international business. For more information about diversity, reference is made to the section Corporate Governance -
Other Board-Related Matters.
Supervisory Board skills matrix
Gerard
Kleisterlee
(Chair)
Annet
Aris
Birgit
Conix
Marc
Durcan
Warren
East
Terri Kelly
Rolf-Dieter
Schwalb
Hans
Stork
General skills
Executive board member
of (listed) international
company
Finance / governance
Remuneration
Human resources /
employee relations
IT / digital / cyber
ASML-specific skills
Semiconductor
ecosystem
Deep understanding
of semiconductor
technology
High-tech manufacturing
/ integrated supply chain
management
Business in Asia
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
Changes in composition in 2021
Per the 2021 AGM, the term of appointment of Douglas Grose and Carla Smits-Nusteling expired. Mr. Grose and Ms.
Smits-Nusteling stepped down from the Supervisory Board per the 2021 AGM, after having served eight years on the
Supervisory Board. As announced during the 2020 AGM, the number of Supervisory Board members increased
temporarily from eight to nine in 2020. Upon the retirement of Mr. Grose and Ms. Smits-Nusteling, the Supervisory
Board decided to only nominate one candidate, Ms. Birgit Conix, for appointment at the 2021 AGM. The Works Council
of ASML Netherlands B.V. decided not to use its recommendation right with regard to the vacancy arising per the 2021
AGM and the General Meeting resolved to appoint Ms. Conix for a term of four years effective per the 2021 AGM. As a
result, the Supervisory Board consists of eight members per the 2021 AGM.
Changes in composition in 2022
Per the 2022 AGM, the appointment terms of Terri Kelly and Hans Stork will expire.
Mr. Stork has informed the Supervisory Board that he is not available for reappointment and will retire per the 2022 AGM,
upon completion of his current term. The Supervisory Board extends its thanks to Mr. Stork for his valuable contribution
over the past eight years, during which the Supervisory Board has greatly benefited from his knowledge and experience.
Ms. Kelly has informed the Supervisory Board that she is available for reappointment per the 2022 AGM. As Ms. Kelly's
initial appointment was based on the enhanced recommendation right of the Works Council, the Works Council also has
an enhanced right of recommendation in respect of the vacancy arising from the retirement by rotation of Ms. Kelly.
149
ASML ANNUAL REPORT 2021 The agenda and explanatory notes for the 2022 AGM will
contain further information about the nomination for (re)
appointment of Supervisory Board members.
and its individual members, and the education and training
needs for the Supervisory Board and Board of
Management members.
For further information and background on the members of the
Supervisory Board, including details on nationality, gender and
age, please see the Supervisory Board members’ information in
Our performance in 2021 - Governance - Corporate governance
- Supervisory Board as well as the Supervisory Board skills matrix
included in this Supervisory Board Report.
Induction and training
We have a comprehensive induction program in place for
newly appointed Supervisory Board members, designed
to ensure that new members gain a good understanding
of our business and strategy, as well as the key risks we
face. The induction program includes meetings with other
Supervisory Board and Board of Management members,
a technology tutorial and detailed presentations by our
Business Lines, Sectors and Corporate departments. A
site visit and factory tour is also part of the induction
program. On joining the Supervisory Board, Ms. Conix
followed an induction program, which was partly virtual
and partly in person.
To ensure permanent education, the Supervisory Board is
provided with regular deep dives on a variety of topics,
both in the plenary meetings and in the meetings of the
Supervisory Board's committees. During 2021, strategy
and risk deep dives were held on a variety of topics, see
the Our Activities 2021 section in this Supervisory Board
Report. Furthermore, external speakers or advisors
attended various committee meetings to provide outside-
in views on topics such as technology developments and
technology outlook. The Supervisory Board also
performed site visits. We visited the EUV factory at ASML's
headquarters and were updated on the EUV 0.33 NA and
EUV 0.55 NA (High-NA) programs. We saw the
preparations for the assembly of the first High-NA system
and were impressed by the achievements made. The
Technology Committee visited ZEISS to see, among other
things, how ZEISS' High-NA program was progressing.
Finally, a virtual tour of ASML's production facilities in
Wilton and San Diego was organized.
Evaluation
The Supervisory Board greatly values the structural and
ongoing evaluation process as a means of ensuring
continuous improvement in our way of working. Each year,
the Supervisory Board, assisted by the Selection and
Nomination Committee, evaluates the composition,
competence and functioning of the Supervisory Board
and its committees, the relationship between the
Supervisory Board and the Board of Management, its
committees, its individual members, the chairs of both the
Supervisory Board and the committees, as well as the
composition and functioning of the Board of Management
In principle, the evaluation of the Supervisory Board is
performed once every three years by an external adviser;
in the other two years, the evaluation of the Supervisory
Board is performed by means of a self-assessment using
a written questionnaire, followed by one-on-one meetings
between the Chairman and individual Supervisory Board
members.
The 2021 evaluation of the Supervisory Board and its
committees was performed through a web-based survey,
which was prepared by the Selection and Nomination
Committee. The Chairman of the Supervisory Board also
held meetings with the individual Supervisory Board
members. The evaluation was centered around the
following themes: composition, stakeholder oversight,
oversight of strategy, risk management and succession
planning, management and focus of meetings and
priorities for improvement. An upward review by the
Board of Management and the external Auditor was also
part of the annual assessment.
The results of the Supervisory Board evaluation were
discussed in early 2022. The conclusion was that the
Supervisory Board and its committees continue to
function well. Suggestions to further improve the
functioning of the Supervisory Board include further
optimizing the meeting agenda to ensure an appropriate
balance between recurring items and strategic topics as
well as topics related to operations and people and
organization. Other suggestions relate to the balance
between presentation and discussion during meetings,
and increasing the engagement with management and the
organization outside meetings.
The Board of Management also conducted a self-
evaluation in 2021, focusing on the role, responsibilities
and functioning of the Board of Management collectively,
and on the functioning of the individual Board of
Management members. This self-evaluation was
performed in a number of off-site Board of Management
meetings dedicated to this topic. As part of the self-
evaluation a survey was completed and interviews with the
individual Board of Management members were held.
Themes addressed include the Board of Management's
strategic focus, stakeholder involvement, people &
organization, board dynamics and board organization.
Also in 2022 a special Board of Management session will
be held to continue the discussion and follow-up on the
observations made. The overall conclusion of the self-
evaluation was that ASML has a well-functioning Board of
Management. The self-evaluation was also discussed with
the Supervisory Board and its Selection and Nomination
Committee.
150
ASML ANNUAL REPORT 2021 Supervisory Board Committees
The Supervisory Board has four standing committees, whose members are appointed by
the Supervisory Board from among its members. The full Supervisory Board remains responsible
for all decisions, even if prepared and taken by one of the Supervisory Board’s Committees.
members
3
Assisting in
overseeing the
integrity and quality
of our financial reporting
and the effectiveness
of risk management
and controls
members
4
Overseeing the
development and
implementation of the
Remuneration Policies,
in cooperation with
the Audit Committee and
Technology Committee
members
4
Providing advice with
respect to our
technology plans
required to execute
the business strategy
members
4
Assisting with the
preparation of the
selection criteria
and appointment
procedures for the
Supervisory Board and
Board of Management
The four committees of the Supervisory Board prepare the decision-making of the full Board. In the plenary Supervisory
Board meetings, the chairpersons of the committees report on the items discussed in the committee meetings. In
addition, the meeting documents and minutes of the committee meetings are available to all Supervisory Board
members, enabling the full Supervisory Board to make the appropriate decisions.
Audit Committee
The Audit Committee assists the Supervisory Board in overseeing the integrity and quality of our financial reporting and
the effectiveness of the internal risk management and internal control systems.
Members
• Rolf-Dieter Schwalb (Chairman)
• Birgit Conix
• Warren East
The members of the Audit Committee are all independent
members of the Supervisory Board.
The Supervisory Board has determined that both Mr. Schwalb
and Ms. Conix qualify as an Audit Committee financial expert
pursuant to Section 407 of the Sarbanes-Oxley Act and Dutch
statutory rules, taking into consideration their extensive financial
backgrounds and experience.
Main responsibilities
• Overseeing the integrity and quality of ASML's financial
statements and related non-financial disclosure and submitting
proposals to ensure such integrity;
• Overseeing the accounting and financial reporting processes
and the audits of the financial statements;
• Overseeing the effectiveness of our internal risk management
and control systems, including the compliance with the
relevant legislation and regulations, and the effect of codes of
conduct;
• Overseeing the integrity and effectiveness of our system of
disclosure controls and procedures and our system of internal
controls over financial reporting;
• Overseeing the External Auditor’s qualifications, independence,
performance and determining its compensation; and
• Overseeing the functioning of Internal Audit.
The Audit Committee is provided with all relevant information to be able to adequately and efficiently supervise the
preparation and disclosure of financial information. This includes information on the status and development of the
(semiconductor) market to be able to judge the outlook and budget for the next six to 12 months, the application of EU-
IFRS and US GAAP, the choice of accounting policies and the work of the internal and external auditor.
Audit Committee meetings in 2021
The Audit Committee meets at least four times a year and always before the publication of the quarterly, half-year and
annual financial results. In 2021, the Audit Committee held six meetings.
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ASML ANNUAL REPORT 2021 Recurring agenda topics (quarterly)
• Financial update and financing
• Review of the quarterly financial results and press release
• Accounting update
• Internal control update
• Observations External Auditor
• Risk and Internal Audit update
• Disclosure Committee report
• Legal matters report
• Ethics and compliance
Attendance
In addition to the Audit Committee members, the Chairman of
the Supervisory Board attends the Audit Committee meetings
whenever possible. The external auditor and the internal auditor
have a standing invitation for Audit Committee meetings and
attended all Audit Committee meetings in 2021. The CEO, CFO,
EVP Finance, Corporate Chief Accountant and the VP Risk and
Business Assurance are invited to the meetings.
The below overview provides a number of topics discussed during Audit Committee meetings in 2021, in addition to the
recurring agenda topics.
Q1 • 2020 Annual Report and financial statements US GAAP
and EU-IFRS
• Accounting deep-dive: Balance sheet review
• 2020 External audit report
• Annual Reporting Process
• Capital return: final dividend 2020 and share buyback
program
• Fraud-risk assessment
• Results of the External Auditor evaluation 2020
• Results Self-Evaluation Audit Committee
• Annual plans Risk and Internal Audit
Q3 • Statutory Interim report 2021
• External Audit rotation process
• Compliance deep-dive: export control
• Share Buyback program 2021-2023
• Finance and IT transformation program
Q2 • Approval external audit plan 2021
• Expense reporting Board of Management and
Supervisory Board 2020
Q4 • Interim Dividend 2021
• Accounting deep-dive: Zeiss framework agreement
• 2021 Annual Report process
• Long-term financial plan
• Annual Plan 2022
• Compliance deep-dives: Finance compliance and
country compliance Korea
• Annual tax update
• External audit update
• Review rules of procedure Audit Committee
• Process for the External Auditor evaluation
Financials
In 2021, the Audit Committee focused, among other things, on financial reporting, most particularly the review of ASML's
Annual and Interim Reports, including the annual and interim financial statements and non-financial information. The
Audit Committee also closely monitored the progress and discussed the outcomes of the year-end US GAAP and EU-
IFRS audits. The quarterly results and the accompanying press releases were reviewed before publication.
On a quarterly basis, the Audit Committee was provided accounting updates by the Corporate Chief Accountant,
highlighting the main accounting matters relevant for the quarter. A recurring item of focus of the Audit Committee in this
regard is revenue recognition, as this is a complex accounting also identified as a critical audit matter by the external
auditor. Other important elements of the Audit Committee's quarterly procedures were the discussion of the
observations of the External Auditor in relation to the accounting matters, as well as the report by the Disclosure
Committee on the accuracy and completeness of the quarterly disclosures. Throughout the year, specific accounting
topics were addressed in-depth, for instance the accounting aspects of the new framework agreement between ASML
and ZEISS dated September 21, 2021. In this review, the Audit Committee took note of Management's and the external
auditor's assessments on the accounting treatment and concurred with the conclusions. An annual in-depth balance
sheet review was also performed.
The operational and financial short- and long-term performance of ASML was discussed extensively, looking at various
performance scenarios and their impact on ASML’s results, cash generation, and financing and capital return policies.
Particular item of focus in 2021 was the surge in customer demand, the ability of ASML to deliver in order to meet this
demand and the potential impact on the financial figures.
The Audit Committee reviewed and provided the Supervisory Board with advice regarding the long-term financial plan,
the financing of ASML and ASML’s capital return policy. Specifically discussed were the proposed final dividend payment
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ASML ANNUAL REPORT 2021 in respect of the 2020 financial year and the interim
dividend for the financial year 2021, which were approved
by the Supervisory Board upon recommendation of the
Audit Committee. The Audit Committee was kept updated
on the progress of the 2020-2022 share buyback program,
which was replaced by a new program in July 2021. The
Audit Committee also extensively discussed the entering
into of the new 2021-2023 share buyback program,
thereby taking into consideration ASML's cash position
and free cash flow, and provided the Supervisory Board
with a positive recommendation with respect to the Board
of Management's proposal.
Risk management and internal control
Throughout 2021, the Audit Committee closely monitored
risk management and the risk management process,
including the timely follow-up of high-priority actions
based on quarterly progress updates. The Audit
Committee oversaw the annual internal control process.
Focus was on scoping, materiality levels, updates to the
internal control framework, the tests of design and
effectiveness and management's assessment of ASML's
internal control over financial reporting and disclosures.
The observations made by the Internal Auditor and the
External Auditor on the design and effectiveness of
internal controls were also discussed with the Audit
Committee. We are pleased with the conclusion that
ASML's internal control framework was effective in 2021.
Emerging risks related to increasing
demand
In 2021, we performed an in-depth review of emerging
risks as a result of ASML's growth and ramp-up to meet
customer demand, given its potential impact on several
risk categories in the risk landscape. We looked in
detail into the risks impacted and the mitigating actions
identified by management. We paid special attention to
the process effectiveness and efficiency risk, with a focus
on support processes, not only in view of the challenges
related to the significant growth, but also considering the
different business models for ASML's products, the IT and
process landscape.
Ethics and compliance
We consider acting with the highest standards of integrity
of key importance to our value creation for our
stakeholders and the long-term success of ASML. The
Audit Committee received quarterly reports on the Ethics
program, including the trends and risks in the area of
ethics and the Ethics training strategy. The Audit
Committee was also involved in the revision of ASML's
Speak Up & Non-Retaliation Policy. During 2021 we also
discussed ASML's compliance program and performed
detailed reviews of specific compliance topics such as
export control, finance compliance and the country
compliance review for South Korea. Furthermore, an
annual update on fraud and fraud risk management was
provided.
Internal audit
The Audit Committee reviewed the annual internal audit
plan, including the scope of the audit at the start of 2021.
During the year, the Audit Committee was kept updated on
the progress of the internal audit activities on a quarterly
basis and reviewed the results of audits performed as well
as the status of the follow-up on action plans. The Audit
Committee also discussed the internal management letter
and monitored the follow-up by the Board of Management
on the recommendations made in the internal
management letter.
External audit
The Audit Committee reviewed the 2021 external audit
plan, including scoping, materiality level and fees. It
monitored the progress of the external audit activities,
including review of the observations made in the quarterly
procedures and the audits performed at year-end. The
Audit Committee oversaw the follow-up by the Board of
Management on the control deficiencies reported by the
External Auditor in their periodic internal control update.
The Audit Committee confirms that the communication
over the 2021 financial year contained no significant items
that need to be mentioned in this report.
The Audit Committee evaluated the performance of the
external auditor at the end of 2021, including a review of
their independence. The results of the evaluation have led
the Audit Committee to recommend to the Supervisory
Board to submit to the 2022 AGM a proposal to appoint
KPMG as the External Auditor for the reporting year 2023.
The Audit Committee reached the decision to do so
independently.
Due to the required audit partner rotation, a new lead audit
partner became responsible for the ASML audit as of the
2021 reporting year. Much effort has been put into the
transition process in anticipation of the change, and the
Audit Committee is pleased that the transition has gone
smoothly.
In September 2021, the Audit Committee started the
selection process in connection with the mandatory
external audit firm rotation. Although the current external
auditor is only required to rotate off after 2025, the Audit
Committee considers it prudent to start the selection
process early, given the limited number of candidate firms
eligible for selection and in view of non-audit services
provided by potential candidate audit firms. A Selection
Committee was established, consisting of the members of
the Audit Committee, the CFO, the EVP Finance and the
Corporate Chief Accountant. The Selection Committee
met three times in 2021. At the 2022 AGM, we intend to
submit a proposal to appoint a new external auditor for the
2025 reporting year. The proposal will contain more
detailed information on the process followed.
153
ASML ANNUAL REPORT 2021 Other topics
Other topics discussed by the Audit Committee in 2021 were ASML’s tax policy and planning, the Finance and IT
transformation program and the quarterly legal matters overviews.
The Audit Committee also performed an annual review and update of its Rules of Procedure.
After most of the Audit Committee meetings, the internal and external auditor each have a session with the Audit
Committee without management present to discuss their views on the matters warranting the attention of the Audit
Committee. This may include their relationship with the Audit Committee, the relationship with the Board of Management,
and any other matters deemed necessary to be discussed. The Audit Committee also held regular one-to-one meetings
with the CFO.
Remuneration Committee
The Remuneration Committee advises the Supervisory Board, and prepares the Supervisory Board's resolutions with
respect to the remuneration of the Board of Management and the Supervisory Board.
Members
• Terri Kelly (Chair);
• Annet Aris;
• Rolf-Dieter Schwalb;
• Hans Stork.
Each member is an independent, non-executive member of
our Supervisory Board in accordance with the NASDAQ Listing
Rules. Ms. Kelly is neither a former member of our Board of
Management, nor a member of the management board of
another company. Currently, no member of the Remuneration
Committee is a member of the management board of another
Dutch listed company.
Main responsibilities
• Overseeing the development and implementation of the
Remuneration Policy for the Board of Management and
preparing the Supervisory Board Remuneration Policy;
• Reviewing and proposing to the Supervisory Board corporate
goals and objectives relevant to the variable part of the Board
of Management’s remuneration;
• Carrying out scenario analyses of the possible financial
outcomes on the variable remuneration of meeting these goals,
as well as exceeding these goals, before proposing these
corporate goals and objectives to the Supervisory Board for
approval;
• Evaluating the performance of the members of the Board of
Management in view of those goals and objectives, and –
based on this evaluation – recommending to the Supervisory
Board appropriate compensation levels for the members of the
Board of Management.
Remuneration Committee meetings in 2021
The Remuneration Committee meets at least two times a year and more frequently when deemed necessary. In 2021,
the Remuneration Committee held nine meetings. Of these nine meetings, four were regular meeting and five were
special meetings, scheduled in connection with the fundamental review of the Remuneration Policy for the Board of
Management.
Recurring agenda topics
• Remuneration of the Board of Management
• Remuneration of the Supervisory Board
• Update on performance on targets for short- and long-term
incentives
Attendance
In addition to the Remuneration Committee members, the
Remuneration Committee generally invites the CEO, the EVP
HR&O, the Head of Compensation and Benefits and in some
instances also the CFO to attend (parts of) its meetings. The
Remuneration Committee’s external advisor is also invited to
attend the Remuneration Committee meetings when deemed
necessary.
154
ASML ANNUAL REPORT 2021 The below overview provides details on the topics discussed during Remuneration Committee meetings in 2021.
Q1
Q3
• Short-term Incentive Plan: performance 2020, pay-
out 2020 and targets 2021
• Long-term Incentive Plan: share vesting
performance period 2018-2020, and conditional
grant and targets performance period 2021-2023
• Remuneration Report 2020
• Self-Evaluation Remuneration Committee
• Board of Management Remuneration Policy review
• Selection external remuneration adviser
• Board of Management Remuneration Policy review
including labor market reference group
• Feedback BoM on direction of new Remuneration
Policy
• Share ownership guidelines
Q2
• Board of Management Remuneration Policy review
Q4
• Board of Management Remuneration Policy review
• Approach & planning stakeholder outreach
• Update Short-term Incentive Plan and Long-term
Incentive Plan
• Draft Remuneration Report 2021
• Compliance Board of Management members with
share ownership guideline
• Share planning AGM period 2022-2023
• Engagement of external auditor for agreed upon
procedures on remuneration
Remuneration Board of Management
In 2021, the Remuneration Committee proposed certain adjustments to be made to the Remuneration Policy for the
Board of Management and the Supervisory Board. The adjusted Remuneration Policies were submitted to and adopted
by the General Meeting on April 29, 2021.
Starting as of Q2 2021, the Remuneration Committee performed a fundamental review of the Remuneration Policy for the
Board of Management. This review had been planned for 2020, but was postponed due to the COVID-19 pandemic. For
more information about the fundamental review of the Remuneration Policy for the Board of Management, reference is
made to the Remuneration Report, which is also part of this 2021 Annual Report, and to the convocation documents for
the 2022 AGM, which we intend to publish in March 2022.
The Remuneration Committee made recommendations to the Supervisory Board concerning the total remuneration
package of the Board of Management and the variable remuneration consisting of a short-term incentive in cash and a
long-term incentive in shares. The Remuneration Committee proposed 2021 targets for the Board of Management's
variable remuneration to the Supervisory Board. During the year, the Remuneration Committee closely monitored the
Board of Management's performance. It provided recommendations to the Supervisory Board regarding the
achievement of the 2021 targets and related compensation levels for the Board of Management members.
In proposing and evaluating the Board of Management's performance in relation to the corporate goals and objectives
for the variable remuneration of the Board of Management members, the Remuneration Committee closely cooperates
with the Audit Committee and the Technology Committee.
The Remuneration Committee has taken note of the views of the individual members of the Board of Management with
regard to the amount and structure of their remuneration.
The shareholding positions of the Board of Management members were reviewed by the Remuneration Committee in
order to assess compliance with the share ownership guideline as included in the Remuneration Policy for the Board of
Management.
The Remuneration Committee also prepared the Remuneration Report, which details the remuneration of members of
the Supervisory Board and the Board of Management.
155
ASML ANNUAL REPORT 2021 Increased transparency around remuneration
At the AGM 2021, we received valuable feedback from shareholders and shareholder interest organizations on the Remuneration
Report, in particular how to further improve transparency around remuneration. We have taken this feedback into consideration
and as a result, we have implemented several changes in the 2021 Remuneration Report. For example, we now include ex-post
disclosure of the target and actual performance levels for the variable remuneration (where this is not contrary to the strategic and/
or commercial interests of ASML). Read more in the 2021 Remuneration Report, which is included in this Annual Report.
The Remuneration Committee engaged the external auditor to perform certain agreed-upon procedures with respect to
the execution of the Remuneration Policy for the Board of Management.
Remuneration Supervisory Board
In Q1 2021, the Remuneration Committee finalized its benchmark review of the Supervisory Board's remuneration. This
led to some adjustments to the Supervisory Board and Committees membership fees. The revised Remuneration Policy
for the Supervisory Board incorporating these adjustments was submitted to and adopted by the General Meeting on
April 29, 2021.
For further details, see Supervisory Board - Remuneration report.
Selection and Nomination Committee
The Selection and Nomination Committee assists the Supervisory Board in relation to its responsibilities over the
composition and functioning of the Supervisory Board and the Board of Management and to the monitoring of corporate
governance developments.
Members
• Gerard Kleisterlee (Chair)
• Annet Aris
• Mark Durcan
• Terri Kelly
Each member is an independent, non-executive member of
our Supervisory Board in accordance with the NASDAQ Listing
Rules.
Main responsibilities
• The preparation of the selection criteria and appointment
procedures for members of the Supervisory Board and
Board of Management, and the supervision of the Board
of Management's policy in relation to the selection and
appointment criteria for senior management;
• The periodical evaluation of the scope and composition of
the Board of Management and the Supervisory Board, and
proposing the profile of the Supervisory Board;
• The periodical evaluation of the functioning of the Board of
Management and the Supervisory Board, and their individual
members.
• The preparation of the Supervisory Board’s decisions for
appointing and reappointing members of the Board of
Management and proposing (re)appointments of members of
the Supervisory Board
• Monitoring and discussing developments in corporate
governance.
Selection and Nomination Committee meetings
The Selection and Nomination Committee meets at least two times a year and more frequently when deemed necessary.
In 2021, the Selection and Nomination Committee held nine meetings.
Recurring agenda topics
• Role, composition, functioning Board of Management
• Role, composition, functioning Supervisory Board
• Corporate governance
Attendance
Besides the Selection and Nomination Committee members, the
two Presidents and the EVP HRO are regularly invited to attend
(parts of) its meetings. An external advisors is also invited to
attend the Selection and Nomination Committee meetings when
deemed necessary.
156
ASML ANNUAL REPORT 2021 The below overview provides details on the topics discussed during Remuneration Committee meetings in 2021.
1st
Half
Year
• Composition Board of Management, including
diversity aspects, and succession pipeline
• Composition Supervisory Board, incl. succession
and composition of committees per 2021
• Changes in composition Supervisory Board
per 2022 and 2023 AGM and nominations for
appointment of Supervisory Board members
2nd
Half
Year
• Future composition Board of Management, incl.
diversity requirements, and succession pipeline
• Composition Board of Management per 2022 AGM
• Changes in composition Supervisory Board
per 2022 and 2023 AGM and nomination for
appointment of Supervisory Board members
• Composition of the Supervisory Board committees
• Induction program for new appointed Supervisory
per 2022 AGM
board member
• Evaluation of the Supervisory Board and
• Evaluation Supervisory Board and committees
committees
• Corporate Governance update: Dutch gender
diversity bill
• Composition Board of Directors Preference Shares
Foundation per January 1, 2022
Composition, role and responsibilities Board of Management
In 2021, the Selection and Nomination Committee spent ample time to discuss the future composition, role and
responsibilities of the Board of Management, e.g. reviewing the talent bench, discussing career development of top
talent to prepare for future Board of Management roles. The committee also assessed the functioning of the Board of
Management and its individual members. For this purpose, the Chair held meetings with each individual Board of
Management member, the outcome of which was discussed with the Committee.
Frits van Hout retired as member of ASML's Board of Management upon completion of his appointment term, which
ended per the 2021 AGM. ASML did not appoint a successor to Frits van Hout. As a result, the Board of Management
consists of five members effective per the 2021 AGM. Frits van Hout's responsibilities have been taken over by the
remaining Board of Management members, securing the uninterrupted execution of ASML’s strategy to reach its stated
targets for stakeholders.
Per the 2022 AGM the appointment terms of Messrs. Wennink, Van den Brink, Dassen, Fouquet and Schneider-
Maunoury will expire. In light of this, the Selection and Nomination Committee and the Supervisory Board are extensively
discussing the potential extension of the appointment terms effective per the 2022 AGM, both among themselves as well
as with the individual Board of Management members.
Composition, role and responsibilities Supervisory Board
The Selection and Nomination Committee extensively discussed the composition of the Supervisory Board.
A significant amount of time was spent discussing the Supervisory Board's profile and rotation schedule, particularly the
appointment and reappointment of Supervisory Board members to fill vacancies both in the short and longer term. This
resulted in the recommendation to the Supervisory Board to nominate Birgit Conix as member of the Supervisory Board
effective per the 2021 AGM.
The Selection and Nomination Committee also discussed the composition of the Supervisory Board committees in light
of the retirements and new appointment and proposed several changes which took effect per the 2021 AGM.
Changes to Supervisory Board Committees in 2021
On recommendation of the Selection and Nomination Committee, the Supervisory Board decided to implement several changes
in the composition of its committees in 2021. Rolf-Dieter Schwalb became the Chair of the Audit Committee after the retirement of
Carla Smits-Nusteling and Birgit Conix became an Audit Committee member. Terri Kelly took over the Remuneration Committee
chairmanship and Annet Aris joined the Remuneration Committee as a regular member. Mark Durcan was appointed Chair of the
Technology Committee, succeeding Douglas Grose upon his retirement. Mark Durcan and Terri Kelly joined the Selection and
Nomination Committee after Douglas Grose retired. Finally, Annet Aris was appointed Vice Chair of the Supervisory Board.
The Selection and Nomination Committee also discussed the changes to its composition effective per the 2022 AGM
and advised the Supervisory Board on the nomination for appointment of a successor to Hans Stork, who will retire after
having served eight years on our Supervisory Board. For further details, see Supervisory Board - Supervisory Board report -
Composition.
157
ASML ANNUAL REPORT 2021 At the end of 2021 and early 2022, the Selection and Nomination Committee discussed the functioning of the individual
members of the Supervisory Board as well as the process and outcome of the Supervisory Board’s self-evaluation. For
further details on the self-evaluation, see Supervisory Board - Supervisory Board report - Evaluation.
Corporate governance
As part of its responsibility to monitor corporate governance developments, the Selection and Nomination Committee
discussed, among other things, the developments with regard to the Dutch gender diversity bill that was adopted by
Dutch Parliament on September 28, 2021 and its impact on ASML. The focus items of investors and shareholder interest
organizations were also discussed.
Technology Committee
The Technology Committee advises the Supervisory Board with respect to our technology plans required to execute our
business strategy.
Members
• Mark Durcan (Chair)
• Annet Aris
• Gerard Kleisterlee
• Hans Stork
The Technology Committee is supported by external experts and
as experts from within ASML who act as advisers on the subjects
reviewed and discussed by this committee. External experts may
include representatives of customers, suppliers and partners to
increase the committee’s understanding of the technology and
research required to develop our leading-edge systems.
Main responsibilities
• Advising on technology trends, the study of potential alternative
strategies, the technology strategy, product roadmaps,
required technical resources and operational performance in
R&D;
• Making recommendations to the Supervisory Board on
technology-related projects with respect to ASML’s competitive
position;
• Discussing the technology targets set to measure short- and
long-term performance as well as the achievements related to
these, and advising the Remuneration Committee on this topic.
Technology Committee meetings in 2021
In general, the Technology Committee meets at least two times a year and more frequently when deemed necessary. In
2021, the Technology Committee held five meetings.
Recurring agenda items
• Product Roadmap
• Progress Technology Leadership Index
Attendance
Besides the Technology Committee members, the committee's
external and internal advisors regularly attended committee
meetings. The advisers do not have voting rights.
In addition to the recurring agenda items, the Technology Committee also reviewed and discussed other matters in 2021.
Below table provides an overview of these topics.
Q1
Q3
• Business Line review: Applications
• Review self-Evaluation Technology Committee
• Business Line review: DUV
• Future of Moore's Law
• Roadmap in Logic and memory
Q2
Q4
• Business Line review: EUV (including High-NA)
• Status of the roadmap and challenges in EUV
(including High-NA)
• Status of the roadmap and challenges in DUV
• Mid- / Long-term roadmap and technology outlook
Review of technology programs
In 2021, the Technology Committee primarily focused on the review of the execution and implementation of technology
programs and roadmaps in EUV 0.55 NA (High-NA), EUV 0.33 NA, DUV and Applications. In this respect the key
challenges and opportunities both from a business perspective as well as from a technology standpoint were reviewed
and discussed in depth. During each meeting the Technology Committee also discussed the progress made on the
technology targets included in the Technology Leadership Index, a performance measure for the short-term and long-
term variable remuneration of the Board of Management. In a meeting especially planned for this purpose, the
Technology Committee discussed the final achievements on the technology targets and the technology targets for the
new performance period. The Technology Committee subsequently provided advice to the Remuneration Committee
and the Supervisory Board.
158
ASML ANNUAL REPORT 2021 The meeting in Q1 was dedicated to the achievements
within the business line Applications. The Technology
Committee was informed on the outlook toward 2026, the
market developments, competitive landscape and the
opportunities in that respect. In addition, updates were
provided with respect to the computational lithography,
optical metrology, e-beam metrology and control and data
products. In this meeting the Technology Committee also
discussed the outcome of the external evaluation of the
functioning of the Technology Committee.
In Q2, the achievements and challenges in EUV 0.33 NA
and EUV 0.55 NA (High-NA) were discussed. Special
attention was paid to market developments and
performance in EUV 0.33 NA as well as the product and
power roadmap. On High-NA the Technology Committee
was informed on the interest and engagement of
customers for High-NA, the status of the shipment plan
and the value proposition. During this meeting there was a
live connection where the Technology Committee was
provided with a virtual tour of the ASML production
facilities in Wilton and San Diego. Next to that ZEISS also
provided a virtual tour of its facilities in Oberkochen,
Germany.
The primary focus of the Q3 meeting of the Technology
Committee were the developments and achievements in
DUV. Next to the product roadmaps and the technology
programs, the Technology Committee discussed the
possibilities to ramp-up capacity at ASML and its supply
chain to meet customer demand, the continuation of
innovation to support the roadmap and economics of our
customers and the drive for efficiency and quality.
Furthermore, external speakers from imec were invited to
inform the Technology Committee on their view on the
future of Moore’s law and the roadmaps for logic and
memory.
In Q4, the Technology Committee focused on the status of
the roadmaps and the challenges relating to EUV 0.55 NA
(High-NA), EUV 0.33 NA and DUV. Furthermore the
Technology Committee also looked ahead to the mid- and
long-term roadmap and the technology outlook. The Q4
Technology Committee meeting was partly attended by
representatives from ZEISS management to discuss the
cooperation and common challenges related to the
product and technology roadmaps.
Technology Committee visit to ZEISS
The Q4 Technology Committee meeting was held at ZEISS
in Oberkochen, Germany. During the visit, the Technology
Committee and a delegation from ZEISS discussed the
cooperation between the two companies, also in light
of the new framework agreement concluded in 2021.
They also discussed the status of the various product
roadmaps and related challenges. The Technology
Committee also visited the ZEISS manufacturing facility to
witness the great achievements made in preparing for the
assembly of the first EUV 0.55 NA system.
The Technology Committee’s in-depth technology
discussions and the subsequent reporting on the main
points of these discussions in the full Supervisory Board
increases the Supervisory Board’s understanding of our
technology requirements. It also enables the Supervisory
Board to adequately supervise the strategic choices we
face, including our investment in R&D.
Financial Statements and Profit
Allocation
The financial statements of ASML for the financial year
2021, as prepared by the Board of Management, have
been audited by KPMG Accountants N.V. All members of
the Board of Management and the Supervisory Board
have signed these financial statements.
We recommend to shareholders that they adopt the 2021
financial statements. We also recommend that our
shareholders adopt the Board of Management's proposal
to make a final dividend payment of €3.70 per ordinary
share, which together with the interim dividend of €1.80
per ordinary share, leads to a total dividend of €5.50 per
ordinary share in respect of the 2021 financial year.
Finally, we would like to extend a word of thanks to the
Board of Management and all ASML employees for their
continued commitment and hard work during this
challenging year.
The Supervisory Board,
Gerard Kleisterlee, Chair
Annet Aris, Vice Chair
Birgit Conix
Marc Durcan
Warren East
Terri Kelly
Rolf-Dieter Schwalb
Hans Stork
Veldhoven, February 9, 2022
159
ASML ANNUAL REPORT 2021 Message from the Chair of
the Remuneration
Committee
COVID-19 pandemic, we are pleased to see ASML has
had an outstanding performance in a very dynamic
environment. Strong growth in semiconductor end
markets and increasing lithography intensity to address
the need for more wafer output led to huge demand for
ASML’s products and services. To meet current and future
customer demand, ASML and its supply chain partners
are actively adding and improving capacity. In addition,
stepping up in hiring and retaining ASML’s workforce in the
current competitive market has become increasingly
challenging. Overall, starting from high standards, ASML’s
leadership set ambitious targets and was able to resolve
and respond to many challenges. The Supervisory Board
is very supportive of ASML’s long-term strategy and proud
of what the Board of Management and the entire
organization have achieved.
Changes in the Remuneration Committee
in 2021
In 2021, Annet Aris became a member of the
Remuneration Committee, and I feel honored about taking
over the chair role from Rolf-Dieter Schwalb after the 2021
AGM. The Remuneration Committee’s composition
provides a proper balance with very different views, both
from a geographical and historical perspective. For me, it
is a great opportunity to come in at a time that we are
taking a deep dive in revisiting our Remuneration Policy for
the Board of Management, to assess what is working well
and to see where we can still improve. We also rely upon
external experts to help us understand best practices with
other peer organizations, as well as changing expectations
from our many constituents.
Decisions made in 2021
In the first quarter of 2021, we finalized the review of the
Remuneration Policies for the Board of Management and
the Supervisory Board. Based on the results of the bi-
annual review of the labor market reference group and the
remuneration benchmark performed during 2020, the
Supervisory Board concluded that it was appropriate to
slightly adjust the Remuneration Policy for the Board of
Management to maintain competitive remuneration levels
in relation to a reference market in which ASML had
considerably grown again in size and complexity. The
revision of the Remuneration Policy for the Supervisory
Board entailed an amendment of the Supervisory Board
and Committees' membership fees in order to remain
competitive and continue to be able to attract and retain
qualified Supervisory Board members. Both policies were
160
Terri Kelly (Chair of the Remuneration Committee)
Dear Stakeholder,
On behalf of the Remuneration Committee I am pleased to
present the 2021 Remuneration Report, providing a
summary of the remuneration policies for the Board of
Management and the Supervisory Board and an
explanation about how they were applied in 2021.
To maintain its fast pace of innovation and ensure long-
term success as a company, ASML needs to attract and
retain the best talent. Remuneration is an important, but
not the sole factor here – I strongly believe that people are
motivated for other reasons beyond that as well. We have
a great story with the global impact of ASML still growing,
and it can also be very rewarding to work together at the
cutting edge of technology with highly talented colleagues
– we offer a work culture that enables people to develop
their talent, feel respected and work to the best of their
abilities.
A lot of great work has been done in rolling out ASML’s
cultural values and making them more explicit. While
striving to keep a fine balance between protecting our
competitive position and providing transparency, we are
continually looking for opportunities to get these values
reinforced in how we reward our leaders and the broader
organization, to drive long-term success for ASML.
Summary of 2021 performance
Looking back on 2021, which by all accounts was not an
easy year due to the many constraints caused by the
ASML ANNUAL REPORT 2021 submitted to the 2021 AGM and were adopted with over
90% support.
Toward more transparency about our
Remuneration Policy
In 2021, we had many interactions with governance
organizations, proxy advisors, individual shareholders and
ASML's Works Council. These interactions related to the
revision of the Remuneration Policies for the Board of
Management and the Supervisory Board as already
referred to above, and to the 2020 Remuneration Report.
The discussions concerned three topics: i) the level of
transparency around target setting and actual
achievements; ii) a discretionary adjustment to the ROAIC
score as part of the overall achievement score on the long-
term incentive; and iii) the performance metric related to
sustainability. Finally, views were exchanged with our
stakeholders on the Remuneration Policy for the Board of
Management in general, the link between remuneration
and company strategy and performance, the structure of
remuneration and the performance metrics for the short-
and long-term incentives.
The discussions were very constructive and we received
valuable feedback and suggestions on how the level of
transparency in the Remuneration Report could be further
improved. This feedback has been taken into account in
this Remuneration Report. Stakeholder feedback has also
been taken into account in the fundamental review of the
Remuneration Policy for the Board of Management, which
started in Q2 2021. The sustainability-related performance
metric was extensively discussed in this context, in
particular its weight and how to best define the
performance measure and link it to ASML's ESG strategy,
which was amended during 2021.
Looking ahead to 2022
Starting in Q2 2021, the Remuneration Committee
performed a fundamental review of the Remuneration
Policy for the Board of Management – this review had
been planned for 2020, but was postponed due to the
COVID-19 pandemic. Important focus points in the review
were the remuneration structure and elements, as well as
the labor market reference group. We considered a
fundamental review appropriate, as the prior structural
revision of the policy took place in 2017 and since that
time only minor revisions were implemented by adjusting
compensation levels (mainly STI and LTI) to remain
competitive. After five years, it was time to do a more
fundamental review to see if the policy optimally supports
the strategic direction of the company. It was also a
moment to review current market practice, societal trends
and expectations, and developments in corporate
governance. Based on the outcome of this fundamental
review, we intend to submit a proposal for a revised
Remuneration Policy for the Board of Management to the
AGM in 2022. The main changes relate to a revised labor
market reference group and remuneration structure, as
well as adjusted STI and LTI performance metrics.
During the fundamental review of the Remuneration Policy
for the Board of Management, we have had continued
dialogue with the Board of Management to gain their
perspective and feedback. Strong collaboration between
the Remuneration Committee and ASML’s leadership is
top of mind for us, to establish confidence that we are
measuring the things that matter, that we are comparing
ourselves to the right companies, and that we are setting
ambitious, but realistic goals.
We are also in dialogue with the Works Council as well as
with governance organizations, proxy advisors and our
major shareholders on the envisaged changes to the
Remuneration Policy for the Board of Management. More
information on these stakeholder engagements will be
included in the convocation documents for the 2022 AGM.
For the fundamental review of the Remuneration Policy for
the Board of Management we engaged an external
remuneration expert, bringing in a fresh pair of eyes to
challenge us and share with us their experience in the field
of managing people, risk and capital.
The full proposal for the revised Remuneration Policy for
the Board of Management will be included in the
convocation documents for the 2022 AGM, which are
expected to be published in March 2022.
A fundamental review of the Remuneration Policy for the
Supervisory Board has not taken place, since the
Supervisory Board Remuneration Policy is relatively new,
introduced in 2020 based on new legal requirements.
I would like to thank our shareholders and other
stakeholders for their engagement and for sharing their
views on executive remuneration. We welcome feedback
from our stakeholders on this 2021 Remuneration Report,
which will be submitted to the shareholders on April 29,
2022 for an advisory vote. Furthermore, we hope for that
our shareholders will support the 2022 Remuneration
Policy for the Board of Management which we intend to
submit for adoption at our 2022 AGM.
Terri Kelly
Chair of the Remuneration Committee
161
ASML ANNUAL REPORT 2021 Remuneration report
This report describes how the Remuneration Policies of the Board
of Management and the Supervisory Board were implemented in 2021.
€19.7m
Total remuneration of
the Board of Management
134.5%
Achieved of target
180.3%
Achieved of target
40
Internal pay ratio
(CEO versus average per FTE)
Board of Management remuneration
In this section of the Remuneration Report we provide an
overview of the 2021 Remuneration Policy for the Board of
Management which was adopted by the General Meeting
on April 29, 2021 and applied as of January 1, 2021. It also
contains information about the execution of the 2021
Remuneration Policy for the Board of Management as well
as the details of the Board of Management members'
actual remuneration for the financial year 2021. The 2021
Remuneration Policy for the Board of Management can be
found in the governance section of our website.
Remuneration Policy
Remuneration as a strategic instrument
The 2021 Remuneration Policy for the Board of
Management supports the long-term development and
strategy of ASML in a highly dynamic environment, while
aiming to fulfill all stakeholders’ requirements and
maintaining an acceptable risk profile. More than ever, the
challenge for ASML is to drive technology, to serve its
customers and to satisfy its stakeholders. These drivers
are embedded in the identity, mission and values of ASML
and its affiliated enterprises and are the backbone of the
policy. The Supervisory Board ensures that the policy and
its implementation are linked to ASML's objectives.
The 2021 Remuneration Policy for the Board of
Management is designed to enable ASML to attract,
motivate and retain qualified industry professionals for the
Board of Management in order to define and achieve our
strategic goals. The policy acknowledges the internal and
external context as well as our business needs and long-
term strategy. The policy encourages behavior that is
focused on long-term value creation and the long-term
interests and sustainability of ASML, while adopting the
highest standards of good corporate governance. It is
aimed at motivating for outstanding achievements, using a
combination of non-financial and financial performance
measures. Technology leadership, customer value
creation and employee engagement are the key drivers of
sustainable returns to our shareholders.
Remuneration principles
The remuneration philosophy that ASML applies for all its
employees includes the principle that ASML wants to be
competitive in its relevant labor markets and pay what is
fair in such markets, while maintaining internal consistency
in reflecting differences in size and complexity of individual
jobs. The Supervisory Board applies the same principle for
the Board of Management of ASML and in doing so takes
the pay and employment conditions for the ASML
employees into account when formulating the
remuneration policy.
The 2021 Remuneration Policy for the Board of
Management is built on the following principles:
• Transparent – The policy and its execution are clear and
practical;
• Aligned – The policy is aligned with the Short-term
Incentive and/or Long-Term Incentive policy for ASML
senior management and other ASML employees;
• Long-term – The incentives focus on long-term value
creation;
• Compliant – ASML adopts the highest standards of
good corporate governance; and
• Simple – The policy and its execution are as simple as
possible and easily understandable to all stakeholders.
Reference group and market positioning
Similar to the remuneration philosophy for all ASML
employees, we offer the Board of Management a
remuneration package that is competitive compared to a
relevant labor market. This market is defined by creating a
reference group of companies comparable to ASML in
terms of size and complexity, data transparency and
162
ASML ANNUAL REPORT 2021 geographical area. The median market level serves as reference point for determining the level of pay for the Board of
Management for as long as ASML is positioned around the median of the reference group in terms of company size
(measured by enterprise value, revenue and number of employees) and thus complexity.
In principle, a benchmark is conducted every two years. To ensure an appropriate composition of the relevant labor
market, the Supervisory Board reviews the composition of the reference group at the time a benchmark is conducted.
Substantial changes applied to the composition of the reference group will be proposed to the shareholders. In the year
without a market assessment, the Supervisory Board considers the appropriateness of any change of base salary in light
of the market environment as well as the salary adjustments for other ASML employees.
In 2020 we reviewed the reference group and performed a remuneration benchmark. The reference group (consisting of
twenty companies) had not changed since 2018, while ASML grew considerably. The outcome of the 2020 review of the
reference group was that, as a result of ASML's growth, one reference company, Smith & Nephew PLC, became too
small compared to ASML and was therefore removed. Two other companies, Shire PLC and Linde AG, were removed
because they were acquired by or merged with companies outside Europe and therefore no longer qualified as reference
companies due to geography. To keep the size of the reference group more or less equal, two new companies were
added to the reference group: NXP Semiconductors, which is an industry peer of ASML, and Ericsson, which is on
average larger than ASML and therefore brings ASML closer to the median of the reference group in terms of size. In the
revised reference group, ASML ends up slightly above the median (55th percentile) in terms of size (based on 2019 data).
The 2020 review of the reference group and corresponding benchmark were the basis for the adjustments in the 2021
Remuneration Policy for the Board of Management.
Current reference group composition
AkzoNobel
Alstom
Continental
Covestro
DSM
Ericsson
Essilux (formerly Essilor)
Evonik
Givaudan
Infineon Technologies
Legrand
Leonardo-Finmeccanica
Nokia
NXP Semiconductors
Philips
SAP
Schindler
Solvay
Yara International
Total direct compensation
The remuneration levels are determined using the total direct compensation. Total direct compensation consists of a
fixed base salary and variable remuneration in the form of a short-term incentive (STI) and a long-term incentive (LTI).
Other remuneration elements are pension and expense reimbursements.
Variable compensation
The performance parameters are set by the Supervisory Board and consist of financial and qualitative measures in such
a way that an optimal balance is achieved between the various corporate objectives, both in the short term and the long
term. By doing so, it is ensured that the variable compensation contributes to the strategy, long-term interests and
sustainability of ASML. The Supervisory Board may adjust the performance measures and their relative weighting of the
variable income based on the rules and principles as outlined in the 2021 Remuneration Policy for the Board of
Management, if required by changed strategic priorities in any given year. The Supervisory Board may use its
discretionary power to adjust the incentive pay-out upward or downward (‘ultimum remedium’).
As part of the revision of the Remuneration Policy for the Board of Management as approved at the 2021 AGM, total
direct compensation at target was adjusted so that it was closer to the median total direct compensation level of the
revised reference group. This was done by increasing the at-target level of the long-term incentive from 110%
(Presidents) or 100% (other Board of Management members) to 120% for all Board of Management members.
The following table represents the variable pay as percentage of base salary for the Board of Management in the case of
on-target performance.
Variable compensation
Short-term incentive
Long-term incentive
Total
Variable pay as % of base salary
80%
120%
200%
163
ASML ANNUAL REPORT 2021 Summary of 2021 Remuneration Policy Board of Management
The elements of the 2021 Remuneration Policy for the Board of Management and their link to the strategy of ASML are
summarized below.
Component
Link to
company strategy
Policy summary
Base salary
(fixed cash
compensation)
Attract, motivate and retain qualified
industry professionals for the Board
of Management in order to define
and achieve strategic goals.
• Derived from total direct compensation
• Determined by the Supervisory Board
Short-term
incentive
(STI)
(short-term
performance related
cash incentive)
Ensure a balanced focus on
both the (financial) performance
of ASML in the short term,
as well on the sustained company
future in terms of technological
advancement and customer
satisfaction, fueling long-term
success.
• On-target level: 80% of base salary
• Performance measures (in principle set and evaluated annually)
Qualitative: Technology Leadership Index
Qualitative: Market position
Financial measures, equally weighted, in
principle selected from a pre-defined list:
Read more: https://www.asml.com/rempolicy_born
Weight
20%
20%
60%
y
c
i
l
o
P
n
o
i
t
a
r
e
n
u
m
e
R
y
r
a
m
m
u
S
• Pay-out levels
Maximum
Target
Threshold
Below threshold
Linear pay-out between threshold and target, and between
target and maximum
% of target
150%
100%
50%
0%
Long-term
incentive
(LTI)
(long-term
performance related
share-based incentive)
Contribute to the strategy,
long-term interests and
sustainability of ASML using
performance measures which
balance the direct interest of
ASML’s investors, the long-term
financial success of ASML,
the long-term continuation of
technological advancement
and the environmental and
social dimensions of sustainability.
• Aligned with STI applicable to ASML employees (except employees
in Netherlands subject to CLA with own profit sharing plan)
• On-target level: 120% of base salary
• Performance measures
(set annually, evaluated over 3-year period)
ROAIC
Total shareholder return (TSR) vs Index
Technology Leadership Index
Sustainability
• Pay-out levels TSR vs Index
(TSR ASML-TSR PHLX Index (X.SOX))
Greater than or equal to 20%
0 to 20%
-20 to 0%
Less than or equal to -20%
Weight
40%
30%
20%
10%
% of target
200%
100-200%
50-100%
0%
• Pay-out levels ROAIC, Technology Leadership Index,
Sustainability
Maximum
Target
Threshold
Below threshold
Linear pay-out between threshold and target, and between
target and maximum
% of target
200%
100%
50%
0%
• Aligned with LTI of ASML employees eligible to receive
performance shares - by using identical performance measures
Share
ownership
guidelines
Requirement for a minimum share
ownership by members of the Board
of Management. Ensure alignment
between the interests of the Board
of Management members and
ASML’s long-term value creation.
• Presidents 3x annual base salary, other Board members
2x annual base salary
• 3-year period to comply for new members
• Supervisory Board has discretion to allow a temporary
deviation in extraordinary circumstances
• Any shortfall will be remediated through the next vesting of shares
Other
remuneration
Contribute to the competitiveness
of the overall remuneration package
and create alignment with market
practice.
• Pension arrangement based on the ‘excedent’
(supplementary) arrangement for ASML employees
in the Netherlands - a defined contribution plan
• Expense reimbursements, such as company car costs,
travel expenses, representation allowances, housing costs
(gross amount before taxes), social security costs,
and health and disability insurance costs
164
ASML ANNUAL REPORT 2021
Remuneration Board of Management in
2021
The remuneration of the Board of Management for the
financial year 2021 is an implementation of and complies
with the 2021 Remuneration Policy for the Board of
Management as further explained below. As such, the
remuneration of the Board of Management in 2021
contributed to the objectives of the 2021 Remuneration
Policy for the Board of Management and, as a result, to
ASML's strategy aimed at long-term value creation.
Scenario analyses of the possible outcomes of the
variable remuneration components and their effect on the
remuneration of the Board of Management are conducted.
Base Salary
The base salaries of the members of the Board of
Management were set at the beginning of 2021. The
Supervisory Board decided not to apply a base salary
increase for 2021 compared to 2020 levels. The reason to
keep base salary levels unchanged, was the 2021 revision
of the Remuneration Policy, which included an increase of
the at-target level of the long-term incentive, thereby
increasing total direct compensation. For 2021 base salary
levels, reference is made to section Total remuneration
Board of Management.
Short-Term Incentive
The financial and non-financial target levels for the STI
were set at the beginning of the 2021 financial year in
accordance with the 2021 Remuneration Policy for the
Board of Management and taking into account the annual
plan (forecast) for 2021.
For the STI, the following qualitative performance metrics
applied in 2021:
• Technology Leadership Index, a set of internal targets
related to ASML's product and technology roadmaps. As
such, it measures the technological progress made by
ASML over the relevant performance period, supporting
our efforts to drive innovation and thereby helping our
customers achieve their goals and realize new technology
and applications. The Technology Leadership Index for
2021 consisted of a list of 17 key projects in Applications,
DUV and EUV. These projects are for example related to
improvements in inspection and metrology systems,
manufacturing capacity expressed in wafers per day,
component commonality to decrease costs, the power of
the (EUV) light source, etcetera. Exact details of the key
projects included in the Technology Leadership Index are
not disclosed, given that this would be detrimental to the
Company and its stakeholders from a competitive and
strategic point of view. To calculate the Technology
Leadership Index performance, each project is scored
between 1 and 10; the overall Technology Leadership
Index score is the average of the 17 individual scores.
Both the STI and LTI make use of the Technology
Leadership Index as a qualitative performance measure.
The objectives are the same for both, but the applicable
measures, targets and performance periods are different
and aligned with specific short- and long-term strategic
priorities.
In addition to the Technology Leadership Index and Market
Position performance metrics, three financial performance
metrics were selected for the 2021 STI. Based on ASML's
business challenges and circumstances in 2021, the
Supervisory Board chose the following three financial
measures from the pre-defined list as included in the 2021
Remuneration Policy for the Board of Management:
• EBIT Margin %, measuring Income from operations as
• Market Position, measuring ASML’s performance in the
percentage of Total net sales
market, not only in terms of market share, but also
customer satisfaction and quality. The Market Position
metric consisted of several sub-metrics. For the
Applications and DUV business, market share targets
were set. These targets related to certain segments of
the Applications and DUV markets where ASML faces
intense competition. For EUV, no market share target
was set, given that ASML is the sole supplier of EUV
technology. Instead, a target related to the availability of
the NXE:3400 tool was used, as availability is a key
metric reflecting the quality of the performance of our
tools at the customer site, and as such the Supervisory
Board considered it an appropriate metric to measure
customer satisfaction. Overall customer satisfaction was
also part of the Market Position metric and was
measured using an external benchmark: the VLSI
Survey. The Applications and DUV market share metrics
and the EUV availability metric together accounted for
50% of the total weighting of the Market Position metric.
The VLSI survey result accounted for the remaining 50%
of the Market Position target.
• EUV Gross Margin %, measuring Gross Profit as a
percentage of Total net sales for EUV
• Free Cash Flow, measuring Cash Flow from Operating
Activities minus purchase of property, plant and
equipment and Purchase of intangible assets.
After the end of the performance period, the Supervisory
Board assessed the performance achieved against the
targets, in cooperation with the relevant subcommittees
Technology Committee, Audit Committee and
Remuneration Committee. The target and actual
achievement levels for the STI performance criteria are set
out in the table below, except for figures which qualify as
commercially or strategically sensitive information, being
the figures related to availability and market share related
elements of the Market Position metric. The Supervisory
Board considers disclosure of this information not to be in
the interest of ASML and its stakeholders. In view of
transparency, we report performance for these metrics as
percentage of target.
165
ASML ANNUAL REPORT 2021 Performance metric
Weight
Performance Targets2
Threshold
Target
Stretch
Actual
Outcome
Market Position
Availability & market share
VLSI Survey
Total Market Position
Technology Leadership Index
EBIT Margin (%) 3
EUV Gross Margin %
Free Cash Flow (€, in millions) 1
Total
10%
10%
20%
20%
20%
20%
20%
100%
Payout4
% target
122.5%
150.0%
136.3%
*
Top 5
Top 3
Top 2
Top 2
4
6
24%
27%
10
30%
8
125.0%
36%
150.0%
43.5%
45.5%
47.5%
46.0%
111.3%
1,000
2,000
3,000
8,158
150.0%
134.5%
1. Free Cash Flow target levels and actuals are excluding early payments received in this financial year from clients without a contractual payment obligation in 2021. Actual
Outcome Free Cash Flow (Non-GAAP measure) is calculated as Cash Flow from Operating Activities of €10,846 million minus Purchase of property, plant and equipment
of €901 million, minus purchases of Intangible assets of €39.6 million and minus early payments received in this financial year from clients without a contractual payment
obligation in 2021 of €1,747 million resulting in an Actual Outcome of €8,158 million.
2. Certain performance targets (*) are not disclosed due to strategic or commercial sensitivity.
3. Actual Outcome EBIT Margin % (Non-GAAP measure), is calculated as Income from Operations of €6,750 million divided by Total net sales of €18,611 million resulting in
an Actual Outcome of 36%.
4. The Payout % is based on the payout levels as included in the section Summary of 2021 Remuneration Policy Board of Management.
The total STI outcome for current Board of Management results in a cash pay-out of €4.4 million, representing a payout
as % of target of 134.5%.
The Actual Performance outcome for EBIT Margin of 36% is mainly driven by an increase in sales and profitability.
Profitability increased for our EUV and DUV immersion systems, as we deliver more value to our customers. The
improved profitability in our installed base business is through a ramp in production and economies of scale.
The Actual Performance outcome for Free Cash Flow of €8,158 million is mainly driven by strong Net cash provided by
operating activities due to the increase in Net income and increase in down payments from our customers.
Long-Term Incentive
For the LTI, the following performance metrics apply, in accordance with the 2021 Remuneration Policy for the Board of
Management:
• Total shareholder return vs. Index, measuring ASML's relative change in share price, plus dividends paid over the
relevant performance period. ASML's total shareholder return is compared to the PHLX Semiconductor Sector Index, a
NASDAQ index designed to track the performance of a set of companies engaged in the design, distribution,
manufacture, and sale of semiconductors.
• Return on Average Invested Capital (ROAIC), measuring ASML’s rate of return on capital it has put to work, regardless
of our capital structure. It is used as a fundamental metric to measure value creation of the company. The ROAIC is
calculated by dividing the Income after income taxes by the Average Invested Capital.
• Technology Leadership Index, a qualitative measure which is also applied for the STI. For the definition of the
Technology Leadership Index and an explanation of how it contributes to the corporate strategy, reference is made to
the section Short-Term Incentive. The Technology Leadership Index as metric for the LTI is more forward looking than
its STI equivalent. It consists of targets to be achieved three years ahead, two years ahead, and in the coming year.
Each year, new targets are defined for the period three years ahead. The targets for two years ahead are based on the
prior year targets (that were three years ahead at that moment) and a correction factor on the score (up or down)
depending on whether targets appeared to be easier or more difficult to achieve. The same approach is utilized for the
subsequent years. The total score for the Technology Leadership Index over the three-year performance period is the
average of the scores over the three years, including the relevant correction factors applied on each year's score.
• Sustainability, a qualitative measure for determining our performance in the area of sustainability by benchmarking our
result from the annual comprehensive Dow Jones Sustainability Index (DJSI) against the best of the semiconductor
industry. This DJSI Assessment is a comprehensive assessment measuring our performance on more than 20 ESG
aspects. It allows us to benchmark our company performance in the wider field of ESG with our industry peers and
drive continuous improvement. Underlying is our Sustainability Strategy 2019-2025 containing a set of 16 KPIs and
targets, which we define by means of a comprehensive materiality assessment and input from continuous stakeholder
engagement. Read more in: Non-financial statements - Materiality assessment.
166
ASML ANNUAL REPORT 2021
Vesting LTI 2019-2021
After the end of the three-year performance period 2019-2021, the Supervisory Board assessed the performance
achieved against the LTI targets, in cooperation with the Technology Committee, Audit Committee and Remuneration
Committee. The target and actual achievement levels for the LTI performance criteria are set out in the table below.
The Supervisory Board applied an adjustment for the pay-out related to the ROAIC performance metric of the 2019-2021
LTI plan, in order to bring the performance metric in line with the metric in use for the 2021-2023 plan and the previously
adjusted 2018-2020 plan. The adjustment resulted in a payout of 193.3% for the performance metric ROAIC compared to
Stretch performance (200%) on an unadjusted basis, and was therefore unfavorable for the outcome under the 2019-
2021 LTI plan. This adjustment has no incremental accounting impact since expenses are recognized based on the
maximum Stretch performance.
The target and achievement levels for the 2019-2021 LTI performance criteria are set out in the table below.
Performance metric
Performance Targets
Weight
Threshold
Relative TSR
ROAIC 1
Technology Leadership
Index
Sustainability
Total
30%
40%
20%
10%
100%
(20)%
27.0%
Target
0%
29.5%
4
6
≤ 16%
≤ 13%
Exceed
n/a
32.0%
8
n/a
Stretch
20%
34.5%
10
≤ 7%
Actual
Performance
Payout %2
161.1%
34.2%
200.0%
193.3%
8.3
12.1%
157.5%
115.2%
180.3%
1. Actual Performance score ROAIC of 34.2% is the Normalized score. ROAIC is calculated by dividing the Income after income taxes by the Average Invested Capital.
2. The Payout % is based on the payout levels as included in the section Summary of 2021 Remuneration Policy Board of Management.
3. Total Actual Performance score of 180.3% is based on weighting of individual performance metrics multiplied with the payout %.
The total LTI outcome results in a share vesting of 180.3% of target.
Grant 2021
At the beginning of 2021, 28,354 performance shares were conditionally granted to the current members of the Board of
Management for the 2021 performance plan. These conditional grants are based on the maximum achievable
opportunity.
The targets levels related to the LTI performance measures ROAIC, Technology Leadership Index and Sustainability were
set at the beginning of 2021 for the performance period 2021-2023. This was done taking into account the long-term
product roadmap, sustainability goals and the long-term financial plan, thereby ensuring alignment between the various
targets and ASML’s long-term strategic priorities and encouraging behavior focused on long-term value creation.
Other remuneration
In 2021, the Board of Management members participated in the pension arrangement for the Board of Management,
which is based on the ‘excedent’ (supplementary) arrangement for our employees in the Netherlands, a defined
contribution opportunity as defined in Dutch fiscal regulations. It consists of a gross pension element (for the salary
below approximately EUR 112,000) and a net pension element (for the salary above EUR 112,000). Some members opted
out of the net pension due to different tax treatment of this outside the Netherlands. Details on the incurred accounting
expenses relating to the application of the pension arrangement in 2021 can be found in the table Total Remuneration
Board of Management.
Expenses reimbursed by ASML in 2021 included company car costs, representation allowances, social security costs,
and health and disability insurance costs.
167
ASML ANNUAL REPORT 2021
Share ownership guidelines
The table below shows the share ownership requirement, number of outstanding vested shares and share ownership
ratio of each Board of Management member as per December 31, 2021.
BoM Member
P.T.F.M. Wennink
M.A. van den Brink
F.J.M Schneider-Maunoury
R.J.M. Dassen 2
C.D. Fouquet
Ownership
requirement
3x base
3x base
2x base
2x base
2x base
2021 base salary in €
thousands
1,020
1,020
694
694
694
Total vested shares
32,485
13,066
17,506
1,613
3,488
Ownership ratio1
22.51
9.05
17.83
1.64
3.55
1. The Ownership ratio is calculated by multiplying the total vested shares with the share price of €706.70 (based on the closing share price of December 31, 2021) and
dividing this by the base salary.
2. The Ownership ratio of RJ.M. Dassen as per December 31, 2021 is lower than the internal Ownership requirement. The Remuneration Committee decided to take into
account the vesting of shares in January 2022 for the assessment of compliance with the share ownership guidelines per December 31, 2021. This results in a total
number of vested shares that far exceeds the ownership requirement due to vesting of the 2019-2021 plans on January 1, 2022.
Total remuneration Board of Management
The remuneration of the members of the Board of Management based on incurred accounting expenses in 2021, 2020
and 2019 was as follows (amounts are in € thousands):
Total
variable
%
Variable
Total
Remuneration
Relative
proportion
fixed vs.
variable
Board of
Management
Financial
Year
Base
salary
Pension
Other
benefits
Total
fixed % Fixed
P.T.F.M.
Wennink
M.A. van den
Brink
F.J.M.
Schneider-
Maunoury
R.J.M. Dassen
C.D. Fouquet
Total Board of
Management
2021
2020
2019
2021
2020
2019
2021
2020
2019
2021
2020
2019
2021
2020
2019
2021
2020
2019
1,020
1,020
1,000
1,020
1,020
1,000
694
694
680
694
694
680
694
694
680
4,122
4,122
4,040
206
216
207
206
216
207
115
122
114
115
100
93
78
83
74
720
737
695
57
57
53
56
57
52
36
36
30
51
51
47
52
51
47
1,283
1,293
1,260
1,282
1,293
1,259
845
852
824
860
845
820
824
828
801
252
252
229
5,094
5,111
4,964
26.6%
28.3%
28.9%
26.6%
28.3%
28.9%
26.8%
29.1%
30.3%
22.6%
22.2%
27.7%
26.3%
27.8%
36.4%
25.8%
27.1%
29.9%
STI
1,098
1,135
1,070
1,098
1,135
1,070
747
773
728
747
773
728
747
773
728
LTI
2,439
2,136
2,031
2,439
2,136
2,031
1,566
1,302
1,172
2,193
2,186
1,408
1,566
1,374
674
3,537
3,271
3,101
3,537
3,271
3,101
2,313
2,075
1,900
2,940
2,959
2,136
2,313
2,147
1,402
4,437
4,589
4,324
10,203
9,134
7,316
14,640
13,723
11,640
73.4%
71.7%
71.1%
73.4%
71.7%
71.1%
73.2%
70.9%
69.7%
77.4%
77.8%
72.3%
73.7%
72.2%
63.6%
74.2%
72.9%
70.1%
4,820
4,564
4,361
4,819
4,564
4,360
3,158
2,927
2,724
3,800
3,804
2,956
3,137
2,975
2,203
19,734
18,834
16,604
0.36
0.40
0.41
0.36
0.40
0.41
0.37
0.41
0.43
0.29
0.29
0.38
0.36
0.39
0.57
0.35
0.37
0.43
The remuneration reported as part of the LTI (share awards) is based on costs incurred under US GAAP. The costs of
share awards are charged to the Consolidated Statements of Operations over the 3-year vesting period based on the
number of awards expected to vest for Non-market based elements. For the first 2 years, we apply the maximum
achievable number of share awards, and in the final performance year of the awards we update this estimate for the non-
market performance conditions to the best estimated amounts which are anticipated to vest. Any difference between the
amount based on the best estimate of achievable number of shares awards and the amount based on the actual number
of share awards that vest, is taken into account in the Consolidated Statements of Operations in the financial year in
which the share awards vest. Market based elements are accounted at target.
Total remuneration Former Board of Management
F.J. van Hout is no longer part of the Board of Management since he retired from the company in 2021.
Former Board
of
Management
Financial
Year
Base
salary
Pension
Other
benefits
Total
fixed % Fixed
F.J. van Hout 1
2021
2020
2019
231
694
680
47
122
114
16
47
44
294
863
838
11.4%
29.4%
30.6%
STI
243
773
728
LTI
2,036
1,302
1,172
Total
variable
%
Variable
Total
Remuneration
2,279
2,075
1,900
88.6%
70.6%
69.4%
2,573
2,938
2,738
1. The 2021 total remuneration of F.J. van Hout is excluding an estimated amount of €8.8 million to account for the tax levy payable to the Dutch tax authorities by the
Company on termination benefits pursuant to Article 32bb of the Dutch wage tax act.
Relative
proportion
fixed vs.
variable
0.13
0.42
0.44
168
ASML ANNUAL REPORT 2021 The 2021 STI of Mr. van Hout is pro-rated based on the days of service provided in 2021. Mr. van Hout will remain
entitled to the performance shares granted under the LTI plans in 2018, 2019 and 2020, which will vest in accordance
with the relevant performance criteria as stated in the grant letters. The grant of the 2021-2023 LTI plan is pro-rated
based on the days of service provided in 2021. All LTI expenses for the running LTI plans are accounted in 2021, since no
services are provided beyond the end of the service period in 2021. The total disclosed remuneration is excluding an
estimated amount of €8.8 million to account for the tax levy payable to the Dutch tax authorities by the Company on
termination benefits pursuant to Article 32bb of the Dutch wage tax act. Total remuneration expense for Mr. van Hout
including this tax levy are €11.4 million for the financial year 2021.
Share-based payments
Performance based share-based remuneration current members of the Board of Management is disclosed in below
table.
Market based
element
Non-Market based
element
Board of
Management
Grant
date
Status
Full
control
Number
of
shares
at target
Fair
value at
grant
date
Number
of
shares
at target
Fair
value at
grant
date
P.T.F.M.
Wennink
M.A. van
den Brink
F.J.M.
Schneider-
Maunoury
R.J.M.
Dassen
1/22/21 Conditional
1/24/20 Conditional
No
No
7/19/19 Unconditional No
1/19/18 Unconditional No
1/20/17 Unconditional No
1/22/21 Conditional
1/24/20 Conditional
No
No
7/19/19 Unconditional No
1/19/18 Unconditional No
1/20/17 Unconditional No
1/22/21 Conditional
1/24/20 Conditional
No
No
7/19/19 Unconditional No
1/19/18 Unconditional No
1/20/17 Unconditional No
1/22/21 Conditional
1/24/20 Conditional
No
No
7/19/19 Unconditional No
1/25/19 Unconditional No
7/20/18 Unconditional No
C.D. Fouquet
1/22/21 Conditional
1/24/20 Conditional
No
No
7/19/19 Unconditional No
7/20/18 Unconditional No
1,053
1,387
2,217
1,958
3,037
1,053
1,387
2,217
1,958
3,037
717
858
1,371
1,125
1,745
717
858
1,371
3,000
657
717
858
1,371
844
635.6
286.9
245.4
215.1
145.4
635.6
286.9
245.4
215.1
145.4
635.6
286.9
245.4
215.1
145.4
635.6
286.9
245.4
169.0
274.6
635.6
286.9
245.4
274.6
2,455
3,235
5,173
4,570
7,085
2,455
3,235
5,173
4,570
7,085
1,670
2,001
3,198
2,626
4,070
1,670
2,001
3,198
7,000
1,531
1,670
2,001
3,198
1,969
454.9
263.7
194.4
162.8
110.5
454.9
263.7
194.4
162.8
110.5
454.9
263.7
194.4
162.8
110.5
454.9
263.7
194.4
148.3
185.0
454.9
263.7
194.4
185.0
Total
target
shares
at grant
date
3,508
4,622
7,390
6,528
Maximum
shares
(200%)
7,016
9,245
14,780
Vesting
date
1/1/24
1/1/23
1/1/22
13,056
1/19/21
10,122
20,243
7,016
9,245
14,780
1/1/20
1/1/24
1/1/23
1/1/22
3,508
4,622
7,390
6,528
13,056
1/19/21
10,122
20,243
2,387
2,859
4,569
3,751
5,815
2,387
2,859
4,569
4,774
5,718
9,137
7,502
11,629
4,774
5,718
9,137
10,000
20,000
1/1/20
1/1/24
1/1/23
1/1/22
1/19/21
1/1/20
1/1/24
1/1/23
1/1/22
1/1/22
2,188
2,387
2,859
4,569
2,813
4,376
1/19/21
4,774
5,718
9,137
1/1/24
1/1/23
1/1/22
5,626
1/19/21
Number
of
shares
at
vesting
date
Year-end
share
price in
year of
vesting
End of
lock-up
date
n/a
n/a
13,326
9,566
16,733
n/a
n/a
13,326
9,566
16,733
n/a
n/a
8,239
5,496
9,613
n/a
n/a
8,239
18,032
3,207
n/a
n/a
8,239
4,122
n/a
n/a
706.7
439.9
263.7
n/a
n/a
706.7
439.9
263.7
n/a
n/a
706.7
439.9
263.7
n/a
n/a
706.7
706.7
439.9
n/a
n/a
706.7
439.9
1/1/26
1/1/25
1/1/24
1/19/23
1/1/22
1/1/26
1/1/25
1/1/24
1/19/23
1/1/22
1/1/26
1/1/25
1/1/24
1/19/23
1/1/22
1/1/26
1/1/25
1/1/24
1/1/24
1/19/23
1/1/26
1/1/25
1/1/24
1/19/23
Performance based share-based remuneration former member of the Board of Management is disclosed in below table.
Market based
element
Non-Market based
element
Former
Board of
Management
Grant
date
Status
F.J. van Hout
1/22/21 Conditional
1/24/20 Conditional
Full
control
No
No
7/19/19 Unconditional No
1/19/18 Unconditional No
1/20/17 Unconditional No
Number
of
shares
at target
Fair
value at
grant
date
Number
of
shares
at target
Fair
value at
grant
date
239
858
1,371
1,125
1,745
635.6
286.9
245.4
215.1
145.4
557
2,001
3,198
2,626
4,070
454.9
263.7
194.4
162.8
110.5
Total
target
shares
at grant
date
796
2,859
4,569
3,751
5,815
Number
of
shares
at
vesting
date
Year-end
share
price in
year of
vesting
Maximum
shares
(200%)
Vesting
date
1,592
1/1/24
5,718
9,137
7,501
1/1/23
1/1/22
1/19/21
11,629
1/1/20
n/a
n/a
8,239
5,496
9,613
n/a
n/a
706.7
439.9
263.7
End of
lock-up
date
1/1/26
1/1/25
1/1/24
1/19/23
1/1/22
Reasons, criteria and principal conditions for granting shares
For the reasons and criteria for granting the performance shares to each member of the Board of Management, reference
is made to the table summarizing the 2021 Remuneration Policy for the Board of Management and to the section Board of
Management Remuneration in 2021 - Long Term Incentive as included in this Remuneration Report.
169
ASML ANNUAL REPORT 2021 The principal conditions applicable to the 2021 performance shares are described below. These apply to each member
of the Board of Management.
Instrument:
Grant:
Grant date:
Performance period:
Vesting:
Lock-up period:
Performance Shares
Conditional grant on an annual basis based on maximum achievable opportunity. The number of
performance shares to be conditionally awarded is calculated using the volume-weighted average share
price during the last quarter of the year preceding the conditional award.
Two days after the publication of ASML’s annual results in January of the year in which the three-year
performance period starts
Three years, starting on January 1 in year of grant
The shares will become unconditional in the year after the end of the three-year performance period,
depending on the level of achievement of the predetermined performance targets
The minimum holding period is two years after the vesting date.
Upon termination of contract the transfer restrictions will remain in place during the holding period except
in case of decease.
In case a tax payment is due by the members of the Board of Management over the retrieved variable
income, performance shares may be partially sold at vesting (‘sell to cover’) in accordance with the law
and internal regulations.
Relationship between accounted remuneration and company's performance
The following table sets forth an overview of the relationship between accounted remuneration and the company's
performance for the past five years:
For the year ended December 31 (€, in thousands)
Net sales
Net income based on US GAAP
Net income based on EU-IFRS
ASML share price (closing price on Euronext Amsterdam in €)
Average number of payroll employees in FTEs
2017
2018 1
2019
2020
2021
8,962,658
10,944,016
11,820,001
13,978,452
18,610,994
2,066,679
2,591,614
2,592,252
3,553,670
2,173,400
2,525,515
2,581,107
3,696,813
145.2
15,136
137.2
18,204
263.7
22,192
397.6
24,727
5,883,177
6,134,595
706.7
28,223
Remuneration P.T.F.M. Wennink (CEO)
Remuneration M.A. van den Brink
Remuneration R.J.M. Dassen
Remuneration F.J. van Hout
Remuneration C.D. Fouquet
Remuneration F.J.M. Schneider-Maunoury
Average remuneration per FTE 2
Internal pay ratio (CEO versus employee remuneration) 2
3,455
3,454
—
2,276
—
2,260
117
30
3,433
3,431
897
2,177
1,125
2,169
115
30
4,361
4,360
2,956
2,738
2,203
2,724
114
38
4,564
4,564
3,804
2,938
2,975
2,927
120
38
4,820
4,819
3,800
2,573
3,137
3,158
122
40
1. The remuneration of the R.J.M. Dassen and C.D. Fouquet is lower in 2018 as they were appointed as members of the Board of Management during 2018.
2. The calculation approach of the Internal pay ratio is disclosed in the section Relationship between CEO and average remuneration (pay ratio). We revised our calculation
approach to the internal pay ratio based on the December 2020 guidance from the Monitoring Committee Dutch Corporate Governance Code on section 3.4.1.iv of the
Dutch Corporate Governance Code effective as of 2021. The comparative historical numbers of the internal pay ratio have therefore been restated to include the social
security expenses in the internal pay ratio numbers. In the calculation, we have taken into account the payroll employees only, since this ensures consistency with the
figures disclosed in the consolidated financial statements. The ratio would be lower in case we would incorporate the temporary employees as they earn on average a
higher remuneration.
Explanation of changes in company's performance versus remuneration
The table set out above aims to provide insight into the Company's performance over the past five years and the
development of the remuneration. The metrics sales, net income and share price are used to measure Company
performance, as they are key metrics serving as a good proxy for ASML's general performance, as well as in view of
comparability with other companies. The Company has grown significantly over the last years, not only reflected in the
number of employees but also in terms of revenue. Since 2017, net sales increased by 107%. The performance of the
Company in that same period has increased significantly as well, reflected for example in Net Income (185% growth
since 2017 based on EU-IFRS) and ASML share price (387% growth). As the table shows, the Company performance
over the last five years has improved more significantly compared to the development of remuneration in that same
period. The growth of the Company has led to revisions of the Remuneration Policy for the Board of Management in 2019
and 2021, resulting into higher base salaries as well as higher levels of STI (at target) and LTI (at target). Actual
remuneration may fluctuate year over year depending on actual STI pay-out in any year, as well as the vesting of
performance shares (LTI) in any year and the share price at that moment.
170
ASML ANNUAL REPORT 2021
Relationship between CEO and average remuneration (pay ratio)
The internal pay ratio1 (CEO versus employee remuneration) increased towards 40:1 in 2021 (2020 38:1), due to the policy
change performed in 2021, which increased remuneration. ASML intends to grant competitive remuneration to
employees at all position levels within the Company. At each level remuneration should reflect the responsibilities of the
role. The build-up of remuneration from level to level should therefore be gradual and in line with increasing
responsibilities, also following market practice. At the highest level the steps become gradually bigger as responsibilities
ultimately rise from a divisional level to an overall company level. The Supervisory Board considers the current build-up
and the overall pay ratio of 40:1 to be equitable, considering the current size and organization structure of the company.
1. This ratio consists of the CEO's total remuneration (including all remuneration components) during 2021 of €4,820 thousand, compared to the average remuneration of all
employees. The average remuneration of all employees was calculated using the average number of payroll employees in FTE (wages and salaries + social security
expenses + pension and retirement expenses + share-based payments) / average number of payroll employees = €3,439.2 million / 28,223 = €122 thousand. This ratio
has not been prepared to comply with the Pay Ratio Disclosure requirements under SEC regulations.
Remuneration Supervisory Board
In this section of the Remuneration Report we provide an overview of the 2021 Remuneration Policy for the Supervisory
Board as adopted by the General Meeting on April 29, 2021 and as in force as of April 1, 2021. The Supervisory Board's
Remuneration Policy as adopted by the General Meeting on April 22, 2020 was applicable for the first few months in
2021, as disclosed in the Remuneration Report 2020. It also provides information about the implementation of the 2021
Remuneration Policy for the Supervisory Board and the details of the Supervisory Board members' actual remuneration
in 2021. The 2021 Remuneration Policy for the Supervisory Board can be found in the Governance section of our
website.
Remuneration Policy
Remuneration objectives and principles
The 2021 Remuneration Policy for the Supervisory Board is designed to enable ASML to attract and retain qualified
Supervisory Board members, which together compose a diverse and balanced Supervisory Board with the appropriate
level of skills, competencies and experience required to properly supervise (the execution of) ASML's strategy, which is
focused on the creation of long-term value for all stakeholders.
The 2021 Remuneration Policy for the Supervisory Board is built on the following principles:
• Transparent – The remuneration policy and its execution are clear and practical
• Alignment – The remuneration policy is benchmarked to market practice
• Compliant – ASML adopts the highest standards of good corporate governance
• Simple – The remuneration policy and its execution are as simple as possible and easily understandable to all
stakeholders
• Fair – The remuneration should reflect the time spent and the responsibilities of the role of the members of the
Supervisory Board
• Independent – The remuneration of a Supervisory Board member may not be dependent on the results of the
company.
Reference group and market positioning
The remuneration of the Supervisory Board should be competitive compared to a relevant reference market. This market
is defined using a reference group of companies with a two-tier board structure included in the AEX Index of Euronext
Amsterdam. To determine the positioning in this group, enterprise value, revenue and number of employees are taken
into account.
171
ASML ANNUAL REPORT 2021 Summary of Remuneration Policy Supervisory Board
The table below provides an overview and description of the elements of the 2021 Remuneration Policy for the
Supervisory Board. The table includes the amended Supervisory Board and Committee membership fees resulting from
the revision of the Remuneration Policy as approved at the 2021 AGM.
Component
Description
Value
Fixed
remuneration
Basic membership fee
Chair of Supervisory Board
Vice-Chair of Supervisory Board
Member of Supervisory Board
Chair Audit Committee
Member Audit Committee
Chair other Committees
Member of other Committees
Value
€ 130,000
€ 94,000
€ 75,000
€ 25,500
€ 18,000
€ 20,000
€ 14,500
y
c
i
l
o
P
n
o
i
t
a
r
e
n
u
m
e
R
y
r
a
m
m
u
S
Extra
allowance for
intercontinental
meetings
Expenses
Loans and
guarantees
Shares and
share ownership
Other
arrangements
Extra, fixed allowance paid in
connection with additional time
commitment for intercontinental
travel
€ 5,000 for each meeting that involves intercontinental travel
Expenses incurred in relation
to meeting attendance are
reimbursed. In addition, a fixed
net cost allowance is paid,
covering certain pre-defined
out-of-pocket expenses
Depending on level of expenses
Chair of Supervisory Board
Member of Supervisory Board
Value
€ 1,980
€ 1,380
Not applicable
Not applicable
Not applicable
No (rights to) shares are granted by
way of remuneration. Any holding
of ASML shares for the purpose of
long-term investment. Any trading
activity is subject to ASML's Insider
Trading Rules
(Re)appointment based on
Dutch law and ASML's articles
of association. No claw-back,
severance or change in control
arrangements are in place
Remuneration Supervisory Board in 2021
Overview of the remuneration to the Supervisory Board members based on incurred accounting expenses over the last
five years (amounts are in € thousands):
G.J. Kleisterlee
A.P. Aris
B.M. Conix
D.M. Durcan
D.W.A. East
T.L. Kelly
R.D. Schwalb
J.M.C. Stork
Total
Membership
fees 2021
Committee
fees 2021
Allowances
20211
125
87
50
74
74
74
74
74
51
39
12
27
17
27
38
28
632
239
2
1
1
11
2
6
1
11
35
Proportion
fixed vs.
variable
2021
100:0
100:0
100:0
100:0
100:0
100:0
100:0
100:0
100:0
1.
Allowances consist of fixed expense allowances and allowances for intercontinental meetings.
Total
remuneration
2021
Total
remuneration
2020
Total
remuneration
2019
Total
remuneration
2018
Total
remuneration
2017
178
127
63
112
93
107
113
113
906
157
95
—
57
59
88
104
100
660
154
98
—
—
—
101
101
118
572
138
80
—
—
—
60
88
100
466
135
80
—
—
—
—
86
100
401
172
ASML ANNUAL REPORT 2021
No variable pay has been granted to the current and former members of the Supervisory Board during the last five years.
The remuneration of the Supervisory Board is not directly linked to the performance of ASML, in line with the
remuneration principles set out in the 2021 Remuneration Policy for the Supervisory Board.
Remuneration Former Supervisory Board
Overview of the remuneration awarded to the former Supervisory members in 2021, 2020 and 2019 (amounts are in €
thousands):
Membership
fees 2021
Committee fees
2021
Allowances
20211
Proportion fixed
vs. variable
2021
Total
remuneration
2021
Total
remuneration
2020
Total
remuneration
2019
D.A. Grose
C.M.S. Smits Nusteling
W.H. Ziebart
Total
26
23
—
49
10
8
—
18
—
—
—
—
100:0
100:0
—
36
31
—
67
117
95
30
242
133
91
101
325
1.
Allowances consist of fixed expense allowances and allowances for intercontinental meetings.
Other information
Total remuneration
The total annual remuneration for the members of the Board of Management and Supervisory Board members including
Former Members during 2021 amounts to €23.2 million (2020: €22.6 million).
Other arrangements
No remuneration has been granted and allocated by subsidiaries or other companies whose financials are consolidated
by ASML, since all members of the Board of Management and the Supervisory Board are paid directly by ASML Holding
N.V.
No (personal) loans have been granted to the members of the Board of Management or the Supervisory Board and no
guarantees or the like have been granted in favor of any of the members of the Board of Management and the
Supervisory Board.
No severance payments were granted to members of the Board of Management and the Supervisory Board in 2021 and
no variable remuneration has been clawed-back.
Deviations
In 2021 no deviations took place from the decision-making process for the implementation of the 2021 Remuneration
Policies for the Board of Management and the Supervisory Board and no temporary deviations took place from the 2021
Remuneration Policies.
Shareholder voting
At the 2021 AGM the 2021 Remuneration Policy for the Board of Management was adopted with 93.86% of the votes
cast in favor. The 2021 Remuneration Policy for the Supervisory Board was also adopted at the 2021 AGM with a
majority of 98.90% of the votes cast in favor of the proposal.
The Remuneration Report for the financial year 2020 was submitted to the 2021 AGM for an advisory vote. 85.07% of the
votes were cast in favor. In the Message from the Remuneration Committee Chair at the beginning of this Remuneration
Report, we discuss how we have responded to the feedback received on Board of Management remuneration.
This Remuneration Report will be submitted to the 2022 AGM for an advisory vote in line with Dutch law, together with a
proposal for revision of the 2021 Remuneration Policy for the Board of Management as described in more detail in the
section "Looking forward to 2022".
173
ASML ANNUAL REPORT 2021 Consolidated
financial
statements
174
ASML ANNUAL REPORT 2021 Report of Independent Registered
Public Accounting Firm
To the Shareholders and the Supervisory Board
ASML Holding N.V.:
Opinions on the Consolidated Financial
Statements and Internal Control Over
Financial Reporting
We have audited the accompanying consolidated balance
sheets of ASML Holding N.V. and subsidiaries (the
“Company”) as of December 31, 2021 and 2020, the
related consolidated statements of operations,
comprehensive income, shareholders’ equity and cash
flows for each of the years in the three-year period ended
December 31, 2021, and the related notes (collectively, the
“consolidated financial statements”). We also have audited
the Company’s internal control over financial reporting as
of December 31, 2021, based on criteria established in
Internal Control – Integrated Framework (2013) issued by
the Committee of Sponsoring Organizations of the
Treadway Commission.
In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects, the
financial position of the Company as of December 31,
2021 and 2020, and the results of its operations and its
cash flows for each of the years in the three-year period
ended December 31, 2021, in conformity with U.S.
generally accepted accounting principles. Also in our
opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of
December 31, 2021, based on criteria established in
Internal Control – Integrated Framework (2013) issued by
the Committee of Sponsoring Organizations of the
Treadway Commission.
Basis for Opinions
The Company’s management is responsible for these
consolidated financial statements, for maintaining effective
internal control over financial reporting, and for its
assessment of the effectiveness of internal control over
financial reporting, included in the accompanying
Management’s report on internal control over financial
reporting. Our responsibility is to express an opinion on
the Company’s consolidated financial statements and an
opinion on the Company’s internal control over financial
reporting based on our audits. We are a public accounting
firm registered with the Public Company Accounting
Oversight Board (United States) (“PCAOB”) and are
required to be independent with respect to the Company
in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we
plan and perform the audits to obtain reasonable
assurance about whether the consolidated financial
statements are free of material misstatement, whether due
to error or fraud, and whether effective internal control
over financial reporting was maintained in all material
respects.
Our audits of the consolidated financial statements
included performing procedures to assess the risks of
material misstatement of the consolidated financial
statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding
the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the
accounting principles used and significant estimates
made by management, as well as evaluating the overall
presentation of the consolidated financial statements. Our
audit of internal control over financial reporting included
obtaining an understanding of internal control over
financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on
the assessed risk. Our audits also included performing
such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a
reasonable basis for our opinions.
Definition and Limitations of Internal
Control Over Financial Reporting
A company’s internal control over financial reporting is a
process designed to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes
in accordance with generally accepted accounting
principles. A company’s internal control over financial
reporting includes those policies and procedures that (1)
pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in
accordance with generally accepted accounting
principles, and that receipts and expenditures of the
company are being made only in accordance with
authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition,
use, or disposition of the company’s assets that could
have a material effect on the financial statements.
Because of its inherent limitations, internal control over
financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in
conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
175
ASML ANNUAL REPORT 2021 Critical Audit Matter
The critical audit matter communicated below is a matter
arising from the current period audit of the consolidated
financial statements that was communicated or required
to be communicated to the audit committee and that: (1)
relates to accounts or disclosures that are material to the
consolidated financial statements and (2) involved our
especially challenging, subjective, or complex judgments.
The communication of a critical audit matter does not alter
in any way our opinion on the consolidated financial
statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a
separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.
Revenue recognition - Identification of distinct
Revenue recognition - Identification of distinct
performance obligations and allocation of the total
performance obligations and allocation of the total
contract consideration
contract consideration
As disclosed in note 2 to the consolidated financial
statements, net system sales was EUR 13,652.8 million for
the year ended December 31, 2021. Sales of systems are
usually entered into with customers under Volume
Purchase Agreements (VPAs). These VPAs contain
multiple performance obligations, for example delivery of
goods, installation, warranty and training. Once these
performance obligations are identified, the total contract
consideration, including discounts, offer of free goods or
services and credits that can be used towards future
purchases, is allocated to the performance obligations.
We identified revenue recognition, and specifically the
identification of performance obligations in the VPAs as
well as the allocation of the total contract consideration,
including discounts, offer of free goods or services and
credits that can be used towards future purchases, as a
critical audit matter since it is inherently judgmental, and
complex. As a result, evaluating the Company’s judgments
regarding the identified performance obligations, notably
the estimate of the number of systems to be delivered, and
the allocation of the total contract consideration to these
performance obligations required a high degree of auditor
judgment.
The following are the primary procedures we performed to
address this critical audit matter. We evaluated the design
and tested the operating effectiveness of certain internal
controls related to the critical audit matter. This includes
controls related to VPA assessments for the identification
of performance obligations and the allocation of the total
contract consideration to these performance obligations,
and the correct application to individual sales transactions.
We evaluated the identification of performance obligations
and the allocation of the total contract consideration by
inspecting a selection of VPAs and the related
documentation, performing inquiries with relevant
operational functions in the Company, and performing
sensitivity analyses, to assess the impact of the estimated
number of systems to be delivered on the allocation.
Furthermore, we tested a selection of recognized sales
transactions under VPAs and performed a retrospective
review of prior period estimates to assess management’s
ability to estimate the number of systems to be delivered.
Finally, we checked the accuracy of the Company’s model
used to allocate the contract consideration to the
identified performance obligations.
/s/ KPMG Accountants N.V.
We have served as the Company's auditor since 2015.
Amstelveen, the Netherlands
February 9, 2022
176
ASML ANNUAL REPORT 2021 Consolidated Statements of Operations
Year ended December 31 (€, in millions, except per share data)
Net system sales
Net service and field option sales
Total net sales
Notes
2, 3
Cost of system sales
Cost of service and field option sales
Total cost of sales 1
2019
8,996.2
2,823.8
11,820.0
(4,676.2)
(1,864.0)
(6,540.2)
2020
10,316.6
3,661.9
13,978.5
(5,169.3)
(2,012.0)
(7,181.3)
2021
13,652.8
4,958.2
18,611.0
(6,482.9)
(2,319.1)
(8,802.0)
Gross profit
5,279.8
6,797.2
9,809.0
Research and development costs
Selling, general and administrative costs
Other income
Income from operations
Interest and other, net
Income before income taxes
Income tax expense
Income after income taxes
Profit from equity method investments
Net income
Basic net income per ordinary share
Diluted net income per ordinary share
Number of ordinary shares used in computing per share amounts:
Basic
Diluted
(1,968.5)
(520.5)
—
2,790.8
(25.0)
2,765.8
(191.7)
2,574.1
18.2
2,592.3
6.16
6.15
420.8
421.6
(2,200.8)
(544.9)
—
4,051.5
(34.9)
4,016.6
(551.5)
3,465.1
88.6
3,553.7
8.49
8.48
418.3
419.1
(2,547.0)
(725.6)
213.7
6,750.1
(44.6)
6,705.5
(1,021.4)
5,684.1
199.1
5,883.2
14.36
14.34
409.8
410.4
10
16
21
9
23
23
23
23
1. Cost of sales includes amounts with related parties of €1,855.2 million, €1,457.4 million and €1,321.8 million in 2021, 2020, and 2019, respectively.
177
ASML ANNUAL REPORT 2021 Consolidated Statements of Comprehensive Income
Year ended December 31 (€, in millions)
Net income
Other comprehensive income:
Notes
2019
2,592.3
2020
3,553.7
2021
5,883.2
Proportionate share of OCI from equity method investments
(19.8)
(1.3)
22.0
Foreign currency translation, net of taxes:
Gain (loss) on foreign currency translation and effective portion of hedges
20.1
(73.8)
93.3
Financial instruments, net of taxes:
Gain (loss) on derivative financial instruments
Transfers to net income
Other comprehensive income, net of taxes
Total comprehensive income, net of taxes
Attributable to equity holders
25
25
3.2
(10.7)
(7.2)
(21.0)
(2.3)
(98.4)
2,585.1
2,585.1
3,455.3
3,455.3
16.6
22.2
154.1
6,037.3
6,037.3
178
ASML ANNUAL REPORT 2021
Consolidated Balance Sheets
As of December 31 (€, in millions, except share and per share data)
Notes
2020
2021
Assets
Cash and cash equivalents
Short-term investments
Accounts receivable, net
Finance receivables, net
Current tax assets
Contract assets
Inventories, net
Other assets 1
Total current assets
Finance receivables, net
Deferred tax assets
Other assets 2
Equity method investments
Goodwill
Other intangible assets, net
Property, plant and equipment, net
Right-of-use assets - Operating
Right-of-use assets - Finance 3
Total non-current assets
Total assets
Liabilities and shareholders’ equity
Accounts payable 4
Accrued and other liabilities
Current tax liabilities
Current portion of long-term debt
Contract liabilities
Total current liabilities
Long-term debt
Deferred and other income tax liabilities
Contract liabilities
Accrued and other liabilities
Total non-current liabilities
Total liabilities
Ordinary shares; €0.09 nominal value;
699,999,000 shares authorized at December 31, 2021; (2020: 699,999,000)
402,601,613 issued and outstanding at December 31, 2021; (2020: 416,514,034)
Issued and outstanding shares
Share premium
Treasury shares at cost
Retained earnings
Accumulated other comprehensive income
Total shareholders’ equity
4
4
5
6
21
2
7
8
6
21
8
9
11
12
13
14
14
15
21
16
2
16
21
2
15
22
6,049.4
1,302.2
1,310.3
1,710.5
67.3
119.2
4,569.4
801.7
15,930.0
400.5
671.5
951.5
820.7
4,629.1
1,048.9
2,470.3
180.1
164.8
11,337.4
6,951.8
638.5
3,028.0
1,185.6
42.0
164.6
5,179.2
1,000.5
18,190.2
383.0
1,098.7
1,011.4
892.5
4,555.6
952.1
2,982.7
159.5
5.3
12,040.8
27,267.4
30,231.0
1,377.9
1,146.0
110.0
15.4
3,954.2
6,603.5
4,662.8
238.3
1,639.9
257.5
6,798.5
2,116.3
1,435.5
301.9
509.1
7,935.2
12,298.0
4,075.0
240.6
3,225.7
251.1
7,792.4
13,402.0
20,090.4
37.6
3,780.1
(863.2)
10,731.5
179.4
13,865.4
36.5
3,876.1
(2,422.8)
8,317.3
333.5
10,140.6
Total liabilities and shareholders’ equity
27,267.4
30,231.0
1. Other assets - current includes amounts with related parties of €288.5 million and €265.8 million at December 31, 2021 and 2020, respectively.
2. Other assets - non-current includes amounts with related parties of €818.7 million and €668.0 million at December 31, 2021 and 2020, respectively.
3. Right-of-use assets - Finance includes amounts with related parties of €0.0 million and €149.9 million at December 31, 2021 and 2020, respectively.
4. Accounts Payable includes amounts with related parties of €482.7 million and €110.9 million at December 31, 2021 and 2020, respectively.
ASML ANNUAL REPORT 2021
179
Consolidated Statements of Shareholders’ Equity
(€, in millions)
Balance at January 1, 2019
Components of comprehensive income:
Net income
Share of OCI from equity method
investments
Foreign currency translation
Gain (loss) on financial instruments
Total comprehensive income
Purchase of treasury shares
Cancellation of treasury shares
Share-based payments
Issuance of shares
Dividend paid
Balance at December 31, 2019
Components of comprehensive income:
Net income
Share of OCI from equity method
investments
Foreign currency translation
Gain (loss) on financial instruments
Total comprehensive income
Purchase of treasury shares
Cancellation of treasury shares
Share-based payments
Issuance of shares
Dividend paid
Balance at December 31, 2020
Components of comprehensive income:
Net income
Share of OCI from equity method
investments
Foreign currency translation
Gain (loss) on financial instruments
Total comprehensive income
Purchase of treasury shares
Cancellation of treasury shares
Share-based payments
Issuance of shares
Dividend paid
Balance at December 31, 2021
Issued and
Outstanding Shares
Amount
Number
Share
Premium
Treasury
Shares at
Cost
Retained
Earnings
Notes
OCI1
Total
421.1
38.6
3,741.3
(1,621.8)
9,197.9
285.0
11,641.0
—
—
—
—
—
(1.9)
—
—
0.6
—
—
—
—
—
—
—
(0.5)
—
0.1
—
—
—
—
—
—
—
—
74.6
(43.9)
—
—
—
—
—
—
(410.0)
902.3
—
2,592.3
— 2,592.3
—
—
—
2,592.3
—
(901.8)
—
(19.8)
(19.8)
20.1
(7.5)
(7.2)
—
—
—
20.1
(7.5)
2,585.1
(410.0)
—
74.6
109.9
(38.9)
— (1,325.7)
—
27.2
— (1,325.7)
419.8
38.2
3,772.0
(1,019.6)
9,523.8
277.8
12,592.2
—
—
—
—
—
(3.9)
—
—
0.6
—
—
—
—
—
—
—
(0.7)
—
0.1
—
—
—
—
—
—
—
—
—
—
—
3,553.7
—
3,553.7
—
—
—
(1.3)
(73.8)
(23.3)
(1.3)
(73.8)
(23.3)
3,553.7
(98.4)
3,455.3
— (1,207.5)
—
— (1,207.5)
—
1,262.3
(1,261.6)
—
101.6
—
(18.0)
—
—
—
—
53.9
37.9
— (1,066.4)
— (1,066.4)
53.9
(45.8)
—
416.5
37.6
3,780.1
(863.2)
10,731.5
179.4
13,865.4
—
—
—
—
—
(14.4)
—
—
0.5
—
—
—
—
—
—
—
(1.2)
—
0.1
—
—
—
—
—
—
— 5,883.2
— 5,883.2
—
—
—
—
—
—
—
22.0
93.3
38.8
22.0
93.3
38.8
5,883.2
154.1
6,037.3
— (8,560.3)
—
— (8,560.3)
— 6,926.6
(6,925.4)
—
74.1
—
(3.7)
—
—
—
—
117.5
49.0
— (1,368.3)
— (1,368.3)
117.5
(21.5)
—
402.6
36.5
3,876.1
(2,422.8)
8,317.3
333.5
10,140.6
25
22
22
20
20
22
25
22
22
20
20
22
25
22
22
20
20
22
1. As of December 31, 2021, accumulated OCI consists of €(4.9) million loss relating to our proportionate share of other comprehensive income from equity method
investments (2020: €(26.9) million loss; 2019: €(25.6) million loss), €321.9 million relating to foreign currency translation gain (2020: €228.6 million gain; 2019: €302.4
million gain) and €16.5 million relating to unrealized gains on financial instruments (2020: €(22.3) million loss; 2019: €1.0 million gains).
180
ASML ANNUAL REPORT 2021
Consolidated Statements of Cash Flows
Year ended December 31 (€, in millions)
Cash Flows from Operating Activities
Net income
Notes
2019
2020
2021
2,592.3
3,553.7
5,883.2
12, 13, 14
448.5
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization 1
Impairment and loss (gain) on disposal
Share-based compensation expense
Gain on sale of subsidiaries
Inventory reserves
Deferred tax expense (benefit)
Equity method investments 2
Changes in assets and liabilities:
Accounts receivable, net
Finance receivables, net
Inventories
Other assets
Accrued and other liabilities
Accounts payable
Current tax assets and liabilities
Contract assets and liabilities
Net cash provided by operating activities
Cash Flows from Investing Activities
Purchase of property, plant and equipment 3
Purchase of intangible assets
Purchase of short-term investments
Maturity of short-term investments
Loans issued and other investments
Proceeds from sale of subsidiaries (net of cash disposed of)
Acquisition of subsidiaries (net of cash acquired)
Net cash used in investing activities
Cash Flows from Financing Activities
Dividend paid
Purchase of treasury shares
Net proceeds from issuance of shares
Net proceeds from issuance of notes, net of issuance costs
Repayment of debt and finance lease obligations
Net cash used in financing activities
Net cash flows
Effect of changes in exchange rates on cash
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
Supplemental Disclosures of Cash Flow Information:
Unpaid portion of property, plant & equipment excluded in investing activities
Interest received
Interest paid
Income taxes paid, net of refunds
12, 13
18, 20
10
7
21
9
5
6
7
8
15
21
2
13
12
4
4
8
10
10
22
22
20
16
14, 16
4
4
7.8
74.6
—
221.5
(236.8)
56.9
(255.0)
(95.3)
(404.7)
(199.1)
82.1
(12.1)
(202.6)
1,198.3
3,276.4
(766.6)
(119.3)
(1,291.5)
1,019.0
0.9
—
—
490.8
5.5
53.9
—
192.4
(211.3)
11.0
471.0
(15.9)
117.5
(213.7)
180.7
(419.6)
(49.8)
507.5
(1,754.9)
(1,125.4)
(706.7)
(75.1)
47.5
334.3
131.5
1,418.0
4,627.6
(962.0)
(38.8)
(1,475.5)
1,359.1
(12.2)
—
(222.8)
542.3
(483.2)
(222.2)
347.6
718.6
214.4
5,529.8
10,845.8
(900.7)
(39.6)
(1,162.7)
1,826.4
(124.4)
329.0
—
(72.0)
(1,157.5)
(1,352.2)
(1,325.7)
(410.0)
27.2
—
(3.8)
(1,066.4)
(1,207.5)
37.9
1,486.3
(3.3)
(1,368.3)
(8,560.3)
49.0
—
(12.1)
(1,712.3)
(753.0)
(9,891.7)
406.6
4.6
411.2
3,121.1
3,532.3
85.9
38.9
(59.9)
(678.7)
2,522.4
(5.3)
2,517.1
3,532.3
6,049.4
(46.9)
32.1
(64.1)
882.1
20.3
902.4
6,049.4
6,951.8
29.3
36.6
(83.0)
(650.2)
(1,235.0)
1. Depreciation and amortization includes depreciation of property, plant and equipment, amortization of intangible assets, depreciation of right-of-use assets, amortization
of underwriting commissions and discount related to the bonds and credit facility.
2. Equity method investments includes the profit and dividends received from our equity method investment, as well as the capitalization of R&D and supply chain support
funding in 2019 and 2020 as disclosed in note 26. Related parties and variable interest entities. The dividend received is a cash inflow in 2021 of €168.0 million (2020:
€128.1 million, 2019: €99.9 million).
In 2021, an amount of €69.2 million (2020: €203.7 million, 2019: €184.1 million) was included in purchase of property, plant and equipment which relates to funding
provided for facilities and tooling to our equity method investment, which was initially recognized as part of the other assets.
3.
181
ASML ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements
1. General information / summary of general accounting policies
We are a global innovation leader in the chip industry. We provide chipmakers with hardware, software and services to
mass produce patterns on silicon with the highest possible level of fidelity, we call this holistic lithography. What we do
increases the value and lowers the cost of a chip, which advances us all toward a smarter, more connected world.
Headquartered in Europe’s top tech hub, the Brainport Eindhoven region in the Netherlands, we are a global team of
over 32,000 FTEs with 122 different nationalities across 3 continents. ASML’s principal operations are in Europe, North
America and Asia.
Our shares are listed for trading in the form of registered shares on Euronext Amsterdam and on NASDAQ. The principal
trading market of our ordinary shares is Euronext Amsterdam.
Basis of preparation
The accompanying Consolidated Financial Statements are stated in millions of euros unless indicated otherwise.
The accompanying Consolidated Financial Statements have been prepared in conformity with US GAAP.
Use of estimates
The preparation of our Consolidated Financial Statements in conformity with US GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities on the balance sheet dates, and the reported amounts of net sales and costs during the reported
periods. The inputs into our estimates and assumptions consider economic implications including COVID-19 on our
critical accounting estimates. We believe that the critical accounting estimates and assumptions are appropriate. ASML
will continue to monitor the impacts of economic implications including COVID-19 and incorporate them into accounting
estimates. Actual results could differ from those estimates. We evaluate our estimates continuously and we base our
estimates on historical experience and on various other assumptions that we believe to be reasonable under the
circumstances. Actual results may differ from these estimates if the assumptions prove incorrect. To the extent there are
material differences between actual results and these estimates, our future results could be materially and adversely
affected. We believe that the accounting policies described below require us to make significant judgments and
estimates in the preparation of our Consolidated Financial Statements. Our most critical accounting estimates include:
• Revenue recognition, including lease accounting
• Inventory reserves
• Unrecognized tax benefits
• Contingencies and litigation
• Evaluation of long-lived assets for impairment
Principles of consolidation
The Consolidated Financial Statements include the Financial Statements of ASML Holding N.V. and all of its subsidiaries.
Subsidiaries are all entities over which ASML controls the financial and operating activities, generally accompanying a
shareholding of more than 50.0% of the outstanding voting rights. Subsidiaries are fully consolidated from the date on
which control is obtained by ASML. The Company consolidates Berliner Glas using a one-quarter lag, to allow for the
timely preparation of consolidated financial information. There were no significant intervening events occurred during this
lag period that materially affected the Consolidated Financial Statements except for the divestiture of the non-core
business of Berliner Glas, which has been recognized in the financial year ended December 31, 2021. All intercompany
transactions, balances and unrealized results on transactions with subsidiaries are eliminated. We also assess if we are
the primary beneficiary of, and thus would consolidate, any variable interest entity.
Foreign currency translation
The financial information for subsidiaries with a functional currency outside the euro-zone is measured using a mix of
local currencies or the euro as the functional currency. The Financial Statements of those foreign subsidiaries with a
functional currency different than the euro are translated into euros in the preparation of ASML’s Consolidated Financial
Statements. Assets and liabilities are translated into euros at the exchange rate on the respective balance sheet dates
and income and costs are translated into euros based on the average exchange rate for the corresponding period. The
resulting translation adjustments are recorded directly in shareholders’ equity.
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ASML ANNUAL REPORT 2021 New US GAAP accounting pronouncements adopted
During 2021, there were no new US GAAP accounting pronouncements that were adopted which have a material impact
on our Consolidated Financial Statements.
New US GAAP accounting pronouncements issued but not adopted
For the year ended December 31, 2021, there are no new US GAAP accounting pronouncements issued which have not
yet been adopted and are expected to have a material impact on our Consolidated Financial Statements.
2. Revenue from contracts with customers
Accounting Policy
We measure revenue based on the consideration specified in the contracts with our customers, adjusted for any
significant financing components, and excluding any taxes collected on behalf of third parties. We recognize
revenue when we satisfy a performance obligation by transferring control over a good or service to our customer.
We bill our customers for, and recognize as revenue, any charges for shipping and handling costs.
Depending on the contract, we obtain a right to payment for our systems through a combination of either a
reservation of a production slot or upon delivery of our systems, with the remaining portion upon final acceptance
of our systems. Right to payment for our service and field options occurs upon shipment or completion of the
service unless described otherwise. The payment is typically due 15-45 days after the aforementioned events. Our
contracts typically include cancellation penalties that provide economic protection from the risk of customer
cancellation. The costs related to our sales are recognized as cost of sales.
We generate revenue from the sale of integrated patterning solutions for the semiconductor industry, which mainly
consist of systems, system related options and upgrades, other holistic lithography solutions and customer
services. The main portion of our net sales is derived from volume purchase agreements with our customers that
have multiple performance obligations, which mainly include the sale of our systems, system related options,
installation, training and extended and enhanced warranties. In our volume purchase agreements we offer
customers discounts in the normal course of sales negotiations. As part of these volume purchases agreements,
we may also offer free goods or services and credits that can be used towards future purchases. Occasionally,
systems, with the related extended and enhanced warranties, installation and training services, are ordered
individually. Our sales agreements do not include a right of return for any reason other than not meeting the agreed
upon specifications.
For bundled packages, we account for individual goods and services as separate and distinct performance
obligations, including the free or discounted goods or services, if a product or service is separately identifiable from
other items in the bundled package and if a customer can benefit from it on its own or with other resources that are
readily available to the customer.
The consideration paid for our performance obligations is typically fixed. However, most of our volume purchase
agreements with customers contain some component of variable consideration, typically dependent on the final
volume of systems ordered by the customer or the system performance. Variable consideration is estimated at
contract inception for each performance obligation based on communications with the customer to understand
their requirements and roadmap. This is subsequently updated each quarter, using either the expected value
method or most likely amount method, whichever is determined to best predict the consideration to be collected
from the customer. Variable consideration is only included in the transaction price if it is considered probable that a
significant revenue reversal will not occur.
In certain scenarios when entering into a volume purchase agreement, free goods or services are provided directly
or through a voucher that can be used on future contracts. Consideration from the contract will be allocated to
these performance obligations and revenue recognized when control transfers based on the nature of the goods or
services provided.
Some of our contracts require our customers to pay a down payment on systems to be shipped. We do not record
a significant financing component for down payments as the timing difference between when the consideration is
paid and when the system is transferred to the customer arises from reasons other than financing.
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ASML ANNUAL REPORT 2021 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 determined based on other stand-
alone sales that are directly observable, when possible. However, for the majority of our performance obligations
these are not available. If no directly observable evidence is available, the stand-alone selling price is determined
using the adjusted market assessment approach, which requires judgment.
Options to buy goods or services in addition to the purchase commitment are assessed to determine if they
provide a material right to the customer that they would not have received if they had not entered into this contract.
Each option to buy additional goods or services provided at a discount from the stand-alone selling price is
considered a material right. The discount offered from the stand-alone selling price will be allocated from the
consideration of the other goods and services in the contract if it is determined the customer will exercise the
option to buy, adjusted for the likelihood. Revenue will be recognized in line with the nature of the related goods or
services. If it is subsequently determined the customer will not exercise the option to buy, or the option expires,
revenue will be recognized.
Occasionally we enter into bill-and-hold transactions where we invoice a customer for a system that is ready for
delivery but not shipped to the customer until a later date, based on customer’s request. Transfer of control is
determined to have occurred only when there is a substantive reason for the arrangement, the system is separately
identified as belonging to the customer, the good has been accepted by the customer and is ready for delivery, and
we do not have the ability to direct the use of the system.
We generate revenue from lessor agreements, which we classify as a sales-type lease when the lease meets any of
the following criteria at lease commencement:
• The lease transfers ownership of the underlying asset to the lessee by the end of the lease term;
• The lease grants the lessee an option to purchase the underlying asset, that the lessee is reasonably certain to
exercise;
• The lease term is for the major part of the remaining economic life of the underlying asset. However, if the
commencement date falls at or near the end of the economic life of the underlying asset, this criterion shall not be
used for purposes of classifying the lease;
• The present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not
already reflected in the lease payments equals or exceeds substantially all of the fair value of the underlying
asset; or
• The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at
the end of the lease term.
For sales-type leases where substantially all the risks and rewards incidental to ownership of an asset are
transferred to the lessee, revenue is recognized at commencement of the lease term. The difference between the
gross finance receivable and the present value of the minimum lease payments is initially recognized as unearned
interest and presented as a deduction to the gross finance receivable. Interest income is recognized in the
Consolidated Statements of Operations over the term of the lease contract using the effective interest method.
Leases that are not a sales-type lease are operating lease arrangements. If we have offered the customer an
operating lease arrangement, the system is included in Property, plant and equipment upon commencement of the
lease. Revenue from operating lease arrangements is recognized in the Consolidated Statements of Operations on
a straight-line basis over the term of the lease contract.
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ASML ANNUAL REPORT 2021 Goods or services
New systems (established
technologies)
Used systems
Field upgrades and
options (system
enhancements)
Nature, timing of satisfying the performance obligations, and significant payment terms
New systems sales include i-line, KrF, ArF, ArFi and EUV related systems, along with the related
factory options ordered with the base system, as well as metrology and inspection systems. Prior
to shipment, the majority of our systems undergo a Factory Acceptance Test (FAT) in our cleanroom
facilities, effectively replicating the operating conditions that will be present on the customer’s site,
in order to verify whether the system meets its standard specifications and any additional technical
and performance criteria agreed with the customer. A system is shipped only after all contractual
specifications are met or discrepancies from agreed upon specifications are waived and customer
sign-off is received for delivery. Each system’s performance is re-tested through a Site Acceptance Test
(SAT) after installation at the customer site. We have never failed to successfully complete installation
of a system at a customer’s premises; therefore, acceptance at FAT is considered to be proven for
established technologies with a history of successful customer acceptances at SAT (equal or better than
FAT).
New system sales do not meet the requirements for over time revenue recognition because our
customers do not simultaneously receive and consume the benefits provided by our performance, or
control the asset throughout any stage of our production process, as well as the systems are considered
to have alternative use.
Transfer of control of a system undergoing a FAT, and recognition of revenue related to this system, will
occur upon delivery of the system.
Transfer of control of a system not undergoing a FAT, and recognition of revenue related to this system,
will occur upon customer acceptance of the system at SAT after installation is complete.
We have no repurchase commitments in our general sales terms and conditions, however we
occasionally repurchase systems that we previously manufactured and sold, in order to refurbish and
resell the system to a different customer. This repurchase decision is mainly driven by market demand
expressed by other customers.
Transfer of control of a used system, and recognition of revenue, follow the same logic as for our “New
systems (established technologies)”.
Field upgrades and options mainly relate to goods and services that are delivered for systems already
installed in the customer factories. Certain upgrades require significant installation efforts, enhancing
an asset the customer controls, therefore resulting in transfer of control over the period of installation,
measured using the cost incurred method which is estimated using labor hours, as this best depicts
the satisfaction of our obligation in transferring control. For the options and other upgrades for which
the customer receives and consumes the benefit at the moment of delivery, the transfer of control and
recognition of revenue will occur upon delivery.
As long as we are not able to make a reliable estimate of the total efforts needed to complete the
upgrade, we only recognize revenue to cover costs incurred. Margin will be realized at the earlier of us
being able to make a reliable estimate or completion of the upgrade.
New product introduction We sell new products and services, which are evolutions of our existing technologies. If installation
is determined not to be a separate performance or if there is not a sufficient established history of
acceptance on FAT, the product is determined to be a “new product introduction”.
Installation
Warranties
New product introductions are typically newly developed options to be used within our systems. Transfer
of control and revenue recognition for new product introductions occurs after successful installation
and customer acceptance at SAT. Once there is an established history of successful installation and
customer acceptance, revenue will be recognized consistent with other systems and goods after transfer
of control.
Installation is provided within the selling price of a system. Installation is considered to be distinct as it
does not significantly modify the system being purchased and the customer or a third party could be
capable of performing the installation themselves, if desired. Transfer of control takes place over the
period of installation from delivery through SAT, measured on a straight-line basis, as our performance is
satisfied evenly over this period of time.
We provide standard warranty coverage on our systems for 12 months, providing labor and non-
consumable parts necessary to repair our systems during these warranty periods. These standard
warranties cannot be purchased and do not provide a service in addition to the general assurance the
system will perform as promised. As a result, no revenue is allocated to these standard warranties.
Both the extended and enhanced warranties on our systems are accounted for as a separate
performance obligation, with transfer of control taking place over the warranty period, measured on a
straight-line basis, as this is a stand-ready obligation.
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ASML ANNUAL REPORT 2021
Goods or services
Nature, timing of satisfying the performance obligations, and significant payment terms
Time-based licenses and
related service
Application projects
Service contracts
Time-based licenses relate to software licenses and the related service which are sold for a period of
time. The licenses and the related service are not considered to be individually distinct as the support
services are integral to the customer’s ability to continue to use the software license in the rapidly
changing technological environment. The transfer of control takes place over the license term, measured
on a straight-line basis, as our performance is satisfied evenly over this period of time. Payments are
made in installments throughout the license term.
Application projects are node transition and consulting projects which at times may be provided as free
service within a volume purchase agreement. Measuring satisfaction of this performance obligation is
performed through an input method based on the labor hours expended relative to the estimated total
labor hours as this best depicts the transfer of control of these kind of services.
Service contracts are entered into with our customers to support our systems used in their ongoing
operations during the systems lifecycle, typically in the form of full-service agreements, limited manpower
agreements, other labor agreements, parts availability or parts usage agreements. These services are
for a specified period of time and typically have a fixed price. Control transfers over this period of time,
measured on a straight-line basis, as these are stand-ready obligations. For service contracts where the
price is not fixed, the transaction price has a variable component that is based on the performance of the
system.
Billable parts and labor
Billable labor represents maintenance services to our systems installed in the customer’s factories while
in operation, through purchase orders from our customer. Control over these services is transferred to
the customer upon receipt of customer sign-off.
Billable parts represent spare parts including optical components relating to our systems installed in the
customer’s factories while in operation, through purchase orders from our customer.
Billable parts can be:
• Sold as direct spare parts, for which control transfers upon delivery; or
• Sold as part of maintenance services, where control transfers upon receipt of customer sign-off.
Field projects (relocations) Field projects represent mainly relocation services. Measuring satisfaction of this performance obligation
is performed through an input method based on the labor hours expended relative to the estimated total
labor hours as this best depicts the transfer of control of our service.
OnPulse Maintenance
OnPulse maintenance services are provided over a specified period of time on our light source systems.
Payment is determined by the amount of pulses counted from each light source system, which is
variable. Invoicing is monthly based on the pulses counted. Revenue is recognized in line with invoicing
using the practical expedient in ASC 606-10-55-18.
186
ASML ANNUAL REPORT 2021 Disaggregation of revenue
Our revenue from contracts with customers, on a disaggregated basis, aligns with our reportable segment disclosures
with the addition of disaggregation of net system sales per technology and per end-use.
Net system sales per technology were as follows:
Year ended December 31
2021
EUV
ArFi
ArF dry
KrF
I-line
Metrology & Inspection
Total
2020
EUV
ArFi
ArF dry
KrF
I-line
Metrology & Inspection
Total
2019
EUV
ArFi
ArF dry
KrF
I-line
Metrology & Inspection
Total
Net system sales per end-use were as follows:
Year ended December 31
2021
Logic
Memory
Total
2020
Logic
Memory
Total
2019
Logic
Memory
Total
Net system sales
in units
Net system sales
in € millions
42
81
22
131
33
196
505
31
68
22
103
34
137
395
26
82
22
65
34
115
344
6,284.0
4,959.6
431.9
1,321.3
142.3
513.7
13,652.8
4,463.8
3,917.0
427.0
1,012.3
146.4
350.1
10,316.6
2,799.7
4,707.7
401.2
679.7
133.5
274.4
8,996.2
Net system sales
in units
Net system sales
in € millions
327
178
505
260
135
395
238
106
344
9,588.5
4,064.3
13,652.8
7,393.0
2,923.6
10,316.6
6,565.3
2,430.9
8,996.2
Contract assets and liabilities
The contract assets relate to our right to a consideration in exchange for goods or services delivered, when that right is
conditional on something other than the passage of time. The contract assets are transferred to the receivables when the
receivables become unconditional. The contract liabilities primarily relate to remaining performance obligations for which
consideration has been received such as down payments received for systems to be delivered, as well as deferred
revenue from system shipments, based on the allocation of the consideration to the related performance obligations in
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ASML ANNUAL REPORT 2021
the contract. This deferred revenue mainly consists of extended and enhanced warranties, installation and free goods or
services provided as part of a volume purchase agreement.
The majority of our customer contracts contain both asset and liability positions. At the end of each reporting period,
these positions are netted on a contract basis and presented as either an asset or a liability in the Consolidated Balance
Sheets. Consequently, a contract balance can change between periods from a net contract asset balance to a net
contract liability balance in the balance sheet.
Significant changes in the contract assets and the contract liabilities balances during the periods are as follows.
Year ended December 31 (€, in millions)
2020
2021
Balance at beginning of the year
Transferred from contract assets to accounts receivables
Revenue recognized during the year ending in contract assets
Revenue recognized that was included in contract liabilities
Changes as a result of cumulative catch-up adjustments arising from
changes in estimates
Remaining performance obligations for which considerations
have been received, or for which we have an unconditional right to
consideration
Transfer between contract assets and liabilities
Total
Contract
Assets
231.0
(192.2)
83.4
—
—
—
(3.0)
119.2
Contract
Liabilities
4,286.0
—
—
(2,428.4)
(41.9)
3,781.4
(3.0)
5,594.1
Contract
Assets
119.2
(268.2)
199.7
—
—
—
113.9
164.6
Contract
Liabilities
5,594.1
—
—
(3,767.0)
39.7
9,180.2
113.9
11,160.9
The increase in the net contract liability to €10,996.3 million as of December 31, 2021 compared to €5,474.9 million as
of December 31, 2020 is mainly driven by the recognition of down payments for systems which will be shipped in the
future. Cumulative catch-up adjustments recognized in our current year revenue are due to updated estimates for system
volume, discounts and credits included in our volume purchase agreements.
Remaining performance obligations
Our customers generally commit to purchase systems, service, or field options through separate sales orders and
service contracts. Typically the terms and conditions of these sales orders come from volume purchase agreements with
our customers which can cover up to 5 years. The revenues for each committed performance obligation are estimated
based on the terms and conditions agreed through the volume purchase agreements.
When revenues will be recognized is mainly dependent on when systems are shipped or installed, as well as when
service projects and field upgrades are performed and completed. All of which is estimated based on contract terms and
communication with our customers, including the customer facility readiness to take delivery of our goods or services.
The volume purchase agreements may be subject to modifications, impacting the amount and timing of revenue
recognition for the anticipated revenues.
As of December 31, 2021 the remaining performance obligations amount to €28.9 billion (December 31, 2020: €15.1
billion). We estimate that 61% (December 31, 2020: 76%) of these anticipated revenues will be recognized during the next
12 months. The remaining anticipated revenues mainly include orders related to EUV systems and our next-generation
EUV platform, High-NA, which are planned to be shipped in 2023 or later.
3. Segment disclosure
ASML has one reportable segment, for the development, production, marketing, sales, upgrading and servicing of
advanced semiconductor equipment systems, consisting of lithography, metrology and inspection systems. Its operating
results are regularly reviewed by the Chief Operating Decision Maker in order to make decisions about resource
allocation and assess performance.
Management reporting includes net system sales figures of new and used systems, sales per technology and sales per
end-use. For the sales per technology and end-use, see Note 2 Revenue from contracts with customers.
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ASML ANNUAL REPORT 2021 Net system sales for new and used systems were as follows:
Year ended December 31 (€, in millions)
New systems
Used systems
Net system sales
2019
8,807.1
189.1
8,996.2
2020
10,160.8
155.8
10,316.6
2021
13,446.1
206.7
13,652.8
For geographical reporting, total net sales are attributed to the geographic location in which the customers’ facilities are
located. Long-lived assets are attributed to the geographic location in which these assets are located. Total net sales and
long-lived assets (consisting of Property, plant and equipment, net) by geographic region were as follows:
Year ended December 31 (€, in millions)
2021
Total net sales
Long-lived assets
Japan
South Korea
Singapore
Taiwan
China
Rest of Asia
Netherlands
EMEA
United States
Total
2020
Japan
South Korea
Singapore
Taiwan
China
Rest of Asia
Netherlands
EMEA
United States
Total
2019
Japan
South Korea
Singapore
Taiwan
China
Rest of Asia
Netherlands
EMEA
United States
Total
459.3
6,223.0
126.2
7,327.9
2,740.8
1.8
14.2
134.6
1,583.2
18,611.0
542.8
4,151.6
84.9
4,731.3
2,324.4
1.6
1.6
483.3
1,657.0
13,978.5
463.2
2,202.1
120.0
5,357.0
1,377.7
2.6
2.6
314.6
1,980.2
11,820.0
5.5
61.2
7.3
163.6
17.0
0.2
2,048.1
124.0
555.8
2,982.7
8.3
34.1
2.1
164.3
17.8
0.4
1,625.2
129.2
488.9
2,470.3
6.5
24.1
1.6
131.6
21.3
0.5
1,396.0
4.3
413.4
1,999.3
In 2021, 2 customers exceed more than 10% of total net sales, totaling €12,505.4 million, or 67.2%, of total net sales. In
2020 and 2019, 3 customers exceed more than 10% of total net sales, in 2020 totaling €9,946.5 million, or 71.2% (2019:
€8,018.1 million, or 67.8%). Our three largest customers (based on total net sales) accounted for €3,855.2 million, or
83.7%, of accounts receivable and finance receivables at December 31, 2021, compared with €2,757.0 million, or 80.1%,
at December 31, 2020 and 2,191.8 million, or 77.2%, at December 31, 2019.
The increase in total net sales of €4,632.5 million, or 33.1%, to €18,611.0 million in 2021 from €13,978.5 million in 2020 is
driven by the global chip shortage, the acceleration of the digital infrastructure and the push for ‘technological
sovereignty’. This resulted in higher sales volumes across each technology. It has also led to growth in our service and
field options business, as customers have pulled forward demand for our productivity enhancement packages, which
provide the most effective and efficient way to increase wafer output. The Logic sector continued to be strong in 2021,
and was the largest consumer of our most advanced EUV systems. Memory demand continued growing in
2021 resulting from strong data center and smartphone demand. Taiwan and South Korea saw the largest geographic
sales growth in support of expanding capacity to meet worldwide demand.
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ASML ANNUAL REPORT 2021
4. Cash and cash equivalents and short-term investments
Accounting Policy
Cash and cash equivalents consist primarily of highly liquid investments, such as bank deposits, deposits with
governments and government related bodies, money market funds and bank accounts readily convertible to known
amounts of cash with insignificant interest rate risk and original maturities to the entity holding the investments 3
months or less at the date of acquisition.
Investments with original maturities at the date of acquisition greater than 3 months and 1 year or less are
presented as short-term investments. Fair value changes in these investments, which are not temporary, are
recognized in the Consolidated Statements of Operations. Short-term investments have insignificant interest rate
risk.
Cash and cash equivalents and short-term investments consist of the following:
Year ended December 31 (€, in millions)
Deposits with financial institutions, governments and government related bodies
Investments in money market funds
Bank accounts
Cash and cash equivalents
Deposits with financial institutions, governments and government related bodies
Short-term investments
2020
1,545.3
3,841.9
662.2
6,049.4
1,302.2
1,302.2
2021
2,131.7
2,928.3
1,891.8
6,951.8
638.5
638.5
Cash and cash equivalents and short term investments are mainly impacted by strong net cash provided by operating
activities, driven by higher net income and increase in down payments, mainly offset by the share buyback program,
dividends paid and acquisition of property plant & equipment and intangible assets.
The deposits with financial institutions, governments and government related bodies and investments in money market
funds have an investment grade credit rating as rated by credit rating institutions such as S&P, Moody's or Fitch. Our
cash and cash equivalents are predominantly denominated in euros and to some extent in US dollars, Taiwanese dollars,
South Korean Won and Chinese Yuan.
As of December 31, 2021, no restrictions on usage of cash and cash equivalents exist (2020: no restrictions). The
carrying amount of these assets approximates their fair value.
5. Accounts receivable, net
Accounting Policy
Accounts receivable are measured at fair value and are subsequently measured at amortized cost, less allowance
for credit losses. The carrying amount of the accounts receivable approximates the fair value. We perform ongoing
credit evaluations on our customers’ financial condition. We periodically review whether an allowance for credit
losses is needed by considering factors such as historical payment experience, credit quality, aging of the accounts
receivable balances, expected lifetime losses, and current economic conditions that may affect a customer's ability
to pay.
When entering into arrangements to sell our receivable, we derecognize the receivable only when meeting the
derecognition criteria. The criteria require isolation from the seller, granting the buyer the right to pledge or
exchange the receivables, and legal transfer of control over the receivable.
Accounts receivable consist of the following:
Year ended December 31 (€, in millions)
Accounts receivable, gross
Allowance for credit losses
Accounts receivable, net
2020
1,313.1
(2.8)
1,310.3
2021
3,032.5
(4.5)
3,028.0
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ASML ANNUAL REPORT 2021
The increase in accounts receivable as of December 31, 2021 compared to December 31, 2020 is due to an increase in
our sales and timing of factoring receivables.
In 2021, receivables have been sold through factoring arrangements for cash totaling €2.3 billion (2020: €2.2 billion). The
amounts consist of €0.5 billion (2020: €1.4 billion) regular trade receivables and €1.8 billion (2020: €0.8 billion) absolute,
unconditional, irrevocable accounts receivable for down payments on systems to be shipped in 2022 and 2023. The
factored receivables have been derecognized since the asset is isolated from the seller, control is transferred to the buyer
and there are no restrictions on the buyer related to the factored items. The fair value of the receivables sold was
substantially the same as their carrying value. The cash receipt is treated as an operating cash flow within the
Consolidated Statements of Cash Flows.
6. Finance receivables, net
Accounting Policy
Finance receivables consist of receivables in relation to sales-type leases. We perform ongoing credit evaluations
of our customers’ financial condition. We periodically review whether an allowance for credit losses is needed by
considering factors such as historical payment experience, credit quality, the aging of the finance receivables
balances, expected lifetime losses, and current economic conditions that may affect a customer’s ability to pay.
The following table lists the components of the finance receivables as of December 31, 2021 and 2020:
Year ended December 31 (€, in millions)
Finance receivables, gross
Unearned interest
Finance receivables, net
Current portion of finance receivables, gross
Current portion of unearned interest
Non-current portion of finance receivables, net
2020
2,122.5
(11.5)
2,111.0
1,716.1
(5.6)
400.5
2021
1,570.0
(1.4)
1,568.6
1,187.0
(1.4)
383.0
The decrease in finance receivables as of December 31, 2021 compared to December 31, 2020 is the result of the
expiration of free-use and evaluation periods of systems shipped, partly offset by new sales-type leases by providing
additional systems with a free-use period. These sales-type leases support the capacity ramp-up of high-end systems
which are part of the early-insertion lifecycle of the technology. It is expected they will be purchased at the end of the
free-use period.
Gross profit recognized at the commencement date of the lease for our sales-type leases amounts to €514.2 million
during 2021 (2020: €830.2 million; 2019: €343.9 million).
At December 31, 2021, payment of the finance receivables in the next 5 years and thereafter are:
(€, in millions)
2022
2023
2024
2025
2026
Thereafter
Finance receivables, gross
Amount
1,187.0
383.0
—
—
—
—
1,570.0
In 2021, 2020 and 2019 we did not record any expected credit losses from finance receivables. As of December 31, 2021,
the finance receivables were neither past due nor impaired.
191
ASML ANNUAL REPORT 2021 7. Inventories, net
Accounting Policy
Inventory costs are computed on a first-in, first-out basis. Our inventory values are comprised of purchased
materials, freight expenses, customs, duties, production labor and variable overhead. The valuation of inventory
includes determining which fixed costs should be capitalized into inventory based on the normal capacity of our
manufacturing and assembly facilities. During periods when production is below our established normal capacity,
abnormal amounts of our fixed overhead costs, freights and wasted materials are not capitalized into inventory but
are expensed in Cost of sales as incurred.
Inventory is valued at the lower of cost or net realizable value, based on assumptions about future demand and
market conditions. Valuation of inventory also requires us to establish provisions for inventory that is defective,
obsolete or in excess. We use our demand forecast to develop manufacturing plans and utilize this information to
compare against raw materials, work in progress and finished product levels to determine the amount of defective,
obsolete or excess inventory.
Inventories consist of the following:
Year ended December 31 (€, in millions)
Raw materials
Work-in-process
Finished products
Inventories, gross
Inventory reserves
Inventories, net
2020
2,073.4
1,805.0
1,164.2
5,042.6
(473.2)
4,569.4
2021
2,668.3
1,749.9
1,179.0
5,597.2
(418.0)
5,179.2
The increase in inventory in 2021 compared to 2020 is driven by the increased demand from customers, higher costs of
our latest technologies and growing install base.
A summary of movements in the inventory reserves is as follows:
Year ended December 31 (€, in millions)
Balance at beginning of year
Additions for the year
Effect of changes in exchange rates
Utilization of the reserve
Balance at end of year
2020
(494.3)
(192.4)
0.8
212.7
(473.2)
2021
(473.2)
(180.7)
(6.1)
242.0
(418.0)
The additions for 2021, 2020 and 2019 are recorded in Cost of sales. The additions for the year mainly relate to inventory
items which became obsolete due to technological developments and design changes.
192
ASML ANNUAL REPORT 2021 8. Other assets
Other current and non-current assets consist of the following:
Year ended December 31 (€, in millions)
Advance payments to Carl Zeiss SMT GmbH 1
Prepaid expenses
Derivative financial instruments 2
VAT receivable
Other assets
Other current assets
Advance payments to Carl Zeiss SMT GmbH 1
Loan to Carl Zeiss SMT GmbH 1
Prepaid expenses
Derivative financial instruments 2
Compensation plan assets
Non-current accounts receivable
Other assets
Other non-current assets
2020
265.8
278.7
39.0
125.6
92.6
801.7
668.0
—
55.2
123.8
67.0
22.6
14.9
951.5
2021
288.5
374.3
52.2
136.7
148.8
1,000.5
694.3
124.4
41.0
47.3
81.4
8.0
15.0
1,011.4
1. For further details on other assets to Carl Zeiss SMT GmbH see Note 26 Related parties and variable interest entities.
2. For further details on derivative financial instruments see Note 25 Financial risk management.
Prepaid expenses mainly include prepaid income taxes to intercompany profit on inventory that has not been realized by
the ASML group of €261.2 million (2020: €162.9 million). Prepaid expenses further include mainly prepayments for
maintenance and the contract balance related to the joint development program with imec of €30.3 million as of
December 31, 2021 (2020: €53.8 million). At the end of 2018 we started the new joint development program with imec
under which we mainly deliver systems and services upfront and receive R&D services throughout the contract period up
until 2024.
9. Equity method investments
Accounting Policy
Equity investments which we are able to exercise significant influence but do not control, are accounted for using
the equity method and presented on our Consolidated Balance Sheets within Equity method investments. The
difference between the cost of our investment and our proportionate share of the carrying value of the investee's
underlying net assets as of the acquisition date is the basis difference. The basis difference is allocated to the
identifiable assets and liabilities based on their fair value as of the acquisition date (i.e. the date which we obtain
significant influence), with the excess costs of the investment over our proportional fair value of the identifiable
assets and liabilities being equity method goodwill.
We amortize the basis difference related to the other intangible assets over the estimated remaining useful lives of
these assets that gave rise to this difference. The remaining weighted-average life of the finite-lived intangible
assets acquired is 15.1 years and is amortized using a straight-line method. In-process R&D is initially capitalized at
fair value as an intangible asset with an indefinite life. When the R&D project is complete, it is reclassified as an
amortizable purchased intangible asset and is amortized over its estimated useful life. If the project is abandoned,
we will record the full basis difference charge for the value of the related intangible asset in our Consolidated
Statements of Operations in the period of abandonment. Equity method goodwill is not amortized or tested for
impairment; instead the equity method investment is tested for impairment whenever events or changes in
circumstances indicate that the carrying value of the investment may not be recoverable.
Under the equity method, after initial recognition at cost, our Equity method investments are adjusted for our
proportionate share of the profit or loss and other comprehensive income of the investee, recognized on a one-
quarter time lag to allow for the timely preparation of financial information and presented within Profit from equity
method investments. Our proportionate share of the profit or loss of the investee is adjusted for any differences in
accounting principles and policies, basis difference adjustments and intra-entity profits. Receipt of dividends
reduces our Equity method investments, which is presented as an operating cash flow based on the nature of the
distributions.
193
ASML ANNUAL REPORT 2021
Equity method investments consists of a 24.9% equity interest acquired on June 29, 2017 in Carl Zeiss SMT Holding
GmbH & Co. KG, a limited partnership that owns Carl Zeiss SMT GmbH, our single supplier of optical columns.
For the year ended December 31, 2021, we recorded a profit from equity method investments of €199.1 million (2020:
€88.6 million) in our Consolidated Statements of Operations. This profit includes the following components:
• Profit of €246.5 million (2020: €111.4 million) related to our share of Carl Zeiss SMT Holding GmbH & Co. KG’s net
income after accounting policy alignment, including a €79.0 million benefit in 2021 related to previously deferred
income of Carl Zeiss SMT Holding GmbH & Co. KG, which was released due to entering into the new framework
agreement
• Cost due to basis difference amortization related to intangible assets of €26.7 million (2020: €26.7 million)
• Cost (benefit) due to intercompany profit elimination of €20.7 million (2020: €(3.9) million)
In 2021 we received a dividend of €168.0 million (2020: €128.1 million) from Carl Zeiss SMT Holding GmbH & Co. KG.
Carl Zeiss SMT Holding GmbH & Co. KG is a privately held company; therefore, quoted market prices for its stock are
not available.
10. Business combinations and divestitures
Accounting Policy
Acquisitions of subsidiaries are included on the basis of the acquisition method. The cost of acquisition is
measured based on the consideration transferred at fair value, the fair value of identifiable assets distributed and
the fair value of liabilities incurred or assumed at the acquisition date (i.e. the date which we obtain control).
Goodwill is capitalized as the excess of the costs of an acquired subsidiary, net of the amounts assigned to
identifiable assets acquired and liabilities incurred or assumed. Acquisition-related costs are expensed when
incurred in the period they arise or the service is received.
Business combinations
On October 30, 2020, we concluded the acquisition of Berliner Glas and obtained control through acquiring 100% of the
issued share capital of Berliner Glas, for a total consideration of €257.1 million. Berliner Glas is one of the world’s leading
providers of optical key components, assemblies and systems.
The total consideration was allocated to goodwill of €87.9 million, assets acquired of €312.1 million and liabilities
assumed of €142.9 million. The contingent consideration was paid in cash in 2021. The majority of the goodwill arising
on the acquisition of Berliner Glas is attributable to the fact that the acquisition will help us achieve our strategic objective
to secure the ramp-up and roll-out of future lithography systems. All goodwill has been allocated to the ASML reporting
unit. None of the goodwill recognized is expected to be deductible for income tax purposes.
Divestitures
During 2021, we sold the non-semiconductor businesses acquired as part of the Berliner Glas acquisition.
The proceeds from these disposals totaled €339.4 million, which primarily related to the sale of the Medical Applications
and Swiss Optic business on November 30, 2021. The remaining proceeds are from the sale of the Berliner Glas
Technical Glas business on April 30, 2021.
A pre-tax gain of €213.7 million was recognized on these transactions which was recorded in the line item Other income
(loss) in our Consolidated Statements of Operations.
194
ASML ANNUAL REPORT 2021 11. Goodwill
Accounting Policy
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 acquisition. Goodwill on
acquisition of subsidiaries is allocated to reporting units for the purpose of impairment testing. The allocation is
made to those reporting units that are expected to benefit from the business combination in which the goodwill
arose. Goodwill is stated at cost less accumulated impairment losses.
Goodwill is tested for impairment annually or whenever events or changes in circumstances indicate that the
carrying amount of the goodwill may not be recoverable. To determine whether it is necessary to perform the
quantitative goodwill impairment test, we perform a step-zero qualitative assessment, annually. If we determine that
it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, we do not perform a
quantitative goodwill impairment test.
Goodwill mainly results from the acquisitions of Cymer and HMI. The balance as of December 31, 2021 is €4,555.6 million
(2020: €4,629.1 million). The decrease of €73.5 million is the result of the divestment of the non-semiconductor businesses
of Berliner Glas during 2021.
We have identified two reporting units: Reporting Unit ASML and Reporting Unit Cymer Light Sources. As of
December 31, 2021 the goodwill allocated to Reporting Unit ASML amounts to €4,093.3 million (2020: €4,166.8 million)
and Reporting Unit Cymer Light Sources amounts to €462.3 million (2020: €462.3 million).
Based on our assessment during the annual goodwill impairment test, we believe it is more likely than not that the fair
values of the reporting units exceed their carrying amounts, and therefore goodwill was not impaired as of December 31,
2021.
12. Intangible assets, net
Accounting Policy
Intangible assets include brands, intellectual property, developed technology, customer relationships, and other
intangible assets not yet available for use. These finite-lived intangible assets are stated at cost, less accumulated
amortization and accumulated impairment losses. Amortization is calculated using the straight-line method based
on the estimated useful lives of the assets.
Finite-lived intangible assets are assessed for impairment whenever there is an indication that the balance sheet
carrying amount may not be recoverable using cash flow projections for the useful life.
The following table shows the respective useful lives for intangible assets:
Category
Brands
Intellectual property
Developed technology
Customer relationships
Other
Estimated useful life
20 years
3 - 10 years
6 - 15 years
8 - 18 years
2 - 10 years
195
ASML ANNUAL REPORT 2021 As of December 31, 2021 intangible assets consist mainly of brands, intellectual property, developed technology and
customer relationships obtained from the acquisitions of HMI (2016) and Cymer (2013):
€, in millions
Cost
Balance at January 1, 2020
Acquisitions through business combinations
Additions
Disposals
Effect of changes in exchange rates
Balance at December 31, 2020
Additions
Divestment
Disposals
Effect of changes in exchange rates
Balance at December 31, 2021
Accumulated amortization
Balance at January 1, 2020
Amortization
Disposals
Effect of changes in exchange rates
Balance at December 31, 2020
Amortization
Divestment
Disposals
Effect of changes in exchange rates
Balance at December 31, 2021
Carrying amount
December 31, 2020
December 31, 2021
Brands
Intellectual
property
Developed
technology
Customer
relationships
Other
Total
228.6
110.5
1,720.5
38.9
142.4
—
—
—
—
38.9
—
—
—
—
—
2.5
—
(0.1)
144.8
—
—
—
—
1,200.1
30.0
—
—
—
—
—
—
—
1,230.1
228.6
—
(9.9)
—
—
—
—
—
—
38.9
144.8
1,220.2
228.6
70.6
8.2
—
—
78.8
8.4
—
—
—
428.6
82.1
—
—
510.7
84.2
(0.9)
—
—
83.2
12.7
—
—
95.9
12.7
—
—
—
87.2
594.0
108.6
9.2
1.9
—
—
11.1
1.9
—
—
—
13.0
27.8
25.9
2.3
33.4
(0.2)
(0.1)
145.9
45.6
(0.8)
(0.5)
(0.2)
190.0
24.5
18.6
(0.2)
—
42.9
25.8
(0.4)
(0.4)
(0.3)
67.6
32.3
35.9
(0.2)
(0.2)
1,788.3
45.6
(10.7)
(0.5)
(0.2)
1,822.5
616.1
123.5
(0.2)
—
739.4
133.0
(1.3)
(0.4)
(0.3)
870.4
66.0
57.6
719.4
626.2
132.7
120.0
103.0
122.4
1,048.9
952.1
The Consolidated Statements of Operations include the following amortization charges:
Year ended December 31 (€, in millions)
Cost of Sales
R&D Costs
SG&A
Total Amortization
2019
97.4
7.5
10.5
115.4
2020
101.8
12.0
9.7
123.5
2021
107.8
14.5
10.7
133.0
As of December 31, 2021, the intangible assets not yet available for use amount to €23.6 million (2020: €24.8 million) and
are allocated to Reporting Unit ASML.
During 2021 we recorded no impairment charges (2020: €0.0 million; 2019: €0.0 million).
As of December 31, 2021, the estimated amortization expenses for intangible assets for the next 5 years and thereafter:
€, in millions
2022
2023
2024
2025
2026
Thereafter
Total
Amount
135.2
130.4
121.0
115.6
109.0
340.9
952.1
196
ASML ANNUAL REPORT 2021
13. Property, plant and equipment, net
Accounting Policy
Property, plant and equipment are stated at cost, less accumulated depreciation and accumulated impairment
losses. Costs of assets manufactured by ASML include direct manufacturing costs, production overhead and
interest costs incurred for qualifying assets during the construction period. Property, plant and equipment are
depreciated on a straight-line basis in the Consolidated Statements of Operations over their estimated useful lives,
except for land which is not depreciated.
Evaluation systems leased to our customers under an operating lease are capitalized as Property, plant and
equipment at cost and depreciated over the respective lease term. Leased assets that are returned to ASML upon
expiration of the lease term are either taken back into Property, plant and equipment as they will be used internally
by D&E or transferred back to Inventory to be reworked and sold.
The carrying values of prototypes, tooling and equipment that are intended to be sold, but first internally utilized for
more than one year for R&D purposes, are reclassified from Inventories to Property, plant and equipment and
depreciated while being internally used. When no longer required for R&D activities, the assets' carrying value is
reclassified back to Inventories and reworked to make them ready for sale to our customers. These transfers are
reported as Net non-cash movements to/from Inventories in our Property, plant and equipment movement
schedule.
Property, plant and equipment is assessed for impairment whenever there is an indication that the carrying amount
may not be recoverable using cash flow projections for the useful life.
The following table shows the respective useful lives for Property, plant and equipment:
Category
Buildings and constructions
Machinery and equipment
Leasehold improvements
Furniture, fixtures and other
Estimated useful life
5 - 45 years
1 - 7 years
1 - 10 years
3 - 5 years
197
ASML ANNUAL REPORT 2021 Property, plant and equipment consist of the following:
Land and
buildings
Machinery
and
equipment
Leasehold
improvements
Furniture,
fixtures and
other
€, in millions
Cost
Balance at January 1, 2020
Acquisitions through business combinations
Additions
Disposals
Net non-cash movements to/from Inventories
Effect of changes in exchange rates
Balance at December 31, 2020
Additions
Divestment
Disposals
Net non-cash movements to/from
Inventories
Effect of changes in exchange rates
Balance at December 31, 2021
Accumulated depreciation and impairment
Balance at January 1, 2020
Depreciation
Impairment charges
Disposals
Net non-cash movements to/from Inventories
Effect of changes in exchange rates
Balance at December 31, 2020
Depreciation
Impairment charges
Divestment
Disposals
Net non-cash movements to/from
Inventories
Effect of changes in exchange rates
Balance at December 31, 2021
2,036.5
1,587.8
49.1
359.3
(0.4)
—
(12.3)
2,432.2
372.7
(17.9)
(0.5)
—
17.2
65.7
263.0
(53.6)
(23.9)
(10.1)
1,828.9
389.6
(13.4)
(199.1)
11.9
10.8
2,803.7
2,028.7
746.3
102.0
—
(0.1)
—
(5.6)
842.6
95.6
3.1
(0.6)
(0.4)
—
7.4
947.7
1,022.7
186.2
2.7
(51.6)
(29.9)
(3.9)
1,126.2
167.1
8.2
(4.4)
(181.2)
(7.9)
7.6
1,115.6
Total
4,303.0
125.1
711.4
(68.2)
(23.9)
(25.4)
5,022.0
860.8
(36.0)
(277.4)
11.9
33.8
5,615.1
377.7
10.3
43.4
(9.0)
—
(1.8)
420.6
65.3
(4.7)
(70.3)
—
3.2
414.1
253.4
2,303.7
42.1
—
(9.0)
—
(0.9)
285.6
43.0
—
(2.5)
(69.7)
—
1.7
258.1
135.0
156.0
351.7
2.7
(65.4)
(29.9)
(11.1)
2,551.7
321.6
11.5
(7.5)
(255.2)
(7.9)
18.2
2,632.4
2,470.3
2,982.7
301.0
—
45.7
(5.2)
—
(1.2)
340.3
33.2
—
(7.5)
—
2.6
368.6
281.3
21.4
—
(4.7)
—
(0.7)
297.3
15.9
0.2
—
(3.9)
—
1.5
311.0
43.0
57.6
Carrying amount
December 31, 2020
December 31, 2021
1,589.6
1,856.0
702.7
913.1
As of December 31, 2021, the carrying amount includes assets under construction of €695.9 million (2020: €676.4 million)
consisting of primarily Land and buildings, as well as Machinery and equipment.
As of December 31, 2021, the carrying amount of land amounts to €137.5 million (2020: €102.4 million).
The additions in 2021 in Land and buildings, as well as Furniture, fixtures and other, relates to construction of ASML’s
logistics facility, EUV 0.55 NA (High-NA) factory and office space at our headquarters in Veldhoven, in order to support
our continued growth.
The additions in 2021 in Machinery and equipment mainly relate to the upgrade and expansion of production tooling to
support the growth of our business, as well as investments in prototypes of new technologies.
The additions in 2021 in Leasehold Improvements relate to installation of clean rooms and office space for leased
properties in both the United States and Korea. During 2021 we did not enter into any additional leases that will require
further Leasehold Improvement investments.
198
ASML ANNUAL REPORT 2021
The Consolidated Statements of Operations include the following depreciation charges:
Year ended December 31 (€, in millions)
Cost of Sales
R&D Costs
SG&A
Total Depreciation
2019
196.1
117.2
12.0
325.3
2020
205.9
119.9
25.9
351.7
2021
188.6
101.4
31.6
321.6
14. Right-of-use assets and lease liabilities
Accounting Policy
We determine if an arrangement is a lease at inception. Operating leases are included in Right-of-use assets -
Operating, Accrued & other current liabilities, and Accrued & other non-current liabilities in our consolidated
balance sheets. Finance leases are included in Right-of-use assets - Finance, current portion of Long-term debt,
and Long-term debt in our Consolidated Balance Sheets.
Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent
our obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are
recognized at commencement date based on the present value of lease payments over the lease term. As our
leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at
commencement date in determining the present value of lease payments. The Right-of-use assets include any
lease payments made at or before the commencement date and are reduced by lease incentives. Our Right-of-use
asset valuation may include options to extend or terminate the lease when it is reasonably certain that we will
exercise that option. Lease expenses are recognized on a straight-line basis over the lease term.
We have lease agreements with lease and non-lease components. The lease components are accounted for
separately from non-lease components. The allocation of the consideration between lease and non-lease
components is based on the relative stand-alone prices of lease components included in the lease contracts.
Right-of-use assets consist of the following leases:
Year ended December 31 (€, in millions)
Properties
Cars
Equipment
Warehouses
Other
Right-of-use assets
Operating Leases
Finance Leases
2020
158.2
7.6
—
11.0
3.3
180.1
2021
144.4
6.7
—
7.5
0.9
159.5
2020
130.7
—
34.1
—
—
164.8
2021
5.3
—
—
—
—
5.3
ASML owns the majority of real estate we utilize for manufacturing, supply chain management and general administration
at our headquarter in Veldhoven, in the Netherlands. At our other locations, worldwide much of the properties we occupy
are leased.
The Right-of-use assets from finance leases in 2020 mainly consisted of facilities and tooling related to our High-NA
agreement with Carl Zeiss SMT, for which the funds are prepaid by ASML. This agreement was replaced by a new
framework agreement. These assets no longer meet the definition of a lease upon entering into the new agreement. They
are classified as part of Other assets in 2021. For further details, see Note 26 Related parties and variable interest
entities.
199
ASML ANNUAL REPORT 2021 Lease liabilities are split between current and non-current:
Year ended December 31 (€, in millions)
Current
Non-current
Lease liabilities
Operating Leases
Finance Leases
2020
46.5
129.8
176.3
2021
43.7
118.0
161.7
2020
4.7
8.1
12.8
For the year ended December 31, 2021, Lease Liabilities under an operating lease arrangement decreased by €14.6
million, mainly due to scheduled lease payments, partly offset by new lease contracts.
The Consolidated Statements of Operations include the following depreciation charges relating to these leases:
Year ended December 31 (€, in millions)
Properties
Cars
Equipment
Warehouses
Other
Depreciation charge right-of-use assets
Operating Leases
2019
48.2
8.1
—
4.5
12.4
73.2
2020
47.6
5.5
—
6.6
5.9
65.6
2021
49.3
4.8
—
3.0
2.4
59.5
Finance Leases
2019
2020
2.8
—
4.5
—
—
7.3
4.1
—
7.0
—
—
11.1
2021
2.9
2.3
5.2
2021
2.9
—
—
—
—
2.9
The total cash flows relating to the lease liabilities are as follows:
Year ended December 31 (€, in millions)
Total Cash Flows
Operating Leases
2019
73.2
2020
58.8
2021
64.3
Finance Leases
2019
2.8
2020
2.9
2021
4.6
The weighted average remaining lease term and weighted average discount rate related to the leases are as follows:
Year ended December 31 (€, in millions)
Weighted average remaining lease term (months)
Weighted average discount rate (%)
2019
70
2.2%
2020
65
2.0%
2021
64
2.0%
2019
230
0.7%
2020
243
0.5%
2021
86
0.5%
Operating Leases
Finance Leases
15. Accrued and other liabilities
Accrued and other liabilities consist of the following:
Year ended December 31 (€, in millions)
Costs to be paid
Personnel related items
Derivative financial instruments 1
Operating lease liabilities 2
Provisions
Standard warranty reserve
Other
Accrued and other liabilities
Less: non-current portion of accrued and other liabilities
Current portion of accrued and other liabilities
2020
233.9
757.4
20.0
176.3
84.8
119.1
12.0
1,403.5
257.5
1,146.0
2021
352.0
864.7
2.8
161.7
91.2
145.3
68.9
1,686.6
251.1
1,435.5
1. For further details on derivative financial instruments see Note 25 Financial risk management.
2. For further details on operating lease liabilities see Note 14 Right-of-use assets and lease liabilities.
Costs to be paid as of December 31, 2021 include VAT payables and accrued costs for unbilled services provided by
suppliers including contracted labor, outsourced services and consultancy.
Personnel related items mainly consist of accrued annual short-term incentive bonus plans, accrued vacation days,
accrued pension premiums, accrued wage tax and accrued vacation allowance. The increase in the accrued personnel
200
ASML ANNUAL REPORT 2021 related items compared to prior year is mainly the result of the continued growth of our business, which resulted in an
increase in the number of our employees.
The standard warranty reserve is based on historical product performance and total expected costs to fulfill our
warranty obligation. Annually, we assess and update the standard warranty reserve based on the latest actual historical
warranty costs and expected future warranty costs. Total changes in standard warranty reserve for the years 2021 and
2020 are as follows:
Year ended December 31 (€, in millions)
Balance at beginning of year
Additions for the year
Utilization of the reserve
Effect of exchange rates
Balance at end of year
2020
128.4
137.1
(145.9)
(0.5)
119.1
2021
119.1
188.6
(162.8)
0.4
145.3
16. Long-term debt and interest and other costs
Accounting policy
Long-term debt represents debt issued privately without registration with a government authority and is payable to
others under the terms of a signed agreement. Long-term debt is initially recognized at fair value and subsequently
measured at amortized cost. Debt is qualified as long-term debt as long as the group has an unconditional right to
defer settlement of the liability for at least 12 months after the reporting period.
Interest accruals and payments relating to Long-term debt are accounted for as part of Accrued and other
liabilities. Interest and other costs should be accrued and recorded with the passage of time over the agreed term,
regardless of when the interest receipt or payment has taken place.
Long-term debt consists of the following:
Year ended December 31 (€, in millions)
€500 million 0.625% senior notes issued July 2016 and principal due July 7th 2022 interest annually
payable on July 7th, carrying amount
€750 million 3.375% senior notes issued September 2013 and principal due September 19th 2023
interest annually payable on September 19th, carrying amount
€1,000 million 1.375% senior notes issued July 2016 and principal due July 7th 2026 interest
annually payable on July 7th, carrying amount
€750 million 1.625% senior notes issued November 2016 and principal due May 28th 2027 interest
annually payable on May 28th, carrying amount
€750 million 0.250% senior notes issued February 2020 and principal due February 25th 2030
interest annually payable on February 25th, carrying amount
€750 million 0.625% senior notes Issued May 2020 and principal due May 7th 2029 interest annually
payable on May 7th, carrying amount
Debt acquired with Berliner Glas
Other
Long-term debt
Less: current portion of long-term debt
Non-current portion of long-term debt
2020
501.5
802.1
2021
500.5
780.6
1,028.0
1,003.2
795.4
769.3
740.7
746.8
55.5
8.2
4,678.2
15.4
4,662.8
741.7
747.1
36.4
5.3
4,584.1
509.1
4,075.0
All senior notes are redeemable at the option of ASML, in whole or in part, at any time by paying a make whole premium,
and unless previously redeemed, will be redeemed at 100% of their principal amount on the due date.
201
ASML ANNUAL REPORT 2021 Our obligations to make principal repayments under our senior notes and other borrowing arrangements excluding
interest expense as of December 31, 2021:
€, in millions
2022
2023
2024
2025
2026
Thereafter
Total debt maturities
Amount
508.6
755.9
4.5
4.5
1,004.5
2,263.6
4,541.6
For the year 2022, the obligations mainly relate to principal repayment of the senior notes due on July 7, 2022. The years
thereafter mainly relate to repayments of principals under the long-term senior notes.
Eurobonds
The following table summarizes the carrying amount of our outstanding Eurobonds, including the fair value of interest
rate swaps used to hedge the change in the fair value of the Eurobonds:
Year ended December 31 (€, in millions)
Amortized cost amount
Fair value interest rate swaps 1
Carrying amount
1. The fair value of the interest rate swaps excludes accrued interest.
2020
4,474.1
140.4
4,614.5
2021
4,478.5
63.9
4,542.4
We use interest rate swaps to minimize the net interest exposure for the group by aligning the interest terms of the
available cash and the interest bearing debt. The fair value changes of these interest rate swaps are recorded on the
Consolidated Balance Sheets under Other assets and the carrying amount of the Eurobonds is adjusted for these fair
value changes. We did not enter into additional interest rate swaps in connection with the Eurobonds issued in 2020.
The following table summarizes the estimated fair value of our Eurobonds:
Year ended December 31 (€, in millions)
Principal amount
Carrying amount
Fair value 1
1. Source: Bloomberg Finance LP.
2020
4,500.0
4,614.5
4,798.8
2021
4,500.0
4,542.4
4,673.9
The fair value of our Eurobonds is estimated based on quoted market prices as of December 31, 2021. The fair value
deviates from the principal amount, due to changes in market interest rates and credit spreads since the issue of our
Eurobonds which carry a fixed coupon interest rate.
Debt acquired with Berliner Glas
The loans of Berliner Glas are comprised of a mortgage loan of €24.1 million with an annual interest rate of 0.5%
repayable in 2034, revolving credit facilities at various financial institutions of €12.3 million with an annual interest rate
between 0.8% and 1.2% that are repayable annually through 2024.
Lines of credit
We maintain an available committed credit facility, with a group of banks, of €700.0 million as of December 31, 2021 and
as of December 31, 2020. No amounts were outstanding under the committed credit facility at the end of 2021 and
2020. This facility of €700.0 million was renegotiated on July 3, 2019, with an original maturity date of July 3, 2024. The
facility included two 1-year extension options. The second 1-year extension was exercised in June 2021. This extends the
maturity from July 2025 to July 2026. Outstanding amounts under this credit facility will bear an interest of Euribor plus a
margin. The margin depends on our credit rating and ESG score.
We have a non-committed guarantee facility of €85.0 million under which guarantees in the ordinary course of business,
such as customs or rental guarantees, can be provided to third parties. As of 2019, ASML entered into a non-committed
credit facility for our Chinese subsidiary of €130.0 million. The non-committed credit facility covers bank guarantees,
standby letters of credit, as well as advances up to €75.0 million. No amounts were outstanding under this facility.
202
ASML ANNUAL REPORT 2021 Outstanding amounts under the non-committed facility will bear interest based on market conditions at the moment of
draw down.
Interest and other, net
Interest and other, net consist mainly of interest income and interest expenses. In 2021, the interest expense component
is €54.6 million (2020: €43.3 million; 2019: €36.6 million). The expenses mainly relate to interest expense on our
Eurobonds, interest rate swaps and hedges, and amortized financing costs, and to negative interest on Cash and cash
equivalents.
17. Commitments and contingencies
Commitments
We have various contractual obligations, some of which are required to be recorded as liabilities in our Consolidated
Balance Sheets, including long- and short-term debt and lease commitments. Other contractual obligations, namely
purchase obligations, are generally not required to be recognized as liabilities but are required to be disclosed.
Our contractual obligations as of December 31, 2021 can be summarized as follows:
Payments due by period (€, in millions)
Long-Term Debt Obligations, including interest1
Lease Obligations 2
Purchase Obligations
Total Contractual Obligations
Total
4,806.9
161.7
8,527.4
13,496.0
1 year
570.3
43.7
6,974.0
7,588.0
2 year
814.2
35.7
814.1
1,664.0
3 year
37.5
21.3
405.7
464.5
4 year
37.6
16.6
223.4
277.6
5 year
1,037.7
>5 years
2,309.6
15.4
74.2
29.0
36.0
1,127.3
2,374.6
1. Long-term debt obligations mainly relate to principal amounts and interest payments of our Eurobonds. For the amounts excluding interest expenses and for further
details see Note 16 Long-term debt and interest and other costs.
2. For further details see Note 14 Right-of-use assets and lease liabilities.
We have purchase obligations towards suppliers in the ordinary course of business which mainly relate to goods and
services for our operations. The general terms and conditions of the agreements relating to the major part of our
purchase obligations as of December 31, 2021 contain clauses that enable us to delay or cancel delivery of ordered
goods and services up to the dates specified in the purchase agreements, in line with the timing of future sales. The
terms and conditions that we normally agree with our suppliers give us additional flexibility to adapt our purchase
obligations to our requirements in light of the cyclically and technological developments inherent in the industry in which
we operate.
Contingencies
ASML is subject to proceedings, litigation and other actual or potential claims. In addition, ASML’s customers may be
subject to claims of infringement from third parties alleging that the ASML equipment used by those customers in the
manufacture of semiconductor products, and / or the methods relating to use of the ASML equipment, infringes one or
more patents issued to those third parties. If these claims were successful, ASML could be required to indemnify such
customers for some or all of the losses incurred or damages assessed against them as a result of that infringement.
In connection with any proceedings and claims, our management evaluates, based on the relevant facts and legal
principles, the likelihood of an unfavorable (or favorable) outcome, and whether the amount of the loss (or gain) can be
reasonably estimated. Judgment is required in these evaluations, including judgments regarding the validity of asserted
claims and the likely outcome of legal and administrative proceedings. The outcome of these proceedings, however, is
subject to a number of factors beyond our control, most notably the uncertainty associated with predicting decisions by
courts and administrative agencies. In addition, estimates of the potential costs (or gains) associated with legal and
administrative proceedings frequently cannot be subjected to any sensitivity analysis, as damage estimates or settlement
offers by claimants may bear little or no relation to the eventual outcome. Finally, in any particular proceeding, we may
agree to settle or to terminate a claim or proceeding in which we believe that it would ultimately prevail where we believe
that doing so, when taken together with other relevant commercial considerations, is more effective than engaging in an
expensive and protracted litigation, the outcome of which is uncertain.
As of December 31, 2021, management has determined that ASML does not have any material contingency which is
considered probable or reasonably probable for each year presented in our Consolidated Balance Sheets.
203
ASML ANNUAL REPORT 2021 18. Personnel expenses and employee information
Personnel expenses for all payroll employees were as follows:
Year ended December 31 (€, in millions)
Wages and salaries
Social security expenses
Pension and retirement expenses
Share-based payments
Personnel expenses
2019
2,124.4
181.9
152.5
74.6
2,533.4
2020
2,519.6
208.1
182.6
53.9
2,964.2
2021
2,842.7
249.8
229.2
117.5
3,439.2
The continued increase in personnel expenses is mainly due to an increase in payroll employees to support the
continued growth of our business. The personnel expenses in 2020 do not include any expenses of Berliner Glas, since
ASML consolidates Berliner Glas using a one-quarter lag.
The average number of payroll employees in FTEs was:
Average number of payroll employees in FTEs
Netherlands
Worldwide
2019
11,376
22,192
The total number of payroll and temporary employees as of December 31 in FTEs per sector was:
Year ended December 31 (in FTE)
Customer Support
Manufacturing and Supply Chain Management
Strategic Supply Management
General & Administrative
Sales and Mature Products and Services
Research & Development
Total
Less: Temporary employees
Payroll employees
2019
5,953
5,933
326
1,898
624
10,166
24,900
1,681
23,219
2020
12,812
24,727
2020
6,429
7,680
346
2,061
744
10,813
28,073
1,459
26,614
2021
14,222
28,223
2021
7,485
8,237
707
2,761
766
12,060
32,016
2,155
29,861
Short-term incentive bonus plans
We have annual performance related short-term incentive (STI) bonus plans for our employees. Under these plans, the
employee bonus payout depends on the employee's job grade, the type of bonus plan and the company/individual
performance. The employee bonus payout (excluding the Board of Management) ranges between 0.0% and 117.0% of
their annual base gross salary. The 2021 STI bonus is accrued for as part of Accrued and other liabilities in the
Consolidated Balance Sheets and will be paid in the first quarter of 2022.
The STI bonus expenses for the Board of Management and other employees were as follows:
Year ended December 31 (€, in millions)
Board of Management
Former Board of Management
Other employees
Total STI bonus expenses
19. Employee benefits
2019
5.1
—
269.1
274.2
2020
5.4
—
402.5
407.9
2021
4.4
0.2
423.5
428.1
Accounting policy
Contributions to defined contribution retirement benefit plans are recognized as an expense when employees have
rendered service entitling them to the contributions. Payments made to state-managed retirement benefit schemes
are dealt with as payments to defined contribution plans where our obligations under the plans are equivalent to
those arising in a defined contribution retirement benefit plan.
204
ASML ANNUAL REPORT 2021 We maintain one multi-employer union defined benefit pension plan and various other defined contribution pension
plans covering a substantial part of our employees. ASML accounts for its multi-employer defined benefit plan as if
it were a defined contribution plan for the following reasons:
• ASML is affiliated to an industry-wide pension fund and uses the pension scheme in common with other
participating companies
• Under the regulations of the pension plan, the only obligation these participating companies have towards the
pension fund is to pay the annual premium liability. Participating companies are under no obligation whatsoever
to pay off any deficits the pension plan may incur. Nor have they any claim to any potential surpluses
Our pension and retirement expenses for all employees for the years ended December 31, 2021, 2020 and 2019 were:
Year ended December 31 (€, in millions)
Pension plan based on multi-employer union plan
Pension plans based on defined contribution & other plans
Pension and retirement expenses
2019
96.6
55.9
152.5
2020
126.8
55.8
182.6
2021
161.7
67.5
229.2
Multi-employer union plan
In accordance with the collective bargaining agreements effective for the industry in which we operate, which has no
expiration date, there are 15,414 eligible employees in the Netherlands (51.6% of our total payroll employees) that
participate in a multi-employer union plan. 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.
This multi-employer union plan is managed by PME (Stichting Pensioenfonds van de Metalektro) and this plan covers
approximately 1,466 companies and approximately 167,768 contributing members. Every participating company
contributes a premium that is based on the same contribution rate. This contribution rate can fluctuate yearly based on
the coverage ratio of the multi-employer union plan. For 2021, the contribution percentage was 27.6% (2020: 22.7%,
2019: 22.7%). For 2021, our contribution to this multi-employer union plan (including the premiums paid by employees),
was 13.6% (2020: 14.0%, 2019: 11.7%) of the total contribution to the plan. For 2022, we expect to contribute around
€240.0 million to this plan (including the premiums paid by employees). The pension rights of each employee are based
upon the employee’s average salary during employment.
The PME multi-employer union plan monitors its risks on a global basis and is subject to regulation by Dutch
governmental authorities. By Dutch 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. The coverage ratio is calculated by
dividing the funds capital by the total sum of pension liabilities and is based on actual market interest rates.
During 2021 the coverage ratio of PME improved to 107.9% as per December 31, 2021 (December 31, 2020: 97.2%). The
pension payouts during 2021 were not reduced, since PME made use of an extended temporary ministerial exemption
regulation. The legally required minimal coverage ratio is 104.3% (2020: 104.3%). A recovery plan is in place to improve
the coverage ratio towards 118%. ASML has no obligation to pay off any deficits the pension fund may incur, nor do we
have any claim to any potential surpluses.
Defined contribution and other pension plans
We also participate in several other defined contribution pension plans (inside and outside the Netherlands), with our
expenses for these plans equaling the employer contributions made in the relevant period.
Deferred compensation plans
For our US employees we have a non-qualified deferred compensation plan that allows a select group of management or
highly compensated employees to defer a portion of their salary, bonus, and commissions. The plan allows us to credit
additional amounts to the participants’ account balances. The participants divide their funds among the investments
available in the plan. Participants elect to receive their funds in future periods after the earlier of their employment
termination or their withdrawal election, at least 3 years after deferral. Expenses were close to nil relating to this plan in
2021, 2020 and 2019. As of December 31, 2021, our liability under deferred compensation plans was €82.4 million (2020:
€68.3 million). The related compensation plan assets are €81.4 million (2020: €67.0 million).
205
ASML ANNUAL REPORT 2021 20. Share-based compensation
ASML has the following plans in place for its employees:
• Long-term incentive bonus plans
• Option plans
• Employee purchase plan
Long-term incentive bonus plans
Our LTI plans are covered by an overarching Employee Umbrella Share Plan, which is effective as of January 1, 2014 and
covers all employees. The main purpose of the grants of Equity Incentives under this Employee Umbrella Share Plan is to
continue to attract, reward and retain qualified and experienced industry professionals in an international labor market.
All grants under the Employee Umbrella Share Plan typically have a 2.5 to 3 year vesting period and are subject to
performance and/or service criteria.
As part of our long-term incentive (LTI) bonus, employees can be granted either a service or performance share based-
payment plan. For service-type plans, shares are granted at grant date and after having been in service for a set period,
the participant is awarded these shares at the vesting date. For performance plans, the same conditions apply as a
service-type plan. Additionally, the shares are conditionally granted and awarded based on the company specific
performance criteria, which can be split between market and non-market based elements. These shares vest after
completion of the service period and the performance reached at vesting date.
The General Meeting approved the adoption of the most recent remuneration policy for the Board of Management and
the number of shares to be issued. The most recent remuneration policy includes the target and maximum levels of the
LTI plans, the performance measures and pay-out zone percentages. The policies for employees are approved by the
Board of Management. The General Meeting also approved the restrictions and limits to the Board of Management for
issuance/granting of ordinary shares, limits for restricting or excluding the preemption rights accruing to shareholder and
the restrictions and limits to the Board of Management for repurchasing ordinary shares on behalf of the company.
The table below shows the performance criteria and the corresponding weight of the LTI performance plans granted
in 2021.
LTI performance plan criteria
Total Shareholder Return
ROAIC
Technology Leadership Index
Sustainability
Total
Market / Non-Market element
Market
Non-Market
Non-Market
Non-Market
Weight
30%
40%
20%
10%
100%
Accounting Policy
The fair value of the market based element is measured at the grant date incorporating the expected vesting and
expected value at vesting, using a tailored Monte Carlo simulation model. The fair value of the service plans and the
non-market based elements of the performance plans is the share price at grant date less the present value of
expected dividends during the vesting period, as participants are not entitled to dividends payable and voting rights
during the vesting period. The likelihood of the conditions being met for service and non-market performance plans
is assessed as part of the company’s best estimate of the number of equity instruments that will ultimately vest.
Participants are entitled to a conditional grant of company shares upon awarding. Performance plans are subject to
cliff vesting and are accounted for on a straight line basis. Service only plans are subject to graded vesting. Each
installment of the plan is therefore accounted as a separate grant with a separate fair value. This means that each
installment will be separately measured and attributed to expense over the related vesting period. Expenses for the
market based element are recognized during vesting at a fixed vesting level (as the vesting expectation is
incorporated in the fair value) provided that all other performance conditions are met. Expenses for the non-market
based elements and service plans are recognized during vesting at expected vesting levels, which are updated
during vesting period as necessary, with a final update/adjustment at vesting date. All share based remuneration
expenses are recognized as personnel expense, with a corresponding entry in equity, during the vesting period of
the award. Share based remuneration expenses are included in the same income statement line or lines in the
functional grouped consolidated statement of operations as the compensation paid to the employees receiving the
stock-based awards.
206
ASML ANNUAL REPORT 2021 The most important assumptions for the calculation of the fair value of shares for the LTI performance plans, which
include a market based performance criteria, are set out in the following table:
Year ended December 31
Share price in € at grant date
Expected volatility ASML
Expected volatility PHLX index
Vesting period
Dividend yield
Risk free interest rate (Eurozone)
Risk free interest rate (US)
Expenses for LTI plans, including the Board of Management, were as follows:
Year ended December 31 (€, in millions)
Total incurred expenses
Recognized income tax benefit (excluding excess income tax benefits)
Total expected expenses in future periods
Weighted average period in which these expected expenses are to be recognized
2019
199.5
29.8%
24.8%
2020
270.7
28.9 %
24.7 %
2021
462.9
38.5%
35.3%
2.5 years
2.9 years
2.9 years
1.1%
(0.8)%
1.8%
0.9 %
(0.6)%
1.5 %
2019
74.6
5.9
95.8
2020
53.9
6.6
85.9
0.6%
(0.8)%
0.2%
2021
117.5
8.2
125.4
1.6 years
1.6 years
1.7 years
Details with respect to shares granted and vested during the year are set out in the following table:
Year ended December 31
Total fair value at vesting date of shares vested during the year (in millions)
Weighted average fair value of shares granted
EUR-denominated
2019
2020
2021
USD-denominated
2019
2020
2021
58.7
124.9
156.9
54.9
133.9
164.0
190.33
297.05
547.79
206.90
302.75
498.64
A summary of the status of conditionally outstanding shares as of December 31, 2021, and changes during the year
ended December 31, 2021, is presented below:
Conditional shares outstanding at January 1, 2021
Granted
Vested
Forfeited
Conditional shares outstanding at December 31, 2021
EUR-denominated
USD-denominated
Weighted
average
fair value at
grant date
201.44
547.79
273.86
458.46
303.32
Number
of shares
555,094
120,665
(222,085)
(1,469)
452,205
Weighted
average
fair value at
grant date
225.26
498.64
270.80
349.44
416.07
Number
of shares
444,754
69,440
(205,945)
(11,248)
297,001
Option plans
Since 2017 we no longer grant any options, but there are still outstanding options which may be exercised by employees.
Accounting Policy
The grant-date fair value of stock options was estimated using a Black-Scholes option valuation model. This Black-
Scholes model required the use of assumptions, including expected share price volatility, the estimated life of each
award and the estimated dividend yield. The risk-free interest rate used in the model is determined, based on an
index populated with euro denominated European government agency bonds with high credit ratings and with a life
equal to the expected life of the equity settled share-based payments. Our option plans typically vest over a 3-year
service period with any unexercised stock options expiring 10 years after the grant date. Options granted have fixed
exercise prices equal to the closing price of our shares listed at Euronext Amsterdam on grant date. The purchase
of shares against the exercise price is settled with the employees involved through deductions on their salary and
the issuance of shares upon exercising the stock options are deducted from our treasury shares.
207
ASML ANNUAL REPORT 2021
Details with respect to stock options exercised and outstanding are set out in the following table:
Year ended December 31
Weighted average share price at the exercise date of stock options
Aggregate intrinsic value of stock options exercised (in millions)
Weighted average remaining contractual term of currently exercisable
options (in years)
Aggregate intrinsic value of exercisable stock options (in millions)
Aggregate intrinsic value of outstanding stock options (in millions)
EUR-denominated
2019
2020
2021
USD-denominated
2019
2020
2021
201.52
302.20
583.33
225.70
355.44
658.16
4.3
4.8
5.7
2.3
3.7
4.1
4.16
17.7
17.7
3.55
22.4
22.4
2.81
36.7
36.7
4.40
11.8
11.8
3.66
16.9
16.9
2.93
24.9
24.9
The number and weighted average exercise prices of stock options as of December 31, 2021, and changes during the
year then ended are presented below:
Outstanding, January 1, 2021
Granted 1
Exercised
Forfeited
Expired
Outstanding, December 31, 2021
Exercisable, December 31, 2021
1. As of 2017 we no longer grant options to our employees.
EUR-denominated
USD-denominated
Weighted
average
exercise price
per ordinary
share (EUR)
70.02
—
48.77
28.77
—
73.87
73.87
Weighted
average
exercise price
per ordinary
share (USD)
86.87
—
69.32
—
—
90.36
90.36
Number
of options
42,255
—
(7,004)
—
—
35,251
35,251
Number
of options
68,540
—
(10,717)
100
—
57,923
57,923
Details with respect to stock options exercised in the relevant year and outstanding stock options as of December 31,
2021 are set out in the following table:
EUR-denominated
USD-denominated
Range of
exercise prices
(€)
25 - 40
40 - 50
50 - 60
60 - 70
70 - 80
80 - 90
90 - 100
100 - 110
Total
Number of
outstanding
options
Weighted average
remaining
contractual life of
outstanding (years)
234
5,902
5,376
12,355
10,920
11,625
11,511
—
57,923
0.08
0.80
1.95
1.94
3.35
3.85
3.69
0.00
2.81
Range of
exercise prices
(USD)
25 - 40
40 - 50
50 - 60
60 - 70
70 - 80
80 - 90
90 - 100
100 - 110
Total
Number of
outstanding
options
Weighted average
remaining
contractual life of
outstanding (years)
—
291
1,699
393
843
9,036
16,062
6,927
35,251
0.00
0.05
0.62
1.06
1.30
2.89
3.02
3.74
2.93
Employee purchase plan
Additionally, we also offer an Employee Purchase Plan to our payroll employees, except the Board of Management who
is excluded from participation in this plan. Through this plan, payroll employees are given the opportunity to buy our
shares using their monthly paycheck. The maximum amount for which employees can participate in the plan amounts to
10.0% of their annual gross base salary. When employees retain the shares for a minimum of 12 months, we will pay out
a 20.0% gross cash bonus on the initial participation amount.
Accounting Policy
Employee purchase plans are accounted on an accrual basis. The shares for employee purchase plans are issued
on a quarterly basis and the share purchase price is based on the closing share price of our listed shares on grant
date, which is the date after our quarterly filings. The purchased shares by employees are deducted from our
treasury shares.
In 2021, ASML received €49.0 million (2020: €37.9 million and 2019: €27.2 million) from issuance of shares for this plan.
208
ASML ANNUAL REPORT 2021
21. Income taxes
Accounting Policy
The asset and liability method is used in accounting for income taxes. Under this method, deferred tax assets and
liabilities are recognized for the tax effect of operating losses and tax credit carry forward as well as for tax
consequences attributable to differences between the balance sheets carrying amounts of existing assets and
liabilities and their respective tax bases. If it is more likely than not that the carrying amounts of deferred tax assets
will not be realized, a valuation allowance is recorded for the difference. Income tax expense includes current and
deferred taxes on profit, related interest and penalties, non-recoverable withholding taxes that qualify as income
tax, as well as actual or potential withholding taxes on current and expected dividend income from group
companies.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the
years in which temporary differences, net operating losses and tax credit carry forwards are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the
Consolidated Statements of Operations in the period that includes the enactment date. Deferred income taxes
originally recognized through OCI are recycled through earnings in future periods upon release of the connected
item from OCI to the statement of income.
We assess unrecognized tax benefits based on a two-step process. The first step is to evaluate the tax position for
recognition by determining if the weight of available evidence indicates that it is more likely than not that the
position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second
step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon
settlement. While we believe we have appropriate support for the positions taken on our tax returns, we regularly
assess the potential outcomes of examinations by tax authorities in determining the adequacy of our income tax
expense, and adjust the income tax expense, income taxes payable and deferred taxes in the period in which the
facts that give rise to a revision become known.
Income taxes are affecting our Consolidated Statements of Operations, Consolidated Statements of Comprehensive
Income and Consolidated Balance Sheets. The disclosure of the Income taxes is therefore split into:
• Income tax expense
• Liability for unrecognized tax benefits
• Deferred taxes
Income tax expense
The components of the income tax expense are as follows:
Year ended December 31 (€, in millions)
Netherlands
Foreign
Income before income taxes
Income tax expense current
Income tax expense deferred
Income tax expense Netherlands
Income tax expense current
Income tax expense deferred
Income tax expense Foreign
Total income tax expense current
Total income tax expense deferred
Total income tax expense
2019
2,441.2
324.6
2,765.8
(305.5)
74.8
(230.7)
(118.4)
157.4
39.0
(423.9)
232.2
(191.7)
2020
3,574.6
442.0
4,016.6
(407.7)
1.4
(406.3)
(375.3)
230.1
(145.2)
(783.0)
231.5
(551.5)
2021
5,982.8
722.7
6,705.5
(865.0)
(28.6)
(893.6)
(523.5)
395.7
(127.8)
(1,388.5)
367.1
(1,021.4)
209
ASML ANNUAL REPORT 2021
Current and deferred tax expense can be further broken down into:
Year ended December 31 (€, in millions)
Current year tax expense
Prior year tax expense
Current tax expense
Year ended December 31 (€, in millions)
Changes to recognition of tax losses and tax credits
Prior year tax expense
Tax rate changes
Origination and reversal of temporary differences, tax losses and tax credits
Deferred tax expense
2019
(470.6)
46.7
(423.9)
2019
7.6
9.8
—
214.8
232.2
2020
(743.7)
(39.3)
(783.0)
2020
(56.9)
27.0
15.0
246.4
231.5
2021
(1,367.2)
(21.3)
(1,388.5)
2021
(37.2)
(2.4)
1.5
405.2
367.1
The Dutch statutory tax rate was 25.0% in 2021, 2020 and 2019. Tax amounts in other jurisdictions are calculated at the
rates prevailing in the relevant jurisdictions.
The effective tax rate increased to 15.2% in 2021, compared to 13.7% in 2020. The higher rate is mainly due to an
increase in the innovation box rate in the Netherlands changing from 7% to 9% as of 2021.
The reconciliation of the income tax expense from the Dutch statutory rate to the effective income tax rate is as follows:
Year ended December 31 (€, in millions)
Income before income taxes
Income tax expense based on ASML’s domestic rate
Effects of tax rates in foreign jurisdictions
Adjustments in respect of tax exempt income
Adjustments in respect of tax incentives
Adjustments in respect of prior years’ current taxes
Adjustments in respect of prior years’ deferred taxes
Movements in the liability for unrecognized tax benefits
Tax effects in respect of acquisition/restructuring related
items
Change in valuation allowance
Equity method investments
Effect of change in tax rates
Other (credits) and non-tax deductible items
Income tax expense
1. As a percentage of income before income taxes.
2019
2,765.8
(691.4)
5.0
7.2
351.0
46.7
9.8
(16.9)
89.8
7.6
(19.7)
—
19.2
(191.7)
%1
100.0%
25.0%
(0.2)%
(0.3)%
(12.7)%
(1.7)%
(0.4)%
0.6%
(3.2)%
(0.3)%
0.7%
—%
(0.7)%
6.8%
2020
4,016.6
(1,004.1)
%1
2021
%1
100.0%
6,705.5
100.0%
25.0% (1,676.4)
25.0%
0.9
0.2
510.4
(39.3)
27.0
(41.0)
—
(56.9)
(20.9)
15.0
57.2
—%
—%
(12.7)%
1.0%
(0.7)%
1.0%
—%
1.4%
0.5%
(0.4)%
(1.4)%
(4.6)
—
727.3
(21.3)
(2.4)
(21.6)
35.9
(37.2)
(46.7)
1.5
24.1
(551.5)
13.7% (1,021.4)
0.1%
—%
(10.8)%
0.3%
—%
0.3%
(0.5)%
0.6%
0.7%
—%
(0.4)%
15.2%
The individual line items in the table above are explained in more detail below.
Income tax expense based on ASML’s domestic rate
The income tax expense based on ASML’s domestic rate is based on the Dutch statutory income tax rate. It reflects
the income tax expense that would have been applicable assuming that all of our income is taxable against the Dutch
statutory tax rate and there are no differences between taxable base and financial results and no tax incentives are
applied.
Effects of tax rates in foreign jurisdictions
A portion of our results is realized in countries other than the Netherlands where different tax rates are applicable. The
effect can differ from year to year depending on the profit before tax in respective foreign jurisdictions.
Adjustments in respect of tax exempt income
In past years in certain jurisdictions part of the income generated was tax exempted. In conjunction with changed facts
and circumstances this effect is significantly reduced as of 2020 and stable in 2021.
Adjustments in respect of tax incentives
Adjustments in respect of tax incentives mainly relate to a reduced tax rate as a result of application of the Dutch
Innovation Box, which is a facility under Dutch corporate tax law pursuant to which qualified income associated with
R&D is subject to an effective tax rate of 9.0% in 2021. The effective innovation box tax rate was 7% in 2020 and 2019.
210
ASML ANNUAL REPORT 2021 The innovation box benefit is determined according to Dutch laws and published tax policy, whereby the application has
been confirmed in an agreement between ASML and the Dutch tax authorities that is applicable for the years through
2023 assuming facts and circumstances do not change.
Furthermore this category includes the benefit of the Foreign Derived Intangible Income (FDII) deduction which is
applicable at the level of our US group companies. The FDII deduction is a facility under US corporate tax law which
reduces the effective tax rate on income derived from tangible and intangible products and services in foreign markets.
The higher amount in 2021 compared to prior years is mainly caused by an increase in innovation box benefit resulting
from an increased level in income before tax at the level of our Dutch group companies.
Adjustments in respect of prior years' current taxes
The adjustments in respect of prior years’ current taxes relate to differences between the initially estimated income taxes
and final corporate income tax returns filed or arrangements agreed upon with tax authorities.
The benefit in 2019 mainly related to the FDII deduction which was taken into account in our 2018 tax filings in the US for
the first time.
Adjustments in respect of prior years’ deferred taxes
The movements in the adjustments in respect of prior years’ deferred taxes also mainly relate to differences between the
initially estimated income taxes and final corporate income tax returns filed. Additionally it includes some smaller
adjustments on the deferred tax positions initially recorded.
Movements in the liability for unrecognized tax benefits
In 2021, similar to prior years, the effective tax rate was impacted by movements in the liability for unrecognized tax
benefits. The movement for 2021 is mainly driven by pending dialogues with Dutch and foreign tax authorities in the area
of transfer pricing, as well as by uncertainties in FDII deduction claimed at the level of our US group companies.
Tax effects in respect to acquisition/restructuring related items
The 2019 effect was driven by an internal restructuring of our HMI group companies concluded in that year. As a result of
that restructuring a deferred tax asset was recognized in 2019 for book to tax differences on intangible fixed assets
transferred as part of the restructuring. For years 2020 and 2021 this restructuring has no additional impact on the
effective tax rate.
The 2021 effect relates to divestment of part of the Berliner Glas entities, whereby the commercial transaction result to a
large extent is exempt for income tax purposes.
Change in valuation allowance
The higher effect in 2020 and 2021 as compared to 2019 is mainly caused by the recognition of R&D and withholding tax
credits during the year at the level of our group companies in the Netherlands and the US as of which it is considered not
more likely than not that these can be realized in future years.
Equity method investments
This line includes the income tax expense relating to our investment in Carl Zeiss SMT Holding GmbH & Co. KG. The
increased effect in 2021 compared to prior years is mainly caused by an increase in the profit from the equity method
investment as well tax accounting consequences following from adjustment in the outside basis difference for the equity
investment.
Effect of change in tax rates
The impact on the effective tax rate in 2021 is caused by the enacted increase of the general Dutch corporate income tax
rate to 25.8% as of 2022, which impacts the valuation of deferred tax assets and liabilities of our Dutch fiscal unity.
Other credits and non-tax deductible items
Other credits and non-tax deductible items reflect the impact on our statutory rates of permanent non-tax deductible
items such as non-deductible withholding taxes, non-deductible shared based payment expenses and non-deductible
meals and entertainment expenses, as well as the impact of various tax credits on our income tax expense.
211
ASML ANNUAL REPORT 2021 US Tax Reform
The year-end tax positions also reflect the regulations of 2017 US Tax Reform, thereby taking into account the guidance
issued by the US government. Hereby the most recent guidance for the final FDII regulations has been applied as of
2021 onwards, not retrospectively as permitted by aforementioned regulations. With regard to GILTI and BEAT, the
decision has been taken to treat these as a period permanent item.
Liability for unrecognized tax benefits and deferred taxes
The liability for unrecognized tax benefits and related accrued interest and penalties and total deferred tax position
recorded on the Consolidated Balance Sheets is as follows:
Year ended December 31 (€, in millions)
Liability for unrecognized tax benefits
Deferred tax assets
Deferred tax liabilities
Deferred and other tax assets (liabilities)
2020
(200.4)
671.5
(37.9)
433.2
2021
(205.9)
1,098.7
(34.7)
858.1
Liability for unrecognized tax benefits
We have operations in multiple jurisdictions, where we are subject to the application of complex tax laws. Application of
these complex tax laws may lead to uncertainties on tax positions. We aim to resolve these uncertainties in discussions
with the tax authorities. We record unrecognized tax benefits in line with the requirements of ASC 740, which requires us
to estimate the potential outcome of any tax position. Our estimate for the potential outcome of any uncertain tax
position is highly judgmental. We believe that we have adequately provided for uncertain tax positions. However,
settlement of these uncertain tax positions in a manner inconsistent with our expectations could have a material impact
on our Consolidated Financial Statements.
Consistent with the requirements of ASC 740, as of December 31, 2021, the liability for unrecognized tax benefits and
related interest and penalties amounts to €205.9 million (2020: €200.4 million) which is classified as Deferred and other
income tax liabilities. If recognized, these unrecognized tax benefits would affect our effective tax rate for approximately
€190.9 million benefit (2020: €151.7 million benefit).
Expected interest and penalties related to income tax liabilities have been accrued for and are included in the liability
for unrecognized tax benefits and in the income tax expense. Accrued interest and penalties in 2021 amount to a benefit
of €9.7 million (2020: €14.2 million benefit; 2019: €9.0 million expense).
A reconciliation of the beginning and ending balance of the liability for unrecognized tax benefits (excluding interest and
penalties) is as follows:
Year ended December 31 (€, in millions)
Balance as at January 1
Gross presentation for different tax jurisdictions
Gross increases – tax positions in prior period
Gross decreases – tax positions in prior period
Gross increases – tax positions in current period
Settlements
Lapse of statute of limitations
Effect of changes in exchange rates
Total liability for unrecognized tax benefits
Balance of accrued interest and penalties
Total liabilities for unrecognized tax benefits including interest and penalties
2020
(150.7)
(27.3)
(66.6)
0.5
(21.6)
106.6
14.5
6.6
(138.0)
(62.4)
(200.4)
2021
(138.0)
—
(21.6)
8.9
(18.8)
2.5
32.0
(9.3)
(144.3)
(61.6)
(205.9)
We conclude our liability for unrecognized tax benefits to be appropriate. Based on the information currently available,
we estimate that the liability for unrecognized tax benefits will decrease by €23.8 million (excluding interest and penalties)
within the next 12 months, mainly as a result of expiration of statute of limitations.
For 2020 gross increases of tax positions in prior period and settlements were in essence mainly relating to finalization of
a tax audit at the level of our South Korean group companies.
212
ASML ANNUAL REPORT 2021 We file income tax returns in all countries where we operate, with the Netherlands, US, Taiwan, South Korea and China
being the major jurisdictions. The years for which tax returns are still open for examination for respective jurisdictions are
as follows:
Country
Netherlands
US
Taiwan
South Korea
China
Years
2018-2021
2015-2021
2016-2021
2017-2021
2011-2021
We are routinely subject to examinations and audits from tax and other authorities in the various jurisdictions in which we
operate. We believe that adequate amounts of taxes and related interest and penalties have been provided for, and any
adjustments as a result of examinations are not expected to have a material adverse effect.
Deferred taxes
The composition of total deferred tax assets and liabilities reconciled to the classification in the Consolidated Balance
Sheets is:
Consolidated
Statements
of
Operations
Income tax
recognized
in Other
Comprehensive
Income
Effect of
changes
in exchange
rates
December 31,
2021
January 1,
2021
Credits
and other
Deferred taxes (€, in millions)
Deferred tax assets:
Capitalized R&D expenditures
R&D & other credit carry forwards
Inventories
Deferred revenue
Accrued and other liabilities
Installation and warranty reserve
Tax effect carry-forward losses
Property, plant and equipment
Lease liabilities
Intangible fixed assets
Share-based payments
Other temporary differences
Total deferred tax assets, gross
Valuation allowance 1
Total deferred tax assets, net
Deferred tax liabilities:
Intangible fixed assets
Goodwill
Right-of-use assets
Property, plant and equipment
Deferred revenue
Borrowing costs long-term debt
Other temporary differences
Total deferred tax liabilities
Net deferred tax assets (liabilities)
Classified as:
Deferred tax assets – non-current
Deferred tax liabilities – non-current
Net deferred tax assets (liabilities)
106.8
16.4
(7.2)
288.0
5.7
(6.3)
(19.9)
(10.8)
16.2
—
1.8
7.5
398.2
(37.2)
361.0
17.1
(5.3)
(16.2)
(4.3)
10.3
0.1
4.4
6.1
367.1
—
21.4
—
—
—
—
—
—
—
—
—
—
21.4
—
21.4
2.9
—
—
—
—
—
2.5
5.4
26.8
287.1
117.2
37.2
125.2
87.8
16.4
27.1
26.9
6.5
143.5
7.2
23.9
906.0
(122.5)
783.5
(93.9)
(15.6)
(6.5)
(5.4)
(18.2)
(1.6)
(8.7)
(149.9)
633.6
671.5
(37.9)
633.6
—
—
—
—
—
—
—
—
—
—
—
(1.0)
(1.0)
—
(1.0)
—
—
—
—
—
—
—
—
(1.0)
26.5
7.7
1.5
10.0
4.6
1.2
0.2
2.5
0.5
—
0.6
(2.9)
52.4
(7.9)
44.5
(6.0)
—
(0.5)
(1.2)
—
—
0.7
(7.0)
37.5
1. The valuation allowance disclosed above relates to R&D and other credits and Tax effect carry-forward losses that may not be realized.
420.4
162.7
31.5
423.2
98.1
11.3
7.4
18.6
23.2
143.5
9.6
27.5
1,377.0
(167.6)
1,209.4
(79.9)
(20.9)
(23.2)
(10.9)
(7.9)
(1.5)
(1.1)
(145.4)
1,064.0
1,098.7
(34.7)
1,064.0
213
ASML ANNUAL REPORT 2021 Deferred taxes (€, in millions)
Deferred tax assets:
Capitalized R&D expenditures
R&D & other credit carry forwards
Inventories
Deferred revenue
Accrued and other liabilities
Installation and warranty reserve
Tax effect carry-forward losses
Property, plant and equipment
Lease liabilities
Intangible fixed assets
Share-based payments
Other temporary differences
Total deferred tax assets, gross
Valuation allowance 1
Total deferred tax assets, net
Deferred tax liabilities:
Intangible fixed assets
Goodwill
Right-of-use assets
Property, plant and equipment
Deferred revenue
Borrowing costs long-term debt
Other temporary differences
Total deferred tax liabilities
Net deferred tax assets (liabilities)
Classified as:
Deferred tax assets – non-current
Deferred tax liabilities – non-current
Net deferred tax assets (liabilities)
Acquisitions
through
business
combinations
Consolidated
Statements
of
Operations
January 1,
2020
Income tax
recognized
in Other
Comprehensive
Income
Effect of
changes
in exchange
rates
December 31,
2020
—
—
—
—
3.8
—
—
0.8
—
—
—
4.6
—
4.6
(8.9)
—
—
(1.9)
—
—
(5.7)
(16.5)
(11.9)
192.9
60.8
49.3
56.8
73.4
12.3
12.5
32.8
8.1
129.8
8.5
20.3
657.5
(73.6)
583.9
(104.2)
(6.6)
(8.1)
(15.3)
(13.1)
(1.5)
2.9
(145.9)
438.0
445.3
(7.3)
438.0
117.3
63.7
(9.0)
70.8
15.9
5.4
15.3
(7.0)
(1.6)
13.7
(0.6)
1.9
285.8
(56.9)
228.9
11.0
(9.0)
1.6
10.9
(5.1)
(0.1)
(6.7)
2.6
—
—
—
—
—
—
—
—
—
—
—
0.6
0.6
—
0.6
—
—
—
—
—
—
—
—
(23.1)
(7.3)
(3.1)
(2.4)
(5.3)
(1.3)
(0.7)
0.3
—
—
(0.7)
1.1
(42.5)
8.0
(34.5)
8.2
—
—
0.9
—
—
0.8
9.9
231.5
0.6
(24.6)
287.1
117.2
37.2
125.2
87.8
16.4
27.1
26.9
6.5
143.5
7.2
23.9
906.0
(122.5)
783.5
(93.9)
(15.6)
(6.5)
(5.4)
(18.2)
(1.6)
(8.7)
(149.9)
633.6
671.5
(37.9)
633.6
1. The valuation allowance disclosed above relates to R&D and other credits and Tax effect carry-forward losses that may not be realized.
Tax effect carry-forward losses and Tax credits
The deferred tax assets from carry-forward losses and R&D & other credits recognized as per December 31, 2021 are
almost fully reserved. R&D & other credits for the amount of €135.8 million have no expiration date. The remaining R&D &
other credits of €26.9 million have an expiration date between 2022 and 2036. The carry-forward losses of €48.2 million
have an expiration date between 2022 and 2030.
Unrecognized Deferred Tax Liability Related to Investments in Foreign Subsidiaries
In general, it is our practice and intention to indefinitely reinvest the earnings of our non-Dutch subsidiaries in those
operations and distribute only when strictly necessary or opportune and permitted by law. The tax implications of
distributions by such non-Dutch subsidiaries are dependent on local tax and accounting regulations applying at the
moment of actual distribution. As these cannot practicably be determined, no deferred tax liability has been recognized
in respect of undistributed profit reserves of the foreign subsidiaries. As per December 31, 2021, the aggregate amount
of unrecognized temporary differences approximately amounts to €283.4 million (2020: €240.0 million).
22. Shareholders’ equity
Share capital
ASML's authorized share capital amounts to €126.0 million and is divided into:
Type of shares
Cumulative preference shares
Ordinary shares
Ordinary shares B
Amount of shares
Nominal value
Votes per share
700,000,000
€0.09 per share
699,999,000
€0.09 per share
9,000
€0.01 per share
9
9
1
214
ASML ANNUAL REPORT 2021 The issued and fully paid up ordinary shares with a nominal value of €0.09 each were as follows:
Year ended December 31
Issued ordinary shares with nominal value of €0.09
Issued ordinary treasury shares with nominal value of €0.09
Total issued ordinary shares with nominal value of €0.09
2019
2020
2021
419,810,706
416,514,034
402,601,613
5,848,998
2,983,454
3,873,663
425,659,704
419,497,488
406,475,276
82,915,935 ordinary shares were held by 286 registered holders with a registered address in the US. Since certain of our
ordinary shares were held by brokers and nominees, the number of record holders in the US may not be representative
of the number of beneficial holders, or of where the beneficial holders are resident.
Each ordinary share consists of 900 fractional shares. Fractional shares entitle the holder thereof to a fractional dividend,
but do not give entitlement to voting rights. Only those persons who hold shares directly in the share register in the
Netherlands, held by us at our address at 5504 DR Veldhoven, de Run 6501, the Netherlands, or in the New York share
register, held by JP Morgan Chase Bank, N.A., P.O. Box 64506, St. Paul, MN 55164-0506, United States, can hold
fractional shares. Shareholders who hold ordinary shares through the deposit system under the Dutch Securities Bank
Giro Transactions Act maintained by the Dutch central securities depository Euroclear Nederland or through the
Depository Trust Company cannot hold fractional shares.
No ordinary shares B and no cumulative preference shares have been issued.
There are no special voting rights on the issued shares in our share capital.
In 2012, we issued shares to three key customers – Intel, TSMC and Samsung – as part of the customer co-investment
program (CCIP) to accelerate ASML’s development of EUV. Under this program, the participating customers funded
certain development programs and invested in ASML’s ordinary shares. Currently, only one participating customer still
holds (directly or indirectly) ordinary shares. Certain voting restrictions apply in respect of ordinary shares issued in
connection with the CCIP. These voting restrictions in respect of these ordinary shares are set out in the underlying
agreement between ASML and the relevant customer. The shares issued in the CCIP were held by foundations which
issued depository receipts to participants in the CCIP. A total of 96,566,077 depository receipts for ordinary shares were
issued at the launch of the CCIP. This number has since decreased with the sell-down by the relevant customers
following expiry of the lock-up.
There are currently no limitations, either under Dutch law or in ASML’s Articles of Association, on the transfer of ordinary
shares in the share capital of ASML. Pursuant to ASML’s Articles of Association, the Supervisory Board’s approval shall
be required for every transfer of cumulative preference shares.
Issue and repurchase of (rights to) shares
Our Board of Management has the power to issue ordinary shares and cumulative preference shares insofar as it has
been authorized to do so by the General Meeting. The Board of Management requires approval of the Supervisory Board
for such an issue. The authorization by the General Meeting can only be granted for a certain period not exceeding five
years and may be extended for no longer than five years on each occasion. If the General Meeting has not authorized the
Board of Management to issue shares, the General Meeting will be authorized to issue shares on the Board of
Management’s proposal, provided that the Supervisory Board has approved such proposal.
Holders of ASML’s ordinary shares have a preemptive right, in proportion to the aggregate nominal amount of the
ordinary shares held by them. This preemptive right may be restricted or excluded. Holders of ordinary shares do not
have preemptive right with respect to any ordinary shares issued for consideration other than cash or ordinary shares
issued to employees. If authorized for this purpose by the General Meeting, the Board of Management has the power,
subject to approval of the Supervisory Board, to restrict or exclude the preemptive rights of holders of ordinary shares.
At our 2021 AGM, the Board of Management was authorized from April 29, 2021 through October 29, 2022, subject to
the approval of the Supervisory Board, to issue shares and / or rights thereto representing up to a maximum of 5% of our
issued share capital at April 29, 2021, plus an additional 5% of our issued share capital at April 29, 2021 that may be
issued in connection with mergers, acquisitions and / or (strategic) alliances. Our shareholders also authorized the Board
of Management through October 29, 2022, subject to approval of the Supervisory Board, to restrict or exclude
preemptive rights with respect to holders of ordinary shares up to a maximum of 5% of our issued share capital in
connection with the general authorization to issue shares and/ or rights to shares, plus an additional 5% in connection
with the authorization to issue shares and/ or rights to shares in connection with mergers, acquisitions and / or (strategic)
alliances.
215
ASML ANNUAL REPORT 2021 We may repurchase our issued ordinary shares at any time, subject to compliance with the requirements of Dutch law
and our Articles of Association. Any such repurchases are subject to the approval of the Supervisory Board and the
authorization by the General Meeting, which authorization may not be for more than 18 months.
At the 2021 AGM, the Board of Management was authorized, subject to Supervisory Board approval, to repurchase
through October 29, 2022, up to a maximum of two times 10% of our issued share capital at April 29, 2021, at a price
between the nominal value of the ordinary shares purchased and 110% of the market price of these securities on
Euronext Amsterdam or NASDAQ.
ASML Preference Shares Foundation
The ASML Preference Shares Foundation (Stichting Preferente Aandelen ASML), a foundation organized under Dutch
law, has been granted an option right to acquire preference shares in the share capital of ASML. The Foundation may
exercise the Preference Share Option in situations where, in the opinion of the Foundation’s Board of Directors, ASML’s
interests, ASML’s business or the interests of ASML’s stakeholders are at stake. This may be the case if:
• A public bid for ASML’s shares is announced or made, or there is a justified expectation that such a bid will be made
without any agreement having been reached with ASML in relation to such a bid; or
• In the opinion of the Foundation’s Board of Directors, the (attempted) exercise of the voting rights by one shareholder
or more shareholders, acting in concert, is materially in conflict with ASML’s interests, ASML’s business or ASML’s
stakeholders.
The Foundation’s objectives are to look after the interests of ASML and the enterprises maintained by and/or affiliated in
a group with ASML, in such a way that the interests of ASML, of those enterprises and of all parties concerned are
safeguarded in the best possible way, and that influences in conflict with these interests, which might affect the
independence or the identity of ASML and those companies, are deterred to the best of the Foundation’s ability, and
everything related to the above or possibly conducive thereto. The Foundation aims to realize its objects by acquiring
and holding cumulative preference shares in the capital of ASML and by exercising the rights attached to these shares,
particularly the voting rights.
The Preference Share Option gives the Foundation the right to acquire such number of cumulative preference shares as
the Foundation will require, provided that the aggregate nominal value of such number of cumulative preference shares
shall not exceed the aggregate nominal value of the ordinary shares issued at the time of exercise of the Preference
Share Option. The subscription price will be equal to their nominal value. Only one-fourth of the subscription price would
be payable at the time of initial issuance of the cumulative preference shares, with the other three-fourths of the nominal
value only being payable when ASML calls up this amount. Exercise of the preference share option could effectively
dilute the voting power of the outstanding ordinary shares by one-half.
Cancellation and repayment of the issued cumulative preference shares by ASML requires authorization by the General
Meeting, on a proposal to this effect made by the Board of Management and approved by the Supervisory Board. If the
Preference Share Option is exercised and as a result cumulative preference shares are issued, ASML will initiate the
repurchase or cancellation of all cumulative preference shares held by the Foundation on the Foundation’s request. In
that case, ASML is obliged to effect the repurchase and respective cancellation as soon as possible. A cancellation will
result in a repayment of the amount paid and exemption from the obligation to pay up on the cumulative preference
shares. A repurchase of the cumulative preference shares can only take place when such shares are fully paid up.
If the Foundation does not request ASML to repurchase or cancel all cumulative preference shares held by the
Foundation within 20 months of issuance of these shares, we will be required to convene a General Meeting for the
purpose of deciding on a repurchase or cancellation of these shares.
The Foundation is independent of ASML. The Board of Directors of the Foundation is composed of four independent
members from the Netherlands’ business and academic communities. The Foundation’s Board of Directors is composed
per December 31, 2021 of the following members: Mr. A.P.M. van der Poel, Mr. S. Perrick, Mr. A.H. Lundqvist and Mr. J.
Streppel.
Other than the arrangements made with the Foundation as described above, ASML has not established any other anti-
takeover devices.
216
ASML ANNUAL REPORT 2021 Dividend policy
ASML aims to distribute a dividend that will be growing over time, paid semi-annually. On an annual basis, the Board of
Management, upon prior approval from the Supervisory Board, submits a proposal to the AGM with respect to the
amount of dividend to be declared with respect to the prior year, taking into account any interim dividend distributions.
The dividend proposal in any given year will be subject to availability of distributable profits, retained earnings and cash,
and may be affected by, among other things, our view of potential future liquidity requirements including for investments
in production capacity, working capital requirements, the funding of our R&D programs and acquisition opportunities
that may arise from time to time.
ASML intends to declare a total dividend in respect of 2021 of €5.50 per ordinary share. Recognizing the interim dividend
of €1.80 per ordinary share paid in November 2021, this leads to a final dividend proposal to the General Meeting
of €3.70 per ordinary share. The total 2021 dividend is a 100% increase compared to the 2020 total dividend of €2.75 per
ordinary share.
Dividends on ordinary shares are payable out of net income or retained earnings as shown in our Financial Statements
as adopted by our AGM, after payment first of (accumulated) dividends out of net income on any issued cumulative
preference shares.
Purchase of equity securities
In addition to dividend payments, we intend to return cash to our shareholders on a regular basis through share
buybacks or capital repayment, subject to our actual and anticipated level of liquidity requirements and other relevant
factors.
On July 21, 2021 we announced a new share buyback program to be executed by 31 December 2023. As part of this
program, ASML intends to repurchase shares up to an amount of €9 billion, of which we expect a total of up to
0.45 million shares will be used to cover employee share plans. ASML intends to cancel the remainder of the shares
repurchased. The new program has replaced the previous €6 billion share buyback program 2020-2022 which has not
been completed for the full amount in light of the new share buyback program.
In 2021 we repurchased 14,358,838 shares (2020: 3,908,429 shares) for a total consideration of €8,560.3 million (2020:
€1,207.5 million) of which 6,601,699 shares for a consideration of €4,560.3 million were purchased under the new
program. In 2021 we cancelled 13,023,016 shares (2020: 6,162,395 shares canceled), of which 9,759,021 shares were
repurchased under the 2020-2022 program and 3,263,995 shares were repurchased under the 2021-2023 program.
The share buyback program may be suspended, modified or discontinued at any time.
The following table provides a summary of shares repurchased by ASML in 2021:
Period
January 21 - 31, 2021
February 1 - 28, 2021
March 1 - 31, 2021
April 1 - 30, 2021
May 1 - 31, 2021
June 1 - 30, 2021
July 1 - 31, 2021
August 1 - 31, 2021
September 1 - 30, 2021
October 1 - 31, 2021
November 1 - 30, 2021
December 1 - 23, 2021
Total
Total number
of shares
purchased
Average
price paid per
Share (€)
Total number
of shares
purchased under
programs
Maximum value
of shares that may yet
be purchased
(€ millions)
495,533
1,360,410
1,580,604
1,128,123
1,240,714
1,204,128
1,178,129
1,274,521
1,188,430
1,237,721
1,393,794
1,076,731
14,358,838
455.68
474.24
469.40
537.04
528.93
570.95
603.46
674.28
723.11
658.97
726.43
687.26
596.17
495,533
1,855,943
3,436,547
4,564,670
5,805,384
7,009,512
8,187,641
9,462,162
10,650,592
11,888,313
13,282,107
14,358,838
4,566.7
3,921.6
3,179.6
2,573.8
1,917.5
1,230.0
8,726.6
7,867.2
7,007.8
6,192.2
5,179.7
4,439.7
217
ASML ANNUAL REPORT 2021 23. Net income per ordinary share
Basic net income per ordinary share is calculated by dividing net income by the weighted average number of ordinary
shares outstanding for that period.
The dilutive effect is calculated using the treasury stock method by dividing net income by the weighted average number
of ordinary shares outstanding for that period plus shares applicable to options and conditional shares (dilutive potential
ordinary shares). The calculation of diluted net income per ordinary share does not assume exercise of options when
exercise would be anti-dilutive. Excluded from the diluted weighted average number of shares outstanding calculation
are cumulative preference shares contingently issuable to the preference share foundation, since they represent a
different class of stock than the ordinary shares.
The basic and diluted net income per ordinary share has been calculated as follows:
Year ended December 31 (€, in millions, except per share data)
Net income
2019
2,592.3
2020
3,553.7
2021
5,883.2
Weighted average number of shares outstanding
Basic net income per ordinary share
Weighted average number of shares outstanding
Plus shares applicable to options and conditional shares
Diluted weighted average number of shares
Diluted net income per ordinary share
420.8
6.16
420.8
0.9
421.6
6.15
418.3
8.49
418.3
0.8
419.1
8.48
409.8
14.36
409.8
0.6
410.4
14.34
24. Vulnerability due to certain concentrations
We rely on outside vendors for components and subassemblies used in our systems including the design thereof, each
of which is obtained from a single supplier or a limited number of suppliers. Our reliance on a limited group of suppliers
involves several risks, including a potential inability to obtain an adequate supply of required components, reduced
control over pricing and the risk of untimely delivery of these components and subassemblies.
25. Financial risk management
We are exposed to certain financial risks such as foreign currency risk, interest rate risk, credit risk, liquidity risk and
capital risk. Our overall risk management program focuses on the unpredictability of financial markets and seeks to
minimize potentially adverse effects on our financial performance. Our risk management program focuses appropriately
on the current environment of uncertainty in the financial markets.
A key element within our risk management program is our long held prudent financing policy, which is based on three
foundational elements:
• Liquidity: Maintain financial stability with a target to keep our Cash & cash equivalents, together with Short-term
investments, above a minimum range of €2.0 to €2.5 billion
• Capital structure: Maintain a capital structure that targets a solid investment grade credit rating
• Cash return: Provide a sustainable dividend per share that will grow over time, paid semi-annually, while returning
excess cash to shareholders through share buybacks or capital repayment
We use derivative financial instruments to hedge certain risk exposures. None of these transactions are entered into for
trading or speculative purposes. We use market information to determine the fair value of our derivative financial
instruments.
Foreign currency risk management
We are exposed to currency risks. Our Financial Statements are expressed in euros. Accordingly, our results of
operations are exposed to fluctuations in exchange rates between the euro and other currencies. Changes in currency
exchange rates can result in losses in our Financial Statements. We are particularly exposed to fluctuations in the
exchange rates between the US dollar and the euro, and to a lesser extent to the Japanese yen, the South Korean won,
218
ASML ANNUAL REPORT 2021
the Taiwanese dollar and Chinese yuan, in relation to the euro. We incur costs of sales predominantly in euros with
portions also denominated in US and Taiwanese dollars. A small portion of our operating results are driven by
movements in currencies other than the euro, US dollar, Japanese yen, South Korean won, Taiwanese dollar or Chinese
yuan. In general, our customers run their businesses in US dollars and therefore a weakening of the US dollar against the
euro might impact the ability or desire of our customers to purchase our products at quoted prices.
Foreign currency sensitivity
The following table details our sensitivity to a 10.0% strengthening of foreign currencies against the euro. The sensitivity
analysis includes foreign currency denominated monetary items outstanding and adjusts their translation at the period
end for a 10.0% strengthening in foreign currency rates. A positive amount indicates an increase in net income or equity.
Year ended December 31 (€, in millions)
2020
2021
US dollar
Japanese yen
Taiwanese dollar
Other currencies
Total
Impact on net
income
Impact on
equity
Impact on net
income
Impact on
equity
(4.3)
(13.4)
1.3
(3.9)
(20.3)
34.4
—
—
—
34.4
(6.9)
(2.2)
(3.7)
6.2
(6.6)
51.5
(32.9)
—
—
18.6
It is our policy to limit the effects of currency exchange rate fluctuations on our Consolidated Statements of Operations.
The impact on net income reflects our net exposure to currencies other than the euro at year-end 2021. The negative
effect on net income as presented in the table above for 2021 is mainly attributable to timing differences between the
arising and hedging of exposures.
The effects of the fair value movements of cash flow hedges, entered into for US dollar transactions are recognized in
equity. The US dollar effect on equity in 2021 compared with 2020 is the result of an increase in outstanding purchase
hedges. The Japanese Yen effect on equity in 2021 compared to 2020 is the result of an increase in outstanding sales
hedges due to the strong increase in demand for chips.
For a 10.0% weakening of the foreign currencies against the euro, there would be approximately an equal but opposite
effect on net income and equity.
Foreign currency risk policy
It is our policy to hedge material transaction exposures, such as forecasted sales and purchase transactions. We hedge
these exposures through the use of forward foreign exchange contracts.
Foreign exchange contracts
The notional principal amounts of the outstanding forward foreign exchange contracts are mainly denominated in US
dollar, Japanese yen, Taiwanese dollar, Korean won and Chinese Yuan at December 31, 2021 are respectively USD 0.6
billion, JPY 44.5 billion, TWD 2.5 billion, KRW 11.9 billion and CNY 0.6 billion (2020: USD 0.4 billion, JPY 15.5 billion, TWD
0.5 billion, KRW 0.0 billion and CNY 0.4 billion).
The hedged highly probable forecasted transactions denominated in foreign currency are expected to occur at various
dates during the coming 12 months. Gains and losses recognized in OCI on forward foreign exchange contracts included
in a hedge relationship will be recognized in the Consolidated Statements of Operations in the period during which the
hedged forecasted transactions affect the Consolidated Statements of Operations.
In 2021, we recognized a transfer to net income of €22.2 million loss (2020: €2.3 million gain; 2019: €10.7 million gain) in
the Consolidated Statements of Operations resulting from effective cash flow hedges for forecasted sales and purchase
transactions that occurred in the year. Furthermore, we recognized a net amount of €7.9 million loss in the Consolidated
Statements of Operations resulting from derivative financial instruments measured at fair value through profit or loss
(2020: €28.2 million gain; 2019: €12.0 million loss), which is mainly offset by the revaluation of the hedged monetary
items.
219
ASML ANNUAL REPORT 2021 OCI balance unrealized gains and losses on financial instruments from foreign exchange contracts
Outstanding accumulated OCI balances unrealized gains and losses on financial instruments consist of:
• Outstanding anticipated gains and losses of foreign currency denominated forecasted purchase transactions. As of
December 31, 2021, outstanding accumulated OCI includes €20.8 million representing the total anticipated gain to be
released to cost of sales (2020: loss €26.1 million and 2019: gain €2.1 million), (net of taxes: 2021: gain €17.7
million; 2020: loss €22.7 million; 2019: gain €1.8 million), which will offset the euro equivalent of foreign currency
denominated forecasted purchase transactions. All amounts are expected to be released over the next 12 months.
• Outstanding anticipated loss to be realized to sales. As of December 31, 2021, outstanding accumulated OCI
includes loss €1.2 million (2020: gain €0.4 million; 2019: loss €1.2 million), representing the total anticipated loss to be
released to sales.
The effectiveness of all contracts for which we apply hedge accounting is monitored on a quarterly basis throughout the
life of the hedges. During 2021, 2020 and 2019, no ineffective hedge relationships were recognized.
Interest rate risk management
We have interest-bearing assets and liabilities that expose us to fluctuations in market interest rates, managed through
interest rate swaps.
Interest rate sensitivity
The sensitivity analysis below has been determined based on the exposure to interest rates for both derivative financial
and non-derivative financial instruments at the balance sheet date with the stipulated change taking place at the
beginning of the financial year and held constant throughout the reporting period. The table below shows the effect of a
1.0% increase in interest rates on our net income and equity. A positive amount indicates an increase in net income and
equity.
Year ended December 31 (€, in millions)
Effect of a 1.0% increase in interest rates
2020
Impact on net
income
43.5
2021
Impact on
equity
—
Impact on net
income
45.9
Impact on
equity
—
The positive effect on net income mainly relates to our total amount of cash and cash equivalents and short-term
investments being higher than our total floating debt position, which is excluding the Eurobonds issued in 2020.
For a 1.0% decrease in interest rates there would be approximately an equal but opposite effect on net income and
equity.
Hedging policy interest rates
We use interest rate swaps to minimize the net interest exposure for the group by aligning the interest terms of the
available cash and the interest bearing debt. There may be residual interest rate risk to the extent the asset and liability
positions do not fully offset.
Interest rate swaps
The notional principal amount of the outstanding interest rate swap contracts as of December 31, 2021 was €3.0 billion
(2020: €3.0 billion). During 2021, these outstanding hedges were highly effective in hedging the fair value exposure to
interest rate movements. The changes in fair value of the Eurobonds were included in the Consolidated Statements of
Operations in the same period as the changes in the fair value of the interest rate swaps. We did not enter into interest
rate swaps in connection with the Eurobonds issued in 2020.
Credit risk management
Financial instruments that potentially subject us to significant concentration of credit risk consist principally of Cash and
cash equivalents, Short-term investments, Derivative financial instruments used for hedging activities, Accounts
receivable and Finance receivables and prepayments to suppliers.
Cash and cash equivalents, Short-term investments and Derivative financial instruments contain an element of risk of the
counterparties being unable to meet their obligations. Our risk management program focuses appropriately on the
current environment of uncertainty in the financial markets. We invest our Cash and cash equivalents and Short-term
investments in short-term deposits with financial institutions that have investment grade credit ratings and in government
and or government related bodies that have investment grade credit ratings and in money market and other investment
220
ASML ANNUAL REPORT 2021 funds that invest in high-rated debt securities. To mitigate the risk that our counterparties in hedging transactions are
unable to meet their obligations, we enter into transactions with a limited number of major financial institutions that have
investment grade credit ratings and closely monitor their creditworthiness. All credit ratings are rated by credit rating
institutions like for instance S&P, Moody’s or Fitch. Concentration risk is mitigated by limiting the exposure to each of the
individual counterparties.
Our customers consist of integrated circuit manufacturers located throughout the world. We perform ongoing credit
evaluations of our customers’ financial condition. We mitigate credit risk through additional measures, including the use
of down payments, letters of credit, and contractual ownership retention provisions. Retention of ownership enables us
to recover the systems in the event a customer defaults on payment.
Liquidity risk management
Our principal sources of liquidity consist of Cash and cash equivalents, Short-term investments and available credit
facilities with a target to keep our Cash & cash equivalents, together with Short-term investments, above a minimum
range of €2.0 to €2.5 billion. In addition, we may from time to time raise additional funding in debt and equity markets. We
seek to ensure that our principal sources of liquidity will be sufficient to satisfy our liquidity requirements at all times.
Our liquidity needs are affected by many factors, some of which are based on the normal on-going 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 these factors, we believe that cash generated from
operations, together with our other sources of liquidity are sufficient to satisfy our current requirements, including our
expected capital expenditures and debt servicing.
We intend to return cash to our shareholders on a regular basis in the form of dividend payments and, subject to our
actual and anticipated liquidity requirements and other relevant factors, share buybacks or capital repayments.
Capital risk management
Our objectives when managing our capital structure are to safeguard our ability to satisfy our capital providers by
maintaining a capital structure that ensures liquidity and supports a solid investment grade credit rating. The capital
structure includes both debt and the components of equity, in accordance with both US GAAP and EU-IFRS. The capital
structure is mainly altered by, among other things, adjusting the amount of dividends paid to shareholders, the amount of
share buybacks or capital repayment, and any changes in the level of debt. Our capital structure is formally reviewed
with the Supervisory Board each year in connection with our updated long-term financial plan and relevant scenarios.
The outcome of this year’s review confirmed to maintain our existing financing policy in relation to our capital structure.
Our current credit rating from Moody’s is A2 (Stable). This rating was upgraded in September 2021 from A3. Our current
credit rating from Fitch is A- (stable), which is consistent with the rating on December 31, 2020.
Financial instruments
Accounting Policy - Derivative financial instruments and hedging activities
We measure all derivative financial instruments based on fair values derived from level 2 input criteria. We adopt
hedge accounting for hedges that are highly effective in offsetting the identified hedged risks taking into account
required effectiveness criteria.
Derivatives are initially recognized at fair value on the date a derivative contract is entered into and subsequently
remeasured. The method of recognizing the resulting gain or loss depends on whether the derivative is designated
as a hedging instrument, and if so, the nature of the item being hedged. We designate derivatives as one of the
following:
• A hedge of an exposure relating to changes in the fair value of a recognized asset or liability, that is attributable to
a particular risk (fair value hedge).
• A hedge of an exposure relating to the variability in the cash flows of a recognized asset or liability, or of a
forecasted transaction, that is attributable to a particular risk (cash flow hedge).
• A hedge of the foreign currency exposure relating to a net investment in a foreign operation (net investment
hedge).
221
ASML ANNUAL REPORT 2021 We assess at the inception of the transaction the relationship between hedging instruments and hedged items, as
well as our risk management objectives and strategy for undertaking various hedging transactions. We also assess,
both at hedge inception and on an ongoing basis, whether derivatives that are used in hedging transactions are
highly effective in offsetting changes in fair values or cash flows of hedged items. The cash flows resulting from the
derivative financial instruments are classified in the Consolidated Statements of Cash Flows according to the nature
of the hedged item.
Fair value hedge
Changes in the fair value of a derivative financial instrument, that is designated and qualified as a fair value hedge,
along with the gain or loss on the hedged asset or liability that is attributable to the hedged risk, are recorded in the
Consolidated Statements of Operations.
Hedge accounting is discontinued when we revoke the hedging relationship, the hedging instrument expires or is
sold, terminated or exercised, or no longer qualifies for hedge accounting. The adjustment to the carrying amount
of the hedged item arising from the hedged risk is amortized to the Consolidated Statements of Operations from
that date.
Interest rate swaps that are being used to hedge the fair value of fixed loan coupons payable are designated as fair
value hedges. The change in fair value is intended to offset the change in the fair value of the underlying fixed loan
coupons, which is recorded accordingly. The gain or loss relating to the ineffective portion of interest rate swaps
hedging fixed loan coupons payable is recognized in the Consolidated Statements of Operations as interest and
other, net.
Cash flow hedge
Changes in the fair value of a derivative that is designated and qualified as a cash flow hedge are recorded in OCI,
net of taxes, until the underlying hedged transaction is recognized in the Consolidated Statements of Operations. In
the event that the underlying hedge transaction will not occur within the specified time period, the gain or loss on
the related cash flow hedge is released from OCI and included in the Consolidated Statements of Operations,
unless extenuating circumstances exist that are related to the nature of the forecasted transaction and are outside
our control or influence and which cause the forecasted transaction to be probable of occurring on a date that is
beyond the specified time period.
Foreign currency hedging instruments that are being used to hedge cash flows related to forecasted sales or
purchase transactions in non-functional currencies are designated as cash flow hedges. The gain or loss relating to
the ineffective portion of the foreign currency hedging instruments is recognized in the Consolidated Statements of
Operations in Net sales or Cost of sales.
Fair values of the derivatives
The following table summarizes the notional amounts and estimated fair values of our derivative financial instruments:
Year ended December 31 (€, in millions)
Forward foreign exchange contracts
Interest rate swaps
2020
Notional
amount
182.0
3,000.0
Fair Value
(17.6)
160.4
2021
Notional
amount
27.5
3,000.0
Fair Value
12.8
83.9
The following table summarizes our derivative financial instruments per category:
Year ended December 31 (€, in millions)
2020
2021
Interest rate swaps — fair value hedges
Forward foreign exchange contracts — cash flow hedges
Forward foreign exchange contracts — no hedge accounting
Total
Less non-current portion:
Interest rate swaps — fair value hedges
Total non-current portion
Total current portion
Assets
160.4
0.9
1.5
162.8
123.8
123.8
39.0
Liabilities
Assets
Liabilities
—
15.1
4.9
20.0
—
—
20.0
83.9
15.0
0.6
99.5
47.3
47.3
52.2
—
2.2
0.6
2.8
—
—
2.8
222
ASML ANNUAL REPORT 2021 The fair value part of a hedging derivative financial instrument that has a remaining term of 12 months or less after
balance sheet date is classified as current asset or liability. When the fair value part of a hedging derivative has a term of
more than 12 months after balance sheet date, it is classified as non-current asset or liability. Derivative financial
instruments are included in Other assets and Accrued and other liabilities in the Consolidated Balance Sheets, split
between current and non-current.
Fair value measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement hierarchy prioritizes the inputs to
valuation techniques used to measure fair value as follows:
• Level 1: Valuations based on inputs such as quoted prices for identical assets or liabilities in active markets that the
entity has the ability to access.
• Level 2: Valuations based on inputs other than level 1 inputs such as quoted prices for similar assets or liabilities,
quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable
data for substantially the full term of the assets or liabilities.
• Level 3: Valuations based on inputs that are supported by little or no market activity and that are significant to the fair
value of the assets or liabilities.
The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or
liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). A financial instrument’s fair value classification
is based on the lowest level of any input that is significant in the fair value measurement hierarchy.
Financial assets and financial liabilities measured at fair value on a recurring basis
Investments in money market funds (included in our Cash and cash equivalents) have fair value measurements which are
all based on quoted prices for identical assets or liabilities.
Our Short-term investments consist of deposits with original maturities to the entity holding the investments longer than 3
months and one year or less at the date of acquisition with financial institutions that have investment grade credit ratings.
The fair value of the deposits is determined with reference to quoted market prices in an active market for similar assets
or discounted cash flow analysis.
The principal market in which we execute our derivative contracts is the institutional market in an over-the-counter
environment with a high level of price transparency. The market participants usually are large commercial banks. The
valuation inputs for our derivative contracts are based on quoted prices and quoting pricing intervals from public data
sources; they do not involve management judgment.
The valuation technique used to determine the fair value of forward foreign exchange contracts (used for hedging
purposes) approximates the net present value technique which is the estimated amount that a bank would receive or pay
to terminate the forward foreign exchange contracts at the reporting date, taking into account current interest rates and
current exchange rates.
The valuation technique used to determine the fair value of interest rate swaps (used for hedging purposes) is the net
present value technique, which is the estimated amount that a bank would receive or pay to terminate the swap
agreements at the reporting date, taking into account current interest rates.
Four of our outstanding Eurobonds, with a combined principal amount of €3 billion, serve as hedged items in fair value
hedge relationships in which we hedge the variability of changes in the fair value of our Eurobonds due to changes in
market interest rates with interest rate swaps. No hedging is applied for our bond offerings issued in 2020. The fair value
changes of the interest rate swaps are recorded on the Consolidated Balance Sheets under derivative financial
instruments and the carrying amounts of the Eurobonds are adjusted for the effective portion of these fair value changes
only. For the actual aggregate carrying amount and the fair value of our Eurobonds, see Note 16 Long-term debt and
interest and other costs.
223
ASML ANNUAL REPORT 2021 The following tables present our financial assets and financial liabilities that are measured at fair value on a recurring
basis:
Year ended December 31, 2021 (€, in millions)
Assets measured at fair value
Derivative financial instruments 1
Money market funds 2
Short-term investments 3
Total
Liabilities measured at fair value
Derivative financial instruments 1
Assets and Liabilities for which fair values are disclosed
Long-term debt 4
Year ended December 31, 2020 (€, in millions)
Assets measured at fair value
Derivative financial instruments 1
Money market funds 2
Short-term investments 3
Total
Liabilities measured at fair value
Derivative financial instruments 1
Assets and Liabilities for which fair values are disclosed
Long-term debt 4
Level 1
Level 2
Level 3
Total
—
2,928.3
—
2,928.3
—
4,673.9
99.5
—
638.5
738.0
2.8
—
—
—
—
—
—
—
99.5
2,928.3
638.5
3,666.3
2.8
4,673.9
Level 1
Level 2
Level 3
Total
—
3,841.9
—
3,841.9
—
4,798.8
162.8
—
1,302.2
1,465.0
20.0
—
—
—
—
—
—
—
162.8
3,841.9
1,302.2
5,306.9
20.0
4,798.8
1. Derivative financial instruments consist of forward foreign exchange contracts and interest rate swaps.
2. Money market funds are part of our cash and cash equivalents.
3. Short-term investments consist of deposits with original maturities to the entity holding the investments longer than three months, but one year or less at the date of
acquisition. These deposits are valued at amortized costs which is close to their fair value. Their fair value is determined with reference to quoted market prices in an
active market for similar assets or discounted cash flow analysis
4. Long-term debt mainly relates to Eurobonds.
There were no transfers between levels during the years ended December 31, 2021 and December 31, 2020.
Financial assets and financial liabilities that are not measured at fair value
The carrying amount of Cash and cash equivalents, Accounts payable, and other current financial assets and liabilities
approximate their fair value because of the short-term nature of these instruments. The carrying amount of the loan to
Carl Zeiss SMT GmbH approximates the fair value given current interest and investment grade credit rating.
Money market and investment funds measurement
The money market and investment funds qualify as available for sale securities. The fair value is close to the carrying
value due to short term nature and since related to investment with investment grade credit ratings. Allowances for credit
losses and total unrealized gains and losses are close to nil. These money market funds can be called on a daily basis.
Investments and redemptions in money market funds are managed on a daily basis based triggered through actual cash
balances. Realized gain and losses on these money market funds are not significant given low interest rates and high
credit ratings. Costs of securities were close to nil. ASML does not have trading securities as of December 31, 2021.
Deposits measurement
The deposits as part of the Cash and cash equivalents and Short term investments qualify as securities held to maturity.
The amortized cost value is close to the fair value and carrying value due to short term nature and since related to
investment with investment grade credit ratings. Allowance for credit losses and total unrealized gains and losses are
close to nil. Maturities are 1year or less. No held to maturity securities were sold before expiration date.
Assets and liabilities measured at fair value on a non-recurring basis
In 2020 and 2021, we had no significant fair value measurements on a non-recurring basis from regular business
activities. We did not recognize any impairment charges for goodwill and other intangible assets during 2020 and
2021. For fair value measurements in relation to the acquisition of Berliner Glas in 2020 and the subsequent divestment of
the non-semiconductor businesses in 2021, we refer to Note 10 Business combinations and divestitures.
224
ASML ANNUAL REPORT 2021 26. Related parties and variable interest entities
Carl Zeiss SMT GmbH is our single supplier, and we are their single customer, of optical columns for lithography
systems. Carl Zeiss SMT GmbH is capable of developing and producing these items only in limited numbers and only
through the use of manufacturing and testing facilities in Oberkochen and Wetzlar, Germany. Our relationship with Carl
Zeiss SMT GmbH is structured as a strategic alliance that is run under the principle of ‘two companies, one business’
and is focused on continuous innovation and improvement of operational excellence in the lithography business.
We have a 24.9% interest in Carl Zeiss SMT Holding GmbH & Co. KG, which owns 100% of the shares in Carl Zeiss SMT
GmbH. Based on the 24.9% investment, Carl Zeiss SMT Holding GmbH & Co. KG and its subsidiaries are considered
related parties. Additionally, we have determined that Carl Zeiss SMT Holding GmbH & Co. KG is a variable interest entity
because the entity was established without substantive voting rights since there is disparity between our voting rights
and our economics, as well as substantially all of Carl Zeiss SMT Holding GmbH & Co. KG’s activities involve us or are
conducted on our behalf. However, we are not the primary beneficiary of the variable interest entity because we lack the
power to direct the activities that most significantly impact Carl Zeiss SMT Holding GmbH & Co. KG’s economic
performance.
We had several framework agreements in place with Carl Zeiss SMT GmbH since 1997. We entered into a new
framework agreement in September 2021 with Carl Zeiss SMT GmbH, with effect as of the beginning of 2021. This
agreement replaces our key existing framework agreements and aligns our business interests in order to focus on
supporting our end customers. The key components to the new framework agreement are:
• A behavior and interaction model that fosters mutual respect and understanding
• A governance model that enables both companies to become more effective and aligned in their decision-making and
the execution of the strategy in the business via mutual approval on (i) certain investment decisions affecting the
lithography business, and (ii) the requirements of all products supplied by Carl Zeiss SMT GmbH
• New variable pricing model for purchases of products and services determined by the relevant annual financial
performance of both ASML and Carl Zeiss SMT GmbH in the lithography business
• Cash support via additional prepayments on product deliveries to ensure Carl Zeiss SMT GmbH a minimum adjusted
free cash flow floor in an annual period, if certain criteria are met
• A commitment from ASML to finance the capital expenditures of Carl Zeiss SMT GmbH up to €1 billion if their
investments required to execute on the lithography business roadmap exceed certain thresholds, measured annually
The financing would be through loan agreements, with the key terms being:
• Ten years term loans with linear annual repayment after three years grace period
• Interest rate subject to a floor of 0.01% and a cap of 1%
• Voluntary prepayment option without penalty
The two companies have agreed to perpetually continue their strategic alliance in order to meet end customer demand,
even in case of termination of the new framework agreement.
Transition from previous agreements
In 2016, we agreed with Carl Zeiss SMT GmbH to support their R&D costs, capital expenditures and supply chain
investments, in respect of EUV 0.55 NA (High-NA). With our new framework agreement, these payments will no longer be
made starting in 2021. We paid €969.1 million prior to the effective amendment date of the new framework agreement, of
which €305.5 million relating to R&D costs, which was not to be repaid, and €663.6 million relating to capital
expenditures and supply chain investments. The method of repayment for the capital expenditure and supply chain
investment support has been converted to be repaid annually to ASML between 2021 and 2032. This amount is
presented within Other Assets as Advanced payments to Carl Zeiss SMT GmbH. The new framework agreement does
not change the risk associated with these assets.
The cash outflows from ASML in the new variable pricing model for purchases of products and services was determined
to currently have two elements. The first is cash outflows for purchasing products and services reflected in our inventory
valuation and cost of sales. The second consists of R&D funding for High-NA as Carl Zeiss SMT GmbH, for which these
costs are presented within Research and development costs. For 2021, this amount was determined to be €61.2 million.
Under the previous High-NA agreement, we incurred R&D costs of €96.1 million in 2020 and €94.2 million in 2019.
225
ASML ANNUAL REPORT 2021 An initial loan of €124.4 million has been provided on September 29, 2021, which is valued at amortized cost and
presented within Other Assets. Under the previous High-NA agreement, we provided support for capital expenditures
and supply chain investments in 2020 of €221.4 million and in 2019 of €188.6 million.
In addition to the High-NA support, we make non-interest bearing advance payments to support Carl Zeiss SMT GmbH’s
work-in-process. These payments are made to secure optical column deliveries and these advance payments are settled
through future lens or optical column deliveries, and are also presented in Other Assets. The new framework does not
change our right to settle the previously paid amounts and does not change the risk associated with these assets. We
will continue to support Carl Zeiss SMT GmbH's work-in-process under the new framework agreement through
prepayments on product deliveries.
The outstanding balances with Carl Zeiss SMT Holding GmbH & Co. KG and its subsidiaries in our Consolidated Balance
Sheets, as well as our maximum exposure to losses as of December 31, 2021:
Year ended December 31 (€, in millions)
Advance payments included in Other assets
Advance payments included in Property, plant & equipment
Loan receivable
Right-of-use assets - Finance
Investment agreement for 24.9% equity
Accounts payable
Accrued and other liabilities
2020
933.8
52.8
—
149.9
820.7
110.9
—
Maximum
exposure to loss
982.8
82.1
124.4
—
892.5
—
—
2021
982.8
82.1
124.4
—
892.5
482.7
—
Our maximum exposure to loss related to our involvement in Carl Zeiss SMT Holding GmbH & Co. KG as a variable
interest entity includes the carrying value of each of the assets, as well as the risk of any future operating losses of Carl
Zeiss SMT Holding GmbH & Co. KG, which cannot be quantified.
The Right-of-use assets from finance leases in 2020 mainly consisted of facilities and tooling related to our High-NA
agreement with Carl Zeiss SMT, for which the funds are prepaid by ASML. This agreement was replaced by a new
framework agreement. These assets no longer meet the definition of a lease upon entering into the new agreement. They
are classified as part of Other assets in 2021.
The total purchases from Carl Zeiss SMT Holding GmbH & Co. KG and its subsidiaries are as follows:
Year ended December 31 (€, in millions)
Total purchases
2019
1,502.3
2020
1,623.9
2021
2,070.3
Other related party considerations
There have been no transactions between ASML or any of its subsidiaries, any other significant shareholder, any director
or officer, or any relative or spouse thereof, other than ordinary course (compensation) arrangements. During our most
recent fiscal year, there has been no, and at present there is no, outstanding indebtedness to ASML owed by or owing to
any director or officer of ASML or any associate thereof. Furthermore, ASML has not granted any personal loans,
guarantees, or the like to members of the Board of Management or Supervisory Board.
226
ASML ANNUAL REPORT 2021 27. Subsequent events
Subsequent events were evaluated up to February 9, 2022, which is the date the Financial Statements included in this
Annual Report were approved.
ASML Berlin manufactures components for ASML’s lithography systems, including wafer tables and clamps, reticle
chucks and mirror blocks. There was a fire on January 2, 2022 inside a part of one production building on the site in
Berlin and the smoke partly impacted an adjacent building. We have been able to resume production in parts of these
buildings already. The other buildings on the site have not been affected and are fully operational. We are in the process
of a thorough investigation and make a full assessment on the financial impact. Based on our current insights, we believe
we can manage the consequences of this fire without significant impact on our system output.
There are no other events to report.
Veldhoven, the Netherlands
February 9, 2022
/s/ Peter T.F.M. Wennink
Peter T.F.M. Wennink
President, CEO and member of the Board of Management
/s/ Roger J.M. Dassen
Roger J.M. Dassen
Executive Vice President, CFO and member of the Board of Management
227
ASML ANNUAL REPORT 2021 Non-financial
statements
228
ASML ANNUAL REPORT 2021 Assurance Report of the
Independent Auditor
To: the General Meeting of Shareholders and the
Supervisory Board of ASML Holding N.V.
applying these reporting criteria, taking into account
applicable law and regulations related to reporting.
Our conclusion
We have reviewed the non-financial information of ASML
Holding N.V. (hereafter:’ the Company’) for the year ended
31 December 2021 (hereafter: the non-financial
information).
Based on the procedures performed nothing has come to
our attention that causes us to believe that the non-
financial information is not prepared, in all material
respects, in accordance with the reporting criteria as
described in the ‘Reporting criteria’ section of our report.
4 to 7)
The non-financial information consists of: 2021 at a glance
(pages 5 to 8), Who we are and what we do (pages 9-27),
32-35)
Our strategy (pages 34-37), Our performance in 2021
50-140)
(pages 38-41 and 52-138) and the Non-financial
228-254)
statements (pages 221-246).
36-39
8-25)
Basis for our conclusion
We performed our review in accordance with Dutch law,
including Dutch Standard 3810N: "Assurance
engagements relating to sustainability reports", which is a
specified Dutch standard that is based on the International
Standard on Assurance Engagements (ISAE) 3000:
"Assurance Engagements other than Audits or Reviews of
Historical Financial Information (Attestation
engagements)". This engagement is aimed to obtain
limited assurance.
Our responsibilities in this regard are further described in
the ‘Auditor’s responsibilities’ section of our report.
We are independent of ASML Holding N.V. in accordance
with the ‘Verordening inzake de onafhankelijkheid van
accountants bij assurance-opdrachten’ (ViO, Code of
Ethics for Professional Accountants, a regulation with
respect to independence). Furthermore, we have complied
with the ‘Verordening gedrags- en beroepsregels
accountants’ (VGBA, Dutch Code of Ethics).
We believe the assurance evidence we have obtained is
sufficient and appropriate to provide a basis for our
conclusion.
Reporting Criteria
The non-financial information needs to be read and
understood together with the reporting criteria. ASML
Holding N.V. is solely responsible for selecting and
The reporting criteria used for the preparation of the non-
financial information are the Sustainability Reporting
Standards of the Global Reporting Initiative (GRI) and the
applied supplemental reporting criteria as disclosed in
section ‘About the non-financial information’ of the Annual
Report.
Materiality
Based on our professional judgement we determined
materiality levels for each relevant part of the non-financial
information and for the non-financial information as a
whole. When evaluating our materiality levels, we have
taken into account quantitative and qualitative
considerations as well as the relevance of information for
both stakeholders and the Company.
We agreed with the Supervisory Board that misstatements
which are identified during the review and which in our
view must be reported on quantitative or qualitative
grounds, would be reported to them.
Scope of the group review
ASML Holding N.V. is the parent company of a group of
entities. The non-financial information incorporates the
consolidated information of this group of entities to the
extent as specified in ‘About the non-financial information’
of the Annual Report.
Our group review procedures consisted of both review
procedures at corporate (consolidated) level and at entity
level. Our selection of entities in scope of our review
procedures is primarily based on the entities’ individual
contribution to the consolidated information.
By performing our review procedures at entity level,
together with additional review procedures at corporate
level, we have been able to obtain sufficient and
appropriate assurance evidence about the group’s non-
financial information to provide a conclusion about the
non-financial information.
Limitations to the scope of our review
The non-financial information includes prospective
information such as ambitions, strategy, plans,
expectations and estimates. Inherently the actual future
results are uncertain. We do not provide any assurance on
the assumptions and achievability of prospective
information in the non-financial information.
229
ASML ANNUAL REPORT 2021 References to external sources or websites in the non-
financial information are not part of the non-financial
information itself as reviewed by us. Therefore, we do not
provide assurance on this information.
Board of Management's responsibilities
The Board of Management of the Company is responsible
for the preparation of the non-financial information in
accordance with the applicable criteria as described in the
‘Reporting criteria’ section of our report, including the
identification of stakeholders and the definition of material
matters. The choices made by Board of Management
regarding the scope of the non-financial information and
the reporting policy are summarized within the section
‘About the non-financial information’ of the Annual Report.
Furthermore, the Board of Management is responsible for
such internal control as it determines is necessary to
enable the preparation of the non-financial information that
is free from material misstatement, whether due to fraud or
error.
The Board of Management is, amongst other things,
responsible for overseeing the Company’s reporting
process.
Auditor's responsibilities
Our responsibility is to plan and perform our review in a
manner that allows us to obtain sufficient and appropriate
assurance evidence for our conclusion.
Procedures performed to obtain a limited level of
assurance are aimed to determine the plausibility of
information and vary in nature and timing, and are less in
extent, compared to a reasonable assurance engagement.
The level of assurance obtained in a limited assurance
engagement is substantially lower than the assurance that
would have been obtained had a reasonable assurance
engagement been performed.
We apply the ‘Nadere Voorschriften Kwaliteitssystemen’
(NVKS, Regulations for Quality management systems) and
accordingly maintain a comprehensive system of quality
control including documented policies and procedures
regarding compliance with ethical requirements,
professional standards and applicable legal and regulatory
requirements.
Our review included among others:
• Performing an analysis of the external environment and
obtaining an understanding of relevant societal themes
and issues, and the characteristics of the Company;
• Evaluating the appropriateness of the reporting criteria
used, their consistent application and related
disclosures in the non-financial information. This
includes the evaluation of the results of stakeholder
dialogue and the reasonableness of estimates made by
the Board of Management;
• Obtaining an understanding of the reporting processes
for the non-financial information, including obtaining a
general understanding of internal control relevant to our
review;
• Identifying areas of the non-financial information where
a material misstatement, whether due to fraud or error, is
most likely to occur, designing and performing
assurance procedures responsive to these areas, and
obtaining assurance information that is sufficient and
appropriate to provide a basis for our conclusion. Our
procedures included, among others:
– Interviewing management and relevant staff
responsible for the strategy, policy and results;
– Interviewing relevant staff responsible for providing
the information for, carrying out internal control
procedures over, and consolidating the data in the
non-financial information;
– Obtaining assurance information that the non-financial
information reconciles with underlying records of the
Company;
– Reviewing, on a limited test basis, relevant internal
and external documentation;
– Performing an analytical review of the data and
trends.
• Evaluating the consistency of the non-financial
information with the information in the report which is
not included in the scope of our review;
• Evaluating the presentation, structure and content of the
non-financial information;
• Considering whether the non-financial information as a
whole, including the disclosures, reflects the purpose of
the reporting criteria used.
We have communicated with the Board of Management
and the Supervisory Board regarding, among other
matters, the planned scope and timing of the review and
significant findings that we identified during our review.
We have exercised professional judgement and have
maintained professional scepticism throughout the review,
in accordance with the Dutch Standard 3810N, ethical
requirements and independence requirements.
Amstelveen, 9 February 2022
KPMG Accountants N.V.
P.J. Groenland- van der Linden RA
230
ASML ANNUAL REPORT 2021 About the non-financial
information
Reporting scope
The content disclosed in this Annual Report1 is based on
the material topics identified for both ASML and our
stakeholders by the comprehensive materiality
assessment conducted in 2018. As part of the materiality
assessment, we asked internal and external stakeholders
to identify where in the value chain the theme has an
impact, where we include the boundaries as required by
the GRI Standards). Read more in: Non-financial statements -
Materiality assessment.
The materiality assessment was used as input for the
sustainability strategy setting for the period 2019-2025.
(Key) performance indicators have been determined to
report on our performance of this sustainability
strategy. During our investor day we announced our
updated sustainability strategy over which we will report
as of 2022.
The Reporting scope table (see next page) clarifies the
scope of the data reported per theme and explains where
the scope of the data provided differs from the scope of
the report’s content.
This Annual Report generally covers the performance of
ASML from January 1, 2021 to December 31, 2021.
The financial information in this report is derived from our
Financial Statements that are in conformity with US GAAP.
The reporting basis for the information in this report on our
performance in the area of sustainability is prepared in
accordance with the GRI Sustainability Reporting
Standards and is presented in accordance with the ‘core’
option. Details of our compliance with the GRI standards
(GRI content index) can be found in a separate Reporting
Supplement available on the Website.
1. We publish two annual reports. One version of the annual report is prepared in
conformity with US GAAP. The other version of the annual report is prepared in
accordance with EU-IFRS and also complies with Article 362.9 of Book 2 of the
Dutch Civil Code. For internal and external reporting purposes, we apply US
GAAP. US GAAP is our primary accounting standard for setting financial and
operational performance targets.
Reporting process
Each theme has an owner who is responsible for the
theme ambition, strategy and relevant performance
indicators, as well as the timely delivery of content and
relevant data for reporting and monitoring the execution of
the strategy. The data is reviewed and consolidated by
Finance. Finance is also responsible for the reporting and
planning process for the Annual Report.
Reporting indicators
The Consolidated Financial Statements included in this
report are audited. Read more in: Consolidated Financial
Statements - Report of Independent Registered Public Accounting
Firm.
The non-financial data disclosed in this report is derived
from various sources and the way data is processed
differs within our operating subsidiaries and departments.
This causes a degree of uncertainty, because of limitations
in measuring and estimating data. We continue to work on
improving our sustainability control environment and data
collection processes.
Systems active in installed base
We monitor the number of active systems in our installed
base, which we service. This includes our EUV, DUV and
PAS5500 systems. We calculated the percentage of all
systems ever sold (EUV, DUV and PAS5500 systems) that
are still in use. Some systems in the field may not be
serviced by ASML, but are operational. For the indicator
'% of active systems' we apply assumptions for the
portion of systems active but not serviced by ASML.
Based on historical information and experience we
determine that 33% of non-ASML serviced systems are
still active in the field.
Scope 3 emissions
We measure and report the indirect emissions from our
activities in the value chain – scope 3 emissions. This
category includes emissions resulted from our operations
as well as the emissions from upstream supply chain and
downstream use of our products by customers. Read more
in: Our performance in 2021 - Environmental - Climate and energy -
Carbon footprint strategy.
When using the reported information, the following
methodology, assumptions and data reliability needs to be
considered:
• Due to its nature the scope 3 emissions data includes a
time lag. As a result the emissions reported in the
reporting year, are calculated by use of the actual data
sources from one year earlier.
• The emissions reported are in line with the Greenhouse
Gas (GHG) Protocol and are calculated for nine
categories, as described in the Scope 3 Accounting and
Reporting Standard issued by GHG Protocol, which are
deemed relevant to us and our value chain.
• The categories included: Cat.1 Purchased goods and
services, Cat.2 Capital goods, Cat.3 Fuel- and energy-
related activities, Cat.4 and Cat.9 Upstream /
Downstream transportation & distribution, Cat.5 Waste
generated in operations, Cat.6 Business travel, Cat.7
231
ASML ANNUAL REPORT 2021 Employee commuting, Cat.11 Use of sold products, and Cat.12 End-of-life treatment of sold products. The remaining
five categories are deemed irrelevant or immaterial to ASML and our value chain. Therefore we exclude these
categories from our Scope 3 emissions assessment.
• The applied emission factors used to calculate our value chain carbon footprint are from the latest DEFRA (UK
Department for Environment, Food & Rural Affairs) 2021 emission factors.
• The basis for the calculation method applied for scope 3, Cat.11 Use of sold products is based on SEMI S23 standard
for the system energy measurement. In addition, we apply certain assumptions such as system availability level and
performance level. These may change overtime due to system enhancements.
• The basis for the calculation method applied for scope 3, Cat.1 Purchased goods and services is based on spend. As
a result, it relies on expenditure-based emission factors, which is an indirect measure of GHG intensity of goods and
services.
• In addition, we have gathered actual emissions data from our suppliers for Cat.4 Upstream transportation &
distribution and Cat.6 Business travel, which accounts for around 3% of total Scope 3 emissions.
Reporting scope table
The below table clarifies the scope of the data reported per theme and explains where the scope of the data provided
differs from the scope of the report’s content. Companies excluded in the scope below do not have data available for
certain subchapters.
(Sub)chapter Annual Report
Who we are and what we do
Scope
How we innovate
Customer intimacy
Financial performance
Financial performance indicators
Climate and energy
Carbon footprint strategy
Product energy efficiency strategy
Circular economy
ASML worldwide
ASML worldwide
ASML worldwide
ASML locations above 250 FTE, excluding BG
ASML products, excluding BG
Reduce waste in our operations
Re-use parts and materials from installed base ASML products, excluding BG
ASML products, excluding BG
Recycle mature products through
refurbishment
Our people
ASML locations above 250 FTE, excluding BG
Our people vision
Unified culture
Employee experience
Strong leadership
Ensuring employee safety
Community engagement
Community engagement program
ASML Foundation
Innovation ecosystem
Partnerships with research institutes and
universities
Collaborating with R&D partners
Supporting startups and scaleups
Responsible supply chain
Sourcing and supply chain strategy
Supplier performance management
Supply chain risk management
Responsible Supply Chain
Responsible business
Business ethics and Code of Conduct
Product safety
Water management
Rest
ASML worldwide, excluding BG
ASML worldwide, excluding BG
ASML worldwide, excluding BG – NOTE: The indicator ‘Absenteeism’ is excluding
Cymer and HMI. The scope for indicator Open positions filled by internal
candidates (in %) excludes ASML US.
ASML worldwide, excluding BG
ASML worldwide, excluding BG
ASML worldwide, excluding BG – NOTE: Technology promotion is ASML
Netherlands only
ASML worldwide, excluding BG
ASML worldwide, excluding BG
ASML worldwide, excluding HMI and BG
ASML Netherlands
ASML worldwide, excluding BG
ASML worldwide, excluding BG
ASML worldwide, excluding BG
ASML worldwide, excluding HMI and BG
ASML worldwide, excluding BG
ASML products
ASML locations above 250 FTE, excluding BG - except for Total Ultra-pure water
consumption and Total water recycled and re-used, which is Veldhoven (the
Netherlands), Linkou (Taiwan) and HMI Tainan (Taiwan) only.
ASML worldwide
232
ASML ANNUAL REPORT 2021 Review of this report
As requested by our Board of Management, our non-
financial information has been independently reviewed.
Our external auditor (KPMG) was asked to review this non-
financial information. For KPMG’s assurance report, including
details of the work they carried out, read more in: Non-financial
statements - Assurance Report of the Independent Auditor.
Scope changes
Compared to the 2020 Annual Report, the following scope
changes have been made:
• The scope of 'Carbon footprint of our operations', 'Water
management' and 'Reduce waste' for the 2021 non-
financial data is extended with the manufacturing
locations 'San Jose', 'Tainan' and 'Other'. Other includes
the locations with more than 250 FTE combined, except
BG.
• 'GRI 306: Waste 2020' requires a split between 'waste
diverted from disposal' and 'waste directed to disposal'.
The non-financial data layout of 'Circular economy-
reduce waste' is changed to be compliant with the
updated GRI for waste.
• The scope of 'Fair Remuneration' is extended with a
split by region for 2019, 2020 and 2021 non-financial
data.
• The source for 'Total training expenses' changed from a
HR-report to a more detailed SAP report.
• As of 2021, overall ranking for South Korea is no longer
conducted by Universum. The result reported for 2021 is
based on a customized ranking report. We corrected
2020 result for the Netherlands by including the overall
ranking.
233
ASML ANNUAL REPORT 2021 Non-financial indicators
The non-financial Key Performance Indicators (KPIs) are reported in the different chapters of our sustainability reporting within Our position in the semiconductor value chain. The
other non-financial performance indicators (PIs) are reported in the tables below.
Customer intimacy
Description
Overall Loyalty Score (Customer Feedback Survey)
VLSI Survey results
2019
n/a
2020
72.6%
2021 Comments
n/a The survey takes place every 24 months (last survey held in September 2020)
Large suppliers of chipmaking equipment - score (scale 0 to 10)
Suppliers of Fab equipment - score (scale 0 to 10)
Technical leadership for lithography equipment - score (scale 0 to 10)
9.2
9.2
9.6
9.3
9.3
9.7
9.2
9.2
9.5
ASML ANNUAL REPORT 2021
234
Climate and energy - Energy
Description
Energy consumption (in TJ)
Energy savings worldwide through projects (in TJ)
Electricity purchased per location (in TJ)
Veldhoven
Wilton
Linkou
San Diego
San Jose
Tainan
Other
2019
1,367
80
2020
1,412
114
751
102
36
162
—
—
—
802
114
35
167
—
—
—
2021 Comments
1,689
13 In 2021 we started a new master-plan period for 2021-2025 with a target to achieve 100 TJ
energy savings by the end of 2025. The savings are realized by projects resulting in improved
technical installation or by projects resulting in an improved production process. Types of
energy included in savings: fuel and electricity. The figures from 2019 and 2020 are related to
the master-plan 2016-2020. The savings reported are cumulated compared to the base year,
therefore they are not comparable.
881
120
34
176
28 In scope for this indicator since 2021.
36 In scope for this indicator since 2021.
47 In scope for this indicator since 2021. Other includes the locations with more than 250 FTE
Total
Fossil fuels consumed from non-renewable sources (in TJ) 1
Veldhoven
Wilton
Linkou
San Diego
San Jose
Tainan
Other
Total
Fuels consumed from renewable sources (in TJ)
1,051
1,118
1,322
combined.
159
111
—
46
—
—
—
316
—
141
112
—
40
—
—
—
293
—
Fossil fuels consumed consists of only natural gas.
184
127
— No natural gas is used by this manufacturing location.
43
5 In scope for this indicator since 2021.
— In scope for this indicator since 2021. No natural gas is used by this manufacturing location.
8 In scope for this indicator since 2021. Other includes the locations with more than 250 FTE
combined.
367
—
1.
The sources of the conversion factors used are the Dutch Emissions Authority and the US Energy Information Administration.
ASML ANNUAL REPORT 2021
235
Climate and energy - CO2 emissions
Description
Emission intensity (scope 1+2+3)
Type of Energy Attribute Certificates (in TJ)
Guarantee of Origins (GOs)
Renewable Energy Certificates (RECs)
I-RECs
Total
Type of Energy Attribute Certificates (in kton)
Guarantee of Origins (GOs)
Renewable Energy Certificates (RECs)
I-RECs
Total
Number of significant fines and non-monetary sanctions
The monetary value of significant fines for non-compliance with
environmental laws and regulations (in thousand €)
2019
0.01
2020
0.61
2021 Comments
0.47 In 2020 the definition for emission intensity has changed and is calculated as scope 1,2 and
3 emissions (in kt) divided by total revenue (in millions). The recalculated number for 2019
amounts to 0.56. In 2019 the emission intensity was calculated as net scope 1 and scope
2 emissions (in kt) divided by total revenue (in millions). Per 2020, scope 3 is included in the
calculation.
751
264
—
802
281
35
883
331
—
1,015
1,118
1,214
116
21
—
137
—
—
110
21
9
140
1
70
121
24
—
145
— In 2020, there was one fine for HMI Beijing due to fact that they had no environmental permit.
—
ASML ANNUAL REPORT 2021
236
Circular economy - Waste management
Description
Total waste generated (in 1,000 kg)1
Total non-hazardous waste
Total hazardous waste
Total construction waste
Total
Total waste by disposal (in 1,000 kg)1
Waste diverted from disposal
Waste directed to disposal
Total
Waste diverted from disposal: Recycling1
Total non-hazardous waste
Total hazardous waste
Total construction waste
Total
Waste directed to disposal: Incineration (with energy recovery)1
Total non-hazardous waste
Total hazardous waste
Total construction waste
Total
Waste directed to disposal: Incineration (without energy
recovery)1
Total non-hazardous waste
Total hazardous waste
Total construction waste
Total
Waste directed to disposal: Landfill1
Total non-hazardous waste
Total hazardous waste
Total construction waste
Total
Total waste disposed (% of total waste from operations)1
Incineration (with energy recovery)
Incineration (without energy recovery)
Landfill
Total
Used lithography systems sold
2019
2020
2021 Comments
4,565
4,654
5,284
362
608
372
231
395
199
5,535
5,257
5,878 Total waste is treated offsite, no waste treatment onsite.
4,532
1,003
5,535
3,618
336
578
4,532
567
9
20
596
37
15
0
52
343
2
10
355
12%
1%
7%
20%
26
4,466
791
5,257
3,911
349
206
4,466
411
9
20
440
3
13
0
16
329
1
5
335
8%
—%
7%
15%
22
We apply recycling of waste. Other categories like preparation for re-use and composting are
not applicable to us.
Increase due to change in waste treatment by supplier. We engaged with the supplier to
recycle related waste.
4,544
1,334
5,878
4,028
346
170
4,544
938
16
17
971
51
27
0
78
267
6
12
285
17%
1%
5%
23%
23 Lifetime extension of mature systems.
1. The waste disposal methods are determined by information provided by the waste disposal contractor. As of 2021 we split total waste in waste directed to disposal and waste diverted from disposal as required by the GRI. The comparing figures for 2019
and 2020 are adjusted to disclose this split.
ASML ANNUAL REPORT 2021
237
Our people - Workforce indicators
Number of FTEs (payroll and temporary)
Payroll employees (in FTE)
Female (in %)
Male (in %)
Temporary employees (in FTE)
Female (in %)
Male (in %)
Total
Number of FTEs (by age group)
< 30
30 - 50
> 50
Unknown 1
Total
1.
In the US, it is not mandatory to register the age for temporary employees.
Our people - Workforce indicators
Number of payroll FTEs (split in full-time and part-time)
Full-time payroll FTEs (by age group)
< 30
30 - 50
> 50
Total
Full-time payroll FTEs (by gender)
Female (in %)
Male (in %)
Part-time payroll FTEs (by age group)
< 30
30 - 50
> 50
Total
Part-time payroll FTEs (by gender)
Female (in %)
Male (in %)
ASML ANNUAL REPORT 2021
Total ASML
2019
23,219
16
84
1,681
17
83
2020
25,082
17
83
1,399
16
84
2021
28,747
18
82
2,095
18
82
Asia
2020
6,027
2019
5,664
16
84
68
34
66
17
83
30
28
72
Europe
2020
13,627
17
83
1,087
19
81
2019
12,393
16
84
1,339
17
83
2021
7,404
17
83
26
19
81
2021
15,444
18
82
1,786
20
80
2019
5,162
17
83
274
11
89
US
2020
5,428
17
83
282
7
93
2021
5,899
17
83
283
8
92
24,900
26,481
30,842
5,732
6,057
7,430
13,732
14,714
17,230
5,436
5,710
6,182
4,894
4,798
15,606
16,848
4,130
270
4,556
279
6,344
19,058
5,158
282
1,628
3,902
201
1
1,518
4,300
238
1
2,191
4,933
305
1
2,378
8,924
2,430
—
2,381
9,615
2,718
—
3,041
11,007
3,182
—
24,900
26,481
30,842
5,732
6,057
7,430
13,732
14,714
17,230
888
2,780
1,499
269
5,436
899
2,933
1,600
278
5,710
1,112
3,118
1,671
281
6,182
Total ASML
Asia
2019
2020
2021
2019
2020
2021
2019
Europe
2020
2021
2019
2020
2021
US
4,397
13,567
3,674
21,638
4,351
14,938
4,028
23,317
5,664
16,682
4,501
26,847
1,612
3,856
193
5,661
1,512
4,280
232
6,024
2,185
4,917
299
7,401
1,898
6,937
1,988
1,941
7,730
2,207
2,367
8,651
2,542
10,823
11,878
13,560
887
2,774
1,493
5,154
898
2,928
1,589
5,415
1,112
3,114
1,660
5,886
15
85
41
1,264
276
1,581
37
63
15
85
39
1,337
389
1,765
37
63
16
84
46
1,420
434
1,900
37
63
16
84
—
1
2
3
17
83
17
83
—
1
2
3
—
100
17
83
—
2
1
3
—
100
14
86
41
1,259
270
1,570
37
63
14
86
39
1,332
378
1,749
37
63
15
85
46
1,415
423
1,884
37
63
17
83
—
4
4
8
62
38
17
83
—
4
9
13
46
54
17
83
—
3
10
13
27
73
238
Our people - Workforce indicators
Number of new hires payroll employees (in FTEs)
Number of new hires
New hires as a % of the total payroll employees
Gender
Female
Male
Total
Age group
< 30
30 - 50
> 50
Unknown
Total
Our people - Workforce indicators
Employee attrition (in FTE)
Number of involuntary employee attrition
Number of voluntary employee attrition
Total
Gender
Female
Male
Total
Age group
< 30
30 - 50
> 50
Total
Our people - Employee engagement
Engagement score We@ASML by gender
Female
Male
ASML ANNUAL REPORT 2021
Total ASML
2019
2,219
10
542
1,677
2,219
923
1,136
160
2020
1,932
8
454
1,478
1,932
854
947
131
2021
4,373
15
896
3,477
4,373
2,392
1,789
190
2
Asia
2020
598
10
123
475
598
338
253
7
2019
558
10
123
435
558
318
233
7
2021
1,848
25
313
1,535
1,848
1,213
627
6
2
Europe
2020
879
6
216
663
879
329
491
59
2019
1,102
9
280
822
1,102
380
643
79
2021
1,737
11
432
1,305
1,737
783
848
106
US
2020
455
8
115
340
455
187
203
65
2019
559
11
139
420
559
225
260
74
2021
788
13
151
637
788
396
314
78
2,219
1,932
4,373
558
598
1,848
1,102
879
1,737
559
455
788
Total ASML
2019
177
761
938
196
742
938
219
519
200
938
2019
75%
77%
2020
186
723
909
189
720
909
218
479
212
909
2020
80%
80%
2021
199
1,234
1,433
258
1,175
1,433
337
806
290
1,433
Asia
2020
38
201
239
56
183
239
73
149
17
239
2019
40
198
238
55
183
238
78
144
16
238
2021
41
421
462
78
384
462
143
292
27
462
Europe
2020
102
239
341
69
272
341
67
179
95
341
2019
80
257
337
72
265
337
61
198
78
337
2021
101
341
442
89
353
442
69
257
116
442
US
2020
46
283
329
64
265
329
78
151
100
329
2019
57
306
363
69
294
363
80
177
106
363
2021 Comments
78%
78%
2021
57
472
529
91
438
529
125
257
147
529
239
Our people - Employee engagement
Description
Employee Attrition (in %)
Attrition rate of high performers (in %)
Promotion rate - Overall (in %)
Promotion rate of high performers (in %)
Absenteeism (in %)
Asia 1
Europe
US
Our people - Employee engagement
Description
Open positions filled by internal candidates (in %)
Rotation ratio (in %)
Human Capital Return On Investment (ROI)
People Performance Management process completion (in %)
Development Action Plan completion (in %)
Scholarships
Number of scholarships Netherlands
Number of scholarships US
Number of scholarships Taiwan
Number of scholarships China
Number of scholarships South Korea
2019
2020
2021 Comments
4.3
2.4
14
38
0.4
2.6
1.6
3.8
1.7
13
37
0.5
2.3
1.3
5.4
2.6 A high performer is an employee with the merit classification 'exceptional' or 'exceeds
expectations' from the annual employee performance evaluation.
15
40
0.7
2.4
1.4
In some Asian countries sick leave is regarded as annual leave, hence illness-related
absenteeism is recorded as 0%.
2019
2020
2021 Comments
36
18
2.1
97
76
53
—
—
—
—
30
20
2.4
97
77
49
—
16
5
3
29
13
3.0 Human Capital Return on Investment is calculated as total net sales minus total operating
expenses excluding total employee salaries & benefits, divided by total employee salaries &
benefits.
95
74
50
7
24
5
5
ASML ANNUAL REPORT 2021
240
Our people - Employee engagement
Description
Total training expenses (in million €)
2019
19
2020
12
2021 Comments
27 Out-of-pocket expenses for technical and non-product related classroom trainings as
recorded in MyLearning (learning management system).
Average spend on training and development per FTE (€)
836
494
1,020
Number of total training hours per FTE
Includes technical and non-product related training hours (including nomination courses).
Female
Male
Weighted average
Number of technical training hours per technical FTE
Female
Male
Weighted average
Number of non-product related training hours per FTE
Female
Male
Weighted average
41
46
45
35
41
40
13
8
9
26
29
28
22
27
26
7
4
5
25
30
29
22
29
28
8
5
5
The number of technical training hours per FTE is calculated as the total technical training
hours divided by the total payroll FTEs working in technical departments within Operations and
R&D.
Excluding nomination courses (leadership development programs)
Nomination courses: Leadership Development Programs
Number of training hours
33,715
22,896
6,264 Due to COVID-19 only two ECAP programs started in 2021
Number of employees attending (unique)
387
216
48
ASML ANNUAL REPORT 2021
241
Our people - Diversity & inclusion
Description
Male/female in managerial positions and in Supervisory Board
(in headcount) 1
Supervisory Board
Board of Management
Senior Management
Middle Management
Junior Management
Other
Total
Male/female split by sector (in FTE)
Customer Support
Manufacturing and Supply Chain Management
Research & Development
General & Administrative
Sales and Mature Product Services
Strategic Supply Management
Total
1. Temporary employees are not included in the headcount numbers.
Our people - Diversity & inclusion
Description
Workforce by gender male / female (in %)
Female
Male
Total
Number of nationalities working for ASML
Asia
Europe
US
Worldwide total
Foreign nationals working for ASML (in %)
Asia
Europe
US
Worldwide total
ASML ANNUAL REPORT 2021
Gender
Gender ratio
Age group
Comments
Female Male
Total
Female Male
< 30
30 - 50
>50
Total
1
283
1,704
1,136
15,311
18,435
1
36
5,708
5,745
8
4
339
1,163
216
3,320
5,050
8
5
622
2,868
1,388
24,339
29,230
3
67
363
218
4,607
5,258
5
5
555
2,505
1,170
19,732
23,972
Gender
8
5
622
2,868
1,388
24,339
29,230
38%
—%
11%
13%
16%
19%
18%
62%
100%
89%
87%
84%
81%
82%
Gender ratio
Female Male
Total
Female Male
795
1,507
1,733
1,099
116
192
6,596
5,973
10,098
1,632
586
515
7,391
7,480
11,831
2,731
702
707
5,442
25,400
30,842
11%
20%
15%
40%
17%
27%
18%
89%
80%
85%
60%
83%
73%
82%
2019
2020
2021 Comments
16
84
100
36
103
82
118
6
31
29
25
17
83
100
35
103
86
120
6
32
27
25
18
82
100
33
108
90
122
5
33
28
26
Foreign nationals working for ASML (in %) is the percentage of payroll and temporary
employees with another nationality than the country in which the employee is working
242
Our people - Labor relations
Description
Percentage of employees covered by collective bargaining
agreements
2019
52%
2020
53%
2021 Comments
52%
Our people - Fair remuneration
Description
Ratio of base salary of women to men 1,2
Senior Management 3
Middle Management 3
Non-management 3
Ratio of base salary women to men, split by region 1
Europe
Asia
US
Ratio of total cash of women to men 1,4
Senior Management 5
Middle Management 5
Non-Management 5
Ratio of total cash women to men, split by region 1
Europe
Asia
US
2019
2020
2021 Comments
103%
99%
98%
—%
—%
—%
102%
98%
98%
—%
—%
—%
99%
98%
98%
99%
96%
99%
99%
98%
97%
97%
96%
99%
99% Calculation method has been changed compared to 2019 see footnote 3.
99%
Split to region is made since 2021, including comparative figure for 2020.
98%
99%
96%
100%
Total cash is base salary plus short-term incentive.
99% Calculation method has been changed compared to 2019 see footnote 5.
99%
Split to region is made since 2021, including comparative figure for 2020.
98%
98%
96%
100%
Internal pay ratio (CEO versus employee remuneration) 6
38
38
40 For more information, see Supervisory Board - Remuneration Report
1. The base salary and total cash used for the calculation in the reporting year consists of the actual base salaries and total cash paid in the previous reporting year.
2.
In 2020 the definition for the ratio of base salary women to men has changed and is calculated as: average weighted salary female/average weighted salary male * 100%. In 2019 the ratio of the base salary women to men was calculated as: average salary
per grade female/ average salary per grade male *100%.
3. The recalculated ratio of base salary of women to men for 2019 of senior management is 99%. The recalculation does not impact the 2019 PI for middle management and non-management.
4.
In 2020 the definition for the ratio of total cash women to men has changed and is calculated as: average weighted salary including bonus female/average weighted salary including bonus male * 100%. In 2019 the ratio of the base salary women to men was
calculated as: average salary per grade including bonus female/ average salary per grade including bonus male *100%.
5. The recalculated ratio of total cash of women to men for 2019 PI of senior management is 96%. The recalculation does not impact the 2019 PI for middle management and non-management.
6. The calculation approach of the Internal pay ratio is disclosed in the section Relationship between CEO and average remuneration (pay ratio). We revised our calculation approach to the internal pay ratio based on the December 2020 guidance from the
Monitoring Committee Dutch Corporate Governance Code on section 3.4.1.iv of the Dutch Corporate Governance Code effective as of 2021. The comparative historical numbers of the internal pay ratio have therefore been restated to include the social
security expenses in the internal pay ratio numbers. In the calculation, we have taken into account the payroll employees only, since this ensures consistency with the figures disclosed in the consolidated financial statements. The ratio would be lower in
case we would incorporate the temporary employees as they earn on average a higher remuneration.
ASML ANNUAL REPORT 2021
243
Our people - Employee safety
Description
ASML recordable incident rate
Number of recordable incidents
Number of fatalities
Number of recordable incidents by region:
Asia
Europe
US
Number of first-aid incidents per body part affected:
Head
Eyes
Shoulder
Chest
Back
Arm
Hand
Leg
Foot
Other
Total
Number of first-aid incidents per region:
Asia
Europe
US
Total
Number of near misses by region:
Asia
Europe
US
Total
2019
0.28
2020
0.18
2021 Comments
0.17
66
—
12
26
28
45
4
4
2
17
19
80
29
12
29
46
—
12
19
15
37
7
4
3
10
12
70
19
19
1
241
182
44
143
54
241
1,031
1,498
718
3,247
47
80
55
182
3,201
1,221
631
5,053
48
—
7
29
12
45
8
10
2
13
12
74
18
19
12
213
34
112
67
213
1,868
1,354
991
4,213
A near miss is an unplanned event which did not result in injury, illness, or damage, but had the
potential to do so
ASML ANNUAL REPORT 2021
244
Community engagement
Description
Number of students reached
Time investment of volunteers (in hours) - Technology promotion and
Campus promotion
Time investment of volunteers (in hours) - Community Involvement
Total cost of volunteering (x €1,000)
# ASML Foundation projects supported
2019
8,998
5,445
2020
13,378
2,936
2021 Comments
9,168
1,886
7,664
1,333
2,393
772
17
271
22
283
22
Our supply chain - Responsible supply chain
Description
RBA Code of Conduct compliance contract clause for LTSA suppliers
(in %)
Suppliers assessed on sustainability (in #) split by:
2019
59%
2020
67%
2021 Comments
76%
Audits
RBA Self-Assessment Questionnaire (SAQ)
12
29
—
59
— In 2020 and 2021, the audits have been put on hold due to COVID-19.
56
RBA self-assessment completed (in %)
Suppliers identified with overall risk level 'high' on all sustainability
elements (in #)
78%
—
88%
—
This indicator measures whether improvement plans are closed before the due date agreed
with the supplier. The improvement plans are initiated in prior or current reporting period(s)
based on RBA SAQs or Audits.
89%
— The risk level is determined by means of the RBA SAQ and ASML assessment, applied to
major product-related suppliers
ASML ANNUAL REPORT 2021
245
Our supply chain - Supply chain
Description
Total number of suppliers
Number of suppliers, split by region:
Asia
EMEA (excl. Netherlands)
Netherlands
North America
Total
Number of suppliers, split by:
Product-related
Non-product related
Total
Number of suppliers, split by:
Critical
Non-critical
Total
Number of critical suppliers, split by:
Product-related
Non-product related
Total
Number of suppliers in scope for risk management
Total sourcing spend (in million €)
Sourcing spend per supplier group (in %)
Product-related
Non-product related
Proportion of spending on local suppliers (in %)
Veldhoven
Linkou
San Diego
Wilton
2019
5,003
1,356
700
1,620
1,327
5,003
790
4,213
5,003
221
4,782
5,003
198
23
221
212
2020
4,749
1,313
684
1,477
1,275
4,749
779
3,970
4,749
222
4,527
4,749
188
34
222
235
2021 Comments
4,657
1,319
702
1,459
1,177
4,657
772
3,885
4,657 Only Tier 1 suppliers
229 Critical suppliers are Tier 1 suppliers of strategic importance
4,428
4,657
197
32
229
243 This includes 14 critical N-Tier suppliers
6,683
7,645
9,045
66%
34%
68%
32%
70%
30%
We define 'local' as the country in which a significant location of operation is located. The
significant locations of operations are the main manufacturing sites of ASML, which are located
in Veldhoven, the Netherlands; Linkou, Taiwan; San Diego and in Wilton, both in the United
States.
46%
47%
45% A relatively large amount of the total supplier spend for Veldhoven relates to Carl Zeiss (non-
local)
46%
89%
66%
48%
94%
71%
50%
92%
64%
ASML ANNUAL REPORT 2021
246
Responsible business - Business ethics
Description
Total number of Speak Up messages
Anti-corruption & bribery Speak Up messages
Human rights Speak Up messages
2019
255
16
58
2020
229
19
69
2021 Comments
396 In October 2020 a new code of conduct and an updated speak up policy is launched.
37 None of the Speak Up messages led to any indication of violation of anti-corruption laws.
187
% Completion of Code of Conduct online training
86%
88%
71%
Responsible business - Product safety
Description
Percentage of product types shipped that have a SEMI S2 Safety
Guidelines compliance report
Number of (significant) fines for non-compliance with product design
related laws and regulations
2019
100%
2020
100%
2021 Comments
100%
—
—
—
Responsible business - Water management
Description
Water consumption (in 1,000 m3)
Veldhoven
San Diego
Wilton
Linkou
San Jose
Tainan
Other
Total
Total Ultrapure water consumption (in 1,000 m3)
2019
2020
2021 Comments
628
658
90
90
30
—
—
—
838
115
80
94
28
—
—
—
860
127
728
105
95
26
21 In scope for this indicator since 2021.
30 In scope for this indicator since 2021.
36 In scope for this indicator since 2021. Other includes the locations with more than 250 FTE
combined.
1,041 Municipal water supply
84 Only Veldhoven, Linkou and HMI Tainan are in scope for this indicator. The other locations are
excluded from the scope because the data to report on the indicator is not yet available.
1.2% Only Veldhoven, Linkou and HMI Tainan are in scope for this indicator. The other locations are
excluded from the scope because the data to report on the indicator is not yet available.
Total water recycled and reused (in %)
2.4%
1.8%
Water intensity
71
62
56 Water intensity is calculated as total water consumption (in m3) divided by total revenue (in
millions).
ASML ANNUAL REPORT 2021
247
Materiality assessment
Dialogue and knowledge-sharing are important in an innovation-driven industry. To this end, we
continually and openly communicate with our main stakeholder groups through various
channels and at different levels in our organization. Our stakeholders are parties affected by our
activities or those who have a direct interest in or who can influence our company’s long-term
business success.
Our materiality process
We develop our materiality assessment framework according to the GRI Standards, which includes principles of
stakeholder engagement and identification, analysis and prioritization. We conduct our materiality assessment through
a three-step approach.
Step 1: Identification of
relevant aspects
We update a shortlist of relevant
topics annually. These are based on
an analysis of stakeholder feedback,
continuous stakeholder engagement,
risks and opportunities, and a review
of relevant industry and global trends.
Topics include those important to our
stakeholders in their decision-making,
and, for ASML, those that can have
an environmental, social or economic
impact, in the organization, value chain
or society.
Step 2: Analysis and
prioritization
We follow GRI Standards guidelines to
rate how important topics are based on
the level of stakeholder concern, and
the significance of our environmental,
social and economic impact resulting
from our business and operations.
Step 3: Confirmation and
implementation
The results of the materiality
assessment are used to shape our
strategy, setting long-term targets and
aimed at long-term value creation for all
of our stakeholder groups. The results
also define the content of this Annual
Report, in line with the GRI principles for
defining report content.
Input
International standards and legislation, such as: GRI, ISO 26000, TCFD, the EU Non-
financial Reporting Directive
Industry and media analysis, such as: RBA, industry development reports,
benchmarking sustainability performance from our peers in the DJSI
ESG analysts’ questionnaires/assessments, such as: DJSI, Sustainalytics, ISS ESG
rating, CDP, MSCI ESG Index, FTSE4Good
Stakeholder engagement: feedback from regular and occasional stakeholder
communication, ESG conferences and networks. Read more in: Stakeholder engagement.
Output
We narrow the long list of topics down to a shortlist of those relevant to us. The impact
of these topics is gauged using available data, feedback from continuous stakeholder
engagement, discussions with senior management and Board of Management members,
business owners, and other relevant internal stakeholders (such as subject-matter experts).
The Board of Management validates and approves assessment results. We identified
the environmental, social, and governance topics that have the greatest impact on our
business, and are of the greatest concern to stakeholders in our value chain. Read more in:
How we create value.
Strategy and reporting structure
In our latest assessment, conducted in 2018 for the sustainability strategy 2019-2025,
we identified 17 material topics for sustainability, which we categorize in 5 material
sustainability themes, and 2 ASML company specific topic (Innovation management
and customer intimacy). These are the themes most relevant to our stakeholders in their
decision-making, and in areas where ASML has or could have the highest impact. For each
of the material themes we have determined our ambitions and have set long-term targets
(2025). We monitor the progress, measure the performance and report these with regular
intervals, at least annually in the Annual Report.
We also identified other factors we need to address as a company committed to
conducting our business in an accountable and caring way. These include issues
our stakeholders expect us to act on or issues we have an impact on. We have been
categorized these under the ‘Responsible business' themes. Read more in: Materiality matrix
below.
Our current sustainability strategy was launched in 2018 for the time period 2019–2025,
focusing on five strategic sustainability areas. The evolution of our company and the
increasing demand for transparent reporting on environmental, social and governance
(ESG) aspects of sustainability have made us re-assess our sustainability strategy in
2021. To this end, we have updated our materiality assessment for the remaining period
of 2022–2025, based on major sustainability topics and their relative importance to our
business operations. We will implement the updated materiality topics in our reporting
from reporting year 2022 onwards. Read more in: Our strategy.
248
ASML ANNUAL REPORT 2021 We also support the 2030 ambition defined in the United Nations Sustainable Development Goals (SDGs) adopted by the
United Nations. These goals aim to protect the planet and improve the lives of people everywhere. We have mapped out
how our strategy and current efforts actively support these goals. The materiality table outlines the five most relevant
SDGs we contribute to. The SDG 9 'Industry, Innovation and Infrastructure' goal is connected to the core of our company,
as innovation is our lifeblood and the engine that drives our business. We also contribute towards the SDG 4 'Quality
Education', SDG 8 'Decent Work and Economic Growth', SDG 12 'Responsible Production and Consumption' and SDG
13 'Climate Action' goals. We highlight our performance against these SDGs throughout this report.
Materiality matrix
Level of stakeholder concern
High
(E) Energy management (operations)
(E) Carbon footprint
(E) Climate change
(S) Human rights
(S) Community engagement
(S) Occupational health and safety
(S) Diversity and inclusion
(S) Innovation ecosystem - Startups
and scaleups support
(G) Water management
(G) Tax strategy
(G) Financing policy
Low
Low
(B) Innovation management
(B) Customer intimacy
(E) Energy management (products)
(S) Talent attraction and retention
(S) Human capital development
(S) Employee engagement
(E) Waste management
(E) Product stewardship
(E) Circular economy - Re-use
(E) Circular economy - Recycling
(S) ESG risk supply chain
(S) Responsible supply chain
(S) Innovation partnership
(B) Operational excellence
(G) Business ethics and compliance
(G) Information security
(G) IP Protection
(G) Product safety
(G) Enterprise risk management
Degree of impact on ASML
High
249
ASML ANNUAL REPORT 2021 Material themes, topics and their impact on the value chain
Material theme
Topics
GRI topic
Business-related
Innovation
management
• Core strategy
• Technology and innovation
• R&D
• Product roadmap
Customer intimacy • Customer feedback survey
• Operational excellence
• Customer engagement
N/A
N/A
Environment
Climate & energy
Circular economy
Social
Our people
Innovation
ecosystem
Responsible
supply chain
• Energy efficiency products
• Energy consumption EUV
• Scope 1 emissions
• Scope 2 emissions
• Scope 3 carbon footprint
• Renewable energy
• Climate change
• Waste management - Reduce
• Circular economy - Reuse
• Circular economy - Recycling
a. 302: Energy
b. 305: Emissions
a. 306: Effluents and
waste
• Culture and values
• Employee experience
• Employee engagement
• Employer labor market brand
• Human capital development
• Attraction and retention
• Diversity & inclusion
• Labor practice
• Innovation partnerships
• Innovation pipeline
• Support startup and scaleups N/A
• Responsible supply chain
- supplier sustainability
standard (RBA) and
performance
• ESG risk in supply chain
a. 401: Employment
b. 404: Training and
education
c. 405: Diversity of
governance bodies
and employees
a. 204: Procurement
practices
b. 308: Supplier
environmental
assessment
c. 414: Supplier social
assessment
Impact area
Upstream
suppliers
and
partners
Our
operations
Downstream
customers
and society
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
SDG
SDG
9
SDG
13
SDG
12
SDG
4
SDG
8
SDG
9
SDG
8
In addition to above mentioned material themes and topics, there are also other topics of interest for our stakeholders,
which we deem as good company governance and practice, but are less material to our stakeholders and impact to
ASML. We define those as Responsible business topics: business ethics, legal compliance, anti bribery and corruption,
competition law, privacy protection, human rights, information security, intellectual property protection, product safety,
water management, operational excellence, financing policy and tax policy. We report on these topics in a more concise
manner.
Economic performance and corporate governance are topics classified under General Disclosures by the GRI
Standards. While they are not mapped in the materiality matrix, relevant information are disclosed in our company's
annual reporting.
250
ASML ANNUAL REPORT 2021 Managing sustainability
Board of
Management
ESG Sustainability
Committee
ESG Sustainability
Office
Development
& Engineering
Re-use
department
EHS
department
Corporate
Real Estate
Sourcing &
Supply Chain
Human
Resources
We manage ESG sustainability through a robust
framework, governed by several levels to drive
accountability and execution, which include Board of
Management, ESG Sustainability committee, ESG
Sustainability office, topic specific action owners and
experts.
Our Board of Management approves and signs off our
ESG Sustainability strategy. They are responsible for
policymaking and the supervision of ASML’s ESG
Sustainability Strategy, as well as its compliance with legal
and reporting requirements. This includes addressing the
principal risks and opportunities related to the strategy.
The Board of Management meets regularly to give
guidance on relevant issues, including climate related risks
and opportunities.
The ESG Sustainability Committee (SC) comprises
members of the Board of Management and senior
management executives and is headed by our CEO and
COO. The ESG SC aims to optimize coordination and
alignment at company wide level. The ESG SC is charged
with developing corporate-wide ESG sustainability policies
and has overall responsibility for monitoring and reviewing
the ESG Sustainability KPIs to track progress. This also
includes initiatives and actions addressing climate change
matters. The ESG SC is equally focused on creating
positive social and environmental impacts.
Our ESG Sustainability Office is responsible for overseeing
and implementing our ESG Sustainability Strategy, and
facilitating the ESG SC, such as facilitating the
accomplishment of sustainability management policies
and goals. Furthermore, the ESG Sustainability Office is
tasked with identifying key issues, risks and opportunities
(including climate change relates matters), global trends
and (peers) best practices that could impact various short,
medium and long-term ESG sustainability objectives.
Each of the material and responsible business themes are
assigned to a senior executive, supported by a topic
expert. Each senior executive is responsible for a KPI from
the ESG Sustainability Strategy and is responsible for
monitoring progress against agreed targets, and ensuring
there are sufficient resources available to meet targets and
objectives. In the event of insufficient progress, this is
discussed at operational performance review meetings
and raised during the ESG SC meetings.
In addition, we identify and assess the impact of climate-
related risks and opportunities through an Enterprise Risk
Management (ERM) process. We assess risks from both
top-down (company-level) and bottom-up (organization
and process-level) perspectives. Our risk management
and control system is based on identifying external and
internal risk factors that could influence our operational,
business continuity and financial objectives. It contains a
system of multidisciplinary assessments, monitoring,
reporting, and operational reviews. The main value chain
stages include, but are not limited to, our direct
operations, upstream (our supply chain) and downstream
(our customers) value chain.
Our performance on sustainability areas, as outlined in the
materiality table, is part of the long-term incentive plans of
our Board of Management and senior management. We
measure our overall sustainability performance by
benchmarking our result from the annual comprehensive
Dow Jones Sustainability Index (DJSI) – assessing more
than 20 ESG topics – with the best of the semiconductor
industry. Read more in: Remuneration report.
251
ASML ANNUAL REPORT 2021 Stakeholder engagement
We define stakeholders as those individuals or groups or organizations that can affect or can be affected by our
business. We regard five stakeholder groups: shareholders, customers, suppliers (including contractors), employees and
society (e.g. local community, governments and authorities, industry union, labor organizations, other associations,
media and NGOs).
Continuous stakeholder engagement, in which we embrace open dialogue and knowledge-sharing, are important in an
innovation-driven industry and helps us to identify the areas of improvement. We communicate with our stakeholders
through various channels and at a variety of levels. The methods of engagement will vary depending on the stakeholders,
the issues of concern and the purpose of engagement. The following table is an overview of our main stakeholder
groups, the way we communicate with them and an overview of the topics most relevant to them.
Shareholders
Purpose: This group consist of current shareholders, potential active and passive investors, financial and ESG analysts.
We aim to help them to understand our (long-term) investment opportunities. We communicates with them about our
financial growth strategies and opportunities, financial performance and outlook, shareholder returns as well as our
Sustainability Strategy.
Main communication channel and
frequency
• Direct interaction with the Investor Relations
department (e.g. calls, ESG performance surveys,
email exchange, site visits - at ASML and/or at the
investor) - [daily]
• AGM - [annually]
• Investor Day - [bi-annually]
• Company quarterly results presentation and press
release - [quarterly]
Main engagement topic
Themes in our materiality
• Financial results
• Capital return
• Market outlook
• Products and end-market
• Customer adoption
• Geopolitics
• Business summary
• Company roadmap and product
• Financial performance
• Technology and innovation
ecosystem
• Customer intimacy
• Our people
• Our supply chain
• Circular economy
• Climate and energy
• How we manage risk
• Responsible business
• Governance
• Various investor conferences and roadshows - [on
portfolio
occurrence]
• Various sustainability questionnaires, assessments and
survey feedback - [on occurrence, the majority of these
are annual recurring]
• ESG targets: human capital
development, carbon
footprint, waste, recycling,
energy consumption, social
responsibility in supply chain
• Board diversity and remuneration
Customers
Purpose: We are a manufacturer of leading edge chipmaking equipment. We enable our customers to create the
patterns that define the electronic circuits on a chip. Our customers are the world’s leading microchip manufacturers,
and our success is inextricably linked with theirs.
Main communication channel and
frequency
• Customer feedback Survey - [bi-annually]
• Direct interaction via account teams and zone quality
managers
• Voice of the customer sessions - [monthly]
• Technology Review Meetings (between our CTO,
product managers, other executives and our major
customers) - [bi-annually]
• Executive Review Meetings (between ASML executives
and major customers) - [bi-annually]
• Different technology symposia and special events - [on
occurrence]
Main engagement topic
Themes in our materiality
• Products and technology
• Customer roadmap
• Innovation
• Customer support, cost of
ownership and quality
• ESG targets: carbon footprint,
energy consumption, social
responsibility in supply chain
(RBA)
• Technology and innovation
ecosystem
• Customer intimacy
• Operational excellence
• Responsible supply chain
• Circular economy
• Climate and energy
252
ASML ANNUAL REPORT 2021 Suppliers
Purpose: We rely heavily on our supplier network to achieve the innovations we strive for. Our goal is to ensure we get
the products, materials and services we need to meet our short- and long-term needs. To this end we invest in
developing our supply landscape to help suppliers meet our requirements with regard to quality, logistics, technology,
cost and sustainability. We are committed to a responsible and sustainable supply chain.
Main communication channel and
frequency
• ASML’s supplier day - [annually]
• Direct interaction via supplier account teams /
procurement account managers - [daily]
• Supplier audits - [on occurrence]
• Site visit - [on occurrence]
• Newsletter - [monthly]
• RBA Self-assessment questionnaire - [annually]
• ASML Speak up service - [on occurrence]
Main engagement topic
Themes in our materiality
• Technology and innovation
ecosystem
• Our supply chain
• Responsible supply chain
• Responsible business (including
human rights)
• Circular economy
• Climate and energy
• Products and technology
• QLTCS
• Supplier performance and risk
management
• IP / information security
• Business continuity
• RBA compliance (ethics, labor
practice, health and safety, and
environment)
• Scare (natural) resources, 3TG,
hazardous substances, etc.
• Circularity (re-use, recycling,
refurb)
• Scope 3 carbon footprint
Employees
Purpose: We want to provide a unified direction and anchor ASML’s identity deep in the organization. To do this, we aim
to help people embrace our values and familiarize themselves with our strategy and purpose and uphold our Code of
Conduct principles. Employee engagement is important to the success of our company and employer brand enables us
to attract talent. We are committed to good labor practice and respect human rights.
Main communication channel and
frequency
• Employee engagement survey - [annually]
• Training and development programs including
employee evaluation/feedback - [on occurrence]
• ASML Speak up service - [on occurrence]
• Works Council - [quarterly]
• Employee networks, such as Young ASML, Women@
ASML, Seniors@ASML, Pink ASML - [on occurrence]
• Internal communication and awareness (e.g. intranet,
ethics program, department employee meeting, lunch
with board members) - [daily]
• Onboarding program new employees - [on
occurrence]
• All-employee meeting and Senior Management
meetings - [annually]
Main engagement topic
Themes in our materiality
• Training and development
• Code of Conduct/Ethics
• Strategy
• Diversity and inclusion
• Labor conditions
• Vitality
• Human rights
• Sustainability target and
performance
• Technology and innovation
ecosystem
• Our people (employee
development, labor relations, fair
remuneration)
• Responsible supply chain
• Circular economy
• Climate and energy
• Responsible business
253
ASML ANNUAL REPORT 2021 Society
Purpose: We are committed to conducting our business in an accountable and caring way, for our employees and the
wider communities we operate in. As a global technology leader and employer, we play an active role in the local
communities in which we operate. We engage regularly with governments and (local) authorities, industry unions and
associations, (local) community, universities, media and NGOs.
Main engagement topic
Themes in our materiality
• Employee development
• Charity, sponsoring and
donations
• Collaboration in innovation
• Strengthening innovation in the
industry, society and where we
operate
• Technology and innovation
ecosystem
• Customer intimacy
• Community engagement
• Responsible business (human
rights, ethics, privacy, ABC
policy, etc.)
• Social and environmental
• Our people (employee
responsibility
• Promote STEM education
• Local developments
development, labor relations, fair
remuneration)
• Climate and energy
• Circular economy
• How we manage risk
Main communication channel and
frequency
Industry unions and associations
• Member conferences and technical forums (e.g. RBA,
SEMI, FME, VNO-NCW, SPIE, etc.) - [monthly/on
occurrence]
• Member consultation on standards - [on occurrence]
• Brainport - [on occurrence]
Governments and authorities
• Dialogue with tax authority - [monthly/on occurrence]
• Relevant EU round table discussions (semiconductor
industry or innovation) - [on occurrence]
• Compliance reporting - [monthly/on occurrence]
• Proactive dialogue with government, authorities and
municipalities - [on occurrence]
Community, universities, media, NGOs, other
• www.asml.com - [daily]
• Community engagement program (STEM promotion
at secondary schools and universities, cultural
institutions, local community, etc.) - [on occurrence]
• Young high tech community (HighTechXL, Make Next
platform, Startup Alliance) - [daily/on occurrence]
• Company visit - [on occurrence]
• Press release, interviews, engagement calls/meetings,
etc. - [on occurrence]
254
ASML ANNUAL REPORT 2021 Other
appendices
255
ASML ANNUAL REPORT 2021 Appendix - Principal accountant fees and services
KPMG has served as our independent registered public accounting firm for the years ended December 31, 2021 and
2020. The following table sets out the aggregate fees for professional audit services and other services rendered by
KPMG and their member firms and affiliates in 2021 and 2020:
Year ended December 31
(€, in thousands)
Audit fees
Audit-related fees
Tax fees
All other fees
Principal accountant fees
KPMG
Accountants
N.V.
2,246
88
—
37
2020
KPMG
Network
1,090
—
—
—
KPMG
Accountants
N.V.
2,449
90
—
27
Total
3,337
88
—
37
2021
KPMG
Network
1,047
—
—
—
Total
3,496
90
—
27
2,371
1,090
3,461
2,566
1,047
3,613
Audit fees and audit-related fees
Our independent registered public accounting firm is KPMG Accountants N.V. (KPMG), Amstelveen, The Netherlands,
Auditor Firm ID: 1012. Audit fees relate to the audit of the Financial Statements as set out in this Annual Report, certain
quarterly procedures, services related to offering memoranda (2020 only), as well as our statutory and regulatory filings
of our subsidiaries. These fees relate to the audit of the respective Financial Statements, regardless of whether the work
was performed during the financial year. Other audit-related fees are related to assurance services on non-financial
information.
Other (non-audit) services relate to certain agreed-upon procedures on the targets achieved in order for the
Remuneration Committee to assess compliance with the Remuneration Policy and agreed upon procedures for the US
Advanced Pricing Agreement.
All audit fees, audit-related fees and permitted services that the independent auditor provides are subject to pre-
approval by the Audit Committee. The Audit Committee pre-approved 100% of the external audit plan and audit fees for
the years 2021 and 2020.
The Audit Committee monitors compliance with the Dutch, EU regulation and SEC rules on non-audit services provided
by an independent registered public accounting firm, which outlines strict separation of audit and advisory services for
Dutch public interest entities.
256
ASML ANNUAL REPORT 2021 Appendix - Property, plant and equipment
We lease a number of our facilities under operating leases.
We also own a number of buildings, mainly consisting of
production facilities in Veldhoven, the Netherlands, in
Wilton, Connecticut, and San Diego, California, both in the
US, in Linkou and Tainan, both in Taiwan and in
Pyeongtaek, South Korea. The book value of land and
buildings owned amounts to €1,856.0 million as
of December 31, 2021 compared with €1,589.6 million as
of December 31, 2020. See Consolidated Financial
Statements - Notes to the Consolidated Financial
Statements - Note 13 Property, plant and equipment, net.
Our capital expenditures (purchases of property, plant and
equipment, see the Consolidated Statements of Cash
Flows as recorded in the Consolidated Financial
Statements) for 2021, 2020 and 2019 amounted to €900.7
million, €962.0 million and €766.6 million, respectively. The
capital expenditures in 2021 slightly decreased compared
to 2020 and relate to the expansion and upgrades of
facilities, prototypes, evaluation and training systems.
Subject to market conditions, we expect that our capital
expenditures (purchases of property, plant and equipment)
in 2022 will be approximately €1.6 billion. These
expenditures will mainly consist of further expansion and
upgrades of facilities. We expect to finance these capital
expenditures through cash generated by operations and
existing cash and cash equivalents.
Facilities in Europe
Our headquarters, mainly manufacturing and R&D facilities
are located at a single site in Veldhoven, the Netherlands.
This state-of-the-art facility includes 187 thousand square
meters of office space and 58 thousand square meters of
cleanroom used for manufacturing and R&D activities and
53 thousand square meters of warehouses. Our main
facilities in Veldhoven (and other buildings in the larger
Eindhoven area) in the Netherlands are partly owned and
partly leased office and industrial buildings. We also lease
several sales and service offices across Europe consisting
of 3 thousand square meters. This year we added the site
in Berlin to our portfolio.
Facilities in the US
Our US head office is located in a 5 thousand square
meter office building in Chandler, Arizona. We maintain
R&D and manufacturing operations in a 42 thousand
square meter facility and 8 thousand square meter
warehousing in Wilton, Connecticut, and one facilities for
mainly office and R&D activities totaling 17 thousand
square meters in San Jose, California. Furthermore, our
facilities in San Diego totaling 46 thousand square meters
include 29 thousand square meters of buildings used for
office and R&D activities, 10 thousand square meters of
buildings used for manufacturing and R&D activities and 7
thousand square meters of buildings used for
warehousing. Our HMI facilities in San Jose, California
which is mainly used for R&D and Local sales and service
activities are comprised of approximately 34 thousand
square meters.
Facilities in Asia
Our key locations are Taiwan, Korea and China, where we
have local service, sales and manufacturing activities. Our
facility in Linkou, Taiwan is comprised of a manufacturing
facilities that is approximately 3 thousand square meters
and office space that is approximately 5 thousand square
meters. Our facility in Hwasung, South Korea is comprised
of a cleanroom that is approximately 0.9 thousand square
meters and office space that is approximately 7 thousand
square meters. Our Cymer facility in Pyeongtaek, South
Korea, is a manufacturing facility, mainly used for
refurbishment activities of light sources. Our HMI facilities
include Tainan, Taiwan (approximately 20 thousand square
meters) utilized for manufacturing and office space, as well
as Beijing, China that is 9 thousand square meters utilized
for manufacturing and office space. We also have several
sales, service and training locations across Asia. Lastly,
we have regional service activity in Hong Kong.
257
ASML ANNUAL REPORT 2021 Appendix - Dutch taxation
The statements below represent a summary of current
Dutch tax laws, regulations and judicial interpretations
thereof. The description is limited to the material tax
implications for a holder of ordinary shares who is not, and
/ or is not deemed to be, a resident of the Netherlands for
Dutch tax purposes (‘Non-Resident Holder’). This
summary does not address special rules that may apply to
special classes of holders of ordinary shares and should
not be read as extending by implication to matters not
specifically referred to herein. As to individual tax
consequences, each investor in our ordinary shares
should consult his or her tax counsel.
General
The acquisition of ordinary shares by a non-resident of the
Netherlands should in itself not be treated as a taxable
event for Dutch tax purposes. The material tax
consequences in connection with owning and disposing
of our ordinary shares are discussed below.
Substantial interest
A person that, (inter alia) directly or indirectly, and either
independently or jointly with his partner (as defined in the
Dutch Personal Income Tax Act 2001), owns 5.0% or more
of our share capital, owns profit participating rights that
correspond to at least 5.0% of the annual profits of a
Dutch company or to at least 5.0% of the liquidation
proceeds of such company or holds options to purchase
5.0% or more of our share capital, is deemed to have a
substantial interest in our shares, or our options, as
applicable. Specific rules apply in case certain family
members of the Non-Resident Holder hold a substantial
interest. A deemed substantial interest also exists if (part
of) a substantial interest has been disposed of, or is
deemed to be disposed of, in a transaction where no
taxable gain has been recognized. Specific attribution
rules exist in determining the presence of a substantial
interest.
Income tax consequences for individual
non-resident holders on owning and
disposing of the ordinary shares
An individual who is a Non-Resident Holder will not be
subject to Dutch income tax on received income in
respect of our ordinary shares or capital gains derived
from the sale, exchange or other disposition of our
ordinary shares, provided that such holder:
• Does not carry on and has not carried on a business in
the Netherlands through a (deemed) permanent
establishment or a permanent representative to which
the ordinary shares are attributable;
• Does not hold and has not held a (deemed) substantial
interest in our share capital or, in the event the Non-
Resident Holder holds or has held a (deemed)
substantial interest in our share capital, such interest is,
or was, a business asset in the hands of the holder;
• Does not share and has not shared directly (through the
beneficial ownership of ordinary shares or similar
securities) in the profits of an enterprise managed and
controlled in the Netherlands which (is deemed to)
own(s), or (is deemed to have) has owned, our ordinary
shares; and
• Does not carry out and has not carried out any activities
which generate taxable profit in the Netherlands or
taxable income in the Netherlands to which the holding
of our ordinary shares was connected.
Corporate income tax consequences for
corporate non-resident holders
Income derived from ordinary shares or capital gains
derived from the sale, exchange or disposition of ordinary
shares by a corporate Non-Resident Holder is taxable if:
• The holder carries on a business in the Netherlands
through a permanent establishment or a permanent
representative in the Netherlands (Dutch enterprise) and
the ordinary shares are attributable to this permanent
establishment or permanent representative, unless the
participation exemption (discussed below) applies; or
• The holder has a substantial interest in our share capital,
which is held with the primary aim or one of the primary
aims to avoid the levy of income tax at the level of
another person and which is not put into place with valid
commercial reasons that reflect economic reality; or
• The holder is a resident of Aruba, Curacao or Saint
Martin with a permanent establishment or permanent
representative in Bonaire, Eustatius or Saba to which
our ordinary shares are attributable and certain
conditions are met; or
• Certain assets of the holder are deemed to be treated as
a Dutch enterprise under Dutch tax law and the ordinary
shares are attributable to this Dutch enterprise.
To qualify for the Dutch participation exemption, the holder
must generally hold at least 5.0% of our nominal paid-in
capital and meet certain other requirements.
Dividend withholding tax
In general, a dividend distributed by us in respect of our
ordinary shares will be subject to a withholding tax
imposed by the Netherlands at the statutory rate of 15.0%.
Dividends include:
• Dividends in cash and in kind;
• Deemed and constructive dividends;
• Consideration for the repurchase or redemption of
ordinary shares (including a purchase by a direct or
indirect ASML subsidiary) in excess of qualifying
average paid-in capital unless such repurchase is made
for temporary investment purposes or is exempt by law;
• Stock dividends up to their nominal value (unless
distributed out of qualifying paid-in capital);
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ASML ANNUAL REPORT 2021 • Any (partial) repayment of paid-in capital not qualifying
as capital for Dutch dividend withholding tax purposes;
and
• Liquidation proceeds in excess of qualifying average
paid-in capital for Dutch dividend withholding tax
purposes.
Under certain circumstances, a reduction of Dutch
dividend withholding tax can be obtained:
• An exemption at source is available if the participation
exemption applies and the ordinary shares are
attributable to a business carried out in the Netherlands;
• An exemption at source is available for dividend
distributions to certain qualifying EU/EEA resident
corporate holders, unless such holder holds our
ordinary shares with the primary aim or one of the
primary aims to avoid the levy of Dutch dividend
withholding tax at the level of another person and our
ordinary shares are not held for valid commercial
reasons that reflect economic reality;
• An exemption at source is available for dividend
distributions to certain qualifying corporate holders that
are a resident of a non-EU/EEA jurisdiction with which
the Netherlands has concluded a tax treaty that includes
a dividend article, unless such holder holds our ordinary
shares with the primary aim or one of the primary aims
to avoid the levy of Dutch dividend withholding tax at the
level of another person and our ordinary shares are not
held for valid commercial reasons that reflect economic
reality;
• Certain tax exempt organizations (e.g. pension funds
and excluding collective investment vehicles) resident in
EU/EEA member states or in qualifying non-EU/EEA
states may be eligible for a refund of Dutch dividend
withholding tax upon their request. Based on domestic
law not yet entered into force, in those circumstances,
an exemption at source may also become available
upon request;
• Upon request and under certain conditions, certain
qualifying Non-Resident Individual and Corporate
Holders of ordinary shares resident in EU/EEA member
states or in a qualifying non-EU/EEA state may be
eligible for a refund of Dutch dividend withholding tax
insofar the withholding tax levied is higher than the
personal and corporate income tax which would have
been due if they were resident of the Netherlands.
Furthermore, a Non-Resident Holder of ordinary shares
can be eligible for a partial or complete exemption or
refund of all or a portion of the above withholding tax
under a tax treaty that is in effect between the Netherlands
and the Non-Resident Holder’s country of residence. The
Netherlands has concluded such treaties with the US,
Canada, Switzerland, Japan, most EU member states, as
well as many other countries. Under the treaty between
the US and the Netherlands for the Avoidance of Double
Taxation and the Prevention of Fiscal Evasion with
Respect to Taxes on Income (the ‘US Tax Treaty’),
dividends paid by us to a Non-Resident Holder that is a
resident of the US as defined in the US Tax Treaty (other
than an exempt organization or exempt pension trust, as
discussed below) are generally liable to 15.0% Dutch
withholding tax or, in the case of certain US corporate
shareholders owning directly at least 10.0% of our voting
power, a reduction to 5.0%, provided that the Holder is the
beneficial owner of the dividends received and does not
have an enterprise or an interest in an enterprise that is, in
whole or in part, carried on through a permanent
establishment or permanent representative in the
Netherlands to which the dividends are attributable. The
US Tax Treaty also provides for a dividend withholding tax
exemption on dividends, but only for a shareholder owning
directly at least 80.0% of our voting power and meeting all
other requirements. The US Tax Treaty provides for a
complete exemption from tax on dividends received by
exempt pension trusts and exempt organizations, as
defined therein. Except in the case of exempt
organizations, the reduced dividend withholding tax rate
(or exemption from withholding) can be applied at the
source upon payment of the dividends, provided that the
proper forms have been filed in advance of the payment.
Exempt organizations, in principle, remain subject to the
statutory withholding rate of 15.0% and are required to file
for a refund of such withholding, however such
organizations may become eligible for the exemption at
source when the domestic law as described above has
entered into force.
A Non-Resident Holder may not claim the benefits of the
US Tax Treaty unless (i) he/she is a resident of the US as
defined therein, or (ii) he/she is deemed to be a resident on
the basis of the provisions of article 24(4) of the US Tax
Treaty, and (iii) his or her entitlement to those benefits is
not limited by the provisions of article 26 (limitation on
benefits) of the US Tax Treaty.
Dividend stripping rules
Under Dutch tax legislation regarding anti-dividend
stripping, no exemption from, or refund of, Dutch dividend
withholding tax is granted if the recipient of dividends paid
by us is not considered the beneficial owner of such
dividends.
Gift or inheritance taxes
Dutch gift or inheritance taxes will not be levied on the
transfer of ordinary shares by way of gift or upon the death
of a Non-Resident Holder, unless the transfer is construed
as an inheritance or as a gift made by or on behalf of a
person, who at the time of the gift or death, is deemed to
be resident of the Netherlands.
Gift tax and inheritance tax are levied on the beneficiary.
For purposes of Dutch gift and inheritance tax, an
individual of Dutch nationality is deemed to be a resident
of the Netherlands if he/she has been a resident thereof at
any time during the ten years preceding the time of the gift
or death. For purposes of Dutch gift tax, a person not
possessing Dutch nationality is deemed to be a resident of
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ASML ANNUAL REPORT 2021 the Netherlands if he / she has resided therein at any time
in the twelve months preceding the gift.
Value added tax
No Dutch VAT is imposed on dividends in respect of our
ordinary shares or on the transfer of our shares.
Residence
A Non-Resident Holder will not become resident, or be
deemed to be resident, in the Netherlands solely as a
result of holding our ordinary shares or of the execution,
performance, delivery and / or enforcement of rights in
respect of our ordinary shares.
US taxation
The following is a discussion of the material US federal
income tax consequences relating to the acquisition,
ownership and disposition of ordinary shares by a United
States Holder (as defined below) acting in the capacity of a
beneficial owner who is not a tax resident of the
Netherlands. This discussion deals only with ordinary
shares held as capital assets and does not deal with the
tax consequences applicable to all categories of investors,
some of which (such as tax-exempt entities, financial
institutions, regulated investment companies, dealers in
securities/traders in securities that elect a mark-to-market
method of accounting for securities holdings, insurance
companies, investors owning directly, indirectly or
constructively 10.0% or more of our outstanding voting
shares, investors who hold ordinary shares as part of
hedging or conversion transactions and investors whose
functional currency is not the US dollar) may be subject to
special rules. In addition, the discussion does not address
any alternative minimum tax or any state, local, Foreign
Investment in Real Property Tax Act-related US federal
income tax consequences, or non-US tax consequences.
This discussion is based on the US-Netherlands Income
tax treaty, the Internal Revenue Code of 1986, as amended
to the date hereof, final, temporary and proposed Treasury
Department regulations promulgated, and administrative
and judicial interpretations thereof, changes to any of
which subsequent to the date hereof, possibly with
retroactive effect, may affect the tax consequences
described herein. In addition, there can be no assurance
that the IRS will not challenge one or more of the tax
consequences described herein, and we have not
obtained, nor do we intend to obtain, a ruling from the IRS
or an opinion of counsel with respect to the US federal
income tax consequences of acquiring or holding shares.
Prospective purchasers of ordinary shares are advised to
consult their tax advisers with respect to their particular
circumstances and with respect to the effects of US
federal, state, local or non-US tax laws to which they may
be subject.
As used herein, the term ‘United States Holder’ means a
beneficial owner of ordinary shares for US federal income
tax purposes whose holding of such ordinary shares does
not form part of the business property or assets of a
permanent establishment or fixed base in the Netherlands;
who is fully entitled to the benefits of the treaty in respect
of such ordinary shares; and is:
• An individual citizen or tax resident of the US; or
• A corporation or other entity treated as a corporation for
US federal income tax purposes created or organized in
or under the laws of the US or of any political subdivision
thereof; or
• An estate of which the income is subject to US federal
income taxation regardless of its source; or
• A trust whose administration is subject to the primary
supervision of a court within the US and which has one
or more US persons who have the authority to control all
of its substantial decisions.
If an entity treated as a partnership for US federal income
tax purposes owns ordinary shares, the US federal
income tax treatment of a partner in such partnership will
generally depend upon the status and tax residency of the
partner and the activities of the partnership. A partnership
that owns ordinary shares and the partners in such
partnership should consult their tax advisors about the US
federal income tax consequences of holding and
disposing of the ordinary shares.
Passive Foreign Investment Company
considerations
We believe we were not a passive foreign investment
company for US federal income tax purposes in 2021 and
that we will not be a passive foreign investment company
in 2022. However, as passive foreign investment company
status is a factual matter that must be determined annually
at the close of each taxable year, there can be no certainty
as to our actual passive foreign investment company
status in any particular year until the close of the taxable
year in question. We have not conducted a detailed study
at this time to confirm our non-passive foreign investment
company status. If we were treated as a passive foreign
investment company in any year during which a United
States Holder owned common shares, certain adverse tax
consequences could apply. Investors should consult their
tax advisors with respect to any passive foreign
investment company considerations.
Taxation of dividends
United States Holders should generally include in gross
income, as foreign-source dividend income the gross
amount of any non-liquidating distribution (before
reduction for Dutch withholding taxes) we make out of our
current or accumulated earnings and profits (as
determined for US federal income tax purposes) when the
distribution is actually or constructively received by the
United States Holder. Distributions will not be eligible for
the dividends-received deduction generally allowed to US
corporations in respect of dividends received from other
US corporations. The amount of the dividend distribution
included in income of a United States Holder should be
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ASML ANNUAL REPORT 2021 the US dollar value of the foreign currency (e.g. euros)
paid, determined by the spot rate of exchange on the date
of the distribution, regardless of whether the payment is in
fact converted into US dollars. Distributions in excess of
current and accumulated earnings and profits, as
determined for US federal income tax purposes, will be
treated as a non-taxable return of capital to the extent of
the United States Holder’s US tax basis in the ordinary
shares and thereafter as taxable capital gain. We presently
do not maintain calculations of our earnings and profits
under US federal income tax principles. If we do not report
to a United States Holder the portion of a distribution that
exceeds earnings and profits, the distribution will generally
be taxable as a dividend even if that distribution would
otherwise be treated as a non-taxable return of capital or
as capital gain under the rules described above.
Subject to limitations provided in the US Internal Revenue
Code, a United States Holder may generally deduct from
its US federal taxable income, or credit against its US
federal income tax liability, the amount of qualified Dutch
withholding taxes. However, Dutch withholding tax may be
credited only if the United States Holder does not claim a
deduction for any Dutch or other non-US taxes paid or
accrued in that year. In addition, Dutch dividend
withholding taxes will likely not be creditable against the
United States Holder’s US tax liability to the extent we are
not required to pay over the amount withheld to the Dutch
Tax Administration. Currently, a Dutch corporation that
receives dividends from qualifying non-Dutch subsidiaries
may credit source country tax withheld from those
dividends against Dutch withholding tax imposed on a
dividend paid by a Dutch corporation, up to a maximum of
3.0% of the dividend paid by the Dutch corporation. The
credit reduces the amount of dividend withholding that we
are required to pay to the Dutch Tax Administration but
does not reduce the amount of tax we are required to
withhold from dividends.
For US foreign tax credit purposes, dividends paid by us
generally will be treated as foreign-source income and as
‘passive category income’ (or in the case of certain
holders, as ‘general category income’). Gains or losses
realized by a United States Holder on the sale or exchange
of ordinary shares generally will be treated as US-source
gain or loss. The rules governing the foreign tax credit are
complex and we suggest that each United States Holder
consult his or her own tax advisor to determine whether,
and to what extent, a foreign tax credit will be available.
Dividends received by a United States Holder will generally
be taxed at ordinary income tax rates. However, the Jobs
and Growth Tax Relief Reconciliation Act of 2003, as
amended by the Working Families Tax Relief Act of 2004,
the American Jobs Creation Act of 2004, the American
Taxpayer Relief Act of 2012, and most recently the 2017
tax reform act (Public Law No. 115-97) reduces to 20.0%
the maximum tax rate for certain dividends received by
individuals, so long as certain exclusions do not apply and
the stock has been held for at least 60 days during the
121-day period beginning 60 days before the ex-dividend
date. Dividends received from ‘qualified foreign
corporations’ generally qualify for the reduced rate. A non-
US corporation (other than a passive foreign investment
company) generally will be considered to be a qualified
foreign corporation if: (i) the shares of the non-US
corporation are readily tradable on an established
securities market in the US or (ii) the non-US corporation is
eligible for the benefits of a comprehensive income tax
treaty with the US that has been identified as a qualifying
treaty and contains an exchange of information program.
In addition, subject to income limitations, dividends
received by US individuals and US residents, estates and
trusts will be subject to a Net Investment Income Tax (NIIT)
assessed at the rate of 3.8%. Individual United States
Holders should consult their tax advisors regarding the
impact of this provision on their particular situations.
Dividends paid by us generally will constitute ‘portfolio
income’ for purposes of the limitations on the use of
passive activity losses (and, therefore, generally may not
be offset by passive activity losses) and as ‘investment
income’ for purposes of the limitation on the deduction of
investment interest expense.
Taxation on sale or other disposition of
ordinary shares
Upon a sale or other disposition of ordinary shares, a
United States Holder will generally recognize capital gain
or loss for US federal income tax purposes in an amount
equal to the difference between the amount realized, if
paid in US dollars, or the US dollar value of the amount
realized (determined at the spot rate on the settlement
date of the sale) if proceeds are paid in currency other
than the US dollar, as the case may be, and the United
States Holder’s US tax basis (determined in US dollars) in
such ordinary shares. Generally, the capital gain or loss
will be long-term capital gain or loss if the holding period
of the United States Holder in the ordinary shares exceeds
one year at the time of the sale or other disposition. The
deductibility of capital losses is subject to limitations for
US federal income tax purposes. Gain or loss from the
sale or other disposition of ordinary shares generally will
be treated as US source income or loss for US foreign tax
credit purposes. Generally, any gain or loss resulting from
currency fluctuations during the period between the date
of the sale of the ordinary shares and the date the sale
proceeds are converted into US dollars will be treated as
ordinary income or loss from sources within the US. Each
United States Holder should consult his or her tax advisor
with regard to the translation rules applicable when
computing its adjusted US tax basis and the amount
realized upon a sale or other disposition of its ordinary
shares if purchased in, or sold or disposed of for, a
currency other than US dollar.
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ASML ANNUAL REPORT 2021 Information reporting and backup
withholding
Information returns may be filed with the IRS in connection
with payments on the ordinary shares or proceeds from a
sale, redemption or other disposition of the ordinary
shares. A ‘backup withholding’ tax may be applied to, and
withheld from, these payments if the beneficial owner fails
to provide a correct taxpayer identification number to the
paying agent and to comply with certain certification
procedures or otherwise establish an exemption from
backup withholding. Any amounts withheld under the
backup withholding rules might be refunded (or credited
against the beneficial owner’s US federal income tax
liability, if any) depending on the facts and provided that
the required information is furnished to the IRS.
The discussion set out above is included for general
information only and may not be applicable depending
upon a holder’s particular situation. Holders should
consult their tax advisors with respect to the tax
consequences to them of the purchase, ownership and
disposition of shares including the tax consequences
under state, local and other tax laws and the possible
effects of changes in US federal and other tax laws.
262
ASML ANNUAL REPORT 2021 Appendix - Government regulation
Our business is subject to direct and indirect regulations in each of the countries in which our customers or we do
business, and changes in various types of regulations can affect our business adversely. As our business has expanded,
we have become subject to increasing and increasingly complex regulation. The implementation of new safety,
environmental or legal requirements, including export controls and required permits and licenses or changes in
interpretation, implementation or enforcement of such regulations and requirements, could impact our products, our
manufacturing or distribution processes or location of sales, and could affect the timing of product introductions, the
cost of our production, and products as well as their commercial success in each market in which we operate. The
impact of these regulations could adversely affect our business, financial condition and our results of operations even
where the specific regulations do not directly apply to us or to our products. Read more in: Our performance in 2021 -
Governance - Risk factors - Legal and compliance.
263
ASML ANNUAL REPORT 2021 Appendix - Offer and listing details
Our ordinary shares are listed for trading in the form of registered ASML NASDAQ shares and in the form of registered
ASML Euronext Amsterdam shares. The principal trading market of our ordinary shares is Euronext Amsterdam (trading
symbol: ASML). Our ordinary shares also trade on NASDAQ (trading symbol: ASML).
Our shares listed on NASDAQ are registered with JPMorgan Chase Bank N.A., our New York Transfer Agent, pursuant to
the terms of the Transfer Agent Agreement between ASML and JPMorgan Chase Bank N.A. Our shares listed on
Euronext Amsterdam are held in dematerialized form through the facilities of Euroclear Nederland, the Dutch centralized
securities custody and administration system. The New York Transfer Agent charges shareholders a fee of up to USD
5.00 per 100 shares for the exchange of our shares listed at NASDAQ for our shares listed at Euronext Amsterdam and
vice versa.
Dividends payable on our shares listed at NASDAQ are declared in euro and converted to US dollars at the rate of
exchange at the close of business on the date determined by the Board of Management. The resulting amounts are
distributed through the New York Transfer Agent and no charge is payable by holders of our shares listed at NASDAQ in
connection with this conversion or distribution.
Pursuant to the terms of the Transfer Agent Agreement, we have agreed to reimburse the New York Transfer Agent for
certain out of pocket expenses, including in connection with any mailing of notices, reports or other communications
made generally available by ASML to holders of ordinary shares. The New York Transfer Agent has waived its fees
associated with routine services to ASML associated with our shares listed at NASDAQ. In addition, the New York
Transfer Agent in consideration of its acting as Transfer Agent has agreed to make a contribution towards covering
certain expenses incurred by ASML in connection with the issuance and transfer of our shares listed on NASDAQ. In the
year ended December 31, 2021, the Transfer Agent contributed USD 0.5 million towards coverage of expenses incurred
by ASML (which mainly comprised of audit, advisory, legal and listing fees incurred due to the existence of our share
listing on NASDAQ).
264
ASML ANNUAL REPORT 2021 Appendix - Material contracts
Framework agreement between ASML and Carl Zeiss SMT GmbH
On 21 July 2021, ASML Netherlands B.V. and Carl Zeiss SMT GmbH signed a new overall framework agreement covering
the entire spectrum of their relationship (the ASML-SMT Business Agreement).
For further details see note 26 Related parties and variable interest entities.
265
ASML ANNUAL REPORT 2021 Appendix - Exchange controls
Cash distributions, if any, payable in euros on our shares listed at Euronext Amsterdam may be officially transferred by a
bank from the Netherlands and converted into any other currency without being subject to any Dutch legal restrictions.
However, for statistical purposes, such payments and transactions must be reported by ASML to the Dutch Central
Bank. Furthermore, no payments, including dividend payments, may be made to jurisdictions subject to certain
sanctions, adopted by the government of the Netherlands, implementing resolutions of the Security Council of the United
Nations. Cash distributions, if any, on our shares listed at NASDAQ shall be declared in euros but paid in US dollars,
converted at the rate of exchange at the close of business on the date fixed for that purpose by the Board of
Management in accordance with the Articles of Association.
266
ASML ANNUAL REPORT 2021 Appendix - Documents on display
We are subject to certain reporting requirements of the Exchange Act. As a "foreign private issuer", we are exempt from
the rules under the Exchange Act prescribing certain disclosure and procedural requirements for proxy solicitations, and
our officers, directors and principal shareholders are exempt from the reporting and "short-swing" profit recovery
provisions contained in Section 16 of the Exchange Act, with respect to their purchases and sales of shares. In addition,
we are not required to file reports and financial statements with the SEC as frequently or as promptly as companies
whose securities are registered under the Exchange Act that are not foreign private issuers. However, we are required to
file with the SEC, within 4 months after the end of each fiscal year, an Annual Report on Form 20-F containing financial
statements audited by an independent accounting firm and interactive data comprising financial statements in extensible
business reporting language. We publish unaudited interim financial information in accordance with U.S. GAAP after the
end of each quarter. We furnish this quarterly financial information to the SEC under cover of a Form 6-K.
Documents we file with the SEC are publicly available on the SEC's website, which contains reports and other
information regarding registrants that are required to file electronically with the SEC. The address of this website is http://
www.sec.gov.
267
ASML ANNUAL REPORT 2021 Appendix - Controls and procedures
Disclosure controls and procedures
As of December 31, 2021, ASML’s senior management
conducted an evaluation, under the supervision and with
the participation of ASML’s CEO and CFO, of the
effectiveness of the design and operation of ASML’s
disclosure controls and procedures (as defined in Rule
13a-15(e) under the Exchange Act). Based on such
evaluation, ASML’s CEO and CFO have concluded that, as
of December 31, 2021, ASML’s disclosure controls and
procedures are effective in recording, processing,
summarizing and reporting, on a timely basis, information
required to be disclosed by ASML in the reports that it files
or submits under the Exchange Act and are effective in
ensuring that information required to be disclosed by
ASML is accumulated and communicated to ASML’s
management, including ASML’s CEO and CFO, as
appropriate to allow timely decisions regarding required
disclosure.
Management’s report on internal
control over financial reporting
ASML’s management is responsible for establishing and
maintaining adequate internal control over financial
reporting, as defined in Rule 13a-15(f) under the Exchange
Act. Under the supervision and with the participation of
ASML’s CEO and CFO, ASML’s management conducted
an evaluation of the effectiveness of ASML’s internal
control over financial reporting as of December 31, 2021
based upon the framework in "Internal Control – Integrated
Framework" (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission.
Based on that evaluation, management has concluded
that ASML’s internal control over financial reporting was
effective as of December 31, 2021 at providing reasonable
assurance regarding the reliability of financial reporting
and the preparation of the Financial Statements for
external purposes in conformity with US GAAP.
KPMG Accountants N.V., an independent registered public
accounting firm, have audited the Financial Statements as
included in this Annual Report and, have also audited and
issued a report, included herein, on the effectiveness of
ASML’s internal control over financial reporting.
Changes in internal control over
financial reporting
During the year ended December 31, 2021, there have
been no changes in our internal control over financial
reporting that have materially affected, or are reasonably
likely to materially affect, our internal control over financial
reporting.
Inherent limitations of disclosure
controls and procedures in internal
control over financial reporting
It should be noted that any system of controls, however
well-designed and operated, can provide only reasonable,
and not absolute, assurance that the objectives of the
system will be met. In addition, the design of any control
system is based in part upon certain assumptions about
the likelihood of future events.
268
ASML ANNUAL REPORT 2021 Appendix - Financial calendar and investor relations
Financial Calendar
April 20, 2022
Announcement of First Quarter results for 2022
April 29, 2022
Annual General Meeting
July 20, 2022
Announcement of Second Quarter results for 2022
October 19, 2022
Announcement of Third Quarter results for 2022
Fiscal Year
ASML’s fiscal year ends on December 31, 2022
Investor Relations
ASML Investor Relations supplies information regarding the company and its business opportunities to investors and
financial analysts. Our annual reports, quarterly releases and other information are also available on our website.
269
ASML ANNUAL REPORT 2021 Appendix - ASML contact information
Corporate Headquarters
De Run 6501
5504 DR Veldhoven
The Netherlands
Mailing Address
P.O. Box 324
5500 AH Veldhoven
The Netherlands
Investor Relations
phone: +31 40 268 3938
email: investor.relations@asml.com
For additional contact information please visit www.asml.com.
270
ASML ANNUAL REPORT 2021 Appendix - Reference table 20-F
Form 20-F Caption
Location in this document
Page
Item
Part I
1
2
3
4
Identity of Directors, Senior Management
and Advisors
Offer Statistics and Expected Timetable
Not applicable
Not applicable
Key Information
B. Capitalization and Indebtedness
Not applicable
C. Reasons for the Offer and Use of Proceeds Not applicable
D. Risk Factors
Information on the Company
Our performance in 2021 - Governance - Risk factors
A. History and Development of the Company
Cover Page
Who we are and what we do - Our company
Appendix - Property, plant and equipment
Appendix - Documents on display
Appendix - ASML contact information
B. Business Overview
Who we are and what we do
C. Organizational Structure
D. Property, Plant and Equipment
Our position in the semiconductor value chain
Note 2 Revenue from contracts with customers
Note 3 Segment disclosure
Appendix - Government regulation
Our performance in 2021 - Corporate governance - Financial
Reporting and Audit - Corporate information
Note 13 Property, plant and equipment, net
Appendix - Property, plant and equipment
4A
5
Unresolved Staff Comments
Not applicable
Operating and Financial Review and Prospects
A. Operating Results
B. Liquidity and Capital Resources
Our performance in 2021 - Financial - Financial performance
Our performance in 2021 - Financial - Financial performance
Financing policy
Consolidated Statements of Cash Flows
Note 4 Cash and cash equivalents and short-term investments
Note 16 Long-term debt and interest and other costs
Note 17 Commitments and contingencies
Note 25 Financial risk management
C. Research and Development, Patents and
Licenses, etc.
Message from the CTO
D. Trend Information
E. Critical Accounting Estimates
How we innovate
Financial performance - Research and development costs
Innovation ecosystem
Responsible business - Intellectual Property protection
Financial performance - Long-term growth opportunities
Notes to the Consolidated Financial Statements - Note 1 General
information / summary of general accounting policies - Use of
estimates
6
Directors, Senior Management and Employees
A. Directors and Senior Management
Corporate governance
B. Compensation
C. Board Practices
Remuneration report
Corporate governance
D. Employees
E. Share Ownership
Corporate governance - Supervisory Board - Supervisory Board
Committees
Social - Our people
Corporate governance - Share capital - Major shareholders
Remuneration report - Remuneration of the Board of Management
in 2021
Note 20 Share-based compensation
7
Major Shareholders and Related Party Transactions
A. Major Shareholders
Corporate governance - Share capital - Major shareholders
B. Related Party Transactions
Note 26 Related parties and variable interest entities
115
1
9
257
267
270
8
26
183
188
263
109
109
197
257
43
43
135
181
190
201
203
218
14
16
45
84
131
48
182
95
160
95
98
97
68
107
107
165
162
206
107
107
225
271
ASML ANNUAL REPORT 2021 Item
Form 20-F Caption
C. Interests of Experts & Counsel
8
Financial Information
A. Consolidated Statements and Other
Financial Information
B. Significant Changes
Location in this document
Not applicable
Consolidated Financial Statements
Financial performance - Long-term growth opportunities
Notes to the Consolidated Financial Statements
9
The Offer and Listing
A. Offer and Listing Details
B. Plan of Distribution
C. Markets
D. Selling Shareholders
E. Dilution
F. Expenses of the Issue
10
Additional Information
A. Share Capital
Appendix - Offer and listing details
Not applicable
Appendix - Offer and listing details
Not applicable
Not applicable
Not applicable
Not applicable
B. Memorandum and Articles of Association
Corporate governance - Share capital
C. Material Contracts
D. Exchange Controls
E. Taxation
F. Dividends and Paying Agents
G. Statement by Experts
H. Documents on Display
I. Subsidiary Information
Appendix - Material contracts
Appendix - Exchange controls
Appendix - Dutch taxation / US taxation
Not applicable
Not applicable
Appendix - Documents on display
Not applicable
Quantitative and Qualitative Disclosures
About Market Risk
Note 16 Long-term debt and interest and other costs
Description of Securities Other Than Equity
Securities
Defaults, Dividend Arrearages and
Delinquencies
Material Modifications to the Rights of
Security Holders and Use of Proceeds
Controls and Procedures
Audit Committee Financial Expert
Code of Ethics
Principal Accountant Fees and Services
Exemptions from the Listing Standards for
Audit Committees
Purchases of Equity Securities by the Issuer
and Affiliated Purchasers
Change in Registrant’s Certifying
Accountant
Corporate Governance
Mine Safety Disclosure
Note 25 Financial risk management
Appendix - Offer and listing details
None
None
Appendix - Controls and procedures
Supervisory Board report - Audit committee
Responsible business - Business ethics and Code of Conduct
Appendix - Principal accountant fees and services
Not applicable
Note 22 Shareholders’ equity
None
Corporate governance - Financial reporting and audit - US listing
requirements
Not applicable
Disclosure Regarding Foreign Jurisdictions
that Prevent Inspections
Not applicable
11
12
Part II
13
14
15
16A
16B
16C
16D
16E
16F
16G
16H
16I
Part III
17
18
19
Financial Statements
Financial Statements
Exhibits
Not applicable
Consolidated Financial Statements
Exhibit index
Page
174
48
182
264
264
95
265
266
258
267
201
218
264
268
141
125
256
214
109
109
174
281
This document contains information required for the Annual Report on Form 20-F for the year ended December 31, 2021
of ASML Holding N.V. Reference is made to the Form 20-F cross reference table contained herein under ‘Reference
Table - 20-F’. Only the information in this document that is referenced in the Form 20-F cross reference table and this
paragraph, this cross-reference table itself, the section entitled Special note regarding forward looking statements shall
be deemed to be filed with the Securities and Exchange Commission for any purpose. Any additional information in this
document which is not referenced in the Form 20-F cross reference table, or the Exhibits themselves, shall not be
deemed to be incorporated by reference, shall not be part of the 2021 Annual Report on Form 20-F and is furnished to
the Securities and Exchange Commission for information only.
272
ASML ANNUAL REPORT 2021 Definitions
273
ASML ANNUAL REPORT 2021 Name
0-9
3TG
A
ADAS
AFM
AGM
AI
AIoT
Annual Report
ARCNL
ArF
ArFi
ASC
ASML
ASML Foundation
ASML Preference
Shares Foundation
B
BAPA
BEAT
BoM
BREEAM
Brion
C
CAGR
Canon
CAPEX
Capital resources
Carl Zeiss SMT
CCIP
CCPA
CDP
CEO
CFO
CGU
CGU ASML
Cleanroom
CMO
CO2
Code
Code of Conduct
Company
Computational
lithography
COO
COVID-19
CRC
CRMC
CTO
Cymer
D
D&E
Deloitte
D&I
DJSI
Description
Tin, tantalum, tungsten and gold
Advanced driver-assistance systems
The Dutch Authority for the Financial Markets (Autoriteit Financiële Markten)
Annual general meeting
Artificial intelligence
Artificial intelligence of things
Annual Report on Form 20-F
Advanced Research Center for Nanolithography
Argon fluoride
Argon fluoride immersion
Accounting Standards Codification
ASML Holding N.V. and / or any of its subsidiaries and / or any investments in associates
An independent charity with strong ties to ASML that supports educational initiative for disadvantaged
4-18 year olds in regions where ASML operates.
Stichting Preferente Aandelen ASML
Bilateral advance pricing agreements
Base erosion anti-abuse tax
Board of Management
Building Research Establishment Environmental Assessment Method
Brion Technologies, Inc.
Compound annual growth rate
Canon Kabushiki Kaisha
Additions in property, plant and equipment plus additions in intangible assets plus additions in right-of-use
assets (Operating and finance).
The capitals resources as defined by the IIRC are referred to as: financial, manufacturing, intellectual,
human, social and natural.
Carl Zeiss SMT GmbH
Customer Co-investment Program
California Consumer Privacy Act (US)
The Carbon Disclosure Project
Chief Executive Officer
Chief Financial Officer
Cash-generating unit
ASML excluding CGU Cymer Light Sources
The central part of a wafer fab where wafers are processed, and the environment is minutely controlled to
eliminate dust and other contaminants.
Chief Marketing Officer
Carbon dioxide
The Dutch Corporate Governance Code
Code of ethics and conduct
ASML Holding N.V.
The use of powerful algorithms and computer modeling of the manufacturing process to optimize reticle
patterns by intentionally deforming them to compensate for physical and chemical effects that occur
during lithography and patterning.
Chief Operating Officer
Coronavirus disease 2019
ASML’s corporate risk committee
Capital Research & Management Company
Chief Technology Officer
Cymer Inc., Cymer LLC and its subsidiaries
Development and engineering
Deloitte Accountants B.V.
Diversity and inclusion
Dow Jones Sustainability Index
274
ASML ANNUAL REPORT 2021 Name
DRAM
DUV
E
EHS
EHS Competence
Center
EMEA
EPS
ERM
eScan
ESG score
ETR
EU
EU-IFRS
EURIBOR
Eurobond
Euroclear Nederland
Euronext Amsterdam
EUV lithography
Exchange Act
ExCom
F
Fab
FAT
FDII
Feature
Flash
Foundry
FTEs
FTSE4Good
G
GAAP
GDPR
GeSI
GHG
GILTI
GPU
GRI
GRI standards
H
H2
HDD
High-NA
HMI
Holistic lithography
HTSC
I
IAS
IC
IDM
IIRC
i-line
ILO
Imaging
imec
Description
Dynamic Random Access Memory
Deep ultraviolet
Environment, health and safety
A group within ASML that defines EHS standards, gathers best practices and helps managers implement
them
Europe, the Middle East and Africa
Earnings per share
Enterprise risk management
ASML’s e-beam wafer inspection system family for targeted in-line defect detection
An integrated scoring system for environmental, social and governance (ESG) factors used in credit rating
decisions
Effective tax rate
European Union
International Financial Reporting Standards as adopted by the European Union
Euro Interbank Offered Rate
A bond denominated in Euros
The Dutch Central Securities Depository (Nederlands Centraal Instituut voor Giraal Effectenverkeer B.V.)
Euronext Amsterdam N.V.
A lithography technology that uses extreme ultraviolet light with a wavelength of 13.5 nm. This is currently
the cutting edge of lithography, enabling technology nodes of 16 nm and beyond. It is used for only the
most critical layers with the smallest features.
US Securities Exchange Act of 1934
Executive Committee
Semiconductor fabrication plant
Factory acceptance test
Foreign-derived intangible income
The elements that make up the pattern for a given layer of a microchip.
A type of non-volatile memory used for storing and transferring information.
A contract manufacturer of logic chips
Full-time equivalents
Series of ethical investment stock market indices launched in 2001 by the FTSE Group
Generally accepted accounting principles
General data protection regulation
Global e-Sustainability Initiative
Greenhouse gas
Global intangible low-tax income
Graphics processing unit
Global Reporting Initiative
GRI sustainability reporting standards
Hydrogen
Hard disk drive
High numerical aperture – specifically a next-generation EUV lithography platform (EUV 0.55 NA)
The brand name for ASML's range of electron beam (e-beam) wafer inspection and metrology systems
The ability to optimize the entire microchip manufacturing process and enable affordable scaling in chip
technology by integrating lithography systems with computational modeling and wafer metrology solutions
(analyzing and controlling the manufacturing process in real time)
High Tech Systems Center
International Accounting Standards
Integrated circuit
Integrated device manufacturer
International Integrated Reporting Council
Light with a wavelength of 365 nm, generated by mercury vapor lamps and used in some lithography
systems
International Labor Organization
The ability to transfer a pattern to the photoresist on to a wafer using light
Interuniversitair Micro-Elektronica Centrum
275
ASML ANNUAL REPORT 2021 Name
Immersion lithography
Installed Base
Management
Intel
Internet of Things (IoT)
IPR
ISO
K
KLA-Tencor
KPI
KPMG
KrF
kWh
L
LGBTQI+
LIBOR
Lithography
Logic
LTI
M
MBA
Memory
mm
MPS
MSCI
N
NA
NAND
NASDAQ
NGO
Nikon
NL
nm
Node
Non-GAAP
NRE
NXE
NXT
O
OCI
ODM
OECD
OEM
ONE
Overlay
P
Pattern fidelity
Pattern fidelity control
Description
A lithography technique that uses a pool of ultra-pure water between the lens and the wafer to increase the
lenses numerical aperture (ability to collect and focus light). This improves both the resolution and depth of
focus for the lithography system.
Net service and field option sales
Intel Corporation
A network of physical objects embedded with sensors, actuators, electronics and software that allow the
objects to collect and exchange data
Intellectual property rights
International Organization for Standardization
KLA-Tencor Corporation
Key performance indicator
KPMG Accountants N.V.
Krypton fluoride
Kilowatt-hour
Lesbian, gay, bisexual, transgender, queer and intersex
London Interbank Offered Rate
Lithography, or photolithography, is the process in microchip manufacturing that uses light to pattern parts
on a silicon wafer
Integrated devices such as microprocessors, microcontrollers and GPUs. Also refers to companies that
manufacture such devices
Long-term incentive
Master of Business Administration
Microchips, such as NAND Flash and DRAM, that store information. Also refers to companies that
manufacture such chips.
Millimeter (one thousandth of a meter)
Mature Products and Services
Morgan Stanley Capital International
Numerical aperture
A binary logical operator that gives an output when it receives one or no input; a composite of ‘NOT AND’
NASDAQ Stock Market LLC
Non-governmental organization
Nikon Corporation
The Netherlands
Nanometer (one billionth of a meter)
A steppingstone in the chipmaking industry's roadmap for smaller features and more advanced
microchips, describes and differentiates generations of semiconductor manufacturing technologies and
the chips made with them. Nodes with “smaller sizes” refer to more advanced technologies.
A company’s historical or future financial performance, financial position, or cash flows that are not
calculated or presented in accordance with the most comparable GAAP measure.
Non-recurring engineering
The original TWINSCAN system platform for EUV lithography
An enhanced version of the original TWINSCAN system platform offering significantly improved overlay
and productivity
Other comprehensive income
Original design manufacturer
Organization for Economic Co-operation and Development
Original equipment manufacturer
ASML’s Our New Enterprise program, which aims to improve our business processes and IT enterprise
management system
The layer-to-layer alignment of chip structures
A holistic measure of how well the desired pattern is reproduced on the wafer
A holistic approach to controlling the whole process of manufacturing advanced microchips in high
volumes that aims to improve overall yields. It draws data from production equipment and computational
lithography tools, analyzing it with techniques such as machine learning to provide real-time feedback.
276
ASML ANNUAL REPORT 2021 Name
Patterning
PGP
PME
Preference shares
foundation
Preference share
option
Q
QLTCS
R
R&D
RBA
RC
REACH
Recoverable amount
Remuneration policy
Reticle
ROAIC
RoHS
S
Samsung
SAQ
Sarbanes-Oxley Act
SAT
SB
Scope 1 CO2
emissions
Scope 2 CO2
emissions
Scope 3 CO2
emissions
SDG
SEC
SEMI
SEMI S2
SEMI S23
SG&A
Shrink
SoC
SPE Shareholders
S&SC
SSD
SSRA
STEM
STI
SWOT
T
TC
TCFD
TCJA
TDC
Technical competence
Throughput
TJ
Transistor
TSMC
Description
The process of creating a pattern in a surface (to build microchips)
Product generation process
Bedrijfstakpensioenfonds Metalektro
Stichting Preferente Aandelen ASML
An option to acquire cumulative preference shares in our capital
Quality, logistics, technology, cost and sustainability
Research and development
Responsible Business Alliance
ASML’s Remuneration Committee
Registration, evaluation, authorization and restriction of chemicals
The greater out of an asset’s fair value less costs to sell and its value in use
The remuneration policy applicable to the Board of Management of ASML Holding N.V.
A plate containing the pattern of features to be transferred to the wafer for each exposure
Return on average invested capital
Restriction of hazardous substances
Samsung Electronics Corporation
Self-assessment questionnaire
The Sarbanes-Oxley Act of 2002
Site acceptance test
ASML’s Supervisory Board
Direct carbon dioxide emissions from resources an organization owns or controls
Indirect carbon dioxide emissions due to the energy and organization consumes
All other indirect carbon dioxide emissions that occur in an organization’s value chain
United Nations Sustainable Development Goals
The United States Securities and Exchange Commission
Semiconductor Equipment and Materials International
SEMI S2 – Safety Guideline, Environmental, Health, and Safety Guideline for Semiconductor Manufacturing
Equipment, a set of performance-based EHS considerations for semiconductor manufacturing equipment
SEMI S23 – Guide for Conservation of Energy, Utilities, and Materials Used by Semiconductor
Manufacturing Equipment, guidelines for collecting, analyzing, and reporting energy-consuming
semiconductor manufacturing equipment utility data
Selling, general and administrative
The process of developing smaller transistors for more advanced chips
System on a chip
A syndicate of three banks for the purpose of leasing ASML’s headquarters in Veldhoven
Sourcing and supply chain
Solid-state drive
Safety risk assessment
Science, technology, engineering and mathematics
Short-term incentive
Strengths, weaknesses, opportunities and threats
ASML’s Technology Committee
Task Force on Climate-related Financial Disclosures
Tax Cuts and Jobs Act
Total direct compensation
The capabilities and spread of technical expertise among our people, and the extent to which they are
embedded in our processes and operations
The number of wafers a system can process per hour
Terajoule (one trillion joules)
A semiconductor device that is the fundamental building block of microchips
Taiwan Semiconductor Manufacturing Company Ltd.
277
ASML ANNUAL REPORT 2021 Name
TSR
TWINSCAN
U
UNGP
US
US GAAP
US ITC
V
VAT
VIE
VLSI
VNO-NCW
VP
W
WACC
Wafer inspection
Wafer metrology
Wavelength
Website
Works Council
Y
YieldStar
Z
Zeiss
Description
Total shareholder return
ASML’s unique lithography system platform, with two complete wafer stages to allow one wafer to be
mapped while another is being exposed - enabling higher accuracy and throughput.
United Nations guiding principles
United States
Generally accepted accounting principles in the United States of America
United States International Trade Commission
Value-added tax
Variable interest entity
VLSI Research Inc.
The Confederation of Netherlands Industry and Employers
Vice president
Weighted average cost of capital
The process of locating and analyzing individual chip defects on a wafer
The process of measuring the quality of patterns on a wafer
The distance between two peaks of a wave such as light. The shorter the wavelength of light used in a
lithography system, the smaller the features the system can resolve.
www.asml.com
Works Council of ASML Netherlands B.V.
ASML's diffraction-based wafer metrology platform
Carl Zeiss AG
278
ASML ANNUAL REPORT 2021 ASML Holding N.V. hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly
caused and authorized the undersigned to sign this Annual Report on Form 20-F on its behalf.
ASML Holding N.V. (Registrant)
/s/ Peter T.F.M. Wennink
Name: Peter T.F.M. Wennink
Title: President, CEO and member of the Board of Management
Dated: February 9, 2022
/s/ Roger J.M. Dassen
Name: Roger J.M. Dassen
Title: Executive Vice President, CFO and member of the Board of Management
Dated: February 9, 2022
279
ASML ANNUAL REPORT 2021
Exhibit index
280
ASML ANNUAL REPORT 2021 Exhibit index
Exhibit No. Description
1
Articles of Association of ASML Holding N.V. (English translation) (Incorporated by reference to Amendment No. 13 to
the Registrant’s Registration Statement on Form 8-A/A, filed with the SEC on February 8, 2013)
Description of Securities registered under Section 12 of the Exchange Act 2
Form of Indemnity Agreement between ASML Holding N.V. and members of its Board of Management (Incorporated
by reference to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2003)
Form of Indemnity Agreement between ASML Holding N.V. and members of its Supervisory Board (Incorporated by
reference to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2003)
Form of Employment Agreement for members of the Board of Management (Incorporated by reference to the
Registrant’s Annual Report on Form 20-F for the fiscal year ended December 31, 2003)
Nikon-ASML Patent Cross-License Agreement, dated December 10, 2004, between ASML Holding N.V. and Nikon
Corporation (Incorporated by reference to the Registrant’s Annual Report on Form 20-F for the fiscal year ended
December 31, 2014) 1
ASML/Carl Zeiss Sublicense Agreement, 2004, dated December 10, 2004, between Carl Zeiss SMT AG and ASML
Holding N.V. (Incorporated by reference to the Registrant’s Annual Report on Form 20-F for the fiscal year ended
December 31, 2004) 1
ASML Performance Stock Plan for Members of the Board of Management (Version 1) (Incorporated by reference to the
Registrant’s Registration Statement on Form S-8 filed with the SEC on July 5, 2007 (file No. 333-144356))
ASML Performance Stock Option Plan for Members of the Board of Management (Version 2) (Incorporated by
reference to the Registrant’s Registration Statement on Form S-8 filed with the Commission on July 5, 2007 (file
No. 333-144356))
ASML Board of Management Umbrella Share Plan (Incorporated by reference to the Registrant’s Registration
Statement on Form S-8 filed with the SEC on April 13, 2015 (file No. 333-203390))
Partnership and Joint Venture Agreement, among Carl Zeiss AG, ASML Holding N.V. and Carl Zeiss SMT Holding
Management GmbH, dated 29 June 2017 (Incorporated by reference to the Registrant’s Annual Report on Form 20-F
for the fiscal year ended December 31, 2017)
Settlement and Cross License Agreement, dated February 18, 2019, among Nikon Corporation, ASML Holding
N.V. and Carl Zeiss SMT GmbH and, with regards to Sections 3(b) 2.2.1, 3.8, 6.3.3, 6.6, 10.6, 10.8, 10.14 and 10.15,
Carl Zeiss AG (Incorporated by reference to the Registrant’s Annual Report on Form 20-F for the fiscal year ended
December 31, 2019) 3
ASML - SMT Business Agreement, dated July 21, 2021 between ASML Netherlands B.V. and Carl Zeiss SMT GmbH 2,3
List of Main Subsidiaries 2
Certification of CEO and CFO Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 2
Certification of CEO and CFO Pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 2
Consent of Independent Registered Public Accounting Firm 2
XBRL Instance Document 2
XBRL Taxonomy Extension Schema Document 2
XBRL Taxonomy Extension Calculation Linkbase Document 2
XBRL Taxonomy Extension Definition Linkbase Document 2
XBRL Taxonomy Extension Label Linkbase Document 2
XBRL Taxonomy Extension Presentation Linkbase Document 2
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) 2
2.1
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
8.1
12.1
13.1
15.1
101.INS
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE
104
1. Certain information omitted pursuant to a request for confidential treatment filed separately with the SEC.
2. Filed at the SEC herewith.
3. Portions of this exhibit have been omitted because they are both (i) not material and (ii) would be competitively harmful if publicly disclosed
ASML is party to 6 debt instruments (senior notes) under which the total amount of securities under each individual debt
instrument does not exceed 10% of the total assets of ASML and its subsidiaries on a consolidated basis. Pursuant to
paragraph 2(b) (i) of the instructions to the exhibits to Form 20-F, ASML agrees to furnish a copy of such instruments to
the SEC upon request. Classes of senior notes registered are:
• 0.625% ASML Holding NV Fixed Rate Senior Notes due 2022 (XS1405774990) at Luxembourg Stock Exchange;
• 3.375% ASML Holding NV Fixed Rate Senior Notes due 2023 (XS0972530561) at Luxembourg Stock Exchange;
• 1.375% ASML Holding NV Fixed Rate Senior Notes due 2026 (XS1405780963) at Luxembourg Stock Exchange;
• 1.625% ASML Holding NV Fixed Rate Senior Notes due 2027 (XS1527556192) at Luxembourg Stock Exchange;
• 0.625% ASML Holding NV Fixed Rate Senior Notes due 2029 (XS2166219720) at Luxembourg Stock Exchange;
• 0.25% ASML Holding NV Fixed Rate Senior Notes due 2030 (XS2010032378) at Luxembourg Stock Exchange.
281
ASML ANNUAL REPORT 2021