ASML ANNUAL REPORT 2022
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
2
Smaller size, bigger capability is a well-established trend in the chip industry.
And thanks to the joint efforts of our 39,000 people working together with suppliers,
customers and innovation partners, we are taking that ever further.
Every day we push the boundaries of physics and shrink patterns to help shape the
future of life, work and play across the planet. Strongly embedded in a global
innovation ecosystem, we enable ground-breaking technology that can help humanity
manage challenges and seize opportunities by facilitating smart living and mobility,
accessible healthcare, food security and the transition to renewable energy.
Creating small patterns that enable a big impact.
Tackling
pollution
Global
well-being
Food
security
Energy
transition
Smart
mobility
See page 8 >
See page 22 >
See page 30 >
See page 40 >
See page 51 >
Virtual and
augmented
reality
See page 69 >
Wearable
technology
See page 149 >
ASML ANNUAL REPORT 2022
CONTENTS
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
3
Contents
Message from the CEO on page 5 >
Q&A with the CTO on page 20 >
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIALS & NON FINANCIALS
4
5
9
20
23
31
33
41
44
49
52
56
70
71
Forward-looking statements
Message from the CEO
Our company
Q&A with the CTO
Marketplace
Our business and ESG strategy
Our business model
Q&A with the CFO
Financial performance
Performance KPIs
Long-term growth opportunities
Risk
How we manage risk
Risk factors
Environmental, Social and
Governance
ESG at a glance
Our material ESG sustainability topics
76
85
97
109
118
124
Environmental
Energy efficiency and climate action
Circular economy
Social
Attractive workplace for all
Our supply chain
Innovation ecosystem
Valued partner in our communities
Governance
134 Managing ESG Sustainability
135
147
Responsible business
Our approach to tax
Our stories
Tackling pollution
Global well-being
Food security
Energy transition
Smart mobility
Virtual and augmented reality
8
22
30
40
51
69
152
154
157
160
165
167
Corporate Governance
Board of Management
Supervisory Board
Other Board-related matters
AGM and share capital
Financial reporting and audit
Compliance with Corporate
Governance requirements
Supervisory Board report
168 Message from the Chair of the
Supervisory Board
170
Supervisory Board focus in 2022
174 Meetings and attendance
177
Supervisory Board committees
185
Financial Statements and Profit
Allocation
Remuneration Report
186 Message from the Chair of the
Remuneration Committee
188
190
192
208
Remuneration at a glance
Remuneration Committee
Board of Management remuneration
Supervisory Board remuneration
Consolidated Financial Statements
Report of Independent Registered
Public Accounting Firm
Consolidated Statements of Operations
Consolidated Statements of
Comprehensive Income
Consolidated Balance Sheets
Consolidated Statements of
Shareholders’ Equity
Consolidated Statements of Cash
Flows
Notes to the Consolidated Financial
Statements
Non-financial statements
Assurance Report of the Independent
Auditor
About the non-financial information
Non-financial indicators
Other appendices
Definitions
Exhibit index
214
216
217
218
219
221
222
264
266
272
290
309
317
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 and/or video presentations in
this Annual Report are for reference only and none nor
any portion thereof are incorporated by reference in this
report.
© 2023, ASML Holding N.V. All Rights Reserved.
Q&A with the CFO on page 41 >
149 Wearable technology
View our Highlights online >
ASML ANNUAL REPORT 2022
FORWARD-LOOKING STATEMENTS
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
4
Special note regarding forward-looking statements
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 and goals, expected
semiconductor industry trends, expected
trends in markets served by our customers,
including expected growth in semiconductor
demand, manufacturing
capacity, expected semiconductor market
trends and market growth and drivers of
such trends and growth, expected financial
results, including expected sales, service
revenue, gross margin, expected capital
expenditures, R&D and SG&A expenses,
effective annualized tax rate, annual revenue
growth rate and outlook for 2023 and other
statements under “Trend Information”,
annual sales and gross margin opportunity
and potential and growth outlook and for
2025 and 2030, sales model for 2025 and
other statements under the section entitled
“Long-term growth opportunities”,
statements under the section entitled "Risk
factors", expected trends in customer
demand and demand for semiconductors
including expected trends in end markets,
including Memory and Logic, expected
development of High-NA and expected
timing to start shipment of High-NA systems
and high-volume production of High-NA
systems, for semiconductor industry market
opportunities, expected EUV and DUV and
installed based management sales and the
expectation about continuing role of DUV
systems, EUV product roadmap, our supply
chain strategies and goals, customer, partner
and industry roadmaps, expected
productivity and benefits of our tools,
potential future innovations and system
performance, expected shipments of our
tools, including demand for and timing of
shipments, statements with respect to DUV
and EUV competitiveness, the development
of EUV technology, revenue recognition,
expected demand for wafers, expected
impact of inflation, ESG strategy including
our sustainability targets, goals and
strategies, environmental, diversity and
sustainability strategy, ambitions, goals and
targets, including circular procurement goals,
targeted greenhouse gas emissions 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 and the goals for timing thereof,
statements with respect to Moore’s Law,
cash return and dividend policy, our
expectation to continue to return cash to our
shareholders through share buybacks and
dividends including our proposed dividend
for 2022 and statements relating to our share
buyback program, statements with respect
to the expected impact of accounting
standards and other non-historical
statements. These forward-looking
statements are not historical facts, but rather
are based on current expectations,
estimates, assumptions and projections
about business and future financial results
and readers should not place undue reliance
on them. Forward-looking statements do not
guarantee future performance, and actual
results may differ materially from projected
results as a result of certain risks, and
uncertainties. These risks and uncertainties
include, without limitation, those described
under 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.
ASML ANNUAL REPORT 2022
MESSAGE FROM THE CEO
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
5
Record performance in a challenging year
With record net bookings for 2022, an innovation pipeline filled with new products and services
and our talented, energized and engaged people, we face the future with great confidence.
Dear Stakeholder,
The figures speak for themselves: record sales
of €21.2 billion, up by 13.8% compared with
2021, a gross margin of 50.5% and a dividend
per share of €5.80 add up to another
outstanding year for ASML. Our net bookings
stand at an unparalleled €30.7 billion for the
year 2022, our pipeline is flowing freely, with a
number of new products launched, set to
launch or in development, and our people are
talented, energized and engaged. Not
surprisingly, we are looking forward to a very
bright future with strong growth. I would like to
thank all our stakeholders for their support
during the year – and in particular I wish to pay
tribute to our people, who have again displayed
outstanding commitment and expertise, and
without whom none of our achievements would
have been possible.
Yet despite the positive numbers, the reality
is that 2022 could actually have been even
better. Our ability to meet customer demand
continued to be impacted by a set of
circumstances that were not fully in our
control. The aftermath of COVID-19, the
ongoing war in Ukraine and struggles among
some of our supply chain partners to deliver
according to our agreed plans due to
material shortages have combined to cause
significant turbulence and meant that we
were unable to give our customers what they
needed all of the time.
Ultimately, we have seen the global chip
shortage that first appeared in 2020 continue
through 2022. We have all encountered this in
one way or another in our personal lives,
whether through delays in taking ownership of a
new vehicle or reduced availability of technology
such as solar panels.
Delivering on our business strategy…
Although we have at times struggled
operationally, from a strategic standpoint we
have continued to deliver. Our
comprehensive product portfolio is aligned to
our customers’ roadmaps, delivering cost-
effective solutions in support of all
applications, from leading-edge to mature
nodes. Among many highlights of the year,
we shipped the first TWINSCAN NXT:2100i,
received new orders for the TWINSCAN
EXE:5200 and saw several customers adopt
Alignment Optimization 12 Color.
While we had more unhappy customers than
I would have liked, we have also experienced
empathy and support. We have always kept
customers fully informed of any delays to
shipments, and they can see for themselves
how our investments are set to increase
capacity. Cranes stand across the skylines of
our sites as our investment to increase our
manufacturing capacity to 90 EUV 0.33 NA
and 600 DUV systems by 2025-2026 begins
to take shape, while we are also ramping our
EUV 0.55 NA (High-NA) capacity to 20
systems by 2027-2028. And key partners
such as Carl Zeiss are also busy adding
capacity, doing everything they can to free
the logjam in the supply chain.
Our investments are set to
increase capacity.”
Peter Wennink
President, Chief Executive Officer and Chair of the Board of Management
ASML ANNUAL REPORT 2022
MESSAGE FROM THE CEO CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
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Record performance in a challenging year (continued)
It is true that some customers, concerned
about the global economic environment, are
choosing to delay shipments. But as
evidenced by our order book, most are
continuing to push us to get the tools they
need and are eager to take up any spare
capacity we can release to get deliveries
even earlier than scheduled if possible.
We have also been working to improve the
flexibility of our manufacturing capacity, our
workforce and our supply chain to enable us
to respond quickly and appropriately to the
current waves of uncertainty.
…and on our ESG strategy
The theme for this annual report is Small
patterns. Big impact. The things we do at
ASML have a wide-ranging impact, not only
on our customers but on society at large.
The technology pioneered by our R&D teams
and partners sits at the heart of global
digitalization, and has the potential to
transform how we all live and work, from
enabling predictive healthcare, energy
transition and smart cities to wearables, self-
driving cars and robotics.
Launched in 2021, our ESG strategy
acknowledges and addresses the impact we
have on society. It underpins our drive to be
a responsible organization and a force for
good in the world.
Of course, we are not unique in this. All
responsible companies now dedicate
significant resources to ESG matters,
reflecting how the world is coming to terms
with its major challenges, notably climate
change and the energy transition. For us,
ESG is about helping to create a responsible
society – one where as many people as
possible have a safe and healthy
environment, a job, a home and access to
food, good schools and quality medical care.
These are important basic conditions for
businesses to flourish and for economies to
grow. As we outline in 'Environmental, Social
and Governance - ESG at a glance', we have
made good progress over the last 12
months.
We have always been very vocal about the
fact that we’re running this company to a
stakeholder model, not per se only a
shareholder model. We have five stakeholder
groups – our people, our customers, our
suppliers, our shareholders and society. It is
the balance between those five that actually
makes a company credible. If you focus only
on one or two of those stakeholders, the
others are likely going to suffer. So we work
very hard to get the balance right. We are not
perfect and there remains much to do – but
our ESG strategy is an important beacon that
is lighting up the way ahead.
Working with our partners
We can’t survive without our partnership
ecosystem, and this goes right to the heart
of our values – challenge, collaborate and
care. We love being challenged, and we rise
to challenges much better when we
collaborate with others, from academia and
research institutions to leading-edge
companies from all over the world, creating
trust and sharing both risks and rewards.
Together, we are developing technology that
can have a positive impact – caring for the
ecosystem, for all our stakeholders and for
our planet.
We work together in a strong global
semiconductor innovation ecosystem with
our suppliers and innovation partners, as well
as with other equipment providers such as
etch and deposition partners, to understand
patterning and how we can provide the
solutions that our customers, our customers’
customers and our end users demand.
As architects and integrators, we orchestrate
this process – building on our values to help
fill our innovation funnel and keep the ASML
pipeline flowing freely. The Brainport
Eindhoven innovation ecosystem, in which
we operate from our headquarters in
Veldhoven, is a good example of this level of
cooperation, which is based on trust,
transparency and a willingness to share
expertise and knowledge.
Our ESG strategy is
an important beacon
that is lighting up the
way ahead.”
Peter Wennink
President, Chief Executive Officer and Chair of the
Board of Management
ASML ANNUAL REPORT 2022
MESSAGE FROM THE CEO CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
7
Record performance in a challenging year (continued)
Driving the search for global talent
It may be a cliché that people are a
company’s greatest asset, but it is also very
true – and the shortage of talent is a factor
that is impacting every industry on the planet,
including ours. To meet the chip industry’s
ambitions, globally and within the European
ecosystem, we need to significantly increase
the inflow of engineering talent in the coming
decade.
The governments of South Korea, the US,
Taiwan and Japan are all investing heavily in
chip-related education and vocational
training. We need to see the Dutch and other
European governments doing the same. At
ASML, we’re playing our part. Education is a
key pillar of our community engagement
activities, and during 2022 we again
supported programs to boost interest in
technology among young people and
increase local talent pools in [all the main]
geographies where we operate.
Read more in:
Social
In 2022 we welcomed 7,130 new people into
ASML, so our efforts to attract talented
individuals are paying dividends, supported
by the fact that we’re able to offer them the
opportunity to work at the cutting edge of
technology. Today, we have more than 140
nationalities at ASML – but we know that
young people move often and may not stick
around for 20 years or so as previous
generations did. So our challenge is to make
sure that ASML is an attractive long-term
option where people can contribute and
enjoy the benefits of doing so and develop
themselves. That is where our 'can do'
culture is so important. We have a workplace
environment here where people can drive
innovation forward, inspire each other and
help make sure that digital technology fulfills
its potential.
Looking ahead to 2023 and beyond
At the 2023 AGM, Gerard Kleisterlee, the
Chairman of our Supervisory Board, will step
down after having served on the Supervisory
Board since 2015. I would like to express our
gratitude to Gerard for his valuable
contributions as Chairman of the Supervisory
Board and the Selection and Nomination
Committee, and member of the Technology
Committee. He has brought profound
experience to the Supervisory Board during
his eight years of service and has been a
great source of guidance and advice for
ASML. We wish Gerard all the best for the
future.
When looking at our business environment,
in the short term it is clouded by uncertainty
due to a number of macroeconomic
concerns including energy shortages,
inflation, reduced consumer confidence and
recession. On a geopolitical level, the
bifurcation of socio-economic blocks – with
the associated export and import controls –
is threatening the development of the global
village that contributed so much to a lot of
the innovation we have seen in recent years.
If countries or trade blocks withdraw into
their own territories, then innovation will be
less effective and more expensive.
Several news organizations reported end of
January 2023 that the US, the Netherlands
and Japan agreed to further restrict the
export of semiconductor manufacturing
equipment to China. We understand that
steps have been taken that would cover
advanced lithography tools as well as other
types of equipment. The terms of this
agreement have not been publicly disclosed
and remain confidential for now. We expect
that it will take many months for the
governments to write and enact new rules.
Combined with the current market situation,
we do not expect these measures to have a
material effect on our expectations for 2023.
Looking at the immediate future, we will have
to deal with the shocks in the system, and I
am confident that we will do so, supported
by growing demand for semiconductors and
semiconductor equipment. Over the next 12
months, I anticipate that we will yet again
break records.
Beyond 2023, I am very positive about our
industry in general and about ASML in
particular. Some industry analysts believe
that our semiconductor industry will grow to
be worth a trillion dollars by 2030 – and we
do not disagree. Our own expectation is that
our combined systems and installed base
revenue could provide an annual revenue
growth rate of around 14%1 for the period
2020-2030.
Teamwork, both within ASML and externally
with our partners and suppliers, will be a
crucial component if we are to achieve that
ambition. By challenging, collaborating and
caring, we will play a leading role in meeting
customer demands, delivering the right
technology at the right time to enable the
semiconductor industry to thrive while taking
to heart the interests of the communities
around us.
Peter Wennink
President, Chief Executive Officer and Chair of the Board
of Management
By challenging,
collaborating and
caring, we will play a
leading role in
meeting customer
demands, delivering
the right technology
at the right time.”
Peter Wennink
President, Chief Executive Officer and Chair of the
Board of Management
1. Using the midpoint of the 2030 revenue scenarios
ASML models over the period 2020-2030, we expect
a potential compound annual growth rate of around
14% from our base 2020 revenue, around €14.0
billion. This is a combination of growth in our systems
sales as well as our installed base management
revenue.
ASML ANNUAL REPORT 2022
SMALL PATTERNS. BIG IMPACT.
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
8
TACKLING POLLUTION
Nano
innovations,
macro
challenges
Our lithography solutions not only help to reduce
chip size – they also increase performance and
energy efficiency. That’s opened the door to
nano-innovations such as the ‘winged microchip’
– inspired by the way seeds disperse through the
air, these ultra-miniaturized electronic devices
can ride the wind to track air pollution, airborne
disease and environmental contamination.
Read more online
ASML ANNUAL REPORT 2022
OUR COMPANY
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
9
At a glance
As a global innovation leader in the chip industry, we provide chipmakers with hardware, software and
services to mass produce patterns on silicon through lithography.
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.
Key facts
Key products and services
Our global presence
€21.2bn
Total net sales
€18.6bn Asia
€2.0bn US
€0.6bn EMEA
€3.3bn
R&D investments
We innovate across our entire
product portfolio through strong
investment in R&D
Read more on page 44 >
Read more on page 44 >
39,086
Employees (FTE)
18,854 in Operations
14,181 in R&D
6,051 in Sales and Support
>60
Locations
Across three continents
Headquartered in
the Netherlands since 1984
Read more on page 97 >
Read more on page 9 >
10
Material
sustainability topics
Responsibility and good governance are
fundamental to how we do business
143
Nationalities
We strive to maintain an environment
where all feel valued and respected
Read more on page 71 >
Read more on page 97 >
Lithography systems
Extreme ultraviolet (EUV). We are
the world’s only manufacturer of
EUV equipment, the most
advanced system with the
capability of printing smaller
features with higher density.
Deep ultraviolet (DUV). As the
workhorse of the semiconductor
industry, DUV produces the
majority of layers in a customer
device today, and will remain
important for future devices.
Metrology and
inspection systems
Computational
lithography
This process is used in the
development of new chips to
optimize reticle designs and
enable more precise monitoring
and control.
Using optical and e-beam
technology, these systems enable
chipmakers to assess their
performance across the chip
manufacturing process, helping to
improve accuracy, performance
and quality control.
Software
Lithography process and control software solutions.
Refurbishment
Customer support
We measure a machine’s life in
decades, not years. We refurbish
and upgrade our older lithography
systems to extend their lives, and
we offer associated services.
We support our customers with a
broad range of applications,
services, technical support
products and upgrades to ensure
our equipment works reliably in
their production process.
Asia
China
Hong Kong
Japan
South Korea
Malaysia
Singapore
Taiwan
Oregon
Texas
Utah
Virginia
North America
Arizona
California
Colorado
Connecticut
Idaho
Massachusetts
New Mexico
New York
EMEA
Belgium
France
Germany
Ireland
Israel
Italy
Netherlands
United Kingdom
ASML ANNUAL REPORT 2022
OUR COMPANY CONTINUED
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What makes us ASML
Our purpose
Our vision
Our mission
Why we exist
Unlocking the potential of people and society
by pushing technology to new limits
What we try to achieve
We enable ground-breaking technology to solve
some of humanity’s toughest challenges
What we uniquely do
Together with our partners, we provide leading
patterning solutions that drive the advancement
of microchips
Society has made huge advances over the years, but the world still
faces crucial challenges for the future. We must change how we think
and act on themes that impact everyone. That’s why we seek to innovate
at least at the same pace as our customers, focusing our intellect and
resources to constantly look for new ways that will help improve society
in areas such as energy use, climate change, mobility, healthcare,
education 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 that’s
enabling the transition to sustainable energy, improving global health,
increasing the safety and efficiency of transport, tackling pollution, bridging
the digital divide or feeding close to eight billion people without exhausting the
earth’s resources.
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. To
enable shrink, what we do – lithography – is key. Through our sustained
investment in and dedication to research and development, we have
become the innovation leader and a focused supplier of holistic
lithography solutions to all of the world’s major chipmakers.
ASML ANNUAL REPORT 2022
OUR COMPANY CONTINUED
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What makes us ASML (continued)
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 believe that these values help to provide opportunities for our employees in a safe, inclusive environment to develop their talent,
feel respected and thrive, which enables them to make smart decisions that benefit all stakeholders.
We challenge
Say it can’t be done, we dare you. We bravely
challenge boundaries and question the status quo.
We continuously refine our ideas and processes,
which enables us to keep pushing technology
forward.
We collaborate
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. This way, we create solutions that are
optimized for ASML as a whole.
We care
As an industry leader, we act with integrity and
respect, realizing that our impact extends beyond
technology to people, society and the planet. 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, make mistakes, learn and grow.
We bravely challenge boundaries,
we expand our knowledge and skills,
to people, society and the planet.
Watch 'Our values' video
ASML ANNUAL REPORT 2022
OUR COMPANY CONTINUED
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How we innovate
Our innovation philosophy is one where we see ourselves as architects
and integrators, working with partners in an innovation ecosystem.
Tiny microchips, driving a global
ecosystem
Every moment of every day, people make
use of technology that contains microchips.
These are small but mighty devices, and
fabricating the layers on even the simplest
chip requires an elaborate process that few
companies in the world have mastered. This
can take months from start to finished
product, as 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 specialized chip design
companies, equipment and infrastructure
suppliers and the chipmakers themselves.
A strong collaborative network at the
cutting edge of our digital future
As a crucial manufacturer of lithography
equipment, ASML is a vital part of this
ecosystem chain. The fabrication of the
circuitry patterns on silicon wafers, made
possible by our lithography systems, can be
found in the factories of every major
chipmaker in the world.
But our systems are just one part of a
network and process involving numerous
suppliers and the latest chipmaking
equipment. Every step and every machine in
the process is important. That’s why
collaboration and innovation are key. At
ASML, we collaborate to succeed – from the
academics who help us understand and
push the laws of physics, to our customers
who identify new possibilities and the
suppliers that translate our ideas into
products and technology.
Our ecosystem partners
We innovate through partnerships. By
developing our technology in close
collaboration with our customers, we seek to
build today what they need tomorrow. We
develop our machines based on their input,
and engage closely with them to help pursue
their technology and cost roadmaps.
We co-develop expertise through a wide
network of technology partners, including
universities and research institutions such as
imec in Belgium and the technical universities
in Twente, Delft and Eindhoven and
Advanced Research Center for
Nanolithography (ARCNL), all in the
Netherlands.
Generating ideas and finding
technological innovations and solutions
With more than 14,000 of the brightest
minds in the industry in our R&D department,
ASML is uniquely placed to innovate the
most advanced lithography systems in the
world. We continue to invest heavily in R&D –
in 2022, we spent €3.3 billion in this vital
area, compared with €2.5 billion in 2021,
while balancing our customers’ needs,
product capabilities and technology
solutions.
We also 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.
Our R&D teams focus on generating and
exploring exciting new ideas and
demonstrating their feasibility in the long
term, as well as finding technological
solutions to the challenges colleagues may
face with any products and applications that
have already moved into development.
Our partnership with Carl Zeiss SMT has
spanned more than three decades, and we
also hold an important strategic interest in
the company. We apply the principle of ‘two
companies, one business’, working together
to drive operational excellence in innovation
and technology.
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 and help drive their own
semiconductor device roadmaps.
We innovate
through
partnerships. By
developing our
technology in
close
collaboration
with our
customers, we
seek to build
today what they
need tomorrow.
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How we innovate (continued)
Filling the ‘innovation funnel’
We encourage our experts to build a wide
network in the broader technology space.
This supports the constant stream of new
ideas to our technology pipeline that
flows through what we call our
‘innovation funnel’ (see diagram on the
right). This helps us select new ideas that
have the potential to advance our
products and their customer application.
Ideas that pass the feasibility assessment
go into our product generation process
(PGP), a decision-based process for
product development that includes
building and testing system prototypes in
the necessary environments. Prototypes
that pass these tests may eventually lead
to new product releases.
Innovation achievements in 2022
Every day, our teams take on the exciting
challenge of building and driving innovation
to enhance our reputation as the providers
of 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 and capabilities, while
safeguarding their reliability,
manufacturability and serviceability.
In DUV, we shipped the first TWINSCAN
NXT:870 – the first NXT KrF system – and
the first TWINSCAN NXT:2100i – enabling
over 20% improvement of on-product
overlay to a customer.
In our EUV High-NA business, we
received both the first High-NA
mechanical projection optics and
illuminator and the new wafer stage from
suppliers. These modules will be used for
initial testing and integration, an important
step for the EXE:5000 program.
In addition, to further strengthen our
product offering, we released ALO12C –
a hardware-software combination – that
enables our customers to optimize wafer
alignment performance using 12 colors
instead of four.
We have also continued to progress our
metrology and inspection roadmap. For
example, the HMI eScan 1100 multibeam
system, our first-generation multibeam
system with 25 beams (5x5), has been
shipped for customer evaluation.
In 2022, we also shipped our first
eScan460 system, which is our next-
generation single-beam inspection system.
– Our research teams scout for new
– Guided by the PGP, our D&E
ideas
– These ideas are taken through the
‘proof of concept’ stage
– Those that pass the feasibility
assessment are transferred to our
Development and Engineering (D&E)
department
engineers create new components or
subsystems, integrating them into the
functional system
– They also develop new applications
– They ensure we innovate with a
strong focus on time-to-market
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Customer intimacy
We believe a true partnership with our customers is vitally important,
to ensure we share the risks and rewards of what we do.
Engaging with our customers at all
levels and focusing on long-term
challenges
We are one of the world’s leading
manufacturers of chipmaking equipment,
while our customers are the world’s leading
microchip manufacturers. We enable them to
create the patterns that define the electronic
circuits on a chip, and consequently our
success is inextricably linked with theirs.
That’s why we collaborate with our
customers to understand how our
technology best fits their needs and
challenges. That means engaging with our
customers at all levels: building partnerships,
sharing know-ledge and risks, aligning our
investments in innovation and increasingly
focusing on the long-term challenges for the
next five to ten years and beyond. We
develop our
solutions based on their input, help them
achieve their technology and cost roadmaps,
and work together, often literally in the same
team, to make sure our solutions fit together
perfectly.
Engaging fully with customers is also an
important part of working toward securing
the full product portfolio that will sustain our
company into the future – which includes
increasing the adoption of EUV in high-
volume manufacturing environments. In
2022, we received additional orders for the
TWINSCAN EXE:5200, the high-volume
manufacturing version of our EUV 0.55 NA
(High-NA) platform. All current EUV
customers have submitted orders for High-
NA, demonstrating the demand for
continuing shrink.
We collaborate
with our
customers to
understand how
our technology
best fits their
needs and
challenges.
Complete customer satisfaction
Building on our customer relationships
When we talk about customer intimacy, we
mean the entire customer relationship across
all channels, from the early stages of
innovation onward. At each stage, we aim to
foster trust, advocacy and continuous
engagement, with the goal of achieving
complete customer satisfaction.
As customer requirements become more
complex, it takes longer to align with a shared
vision, so we seek to start earlier in the process.
Transparency is key, and our customer intimacy
strategy helps us to leverage our innovations
and develop even more sophisticated solutions
with our customers.
Close customer alignment
We have built a structure of customer
interactions across various channels in the
organization to support and sustain our
partnerships with customers. For example,
we run regular meetings with our key
customers to align our product development
plans with their business goals and needs.
These meetings include 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, our Chief
Technology Officer and our Chief Business
Officer discuss technology roadmaps and
requirements with customers; and Operational
Review Meetings, where we review topics
related to our customers’ operational activities.
We market and sell our products directly to
customers, without agencies or other
intermediaries. Our dedicated Sales and
Customer Management department is
responsible for building and maintaining our
customer relationships and ensuring all
relevant ASML departments contribute to
meeting customer needs. Our account
managers, field and application engineers
and service and technical support specialists
are located close to our customers
throughout Asia, the US and EMEA.
We know how essential it is for us to have
well-trained engineers in the regions where
we operate, so we offer training designed to
boost the capabilities of our local customer
service teams as well as enhance local
technical expertise. Alongside good remote-
control capabilities, this ensures that we
continue to increase the self-sufficiency of
the local field engineers.
Working with customers in 2022
While we maintained a high level of
engagement with our customers throughout
the pandemic, we were pleased that the
physical interactions started to return to
‘normal’ this year. With travel restrictions,
quarantine and workforce constraints coming
to an end in many countries, we were able to
hold physical meetings with more customers
around the world, and they were able to visit
us at the Veldhoven campus more and more.
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Customer intimacy (continued)
However, some restrictions remained around
the world during the year.
Our customer relationships have been
important in trying to manage the significant
ramp-up of demand in the first part of the
year. The market remained strong, but the
overheated nature of the market this year,
combined with the challenges we
experienced in delivering systems as fast as
our customers needed, impacted the
conversations we had with them. While we
went through the delivery challenges
together, we did our best to keep our
customers fully informed of shipment status
and progress in our capacity plans.
Given the shortages that built up in the early
part of 2022, our customers still needed our
equipment urgently. We have worked with
them to achieve this, focusing on the
dynamics of different customers in various
areas in the industry. As part of our
commitment to responding rapidly to our
customers’ needs, we also introduced ‘fast
shipments'.
The market continues to be influenced by
governments, for example through the CHIPS
and Science Act in the US and EU, which
focuses on federal aid to encourage the
construction of microprocessor manufacturing
facilities. This type of governmental attention
requires major investments in specific regions,
which also require delivery of our equipment for
new fabs.
Measuring our approach
Our Voice of the Customer program helps to
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.
While we still face the long tail of COVID-19
restrictions in some areas, we continue to
run local Voice of the Customer initiatives
and remote customer interviews. Our regular
schedule of interactions continued
throughout the year, and we are starting to
reintroduce live presentations with larger
audiences and combining remote with face-
to-face interactions where we can.
We also ask our customers to rate our
performance through our Customer
Feedback Survey. Their direct ratings and
frank comments provide valuable insight into
how we can contribute to our customers’
successes and help them to overcome
challenges. We carefully analyze the results,
check the insights gained with each
customer and then define targeted,
continuous improvement plans with their
input to ensure we take their priorities into
account.
We have been busy deploying the
improvement actions identified in our 2020
survey. This has helped us focus on truly
understanding what customers need from
us, and validating that we are on the right
track with the right improvements. We have
updated our customers regularly on the
progress being made, and in September
2022 we sent out our latest survey. The
results of the 2022 survey show us that our
customers are satisfied with our teams, and
products, performance and the business
support we provide for them. They also ask
us to closely listen to their feedback, provide
them with shorter delivery times and continue
pushing the technology forward in
collaboration with them and in line with their
needs.
Externally, TechInsights, through its 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. Our target
is to achieve a top-three ranking among large
suppliers of semiconductor equipment. In the
2022 TechInsights benchmark, we again
achieved a second place Customer
Satisfaction ranking among the ‘10 Best
Large Suppliers of Chip Making Equipment’,
and first place in the best suppliers of fab
equipment category.
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Our products and services
Our highly differentiated solutions provide unique value drivers, for both our customers
and ASML, that will enable affordable shrink well into the next decade.
Holistic lithography product and
service portfolio
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 that goes far
beyond the current decade, allowing our
customers to generate the greatest value per
silicon wafer for many years to come.
As chipmakers continue to scale nodes, they
face unprecedented engineering, material,
structural and manufacturing difficulties.
Our applications products support our
lithography platforms, driven by our unique
capability to help customers maximize
patterning performance. This portfolio
includes optical and e-beam metrology,
high-resolution e-beam inspection,
computational lithography and scanner and
process control software solutions.
We also support our growing installed base
with best-in-class customer support,
providing our customers with upgrade
solutions for higher productivity and
improved imaging, overlay and availability.
Our comprehensive portfolio supports
customers with a broad range of products
and services, from mass-producing
advanced Logic and Memory chips to
creating novel ‘More than Moore’
applications or cost-effective mature chip
technologies. Our product offerings provide
patterning solutions for various industry
wavelengths – from the most advanced
13.5 nm EUV wavelength to the industry’s
workhorse DUV wavelengths of 193 nm,
248 nm and 365 nm.
In more than two decades since we started
developing EUV technology, we have
invested billions in R&D and acquired
Cymer, a San Diego-based maker of light
sources, to accelerate our EUV source
technology. This has helped us solve
several technical challenges to enable the
EUV infrastructure our customers need for
high-volume manufacturing.
Our success has come through close
cooperation with our customers and
suppliers, and ASML is currently the
world’s only manufacturer of EUV
lithography systems. Since its introduction,
our EUV installed base produced more than
111 million wafers, compared with 59
million wafers produced by end of 2021.
EUV 0.33 NA
Our EUV platform extends our customers’
Logic and Memory roadmaps by delivering
resolution improvements and state-of-the-
art overlay performance, enabling 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 with 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 enables them to further
shrink microchip structures. Our EUV
product roadmap is intended to drive
affordable scaling to 2030 and beyond.
Our holistic lithography approach
See page 35 >
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 with its
predecessor, the TWINSCAN NXE:3400C,
while also improving system availability.
EUV 0.55 NA (High-NA)
After six years of engineering, we have
started to build the next generation of EUV
lithography systems – further improving
resolution with a higher numerical aperture
(NA) of 0.55 NA compared with 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.
Our EUV 0.55 NA systems – TWINSCAN
EXE:5000 and EXE:5200 – are an
evolutionary step in EUV technology,
introducing a novel optics design and
significantly faster reticle and wafer stages.
Their 0.55 NA provides a resolution increase
compared with the 0.33 NA lens used in our
previous EUV machines, and this enables
higher-resolution patterning for even smaller
transistor features.
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Our products and services (continued)
These enhancements offer considerable
benefits to our customers, enabling
lithography simplification for future nodes,
higher yield and decreased defect density
for both Logic and dynamic random-
access memory (DRAM). With its larger
optics, the EXE platform can print smaller
features with higher density, reducing
patterning costs for customers. EUV 0.55
NA helps our customers to extend their
shrink roadmap and minimize double or
triple patterning compared with 0.33 NA,
leading to reduced patterning complexity,
lower risk of defects and a shorter cycle
time.
EUV 0.55 NA has also been designed to
enable multiple future nodes, with the
industry’s first deployment expected in
2025, followed by memory technologies at
similar density. We expect EUV 0.55 NA
(High-NA) technology to start supporting
high-volume manufacturing in 2025/2026.
In 2022, we received purchase orders from
all of our current EUV customers for the
delivery of the industry’s first TWINSCAN
EXE:5200 system – EUV high-volume
production system with a high NA and a
productivity of 220 wafers per hour.
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 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. Using the refractive index of water
to increase NA improves resolution to
support further shrink. Our immersion
systems are suitable for both single-
exposure and multiple-patterning
lithography, and can be used in seamless
combination with EUV systems to print
different layers of the same chip.
Our latest state-of-the-art immersion system
is the TWINSCAN NXT:2100i, launched in
the third quarter of 2022. Alongside intrinsic
improvements to lens metrology, reticle
conditioning and wafer table, as well as
overall cross-matching improvements, the
NXT:2100i features innovations such as the
Alignment Optimizer 12 Color package. The
system delivers 295-wafers-per-hour
productivity combined with unprecedented
overlay performance, providing the most
cost-efficient solution to customers for
critical immersion layers on the sub 3 nm
nodes.
Dry systems
Not every layer on a chip has to be
produced by the most innovative immersion
lithography systems. While some more
complicated layers do require more
advanced lithography systems, others can
often be printed using ‘older’ technology
such as dry lithography systems. Our dry
systems product portfolio offers our
customers more cost-effective solutions for
all types of wavelengths.
Our TWINSCAN NXT:1470 dual-stage ArF
system continues to be adopted by the
majority of Memory and Logic customers and
has been inserted in high-volume
manufacturing processes. It is the first dry NXT
system, building on the common immersion
platform, with improvements in matched
machine overlay (<4.0 nm), productivity (>300
wafers per hour) and footprint.
Following our new-generation KrF system,
the TWINSCAN XT:860N, we shipped the
first TWINSCAN NXT:870 248 nm step-and-
scan system to a customer. The NXT:870 is
a high-productivity, dual-stage KrF
lithography tool designed for volume
300 mm wafer production at and above
110 nm resolution. The system increases
productivity from the 260 wafers per hour
capability of the XT:860N to 330 wafers per
hour through the use of the NXT platform, a
higher scan speed and reduced system
overhead time.
For more critical KrF layers, the 0.93 NA
TWINSCAN XT:1060K is our most
advanced dual-stage KrF lithography tool at
248 nm, with the highest NA and
productivity in the industry, offering best-in-
class resolution at and below 80 nm.
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.
With an 0.80 NA, the
TWINSCAN NXT:870
is our new generation
KrF system.
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Our products and services (continued)
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 would prove to be our
breakthrough platform. This system
dramatically reduced manufacturing times
for our customers, and its modular design
enabled them to produce multiple
generations of advanced chips using the
same system.
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. Many customers are
therefore able to generate value by selling
off systems they no longer require. To
support this sustainable product use and
ensure used systems deliver the quality that
ASML stands for, we are actively involved in
the used-system market through our
refurbishment and associated services.
Remarkably, 95% of the systems that we
have sold in the last 30 years are still in use.
We offer refurbished systems of the PAS
5500 and first-generation AT, XT and NXT
systems. Our refurbishment and associated
services are adept at extending the lifespan
of our customers’ installed base, drawing
value from their capital and contributing to
sustainable product use.
Read more in:
Environmental - Circular economy - Refurbish
mature products.
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 intended pattern.
Our portfolio covers every phase of
bringing a chip to market, from R&D to
mass production, and our systems
monitor each step of the manufacturing
process – enabling chipmakers to assess
the performance of the entire process.
The systems offer the speed and accuracy
needed to create automated control loops
via our process control solutions. This
optimizes the lithography system settings
for each exposure to reduce edge
placement error (EPE), which is the
combination of product overlay and critical
dimension uniformity, 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 contributor to EPE.
As structures on microchips get smaller and
smaller, overlay and EPE become
increasingly important.
The YieldStar 385H, launched in 2020,
offers in-resist post-lithography (pre-etch)
overlay and focus metrology, with
enhanced throughput and accuracy.
Compared with 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, launched in 2021, the
YieldStar 1385H, provides the ability to
measure after-etch device patterns,
enabling extended yield control capability
for our customers. This system for fast,
accurate in-device overlay and metrology
delivers improved in-device accuracy and
around 50% productivity improvement
capability over the previous YieldStar 1375
model, and has the capability to measure
multiple layers at once, helping customers
to improve yield through post-etch process
control.
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
scope for process control. While e-beam
solutions were historically too slow to monitor
volume production processes, we have made
progress in various methods of increasing the
throughput of e-beam systems.
We continue to extend technology 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. It produces
critical dimension (CD) and EPE data in high
volume with a quality level that customers
need for monitoring and control. EPE is
becoming more critical for device patterning
and yield with shrinking design rules and the
adoption of EUV lithography. We also released
an EPE metrology application software
product on eP5. It is capable of local and
global EPE measurements on device, both
intralayer and interlayer.
In 2022, we released and shipped eP5 XLE,
which extends the high-resolution eP5 system
with high landing energy up to 30 keV and fast
back-scattered electron detection for
inspection and metrology of 3D devices in
Logic and Memory. It is capable of overlay
measurement on device patterns,
complementing our YieldStar product offering.
We have also released and shipped the first
next generation high resolution e-beam
metrology system eP6 to succeed eP5. The
projected eP6 performance is expected to be
more than 10 times the speed of existing
technologies.
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Our products and services (continued)
Metrology and inspection systems (continued)
Computational lithography and
software solutions
Our computational lithography solutions are
used in the development of new chips to
optimize both the reticle patterns and the
setup of the lithography system to ensure
robust, manufacturable designs that deliver
high yields. 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.
These products are based on accurate
computer simulations of the lithography
system and process, representing a wide
variety of physical and chemical effects.
Increasingly, we are using machine-learning
techniques to further speed up
development, and are continually
developing our computational lithography
offering to increase the range and accuracy
of models and reduce the computational
time and cost.
Building on the 2020 launch of our
breakthrough multibeam inspection tool HMI
eScan 1000, with a 3x3 image, we have now
introduced 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. In 2022, the first
eScan1100 multibeam system was installed at
a customer site to start customer evaluation.
System and process control
Our system and process control software
products enable automated control loops to
maintain optimal operation of lithography
processes. Using powerful algorithms, they
analyze metrology and inspection data and
calculate necessary corrections for each
individual exposure. These are then fed
back to the lithography system to minimize
EPE 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. We are able to apply
more powerful algorithms with higher-order
corrections to support our customers, own
roadmaps for increasing EPE performance.
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.
Our installed base continues to grow, with
many systems finding second or even third
lives at new owners in new markets and
applications.
We develop and sell product options and
enhancements designed to improve
throughput, patterning performance and
overlay. Our field-upgrade packages enable
customers to optimize their cost of ownership
over a system’s lifetime by upgrading older
systems to improved models.
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 more than 9,000 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.
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Innovation – the driving force behind our progress
In conversation with our President, Chief Technology Officer and Vice Chair of the Board of Management
Martin van den Brink
What were the stand-out achievements
of the last 12 months?
For us, innovation is all about making a
difference in the marketplace. Our goal is
always to give customers the products and
capabilities they need to deliver on the
potential of technology for making a positive
contribution to society. The hunger for
computational power is endless. Energy
transition, connectivity, healthcare and many
more areas are all being transformed by
digital technology – we do not directly create
the tech that is making these developments
possible, but we are important enablers.
So the most pleasing aspects of the last year
have included seeing some of the ideas we
have been working on in recent years
become reality. For example, we made the
first shipment of our latest DUV NXT
technology, the TWINSCAN NXT:2100i.
Furthermore, all our current EUV customers
have now submitted orders for EUV 0.55 NA
(High-NA). Customers will start their R&D in
2024-2025, aiming for high-volume
manufacturing in 2025-2026.
– NA is the numerical aperture, indicating the
entrance angle of the light – with larger NA
lenses/mirrors, smaller structures can be printed.
Besides larger lenses, ASML has increased the NA
of our ArF systems by maintaining a thin film of
water between the last lens element and the wafer,
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.
The Rayleigh criterion that drives
Moore’s Law
– CD is the critical dimension, a measure of how small
the smallest structures are that the lithography
system can print.
– Lambda is the wavelength of the light source used
and the smaller the wavelength, the smaller the
structures that can be printed. Our deep ultraviolet
(DUV) lithography systems, known as the industry
workhorse, dive deep into the UV light spectrum to
print the tiny features that form the basis of the
microchip. Over the years, ASML has 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.
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Innovation – the driving force behind our progress (continued)
In conversation with our President, Chief Technology Officer and Vice Chair of the Board of Management
Martin van den Brink
But first of all, let’s be clear that shrink is a
really complicated story. It is partly
determined by what we do with our
lithography, in line with Moore’s Law, and
through dimensional scaling this has been
the main driver of shrink over the last 15
years. This is still hugely significant but is
slowing down a little [as patterns become
ever smaller]. In addition to dimensional
scaling, shrink is being enabled by both
device and system scaling. Device scaling
involves innovation in the materials and
structures used to make transistors, while
system scaling results from greater on-chip
integration, such as system-on-chip solutions
that combine processors, memory and
auxiliary functionality into one chip.
Looking beyond scaling and Moore’s Law,
other metrics are also important in our
industry – for example, energy-efficient
performance (EEP), which was pioneered at
TSMC, one of our key customers. EEP
tracks energy efficiency, which is expected to
increase threefold every two years.
Behind the scenes, we have been making
good progress with our scanner and process
control software solutions, as well as with our
computational engine and optical and e-
beam metrology and inspection solutions.
And there is a lot more to come in the years
ahead, as we continue to sharpen our focus
on holistic lithography. Lithography systems
are highly complex, so we aim to provide
customers with a holistic, integrated
approach that enables them to optimize the
lithography process. To take the new half-
dome mirror as an example, this provides the
customer with around 100 different controls,
in addition to the approximately 1,000 that
we already offered. This year we enhanced
our virtual computing platform that brings
data together from every part of the
lithography process, analyzes it and provides
a feedback loop to control the performance
of our tools and optimize what is a very
complex process.
Is Moore’s Law still alive and well?
Overall shrink will continue for years to come.
In his book ‘The Singularity is Near’, Ray
Kurzweil explains how the number of
transistors per device will continue to
increase for a decade or more due to system
innovation, of which lithography is one
aspect.
What are the main challenges for you
as CTO?
As CTO, I’m always asking myself how I can
best drive innovation at ASML and make
sure the pipeline continues to be filled. And
one of the most important factors in that is
people. Our growth and ability to hire large
numbers of new staff present challenges in
their own right. We employ more than
14,000 FTE in R&D and are adding 7-8% to
that number every year. So that’s 1,000 or
more new people over a 12-month period, all
of whom need to quickly learn about and buy
into our culture before they can become part
of our team.
Sustainability is another challenge that has
moved rapidly up the agenda in recent years.
The amount of passion and expertise that we
are now able to bring to a topic like re-use
and repair – not only internally within ASML
but also externally among our partners – is
very encouraging. As a group, we are
acknowledging responsibility for our
environmental footprint, which of course is
increasing in line with the industry’s growth.
We are constantly striving to improve EEP,
but the fact remains that more lithography
equipment at work in fabs will inevitably
require more energy in total. It is going to be
challenging to understand what it means to
create a truly sustainable semiconductor
industry.
What’s next for innovation at ASML?
I could talk about EUV with an NA higher than
0.7 (known as Hyper-NA) potentially becoming
a reality shortly after the end of this decade;
however, the most appropriate guide to what
comes next is actually: it all depends on cost.
We need to be more and more focused on cost
reduction – that means not reducing resources
but making sure that the solutions we bring to
market are simpler, more sustainable, more
serviceable, more manufacturable and more
scalable. It is not responsible to move to the
next product without understanding the cost
and complexity constraints we have to put on
those products from the very beginning. That is
exactly what we did with our new optical
metrology system, which will come to market in
2023. We re-examined this project within
intense cost parameters and have been able to
achieve a new technology that is many times
more cost-effective than before.
Similarly, we are continuing to work to contain
the cost of the current EUV 0.33 NA systems,
as well as High-NA and Hyper-NA, to make
sure that the appetite for shrink remains strong.
Ten years ago, when we developed High-NA,
we could not have imagined that NA beyond
0.55 even existed. So Hyper-NA is very, very
difficult to achieve. The great thing is that our
business and R&D capability are such that we
can handle all of these things simultaneously.
We can develop technology like Hyper-NA while
focusing on cost containment, simplicity,
sustainability, manufacturability and
serviceability all at the same time.
We are 100% committed to advancing both
EUV and DUV technologies in order to
provide a balanced product portfolio. We
have seen something of a transition in our
R&D focus in recent years, with increased
emphasis and resources dedicated to DUV,
which will continue to be the industry
workhorse and the technology of choice for
many customers. We are now ramping up
our development of solutions that are driving
commonality, productivity and performance
to new standards, underpinning the future of
DUV.
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GLOBAL WELL-BEING
Molecular-scale
diagnostics,
global health
impact
The COVID-pandemic has underlined the urgent
need for a new generation of healthcare
diagnostic tools. Ongoing scaling and
miniaturization could result in a microchip smaller
than a fingernail that can grab a single molecule
and analyze it, providing real-time access to
biological information and enabling well-being on
a global scale.
Read more online
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The world around us
The big picture
The world faces a range of macro
challenges, including the war in Ukraine,
post-COVID-19 supply chain constraints,
inflationary pressures and risk of a
global recession.
The big picture for our sector continues to be
dominated by the global shortage of
semiconductors. With its ability to transform
how we all live and work, digital technology
sits at the heart of the macroeconomic
landscape. Expanding application space and
relentless innovation are expected to
continue to fuel growth across
semiconductor markets. Industry sources
anticipate annual growth rates of 9% and
more than a doubling of semiconductor
revenue from 2020 to 2030.
However, while the medium- and long-term
outlook and trends remain unchanged, the
current macro environment creates some
near-term uncertainties. The war in Ukraine
has changed short-term economic pressures
around the world by driving a rapid and
significant increase in energy costs which is
likely to dampen consumer demand. Not
surprisingly, people will choose to pay their
utility bills rather than buy the latest
smartphone. In addition, we are seeing
inflation increases across all the world’s
major economies, and this will in the short
term also reduce demand for products that
use semiconductors.
Trends affecting our marketplace
The following are some of the major
themes and trends driving our industry’s
development, both today and tomorrow.
Increasing market 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, urbanization, the
transition toward renewable energy using
wind and solar power, and ongoing
electrification to support smart mobility are
creating increasing demand for advanced
electronic devices.
Microchips are at the heart of all of these
devices, ranging from sensors and actuators
to smart, scalable and flexible computing
solutions. This drives the demand for both
new and mature chips that are specifically
designed for a wave of new applications in
areas ranging from smart homes, cities and
industries to predictive healthcare, smart
wearables and autonomous robotics.
Read more on page 26 >
We continue to be very positive about the
outlook for our sector in general, and for
ASML in particular. While the current macro
environment creates near-term uncertainties,
we expect longer-term demand and capacity
showing healthy growth. Expanding
application space, continued industry
innovation, more foundry competition and
technological sovereignty drive an increased
demand across semiconductor markets.
The issues that restricted the supply chain
during and after the pandemic surges of
2020 and 2021 are beginning to abate, and
we are scaling up for capacity increases.
With additional global demand for wafers
expected to be over 780,000 wafer starts
per month per year in 2030, we plan to
increase our annual capacity to 90 EUV 0.33
NA and 600 DUV systems (2025-2026),
while also ramping up EUV 0.55 NA (High-
NA) capacity to 20 systems per year
(2027-2028).
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The world around us (continued)
Global geopolitics
The current trade environment presents
significant challenges for the global
semiconductor industry. Geopolitical
tensions and increased protectionism are
likely to continue. Recently steps have been
made towards an agreement between
governments that will further restrict the
export of semiconductor manufacturing
equipment to China. This agreement will be
translated into legislation in the course of
2023 and, to our understanding, will be
focused on advanced chip manufacturing
technology, including but not limited to
advanced lithography tools. The pandemic
has alerted governments around the world
that global supply chains can create
significant geographical dependencies on
services, raw materials and end products.
Semiconductors are playing an increasingly
important role in the growth and continuity of
large industrial complexes, and the strategic
importance of the semiconductor industry is
only likely to increase.
Driving Moore’s Law to enable shrink and, at
the same time, improve computing power
and storage capacity, also fuels the demand
for these vital resources. New architectures
and a new way of looking at the entire
ecosystem will be required to enhance
energy and water resource efficiency.
Read more on page 76 >
Acting on climate change
Climate change is an urgent matter for
governments, companies and individuals
around the world. It is a global challenge that
requires a global response to limit global
warming to 1.5°C. Technologies to counter
climate change – from the energy transition
to electrification, supporting smart mobility
and agricultural innovation – all require
semiconductors. For example,
semiconductors are crucial in the generation,
storage, distribution and consumption of
electrical energy.
Internally, the semiconductor industry has an
important role to play, as the manufacturing
process alone consumes large volumes of
energy and water resources.
Governments have turned their attention to
securing sufficient semiconductor supplies to
support their local industries, ensuring higher
levels of technological sovereignty, and they
are planning significant investments in the
semiconductor industry. Industry forecasts
indicate that the top three semiconductor
manufacturers plan to invest over $300 billion
in global capacity in the coming years.
The industry continues to manage its overall
costs, though price rises could ultimately be
passed on to the end market, resulting in an
increase of prices of devices. Trade tensions
and protectionism also introduce significant
complexity throughout the supply chain and
the processes required. The industry, like so
many others in this trading environment,
needs to review its global supply chain.
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The world around us (continued)
Trends affecting our marketplace (continued)
Technological developments
Technology is evolving fast, and the
next level of computing is approaching
at speed. The era of mobile computing
– where you bring the computer with
you – is moving toward an immersive
world of ‘ubiquitous computing’, with
computing power available wherever
you go.
Unleashing the power of data better
and faster with artificial intelligence
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, unleashing the power of data
better and faster than ever. This
combination of artificial intelligence (AI)
technologies and the internet of things (loT)
infrastructure will achieve more efficient loT
operations, improve human-to-machine
interactions and enhance data management
and analytics.
The potential of AloT will gradually open up
as AI and loT 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. To put that in
perspective, one zettabyte is equal to a
trillion gigabytes. And to download 175 ZB
of data with the average internet
connection speed currently available would
take one person 1.8 billion years – a very
long day at the office (or anywhere else).
So, this big data will also need to become
fast data to allow for ubiquitous computing,
as the world moves toward ‘edge’
computing, where processing is brought as
close to the source of data as possible,
rather than happening in the cloud.
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, as shown
in the overview on the right: applications,
data and algorithms.
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The world around us (continued)
Trends affecting our marketplace (continued)
Semiconductor industry market
Smartphone
Personal
computing
Consumer
electronics
Automotive
Industrial
electronics
Wired and wireless
infrastructure
Servers, data
centers and storage
In 2020, more than 953 billion chips
were manufactured around the
world, feeding a $471 billion
industry. In 2022, the
semiconductor industry increased
the output to over 1.11 trillion chips,
which fed a $618 billion market.
Growth is set to continue, with
market analysts predicting the
industry could reach an over $700
billion by 2025.
Semiconductor technology plays a
crucial part in shaping the
interconnected and intelligent
network future, and end markets
continue to grow. The overview
shows an outlook on the current
market size and market opportunity
for the entire industry based on
external research.
Key driver
Continued refresh of
all semiconductor
content including
image sensors
2020 market size
($bn)
117
2022 market size
($bn)
144
2025 market opportunity
($bn)
150
2030 market opportunity
($bn)
213
Outlook CAGR 2020-2030
(%)
6%
High-end compute
and Memory, fast
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
100
115
124
131
3%
50
71
79
114
9%
40
63
93
149
14%
51
73
93
160
12%
38
53
62
82
8%
76
100
136
249
Total
471
618
737
1,098
13%
9%
Source: ASML’s Investor Day presentation (November 2022). Please note rounding differences may exist.
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The world around us (continued)
Our customers – the world’s leading
microchip manufacturers – can be
grouped into Memory and Logic
chipmakers. We design our machines
based on their input, and we work
together to make sure our machines run
smoothly in their fabs.
Memory and Logic chips
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 chips typically made in dedicated
Memory-chip factories: NAND chips that can
store data even when a device is powered
off, and DRAM memory chips that are used
to efficiently provide data to the processor.
Logic 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 that 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 power
leading-edge technology in AI, big data and
automotive technology, while simpler, low-
cost chips integrate sensing capabilities into
everyday technology to create a vast loT.
Growth in the chip market
The historical market compound annual
growth rate (CAGR) over the last 10 years
was 6%, while industry sources project the
chip market (worldwide semiconductor
revenues) will grow at a CAGR of 9%1 in the
period 2020-2023.
1 Source: ASML’s Investor Day presentation (November
2022).
Lithography is where we come in. It is a
driving force in the creation of faster and
cheaper chips that are also more
powerful and energy efficient. Today’s
most advanced processors are based on
the Logic N5 node, and contain billions
of transistors. Shrinking transistors
further is becoming increasingly difficult,
but we are not as close to the
fundamental limits of physics as some
might think.
Next-generation chip designs will include
more advanced materials, new packaging
technologies and more complex 3D designs,
all of which will create the electronics of the
future.
The manufacturing of chips becomes
increasingly complex as semiconductor feature
sizes shrink, but the need to mass produce at
an acceptable 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 that help our
customers to improve their yield.
Our computational models enable our
customers to optimize their mask design and
tape-out time (the time taken in sending the
final design to the manufacturer for
production). This works through mask-
correction software to prepare and modify
the design for optimized exposures, while the
metrology and inspection solutions help in
analyzing and controlling the manufacturing
process in real time.
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The world around us (continued)
The lithography process
When you break it down, a lithography
system is essentially a projection system. In
our DUV systems, light is projected through
a blueprint of the pattern that will be printed
(known as 'mask' or 'reticle'); in our EUV
systems, light is reflected via the 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.
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 on 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 more than 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 are used for the most critical layers
with the smallest features, while our ArFi, ArF,
KrF and i-line systems can be used for less
critical layers with larger features.
Inside a fab
A semiconductor fabrication plant, commonly known
as a ‘fab’, is a factory where microchips are
manufactured. 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 ‘sub
fab’, which contains auxiliary equipment such as the
drive laser. The utility fab – containing the pumping
and abatement systems for vacuum and cooling – is
usually found one floor below this.
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, to create electronic circuits
on a silicon wafer.
Microchips are made of layers about 50-150 nm
thick that are built on the semiconductor substrate
one layer at a time. The most advanced chips require
EUV and DUV immersion lithography tools to make
them. Simpler microchips, such as sensors for loT
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.
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The world around us (continued)
Semiconductor application areas
Predictive healthcare
Smart home
Predictive analysis of health data
from many sources combined with
machine learning and AI is helping to
improve healthcare services and
patient outcomes.
Smart home devices, such as
thermostats, lights and smart TVs,
learn a user’s habits to provide
automated support for everyday
tasks.
Read our story on page 22 >
Energy transition
Semiconductors play a key enabling
role in the global shift from fossil-
based energy production and
consumption to renewable energy
sources like wind and solar.
Read our story on page 40 >
Global connectivity
Mixed reality
5G enables a new kind of network
that is designed to connect virtually
everyone and everything across the
world – including machines, objects
and devices.
Combining augmented reality and
virtual reality technology (so that
physical and digital objects coexist
and interact in real time) will bring
together the real world and digital
elements to create the next-level
user experience.
Read our
story on
page 69 >
Autonomous robotics
A new generation of lightweight
robots connected to a greater
network and fitted with smart
sensors enables humans and
machines to work side by side,
with greater safety and efficiency.
Wearables
Wearable devices (such as fitness
trackers smart watches, smart rings,
jewelry or glasses) are able
to connect to the internet and
continuously monitor, track and
transmit personal data.
Read our story on page 149 >
Smart cities
Smart cities that use technology and
digital networks to integrate
transportation and infrastructure,
connectivity, energy and lighting, and
other public services.
Smart industry
Smart industry devices use real-time
data analytics and machine-to-
machine sensors to optimize
processes to foresee bottlenecks
and prevent errors and injuries.
Self-driving cars
These vehicles are literally
supercomputers on wheels, with
advanced driver-assistance systems
(ADAS) enabled by electronics and
semiconductors.
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FOOD SECURITY
Lower cost,
higher yield
Farmland in remote locations, particularly in
emerging economies such as Kenya and Ethiopia,
can be extremely vulnerable to climate change. As
microchips become smaller and cheaper, access to
mobile devices is increasing across the world.
Farmers are now using smartphones to access vital
weather information – aiming to ensure better crops
and greater food security.
Read more online
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Focused on long-term value creation
Our purpose is to unlock the potential of people and society by
pushing technology to new limits – with a vision that our ground-
breaking technology solves some of humanity’s toughest
challenges. Our strategy and priorities are designed to deliver on
these points and create value for our stakeholders.
We provide chipmakers with everything they
need – hardware, software and services – to
mass produce patterns on silicon through
lithography. Our customers depend on our
products to bring cutting-edge technology to
life. To meet their needs, we invest in the
future. We invest in research and
development to create chipmaking machines
that can deliver the smallest features and
highest yields.
We invest in our factories and facilities
around the world so we can meet increasing
customer demand for our products and
services, driven by strong growth rates
across both advanced and mature
semiconductor markets, continued
innovation, more foundry competition and
technological sovereignty. The number of
machines we plan to deliver in the coming
years continues to grow.
We also invest in our workforce, the people
who give life to our values – challenge,
collaborate and care. They come from more
than 100 countries to work together and
advance ASML's mission. Our values push
us to invest in being a good neighbor and
global citizen. From supporting our
preservation to minimizing our environmental
impact, our initiatives lay the groundwork for
long-term sustainable growth.
To make our vision for the future a reality, we
need to collaborate with our customers and
suppliers, across departments, sectors and
continents, effectively executing
improvements and processes across ASML
and our ecosystem to bring our holistic
lithography solutions to the market. Our
investors enable the innovation that
advances our technology and creates value.
Together, we aim to lead the semiconductor
industry into a sustainable and profitable future.
Our core strategy is to
Grow our holistic lithography business two- to threefold by 2030
1.
2.
Grow our core holistic
lithography business
Secure unique supply
chain capabilities to
ensure business continuity
3. Move toward adjacent
business opportunities
4.
Increase our focus on
ESG sustainability
With a current focus on five priorities
Strengthen
customer trust
Holistic
lithography
DUV
competitiveness
EUV.33 NA for
manufacturing
EUV.55 NA
insertion
Fueled by strong customer demand, we
expect substantial growth opportunities for
our holistic lithography business in this
decade. We will continue to increase the
capacity of our company to meet this
demand, both for mature and advanced
lithography systems, preparing for cyclicality
while sharing risks and rewards fairly with all
stakeholders.
Based on different market scenarios, we
see an opportunity to achieve the following
in 2025 and 2030:
– In 2025: annual revenue between
approximately €30 billion and €40 billion
with a gross margin between
approximately 54% and 56%
– In 2030: annual revenue between
approximately €44 billion and €60 billion
with a gross margin between
approximately 56% and 60%
To realize this significant growth, we will
focus on protecting and gaining market
share by delivering on our technology
roadmap, addressing our growth and
execution challenges, and securing
competitiveness in DUV and metrology and
inspection.
The semiconductor industry innovates at an
incredible pace to deliver on Moore's Law,
producing microchips that are three times
more energy-efficient every two years. By
continuing to advance our lithography and
patterning control solutions for silicon
substrates, we will provide the continued
shrink and reduction in edge placement
error that our customers' semiconductor
roadmaps require over the next decade.
Our holistic lithography approach integrates
a set of products that enables chipmakers
to develop, optimize, and control the
semiconductor production process. In
addition to our lithography systems, we
provide customers with process control
solutions that include computational
lithography, optical and e-beam metrology,
high-resolution inspection, and scanner and
process control software solutions. Our
comprehensive product portfolio is aligned
to our customers’ roadmaps, delivering
cost-effective solutions in support of all
applications, from leading-edge to mature
nodes.
We aim to innovate responsibly by
improving the simplicity, sustainability,
serviceability, manufacturability and
scalability of our future lithography
solutions. By considering the cost and
complexity constraints of a new technology
from day one, we can efficiently allocate our
resources and cost-effectively deliver new
capabilities to our customers.
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Focused on long-term value creation (continued)
Secure unique supply chain
capabilities to ensure business
continuity
We will continue to focus on securing
business continuity in our core lithography
business and controlling future unique,
roadmap-enabling technologies. Our
supply chain is a critical enabler of our
ambition to grow our core business. In
order to deliver our growth aspirations, we
need to secure innovation, scale-up and
continuity, sound business conditions and
a constructive collaboration model with
our unique technology suppliers. We are
pro-actively assessing our supply base for
projected demand and control of future
roadmap-enabling capabilities.
Move toward adjacent business
opportunities
Beyond, if core growth is secured, we can
move into adjacencies representing
additional growth opportunities. We aim to
do this by focusing on synergetic
opportunities at the forefront of holistic
transistor scaling to best serve our
customers, by leveraging product and
technology synergies, and by tapping into
different future semiconductor scaling
engines.
Increase our focus on ESG sustainability
Our five strategic priorities
Our ESG Sustainability strategy
We believe digital technologies are among the most
important tools available to help society make progress
and address environmental challenges. Enabled by
microchips, these technologies are fueling a digital
transformation that is helping to address global challenges,
such as tackling climate change by reducing energy
consumption and greenhouse gas emissions.
We recognize that development of technology comes with
new problems to solve, such as the energy use of devices
and data centers, increased waste and material use, and
social challenges. We believe our industry has a great
opportunity and a moral obligation to drive sustainable
growth.
We are committed to using our innovations to also enable
the semiconductor industry to reduce its footprint. We aim
to help our customers minimize materials and energy
required to produce advanced microchips. Within our own
operations, including our supply chain, we are also looking
closely at our social and environmental impact.
Read more on page 70 >
Through the continued execution of our strategic priorities, we aim to provide
cost-effective solutions for our customers, enable the extension of the
industry roadmap into the next decade, and support our long-term
commitment to our environmental, social and governance (ESG) ambitions.
Central to our strategic approach, we
collaborate with our stakeholders to
deliver on the ambitions of our ESG
Sustainability strategy:
Strengthen
customer trust
DUV
competitiveness
Enhance our innovation and
operational excellence capabilities
to deliver on our roadmap for new
product introductions and system
deliveries, on time and with the
highest quality, to address the
needs of our customers. Increase
our focus on sustainability through
parts commonality and re-use,
and drive improvements in
performance and energy efficiency
of our products to reduce costs
and waste.
Holistic lithography
Build a winning position in edge
placement metrology and control
to support customer needs.
Integrate complete product
portfolio into a holistic lithography
solution to optimize and control
lithography performance.
Continue our innovation leadership,
enabling execution of customer
roadmaps by driving DUV to the
highest level of performance while
remaining cost-competitive. Expand
our installed base and support
customer needs.
EUV .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 by improving system
performance.
EUV .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.
Environmental
We want to continue to expand
computing power but with minimal waste,
energy use and emissions. That's why we
focus on energy efficiency, climate action
and circular economy.
Social
We want to ensure that responsible
growth benefits all our stakeholders – to
have an attractive workplace for all, a
responsible supply chain, to fuel
innovation in our ecosystem and to be a
valued partner in our communities.
Governance
We commit to act on our responsibilities
and fully anchor them in the way we do
business through our focus on integrated
governance, engaged stakeholders and
transparent reporting.
Our ESG Sustainability strategy is based
on a materiality assessment where we
determine the most significant impacts for
our company. Our aim is to create long-
term value for our stakeholders, while also
contributing to the United Nations’
Sustainable Development Goals (SDGs).
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What we need to create value
The depth and breadth of our resources and the
relationships we build are key to our continued success.
People and culture
We have more than 39,000
talented, dedicated and highly
motivated employees of 143
nationalities. Our focus is to recruit
the best and provide them with a
diverse and inclusive environment: a
place of work where people share
the same values to challenge,
collaborate and care. Our culture
helps us make smart decisions to
benefit all stakeholders and create
long-term value for shareholders.
Read more on page 36 and 97 >
Capital
We are a long-term business with strong capital
reserves, underpinned by a robust balance sheet.
Total shareholders' equity at the end of 2022 amounts
to €8.8bn on a consolidated balance sheet total of
€36.3bn and net cash provided by operating activities
of €8.5bn in 2022. This financial strength enables us
to maintain our investment in equipment and ongoing
developments to
achieve our ambitious
growth agenda.
Innovation
We manufacture the most advanced
lithography systems in the world. This
has been achieved because
innovation is a constant in our quest
to push the boundaries of
technology. We spent €3.3bn on
R&D in 2022, but our innovation does
not work in isolation. Instead, it is part
of a close collaboration with key
partners in the value chain and our
14,000 R&D employees.
Read more on page 218 >
Read more on page 118 >
Ecosystem of partners
Manufacturing
Almost 10,000 people work in ASML’s 8
manufacturing sites in the EU, US and Asia. These
global facilities provide a high-precision, Lean
environment, where we assemble, test and deliver our
complex lithography and metrology and inspection
portfolio, from prototype to final product.
Read more on page 16 >
Our lithography solutions are the result of strong partnerships with
shared incentives to compete and drive innovation.
Customers
– Commit to future technology
– Qualify technology for volume
manufacturing
– Drive ecosystems
Suppliers
– Secure supply chain innovation
– Commit investment and
resources to technology
Research partners
– Deliver continuous research
activity
– Co-develop expertise
Peers
– Deliver critical materials
– Deliver critical data
– Deliver new required processes
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Creating value within the fab
We are a critical part of the chip manufacturing process, but
our world-leading technology would not function without
other key partners in the value chain.
Digital
technology
is required
to help people
and society
progress
See page 35 >
1. Deposition
The first step is typically
to deposit thin films of
semiconducting material
onto the silicon wafer.
2. Photoresist coating
The wafer is then coated
with a light-sensitive layer
called a ‘photoresist’.
3. Lithography
Light is projected onto the
wafer through a reticle. Optics
shrink and focus the reticle
pattern. This pattern is then
printed onto the wafer when
the resist layer is exposed to
light.
4. Baking and developing
The wafer is then baked
and developed to make
the pattern permanent, with
a pattern of open spaces.
5. Etching
Materials such as gases are
used to etch away material
from the open spaces, leaving
a 3D version of the pattern.
6. Ion implantation
The wafer may be bombarded
with positive or negative ions to
tune the semiconductor
properties.
7. Removing photoresist
After the layer is ionized, the
remainder of the photoresist
coating that was protecting
areas not to be etched is
removed.
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Creating value with our holistic approach
Our holistic approach is based on the intelligent integration of computational lithography, lithography systems and metrology and inspection.
This enables shrink by optimizing setup and control of the system’s process window during high-volume manufacturing – improving the
availability of our lithography systems, reducing downtime and overall costs, and optimizing yield for our customers.
Our world-
leading systems
Lithography
Computational lithography
Computational lithography is used to predict and enhance the
process window of our lithography systems by calculating the
optimal settings, depending on the specific application. This takes
place in the research and development phase, before a lithography
system goes into high-volume manufacturing.
Metrology and inspection
We have a suite of tools – optical and e-beam metrology, high-
resolution inspection and scanner and process control software
solutions – which control the process window and help ensure that
the lithography system operates optimally in the fab environment.
Lithography is the only way in which inline adjustments can optimize
performance as part of the manufacturing process.
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The value we create for our stakeholders
Our success depends on strong, sustainable relationships with all stakeholders
in the value chain. We aim to create sustainable value for them, and to use
their input to develop our strategy, products and services.
Shareholders
Our large and sustained
investments in research and
development help us execute our
business strategy and 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 cash
return policy by means of share
buyback and paid dividends.
Customers
We invest in innovations that
enable our world-leading
lithographic systems to continue
to shrink 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 reduce costs and their
environmental footprint.
Suppliers
We innovate together with our
strategic partnerships, sharing
knowledge and tapping into each
other’s technology expertise to drive
ever higher levels of complexity and
capability.
We conduct our business in a
sustainable and responsible
manner, where long-term
relationships, close collaboration
and transparency with our suppliers
are key to our success.
Employees
ASML is a growth business providing
employment opportunities around the
world. With our headquarters in
Veldhoven, Netherlands, we are a
major employer in the community.
We invest in people’s career
development and well-being, and
provide a diverse and inclusive
environment where people can
achieve their full potential. This results
in both high employee engagement
scores and low attrition.
Society
Our continuous innovations enable
new technology to support the
growth and transformation of the
semiconductor industry to help
address society’s needs. As a
global technology leader and
employer, we play an active role in
the local communities we operate
in. Our collaborative ecosystem
nurtures innovation and benefits
society. For example, we share our
expertise with universities and
€4.6bn
Share buyback
€21.2bn
Total net sales
€12.4bn
Total sourcing spend
78%
Employee engagement score
€11.5m
Community investment
€5.80
Proposed annualized dividend
per share
€14.14
Earnings per share
345
Lithography systems sold
5,000
Number of suppliers (rounded)
6.0%
Attrition rate
€14.7m
Contribution to EU
research projects
#2
TechInsights Customer
Satisfaction ranking of the 10
Best Large Suppliers of Chip
Making Equipment
24%
Gender diversity – % females
inflow
95%
% of systems sold in the past
30 years still active in the field
11.9 Mt
Indirect emissions from total
value chain (scope 3)
research institutes, support young
tech companies and promote
STEM education worldwide. We
also develop ground-breaking
technology to minimize our own
environmental footprint. We do this
by seeking to minimize waste and
maximize the value of the materials
we use, and executing our carbon
footprint strategy and product
energy-efficiency strategy.
87%
Re-use rate of parts returned
from field and factory
38.1 kt
Emissions from manufacturing
and buildings (scope 1 + 2)
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Engaging with stakeholders
We develop our materiality assessment based on
GRI, which includes the principle of stakeholder
engagement, where we identify key topics to discuss
with the relevant stakeholder group.
Shareholders
This group consists 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 communicate with them about our
financial growth strategies and opportunities, financial performance and outlook
and shareholder returns as well as our sustainability strategy.
Read more on page 71 >
We think about our stakeholders as
belonging to five groups: shareholders,
customers, employees, suppliers and
society. These groups can affect or be
affected by our business, and we
embrace continuous open dialogue and
knowledge sharing for the benefit of all
parties.
How we engage
– Direct interaction with the Investor Relations
department (e.g. calls, ESG performance surveys,
email exchange, site visits – at ASML and/or at the
investor)
– AGM
– Investor Day
– Company quarterly results presentations and press
releases
– Various investor conferences and roadshows
– Various sustainability questionnaires, assessments
and survey feedback
Main topics
– Financial results
– Cash return
– Market outlook
– Products and end market
– Customer adoption
– Geopolitics
– Business summary
– Company roadmap and product portfolio
– ESG targets and results: human capital development,
carbon footprint, waste, recycling, energy
consumption, social responsibility in supply chain
– Board diversity and remuneration
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Engaging with stakeholders (continued)
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.
Customers
Employees
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, 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.
How we engage
– Customer feedback survey
– Direct interaction via account teams and zone quality
How we engage
– Employee engagement survey
– Training and development programs, including
managers
– Voice of the Customer sessions
– Technology Review Meetings (between our CTO,
product managers, other executives and our major
customers)
– Executive Review Meetings (between ASML
executives and major customers)
– Different technology symposia and special events
Main topics
– Products and technology
– Customer roadmap
– Innovation
– Customer support, cost of ownership and quality
– ESG: energy efficiency, integrating ESG sustainability
in strategy and roadmaps, waste reduction and
reuse of materials and safety awareness and
behavior
Our customers are the
world's leading microchip
manufacturers.
employee evaluation/feedback
– ASML's Speak Up service
– Works Council
– Employee networks, such as Next, Women/WAVES,
Seniors, Parents, Veterans, Green ASML, Atypical,
SHADES and Proud
– Internal communication and awareness (e.g. intranet,
Ethics program, department employee meeting,
lunch with Board members)
– Onboarding program for new employees
– All-employee meeting and senior management
meetings
Main topics
– Training and development
– Code of Conduct/Ethics
– Strategy
– Diversity and inclusion
– Labor conditions
– Vitality
– Human rights
– Sustainability target and performance
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Engaging with stakeholders (continued)
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.
Suppliers
Society
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 also develop ground-breaking technology to minimize
our own environmental footprint. We do this by seeking to minimize waste and
maximize the value of material we use, as well as executing our carbon footprint
strategy and product energy efficiency strategy.
How we engage
– ASML’s Supplier Day
– Direct interactions via supplier account teams/
Main topics
– Products and technology
– Quality, logistics, technology, total cost and
procurement account managers
– Supplier audits
– Site visits
– Newsletter
– RBA self-assessment questionnaire (SAQ)
– ASML's Speak Up service
sustainability (QLTCS)
– Supplier performance and risk management
– IP/information security
– Business continuity
– RBA compliance (ethics, labor practice, health and
safety, and environment)
– Scarce (natural) resources, 3TG, hazardous
substances, etc.
– Circularity (re-use, recycling, refurb)
– Scope 3 carbon footprint
How we engage
With industry unions and associations
– Member conferences and technical forums
– Member consultation on standards
– Brainport Eindhoven
With governments and authorities
– Dialogue with tax authorities
– Relevant EU roundtable discussions
– Compliance reporting
– Proactive dialogue with government, authorities and municipalities
With communities, universities, media, NGOs and others
– Website www.asml.com
– Community engagement programs and events
– Young high-tech community (HighTechXL, Make Next Platform,
Eindhoven Startup Alliance)
– Company visits
– Press releases, interviews, engagement calls and meetings
Main topics
– Employee development
– Charity, sponsoring and donations
– Collaboration in innovation
– Strengthening innovation in the industry, in society and where we
operate
– Social and environmental responsibility
– Promotion of science, technology, engineering and mathematics
(STEM) education
– Local developments
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SMALL PATTERNS. BIG IMPACT.
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ENERGY TRANSITION
Tiny
connections,
huge
implications
The shift to renewables is helping deliver the
clean, affordable energy the world needs to
counter climate change. Semiconductors are
absolutely central to this shift – harnessing,
converting, transferring and storing energy as
electricity, and ensuring that national power grids
are both responsive and robust.
Read more online
ASML ANNUAL REPORT 2022
Q&A WITH THE CFO
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Strong demand driving an outstanding performance
In conversation with our Executive Vice President and Chief Financial Officer
Roger Dassen
From a financial perspective, how did
ASML perform in 2022?
What were the key drivers for these
increases?
Our Logic system customers again saw
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. The rise in
Memory system sales was driven by
continued strong end-market demand for
servers.
Growth in our service and field option sales
was primarily driven by the continued scaling
of customers' installed base, which resulted
in increased service sales to support our
systems used in their ongoing operations
during the systems life cycle.
What were the year’s main challenges?
As our CEO Peter Wennink explained in his
message, our ability to meet customer
demand was impacted by several issues in
2022, including the war in Ukraine and the
aftermath of COVID-19.
This was an outstanding year for ASML, with
a record €21.2 billion in net sales – an
increase of €2.6 billion over 2021.
Our gross profit increased, mainly due to the
volume increase in DUV, our NXE:3600D
value proposition and continued growth in
our installed base business. The overall gross
profit, as a percentage of total net sales,
decreased from 52.7% in 2021 to 50.5% in
2022, due to fast shipments, the current
strong inflationary effects relating to
increasing material, freight and labor and the
increased factory costs required to ramp up
production and keep up with customer
demand. In addition, there were costs
incurred due to the preparations for High-NA.
Our strong net income and continued
working capital improvement initiatives
resulted in net cash provided by operating
activities of €8.5 billion in 2022. This allowed
us to return cash to our shareholders
through dividends and our share buyback
programs.
In 2022 we repurchased shares for a total
consideration of €4.6 billion and paid
dividends totaling €2.6 billion.
We are increasing our
output capability for EUV
as well as DUV.”
Roger Dassen
Executive Vice President and Chief Financial Officer
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Strong demand driving an outstanding performance (continued)
In conversation with our Executive Vice President and Chief Financial Officer
Roger Dassen
Are the current financial uncertainties
affecting capital investment plans?
Although the current macro environment is
creating uncertainties, demand for our
products continues to exceed supply, and
we remain committed to our capital
investment plans.
While we are aiming to meet demand in full,
we are preparing for cyclicality at the same
time. We are looking to invest timely and
sustainably in additional capacity while also
embedding flexibility so that we can not only
grow fast but also adjust rapidly in a down
cycle.
Further, we will continue to make the
investments required to ramp up our
capacity in anticipation of the medium- to
long-term growth of our industry. The
expanding application space for
semiconductors and secular trend is driving
structural demand. We need to raise
capacity and plan to further increase our EUV
and DUV shipments to support our
customers’ productivity roadmaps.
We are working hard to keep up with
customer demand, for example by driving
down our manufacturing cycle times across
our entire product portfolio and by
collaborating with our supply chain to
increase our output capability for EUV as well
as DUV. To address materials shortages, we
are significantly expanding capacity together
with our supply chain partners, although
these shortages have already led to the late
start of the assembly of a number of
systems. As our tools are in high demand,
our customers are frequently requesting fast
shipments. A fast shipment process skips
some of the testing in our factory. Final
testing and formal acceptance then takes
place at the customer site. This leads to a
delay of revenue recognition for those
shipments until formal customer acceptance,
but does provide our customers with earlier
access to wafer output capacity.
Additionally, I would like to highlight that
safety is at the heart of our business. While
we did not encounter any ASML work-
related fatalities, regrettably two contracted
workers had a fatal accident on ASML
premises in Wilton in 2022. We are doing
everything we can to minimize this risk and
are working proactively at all levels to deliver
on our mission to ensure injury-free and
healthy working conditions.
What progress have you made in the
project to transform the finance
organization?
We are experiencing growth at an
unprecedented rate, which creates an
increasing demand for the finance
organization to support the business. To set
up our company and people for future
success, we took a snapshot of the current
state of our finance organization and created
a vision for our future.
Our vision is to deliver a strong foundation
and best-in-class integrated solutions. To
embed the new vision and way of working,
our organization is currently executing
multiple projects to improve, automate and
continuously monitor its end-to-end
processes by using new digital tools and
robotics.
What is the outlook for ASML, from a
financial perspective?
There is clearly a lot of uncertainty in the
current semiconductor market due to a
number of global macro concerns such as
inflation, declining consumer confidence and
a real chance of a recession. As we have
shown in the past, in such an environment
we need to maintain flexibility in our supply
chain, in our workforce and in our
manufacturing capability. We aim to adjust
our capacity to meet future demand,
preparing for cyclicality while fairly sharing
risks and rewards with all our stakeholders.
This also means we need to invest timely and
sustainably in additional capacity to plan to
meet demand. Clearly these investments
could put pressure on the gross margin next
year, but they are inevitable if we want to
maintain the longer-term growth profile of the
company.
€2.6bn
Net sales increase
50.5%
Gross margin
€4.6bn
Repurchased shares
€2.6bn
Dividends paid
We are experiencing growth
at an unprecedented rate.”
Roger Dassen
Executive Vice President and Chief Financial Officer
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While the current macro environment creates
near-term uncertainties, we expect longer-
term demand and capacity to generate
healthy growth, fueled by the expanding
application space and relentless innovation.
In conclusion, I believe ASML is well placed
to deliver more record performances in the
future – providing strong cash returns to
shareholders, collaborating with our partners
and suppliers, supporting our people and
enabling our customers to manufacture
technology that will continue to have a big
impact on the future of our planet.
ASML is well placed to deliver more
record performances in the future.”
Roger Dassen
Executive Vice President and Chief Financial Officer
Strong demand driving an outstanding performance (continued)
In conversation with our Executive Vice President and Chief Financial Officer
Roger Dassen
In the near term, fear of a recession could
impact the demand for semiconductors. We
are starting to see diverging demand
dynamics across our market segments, with
some customers running our systems at
lower utilization levels, and others adjusting
the desired timing of their demand to
respond to near-term uncertainties. The vast
majority of our customers, however, are still
requesting shipment of their lithography
systems as soon as possible. This is driven
by the strategic nature of these investments
in support of technology transitions, capacity
additions that require time for wafer output to
materialize, as well as governments' global
investments in pursuit of technology
sovereignty.
The current strong inflationary effects relating
to material, freight and labor costs impact
our suppliers and put pressure on our
margins. In general, customers understand
our request to share these extraordinary cost
increases, and as such we expect to receive
a reasonable level of inflation compensation
over the course of 2023.
The scarcity of highly skilled people in the
labor market is also leading to higher costs.
To maintain our fast pace of innovation and
ensure our long-term success as a company,
we need to attract and retain the best talent
– and this is requiring heavy investment in
our hiring activities as well as in the provision
of opportunities and an environment where
employees can develop their talent, feel
respected and thrive.
The uncertainties around geopolitics
continue. Press reports indicate that steps
have been taken by the US, Netherlands and
Japan to further restrict the export of
semiconductor manufacturing equipment to
China. This would cover advanced
lithography tools as well as other types of
equipment. The terms of this agreement
have not been publicly disclosed and remain
confidential for now. We expect that it will
take many months for the governments to
write and enact new rules. While these rules
are being finalized, ASML will continue to
engage with the authorities to discuss the
potential impact of any proposed regulation
in an effort to ensure the impact on the
global semiconductor supply chain is
properly assessed. Given the timelines and
current market situation, we do not expect
these measures to have a material effect on
our expectations for 2023.
ASML ANNUAL REPORT 2022
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STRATEGIC REPORT
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44
Performance KPIs
Sales
Total net sales
€21.2bn
2021: €18.6bn
Net system sales
€15.4bn
2021: €13.7bn
Net service and field option sales
€5.7bn
2021: €5.0bn
Sales of lithography systems (in units)1
345
2021: 309
Immersion systems recognized (in units)
81
2021: 81
EUV systems recognized (in units)
40
2021: 42
Profitability
Gross profit
€10.7bn
2021: €9.8bn
Income from operations
€6.5bn
2021: €6.8bn
Net income
€5.6bn
2021: €5.9bn
Earnings per share
€14.14
2021: €14.36
% of total net sales
50.5%
52.7%
30.7%
36.3%
26.6%
31.6%
Liquidity
Cash and cash equivalents (year-end)
€7.3bn
2021: €7.0bn
Short-term investments (year-end)
€0.1bn
2021: €0.6bn
Net cash provided by operating activities
€8.5bn
2021: €10.8bn
Free cash flow2
€7.2bn
2021: €9.9bn
1. Lithography systems do not include metrology and inspection systems.
2. Free cash flow is a non-GAAP measure and is defined as net cash provided by operating activities (2022: €8,486.8 million and 2021: €10,845.8 million) minus purchase of property, plant and
equipment (2022: €1,281.8 million and 2021: €900.7 million) and purchase of intangible assets (2022: €37.5 million and 2021: €39.6 million). We believe that free cash flow is an important
liquidity metric for our investors, reflecting cash that is available for acquisitions, to repay debt and to return money to our shareholders by means of dividends and share buybacks. Purchase of
property, plant and equipment and purchase of intangible assets are deducted from net cash provided by operating activities in calculating free cash flow because these payments are
necessary to support the maintenance and investments in our assets to maintain the current asset base.
ASML ANNUAL REPORT 2022
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45
Performance KPIs (continued)
Operating results of 2022 compared to 2021
Total net sales and gross profit
Increase on previous year
2021
13,652.8
4,958.2
%1
73.4
26.6
18,611.0 100.0
2022
15,430.3
5,743.1
%1
72.9
27.1
21,173.4 100.0
% Change
13.0
15.8
13.8
We achieved another record year in 2022, with total net
sales increasing by €2,562.4 million, 13.8%, reflecting an
increase in net system sales of 13.0%, and an increase in
net service and field option sales of 15.8% compared to
2021.
13.8%
Net sales
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
(6,482.9) (34.8)
(2,319.1) (12.5)
(8,802.0) (47.3)
(7,582.3) (35.8)
(2,891.0) (13.7)
(10,473.3) (49.5)
Gross profit
9,809.0
52.7
10,700.1
50.5
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.
(2,547.0) (13.7)
(3.9)
1.1
36.3
(725.6)
213.7
6,750.1
(3,253.5) (15.4)
(4.5)
—
30.7
(945.9)
—
6,500.7
(44.6)
6,705.5
(0.2)
36.0
(44.6)
6,456.1
(0.2)
30.5
(1,021.4)
5,684.1
(5.5)
30.5
(969.9)
5,486.2
(4.6)
25.9
199.1
5,883.2
1.1
31.6
138.0
5,624.2
0.7
26.6
For a comparison of ASML’s operating results for the year ended December 31, 2021, with the year ended
December 31, 2020, please see Our performance in 2021 – Financial – Financial performance – Operating results of
2021 compared with 2020 of ASML’s annual report on Form 20-F for the year ended December 31, 2021.
The preparation of our Consolidated Financial Statements in conformity with US GAAP requires management to
make estimates and assumptions. Reference is made to Note 1 General information / summary of general
accounting policies to the Consolidated Financial Statements for detailed information on critical accounting
estimates.
17.0
24.7
19.0
9.1
27.7
30.4
(100.0)
(3.7)
—
(3.7)
(5.0)
(3.5)
(30.7)
(4.4)
13.0%
Net system sales
15.8%
Net service and field option sales
Revenue growth from each of the Logic
and Memory markets and our installed base
(in millions)
We saw strong demand in both the Logic and Memory
markets. Memory systems sales benefited from
continued strong end-market demand for servers, while
for Logic system sales we saw strong demand in
advanced and mature nodes to support the digital
transformation (5G, AI, VR, intelligent cloud solutions and
simulation and visualization applications).
The global chip shortage in 2022 proved to be an
accelerator for the service and field option sales. Our
productivity enhancement packages enabled our
customers to increase wafer capacity effectively and
efficiently.
€21,173€18,611€9,977.6€9,588.5€5,452.7€4,064.3€5,743.1€4,958.2LogicMemoryService and field options20222021
ASML ANNUAL REPORT 2022
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46
Performance KPIs (continued)
Increase in net sales driven by strong
demand across all technologies
(in millions)
Gross profit
(in millions)
Gross profit increased as a result of an increase in sales.
This is mainly due to the volume increase in DUV and the
value proposition of the NXE:3600D system. The gross
margin decreased from 52.7% in 2021 to 50.5% in 2022.
Fast shipments, the strong inflationary effect related to
increasing costs (material, labor freight) and ramp-up
costs (increased factory costs) combined with the High-
NA investment negatively impacted the gross margin.
Research and development costs
(in millions)
The increase in total net sales was driven by a strong
increase in demand from our customers across all
technologies. Our EUV sales increased as a result of the
NXE:3600D system value proposition and DUV sales
volumes increased to keep up with customer demand
driven by the ongoing digital transformation and chip
shortage. We recognized revenue for 40 EUV systems (all
NXE:3600D) in 2022 compared with 42 EUV systems (16
NXE:3400 & 26 NXE:3600D) in 2021. Our system sales
across our DUV technologies increased from 267 units in
2021 to 305 units in 2022.
In addition to the growth in EUV and DUV system sales,
net service and field option sales were also a key driver
for our overall growth in net sales. The increase is mainly
driven by an increase in service sales as a result of the
continued scaling of our customers' installed base. EUV
continues to contribute 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.
R&D costs were €3,253.5 million in 2022 compared with
€2,547.0 million in 2021. The increase is across each of
our EUV, DUV and Applications programs supporting our
holistic lithography solutions, with the most significant
efforts going toward our roadmap to continue enhancing
EUV high-volume manufacturing, as well as our
development of EUV 0.55 NA (High-NA). In 2022, R&D
activities mainly related to:
– Continued investments in EUV high-volume
manufacturing, finalizing the development of the
NXE:3600D, investments in the development as well as
shipment of the NXE:3800E and further improving
availability and productivity of our installed base
systems. In addition, our roadmap includes High-NA,
our EUV 0.55 NA systems, to support our customers
with future nodes for both Logic and DRAM.
– The introduction of our latest-generation immersion
system NXT:2100i for the most critical DUV layers and
the dry system NXT:870, which introduces break-
through productivity in the KrF market. Continued
developments for the next generation of scanners
shipping in 2023 include NXT:1980Fi and XT:400M,
increasing productivity for the mid-critical and i-line
layers respectively. Furthermore, we are delivering
productivity packages and introducing new value-
based service models to improve ‘good wafers per
day’ at customers’ installed base.
– 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.
€3.3 billion
R&D costs
27.7%
Increase in R&D costs
on previous year
Net sales€18,611€761€277€192€401€146€785€21,1732021EUVArFiArF dryKrF & I-lineMetrology&inspectionService&field options2022€9,809€10,70052.7%50.5%20212022€2,547€3,25413.7%15.4%R&D costs% of net sales20212022
ASML ANNUAL REPORT 2022
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Performance KPIs (continued)
Selling, general and administrative costs
Net income
SG&A costs increased by 30.4% from 2021 to 2022,
largely due to an increase in the number of employees,
an increase in wages as well as investments in
digitalization and cybersecurity.
Net income in 2022 amounted to €5,624.2 million, or
26.6% of total net sales, representing €14.14 basic net
income per ordinary share, compared with net income in
2021 of €5,883.2 million, or 31.6% of total net sales,
representing €14.36 basic net income per ordinary share.
The decrease is mainly due to higher R&D and SG&A
costs, lower profit from our equity method investment
and the one-off net income in 2021 of €213.7 million
related to the divestment of the Berliner Glas (ASML
Berlin GmbH) non-litho business. This is partially offset by
higher gross profit and lower number of shares.
Income taxes
The effective tax rate decreased to 15.0% in 2022,
compared with 15.2% in 2021. The lower rate is mainly
driven by adjustments of estimated tax positions for prior
years following from final tax returns filed.
€726€9463.9%4.5%SG&A costs (in millions)% of net sales20212022€1,021€97015.2%15.0%Income tax expense (in millions)ETR %20212022€14.36€14.14410398EPS (basic)Weighted avg. # of shares (in millions)20212022
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48
Performance KPIs (continued)
Cash flow analysis
We continue to invest heavily in our next-generation technologies in order to secure future growth opportunities which
require a significant cash investment in net working capital, capital expenditures and R&D.
We also continued our efforts to return cash to our shareholders through our share buyback program and growing
dividends. We were able to return a record amount of dividend to our shareholders.
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 flow1
2021
6,049.4
2022
6,951.8
10,845.8
8,486.8
(72.0)
(1,028.9)
(9,891.7)
(7,138.3)
20.3
902.4
(3.1)
316.5
6,951.8
638.5
7,590.3
7,268.3
107.7
7,376.0
(940.3)
(1,319.3)
9,905.5
7,167.5
1. Free cash flow is a non-GAAP measure and is defined as net cash provided by operating activities (2022: €8,486.8 million and 2021: €10,845.8
million) minus purchase of property, plant and equipment (2022: €1,281.8 million and 2021: €900.7 million) and purchase of intangible assets
(2022: €37.5 million and 2021: €39.6 million).
Net cash provided by (used in) operating activities
The decrease in net cash provided by operating activities of €2.4 billion compared with 2021 is mainly due to a
decrease in net income of €0.3 billion and an increase in inventory to prepare for the future ramp-up in order to
facilitate the growing demand from our customers.
Net cash provided by (used in) investing activities
The increase in net cash used in investing activities of €1.0 billion compared to 2021 is mainly due to our continuous
cash investment in capital expenditures, which increased by €0.4 billion, and the €0.2 billion loan issued to a related
party, as well as a decrease in the net purchase and maturity of short-term investments of €0.1 billion. Additionally, in
2021 we had net proceeds from sale of subsidiaries of €0.3 billion, with no proceeds in 2022.
Net cash provided by (used in) financing activities
The decrease in net cash used in financing activities of €2.8 billion compared to 2021, is mainly due to a decrease in
shares purchased through our share buyback program (€3.9 billion), offset with an increase in our dividend (€1.2
billion). In 2022, we had net proceeds from issuances of notes of €0.5 billion and we repaid an amount of €0.5 billion
for a previous issued note that became due, with no note issuance or repayment in 2021.
As of December 31, 2022, management has determined that ASML has sufficient capital for the company’s present
requirements.
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49
Long-term growth opportunities
Our expectations and guidance for the first quarter of
2023 can be summarized as follows:
– Total net sales between €6.1 billion and €6.5 billion
– Gross margin of between 49% and 50%
– R&D costs of around €965 million
– SG&A costs of around €285 million
– Annualized effective tax rate between 15% and 16%
The trends discussed above are subject to risks and
uncertainties.
Read more in:
Forward-looking statements.
Trend information
Despite uncertainties in the market, we expect 2023 to
see continued growth with an expected net sales growth,
of more than 25%. The expected growth is driven by
increasing sales across all technologies, as well as
growth in our installed base business. The industry
momentum around innovation and expanding new
markets further strengthens our confidence in the 2023
outlook and our 2025 growth scenarios.
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 60 EUV systems
in 2023 and an expected sales growth of around 40%.
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. For DUV
we plan to ship 375 systems in 2023 of which around
25% will be immersion systems. For non-EUV systems,
we expect a sales growth of around 30%.
For the Installed Base Management business we expect
year over year revenue growth of around 5 percent. As
we are coming off a strong growth year in 2022, we
expect to see a bit lower demand in our upgrade
business as customers adjust utilization.
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50
Long-term growth opportunities (continued)
Outlook 2025 and 2030
This decade is all about distributed computing, bringing
the cloud closer to devices at the edge. Through
connectivity, 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 into increased
wafer demand at both advanced and mature nodes.
The continued 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 spend on lithography. The semiconductor end
markets, such as automotive, data centers, industrial and
consumer electronics, are expected to grow, and we
expect the total semiconductor market to grow around
9% year-on-year through 2030, fueling the strong growth
of our business based on an increased mix of EUV, while
the demand for DUV is expected to increase across all
wavelengths. To achieve this, we and our supply chain
partners are actively adding and improving capacity to
meet future customer demand.
At our November 2022 Investor Day, also known as
Capital Markets Day (CMD), we presented our upward
revised long-term growth opportunity for 2025 as well as
2030. We remodeled our previous sales scenarios in a
low and high market due to the rapid evolution of end-
market technology growth drivers technological
sovereignty and foundry competition projects since our
update in 2021.
Based on the different market scenarios, we believe we
have an opportunity to reach annual sales of between
approximately €30 billion and €40 billion in 2025, with a
gross margin between approximately 54% and 56%.
Looking further ahead, for 2030 we believe we have an
opportunity to reach annual sales of between
approximately €44 billion and €60 billion, with a gross
margin between approximately 56% and 60%.
The main additional demand drivers behind the upward
adjustments of our scenarios are the market-driven
growth in both advanced and mature markets,
technology (e.g. energy transition, die sizes) and
geopolitical and competition-driven growth.
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 dividends and share
buybacks.
Lastly, we seek to continuously improve our performance
on ESG Sustainability. In 2022, we upgraded our ESG
Sustainability strategy and KPIs to accelerate progress in
close collaboration with our partners.
Read more in:
Our business and ESG strategy.
Our updated model for 2025 goes beyond our high-market scenario from CMD 2021
Market
System units
Total sales opportunity (in €bn)
High
CMD 2021
Units ASML
2025
CMD 2022
Units ASML
2025
CMD 2022
Units ASML
2030
CMD 2021
Sales
2025
CMD 2022
Sales
2025
CMD 2022
Sales
2030
EUV High-NA 0.55
EUV Low-NA 0.33
ArFi (immersion)
Dry
Total
5
70
78
189
342
5
80
105
385
575
30
80
115
425
Systems
(Litho and M&I1)
Installed Base
Management2
650
Total
23
32
47
7
30
8
40
13
60
Low
CMD 2021
Units ASML
CMD 2022
Units ASML
CMD 2022
Units ASML
2025
2025
2030
CMD 2021
Sales
CMD 2022
Sales
CMD 2022
Sales
2025
2025
2030
EUV High-NA 0.55
EUV Low-NA 0.33
ArFi (immersion)
Dry
Total
5
48
63
124
240
5
65
75
180
325
15
65
85
250
Systems
(Litho and M&I1)
Installed Base
Management2
415
Total
18
23
33
6
24
7
30
11
44
1. M&I: Metrology and inspection.
2. Installed Base Management equals our net service and field option sales.
ASML ANNUAL REPORT 2022
SMALL PATTERNS. BIG IMPACT.
STRATEGIC REPORT
GOVERNANCE
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51
SMART MOBILITY
Individual
choices,
shared
benefits
Across the world, people are changing their
views about personal transport. Instead of
owning expensive and environmentally harmful
vehicles, they’re seeking to get from A to B
through car-sharing, ride-sharing, ride-hailing,
micro-mobility and micro-transit. The mobile
apps that underpin smart mobility are all enabled
by semiconductor technology.
Read more online
ASML ANNUAL REPORT 2022
RISK
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
52
How we manage risk
We use an Enterprise Risk Management (ERM) framework to integrate risk
management into our daily business activities and strategic planning.
Enterprise Risk Management
Our ERM framework enables 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. We follow a
systematic approach to identify, manage and monitor
risks in pursuit of our business objectives by setting
standards and enabling management to maintain and
continuously improve our governance, risk management,
internal control and compliance. The framework also
helps to identify opportunities that allow us to achieve our
objectives and enable long-term sustainable growth.
ERM is a continuous process. Its related activities are
periodically repeated to identify and address risks in a
timely fashion, and ensure that its results are relevant for
decision-making purposes. Our Vice President of Risk
and Business Assurance reports to the CFO and Audit
Committee, and is responsible for leading the
development and maintenance of the ERM framework as
well as for the implementation of the ERM process. We
have adopted the ISO 31000:2018 standard as the basis
for our ERM activities. In addition, the Vice President of
Risk and Business Assurance is responsible for leading
the security and internal control function and for
developing and maintaining the compliance process.
Risk management governance structure
Supervisory Board
Audit Committee
Request to investigate
specific risk topics
– Bi-annual risk review
– Assertion on control effectiveness
– Risk topics feedback
– Quarterly progress reporting
Board of Management
Corporate Risk Committee (CRC)
Risk oversight
Disclosure Committee
Internal Control Committee
The purpose of risk management is to
maximize the probability of achieving
business objectives responsibly.”
Geert Beullens
VP Risk and Business Assurance
– Risk appetite
– Risk management policy
– CRC sub committees
(governance)
– Risk assessment results
– Risk response progress
– Control effectiveness
– Incidents
Risk owners
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How we manage risk (continued)
Supervisory Board and Audit Committee
Disclosure Committee
ASML risk universe
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 timely
follow-up of 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.
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 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 across ASML, including the CEO and
COO.
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, 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 Internal Control Committee’s report to the
Audit Committee.
Risk owners
Risk owners monitor the development of risks in the
ASML risk universe and drive risk response across ASML
according to requirements that are defined by the
Corporate Risk Committee.
ASML risk management process provides direction for
adequate risk and control measures for key risks.”
The ASML risk universe is a consolidated overview of the
risks that may have a material adverse impact on our
ability to achieve our business objectives. The risk
universe was updated in 2022 and consists of 35 risk
categories grouped into six risk types. The risk universe
allows us to have a consistent approach to risk
assessments across ASML.
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
annually, 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
– Business model risk
– Merger and
acquisition risk
– Competition risk
– Innovation risk
– Product
stewardship risk
– Product roadmap
execution risk
– Intellectual property
rights risk
Finance and
reporting
– 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
– Product/service
quality risk
– Supplier strategy and
performance risk
– Supply chain
disruption risk
– Knowledge
management risk
– Organizational
effectiveness risk
– Human resource risk
– Product
industrialization risk
– Process effectiveness and
efficiency risk
– Environment, health and
safety risk
– Continuity of own
operation risk
– Security risk
– Information technology risk
– Manufacturing and
install risk
Roel Verstegen
Head of Enterprise Risk Management
Legal and compliance
– Contractual liability risk
– Violation of laws and regulations risk
– Violation of internal policies risk
ASML ANNUAL REPORT 2022
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How we manage risk (continued)
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. We
continuously seek to improve our ERM process.
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 landscape is reviewed, updated and discussed
by the Corporate Risk Committee each quarter. Risk
assessments are carried out according to the risk
management plan and any additional engagement is
approved by the Corporate Risk Committee. We define
strategies to address relevant risks and take these into
account when we define our corporate priorities. Our risk
responses aim to mitigate the risks up to the level defined by
the risk appetite.
Risk appetite
Our risk appetite describes the level of risk we are willing
to accept to achieve our objectives – which depends on
the nature of 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 management process
Risk assessment
Risk response
Top-down risk assessment
Corporate Risk Committee/Risk owners/Emerging risks
Coordination and follow-up
Risk owners
Risk identification
Risk appetite
Risk analysis
Risk
landscape
Risk evaluation
Risk treatment
Bottom-up risk assessment
Country/Sector
Execution
Action owners
Risk type
Averse
Prudent
Moderate
High
Extensive
Strategy and products
Partners
People
Operations
Finance and reporting
Legal and compliance
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How we manage risk (continued)
Risk developments
The table below shows examples of external developments that affected the exposure of a series of risk categories in 2022 and includes examples of our responses. The list of risks and risk responses below is not exhaustive.
Strategy
Continue
innovating at
pace to
maintain
technology
leadership
Advanced
lithography
solutions
Risk categories
Innovation
Product roadmap execution
IP rights
Supplier strategy and
performance
Human resource
Knowledge management
Security
Competition
Product industrialization
Manufacturing and install
Continuity of own operations
Supplier strategy and
performance
Supply chain disruption
Human resource
Product and service quality
Process effectiveness and
efficiency
Violations of laws and
regulations
Business model
Competition
Political
Industry cycle
Risk developments
Intellectual Property (IP) technology leadership pressure
– There is significant 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.
– We experience cyberattacks and other security incidents on our information technology systems, and our suppliers, customers and other
service providers also experience such cyberattacks.
Risk responses
– Intellectual property portfolio management
– Patents and relevant technical publications monitoring
– Extensive investments in security program
– Awareness and training programs
– Cyber Defense Center
Growth challenges
– There is an increasing demand across all market segments and our product portfolio, which is an opportunity for us that also brings
challenges. We face challenges to increase production capacity in our end-to-end supply chain to meet this demand. This is amplified by
supply chain constraints.
– Hiring, onboarding and retaining the workforce in the current competitive market is increasingly challenging. Consistent pressure on our
organization and people as a result of our growth may lead to well-being issues among our employees.
– The high demand we are continuing to experience could change customers’ sourcing strategies to become less dependent on ASML.
Geopolitical tensions
– Geopolitical tensions are rising and additional export control restrictions have been imposed during 2022. The risk of further restrictions on
exports or investments is high, and as a consequence global trade is shifting from globalization to regionalization as China, US and many
other countries strive for technological sovereignty. In particular, the tensions between China and the US may lead to a decoupled ecosystem
and – in the longer term – overcapacity. Given the important role both countries play in the semiconductor supply chain, this can have a
significant impact on our industry. Trade and export barriers have already impacted our ability to sell to and service systems for certain
customers, and this is likely to continue to impact our business going forward.
– Changes in relations between Taiwan and the People’s Republic of China could lead to additional trade restrictions and could impact our
employees and the ability to utilize our manufacturing facilities and supply chain in Taiwan for our global customers, as well as our ability to
service our customers in Taiwan.
Weakening global economy
– Macroeconomic downturn fears are increasing, fueled by high inflation rates that are amplified by the energy crisis. Economic uncertainty has
led to reduced consumer and business spending, and could cause our customers to decrease, cancel or delay their orders. A recession
might also bring opportunities in the tight labor market.
– Increase of manufacturing capabilities, utilization rate
and cycle-time reduction
– Fast shipments
– Support suppliers to increase move rate and mitigate
material shortages
– Deployment of onboarding and well-being programs
– Shorten time to knowledge (learning operating model)
– Actively engage with governmental authorities about
effectiveness, consequences and enforceability of
regulations
– Collaborate with peers in global advocacy
– Scenario planning around potential geopolitical events
– Apply for export licenses as required
– Comply with applicable (existing and new) regulations
– Optimization of supply chain footprint
– Control costs and maintain flexibility
– Scenario planning around macroeconomic trends
Drive a more
sustainable
world
Product stewardship
EHS
Climate change
Human resource
Violation of laws and
regulations
Continuity of own operations
Supply chain disruption
Strengthening ESG regulations and increasing stakeholder expectations
– Companies across all industries are facing increasing scrutiny relating to their ESG policies. Our stakeholders are increasingly focused on our
contribution to society and expect us to minimize the environmental and social impact of our products throughout all life-cycle stages. A global
trend to transition to a lower carbon economy has resulted in the imposition of increased regulations and disclosure requirements. Failure to
achieve our ESG objectives and meet the emerging ESG expectations of our stakeholders could negatively affect our brand and reputation.
Climate change fueling extreme weather
– Climate change contributes to increasing severity and frequency of extreme weather events (such as cyclones and flood, fire stress, drought,
heat and precipitation stress, rising sea levels) that can impact continuity of our operations and/or our supply chain.
– Stakeholder engagement and disclosures
– Deployment of ESG strategy in our organization and
value chain
– Non-financial reporting in accordance with the Global
Reporting Initiative (GRI) Universal Standards 2021
– Deployment of business continuity plans
– Include extreme weather aspects in building upgrades
and new designs
– Comply with (existing and new) regulations
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Risk factors
We face many risks that have the potential to impact our business. It is important to understand the nature of these.
We assess our risks by using the ASML risk universe, which comprises 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 that we do not currently believe to be
material could become material in the
future.
Many of these risks may be intensified by
global events such as the COVID-19
pandemic (including the China Zero-COVID
policy), the Russia–Ukraine conflict,
inflation, global measures taken in
response to these events and any
worsening of the associated global
business and economic conditions.
1. Strategy and products
Our future success depends on our ability to respond timely to commercial and technological
developments in the semiconductor industry
Risk category:
Business model, Innovation
Our success in developing new technologies, products
and services, and in enhancing our existing products
and services, 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, or more costly. 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.
Our business will also suffer 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 resources
to develop and introduce new and enhanced
technologies, products and service offerings. If we are
unsuccessful in developing (or if our customers do not
adopt) these technologies, products and service
offerings such as EUV 0.55 NA and multibeam
inspection, or if alternative technologies or processes
are successfully introduced by others, our competitive
position and business may suffer.
In addition, we make significant investments in
developing new products and product enhancements,
and we may be unable to recoup some or all of these
investments. We may incur impairment charges on
capitalized technology including prototypes or incur
costs related to inventory obsolescence, as a result of
technological changes. Such costs may increase as
the complexity of technology increases. Due to the
highly complex nature and costs of our systems,
including newer technologies, our customers may
purchase existing technology systems rather than new
leading-edge systems, or 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 also depend 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:
Product roadmap execution,
Innovation
As our lithography systems and applications have
become increasingly complex, the costs and time
periods 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 by us and our suppliers to meet our and
our customers’ technology demands. Our suppliers
may not be able or 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. In light of the
high levels of customer demand, we may prioritize our
resources toward increasing production over R&D
programs.
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Risk factors (continued)
We face intense competition
The semiconductor industry can be cyclical and we may be adversely affected by any downturn
We derive most of our revenues from the sale of
a relatively small number of products
Risk category:
Competition
Risk category:
Industry cycle risk
Risk category:
Business model
The semiconductor equipment industry is highly
competitive. Our competitiveness depends upon our
ability to develop new and enhanced lithography
equipment, related applications and services that bring
value to our customers and are competitively priced and
introduced on a timely basis – as well as our ability to
protect and defend our intellectual property, trade secrets
or other proprietary information. We compete primarily
with Canon and Nikon in respect of DUV systems. Both
Canon and Nikon have substantial financial resources
and broad patent portfolios. Each continues to offer
products that compete directly with our DUV systems,
which may impact our sales or business. In addition,
adverse market conditions, long-term overcapacity or a
decrease in the value of the Japanese yen in relation to
the euro could further intensify price-based competition,
resulting in lower prices and lower sales and margins.
We also face competition from new competitors with
substantial financial resources, as well as from
competitors driven by the ambition of self-sufficiency in
the geopolitical context. Furthermore, we face
competition from alternative technological solutions or
semiconductor manufacturing processes, 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 semiconductor industry has historically been
cyclical. As a supplier to the global semiconductor
industry, we are subject to the industry’s business
cycles, and the timing, duration and volatility are
difficult to predict and can have a significant impact on
semiconductor manufacturers and therefore ASML.
Newer entrants to 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 to break-even level. If sales
decrease significantly as a result of an industry
downturn and we are unable to adjust our costs over
the same period, and if down payments need to be
returned, our net income may decline significantly or we
may suffer losses.
As we have significantly increased our organization in
terms of employees, infrastructure, manufacturing
capacity and other areas, we may not be able to adjust
our costs in the event of an industry downturn.
In addition, we are facing a weakening of the global
economy. Economic uncertainty frequently leads to
reduced consumer and business spending, and could
cause our customers to decrease, cancel or delay their
orders. The tightening of credit markets, rising interest
rates and concerns regarding the availability of credit
could make it more difficult for our customers to raise
capital, whether debt or equity, to finance their
purchases of equipment, including the products we
sell. Reduced demand, combined with delays in our
customers’ ability to obtain financing (or the
unavailability of such financing) may adversely affect our
product sales and revenues and therefore may harm
our business and operating results.
If we are unable to timely and appropriately adapt to
changes resulting from difficult macroeconomic
conditions, our business, financial condition or results
of operations may be materially and adversely affected.
We derive most of our revenues from the sale of a
relatively small number of lithography systems (345
units in 2022 and 309 units in 2021). As a result, the
timing of shipments, including any delays, and
recognition of system sales for a particular reporting
period from a small number of systems, with an
increase in sales prices, may have a material adverse
effect on our business, financial condition and results
of operations in that period.
In addition, we may not be able to increase installed
base revenues to the extent we planned, as, for
example, customers may perform more of these
services themselves or find other third-party suppliers
to provide them.
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Risk factors (continued)
Failure to adequately protect intellectual property, trade secrets or other proprietary information could
harm our business
Defending against intellectual property claims brought by others
could harm our business
Risk category:
Intellectual property rights
Risk category:
Intellectual property rights
In addition, legal proceedings may be necessary to
enforce our IP rights and the validity and scope may be
challenged by others. Any such proceedings may
result in substantial costs and diversion of
management resources, and, if unfavorable decisions
are made, could result in significant costs or have a
significant impact on our business.
We have experienced and may in the future experience
misappropriation attacks by third parties or our
employees, including theft of intellectual property, trade
secrets, or other proprietary or confidential information.
For example, we have experienced unauthorized
misappropriation of data relating to proprietary
technology, as described under “Risk Factors –
Cybersecurity and other security incidents, or other
disruptions in our processes or information technology
systems, could materially adversely affect our business
operations”. As a result of such incidents, third parties
or others have or may, without authorization, obtain,
copy, use or disclose our intellectual property, trade
secrets or other proprietary information despite our
efforts to protect them.
We rely on intellectual property (IP) rights such as
patents and copyrights to protect our proprietary
technology. However, we face the risk that such
protective measures could prove to be inadequate,
and we could suffer material harm because, among
other matters:
– IP laws may not sufficiently support our proprietary
rights or may change adversely in the future;
– Our agreements (e.g. confidentiality, licensing) with our
customers, employees and technology development
partners and others to protect our IP may not be
sufficient or may be breached or terminated;
– Patent rights may not be granted or interpreted as
we expect;
– Patent rights will expire, which may result in key
technology becoming widely available that may harm
our competitive position;
– The steps we take to prevent misappropriation or
infringement of our proprietary rights may not be
successful;
– IP rights and trade secrets are difficult to enforce in
countries where the application and enforcement of
the laws governing such rights may not have
reached the same level compared with other
jurisdictions where we operate; and
– Third parties may be able to develop or obtain
patents for our or similar competing technology.
In the course of our business, we have been in the
past and are subject to claims by third parties alleging
that our products or processes infringe upon their IP. If
successful, such claims could limit or prohibit us from
developing our technology, manufacturing and selling
our products.
In addition, our customers or suppliers may be subject
to claims of infringement from third parties, including
patent holder companies, alleging that our products
used by such customers in the manufacturing of
semiconductor products and/or the processes relating
to the use of our products infringe on one or more
patents issued to such third parties. If such claims are
successful, we could be required to indemnify our
customers for some or all of any losses incurred or
damages assessed against them as a result of such
infringement.
We 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, reputational damage and/or settlement
involving significant costs to be paid by us.
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Risk factors (continued)
We are exposed to economic, geopolitical and other developments in
our international operations
We may be unable to make desirable acquisitions or to integrate successfully
any businesses we acquire
Risk category:
Political
Risk category:
Mergers & acquisitions
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, technology and
services internationally. In particular, our ability to deliver
technology in certain countries such as China has been
and continues to be impacted by our ability to obtain
required licenses and approvals.
Our business involves the sale of systems and services
to customers in a number of countries, including China,
where our business has grown in recent years, and
includes technologies that may be the subject of
increased export regulations or policies.
The US government has enacted trade measures,
including national security regulations and restrictions on
conducting business with certain Chinese entities,
restricting our ability to provide certain products and
services to such entities without a license. The list of
Chinese entities impacted by trade restrictions, as well as
the export regulation requirements and the
implementation and enforcement of such regulations,
has increased with the addition of certain entities to the
Entity List, and more recently by the Additional Export
Controls on Semiconductor Manufacturing Items
imposing license requirements on US-origin parts and
US persons destined toward fabs in China working on
advanced technology nodes. The list of restricted
customers is subject to change.
These and further developments in multilateral and bilateral
treaties, national regulation, and trade, national security and
investment policies and practices have affected and may further
affect our business, and the businesses of our suppliers and
customers. Such developments have impacted and continue to
impact our ability to obtain necessary licenses (among others
from the Dutch government), including authorizations 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 our supply chain
and customers are located in Taiwan. Customers in Taiwan
represented 38.2% of our 2022 total net sales and 39.4% of our
2021 total net sales. Taiwan has a unique international political
status. 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, for example, impact our ability to service our
customers in Taiwan, which 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
28.6% of our 2022 total net sales and 33.4% of our 2021 total
net sales. In addition, 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.
From time to time, we may acquire, or seek to 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 or our ability 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 from acquired businesses or we
may have difficulty integrating employees, business
systems and technology. The controls, processes and
procedures of acquired businesses may also not
adequately ensure compliance with laws and
regulations, and we may fail to identify compliance
issues or liabilities.
In connection with acquisitions, antitrust and national
security regulators have 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
antitrust and national-security clearances, which
could inhibit future desired acquisitions.
As a result of acquisitions, we have recorded a
significant amount of goodwill and intangible assets.
Accounting standards require periodic review of these
assets for indicators of impairment. If one or more
indicators of impairment are found to exist, then
valuation of the related asset could change and may
incur impairment charges.
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Risk factors (continued)
We may not be able to achieve our Environmental, Social and 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, capital
providers, shareholder advocacy groups, other market
participants, customers 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 a
focus on contribution to society and minimizing
environmental and social impacts of products
throughout all life-cycle stages. Failure to achieve our
ESG objectives, meet the emerging ESG expectations
of our stakeholders and/or timely respond to
enhanced regulations and disclosure obligations could
negatively affect our brand and reputation, which may
impede our ability to compete as effectively to recruit
or retain employees, which may adversely affect our
operations.
Climate change contributes to increasing severity and
frequency of extreme weather events, rising sea levels
and droughts that can impact continuity of our
operations and/or our supply chain. Climate change
concerns and the potential environmental impact of
climate change have resulted in and 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
value chain. Furthermore, the ability to improve our
product-related environmental performance (such as
energy efficiency) may be affected by the complexity of
our technology and products. In order to meet our ESG
goals and requirements in this regard, we are
dependent on our suppliers and their ability to reduce
their ecological footprints. In addition, we are
dependent on our customers and/or our customers
may not be satisfied with our progress, which can
impact demand.
A global trend to transition to a lower-carbon economy
has resulted in 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 measures or other requirements
that could impact our business and increase our costs.
A variety of regulatory developments have been
introduced that focus on restricting or managing 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.
We publish disclosures on ESG matters relating to our
business and our partners in compliance with
applicable regulations and guidance and other data
which may not be required but which we nonetheless
elect to disclose.
Such disclosure includes statements based on our
expectations and assumptions, involving forecasts
about costs and future circumstances, which may
prove to be incorrect. In addition, our ESG
Sustainability strategy may not have the intended
results, and our estimates concerning the timing and
cost of implementing and ability to meet stated goals
are subject to risks and uncertainties, which could
result in us not meeting our goals on expected timing
or at all or within expected costs. In addition, ESG
disclosure requirements are increasing and authorities
have proposed disclosure requirements on ESG
matters which differ from the requirements that we are
currently subject to, so we face risks in compliance
with such regulations, including the risk of complying
with requirements in different jurisdictions, costs
associated with such compliance and potential liability
in the event that our ESG disclosures prove incorrect.
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Risk factors (continued)
2. Finance and reporting
We are exposed to financial risks, including liquidity risk, interest rate risk,
credit risk, foreign exchange risk and inflation
Risk category:
Liquidity, Interest rate, Counterparty credit, Foreign exchange
We are a global company and are exposed to a variety
of financial risks, including those related to liquidity,
interest rate, credit, foreign exchange and inflation.
Liquidity risk
Negative developments in our business or global
capital markets could affect our ability to meet our
financial obligations or to raise or refinance debt in the
capital or loan markets. In addition, we might be
unable to repatriate cash from a country when needed
for use elsewhere due to legal restrictions or required
formalities.
Interest rate risk
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 the expectation of a downgrade),
developments in capital and lending markets or
developments in our businesses.
Counterparty credit risk
We are exposed to credit risk 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
€5,252.8 million, or 78.6%, of accounts receivable and
finance receivables at December 31, 2022, compared
with €3,855.2 million, or 83.7%, at December 31, 2021.
Accordingly, business failure or insolvency of one of our
main customers could result in significant credit losses.
Currency risk
Our Financial Statements are expressed in euros.
Accordingly, our results of operations are exposed to
fluctuations in exchange rates between the euro and
other currencies. Changes in currency exchange rates
can result in losses in our Financial Statements. We are
particularly exposed to fluctuations in the exchange
rates between the US dollar and the euro, and to a
lesser extent to the Japanese yen, the South Korean
won, the Taiwanese dollar and the Chinese yuan, in
relation
to the euro. We incur costs of sales predominantly in
euros, with portions also denominated in US and
Taiwanese dollars. A small portion of our operating
results are driven by movements in currencies other
than the euro, US dollar, Japanese yen, South Korean
won, Taiwanese dollar or Chinese yuan.
Inflation risk
We are exposed to increases in costs due to inflation
for costs of goods, transportation and wages, which
may impact our profitability. We are currently
experiencing higher-than-normal inflation, which
impacts our costs and margins to the extent we are not
able to pass on increased costs in our prices.
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Risk factors (continued)
3. 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, because the highly specialized
nature of many of our components, particularly for
EUV including 0.55 NA 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 time and at acceptable costs, 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, blockades,
sabotage or other disasters, natural and otherwise,
can lead to delays in delivery of our products which
could impact our business. For example, certain of our
suppliers experienced disruptions in their operations
as a result of 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 with Carl Zeiss 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 be unable to maintain production of optics over a
prolonged period, we would effectively cease to be able
to conduct our business.
From time to time, we experience supply constraints
which can impact our production, particularly during
periods of high levels of demand such as those we
have experienced in 2022 and continue to experience.
In 2022, we were impacted by delays and shortages in
our supply chain, resulting in a late start on the
assembly of a number of systems. In addition, due to
high demand, we reduced cycle time in our factory to
ship more systems. We have achieved this 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 provides our
customers with earlier access to wafer output capacity
but also leads to a delay of revenue recognition for
those shipments until formal customer acceptance. We
and our suppliers are investing in additional capacity to
meet the demand. However, increasing capacity takes
time, and we may be unable to meet the full demand of
our customers for a few years. Further, we face the risk
that demand may not continue to increase, which could
result in overcapacity and loss of investment in
increasing capacity.
In addition, most 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. 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
ability 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. If our suppliers do not meet our
requirements or timetable in product development, our
business could suffer.
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Risk factors (continued)
A high percentage of net sales is derived from
a few customers
Our business and future success depend on our ability to manage the growth of our organization
and attract and retain a sufficient number of adequately educated and skilled employees
Risk category:
Customer dependency
Risk category:
Human resources, Knowledge management, Organizational effectiveness
4. People
Historically, we have sold a substantial number of
lithography systems to a limited number of customers.
Customer concentration can increase because of
continuing consolidation in the semiconductor
manufacturing industry. In addition, although the
applications part of our holistic lithography solutions
constitutes an increasing portion of our revenue, a
significant portion of those customers are the same
customers as those for our systems. Consequently,
while the identity of our largest customers may vary
from year to year, sales may remain concentrated
among relatively few customers in any particular year.
The recognized total net sales to our largest customer
amounted to €7,046.9 million, or 33.3% of total net
sales in 2022, compared with €6,881.1 million, or
37.0% of total net sales in 2021. In 2022, 55.8% of
total net sales were made to two customers. The loss
of any significant customer or any significant reduction
or delay in orders by such a customer may have a
material adverse effect on our business, financial
condition and results of operations.
Our business and future success depends significantly
upon our ability to attract and retain employees,
including a large number of highly qualified
professionals. 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, onboard and retain
qualified personnel increases as our business grows.
Our R&D programs require a large number of qualified
employees. If we are unable to attract sufficient
numbers of such employees, this could affect our
ability to conduct our R&D on a timely basis. Also, the
loss of key employees for unexpected reasons such as
resignation or long-term illness is 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 from other industries or companies. As a
result, we have to educate and train our employees to
work on our systems. Retention of those key
employees is a critical success factor for us.
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 significant
additional costs. Our suppliers face similar risks in
attracting and retaining qualified employees, including
those in connection with programs that will support our
R&D programs and technology developments. If our
suppliers are unable to attract and retain qualified
employees, this could impact our R&D programs or
deliveries of components to us.
In recent years, our organization has grown
significantly. We may be unable to effectively manage,
monitor and control our employees, facilities,
operations and other resources. Our rapid growth in
recent years, driven by strong customer demand, puts
pressure on our organization and employees, which
can negatively impact employee well-being. This may
in turn negatively impact the efficiency of our
operations, our ability to ensure compliance with laws
and regulations as well as our reputation as an
employer.
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Risk factors (continued)
5. Operations
We may face challenges in managing the industrialization of our products and
bringing them to high-volume production
We are dependent on the continued operation of a limited
number of manufacturing facilities
Risk category:
Product industrialization
Risk category:
Continuity of own operation
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.
In addition, when we are successful in industrializing
new products, it can take years to reach profitable
margins, as was the case for EUV 0.33 NA.
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, 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 service a
growing number of EUV systems that are operational in
the field could affect the timing of shipments. It could
also impact the efficient execution of maintenance,
servicing and upgrades, which is key to our systems
continuing to achieve the required productivity.
All of our manufacturing activities, including
subassembly, final assembly and system testing, take
place in cleanroom facilities in Veldhoven (the
Netherlands), Berlin (Germany), Wilton, San Diego (US),
Pyeongtaek (South Korea), and 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, blockages, sabotage or other disasters,
natural and otherwise. We cannot ensure that
alternative production capacity would be available if a
major disruption were to occur. In 2022, we
experienced a fire in our Berlin operations which
required significant recovery efforts to secure our
operations.
Bringing our products to high-volume production at a
value-based price and in a cost-effective manner
depends on our ability to manage the industrialization
of our products and to manage costs. Customer
adoption of our products depends on the performance
of our products in the field. As our products become
more complex, we face an increasing risk that
products may not meet development milestones or
specifications and may not perform according to
specifications, including quality standards. If our
products do not perform according to specifications
and performance criteria or if quality or performance
issues arise, this may result in additional costs,
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 the supply of
components and training qualified personnel. It may
also require our suppliers to expand their
infrastructure capabilities. If we or our suppliers are
unable to expand infrastructure as necessary, we
may be unable to introduce new technologies,
products or product enhancements or reach high-
volume production of newly developed products on
a timely basis or at all.
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Risk factors (continued)
We face challenges to meet demand
The nature of our operations exposes us to health,
safety and environment risks
Risk category:
Manufacturing and install, Human resources, Supplier strategy and performance
Risk category:
Environment, health and safety
We have in recent years and are continuing to
experience increasing demand across all our market
segments and product portfolio because our systems
play critical roles in meeting end-market demand. This
high level of demand brings challenges. We have been
and are continuing to increase production capacity in
our end-to-end supply chain to meet this demand, but
we face challenges in increasing capacity. For
example, in order to increase our capacity, we depend
on our suppliers increasing their capacity, and it takes
time to build the production space and equipment
required for expansion. We and our supply chain also
need to obtain permits to make expansion possible;
these may not be (timely) granted.
It is a challenge for ASML and our suppliers to hire and
retain more employees in the current competitive labor
market. Our processes and systems may not be able
to adequately support our growth. In addition, our end-
to-end supply chain is facing a shortage of materials
which is hampering our growth.
If we are not successful in increasing our capacity to
meet demand, this could impact our relationships with
customers and our competitive position. The increased
demand and resultant supply constraints that we are
continuing to experience lead to longer lead times for
customers which could result in customers changing
their sourcing strategy to become less dependent on
ASML, which impacts our market share in certain
product offerings.
Where we are able to increase our capacity, we are
subject to increased risk of a downturn, as it becomes
more difficult for us to reduce costs in the event of an
industry downturn.
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. This includes the transport, use,
storage, discharge, handling, emission, generation,
and disposal of toxic or other hazardous substances.
In addition, operating our systems (which use lasers
and other potentially hazardous systems) can be
dangerous and can result in injury. 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. This requires us to invest in continued risk
assessments and development of appropriate
preventative and protective measures for health and
safety for both our employees (in connection with the
production and installation of our systems and field
options and performance of our services) and our
customers’ employees (in connection with the
operation of our systems). Our health and safety
practices may not be effective in mitigating all health
and safety risks. Failure to comply with applicable
regulations or the failure of our implemented practices
for customer and employee health and safety could
subject us to significant liabilities.
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Risk factors (continued)
Cybersecurity and other security incidents, or other disruptions in our processes or
information technology systems, could materially adversely affect our business operations
Risk category:
Security, Information technology, Process effectiveness and efficiency
We rely on the accuracy, availability and security of our
information technology (IT) systems. Despite the
measures that we have implemented, including those
related to cybersecurity, our systems could be
breached or damaged by computer viruses and
systems attacks, natural or man-made incidents,
disasters or unauthorized physical or electronic
access, and we have experienced some of these
incidents.
We are experiencing an increasing number of
cyberattacks on our IT systems as well as the IT
systems of our suppliers, customers and other service
providers, whose systems we do not control. These
attacks include malicious software (malware), attempts
and acts to gain unauthorized access to data and
other electronic and physical security breaches of our
IT systems. They also include the IT systems of our
suppliers, customers and other service providers that
have led and could lead, 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.
Inadvertent disclosure or actions or malfeasance by our
employees, those of our suppliers or other third parties
have resulted and may in the future result in a loss or
misappropriation of data or a breach or interruption of
our IT systems, and could result in competitive harm
and violate export controls and other laws and
regulations which could result in fines and penalties,
business disruption, reputational harm and additional
regulatory scrutiny or export control measures. We
have experienced unauthorized misappropriation of
data relating to proprietary technology by a (now)
former employee in China. We promptly initiated a
comprehensive internal review. Based upon our initial
findings we do not believe that the misappropriation is
material to our business. However, as a result of the
security incident, certain export control regulations may
have been violated. ASML has therefore reported the
incident to relevant authorities. We are implementing
additional remedial measures in light of this incident.
In addition, any system failure, accident or security
breach could result in business disruption, theft of our
intellectual property or 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 and violation
of applicable laws.
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, regulatory investigation and proceedings that
could expose us to civil or criminal liabilities and
diversion of significant management attention and
resources to remedy the damages that result.
We may also be required to incur significant costs to
protect against or repair the damage caused by these
disruptions or security breaches, including, for example,
rebuilding internal systems, implementing additional
threat protection measures, providing modifications to
our products and services, defending against litigation,
responding to regulatory inquiries or actions, paying
damages, or taking other remedial steps with respect
to third parties. Further, remediation efforts may not be
successful and could result in interruptions, delays or
cessation of service, unfavorable publicity, damage to
our reputation, customer allegations of breach-of-
contract, possible litigation and loss of existing or
potential customers that may impede our sales or other
critical functions.
Cybersecurity threats are constantly evolving. We
remain potentially vulnerable to additional known or as
yet unknown threats, as in some instances, we, our
customers, partners and our suppliers may be unaware
of an incident or its magnitude and effects.
We also face the risk that we could unintentionally
expose our customers to cybersecurity attacks through
the systems we deliver to them, including in the form of
malware or other types of attacks, as described above,
which could harm our customers. Furthermore, we
have increased the level of remote working within our
organization, which increases the risks of cybersecurity
incidents.
ASML’s visibility and importance for the semiconductor
industry continues to increase. There is a risk that this
may lead to actions that may adversely impact the
security of ASML or the safety of its employees.
In addition, processes and systems may not be able to
adequately support the growth that we have
experienced in recent years and continue to
experience. From time to time, we implement updates
to our IT systems and software, which can disrupt or
shut down our IT systems. We may not be able to
successfully launch and integrate these new systems
as planned without disruption to our operations. For
example, we are currently implementing a new ERP
system and infrastructure. As a result of this system
implementation or otherwise, we have and could
continue to experience disruptions in our operations.
Read more in: Governance - Responsible business -
Information security.
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Risk factors (continued)
6. Legal and compliance
We are subject to increasingly complex regulatory
and compliance obligations
Changes in taxation could affect our
future profitability
Risk category:
Violation of laws and regulations
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, compliance with
laws and regulations, including with as well as our
internal policies and standards, such as without
limitation, the ASML Code of Conduct, has become
more complex. Furthermore, as we operate in different
countries in the world, we have become increasingly
subject to compliance with additional laws and
regulations in such jurisdictions, including but not
limited to export control, anti-corruption, anti-bribery,
antitrust and ESG regulations, which can be complex.
We may also be subject to investigations, audits and
reviews by authorities in such jurisdictions regarding
compliance with laws and regulations, including tax
laws.
In addition, the existing laws and regulations that we
are subject to, including regulations relating but not
limited to trade, national security, tax, export controls,
reporting, product compliance, anti-corruption laws,
antitrust, human rights, data protection, spatial
planning and environmental laws, are becoming more
complex and the trade and national security
environment has resulted in increasing restrictions.
Trade and security regulations limit our ability to sell
our products and services in certain jurisdictions and
we face the risk of further restrictions. We have
experienced delays in permits for shipments as well as
restrictions on shipping certain products or
components to certain customers.
Such changes in the regulations that apply to our
business can increase compliance costs and the risk
of non-compliance. Non-compliance could result in
fines and penalties, business disruption, reputational
harm and additional regulatory scrutiny measures.
Furthermore, additional regulations could impact or
limit our ability to sell our products and services in
certain jurisdictions.
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 to changes in tax
legislation in the countries where we operate, together
with developments driven by global organizations such
as the OECD, as well as any 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 an increase in our effective tax rate in
future years.
Changes in tax legislation in jurisdictions where we
operate may adversely impact our tax position and
consequently our net income. Our worldwide effective
tax rate is heavily impacted by R&D incentives included
in tax laws and regulations in the countries where we
operate. Examples include the so-called innovation box
in the Netherlands and the foreign derived intangible
income deduction/R&D credits we obtain in the US. If
jurisdictions alter their tax policies/laws in this respect,
it may have an adverse effect on our worldwide
effective tax rate. In addition, jurisdictions levy
corporate income tax at different rates. The mix of our
sales over the various jurisdictions in which we operate
may vary from year to year, resulting in a different mix
of corporate income tax rates applicable to our profits,
which can also affect our worldwide effective tax rate
and impact our net income.
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Risk factors (continued)
7. Other risk factors
COVID-19 or other pandemics may impact our
operations
Restrictions on shareholder rights may dilute
voting power
We may not declare cash dividends, conduct
share buyback programs or cancel shares at all
or in any particular amounts in any given year
We may be impacted by the Russia–Ukraine
conflict
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 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
not subject to the ‘structuurregime’.
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 the nominal value
of €0.09 per share, such cumulative preference
shares. Exercise of the Preference Share Option
would effectively dilute the voting power of our
outstanding ordinary shares by one-half, which may
discourage or significantly impede a third party from
acquiring a majority of our voting shares.
We aim to pay a quarterly dividend that is growing (on
an annualized basis) over time, and we conduct share
buybacks from time to time. The dividend proposal,
amount of share buybacks and cancellation of shares
in any given year 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. The Board of Management
may decide to propose not to pay a dividend or to
pay a lower dividend and may suspend, adjust the
amount of or discontinue share buyback programs, or
we may otherwise fail to complete buyback
programs.
Although we do not currently have operations in
Russia or Ukraine, the impact of the military action in
Ukraine creates uncertainty in the macroeconomic
environment. This military action, including sanctions
and other measures taken in response, have and
could further adversely affect the global economy, the
financial markets and supply chain, which therefore
may impact customer demand, delivery of products
and services to clients, as well as our ability and the
ability of our supply chain to obtain parts,
components and gas supply. In addition, the conflict
amplifies the surge in energy prices, commodity
prices, transportation costs, inflation and
cyberattacks.
The COVID-19 pandemic and the measures
implemented to address this pandemic globally may
continue to impact our business, our suppliers and our
customers. Pandemics can have significant impact on
the global economy, which can potentially affect our end
markets.
The COVID-19 pandemic has increased the level of
remote working within our organization, which impacts
productivity and may delay our roadmap, increase the
risks of cybersecurity incidents and/or impact our control
environment. In addition, as we are dependent on our
suppliers, 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. Further, an important part
of our business involves installing and servicing tools at
customer premises around the globe, and this could be
impacted by travel restrictions and vaccination
requirements.
There is uncertainty as to how the COVID-19 pandemic
could develop and the impact on global GDP, end
markets and our manufacturing capability and supply
chain. The impact of the pandemic on ASML will depend
on future developments, including the continued severity
of the pandemic, and the actions of the Dutch and other
foreign governments to contain outbreaks or address
their impact, which are outside of our control.
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VIRTUAL AND AUGMENTED REALITY
Virtual
reality, unreal
opportunities
There’s more to virtual reality (VR) and
augmented reality (AR) than gaming. At ASML,
these technologies are helping us design, build
and maintain some of the world’s most complex
machines. Through VR and AR, our teams are
able to manipulate designs and learn how to
maintain systems – in some cases, many years
before the machines themselves physically exist.
Read more online
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ESG at a glance
We aim to be a leader in sustainability, and to continue driving progress toward
inclusive and sustainable growth for all.
Our vision
Our contribution to a
digital, sustainable future
Our vision at ASML
is to enable ground-
breaking technology
that solves some of
humanity’s toughest
challenges.
We want to contribute
to expanding computing
power but with minimal
waste, energy use and
emissions. That's why
we focus on energy
efficiency, climate action
and circular economy.
We want to ensure that
responsible growth
benefits all our
stakeholders – to have an
attractive workplace for all
and a responsible supply
chain, to fuel innovation in
our ecosystem and to be
a valued partner in our
communities.
We commit to act on
our responsibilities and
fully anchor them in the
way we do business
through our focus on
integrated governance,
engaged stakeholders
and transparent
reporting.
How we report on our ESG progress
SDGs we align with
ESG Sustainability chapters
Environmental
75
– Energy efficiency and climate action
Read more on page 76 >
– Circular economy
Read more on page 85 >
Social
96
– Attractive workplace for all
Read more on page 97 >
– Our supply chain
Read more on page 109 >
– Innovation ecosystem
Read more on page 118 >
– Valued partner in our communities
Read more on page 124 >
Governance
133
– Managing ESG sustainability
Read more on page 134 >
– Responsible business
Read more on page 135 >
– Our approach to tax
Read more on page 147 >
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Our material ESG sustainability topics
We aim to create long-term value for our
stakeholders and to shape a sustainable
future. To achieve these aims, we must
focus our strategy on the ESG
sustainability topics that matter most.
Our material topics represent our most significant
impacts on the economy, environment and people,
including their human rights. We update our materiality
annually based on ongoing engagement with
stakeholders, developments within ASML and the
context in which we operate.
The process for determining material topics consists of
four steps which are based on the guidance provided by
the Global Reporting Initiative (GRI). Our 2022 materiality
assessment process is based on the standard ‘GRI 3:
Material Topics 2021’.
Step 1: Understand
the context
Step 2: Identify
impacts
Step 3: Assess the
significance of the impacts
Step 4: Prioritize the most
significant impacts
List of topics, positive and negative,
actual and potential, short
and long-term impacts
Positive and negative against their
scale, scope and remediability
Most material topics influence
strategy and long-term targets
Shareholders
Customers
Employees
Suppliers
Society
Key changes in the sustainability topics list from 2021 to 2022 (Step 2: Identify impacts)
Environmental
Environmental
2022 topics
– Circular economy
– Energy management and carbon footprint: Supply chain
– Energy management and carbon footprint: Operations
2021 topics
– Waste management
– Circular economy: Re-use
– Circular economy: Recycling
– Energy management operations
– Energy management and carbon footprint: Product use and downstream
– Energy management products
Environmental
– Biodiversity
Social
Social
Social
Social
– Innovation ecosystem
– Talent attraction, employee engagement and retention
– Responsible supply chain and product stewardship
– Diversity and inclusion
– Occupation health and safety
– Responsible supply chain and product stewardship
(none)
– IP protection
– Innovations management
– Innovation partnership
– Talent attraction and retention
– Employee engagement
– Responsible supply chain
– Product stewardship
– Human rights
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Our material ESG sustainability topics (continued)
Step 1:
Understand the context
Key to our materiality assessment process is
understanding the stakeholders that are affected or could
be affected by us. We have five stakeholder groups:
shareholders, customers, employees, suppliers (including
contractors) and society. We continuously engage with
these stakeholders to understand their concerns and
how we may impact their interests. Through stakeholder
engagement we also identify improvement actions and
receive feedback on our performance and progress.
Read more in:
Our business model - Engaging with stakeholders.
We also monitor the sustainability context of our activities
and business relationships by reviewing relevant sources
of information. These sources include international
standards and (upcoming) legislation, industry and peers,
media and ESG rating agencies.
Step 2:
Identify actual and potential impacts
We identified an initial list of topics and impacts based on
insights from stakeholder engagement and relevant
sources of information. The list of topics includes positive
and negative, actual and potential, and short- and long-
term impacts. Actual impacts are those that have already
occurred, and potential impacts are those that could
occur but have not occurred yet. The assessment aims
to cover all impacts likely to be relevant across our value
chain and business relationships and considers the
relevant GRI Topic Standards.
While our 2022 list of topics includes topics from the
2021 materiality assessment, it also includes a number of
changes, with some topics merging to bundle strongly
connected impacts. The table on the previous page
shows key movements across our material issues.
Step 3:
Assess the significance of the impacts
We assessed the significance of actual negative impacts
by their severity (scale, scope and irremediable character)
and the significance of actual positive impacts by their
scale and scope. For potential impacts we also assessed
likelihood. Negative and positive impacts were assessed
separately, as these cannot always be compared, and
negative impacts cannot be offset by positive impacts.
Based on ASML subject matter experts’ assessment, the
topics were ranked, initially based on scale, scope, and
remediability, and in case of an equal ranking also on
likelihood. The ranking of topics was also subject to
review by internal representatives of stakeholder groups,
to ensure the concerns and interests of all stakeholders
were sufficiently considered.
Step 4:
Prioritize the most significant impacts
The most significant impacts are prioritized for strategy
and reporting. The outcomes of the materiality
assessment are used to shape our strategy and long-
term targets, with the aim of long-term value creation for
all our stakeholders. The Board of Management sets this
strategy.
The table below shows the material topics, the impacts
included in the definition of each topic, whether these
impacts are positive or negative, actual or potential and
where in the value chain they occur.
Compared with 2021, the criteria for prioritizing topics in
the GRI standards have changed, which affects
comparability between the 2021 and 2022 material
topics. The following changes occurred in 2022:
– 'Community engagement' emerged as a new material
topic, covering (potential) negative impacts on the
availability of housing, talent and infrastructure in the
region and positive impacts from job creation and
community programs.
– 'Human capital development' is no longer a material
topic, although the assessment shows that ASML has
a positive impact by providing training and career
development opportunities for employees.
– 'Customer intimacy' is no longer a material topic now
that impact is the sole criterion for materiality in the
updated GRI standards.
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Our material ESG sustainability topics (continued)
Material topics 20221
Topic name
Energy management and carbon
footprint – Product use and
downstream
Energy management and carbon
footprint – Supply chain
Energy management and carbon
footprint – Operations
Circular economy
Diversity and inclusion
Talent attraction, employee
engagement and retention
Occupational health and safety
Responsible supply chain and
product stewardship
Topic definition (impacts covered)
a) Energy-efficiency products (EUV, DUV)
b) Energy consumption (EUV, DUV)
c) Scope 3 downstream emissions
a) Energy management supply chain
b) Scope 3 upstream emissions
a) Energy use within and management of own buildings and factories
b) Reduction of energy consumption
c) Use of renewable energy for our operations
d) Resulting scope 1 and 2 GHG emissions
a) Waste generated through operations (e.g. waste from parts, packaging, construction,
hazardous waste and other waste directed to disposal)
b) Use of non-renewable materials and resources
c) Use of renewable materials and resources
d) Measure to reduce and manage waste from operations (e.g. recycling, re-use and waste
diverted from disposal)
e) Measure to reduce the use of materials and move to circulation of products and material
a) Workforce gender diversity
b) Diversity of governance bodies
c) Workforce inclusiveness
d) Pay equality, i.e. the ratio of basic salary and remuneration of women to men
e) Diversity (age, gender, cultural background, etc.) of new hires, promotions and turnover
a) New employee hires and employee turnover
b) Working conditions, including working time, rest periods, holidays, dismissal practices, maternity
protection, support for collective bargaining to determine wages, etc.
c) Remuneration practices, including how these relate to legal and industry minimums, whether
they enable employees to meet their basic needs, how overtime is compensated, etc.
d) Other benefits, including life insurance, healthcare, disability and invalidity coverage, parental
leave, retirement provision, etc.
a) Work-related injuries, ill health and well-being
b) Work-related hazards and risks, including the identification, assessment and measures taken to
manage these risks
c) Safety culture, including worker participation, consultation, communication and training on
occupational health and safety
a) Social impacts (e.g. health and safety, working conditions, child labor, etc.) in the supply chain
and actions taken
b) Environmental impacts (e.g. pollution, water use, etc.) in the supply chain and actions taken
c) Supplier ESG standards and screening
d) Supplier ESG performance
e) Impact on environmental and social aspects in the supply chain from product design and
engineering
Positive or negative impact
Negative
Actual or potential impact
Actual
Impact area value chain
Downstream customers and society
Negative
Negative
Negative
Positive
Positive
Actual
Actual
Actual
Actual
Actual
Upstream suppliers and partners
Own operations
Entire value chain
Entire value chain
Own operations
Positive
Actual
Own operations
Negative
Potential
Own operations
Negative
Potential
Upstream suppliers and partners
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Our material ESG sustainability topics (continued)
Topic name
Innovation ecosystem
Community engagement
Topic definition (impacts covered)
a) Innovation partnerships
b) Innovation pipeline
c) In-kind support startups and scaleups
d) EU public-private R&D innovation projects
e) Knowledge management
Positive or negative impact
Positive
Actual or potential impact
Actual
Impact area value chain
Entire value chain
a) Local community impacts, including housing, talent pipeline (region), mobility and infrastructure,
social cohesion, neighbor (local) impact
b) Local community impacts, including economic growth, local tax contribution and job creation
c) Philanthropy, including local community engagement and development programs
Negative
Positive
Actual
Actual
Own operations
Own operations
1. Although Biodiversity was added as a topic in the 2022 materiality assessment, our impact on this topic was assessed and in comparison to other topics it was not considered material.
Contributing to the UN’s Sustainable
Development Goals
Adopted by all member states in 2013, the UN’s 2030
agenda for sustainable development provides a shared
blueprint for peace and prosperity, for people and planet,
now and in the future.
We have developed the work streams of our ESG
program to support the 2030 ambition as defined by the
UN’s Sustainable Development Goals (SDGs), focusing
on six particular SDGs where we can have the greatest
impact. Our ambitions, commitment and programs for
these SDGs are explained more fully at the start of each
ESG chapter of this report. In brief, they are as follows:
In our Environmental pillar, we focus on SDG 13
(Energy efficiency and climate action) by addressing our
energy efficiency in our operations, and on SDG 12
(Responsible consumption and production) via our
circular economy work streams.
In our Social pillar, we focus on SDG 4 (Quality education)
by developing our people and promoting lifelong learning
opportunities for the communities where we operate. SDG 8
(Decent work and economic growth) is covered by our
commitment to provide an attractive workplace that
promotes sustained, inclusive growth, full and productive
employment and decent work for all throughout our supply
chain. Our support for SDG 9 (Industry, innovation and
infrastructure) is demonstrated by our work to build a
resilient ecosystem that fosters innovation while promoting
inclusive and sustainable industrialization. We support SDG
11 (Sustainable cities and communities) by working with our
community outreach partners to make cities and other
human settlements inclusive, safe, resilient and sustainable.
SDG 12 (Responsible consumption and production) is
addressed by our work with suppliers and in our supply
chain.
In our Governance pillar, we focus on SDG 8 (Decent
work and economic growth) by ensuring that we
eradicate all types of forced labor, protect labor rights
and promote a safe and secure working environment for
everyone. In addition to being covered under our
Environmental and Social pillars (see above), SDG 12
(Responsible consumption and production) is also
supported under our Governance pillar by our work to
achieve environmentally sound management of
chemicals and all wastes throughout their life cycles, in
accordance with agreed international frameworks.
We believe that increasing
digitalization opens the way
to a society that is more
environmentally and
socially sustainable.
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Environmental at a glance
We are committed to reducing our environmental footprint both from our operations and the use of our
products and services.
Energy efficiency and
climate action
SDG 13
Take urgent action to combat climate change and its
impacts by regulating emissions and promoting
developments in renewable energy
Read more on page 76 >
– Energy management and carbon footprint: Operations
(Scope 1 and 2)
– Energy management and carbon footprint: Supply chain,
business travel and commuting (Scope 3)
– Energy management and carbon footprint: Product use
at our customers (Scope 3)
Circular economy
Read more on page 85 >
SDG 12
– Reduce waste in our operations
Ensure sustainable consumption and production patterns
– Re-use parts and materials
– Refurbish mature products
– Water management
What we do
We develop lithography technology that enables
manufacturers to make more energy-efficient
microchips. Reducing our environmental footprint and
managing our waste – both from our operations and in
the use of our products and services – is key to our
ESG practices.
Our aims
As the world continues to increase its dependence on
technology to solve some of its most pressing
challenges, our role is to help make this happen by
expanding the availability of the necessary computing
power.
Our ambition is to achieve carbon neutrality with net
zero emissions in our operations (scope 1 and 2) by
2025. We aim to achieve net zero emissions in our
supply chain (scope 3) by 2030, and net zero
emissions from the use of our products by our
customers (scope 3) by 2040. In addition, our goal is
to have zero waste from operations to landfill or
incineration by 2030.
We focus on energy efficiency – not only in our
business but also by addressing the amount of energy
that semiconductors require in operation. We are also
working hard to manage our own waste streams and
improve the circularity of our value chain.
Our actions are closely aligned to two SDGs in
particular – SDG 13 (Energy efficiency and climate
action) and SDG 12 (Circular economy).
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Energy efficiency and climate action
We are committed to lowering our carbon footprint wherever we can to achieve net zero emissions across our operations
and in our supply chain. As well as increasing the productivity of our products, we are also working toward reducing their
absolute energy consumption.
In this section, we will elaborate on our approach and
explain how we aim to achieve our targets in the context
of our focus areas.
Alongside our efforts to lower our own carbon footprint,
we are committed to using our innovations and digital
technologies to enable the industry to reduce its
environmental footprint. For example, our EUV systems
allow customers to fabricate advanced chips more
efficiently, using fewer process steps and fewer
resources.
Energy efficiency and climate action
SDG target
How we measure
our performance
SDG target 13.1
Strengthen resilience and
adaptive capacity to
climate-related hazards and
natural disasters in all
countries
– Scope 1 and 2 CO2e
emissions
– Scope 3 CO2e
emissions intensity
(per €m gross profit)
– Net scope 3 CO2e
emissions intensity
(per €m revenue)
– Scope 3 CO2e
emissions
– NXE energy use per
exposed wafer pass
Our approach
Climate change is a global challenge that requires urgent
action by everyone, including us. While the benefits our
industry brings to society are considerable, these come
at a cost, through the consumption of considerable
energy and resources. We have identified energy
management and carbon footprint as material topics for
our business across three distinct areas – in our own
operations, throughout our supply chain and in the use of
our products and downstream.
In recognition of the importance of following a science-
based pathway to limit global warming to 1.5°C, we are
signatories to the Science Based Targets initiative (near
term SBTi). Our aim at ASML is to achieve net zero
emissions along our value chain by 2040.
We have set out the following milestones and focus
areas to help us achieve this:
1. Energy management and carbon footprint –
Operations (scope 1 and 2): net zero emissions by
2025
2. Energy management and carbon footprint – Supply
chain (scope 3): reduce net scope 3 upstream
emissions to zero by 2030 and net zero scope 3
emissions from business travel and commuting by
2025
3. Energy management and carbon footprint – Product
use at our customers (scope 3): net zero scope 3
emissions from product use by 2040
38.1 kt
Scope 1 and 2 CO2e emissions
(2025 target: net zero)
1.11 kt
Scope 3 CO2e emissions
intensity (per €m gross
profit)
(2025 target: 1.02)
0.56 kt
Net scope 3 CO2e emissions
intensity (per €m revenue)
11.9 Mt
Scope 3 CO2e emissions
(2040 target: net zero)
8.27 kWh
NXE energy use per exposed
wafer pass (NXE:3600D,
measured in 2021) (2025 target:
5.1 kWh)
IN THIS SECTION
78 Our overall performance in 2022
79 Energy management and carbon footprint:
Operations (scope 1 and 2)
81 Energy management and carbon footprint:
Supply chain, business travel and
commuting and product use at our
customers (scope 3)
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Energy efficiency and climate action (continued)
The following diagram illustrates our journey to net zero emissions in our value chain:
Our journey to net zero emissions in our value
chain
Our goal is to achieve the following milestones in our
journey toward net zero emissions in our value chain by
2040, for each of our impact areas:
3. Aiming to lead on the shift toward 100% credible,
renewable energy
4. Compensating residual emissions to achieve our
targets if no reasonable other improvement actions
are available
– 2025: Net zero scope 1+2 emissions
– 2025: Net zero scope 3 emissions from business
travel and commuting
– 2030: Collaborating with our suppliers, reduce net
scope 3 upstream emissions to zero
– 2040: Collaborating with our customers and peers,
reduce net scope 3 emissions from product use to zero
We recognize that we cannot do any of this alone,
which is why we collaborate closely with our
employees, suppliers, customers, peers and society.
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 approach to achieving net zero emissions is based
on four pillars:
Our TCFD Recommendations: climate-related disclosure,
available on www.asml.com.
1. Analyzing energy use and greenhouse gas (GHG)
emissions to learn about improvement options
2.
Innovating in energy efficiency, and redesigning our
assets, products and processes to minimize
environmental impact
Our environmental management system
To measure our journey, we have an Environmental
Management System (EMS) in place to help us monitor
our energy use and emissions, improve performance and
enhance efficiency. The EMS is integrated into our
Environmental, Health and Safety (EHS) management
system. All our facilities operate on the basis of this
system – and the HMI locations in Tainan (Taiwan) and
San Jose (US) have now been successfully integrated.
Our 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.
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 2022 questionnaire is B, which is above the
global average of C.
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Energy efficiency and climate action (continued)
Our overall performance in 2022
Topic
Target 2025
Performance indicator
Climate action
Net zero
Net zero
Net zero (2040)
Scope 1 – Direct emissions from fossil fuels in our operations (kton)
Scope 2 – Indirect emissions from energy consumption (kton) [market-based]2
Scope 3 – Indirect emissions from total value chain (kton)
Total footprint (in kton)1
Energy efficiency
n/a
1.02
n/a
5.1
n/a
n/a
100 TJ
100%
(10)%
n/a
(60)%
Scope 3 CO2e emissions intensity (per €m revenue)
Scope 3 CO2e emissions intensity (per €m gross profit)
Reduction in GHG emissions from projects (kton)
Products – NXE energy use per wafer (in kWh)
Products – NXT energy use per wafer (in kWh)
Energy consumption (in TJ)
Energy savings worldwide through projects (in TJ)3
Renewable electricity (of total electricity purchased)
Energy consumption (NXE) (reduction in % of baseline 2018 1.4 MW)
Throughput (in wph) (NXE)
Energy use per exposed wafer pass (NXE) (reduction in % of baseline 2018)
2020
15.4
0.0
8,800.0
8,815.4
0.63
1.29
n/a
Progress tracking
2021
19.3
20.1
11,400.0
11,439.4
0.61
1.16
n/a
17.3
20.8
11,900.0
11,938.1
0.56
1.11
2.6
9.64 (NXE:3400C)
8.27 (NXE:3600D)
8.27 (NXE:3600D)
0.45 (NXT:2050i) 0.48 (NXT:1980Ei)
1,689
1,412
0.46 NXT:2100i
1,633
113.9
100%
12.7
92%
19.0
91%
(6)% (NXE:3400C)
(6)% (NXE:3600D)
(6)% (NXE:3600D)
136 (NXE:3400C)
160 (NXE:3600D)
160 (NXE:3600D)
(26)% (NXE:3400C)
(37)% (NXE:3600D)
(37)% (NXE:3600D)
•
•
•
n/a
•
n/a
•
n/a
n/a
•
•
•
n/a
•
On track or met target •
Ongoing focus area n
2022
Status
1. 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 CO2e emissions in kt.
2. We report the market-based emissions after purchase of EACs. ASML currently does not offset any of the remaining emissions, resulting in no differences between our gross and net emissions.
3. In 2021 we started a new masterplan period for 2021-2025, with a target to achieve 100 TJ energy savings by the end of 2025.The figure from 2020 is related to the masterplan 2016-2020. The savings reported are cumulated compared with the base year; therefore, they are not comparable.
Read more in:
Non-financial statements – Non-financial indicators – Energy efficiency and climate action.
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Energy efficiency and climate action (continued)
Energy management and carbon footprint: Operations (scope 1 and 2)
Our approach
We aim to achieve our targets for scope 1 and 2 by:
Our performance in 2022
Scope 1 emissions
Our main direct CO2
mainly natural gas in our operations. The vast majority of
natural gas consumption is used for heating our buildings
and the humidification of our cleanrooms.
emissions come from fossil fuels –
1. Reducing energy consumption
2. Using renewable energy
3. Compensating CO2 emissions
Scope 2 emissions
Our targets
Purchased electricity accounts for 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.
Our target is to achieve net zero scope 1 and 2
emissions by 2025. This target is consistent with
reductions required to keep global warming to 1.5°C and
is approved by the SBTi – under the ‘near-term’
category.
Scope 1 emissions
Our gross scope 1 emissions decreased from 19.3 kt in
2021 to 17.3 kt in 2022, despite our sales growing by
13.8%.
Scope 2 emissions
In 2022, our indirect emissions from energy consumption
were 20.8 kt (20.1 kt in 2021). We report market-based
emissions after purchase of energy attribute certificates
(EACs). ASML currently does not offset any of the
remaining emissions, resulting in no differences between
our gross and net emissions.
Our electricity consumption has increased compared
with 2021, along with our scope 2 emissions. The share
of renewable electricity decreased slightly to 91% from
92% in 2021 due to higher electricity consumption in
Taiwan (where we are currently not yet buying renewable
electricity).
One of the most important challenges for us in achieving
our net zero emissions target is the procurement of
credible renewable energy in Taiwan and South Korea.
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Energy efficiency and climate action (continued)
Our actions in 2022
1. Reducing energy consumption and use of natural gas
We aim to reduce our energy consumption through
direct annual savings of 100 TJ (or 3 kt CO2e) by
executing more than 80 projects in the energy-saving
masterplan which covers each of our five large industrial
sites. The main components of this masterplan are
reducing the use of natural gas and electricity, adding
renewable production of energy on our sites, purchasing
credible renewable electricity and optimizing the use of
BREEAM (Building Research Establishment
Environmental Assessment Method) certified offices.
Out of over 80 projects, the six key projects and the
expected annual energy savings are shown below.
Energy savings are achieved mainly by using more
energy-efficient technical installations and improving our
overall production processes. Our efforts have focused
on recovery of exhaust heat and reduction of the energy
consumption of our cleanrooms, where maintaining the
right conditions is energy intensive.
One of our goals is to reduce the use of natural gas.
Based on our plans and calculations, we expect that the
use of natural gas in Veldhoven will be reduced from
around 4.4 million m3 to around 1.3 million m3 in the next
three years, driven by the energy grid in combination with
other energy-saving measures.
We have a multi-year project to implement an energy grid
to re-use waste heat from our factories in offices on our
site in Veldhoven, the Netherlands. The energy grid is a
two-pipe loop that makes waste heat available for
heating in winter and energy-efficient cooling in summer.
The table below includes six key projects that support the masterplan and will help to realize savings
between 2021 and 2025:
Key projects
Energy grid
Implement adiabatic humidification and elimination of steam
generation
Renewable energy generation (solar panels)
Onsite renewable electricity generation
(solar panels)
Replacement of chillers
HVAC energy consumption and improving (set points)
Total
Location
Veldhoven
Veldhoven
Veldhoven
San Diego
Wilton
Taiwan
Total
estimated
energy
saving –
annual
(TJ)
50
Estimated
natural gas
reduction
(TJ)
40
Estimated
electricity
reduction
(TJ)
10
12
3
8
3
3
79
12
0
0
0
0
52
0
3
8
3
3
27
As we grow as a company, we strive to optimize our
real-estate portfolio. As 95% of our scope 1 and 2
emissions are related to our buildings, optimizing the use
of every square meter in our portfolio contributes to
reducing our environmental footprint – each square
meter saved is one we do not need to heat, cool,
ventilate or light up.
When building new offices and manufacturing sites, we
seize the opportunity to make them as environmentally
sound as possible. Several of our existing buildings have
been assessed for sustainability performance using
BREEAM guidelines. We achieved a score of ‘Excellent’
for our newly built logistics center. We expect to have the
results of the assessment for the other buildings in early
2023. With an eye on future growth, our new campus in
Veldhoven is also being designed with a strong focus on
sustainability. For 2025, we strive to implement the most
suitable green building certifications in new constructions
– such as BREEAM, LEED (Leadership in Energy and
Environmental Design) and G-SEED (Green Standard for
Energy and Environmental Design) – in the countries
where we operate.
In 2022, the key projects executed in the Netherlands,
Wilton and Taiwan resulted in ~19 TJ savings:
– 2.9 TJ per year through further operationalization of the
4,846 m2 solar panels installed on our campus in
Veldhoven
– 11 TJ savings in 2022 in the Netherlands through the
completion of our largest project. This will result in
annual savings of around 11 TJ in the years ahead
– 3 TJ savings in Wilton by replacing chillers with new
high-efficiency variable-speed chillers which reduce
energy consumption
– 3 TJ savings in Hsinchu, Taiwan, by optimizing the use
of air-conditioning systems through time-outs.
2. Using renewable energy
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, we are now in the second year of a
10-year purchase agreement for green electricity for our
installations which will enable us to achieve our goal of
using 100% renewable electricity in the country. We also
achieved 100% renewable energy in the US in 2022. For
much of Asia, while our goal is to use renewable energy
whenever possible, we faced challenges in Taiwan and
South Korea procuring credible renewable energy.
3. Compensating for CO2 emissions
We aim to use renewable energy as much as possible.
Where this is not feasible, we would purchase voluntary
emission reduction certificates (VER).
Action plans for 2022-2025
We will continue our work to procure renewable energy
in Taiwan and South Korea and will make use of
offsetting as a fallback option to reach our net zero
target. We are on track and see no reason to adjust our
current targets. In the coming years, we plan to expand
the use of solar panels on our sites in EMEA, the US and
Asia.
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Energy efficiency and climate action (continued)
Energy management and carbon footprint: Supply chain, business travel and commuting (scope 3)
Our approach
Our performance in 2022
Our actions in 2022
Improving access and mobility
Our scope 3 intensity for 2022 was 1,110 tonnes CO2e
per € million gross profit (similar to 2021). Our results
indicate that the indirect scope 3 emissions from
upstream and downstream value chains account for 11.9
Mt or 99.7% of the total emissions footprint (scope 1, 2
and 3). Of this 11.9 Mt, 7.4 Mt are indirect emissions
‘downstream’ in the value chain (use of sold products at
our customers’ sites) and 4.5 Mt are ‘upstream’
emissions (mainly related to the goods and services we
buy).
We recognize that environmental impact goes beyond
our operations. In general, most of the environmental
impact in our value chain (scope 3) comes from the
greenhouse gas (GHG) emissions of our suppliers
(upstream) and the use of our products at our customers
(downstream).
Our targets
Our overall scope 3 target is to reduce the intensity level
(in line with our SBTi commitment) to 1,016 tons CO2e
per € million gross profit, by 2025. This represents a
35.3% intensity reduction by 2025 compared with 2019.
The intensity is measured by the total scope 3 emissions
(in tonnes CO2e) normalized to the total gross profit (in €,
millions).
We are working toward reducing our upstream emissions
toward net zero by 2030. An element of this target is
business travel and commuting, for which we have set a
net zero target by 2025.
We have also been looking at mobility. For example, with
more than 50% of employees at our Veldhoven campus
living less than 30 minutes away by bike, our Access &
Mobility (A&M) program is focused on developing
sustainable commuting options, and we are working with
employees to encourage, incentivize and support
changing commuting habits. We offer a mix of options,
including cycling incentives, free public transport, car-
pooling and shuttle buses, all supported by various online
apps.
Action plans for 2022-2025
We remain on track to achieve our overall scope 3 target.
Our Supplier Sustainability Program is a key enabler in
our efforts to further reduce scope 3 emissions.
Improving our scope 3 emission data quality
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 continuously seek to improve
the data quality of our scope 3 calculations. In past
years, we have reported scope 3 emission data with a
one-year lag, but in 2022 we made efforts to collect the
emissions data in a more timely manner. For 2022, we
are now able to report nine months of actual data and
three months of estimated data. In the 2023 reporting
year, we will adjust the 2022 figure reported with full-year
actual 2022 data.
The next step in improving our data quality is to include
actual supplier emissions data in our calculation for
scope 3. This will enable us to obtain more reliable scope
3 emission data, because for supplier data we currently
use the spend-based methodology for calculating
emissions. In 2022, we made progress by requesting
CO2e emission data directly from our suppliers through
our Supplier Sustainability Program. That data was not
used in the emission calculations for 2022. Recognizing
that we depend on our suppliers, we also encourage our
value chain partners to work with us to jointly reduce our
carbon footprint.
GHG emission (in kt)Intensity rate (in kt per €m gross profit)3,0803,1804,1004,5005,2005,6507,4007,400Upstream (purchased goods & services)Downstream (use of sold products)Intensity rate in kt (per €m gross profit)Baseline 201920202021202202,0004,0006,0008,00010,00012,00014,00016,0000.000.501.001.502.00
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Energy efficiency and climate action (continued)
Energy management and carbon footprint: Product use at our customers (scope 3)
Our approach
As the demand for enhanced chip functionality grows,
the complexity and energy consumption of the overall
microchip patterning process, including from our
lithography systems, is also increasing.
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. Our roadmap includes
optimizing the sequence of the CO2 laser to produce the
plasma for creating EUV light, for example by turning the
CO2 laser off when the system is in idle mode and
reducing the firing intensity of the laser between
exposures. Our longer-term goal is to eventually stop the
CO2 laser firing between exposures altogether. Following
a feasibility study from our research team and our
suppliers, we know that keeping the laser beam stable
will require corrective hardware that will be part of the
baseline configuration of the next generation (NXE:3800).
Working with our suppliers, we have also identified ways
to use cooling water of a higher temperature to remove
the heat in the EUV source and electronics cabinets. To
do this, we need to make sure that modules such as the
drive laser can operate at a higher cooling water
temperature – this project is currently in development, in
collaboration with our suppliers.
By enabling EUV optics to deal with higher intensities,
higher productivity can be achieved for the same energy
input, thereby increasing efficiency. That is why we are
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.
We recognize that tackling all these challenges requires
ongoing innovation and collaboration within our
innovation ecosystem of customers, suppliers and
knowledge institutions.
Our targets
We have set a target to reduce the overall energy
consumption of our future-generation EUV systems by
10% compared with the 2018 baseline model
(NXE:3400B) by 2025, while increasing productivity. We
have also set a target of reducing the energy
consumption per exposed wafer by 60%, compared with
the 2018 baseline (NXE:3400B).
Our actions in 2022
We have been working on making the reduction of
energy consumption an integral part of our product
generation process (PGP). When designing new
systems, reducing the use of energy is becoming an ever
more important aspect, together with cost, performance
and availability.
In 2022, we continued working on energy-efficiency
improvements for future products, which require long
lead times and take multiple years to achieve. Progress
on these projects is monitored on a quarterly basis. We
believe we are on track to achieve our targets of 10%
EUV system energy consumption reduction by 2025 and
60% reduction in energy use per exposed wafer with
NXE:4000.
In 2022, we proved the capability of the NXE:3600D
system to reach productivity targeting 175 wph (as
compared with the current specification of 160 wph). In
2023, this will be introduced to the market as the
NXE:3600 PEP-D package.
We have begun to better assess the energy efficiency of
our other product families – in DUV, metrology and
inspection, computational lithography and scanner and
process control software solutions.
Regarding our scope 3 product use initiative of net zero
emissions in 2040, we are one of the founding members
of and active contributor to the Semiconductor Climate
Consortium, founded in November 2022 and focused on
speeding up industry value chain efforts to reduce
greenhouse gas emissions.
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Energy efficiency and climate action (continued)
Action plans for 2022-2025
In 2023, we will continue to work on the energy efficiency of our systems and other product families. We are still on
track to achieve our overall scope 3 target. However, 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. At the moment, we see no reason for
adjusting our 2025 targets regarding the energy consumption of our systems.
The table below provides an overview of the system achievements in terms of output and energy-efficiency
improvements to achieve this output.
Platform1
System type
Year of energy measurement
Energy consumption (in MW)
Throughput (wph)
Energy use per exposed wafer pass (in kWh)
DUV
immersion
NXT:1980Di
2015
NXT:2000i
2017
NXT:2050i NXT:1980Ei
2021
NXT:2100i
2022
0.14 MW 0.14 MW 0.13 MW 0.14 MW 0.13 MW 0.14 MW
295
0.46 kWh
295
0.45 kWh
250
0.51 kWh
275
0.51 kWh
295
0.48 kWh
275
0.51 kWh
2020
NXT:1960Bi
+ PEP-B
2021
Platform1
DUV
Dry
YieldStar
System type
Year of energy measurement
XT:860M
2017
XT:1460
2020
NXT:1470
2020
XT:860N
2022
NXT:870
2022
YS350E
2017
YS375F
2019
YS-380
2020
Energy consumption (in MW)
0.07 MW 0.06 MW 0.11 MW 0.06 MW 0.12 MW 0.01 MW 0.01 MW 0.01 MW
Throughput (wph)
Energy use per exposed
wafer pass (in kWh)1
240
209
277
260
330
0.28 kWh 0.27 kWh 0.38 kWh 0.24 kWh 0.36 kWh
n/a
n/a
n/a
n/a
n/a
n/a
Platform1
EUV
20 mJ/cm2
dose
EUV
30 mJ/cm2 dose
System type
Year of energy measurement
Energy consumption (in MW)
Throughput (wph)
107
Energy use per exposed wafer pass (in kWh) 19.49 kWh 13.08 kWh
NXE:3350B NXE:3400B NXE:3400C NXE:3600D
2021
1.15 MW 1.40 MW 1.31 MW 1.32 MW
160
8.27 kWh
136
9.64 kWh
2015
2020
2018
59
1. Dose energy in mJ refers to the energy required per expose per cm2.
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Energy efficiency and climate action (continued)
Creating EUV light
The greatest portion of an EUV system’s energy 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 the flattened
droplet and ionizes the vaporized tin atoms 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
ensuring that this will not negatively affect other
functionalities of the EUV system, is a key challenge for
our R&D teams.
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 two exposures, or at 10 nm
with four 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.
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 pattern a certain layer of a
chip. According to a study conducted by imec, EUV
enables the number of non-lithography processing steps
for some critical layers to be reduced by up to three to
five times – and this significantly reduces production
cycle time. The fab also benefits from reduced energy
and water usage, resulting from the lower number of
deposition, etching and cleaning steps.
The increasing productivity of our EUV systems allows
more advanced and more energy-efficient microchips to
be created faster. Energy consumption of the total
patterning process per wafer will thus be lower using
EUV lithography, compared with using the complex
multi- patterning strategies required for DUV-only
patterning.
Our next-generation EUV system, 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 kept within limits. This will
effectively further limit the total energy consumption of
the patterning process per wafer.
Source: M. Garcia Bardon et al., DTCO including Sustainability: Power-
Performance-Area-Cost-Environmental score (PPACE) Analysis for
Logic Technologies, IEDM2020.
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Circular economy
Minimizing waste and maximizing resources to extract the greatest value from
the materials we use, and repurposing our products across their life cycles
Our approach
Circular economy
315 kg
Waste generated per €m
revenue (2025 target:
209 kg)
75%
Recycling rate (excluding
construction) (2025 target:
90%)
At ASML, we believe the circular economy is vital to
ensure the future success and competitiveness of the
semiconductor industry. Our commitment to a circular
economy is intended to ensure that any materials we use
can retain and generate as much value as possible for us
and for our partners in the ecosystem. Our strategy is to
eliminate waste to avoid negative impacts on the planet
and also to generate business value. We do this by
aiming to:
While continuously innovating with our products, we
work to ensure the increasingly sustainable use of
materials across our processes and value chain. Our
overarching goal is twofold: firstly, we aim to close the
learning loop on our parts performance, and secondly,
we aim to eliminate waste – whether that’s the waste of
energy or the materials we need in our operations at
every level. This approach is part of the fabric of our
company, and fully in line with our values and culture.
95%
% of systems sold in the
past 30 years still active
in the field (2025 target:
>95%)
€0.8bn
Savings from re-used parts
– Reduce waste in our operations
– Re-use parts and materials
– Refurbish mature products
Our impact on the use of materials and resources (in
weight) was identified as a new material topic in our
materiality assessment conducted in 2022 – a process to
formally manage this is currently under development.
87%
Re-use rate of parts
returned from field and
factory (2025 target 95%)
€232m
Value of scrapped parts and
packaging
6,675 t
Total waste from operations (excluding construction)
IN THIS SECTION
87 Our overall performance in 2022
88 Reduce waste in our operations
91 Re-use parts and materials
94 Refurbish mature products
95 Water management
€781 million
Savings from re-used parts
SDG target
SDG target 12.2
By 2030, achieve the
sustainable management
and efficient use of natural
resources
SDG target 12.5
By 2030, substantially
reduce waste generation
through prevention,
reduction, recycling and re-
use
How we measure
our performance
– Recycling rate
– Supplier spend
covered with
commitment to
sustainability (LOI)
– Reduction in waste
– Increase in re-use of
parts
– Decrease in scrapped
parts and packaging
– Lifetime extension of
systems still active in
the field
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Our circular economy approach
Circular economy (continued)
To execute our Circular strategy and achieve our targets,
we have defined a set of principles that guide us in our
increasing efforts to reduce waste in our operations, re-
use parts and materials from our installed base and
recycle mature products through refurbishments:
– We learn to improve our understanding and data
around resources and waste flows.
– We rethink designs and processes to avoid
environmental impact.
– We extend the lifetime and productivity of systems to
maximize resource value.
– We re-use resources within our own value chain, to
minimize our waste streams.
– We recycle materials to give resources a new life, if we
can no longer re-use those resources ourselves.
The following diagram illustrates our circular economy
approach.
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Circular economy (continued)
Our overall performance in 2022
Topic
Target 2025
Performance indicator
Circular economy
>95%
95%
No target
No target
209 kg/€m
90%
No target
% of systems sold in the past 30 years still active in the field
Re-use rate of parts returned from field and factory
Savings from re-used parts (€, in millions)1,2
Value of scrapped parts and packaging (€, in millions)2
Total waste from operations (excl. construction) normalized to revenue
Recycling rate (excl. construction)
Total waste from operations (excl. construction)3
On track or met target •
Ongoing focus area n
Progress tracking
2020
2021
2022
Status
n/a
n/a
551
n/a
360
85 %
5,026
94 %
85 %
686
269
305
77 %
5,679
95 %
87 %
781
232
315
75 %
6,675
•
•
n/a
n/a
•
n
n/a
1. This reporting indicator follows the principle of prior-year indicator ‘Value of parts re-used (in € millions): however, there has been a modification in the methodology and scope:
– For the re-used parts, the value component has been modified from 100% standard cost price to 100% standard cost price less standard reconditioning costs.
Due to the expansion in scope for this indicator, the comparative figures have been recalculated to reflect fair presentation.
2. A limited portion of data is not readily available, therefore the figures in the table are best estimates that contain some uncertainty.
3. Construction waste is excluded from the calculation of this indicator, because this waste is not resulting from the daily operations at ASML. The amount of construction waste tends to fluctuate over the years and can therefore make the trend of the indicator unclear.
For more on our performance indicators (PIs) and related results, please read:
Non-financial statements – Non-financial indicators – Circular economy.
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Circular economy (continued)
Reduce waste in our operations
Our approach
Our targets
Our performance in 2022
Understanding our waste flows
We have set two ambitious targets to reduce waste in
our operations:
– By 2025 we aim to have halved waste generation
(209 kg waste generated per €m revenue as compared
with a 2019 benchmark of 417 kg waste generated per
€m revenue).
– By 2030 we aim to send zero waste from operations to
landfill or incineration.
Managing waste from our operations is a complex issue
and relies on the availability of detailed and accurate
insights into waste streams to and from ASML. We
manage our waste through proper classification,
separation and safe disposal. Disposal is carried out by
waste vendors, in compliance with local legislation.
All our waste vendors are certified by local authorities for
waste disposal, and in our contracts we state they need
to comply with local legislation. We aim to further improve
the way in which we monitor these vendors' compliance
with local legislation. Waste data is managed through our
myEHS system, whereby information from our waste
vendors in our locations is entered into the system along
with the relevant supporting documentation (invoices).
The data entered is checked internally and by an
independent party against the supporting documentation.
In 2022, we generated 6,913 tonnes of waste from our
operations overall (including construction waste), with
75% of this being recycled (77% in 2021). After a
significant decrease in the recycling rate in 2021, the
recycling rate decreased two percentage points in 2022.
This slight decrease is largely due to the impact of
improved data on our waste streams.
Compared with 2021, the total amount of waste
increased by nearly 18% (from 5,878 tonnes in 2021 to
6,913 tonnes in 2022). This is mainly due to more people
working onsite worldwide, following the lifting of
COVID-19 measures and our production increase.
Total amount of waste (excluding construction) was
6,675, up 18% from 5,679 in 2021. Over the years
2019-2021, our waste intensity showed a downward
trend. In 2022, our waste intensity was 315 kg per €m
revenue, slightly up from 305 kg per €m revenue in 2021
but still below the waste intensity pre-COVID-19 waste
intensity (417 kg per €m revenue in 2019, 360 kg per €m
revenue in 2020). However, to achieve our target of 209
kg per €m revenue, we need to scale up our efforts to
reduce our waste streams in absolute terms and improve
our recycling rate.
Our waste from operations to landfill or incineration was
25% of the total waste from operations (compared with
2021: 23%). We need to redouble our efforts in order to
reach our ambitious target of zero waste from operations
to landfill or incineration.
The reduction of our waste is explained below in more
detail, via the different waste streams.
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, resulting from
building activities.
– Hazardous waste, such as the chemicals we use in our
manufacturing processes.
Distribution of waste streams
(total: 6,913 tonnes)
Non-hazardous waste recycling
Non-hazardous waste disposed
Hazardous waste recycling
Hazardous waste disposed
71 %
24 %
4 %
1 %
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Circular economy (continued)
Our non-hazardous waste performance in 2022
Non-hazardous waste accounted for 95% (2021: 93%
(5,483 tonnes)) of our total waste in 2022, of which the
vast majority was recycled (75%).
Distribution of non-hazardous waste
(total: 6,533 tonnes)
Our hazardous waste performance in 2022
The production and operation of our products and
systems requires the use of hazardous substances.
Hazardous waste can include lamps, batteries,
hazardous liquids, empty packaging from hazardous
materials, and cleaning wipes and filters. Liquids,
including acetone and sulfuric acid, comprise the majority
of our hazardous waste streams.
The use of hazardous substances means that we are
subject to a variety of governmental regulations relating
to environmental protection as well as employee and
product health and safety. These include the transport,
use, storage, discharge, handling, emission, generation
and disposal of hazardous substances.
In 2022, hazardous waste accounted for 5% (380
tonnes) of our total waste generated, compared with 7%
(395 tonnes) in 2021. Of this, 81% was recycled.
Distribution of hazardous waste
(total: 380 tonnes)
Hazardous liquids
91 %
Other hazardous waste (e.g. packaging, filters, lamps, etc.)
6 %
Cleaning wipes
Batteries
2 %
1 %
95%
of our total waste in 2022 was
non-hazardous waste
Wood
General waste
Paper and cardboard
Electronics
Metals
Other non-hazardous waste
Plastic
Organic waste
Construction waste
31 %
24 %
13 %
6 %
7 %
5 %
5 %
5 %
4 %
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Circular economy (continued)
Our actions in 2022
Non-hazardous waste
We worked to reduce non-hazardous waste through
several ongoing programs, such as:
– Cross-sector re-use program, which added €400
million of re-usable parts value in our circular flows in
2022. We plan to add a further €450 million in 2023.
– Circular IT life cycle: After four years of use, we give all
functioning computers and laptops used in our
organization 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.
– 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 setup are re-
usable, with a lifespan of more than 30 years.
– Construction waste: As we expand our operations, we
try to make sure that waste from ASML’s construction
activities are recycled wherever possible. Construction
waste accounted for 3% (238 tonnes) of our total
waste generated in 2022 (compared with 3% in 2021),
of which 67% was recycled. In our real-estate portfolio
management, we apply BREEAM standards that
emphasize sustainability through the circular use of
materials.
– In Wilton, local teams in cooperation with suppliers and
waste vendors initiated a recycling program whereby
personal protective equipment (for example gloves, hair
nets, face masks, etc.) are now recycled instead of
being disposed of.
Improving data on our hazardous and
non-hazardous waste streams
In 2022, we made adjustments to our waste stream
figures in Taiwan, as formal reporting was not in line with
our own definition of waste streams. This has led to a
decrease in our 2022 overall recycling rate (75%, from
77% in 2021).
We improved the accuracy of our waste reporting by
increasing actual measurements of the amounts of waste
in our main production site in Veldhoven. We are also
investigating ways to improve data quality in our sites in
the US and Asia.
In the context of improving data, in 2023 we aim to
include ASML waste generated by third-party
warehouses as a first step toward including downstream
waste – we are already preparing the required processes
to enable the relevant data collection for this. On our
campuses we aim to ensure maximum waste separation
onsite (in order for waste vendors to more easily recycle)
and we are working on getting agreements included in
contracts with waste vendors to maximize recycling.
Action plans for 2022-2025
Despite our many waste reduction and/or increasing
recycling rate initiatives, we are still not on track to
achieve our waste recycling goals. This is mainly due to
data improvement processes and more reporting
locations compared with 2020. In order to achieve our
goals, we are currently investigating the impact of our
waste on the environment, cooperating with suppliers
and waste vendors, and ensuring that new contracts
with waste vendors include sustainability requirements.
We currently see no reason to adjust our targets.
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Circular economy (continued)
Re-use parts and materials
Our approach
Our performance in 2022
In 2022, our re-use rate of defective parts was 87%
(85% in 2021). Our savings from re-used parts amounted
to €781 million and the value of scrapped parts and
packaging was €232 million.
We are committed to re-using system parts, packaging
and tools in our value chain to reduce and prevent waste
while also reducing costs. We believe that re-use is a
learning opportunity: by re-using, we learn more about
the performance of parts and how existing processes
affect them. By implementing those learnings in design
and processes, we can then improve parts and system
performance for all of us in the value chain. It is important
that we continue to work closely on this with our
customers and suppliers.
Our targets
Our overall target is to increase our rate of re-use of
defective parts in ASML factories and in the field to 95%
by 2025.
To achieve our ambition, we focus on:
– Design for re-use by focusing on more robust and
repairable designs at an early stage of development
– Return of transportation packaging and materials for
shipments to our customers, for re-use
– 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, also to use in new build
systems
– Harvesting of end-of-life parts through disassembly to
re-use subcomponents
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Circular economy (continued)
Our actions in 2022
Design for re-use
In 2022, we continued to further integrate re-use into our
existing design methodologies and tools, such as in our
Product Generation Process (PGP). This key element of
preventing waste will help us meet our long-term goals.
Re-use requirements are now part of the core product
design strategy and specifications. For example, through
the modular design of our products and their
components, we make sure that future upgrades, worn
parts and components can be replaced as a single unit.
By ensuring commonality in the parts design process, a
part can be used in multiple contexts in a product and
even in future product generations.
Managing reverse flows for re-use
In 2022, we set up a dedicated reverse logistics team to
drive waste reduction in our ‘reverse flows’ – materials
coming back to us or to our suppliers both from the field
and from the factory. The goal of this team is to help
support our drive to re-use, reduce reverse logistics and
repair lead times, and increase the overall re-use rate.
We are continuing to work to resolve bottlenecks in the
execution of re-use and to clarify direction, guidelines
and re-use rules across the business.
Return for re-use of transportation materials
Local repair centers
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 plug materials – to
ensure that the products arrive safely. Instead of being
thrown away, these are re-used. Before these parts are
returned for re-use, they undergo an identification
process and quality check, followed by the logistical and
financial processes required to bring them back in the
supply chain (either to the original module suppliers or to
ASML). Our goal is to standardize these processes and
create a network-related solution to enable high flexibility
and reduce transport, which also reduces our CO2e
footprint.
We are improving the re-use of packaging, locking and
transport materials from the field and factory, and aim to
return and re-use 80% or more in the next installation or
relocation.
We are extending the number of local repair centers for
refurbishing, repairing or cleaning service parts,
packaging and tools, and we are setting up global repair
centers for factory materials. The value handled by our
local repair centers increased fourfold in 2022, and we
expect it will increase three times again in 2023. Our goal
for 2025 is that 10% of our parts sent to the field should
be repaired locally.
Currently we have local repair centers in South Korea
and China, and we are rolling out plans for all our
customer regions to eventually have one or more in
place. A global repair center has been opened in Linkou
and additional global repair centers will be established at
each of our factory hubs in Wilton and San Diego (US)
and Veldhoven (the Netherlands).
Our repair centers partner with local material suppliers
and specialized repair partners, creating a local
ecosystem. By enabling repair and re-use activities and
taking ownership of repairs in the field close to our
customers, we are able to reduce logistics time, the
costs of stocking parts and our environmental impact (by
reducing scrap and waste and greenhouse gas
emissions). Our customers benefit from reduced service
costs and improved material availability.
A single quality standard for both new and
re-used parts
When a part is re-used, our customers expect it to be as
good as, or better than, the original new part. We have a
single qualification standard and requirement in place
that ensures that the same specifications, performance
requirements, warranties, and so on, are applicable to
both new and re-used parts. We expect our suppliers to
be fully engaged in meeting this standard as well.
87%
Re-use rate of defective
parts in 2022
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Circular economy (continued)
Our achievements on re-use in 2022
We have streamlined our scrap approval process. Firstly,
every e-scrap request is accompanied by a proposal
from the re-use team outlining which parts are still re-
usable, to be assessed by the initiator before the request
is approved. Secondly, an automated validation step
makes sure the right follow- up actions are in place,
which reduces the lead time in the scrap process. We
have already implemented this process in Veldhoven and
are creating a roll-out plan for other locations.
Re-use is recognized as a key contributor in our ability to
ramp up our capacity to cope with strong customer
demand. By retrieving parts from inventory or through
repair or harvesting, we have been able to execute a
large amount of extra module build starts in our work
centers, which in turn helps accelerate our efforts to
embed re-use across our company.
For example, in 2022, we successfully demonstrated that
our external interface module (EIM), built by our supplier
Lamers (part of Aalberts Advanced Mechatronics) in the
Netherlands, can be remanufactured, requalified and
used again in a newly built system with as good as new
or better than new quality. EIMs are used for regulating
the flow or pressure of the gas supply into our
TWINSCAN XT and NXT systems. In this case, re-use
saves around 200 kg of waste and between €40k and
€50k per EIM.
We have also created and implemented a process for re-
use of tin catch buckets, modules that are used in the
light source of our EUV systems. We retrieve them,
disassemble them and drain the tin for re-use. After that,
the cleaned module is as-new, ready for re-use in our
EUV systems.
Another pioneering re-use example is the EUV reticle
masking module (REMA) that blanks off not-used parts of
the reticle. Older versions of these modules that return
from our customers are harvested for parts that are used
to build new REMA modules. This has helped to lower
the pressure on our supply chain, secure supplier output
for these modules and reduce waste and carbon
footprint. Learnings from this project are captured and
embedded in our development way of working.
We have also started re-using electronic cabinets that we
retrieved as leftovers from system upgrades in the field
which would normally have been scrapped. A refurbished
electronic cabinet has as-new quality and can therefore
be integrated into new systems for our customers.
The Wilton EHS overseas CRE Re-use program is
another example of how re-use can deliver key benefits.
When an employee or department has a piece of
equipment or furniture that is in good condition and can
be re-used onsite, a picture of the item is placed on the
CRE Re-use Wilton SharePoint page. If an ASML
employee sees something they can use, they reach out
to CRE EHS and our technicians will deliver the item. So
instead of scrapping work benches, cabinets or
machines, we are re-using these items onsite.
We further embedded our re-use commitment by
enhancing our Supplier Sustainability Program.
Read more in:
Social - Our supply chain.
Re-use challenges and roadmap
In 2022, we continued to make good progress on re-use
and remain committed to further reducing our waste
streams. Building a re-use mindset and embedding 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.
As a next step, we have started building a dedicated
global re-use center in Veldhoven (Netherlands) that will
facilitate various repairs and harvesting activities. We
anticipate a bigger re-use inflow from a bigger installed
base. This is part of our strategy to move from re-use
activities as part of build work centers – which can be
very distracting and confusing for teams that are building
modules – to making dedicated re-use centers, which
will help us to create even more re-use output.
Action plans for 2022-2025
This year we determined our targets for 2025 in more
detail. With the action plans above, we see no reason to
adjust our 2025 target. Going forwards, we aim to also
include packaging data to our 'Savings from re-used
parts' indicator.
However, to fully embed our re-use vision, we recognize
that there are several challenges to overcome and
processes to be defined. These include:
– 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 a part’s 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 these to an overall end-to-end re-use
process flow.
– Repair engineering and processes: Part of our new
focus is creating awareness regarding design for re-
use, and defining processes around how to include re-
use in redesigns and engineering changes.
4x
the value handled by our
local repair centers in
2022
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Circular economy (continued)
Refurbish mature products
Our approach
Our performance in 2022
95% of all systems sold in the past 30 years still active in the field
Our approach is to have more than 95% of systems sold
in the past 30 years, still active in the field.
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 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 are expected to be available
through at least 2030 and beyond.
For the TWINSCAN AT systems that are still in operation,
we focus on measures to proactively manage their end of
life. We do this by guaranteeing the availability of spare
parts as long as possible on a best-effort basis.
Our Mature Products and Services (MPS) business
focuses on the refurbishment of the following product
families: PAS 5500 (with around 1,800 systems at
customer sites worldwide), TWINSCAN XT systems and,
as of 2021, NXT:1950-1980 systems. By the end of
2022, we had refurbished and resold well over 540
lithography systems. Some 95% of systems sold in the
past 30 years are still active in the field, and we have a
target to achieve more than 95% by 2025. We are on
track to meet this target.
Our actions in 2022
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 finding an alternative with the same
form, fit and function. In instances where 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 PAS systems, we use this
information to update our priorities for redesigning parts.
For TWINSCAN AT systems, we aim 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
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 been faster than in any
other field.
Action plans for 2022-2025
No additional actions, as we are on track to meet our
target of 95%.
cumulative # of systems soldInstalled baseRetired systems1987199219972002200720122017202205001,0001,5002,0002,5003,0003,5004,0004,5005,0005,5006,000
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Circular economy (continued)
Water management
Water management
Semiconductor manufacturing processes use a great
deal 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 processes, water use in our own
operations is limited. ASML’s products use water mainly
in three ways. First, water is used to remove heat loads,
to keep the system on a constant temperature. These
internal cooling circuits are all designed as ‘closed-
loop’ (recycling) systems. Second, these heat loads are
ultimately removed by cooling towers, using evaporation
of (lower-quality) water. Third, DUV systems use ultrapure
water in the immersion hood – this water is currently only
partially recycled.
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 2022 increased to 1,161,850
cubic meters, up from 1,041,000 cubic meters in 2021.
This increase can primarily be attributed to more cooling
water being used in Veldhoven due to higher power
consumption, driven by an increase in the number of
systems produced and warmer weather in 2022. In
addition, more people were working in the office and
factory compared with 2021. In San Diego, the HVAC
cooling tower water cleanliness set point was modified,
resulting in an increased automated flushing of the
system.
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 located in Veldhoven (Netherlands), San Diego (US),
Wilton (US), Linkou (Taiwan) and Tainan (Taiwan).
Read more in:
Our TCFD Recommendations – Climate-related disclosure,
available on www.asml.com.
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Social at a glance
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.
What we do
Attractive workplace for all
As a multinational technology company, we impact
many people’s lives, both directly and indirectly. We
want to have a positive role in society – for our
employees, our supply chain, everyone involved in our
innovation ecosystem and the communities around
us.
SDG 4 and 8
Ensure inclusive and equitable quality
education and promote lifelong learning
opportunities for all/Promote sustained,
inclusive and sustainable economic
growth, full and productive employment
and decent work for all
Read more on page 97 >
– Inspiring a unified culture
– Best employee experience
– Enabling strong leadership
– Ensuring employee safety
Our aims
We work closely with our stakeholders, collaborating
to achieve the ambitions of our four focus areas.
Our goal is to ensure that responsible growth benefits
everyone. To maintain our fast pace of innovation and
ensure our long-term success as a company, we
need to attract and retain the best talent and provide
the best possible employee experience. We aim to be
a valued and trusted partner, improving the quality of
life for all and supporting people in disadvantaged
communities.
Through our focus areas, we support five different
SDGs in a range of ways.
Our supply chain
Read more on page 109 >
SDG 8 and 12
Promote sustained, inclusive and
sustainable economic growth, full and
productive employment and decent work
for all/Ensure sustainable consumption
and production patterns
– Supplier performance and risk management
– Responsible supply chain
Innovation ecosystem
Read more on page 118 >
SDG 9
Build resilient infrastructure, promote
inclusive and sustainable industrialization
and foster innovation
– Partnerships for research and development
– Supporting startups and scaleups
Valued partner in our communities
Read more on page 124 >
SDG 4 and 11
Ensure inclusive and equitable quality
education and promote lifelong learning
opportunities for all/Make cities and
human settlements inclusive, safe,
resilient and sustainable
– Education
– Arts & culture
– Local outreach
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Attractive workplace for all
Empowering individuals for the collective good to ensure our employees are proud to work for us and
engaged with our ambitions as a company.
6.0%
Attrition rate
(2025 target: <7%)
37,643
Total employees (FTE)1
EMEA 21,267
Asia 8,871
US 7,505
78% (-4%)
Employee engagement score
against benchmark
(2025 target -2% vs. top 25%
performing companies)
24%
Gender diversity (%
females’ inflow)
(2024 target: 23%)
143
Nationalities
IN THIS SECTION
98 Our overall performance in 2022
99
Inspiring a unified culture
101 Best employee experience
106 Enabling strong leadership
107 Ensuring employee safety
Our approach
Our engaged, diverse and highly skilled employees are
critical to the performance of our organization and our
long-term success as a company. We work hard to
attract the world’s top talent and focus on helping them
reach their full potential.
ASML’s people vision sets out our ambition for the
future, supporting our values and what we stand for: We
empower each other to thrive, fueling our growth,
happiness and business success.
Everyone throughout the organization has an important
role in this vision, but we need an environment and tools
that support collaboration, knowledge sharing and
autonomy in more diverse and interdependent teams.
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 talent.
To deliver on our long-term people vision, we focus on
three key areas:
– Inspiring a unified culture;
– Providing the best possible employee experience; and
– Enabling our leadership to bring out the best in our people.
Across the business, we drive various programs that
provide our people with more autonomy in steering their
development and career aspirations in a safe
environment, while enabling our leaders to support the
growth of the company.
Our approach to foster an attractive workplace for all is
set out in the following pages.
1. This FTE number excludes Berliner Glas (ASML Berlin GmbH).
Attractive workplace for all
SDG target
How we measure our performance
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 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
– Employee training and development indicators
– Financial performance
– Employee engagement score
– Workforce data including diversity and inclusion
– Fair remuneration pay ratio
SDG target 8.6
By 2020, substantially reduce the proportion of youth not
in employment, education or training
– Employee attrition rate
– New hires
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
– Employee safety indicators
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Attractive workplace for all (continued)
Our overall performance in 2022
Topic
Target 2025
Performance indicator
2020
2021
2022
Status
Progress tracking
On track or met target •
Ongoing focus area n
Attractive
workplace for all
Be on par with
benchmark
target: 2% below
benchmark of top
25% performing
companies
No target
<7%
Employee engagement score
80 %
78 %
78 %
Employee growth (new hires and rate)
1,932 (8%)
4,373 (15%)
7,130 (21%)
As ASML has continued to grow strongly, we have
managed a large increase in our workforce in recent
years, benefiting from a more diverse employee base.
However, this rapid growth brings its own challenges, as
the organization becomes more complex, and the
expectations of our customers and stakeholders grow.
For more Attractive workplace for all related performance indicators
(PIs), see:
Non-financial statements – Non-financial indicators – Attractive
workplace for all.
Attrition rate
20% (in 2024)
Gender diversity – % females inflow job grade 13+
Gender diversity – % females job grade 13+
Attractiveness to talent (employer brand score)1
Recordable incident rate
Inclusion index
12% (in 2024)
NL top 10
Taiwan top 20
S Korea top 20
US top 75
China top 100
0.16 (2022)
Target is relative
to the score of
the top 25% of
performing
companies by
+/-3%) (2024)
23% (in 2024)
Inflow % female
No target
Total employees
•
n/a
•
•
•
n
n
•
•
n/a
3.8
n/a
n/a
5.4
12%
8%
6.0
35%
10%
NL 10
Taiwan 22
S Korea 24
US3 177
China 168
0.18
NL 6
Taiwan 6
S Korea2 14
US3 177
China 148
0.17
NL 4
Taiwan 6
S Korea n/a
US 159
China 188
0.18
73 %
83 %
85 %
23 %
21 %
24%
Total 26,481
Male 83%
Female 17%
Asia 6,057
EMEA 14,714
US 5,710
Total 30,842
Male 82%
Female 18%
Asia 7,430
EMEA 17,230
US 6,182
Total 37,643
Male 80%
Female 19%
Unknown 1%
Asia 8,871
EMEA 21,267
US 7,505
No target
Number of nationalities
120
122
143
n/a
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.
3. The methodology for the US was changed, which results in a restatement for 2020/2021, so the comparative figures have been revised based on the overall brand ranking. This results in an increased score of 177 versus the previously published rankings of 99 in 2020 and 133 in 2021.
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Attractive workplace for all (continued)
Inspiring a unified culture
Our approach
We are anchoring ASML’s identity deep in the
organization, to help people embrace our values and to
provide a unified direction that enables people to
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 applies equally across the organization. They
help us make choices that keep us true to ourselves, and
allow teams to discuss natural areas of friction when they
occur. They also ensure we balance the traits that have
brought ASML this far (persistence, a ‘can do’ attitude
and a belief that anything is possible) with the right
degree of care).
Building on these core values, our six people principles
guide and inspire us in our decision-making to bring the
best out of our employees. These principles are: clarity
and accountability, continuous learning, inclusion, an
enabling environment, personal growth and trust.
We recognize that our success is driven by our unique
and diverse teams. As an equal opportunity employer,
we are cultivating a diverse and inclusive workforce to
drive innovation and accelerate creativity within our
business. We strive to maintain an environment where all
feel valued and respected and can fully contribute. That
has helped us to build a culturally diverse organization,
with our employees representing 143 different
nationalities. Even with this wide range of diverse talent
on our team, we still have opportunities to be more
inclusive. Our goal is for our workforce to be
representative of the available qualified talent pool.
Our Global Diversity & Inclusion Council, founded in
2021, 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 leads company-wide
accountability for our goals. We also have a global
diversity and inclusion team, including a Chief Diversity
Officer, who is responsible for driving initiatives that are
related to diversity and inclusion across ASML.
Our diversity and inclusion roadmap is integrated in our
people strategy and focuses on three key areas within
ASML: leadership, culture and talent. These pillars
strengthen our connection with ASML’s wider
community. Through activities centered around talent,
culture and leadership, we engage with our communities
in a sustainable, mutually beneficial way that
demonstrates our care and commitment to diversity and
inclusion.
We know it’s important to nurture the connection
between employees’ expectations and perspectives with
the global D&I strategy. ASML employee networks –
such as Atypical for neurodivergent employees and
Proud for the LGBTQIA+ community – play an important
role in this, and we encourage participation from
everyone.
Our Diversity and Inclusion Strategy
Our roadmap focuses on three key areas:
Talent
Attract and retain employees by
ensuring that they are valued,
supported with feedback and
can grow their careers
Leadership
Enabling our leaders to
demonstrate commitment,
accountability and role-model
behavior to advance
inclusion within their teams
Culture
Cultivate and promote an
inclusive culture that equips
employees to challenge norms
and increase collaboration
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Attractive workplace for all (continued)
Our targets
We must hold ourselves accountable in our efforts to
grow an inclusive workplace which drives innovation and
creativity. Therefore, we have set a number of targets
which will allow us to measure the effectiveness of our
approach. These targets are:
– Reach 23% women new hires by 2024
– Reach 12% women at leadership levels by 2024
– Reach 20% inflow of women to leadership levels by 2024
– Score on par +/- 3 percentage points with the top 25%
of top-performing global companies on our inclusion
employee survey score in 2024. Our goal is to meet or
increase this level of inclusion on an ongoing basis.
More information about the diversity of our Supervisory Board and
Board of Management can be found in:
Corporate Governance - Other Board-related matters - Diversity.
Our performance in 2022
In 2022, we made progress in gender diversity at all
levels, including individual contributors and senior
leaders. Female employees now make up 19% of our
workforce worldwide, an improvement of one percentage
point compared with last year. We aim to continue this
upward trend as we move toward 2024.
To do this, we are focusing on the growth of our existing
team members and expanding the diversity of our talent
pool. In 2022, 24% of new hires were female.
The current representation of women at leadership level is
10%, while our ambition is to reach 12% by 2024. To make
this tangible, we have set a goal to increase the hiring and
promotion of female leaders, from 12% in 2021 to 20% in
2024. In 2022, the % inflow of female leaders was 35%.
This talented pool of female employees will be 'role models',
paving a path for more to follow. We believe that promoting
more diversity in our workforce will help us to attract and
retain smart, talented people, enabling us to drive
technological innovations that meet our customers’ needs.
Overall, the global STEM (science, technology,
engineering and math) talent pool is thinly populated, and
it is even more challenging to recruit female talent. Our
R&D workforce is 16% female. Nearly 90% of our job
positions are STEM-related, whereas peers in the high-
tech industry have more 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@ASML, our internal employee survey, measures
inclusion levels each year. In 2022, our inclusion score
was 85%, 1 percentage point above the benchmark of
top-performing global companies. Our goal is to meet or
increase this level of inclusion among our employees on
an ongoing basis.
Our actions in 2022
To promote diversity and inclusion in our workforce, we
are building and implementing programs that lead to
measurable and actionable results. During 2022, we:
– Facilitated over 20 D&I internal training sessions for
approximately 1,000 employees, managers and
leaders globally, both virtually and in person.
– Worked toward broadening our talent pipeline to be more
diverse and inclusive in all areas of demographics, and
having an employee base that is representative of the
available qualified workforce. To help achieve this goal, we
participated in national engineering conferences in the US
such as the National Society of Black Engineers (NSBE),
Society of Hispanic Professional Engineers (SHPE), Out in
Science Technology Engineering, and Mathematics
(oSTEM), and Society of Women Engineers (SWE).
– Collaborated with universities and organizations
dedicated to building diversity and creating
opportunities for professional development and
engagement. New global partners include Out & Equal
Workplace Advocates and Disability:IN.
– Actively engaged with multiple educational programs to
grow the talent pipeline, deploying multiple initiatives to
promote STEM education among the future female
talent pool.
– Executed global D&I engagement activities, such as
International Women’s Day, LGBTQIA+ Pride Month
and Global Diversity Month.
– Held nine D&I events with keynote speakers which were
held alongside observances such as Black History Month,
Pride Month, Juneteenth, Hispanic Heritage Month and
Global Diversity Awareness Month, each with an average
live attendance of 460 employees.
– Supported employee networks giving back locally in their
community through mentoring programs such as
American Corporate Partners, partnering with local Pride
organizations, fundraising events, and donating goods.
Action plans for 2022-2025
In 2022, we had a strong performance with a 24%
female inflow. Due to this result and recognizing that we
want to continue this ambitious inflow, we have defined a
2025 target of 24% (which is at the same level as our
2022 performance, but higher than the original 2024
target of 23%).
24%
of our new hires were women in 2022
85%
2022 inclusion score
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Attractive workplace for all (continued)
Best employee experience
Our approach
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 – this 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.
Likewise, 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 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 recognize that top-tier talent select their employer of
choice, not the other way around. In light of this general
trend for employees to choose their future employer, it is
important that a potential employer has a strong value
proposition.
Within the recruitment funnel, we continuously seek to
raise awareness, consideration and conversion to jobs.
We aim to improve and professionalize how we attempt
to achieve this by understanding our target audiences
and their preferences in an employer. We use this
information to improve our candidate experience and
drive communications, programs and campaigns which
enable our talent acquisition teams to hire top talent with
speed.
Onboarding and developing our people
Once our people are on board, it’s vital to strengthen and
continuously invest in them to anticipate evolving
business requirements and developments in the labor
market. We empower our employees to take
responsibility for their own personal development, pursue
their career ambitions and to thrive, offering tailor-made
training and development programs.
Supporting careers at ASML
We are always looking for ways to improve how we can
help employees identify opportunities for professional
development within ASML. We offer a wide range of
career paths and have various tools in place to support
our employees’ career navigation.
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. This annual survey is a crucial tool for
collecting and measuring employee feedback. It provides
insights that enable us to improve the employee experience
and refine our policies and processes.
To measure the degree to which our values are
embedded in the organization, the survey also includes
questions about our culture and values that go beyond
the ‘what’ to the ‘how’.
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.
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Attractive workplace for all (continued)
Working practices and remuneration
Remote working
Well-being
We want to provide fair labor conditions and social
protection for all our employees, regardless of their
location and whether they are on fixed or temporary
contracts. 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 have no indication that we operate in countries where
the freedom of association and collective bargaining for
ASML employees is restricted. We strive to comply with
the relevant legislations in every country where we
operate. In those countries where we have employee
representation, we engage in regular dialogue with the
different organizations representing our employees. In
these conversations, topics are put forward and
discussed by both the company and the employee
representatives. The working conditions and terms of
employment of employees not directly covered by
collective bargaining agreements are influenced or
determined based on other collective bargaining
agreements, labor market developments and usage and
habits in the specific country.
When it comes to remuneration, our approach is 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 with the market benchmark for
technology professionals in each region where we
operate and, where necessary, make changes to our
remuneration policies and levels.
Following the pandemic, we recognize that patterns of
work have changed, and we want to continue to have a
positive impact on the well-being, productivity and work
– life balance of our people. We aim to provide ASML
employees and their managers with clear guidance and
help them 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 remotely up to two
working days per week if the job allows. There may be
exceptions for certain jobs or departments.
Fundamentally, ASML is convinced that employees
themselves can best manage their own work. At the
same time, managers are responsible for efficiently
organizing the way the team and the company is
working. This means that employees and managers have
joint responsibility for the choices to be made under our
Remote Working Policy.
Care is central to who we are at ASML. In terms of well-
being, this means ensuring we support our employees in
maintaining a healthy, productive and balanced life. After all,
we only thrive as an organization when everyone can give
their best. In a time of unprecedented demand, it is even
more important to take care of each other and ensure the
well-being of all our colleagues. This means building and
maintaining an environment where we can work together
with positive energy. Our well-being framework brings
together all our well-being activities but also allows us to
drive our initiatives region by region to meet local needs.
Within ASML, we look at well-being from a holistic
perspective and we strive to integrate well-being into
everyone’s day-to-day work. We have identified four well-
being dimensions – mental, physical, social and financial
well-being – and have defined and created our programs,
tools and resources accordingly. We also have specific
resources and initiatives in place for teams and managers to
get the right conversations going.
Our offerings include general support for employees,
training and masterclasses, well-being events, and
physical and mental health checks. In Veldhoven we
have a dedicated health & well-being center that provides
several health & well-being employee services including
an in-house physiotherapist, psychologist, career center,
indoor gym, yoga room and a running track. We currently
have more than 165 well-being ambassadors globally,
and the network is still expanding, helping us to spread
well-being across our global organization.
We support our employees
in maintaining a healthy,
productive and balanced life.
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Attractive workplace for all (continued)
Our targets
Employer brand
We measure our employer brand for the main locations
where we operate – the Netherlands, the US, China,
Taiwan and South Korea. We measure 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 our ranking in the different
local labor markets by 2025 – the Netherlands top 10,
the US top 75, China top 100, Taiwan top 20 and South
Korea top 20.
Employee engagement
We want to compare ourselves and grow toward the top
performer category. Our target for 2025 is to be within a
2% range of the top 25% performing companies
benchmark for our employee engagement survey.
Retention
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 rate of 3-8%
for 2022 and for an attrition rate below 7% in the future.
Our performance in 2022
We hired 7,130 new payroll employees in 2022, compared
with 4,373 in 2021, growing our workforce to 37,643 full-
time employees (FTEs) at the year end (with a new hires rate
of 21%, up from 15% last year). In addition, we employ
1,443 FTEs in our ASML Berlin entity, which is not fully
integrated yet in our reporting, which increases our total
workforce to 39,086 FTE. Our workforce has more than
doubled since the end of 2015.
Employer brand
During 2022, we were ranked #4 in the Netherlands, #6
in Taiwan, #159 in the US, #188 in China with ranking
unavailable in South Korea.
We continue to create greater understanding of what we do
and what we stand for as an employer. In 2022, we saw
significant improvement in the Netherlands, our
headquarters, by moving up two points into the top five of
most attractive employers for students and top 10 for
professionals. In Taiwan, we also increased awareness and
consideration among students and professionals, especially
within our engineering/IT target group. In the Netherlands
and Taiwan, we significantly increased awareness among
women in this group. In China, we are still struggling to
position ourselves, as this remains an extremely competitive
and fragmented market for top-tier talent. We are currently
known in 81% of the country among our target group for
students, but are not yet considered an employer of choice.
Similar to China, the US is a fragmented market in which it is
extremely difficult to reach everyone. We therefore focus our
employer-branding efforts on targeting specific states where
we operate and specific target groups. In order to have a
consistent method to measure our employer brand, we use
the Universum research data in those markets.
Unfortunately, Universum stopped providing their services in
South Korea from 2021. Therefore, we are not able to obtain
comparable data. However, according to a local survey,
ASML was recognized as the top ideal employer among the
semiconductor equipment companies operating in South
Korea. We are also certificated as the 'Best Employer' by the
South Korean government.
Employee engagement
In our 2022 we@ASML employee engagement survey,
we again saw good results and a high participation rate
of 84% (in line with previous years) and received valuable
feedback for improvement. The engagement survey
score was 78% in 2022, in line with 2021 – 4 percentage
points above our external global benchmark of 74%,
which decreased by 2% from 2021.
Against the benchmark of the top 25% performing
companies, our 2022 engagement score was four
percentage points lower. Our target for 2025 is to be
within a 2% range of the top performing companies
benchmark, and therefore we have more work to do in
enhancing our engagement score. Overall, we conclude
that ASML has a highly engaged population. People are
proud to work for ASML and would recommend ASML
to others.
We improved in nine out of the 15 categories in the
survey versus last year and only saw a slight decrease
from the 2021 score in two categories related to intention
to stay and quality. These two categories scored above
the global benchmark in 2022.
7,130
New payroll employees in 2022 (4,373 in 2021)
21%
Rate of new hires in 2022 (15% in 2021)
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Attractive workplace for all (continued)
We have seen improvement on all key action topics
compared to 2021: clarity of expectations, enabling
processes, cross-team collaboration and well-being.
Even though we have made good progress, there is still
work to do, as these topics are still behind the external
benchmark with the exception of well-being, which is 6%
above the external norm.
We introduced ESG as a new theme in the 2022 survey
in order to set a baseline for our step-up in internal ESG
engagement. 74% of our employees are proud of our
efforts to have a positive impact on the world, but only
39% indicated that they have the opportunity to
contribute to ESG, which is significantly below the
external benchmark. We therefore plan to improve
awareness and opportunities for employees to contribute
to ESG Sustainability efforts.
Our workforce trend1
Retention
Our actions in 2022
With an overall attrition rate in 2022 of 6.0%, up from
5.4% in 2021, we are well within our target range and
below the industry average in every country in which we
operate. We attribute the increase to the effects of the
global shortage of employees across many industries,
and a booming semiconductor industry that is providing
plenty of job opportunities. Nevertheless, we believe that
our efforts to create a unique employee experience, our
employee engagement programs and our onboarding of
new employees are paying off.
Onboarding and developing our people
With our fast-growing global workforce, a positive
onboarding experience is vital to building a sense of
connection, and helping employees fit in quickly. We
measure the quality of this onboarding experience
through pulse surveys and, on average, 87% of new
hires indicated that they had a positive experience in
2022, with good support from their managers.
Attracting and retaining the best talent
In 2022, travel restrictions were lifted and we were again
able to engage in a personal way with students and
professionals in our countries, both in person and
virtually. There was an increasing focus on living the
brand from the inside out, by asking our employees to
share their stories on why they join and stay, and
supporting these ambassadors in sharing their stories
with their networks. This credible way of messaging
helps us to target talent within earned media and drive
awareness and referrals – a high-quality source of hires.
We continue to research the expectations of our key
target audiences in order to match them with who we are
as an employer. A big challenge is understanding how
expectations have changed since the pandemic,
especially in areas such as hybrid working and work – life
balance. We recognize that potential employees have a
choice, and in the highly competitive global labor market
we are challenged to differentiate ourselves even more in
the coming years, while retaining the unique culture and
values that have helped us get to where we are today.
We launched the ASML Academy to ensure our people
have the right knowledge and expertise to maintain our
technological leadership and the pace of innovation our
industry demands. The Academy unites all learning and
knowledge management within ASML, enabling our
people to easily access the knowledge, skills and
expertise they need to perform well in their roles. The
launch of our new Learning eXperience Platform (LXP)
further enables our people to drive their own
development and learn from each other, and intuitively
connects them to best-in-class learning content from
ASML and external learning content providers.
Overall, we aim to provide the best possible employee
experience by ensuring that learning and knowledge
management takes place on the job, guided by the
70-20-10 approach for learning: 70% on-the-job
learning, 20% coaching and 10% training courses.
1. The 2020 to 2022 FTEs in the chart above do not include the FTEs acquired through the acquisition of Berliner Glas (ASML Berlin GmbH).
87% of new hires indicated that they had a positive
onboarding experience in 2022, with good support from
their managers.
Employees (FTE)Attrition rate %16,21920,04423,21925,08228,74734,7192,9973,2031,6811,3992,0952,92419,21623,24724,90026,48130,84237,643Payroll employees (FTE)Temporary employees (FTE)Total (FTE)Attrition rate %20172018201920202021202205,00010,00015,00020,00025,00030,00035,00040,00045,000012345678910
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Attractive workplace for all (continued)
Supporting careers at ASML
We have reviewed our whole performance management
approach and philosophy to align it better with our
culture and values. We worked hard on reshaping our
performance management processes and to embedding
them in the new tooling, and this went live in January
2022. Our new ‘develop and perform’ methodology
allows for both formal and ‘natural’ moments of
connection, feedback and recognition to support
ongoing development and performance.
Fair pay for our employees
At ASML, we are committed to meeting adequate living-
wage requirements, meaning that employees earn
salaries that meet their and their families’ basic needs to
maintain an adequate standard of life in the
circumstances of each country where we operate, but
we also provide some discretionary income. Our
company has a predominantly highly educated workforce
with relatively high levels of remuneration. On average,
our salaries are significantly above local living wage.
In 2022, as part of a two-year cycle, we conducted an
analysis of how our lowest base salary compared with
the local minimum wage and local ‘living wage’ in the
countries and regions where we operate. We did not
detect any gaps.
Each year, we analyze paid salaries for gender disparity.
In 2022, as in previous years, we found no major
differences in these salaries.
Action plans for 2022-2025
From the results of the we@ASML engagement score,
priority areas have been agreed and will be worked on in
the coming year by the departments responsible, which
will define actions that address the specific situation and
needs of the department. At the moment, we see no
reason to adjust our 2025 targets.
Future ASML CLA
In the Netherlands, we continue to aim for
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 approach to 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.
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Attractive workplace for all (continued)
Enabling strong leadership
Our approach
Our actions in 2022
To remain a market leader, we must provide unified
direction based on authentic leadership that gives 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, while also
presenting a challenge 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.
In 2022, we continued deploying behavioral competencies
training, coaching programs and a practical guide to inspire
and enable personal development. We have leadership
programs that fast-track the careers of our most promising
managers, for example 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.
The impacts of these programs are most visible in
employees’ responses to our 2022 we@ASML survey,
where all four dimensions of our leadership framework
were evaluated: 81% of our employees see their
manager as a role model, 80% as a coach, 77% as a
business leader and 82% as a people leader.
As our company grows, so does the need for clarity
around roles and expectations.
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Attractive workplace for all (continued)
Ensuring employee safety
Our approach
Safety is an integral part of our daily work. More than just
a priority, it is central to everything we do. We work to
ensure we provide injury-free and healthy working
conditions for everyone on our premises by eliminating
hazards and reducing safety risks.
That 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 only by working together to
common standards can we keep each other safe.
Naturally, we follow all government guidelines and safety
measures, and where appropriate we go further.
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.
While it is impossible to completely eradicate risk, we are
working proactively at all levels to identify potential issues or
concerns in the workplace and develop measures toward
reducing them. 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.
Our ongoing ambition is zero recordable incidents, and
this drives our continuous improvement in processes,
working conditions and employee behavior. To achieve
this, we focus on an Environment, Health and Safety
(EHS) management system, safety culture and training.
We are committed to a well-established EHS
management system. We work to the highest possible
professional standards, with continuous improvement as
a key principle. Our EHS management system is based
on the ISO 45001 standard and complies with its
requirements. The EHS reporting system is assessed
against the ISO standard as part of its yearly internal
audit, although it is not certified or audited by an external
party. We have implemented our EHS management
system worldwide at our sites and customer services
locations. It covers everyone whose workplace is
controlled by ASML, including all our employees and
other workers not employed by ASML.
Our Corporate EHS Committee, chaired by our Chief
Operations Officer, oversees and approves ASML’s EHS
strategy. Our line managers are responsible for day-to-
day EHS management and performance. Our EHS
Competence Center (EHS Experts) brings together best
practices, defines the EHS standards for ASML and
supports our managers to implement these standards in
the workplace.
Our commitment to employee and product safety is
captured in our Sustainability Policy, which applies to
ASML colleagues worldwide. Our ASML EHS Guide is
also an invaluable resource, providing practical, useful
and essential information for our employees, contractors
and any other parties working for us. The guide, which
was redesigned in 2022 to create awareness and
ownership, explains our aims and objectives, and clearly
describes how employees can contribute to a safe and
healthy workplace with minimum impact on the
environment.
Incident and risk management are key elements of our
EHS management system. An incident report is required
to be completed by any ASML employee who is involved
in or observes an unsafe situation or incident.
We record and investigate all incidents and high-risk
unsafe situations to determine the root cause and take
actions to prevent them from recurring.
EHS Experts conduct regular hazard and risk evaluations,
with a focus on preventing employees’ potential exposure to
hazards such as chemicals, radiation, mechanical handling
and ergonomic risks. These provide us with further insights
into the main hazard and risk areas at ASML. We are then
able to take appropriate action to mitigate these risks. We
also ensure continuous improvement through internal EHS
audits. These are complemented by regular ‘Safety Gemba
Walks’, where managers visit the employees’ workplace,
helping to increase safety performance and strengthen our
safety culture.
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 subsequently be
identified, so the work can resume.
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 rules and to raise awareness around
these. Training ensures that our people are prepared and
informed about these safety requirements.
All new employees joining ASML are required to complete
our EHS Fundamentals (EHS basics) e-learning module –
with this training refreshed for all employees on an annual
basis. The engineers in our cleanrooms receive more
extensive training upon joining ASML and annually thereafter
through our EHS Cleanroom Fundamentals module, which
explains how to recognize hazards and prevent injuries.
We have company doctors or external health services
available on all our sites.
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Attractive workplace for all (continued)
Our targets
Our safety record
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
0.16, which represents world-class performance.
Our performance in 2022
Strengthening our safety culture
Following our first safety culture measurement in 2019, using
the Bradley maturity model, we repeated this measurement
in 2022. We launched a Safety Perception Survey early in
2022 to 25,000 employees in Operations, Development and
Engineering and our business line organizations. The
feedback was analyzed within the different sectors and rolled
up to company level, and revealed a significant growth on
the maturity curve compared with the 2019 starting point.
The implementation of life-saving rules company wide, safety
leadership programs for managers and safety awareness
campaigns throughout the company in the past three years
has paid off.
We register EHS-related incidents in line with the US
Occupational Health and Safety Act. Our recordable incident
rate increased from 0.17 in 2021 to 0.22 in 2022. Our
recordable incident rate (for our own employees) is 0.18 in
2022, higher than our 2022 desired benchmark of 0.16. The
increased rate is due to an increased number of small
injuries at our campus and in our offices compared with
2021 as more people returned to the office. The recordable
incident rate is the number of cases that required more than
first aid in a year per 100 FTE. As in previous years, we did
not encounter any ASML work-related fatalities. We reported
two injuries in which the employees were away from work for
>180 days. Regrettably, two contracted workers (in two
separate occurrences) had fatal accidents on ASML
premises in Wilton. Although they were not working under
supervision of ASML, we thoroughly investigated these
accidents together with the contracted agencies and the
local authorities to understand the root cause and take
corrective action. These incidents were formally reported to
the local authorities by the contracted companies, in line with
OSHA guidelines.
Our actions in 2022
The rapid growth of ASML presents us with significant
challenges – with a large number of new employees
every month, we have to make sure people are informed,
instructed and also supported while doing their work.
Safety extends beyond procedures, rules and the right
equipment to include human mindset, behavior, attitude
and habits. Following the five safety rules, we deployed
various department-specific awareness programs. For
example, we extended the hein® safety campaign to all
sectors to secure a common safety language and
dialogue. This was supported by workshops and training
sessions that saw many interesting discussions and
insights into our safety behaviors.
In 2022, we started separating those incidents related to
injuries from those related to ill health. We analyzed the
most common root cause for illnesses experienced by
our employees and identified that this is related to
ergonomics. Based on this finding, we developed a new
industrial ergonomics training for our employees, and this
will be rolled out in 2023 to our operations teams,
supported by ergonomic workplace assessments and
improvements where needed. We hope to see a
reduction in illness related to ergonomics in future years.
To address the high number of near-miss reports in prior
years as a result of incorrect use of lifting equipment, a
new ‘lift’ training module was introduced in 2022 for all
engineers performing lifting activities.
Action plans for 2022-2025
In response to the increased recordable incident rate in
2022 from 2021, we are deploying a global safety
awareness campaign in 2023 for all employees.
We have agreed on a new ambition to move to the next
level on the Bradley safety culture measurement maturity
curve by 2025. Improvement plans at corporate and
sector levels have been identified and will be
implemented, supported by solid management
commitment. We will continue to engage with our
partners, main suppliers and customers to align our
safety principles and processes.
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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.
Non-product-related suppliers are goods and services
suppliers, providing the products and services that
support our operations, from temporary labor to logistics,
and from cafeteria services to IT services. With around
4,200 suppliers, this group represents 84% of our total
supplier base.
Our approach
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 5,000 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 approximately 800 suppliers
and represents the highest percentage (69%) of our
procurement volume. We define around 250 of these
suppliers as ‘critical suppliers’, accounting for roughly
92% of the product-related spend. Critical suppliers
supply a unique part and/or are single sourced, those
that have switching time to an alternative supplier of over
12 weeks or suppliers who supply parts with long
production times.
Our supply chain
SDG target
How we measure
our performance
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
– Compliance with RBA
Code of Conduct
– RBA self-assessment
questionnaire completion
– Suppliers with high risk
on sustainability
elements evaluated and
follow-up agreed
– Supplier spend covered
with commitment to
sustainability (LOI)
€12.4bn 5,000
Total sourcing spend
39% Netherlands
41% EMEA (excl. NL)
13% North America
7% Asia
Total suppliers
1,600 Netherlands
750 EMEA (excl. NL)
1,300 North America
1,350 Asia
59%
% supplier spend covered by
commitment to sustainability
(LOI) (2025 target: 80%)
IN THIS SECTION
111 Our overall performance in 2022
112 Supplier performance and risk management
113 Responsible supply chain
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To drive a sustainable and resilient supply chain, we
place high importance on supplier performance
management, supply chain risk management and playing
a full part in a responsible supply chain.
We have adopted the Responsible Business Alliance
(RBA) Code of Conduct, which sets out ethical, social
and environmental standards. We expect our key
suppliers and their suppliers to acknowledge and comply
with its requirements.
Our Supplier Sustainability Program focuses on seven
building blocks – the Supplier Code of Conduct (RBA),
RBA self-assessment, responsible minerals sourcing,
reducing our carbon footprint, increasing re-use
capabilities and reducing waste, information security, and
business continuity.
We set out our approaches in these areas ('Supplier
performance and risk management' and 'Responsible
supply chain') over the following pages.
Our supply chain (continued)
We invest considerable resources in developing and
introducing new systems and system enhancements,
such as EUV lithography and e-beam metrology and
inspection. 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 have 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 involve our suppliers at the earliest possible
stage 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 our suppliers to:
1. Secure materials from their suppliers to enable the
output ramp-up for customers
2. 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
3. Drive cost reductions, quality and capability
improvements through efficient and dedicated
operations
4. 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
5. Make active contributions to our sustainability
strategy
ASML’s supply chain strategy is centered on long-term
relationships and close cooperation with our suppliers
and partners.
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Our supply chain (continued)
Our overall performance in 2022
Topic
Target 2025
Performance indicator
Our supply chain
80%
90%
100%
% supplier spend covered by commitment to sustainability (LOI)
RBA self-assessment completed (in %)
Suppliers with high risk on sustainability elements evaluated and follow-up agreed (in %)
For more supply chain performance indicators (PIs) see:
Non-financial statements – Non-financial indicators – Our supply chain.
On track or met target •
Ongoing focus area n
Progress tracking
2020
2021
2022
Status
n/a
88%
—%
n/a
89%
59%
93%
100%
100%
•
•
•
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Our supply chain (continued)
Supplier performance and risk management
Our approach
Supply chain risk management
Our performance and actions in 2022
Information security and cyber resilience program
Supplier performance management
To help us manage ASML’s growth and our future
ambitions, we continue to 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 dialog 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 the thresholds
we set and persistently fails to recover upon request and
within a reasonable time frame, ASML’s policy is to take
action to secure reliable future supplies.
A structural audit program enables us to assess supply
chain risks and identify areas of improvement to mitigate
or reduce those risks.
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. In
many instances, our sourcing strategy therefore
prescribes ‘single sourcing, dual competence’, which
requires us to proactively manage supplier performance
and risk.
In our risk management framework, we assess six risk
domains – calamity, ownership, finance, intellectual
property ownership, 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:
Risk - How we manage risk.
We conduct continuous performance and risk
management of our supply base to assuring and
improving performance, and preventing reputational
damage. Two key programs to this process: a suppliers'
business continuity program aimed at securing continuity
of supply and suppliers’ information security; and an
information security and cyber resilience program
intended to protect our intellectual property and maintain
our leading technology position.
Business continuity program
In 2022, we continued to focus on improving business
recovery capabilities, carrying out a review of business
continuity plans for reassurance that suppliers can re-
establish deliveries within the shortest possible time
frame 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 store their inventory in
separate locations, implement fire prevention controls or
increase buffer stock. In 2022, we included 235
business-critical product-related suppliers in the
business continuity program, and extended the scope
with 29 non-product-related suppliers.
We continued to expand our information security and
cyber resilience program in 2022, leading to a current
scope of 314 suppliers compared with 202 in 2021.
Additionally, a cyber-risk monitoring tool to monitor the
internet presence of suppliers has been implemented,
with 256 suppliers in scope.
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:
Governance - Responsible business - Information security.
We conduct continuous
performance and risk
management of our supply
base to assure and improve
performance, and prevent
reputational damage.
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Our supply chain (continued)
Responsible supply chain
Despite our best 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 including 3TG
supply chain complexity, the number of tiers of suppliers
involved in tracing the source and the limited number of
certified conflict-free smelters for all conflict minerals.
Obtaining correct data from our supply chain is a
challenge, but we continue to encourage our suppliers to
trace the origins of the 3TG minerals within their supply
chain in accordance with applicable conflict minerals
rules and regulations. We also request our suppliers to
report smelters who are not listed or identified on the
RBA smelters list to the RBA for audit.
For more information, please see our
Conflict Minerals report available on www.asml.com.
Our approach
We actively pursue sustainable development of our
supply chain to ensure that our Tier 1 suppliers and
contractors conduct their business in a caring and
accountable manner, and that they act as responsible
business partners. As we seek to ensure a responsible
supply chain, we deploy several programs that focus on
Responsible Business Alliance (RBA) commitments and
standards, due diligence, and our Supplier Sustainability
Program.
We are a member of the Responsible Business Alliance
(RBA) and have adopted the RBA Code of Conduct.
Read more in:
Governance - Responsible business - Business ethics and Code
of Conduct.
Due diligence
With almost 5,000 Tier 1 (direct) 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:
– Determine inherent risk level by screening our full
supplier base on ethics, labor, health and safety and
environment risk using the RBA Risk Platform.
– Apply supplier risk profiling to business-critical
suppliers. For these suppliers we conduct risk
assessment of QLTCS capability elements.
– 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.
We expect suppliers in scope for these detailed
procedures 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 its
standards. We review all RBA SAQ results, evaluate high-
risk findings (if any) and determine the severity of the
finding. It is our policy to discuss all high-risk findings
with the supplier to evaluate the risk and determine if an
improvement plan is needed.
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, increasing 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 comply with a number of
measures: to continue adhering to the latest version of
the RBA Code of Conduct; to measure and share their
CO2e emission data with ecosystem partners; to set
ambitious targets to reduce CO2e emissions; and to
collaborate with ASML and ecosystem partners to
remanufacture used system parts, tools, packaging and
other materials to maximize the re-use of materials.
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 out by the OECD Due Diligence
Guidance for Responsible Supply Chains of Minerals
from Conflict-Affected and High-Risk Areas (OECD
Guidance). As part of our responsible sourcing program,
we implement a reasonable country of origin inquiry
focusing on five areas: 1. a robust management system,
2. risk identification, 3. risk mitigation, 4. industry
collaboration with the Responsible Minerals Initiative
(RMI) organization and 5. public reporting.
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Our supply chain (continued)
Our targets
Our performance in 2022
We have set three targets to support our drive to
increase the sustainability of our supply chain:
– To have 80% of our top 60 suppliers covered with a
commitment to sustainability (via letter of intent – LOI or
providing us with their CO2e emissions data (scope 1,
scope 2 and scope 3)) by 2025
– For 90% of all suppliers in scope of the RBA self-
assessment to have completed it by 2025
– For 100% of our suppliers identified by the RBA self-
assessment as having high-risk sustainability elements
to be evaluated and follow-up action agreed by 2025
We monitor targets and commitments on a monthly
basis, tracking the progress against target and following
up with the Sourcing lead and Supplier as needed.
Total supplier base
12.4bn
Total spend
800 Product-related suppliers
4,200 Non-product-related suppliers
2025 LOI target
is 80%
% of total spend
69 %
31 %
In 2022, 59% of the total spend
was covered with the LOI
commitment to sustainability
We apply due diligence screening to the total supplier base using the
RBA Risk Assessment Platform.
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Our supply chain (continued)
ASML suppliers
5,000
Suppliers
€12.4bn
Total spend
By year end 2022, 59% of the 60 suppliers in scope had
signed the Letter of Intent, acknowledging their joint
responsibility and commitment to reducing the collective
environmental footprint – in particular the CO2e emissions
contributing to our scope 3 reduction and waste
contributing to our re-use ambitions. By the end of the
year, more than 35 suppliers had provided data on CO2e
emissions. By 2025, we aim for 80% of the top 60
suppliers to have signed the Letter of Intent.
We have asked a total of 59 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. By end 2022,
93% of the suppliers in scope had completed the RBA
SAQ (89% in 2021). The completed RBA SAQs indicated
that no supplier had overall high risk on all sustainability
elements.
Supplier base geographic split by percent spend
1,600 suppliers
750 suppliers
Netherlands
EMEA (excl. Netherlands)
39 %
1300 suppliers
1350
suppliers
41 % 13 % 7 %
North
America
Asia
Supplier Risk Profiles, created for business-critical,
strategically important suppliers
The Responsible Business Alliance (RBA) self-assessment
questionnaire completed by major suppliers*
€8.6bn
216 suppliers
represent 92%
of this spend
€8.6bn
44 suppliers
represent
71% of this
spend
€3.8bn
€3.8bn
Product-related
spend
Non-product-related
spend
Product-related
spend
Non-product-related
spend
29 suppliers
represent 23%
of this spend
15 suppliers
represent 26%
of this spend
* Major suppliers are those that account for 80% of PR spend and any business-critical NPR suppliers.
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Our supply chain (continued)
However, this process did indicate high risk on Health and Safety, Environment or Ethics standards for several suppliers. Further assessment of identified high risks revealed that the risks were related to a missing 'third-party' management
system in place. After follow-up through discussions we assessed the risk as low/medium. ASML does not require suppliers to have a formal environmental/labor management system in place. All suppliers which were followed up on
could show that they have a policy/procedure in place to ensure compliance to ethics, labor, safety and environmental requirements. More details can be found in the table below for 2020-2022.
Standard
Labor
Health and safety
Environment
Ethics
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 ILO's eight fundamental conventions
To minimize the incidence of work-related injury 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
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
2020
2021
2022
Number of high risks identified from RBA SAQ
Main findings
2022
1
0
0
1
0
0
0
0
0
1
3
1
Finding related to a non-product-related supplier where
the requirements do not entirely match the type of
organization.
Findings related to 1) a non-product-related company
where the requirements do not entirely match the type of
organization; 2) a supplier in the process of implementing
a company-wide environmental program and supplier
management and 3) a company with policies in place,
however, no environmental program and supplier
contractual requirements in place.
Finding related to no separate conflict minerals policy
and supplier program in place, but instead this supplier
has a supplier code of conduct in place.
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Our supply chain (continued)
Action plans for 2022-2025
We are on track to achieve our targets and we intend to
expand the number of suppliers with a commitment to
sustainability to include our top 100 suppliers.
We will continue to host supplier workshops every two
months in 2023.
Our actions in 2022
Engaging with suppliers
Reduction of CO2e emissions and waste
In 2022, we made significant progress in our Supplier
Sustainability Program, with the aim of joining forces with
suppliers to achieve our goal of net zero emissions by
2030. We launched this program to our top 60 suppliers,
and our goal is to gradually increase the scope over time.
We recognize that our suppliers are in different phases of
maturity with regard to CO2e emissions and waste
reduction ambitions, varying from advanced target
setting and performances to not having yet started to
measure their environmental footprint.
We also started collecting CO2e emissions data from
suppliers – more than 35 key suppliers now share their
environmental performance and commitment with us,
and we are discussing the emission reduction
opportunities together. We are also sourcing an IT tool
that suppliers can use to share their CO2e emission data
with us.
In 2022, we also resumed our onsite supplier audits for
QLTCS and business continuity. We also initiated two
pilot RBA audits during the year, and we will move to a
model where we structurally audit suppliers on RBA
compliance.
We held a number of engagement sessions with key
suppliers during the year, including a Supplier Ramp-up
Day in March and a Supplier Day in September, which
gave suppliers the opportunity to ask questions and
share mutual challenges with us. We identified action
points from these feedback sessions where possible.
Our suppliers have access to our Sourcing lead or our
Strategic Account (SAT) teams, whose job is to manage
the relationship with our suppliers. Sourcing and Supply
Chain also held workshops for suppliers specifically to
cover collaboration on CO2e emissions data, with experts
invited to introduce the program and talk through scope
1, 2 and 3 emissions. The workshops started with 15
suppliers and expanded to 80 over the year, with one
being held face-to-face at Brainport to give suppliers an
update from an ASML perspective, next steps and the
chance to brainstorm ideas. We ask suppliers to let us
know their challenges when collecting CO2e emissions
data, and we discuss possible solutions.
Suppliers have indicated that these workshops are highly
beneficial and contribute to best-practice sharing and
being able to tackle joint problems together. Topics
raised in workshops are followed up in future workshops.
To meet the continuing high demand from our
customers, we need to work closely together. Our
customers’ trust is key, while material shortages threaten
our output. Greater transparency and collaboration are
crucial to success. We face dynamic market
circumstances and these present challenges in their own
right. During the Supplier Days, ASML leaders and
suppliers spoke openly about how to overcome
challenges by improving partnerships, increasing
transparency, shortening feedback loops and embracing
re-use. In response to suppliers indicating difficulties in
understanding the demand flexibility, our team provided
more insights into why ASML is adjusting the Start Plan
when needing to ramp. Further discussions have
centered on how listening to the voice of the customer is
an essential part of understanding the market dynamics,
as well as transparency on the ASML investments in
robust growth, sustainability and improvements
regarding industrialization. ASML leaders and suppliers
agreed on the importance of highlighting and learning
from areas of collaborative success.
Our experience during 2022 has again underlined the
importance to the Supplier Sustainability Program of
achieving alignment with suppliers and of early
engagement with the supplier on RBA and conflict
minerals in order to remove time pressures. The biggest
challenge relates to collecting data – environmental data
is a new area for some suppliers, so they need to put
processes in place and develop teams to handle those
processes. Every two months we host a workshop to
facilitate and help suppliers with their issues and the
challenges they face. We have also found that overall
company targets are not always aligned across suppliers,
as some work toward 2030 while others are working to
2040.
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Innovation ecosystem
We don’t innovate in isolation. We develop technology together with the help of our partners and our
collaborative knowledge network.
Our approach
Innovation ecosystem
We see ourselves as architects and integrators, working
with partners in an innovation ecosystem. Our focus is on
innovating through partnerships, and in our innovation
ecosystem, long-term collaboration is based on trust. By
sharing our expertise with the ecosystem, we build a
strong knowledge network capable of creating
technological solutions that society can tap into. We
share both risk and reward, and this collaborative
approach allows us to accelerate innovation.
We focus on collaboration with research centers, fueling
the innovation pipeline through partnerships with
academia and research institutes, and collaboration with
R&D partners through EU public–private partnerships.
We also believe that we can create greater impact in the
ecosystem by nurturing future young tech through
support for startups and scaleups.
Over the following pages, we explain how our approach
to partnerships can accelerate innovation.
SDG target
How we measure our performance
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
– 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
€3.3bn
R&D Investments
(2025 target: >4bn)
63%
R&D spend as % growth
from 2019 base year
(2025 target: >100%)
€14.7m €1.0m
Contribution to EU research
projects
Value startups and
scaleups in-kind support
IN THIS SECTION
119 Our overall performance in 2022
120 Partnerships for research and development
122 Supporting startups and scaleups
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Innovation ecosystem (continued)
Our overall performance in 2022
Topic
Target 2025
Performance indicator
Innovation
ecosystem
>4bn euro
R&D Investments
>100%
No target
No target
>20%
14
R&D spend as % growth from 2019 base year
Value startups and scaleups in-kind support
Startups and scaleups in-kind support hours
Startups reached Star level from total startups (in %)
Number of scale-up companies supported (in numbers)
No target
Contribution to EU research projects
On track or met target •
Ongoing focus area n
Progress tracking
2020
2021
2022
Status
€2.2bn
10 %
€0.6m
€2.5bn
25 %
€1.0m
€3.3bn
63 %
€1.0m
1,550 hrs
2,100 hrs
4,180 hrs
16 %
7
€28.5m
15 %
7
€30.3m
12 %
10
€14.7m
•
•
n/a
n/a
n
•
n/a
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Innovation ecosystem (continued)
Partnerships for research and development
Our approach
Public–private partnership
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 integrated circuit (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 continent a degree of
sovereignty by driving and accelerating fundamental
research and ground-breaking innovation in EMEA. This
collaboration also generates significant business value,
fuels job creation and creates knowledge. The increasing
number of patent requests per year, both for ASML and
the other members in the various consortia,
demonstrates the success of these collaborations.
Partnerships with academia and research institutes
We co-develop expertise within a wide network of
technology partners, such as universities and research
institutions. 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 and focusing on
the physics and chemistry that are important in current
and future key technologies within nanolithography and
its application within the semiconductor industry.
Our targets for research and development
Our actions in 2022
Our R&D partnerships are underpinned by a number of
targets:
– Reach >€4bn R&D investments by 2025
– Grow R&D spend over 100% from 2019 base year
Our performance in 2022
Our R&D investments in 2022 amounted to €3.3 billion,
which represents 63% growth from the 2019 investment
level.
Our own contribution in R&D across public–private
partnerships in 2022 was €14.7 million, and the total
value of our investment for the full three-year duration of
our projects is €88.9 million, with a total project size of
€438.9 million. Across all of our projects, we work with
universities, research and technology institutes and other
high-tech companies across EMEA – varying from 20 to
80 partners from 12 different European countries – to
help enable the industry to move toward next-generation
technology.
Public–private partnerships
In 2022, we continued coordinating efforts in four EU
projects – TAPES3, PIN3S, IT2 and ID2PPAC – all with a
duration of three years. We have enabled timely reporting
to the connected public partners, and have organized
online consortium meetings to exchange ideas and
knowledge. The TAPES3 project was successfully closed
in April 2022, when an online project review meeting
involving independent experts from the industry hired by
the European Commission evaluated the results of the
project.
In 2022, we submitted a project proposal – 14ACMOS –
in the first call of the newly established Key Digital
Technologies Joint Undertaking. The aim of this three-
year project is to explore and realize solutions for the
manufacture of 14 angstrom (1.4 nm) CMOS chip
technology. A consortium has been formed that covers
four key areas needed in IC technology development for
manufacture – lithography, metrology, mask
infrastructure and process technology.
The 14ACMOS project brings together the R&D
capabilities of 25 leading expert partners to tackle these
challenges. It is valued at more than €95 million in R&D
costs and unlocks at least €27 million in public funding
for the ecosystem. In terms of geography, the project
connects people from Romania, the United Kingdom,
Belgium, Sweden, France, Germany, Israel and the
Netherlands.
€3.3 billion
R&D investments in 2022
€14.7 million
Contribution in R&D across public–private
partnerships in 2022
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Innovation ecosystem (continued)
Partnerships with academia and research institutes
Over the last couple of years, using 0.33 NA EUV
systems, imec and ASML have entered into an extensive
technical collaboration to prepare for the introduction of
EUV 0.55 NA (High-NA) lithography (see phase 1 in
Figure 1). This collaboration identified the critical device
layers on a customer’s roadmap that required the most
work to enable the introduction of High-NA. We carried
out studies to understand and mitigate foreseen High-NA
scanner-related challenges, among other detailed studies
on depth of focus and field stitching. In parallel studies,
the ecosystem challenges – such as choices of resist
and their stochastic effects, reticle absorber materials
and the necessary massive metrology – were addressed.
As an indication of the impact of this collaboration, more
than 30% of the oral paper presentations submitted by
ASML to the upcoming SPIE Advanced Lithography and
Patterning conference (SPIE ALP 2023) are derived from
the collaboration between imec and ASML. Preparation
for phase 2 began in 2022 with the creation of the
infrastructure for the joint High-NA Lab and the
installation of the necessary peripheral equipment, such
as resist and development track, film thickness and wafer
metrology equipment.
In 2022, we joined forces with the NXTGEN Hightech
program that is intended to support the future growth of
the Netherlands by working on the next generation of
high-tech equipment. The ASML contribution in this
Growth Fund program focuses on mechatronics,
systems engineering and potentially other fields.
Our collaboration with ARCNL is becoming even
stronger. In the past we have established a unique
collaboration model in which scientists from ARCNL can
explore the research questions they would like to focus
on and at the same time create value for ASML. In the
areas of EUV source, metrology and materials, our joint
interest is well established and yielding results. Among
many other examples, these results include: new insights
into optimal drive laser wavelengths for EUV plasma
generation, interferometric metrology techniques for
improved wafer analysis and detailed understanding of
tribology for wear-resistant coatings on wafer tables.
Action plans for 2022-2025
No additional actions, as we are on track to meet our
targets.
Figure 1: ASML’s IPCEI proposal concerns the third step in the three-phase approach toward introduction of EUV 0.55 NA (High-NA) lithography.
Phases 1 & 2 are already planned by ASML and imec.
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Innovation ecosystem (continued)
Supporting startups and scaleups
Our approach
Make Next Platform
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 strengthens 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 offers benefits not just to ASML and
associated partners, but also to other companies and
organizations. In addition, it helps attract a broad base of
talent to the region.
Through HighTechXL and DeepTechXL, we build, finance
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. And through
DeepTechXL, we help to finance these deep-tech
ventures, particularly in the early stages where risks are
still at their highest.
To support young innovative high-tech scaleups, ASML
founded the Make Next Platform (MNP) in 2016 together
with Huisman, Vanderlande and the non-profit Stichting
Technology Rating (STR). Thales NL joined as a co-
founder in 2019. MNP puts the partners’ network,
competencies, expertise and experience to work in
answering questions that these scaleups encounter in
their development and helps them grow into sustainable
companies.
MNP aims to help emerging high-tech ventures that have
moved beyond the startup phase and are ready to
expand. These scaleup companies face challenges such
as systems engineering, supply chain management,
business/corporate development, targeting beachhead
markets, managerial issues, funding issues and public
affairs. Through the exchange of best practices, business
experience and coaching from senior corporate experts,
the MNP partners aim to support scaleup companies in
their development to become global players by giving
them access to their internal and external networks.
Our targets
Our target for 2025 is for >20% of the total startups to reach
Star level and to support 14 new scaleup projects by 2025.
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Innovation ecosystem (continued)
Our performance in 2022
In 2022, ASML committed to providing more than €15
million support to high-tech startups and scaleups, with
4,180 hours of in-kind support provided and over €14
million cash committed. This commitment includes our
contribution to the DeepTechXL startup investment fund
for early-phase funding. 12% of startups reached Star
level.
To date, the MNP has screened more than 250
companies and engaged with the management teams of
more than 60 of them. So far, 10 scaleups have been
adopted, including three in 2022. Meanwhile, one has
reached Alumnus status and is now finding their own
way, based on their own strengths: SMART Photonics
(2021).
Our actions in 2022
ASML as a venture builder
In 2022, we became a strategic investor and co-initiator
in DeepTechXL Fund I, a new Dutch deep-tech fund of
€85 million. Together with the other investing industry
partners (Philips, Brabantse Ontwikkelings Maatschappij
(BOM), research institute TNO, PME Pension Fund,
Invest-NL and some family offices), the fund provides
deep-tech startups and scaleups with access to
knowledge, network, technology, licenses and business
development support, and it intends to finance these
tech ventures particularly in their early stage of growth,
where investments risks are still at the highest. The fund
aims to introduce launching customers, find partners in
the supply chain and to assist in entering new markets
and scaling up manufacturing. DeepTechXL originates
from and will work closely with HighTechXL.
ASML is also one of the main shareholders of HighTechXL,
together with other tech-minded partners in the region such
as Philips, TNO, BOM and High Tech Campus Eindhoven.
Through HighTechXL, we build and accelerate impactful
startups by combining high-tech entrepreneurial talent and
relevant technologies from reputable tech partners such as
ESA, CERN, Fraunhofer, imec and TNO, with the goal of
solving major global societal challenges. Selected ASML
talents join these startups for 30% of their time for a period
of three months. They define their learning goals and typically
benefit from both enriched skills and mindsets after this
entrepreneurial experience.
To date, over 20 new deep-tech ventures have
completed the program and some are already receiving
global attention. Moreover, several new ventures are
currently still in the accelerator program, making good
progress, and new cohorts are already planned.
Action plans for 2022-2025
We are on track to support 14 new scaleup projects by
2025 and to meet our R&D investment targets. However,
the target of 20% of startups to achieve Star level by
2025 may take longer than originally expected. This
target was first set when HighTechXL was still a
traditional startup accelerator, but since it was
transformed into a venture building program, we have
seen that it generally takes longer for these newly
established startups to mature. Additionally, the focus is
now on deep-tech, which typically requires a longer time
to develop. A discussion on defining a more applicable
target reflecting the new situation is ongoing.
inPhocal makes first sale after two years as HighTechXL
Venture Building Program alumnus
In 2020, a group of enthusiastic founders set course on a
journey to start inPhocal, a deep-tech company based
on an optical technology that originated from the CERN
institute, where it was originally developed for long-
distance alignment of equipment in their Large Hadron
Collider (LHC) experiment.
Within the nine-months HighTechXL venture building
program, inPhocal was given the chance to pick
technologies from several top-class institutes and
companies, such as ASML, the European Space
Agency, Philips and TNO, and to develop themselves
into a mature company. As part of this program, inPhocal
discovered the potential of their unique technology for
laser processing, which provides a laser beam with a
long focus depth – this means the focus does not have
to be adjusted when marking curved objects or cutting
through thick materials, which results in unprecedented
improvements in speed and efficiency. Market research
proved that their technology could indeed solve current
problems and their technology quickly gained the interest
of several large companies, such as Heineken, Coca-
Cola, Pepsico, AbInBev and Logitech.
In the meantime, inPhocal developed a functional
product prototype in 2021, together with lab partner
Exspectrum. They optimized their technology further in
cooperation with development partner Lion Lasers,
which led to a first fully certified system mid 2022. By
that time, they also received a €2 million investment, led
by the new DeepTechXL fund in which ASML is
participating as well. InPhocal is using their funding to
scale production in 2023 and have already made their
first sale of a system that will be installed in the
Netherlands in early 2023.
Over the years, inPhocal has made optimal use of the
support provided by ASML to HighTechXL with four
ASML talents joining at various stages during the
program. As part of their own personal development,
these talents are allowed to join the startup for a period
of three months and make contributions to topics
ranging from technology, finance, market research and
strategy. After completing the program, the ASML talents
went back to work on their ASML duties, however with
all of them strong relationships have been built and the
talents remain available for InPhocal to ask for advice and
guidance on an ad hoc basis. InPhocal will continue its
mission to become the new standard in laser processing
while at the same time strengthening the high-tech
ecosystem of the Eindhoven region.
We are on track to support 14 new scaleup
projects by 2025.
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Valued partner in our communities
As a global technology leader and employer, we play an active role in the communities where we operate
– we recognize that when the community thrives, we thrive. At the same time, our ASML Foundation aims
to improve lives through education and training.
€11.5m 13,645
Community investment
Time investment in volunteers
– hrs community involvement
4,736
411
Time investment in volunteers
– hrs technology promotion
Total number of projects
supported
IN THIS SECTION
125 Our overall performance in 2022
126 Education
128 Arts & culture
130 Local outreach
132 ASML Foundation
Our approach
ASML’s success and growth has a significant impact on
the communities where we operate, in particular at our
large sites (Brainport Eindhoven region, Wilton, Silicon
Valley, San Diego and Hsinchu), where ASML and its
network of suppliers and partners generate a wealth of
jobs and social activity.
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. Our
community engagement program, which falls under the
responsibility of our CEO, is built on three pillars where
ASML has competence and can create impact:
1. Education
2. Arts & culture
3. Local outreach
Our corporate citizenship activities stretch beyond
community support to in-kind contribution to startups
and scaleups, aiming to nurture innovation by future
young tech.
Read more in:
Social - Innovation ecosystem - Supporting startups and
scaleups.
Through our global volunteering program, we encourage
employees to become more involved in their local
communities. Every person is able to use one day a year
as a paid volunteering day with an event, charity or
activity that is in line with our volunteering policy.
Employees can also volunteer with ASML Foundation
projects.
In this chapter, we outline our approach to community
outreach and our actions to improve education, arts &
culture and local outreach.
Valued partner in our communities
How we measure
our performance
– Community
engagement and
technology
promotion
– ASML Foundation
projects
– Community
engagement
SDG target
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 11.2
By 2030, provide access to
safe, affordable, accessible
and sustainable transport
systems for all, improving road
safety, notably by expanding
public transport, with special
attention to the needs of
those in vulnerable situations,
women, children, persons
with disabilities and older
persons
SDG target 11.4
Strengthen efforts to protect
and safeguard the world’s
cultural and natural heritage
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Valued partner in our communities (continued)
Our overall performance in 2022
Topic
Target 2025
Performance indicator
2020
2021
2022
Status
Progress tracking
Valued partner in our
communities
No target
No target
No target
No target
No target
No target
No target
ASML Foundation projects supported
ASML Foundation's value of donations
Projects supported
Value of donations
Total cost of volunteering
Time investment of volunteers (in hours) –
Community involvement
Time investment of volunteers (in hours) – Tech
promotion
22
€1.0m
n/a
€3.1m
€271k
1,333
2,936
22
€2.0m
133
€8.1m
€283k
2,393
1,886
21
€2.4m
390
€7.9m
€1,200k
13,645
4,736
n/a
n/a
n/a
n/a
n/a
n/a
n/a
On track or met target •
Ongoing focus area n
We are welcomed as a source of high-tech economic
activity that benefits people and planet, and we scored
7.8 out of 10 in the October 2022 Brainport Eindhoven
survey. However, our many stakeholders in the
community also point out that our growing presence
means that more engagement is expected and required
to ensure that everyone in the community can benefit,
and our presence delivers true positive social impact.
The total amount of cash commitments and in-kind
support that ASML spent on charities, community
engagement, organizations and our own ASML
Foundation in 2022 was approximately €11.5 million.
Five of our locations (Veldhoven, Wilton, Silicon Valley,
San Diego and Hsinchu) benefit from implemented and
dedicated community engagement programs. These
locations represent 83% of our operations (in
headcount). We also operate smaller community
engagement initiatives in other locations, and these will
be gradually scaled up to more formal dedicated
programs in the coming years.
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Valued partner in our communities (continued)
Education
The ASML Foundation aims to unlock the potential of
young people in need by enabling inclusive and equitable
participation in society through quality education. The
ASML Foundation is an independent foundation with
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 underrepresented and underserved youth
around the world, and more specifically in the
communities where ASML operates, through educational
initiatives that develop their talent and help unlock their
potential. Read more in: ASML Foundation.
Our performance in 2022
In 2022, we supported a total of 221 education projects
across the regions where we operate (Netherlands, US
and Asia). The total value of these projects amounted to
€0.9 million.
'Our actions' outlines a few highlights – for more information, please
visit
www.asml.com – community engagement.
Our approach
Education, as the ‘big equalizer’ and opportunity creator,
needs to prepare people of all ages for an increasingly
digital future. Our intensive STEM (science, technology,
engineering and mathematics) education programs aim
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. STEM competencies are
important in helping children to reach their potential,
particularly in disadvantaged communities. At the same
time, we work with senior citizens’ organizations to help
the elderly bridge the digital divide.
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 all these initiatives.
The education team works closely with schools and
education programs in the communities where we have
operations. It provides hands-on support and
coordinates a network of ASML volunteers (known as
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.
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Valued partner in our communities (continued)
We’re doing our part to ensure everyone, at every age, is
prepared for an increasingly digital future and that all
young people have access to technical education to
reach their potential.
Standalone initiatives
– Science & Engineering Night (US): In July 2022, the
San Diego Children’s Discovery Museum was
transformed after hours to host hands-on activities at
Science & Engineering Night. As main sponsor, we
hosted a booth at this educational event with seven
ASML employees featuring an exhibit that taught kids
how to bring a robot to life using coding and
programming, giving them the opportunity to learn
more about science and engineering.
– BOYO Foundation (Taiwan): The Enlighten Your
Potential project aims to prevent underserved students
from dropping out of school by sponsoring the salaries
of educators and the lecture materials for the BOYO
Foundation. As well as providing funding, the ASML
Foundation worked with the ASML Community
Engagement team on setting up teacher-training
workshops. By the end of 2022, over 35 teachers from
four remote schools had joined our workshops. We
also sent multiple volunteers as speakers to schools in
order to encourage underserved students to continue
learning and exploring their potential.
Our actions in 2022
Ongoing projects
– ASML Junior Academy (the Netherlands): In September,
the ASML Junior Academy kicked off with 58 primary
schools in a partnership with Mad Science, a renowned
name in the field of STEM education and promotion. It
offers all participating classes (children aged 4–12)
technology lessons six times a year, with the aim of
creating more awareness of STEM topics. One of the six
lessons focuses on the role of the microchip in our daily
lives and will be given by an ASML employee. The
partnership also includes a project to familiarize teacher-
training students with more STEM topics. The aim is to
have all 271 primary schools in the Brainport Eindhoven
region supported with STEM lessons by 2025.
– Wikimedia (global): We donated €64,000 to the Wikimedia
Foundation, the organization behind Wikipedia, to ensure
its continuity and support its drive to remain a resource for
free and open knowledge for everyone. This annual
donation will increase over time as our employee base
grows, in accordance with Wikimedia’s guidelines.
– Dutch Technology Festival (the Netherlands):
Technology is at the core of who we are and what we
do at ASML. At the annual Dutch Technology Festival
we share this passion and knowledge to inspire the
next generation of scientists and engineers. In 2022,
we highlighted the best our region has to offer, all in
one place, to inspire more than 22,000 young thinkers
and doers.
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Valued partner in our communities (continued)
Arts & culture
Our approach
While culture is the invisible bond that ties the people of a
community together, the arts are how culture becomes
visible. To strengthen that bond, we support 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.
Our performance in 2022
In 2022, we supported a total of 29 arts & culture
projects across the regions where we operate
(Netherlands, US and Asia). The total value of these
projects amounted to €1.9 million.
'Our actions' outlines a few highlights – for more information, please
visit
www.asml.com – community engagement.
Our actions in 2022
Ongoing projects
– Van Gogh Museum and Van Gogh Brabant
(Netherlands and global): 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. In 2022, we made
steady progress in developing the condition
assessment tool – and we are looking forward to
demonstrating our work during the celebrations for the
50th anniversary of the Van Gogh Museum in 2023.
– Vincent’s Lightlab: Museum Vincentre, which focuses
on Vincent’s Brabant years, has plans for a significant
expansion that includes ‘Vincent’s Lightlab’, developed
together with ASML. The reopening is planned for May
2023. The ambition is to welcome 40,000 visitors every
year to the new Museum Vincentre and to share the
story of Vincent Van Gogh and his search for color and
light in Brabant.
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Valued partner in our communities (continued)
– Educational programs: Together with the Van Gogh
Museum, we have developed educational materials for
students in primary and secondary schools, connecting
science and art. The artist’s curiosity was key to his
craftsmanship, and together with the museum, we
encourage students to follow in his footsteps.
– In 2022, we participated in the Vakkanjers program,
which sets real-world competitions – working with a
different industry partner each year – and challenges to
teenage boys and girls, designed to help them discover
and develop their skills. Through this program, schools
and companies collaborate to help develop the
craftspeople of the future. This year, the Van Gogh
Museum in cooperation with ASML challenged
students to think of innovative ways of preserving Van
Gogh’s artworks for the future, as well as to give new
dimensions to Vincent’s story and the way people
experience his paintings by using technical
components and creative solutions. In total, 254
schools and more than 12,000 students took part in
these challenges.
– In Taiwan, ASML and the Van Gogh Museum launched
Masterminds & Masterpieces, an international STEM
program that reached students across the country.
Working closely with two non-profit organizations,
colleagues co-developed a hybrid initiative, leveraging
their expertise in developing offline and online
resources. In September, a bookmobile – developed in
partnership with the CommonWealth Magazine
Foundation – started traveling to schools in remote
areas of Taiwan, supporting wider efforts to improve
students’ literacy. ASML Taiwan recruited over 70
volunteers to participate in this education program. The
roll-out of the school tour and the online learning
program will continue across Taiwan until the end of
2022, with over 20,000 primary school students in
Taiwan estimated to join in Q4 2022.
– GLOW Light Art Festival (the Netherlands): Light is key
to our work, which is why we partner with the annual
GLOW Light Art Festival in Eindhoven, the Netherlands.
In November 2022, around 700,000 people visited the
festival.
Standalone initiatives
– Van Gogh PaintFest (global): This year, a partnership
between the Foundation for Hospital Art (FFHA) and
the Van Gogh Museum in Amsterdam opened the door
for hospitals all over the world to brighten their walls
with the wonder of Van Gogh. The Van Gogh Museum
collaborated with FFHA to license six of Van Gogh’s
greatest original works as inspiration for the designs.
ASML was given first access to the PaintFest Kit
designs before they were made available for public
purchase. Throughout March 2022, leading up to Van
Gogh’s birthday, five ASML sites around the globe
(Wilton, San Jose, San Diego, Veldhoven and Hsinchu)
invited colleagues to paint the murals. 750 colleagues
joined in on the fun. All finished murals were donated to
local healthcare facilities upon completion for
permanent installation to cheer and uplift patients and
their families as well as hospital staff.
– ASML on Stage (the Netherlands): ASML on Stage is
an annual event featuring a multicultural mix of musical
styles, all performed by acts featuring ASML colleagues
and friends. With 17 ASML acts and 1,400 tickets sold
in 2022, the event once again showcased the multiple
talents of our employees, combining their love of music
with their passion for science and technology.
– Spotlight (the Netherlands): Together with
Muziekgebouw Eindhoven, we host the Spotlight
program, where anyone who normally does not have
the chance can take the main stage and experience
being a performing artist. During 2022, 437 people
participated and enjoyed their moment in the spotlight.
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Valued partner in our communities (continued)
Local outreach
Our approach
Because our operations are concentrated in a limited
number of locations, our presence and impact in these
communities is important to us and to our local
stakeholders. Our continuous interactions with community
members as well as local government give us the
opportunity to focus our efforts and improve our impact.
While our stakeholders welcome ASML’s presence in the
community as a sustainable engine of progress and
economic development, they also observe that ASML’s
growth brings several challenges for their community.
Their main concerns are connected with the growing and
increasingly international workforce at ASML and its
supplier network. At our main locations this has recently
been associated with increasing home prices and
competition for scarce engineering talent, while traffic
congestion has been a longer-term concern.
In the Brainport Eindhoven region, community leaders
also observe increasing tensions between established
residents and international newcomers, who all claim
their fair share of public and non-public services. On top
of these main concerns that take place in the public
domain, local government leaders ask for successful
businesses to become more inclusive employers and
offer development and career opportunities for the
disadvantaged local residents who currently benefit less
from the prosperity brought by the high-tech industry.
In these high-impact areas, we aim for smart and
sustainable interventions. To battle congestion, we
actively encourage employees to choose healthy and
sustainable modes of transportation, such as cycling and
public transport, through our successful Access &
Mobility program that has been running for several years.
It is important to us that everyone in our communities
around the world can benefit from ASML’s presence
and develop their potential.
We support education and development by promoting
STEM, with ASML employees working as ‘hybrid
teachers’ and tutoring disadvantaged students, helping
to increase the number of youngsters with a professional
qualification. For our neighbors and local stakeholders,
we invest in local amenities and services, while we
enable our employees to take part in community service
and to share their knowledge and expertise. Across all
our partnerships and programs, we pay special attention
to encouraging integration, promoting diversity and
empowering the underprivileged.
We work with key players and fund high-impact
programs and projects that also make a quantified
contribution to our ESG strategy, and are supported by
approved, robust governance structures.
Our performance in 2022
In 2022, we supported a total of 140 local outreach
projects across the regions where we operate
(Netherlands, US and Asia). The total value of these
projects amounted to €5.1 million.
'Our actions' outlines a few highlights – for more information, please
visit
www.asml.com – community engagement.
Our actions in 2022
Ongoing projects
– Gift Matching (US & the Netherlands): Dedicated to
supporting the causes that our people care about, we
have launched our Gift Matching program in the US
and the Netherlands. We match donations made to
non-profit organizations via the Global Matching Gift
program, up to €1,000 per employee per year. This
means that when an employee donates €100 to a
qualified organization, we match their generosity and
donate another €100 to the same organization. The
program was initially launched in the US and has
already succeeded in matching almost $150,000 of
employee donations. We are looking forward to
launching the program in Asia in 2023.
– PSV football club (the Netherlands): In a unique
sponsorship innovation, ASML and five other partners
teamed up to sponsor professional local soccer club
PSV. Through this partnership, we are committed to
promoting the Brainport Eindhoven region as an
attractive environment to live and work. We support
several programs, including:
– ASML Community Lounge at 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 such as Food Bank, senior
citizens’ union, Severinus, The Salvation Army and
other aid agencies to the venue, totaling more than
4,200 guests in 2022.
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Valued partner in our communities (continued)
– As part of our partnership with PSV, we are able to
use their pitch for a day. We took full advantage
during 2022, inviting the Eindhoven children of the
Weekend School. We also welcomed 500 primary
school students to present their innovative ideas
while participating in the PSV Brainport School
Challenge, as well as 400 Ukrainian children and their
supervisors, who enjoyed some respite from their
troubles.
– Brainport Eindhoven and PSV’s online vitality
platform is still up and running, offering health and
well-being inspiration and motivation for everyone in
the Brainport Eindhoven region, creating a vital and
healthy region for all.
– PSV Analytics: This collaboration project between
PSV Sport performance and ASML BAS Big Data
was initiated to help the Dutch premier top soccer
club unlock, use and optimize the large amounts of
data it has collected, and translate it into dynamic
images analyzing the game plan. This work inspires
our technologists as we collaborate and support the
club to compete with its much bigger (and richer)
rivals.
– Open Huis (the Netherlands): Following a two-year
Standalone initiatives
pause, we were thrilled to once again underline our role
as a good neighbor and welcome 2,400 Brainport
Eindhoven residents to the Veldhoven campus. These
well-known Neighbor Days returned for the seventh
time with a new name, ‘Open Huis’, and took place on
not just one but four days in September. All residents
of the Brainport region were able to register online, with
places filled very quickly. The visitors were guided by
more than 300 ASML ambassadors and enjoyed an
action-packed program. We hosted various on-
campus tours, shared our plans for new ASML
buildings in the local area, gave insightful presentations
on how our machines work, arranged Van Gogh
workshops, led Mad Science experiments, hosted a
photo corner with cleanroom suits and much more.
Our neighbors particularly noted the campus’s full-
sized running track, 24-hour market, magnificent view
over our neighborhood from the nineteenth floor and
extremely neat cleanrooms.
– ASML Eindhoven Marathon (the Netherlands): The
annual ASML Marathon Eindhoven took place in
October 2022. A record 1,700+ ASML colleagues (up
from 900 last year) took part in the various races,
including the full marathon, half marathon, relay and
quarter marathon. Anyone, of any age, experience or
ability was welcome to take part, and we encouraged
all of our runners to wear a special ASML shirt with
pride. Runners and spectators were out in force to
celebrate the city and the spirit of this challenge, with
more than 25,000 runners competing.
– Blood banks (US): The San Diego Blood Bank and
blood banks across the US are experiencing a major
decline in donor turnout, leading to a disruption in
blood supply. In 2022, our San Diego office hosted six
blood drives to help the community. 148 San Diego
employees and 47 members of the community
donated 180 units, which will help save the lives of 544
people.
– Support for Ukraine (the Netherlands): Russia’s
invasion of Ukraine has forced millions of people to
leave their homes and seek refuge in the EU and
neighboring countries. ASML helped the municipality of
Eindhoven and social organization Springplank040 to
accommodate more than 100 refugees in a specially
created shelter. Working with our partners from the
Brainport Partner Fund, we helped fit out the shelter
and provided toys and supplies to soften the
experience for the children. Together with our partner
PSV, we also organized an afternoon of fun and games
in the Philips Stadium for 400 Ukrainian children.
– Wilton Land Conservation Trust (US): Over 30 ASML
Wilton employees joined forces with Wilton Land
Conservation Trust to clear invasive plant species from
Schenck’s Island Park in Wilton. The invasive plants
were replaced with native blueberry bushes, which will
provide food for native animals and local hikers alike.
– Rise Against Hunger (USA): ASML Wilton partnered
with Rise Against Hunger, an international hunger relief
non-profit organization that coordinates the packaging
and distribution of food and other aid to people
worldwide. Over 140,000 meals were packaged and
shipped to our neighbors in need.
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Valued partner in our communities (continued)
ASML foundation
Our approach
The ASML Foundation is our charity of choice, with a
primary focus on impactful, inclusive education and
training programs for young people in need. Its mission is
to improve lives through inclusive and quality education
and training – with the goal of enabling equitable
participation in society. The Foundation aims to make a
sustainable impact on SDG 4 (Quality Education), and
contribute to SDG 5 (Gender Equality), SDG 10 (Reduce
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, no matter
what their background is. We aim to help people who
participate in the programs we support to improve their
chances of a better life. In terms of diversity, our project
selection seeks to improve the inclusion of underserved
groups, such as people of color, people who are
neurodivergent and people from a less-privileged
background, thereby tackling the disadvantages our
target groups may face, such as limited access to
education, special education needs or a lack of
vocational training.
As the ASML Foundation aims to make a difference in
ASML’s communities, it mainly supports projects and
initiatives in EMEA, the US and Asia that address specific
needs in the ASML regions. For example, in the Brainport
Eindhoven region in the Netherlands, tackling illiteracy
continues to be a key focus area for the ASML
Foundation, alongside support for organizations that
provide help to neurodivergent young people, with
special attention on autism and high giftedness. In the
US, projects focus mainly on preventing school dropouts
in less-privileged areas, and on promoting science,
technology, engineering and mathematics (STEM) for
girls as well as for specific minority groups. 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.
Where possible, the ASML Foundation strongly promotes
collaboration between organizations with similar focus,
but with complementary programs. This has resulted in a
number of initiatives that clearly added value to the
organizations, resulting in improved support for a number
of our target groups.
ASML employees support the ASML Foundation
financially when they purchase goods from the ASML
employee store, and the Foundation also receives regular
private donations from a number of colleagues.
Our performance in 2022
Action plans for 2022-2025
In 2022, the Foundation donated around €2.4 million
(€2.0 million in 2021), supporting 21 projects in nine
countries. With the Foundation's financial support, the
Foundation contributed to improving the lives of around
1.2 million young people. Our employees contributed a
total of 13,645 volunteering hours to community
involvement and 4,736 hours to tech promotion. We saw
an increase from prior years due to the relaxation of
COVID-19 measures.
Next steps in society and community engagement
Our reputation and license to operate are for a large part
dependent on the local and regional communities where
we operate – we need their support to be able to
execute our strategy. Our continuing strong growth and
increasing visibility mean that these communities expect
considerably more from us. That is why we aim to
increase our investments, by a factor of 10, in society
and community engagement activities across the globe
in the coming years. Those activities will have a strong
focus on social cohesion, talent and education, digital
inclusion and employee engagement. This has also led to
the creation of an ESG Community Partnership Program
Team. This new team will provide integrated governance
on all company-wide community outreach activities and
overseeing our increasing investments.
As part of our step up we will determine our actions for
this topic, setting tangible targets and implementing a
process to monitor the effectiveness of our approach.
Working closely with local stakeholders as well as
employees, our goal is to increase our positive impact in
all of these areas and strengthen ASML’s position as a
robust, reliable and valued partner in the communities
around us.
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Governance at a glance
What we do
We champion good integrated corporate governance
to build a relationship of trust, respect and mutual
benefit with our stakeholders – shareholders,
customers, suppliers, employees and society. In this
ESG Governance section, we describe how we
organize the management of ESG issues within our
business, and the other ways in which we ensure we
are a responsible business.
Managing ESG sustainability,
Responsible business and
Our approach to tax
SDG 8
Promote sustained, inclusive and
sustainable economic growth, full and
productive employment and decent work
for all.
SDG 12
Ensure sustainable consumption and
production patterns
Our aims
As the innovator that makes vital systems for the chip
industry, we have a responsibility to lead by example.
We are committed to conducting our business in
compliance with applicable laws and regulations in all
the countries we operate in. We strive to work to the
highest standards of integrity and continuous
improvement of our governance, based on feedback
we actively procure from our internal and external
stakeholders. We want to conduct our business with
honesty and embrace an open dialogue and
knowledge sharing throughout our ecosystem.
Read more on page 134, 135, and 147 >
– Managing ESG sustainability
– Business ethics and Code of Conduct
– Legal and compliance
– Anti-bribery and anti-corruption
– Competition law compliance policy
– Privacy protection
– Respecting human rights
– Information security
– Our approach to tax
– Product safety
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Managing ESG Sustainability
the ESG Sustainability strategic themes are driven by one
or more cross-functional table meetings. Responsibility
for executing the strategy lies with the business lines and
sectors. Progress is monitored quarterly by the Board of
Management.
In addition, we identify and assess the impact of ESG
Sustainability-related risks and opportunities, including
risks from climate change, through our Enterprise Risk
Management (ERM) process.
Read more in:
Risk.
Our performance in sustainability areas is part of the
Long Term Incentive Plans of our Board of Management
and senior management.
Read more in:
Remuneration Report.
We manage ESG sustainability as an integrated part of
our corporate strategy. The purpose of the ESG
sustainability governance is to monitor and guide our
organization to realize our ambition to be a top performer
by 2025. This incorporates a number of levels to drive
accountability and execution, including the Supervisory
Board, Board of Management, ESG Sustainability team,
topic-specific action owners and experts from the
business lines and sectors.
Our Board of Management sets the ESG Sustainability
aspects of our integrated strategy and oversees its
execution. The Board of Management meets regularly to
give guidance on relevant issues, including climate-
related risks and opportunities.
The Supervisory Board supervises, monitors and advises
the Board of Management on the ESG Sustainability
aspects which are relevant to the company (see Rules of
Procedure). This includes addressing the principal risks
and opportunities related to the strategy.
Our ESG Sustainability team supports the Board of
Management in relation to ESG Sustainability aspects.
This could include recommendations regarding focus
areas, targets, external commitments and disclosures.
Furthermore, the ESG Sustainability team is responsible
for monitoring risks and opportunities (including climate
change-related matters), global trends, stakeholder
expectations and (peers), best practices that could
impact our short-, medium- and long-term ESG
sustainability objectives.
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Responsible business
Empowering individuals for the collective good to ensure our employees are proud to work for us and
engaged with our ambitions as a company.
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.
Responsible business
SDG target
How we measure our performance
SDG target 8.7
Take immediate and effective measures to eradicate
forced labor, end modern slavery and human trafficking
and secure the prohibition and elimination of the worst
forms of child labor, including recruitment and use of child
soldiers, and by 2025 end child labor in all its forms
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 12.4
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
– Number of speak-up messages
– RoHs/REACH compliance of parts used
414
Speak Up messages
10%
Gender diversity % female
in senior (13+) job grades
(2024 target: 12%)
IN THIS SECTION
136 Business ethics and Code of Conduct
139 Legal & Compliance
139 Anti-bribery and anti-corruption
139 Competition Law Compliance Policy
140 Export Controls
140 Privacy protection
141 Respecting human rights
142 Information security
145 Product safety
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Responsible business (continued)
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 related Compliance organization to the
highest standards. In 2022, we continued to grow our
network of Ethics Liaisons and provided them with
tailored training sessions, updated our Anti-Bribery &
Anti-Corruption and Anti-Fraud policies, and refreshed
our Gifts & Entertainment Policy. These policies are
reflecting the precautionary principle as a guiding
principle. We continued our training programs and
focused on raising awareness across our entire
organization. Our next Global Ethics Survey will take
place in 2023, as part of the we@ASML pulse survey.
Our values – challenge, collaborate and care – guide us
in our everyday dealings with employees, customers,
suppliers, shareholders and the society we serve. These
values are reflected in our Code of Conduct (hereafter:
Code). The Code 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.
At ASML, we rely heavily on the skills, commitment and
behavior of our employees for our continued success,
and for our positive contribution to society. That is 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 over 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 the global electronics industry. As a
member of the RBA, we 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.
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 acknowledge and
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. We also encourage our
suppliers to develop their own sustainability strategies,
policies and processes, and we actively encourage our
suppliers’ adherence to this code.
Our ethics governance consists of several levels,
which include:
1. Our Ethics Board, chaired by our CEO, reports to
the Audit Committee and Board of Management.
The Ethics Board is responsible for policymaking
and the supervision of ASML’s compliance with
legal and ethical requirements. The Ethics Board
meets regularly to give guidance on relevant issues
and approve the relevant policies.
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.
Our values – challenge,
collaborate and care –
guide us in our everyday
dealings with employees,
customers, suppliers,
shareholders and the
society we serve.
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Responsible business (continued)
Our Code of Conduct principles
We respect people
We operate with
integrity
We commit to safety
and social
responsibility
We protect our assets
We encourage you to
communicate and
Speak Up
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.
ASML’s most valuable assets are its people and knowledge, both of which are highly
valued and protected. Our ‘assets’ include intellectual property, trade secrets or other
proprietary information which refers to intangible assets such as technical know-how,
products data, business data and personal data, as well as physical assets such as
products, tooling, funds and computers for conducting ASML business. Our
company expects anyone entrusted with ASML assets to keep them safe from loss,
damage, misuse or theft.
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.
Our Code is available for all our stakeholders on our website
www.asml.com, our intranet and in our Employee app.
Promoting ethical behavior
Our dedicated Ethics program, and related Compliance
program, provides 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 promote 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 2022, we continued to extend our ethics training
curriculum.
In addition to generic modules, which are available to all
employees, the curriculum will include modules with a
specific audience depending on potential exposure. The
curriculum aims to support management and employees
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 focus 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.
Our Code of Conduct serves to foster a culture of
integrity, ethics and respect.
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Responsible business (continued)
We promote an open
culture of trust and honest
communication.
Encouraging people to Speak Up
In 2022, following an update to our Speak Up & Non-
Retaliation Policy which addressed the requirements of
the EU Whistleblowing Directive, we continued to focus
on putting the concept of non-retaliation at the core of
what we do. 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.
In 2022, we also focused on updating our internal ethics
investigation procedure, which outlines the investigation
phases of an ethics complaint, from first report to
remedial action and final closure.
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 or 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 program 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 proper action to
address the report so that any suitable remedial 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 counterparty to understand the
nature of the Speak Up message, and to conduct more
detailed analysis and/or investigation. When required, we
implement remedial actions to prevent recurrence.
We registered 414 ethics-related reports in 2022 (396 in
2021).
Among these Speak Up reports, sixteen complaints were
considered to be admissible as investigations by the
Ethics Committee. These follow a formal ethics complaint
investigation procedure. At the time of publication of this
annual report, the investigation procedure of ten ethics
complaints was completed. Of this total, two complaints
were deemed unsubstantiated – no violation of the Code
– and two partially substantiated. The corrective actions
on the six substantiated complaints vary from warning
letters and suspension to instant dismissal. The
remaining six ethics complaints remain in the formal
investigation process.
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Responsible business (continued)
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. The
function aims 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 regulatory compliance areas
include securities and insider trading, competition law
(antitrust), export control and anti-bribery and anti-
corruption. When needed, our Legal & Compliance
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 colleagues or others. We are
committed to the highest standards of personal and
business integrity. In September 2022, our Anti-Fraud
and Anti-Bribery & Anti-Corruption policies were both
updated. The Anti-Bribery & Anti-Corruption Policy
details our commitment to strong ethics and integrity and
the measures we take to prevent bribery and corruption
at ASML. ASML does not allow employees to accept or
provide facilitation payments or to make political
contributions on behalf of the company. The policy 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 the policy, please visit:
www.asml.com.
Our Gifts & Entertainment Policy 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 and explanatory material (such
as FAQs and flowchart). An important 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.
In 2022, we updated our training curriculum regarding
fraud, anti-bribery and anti-corruption topics, by
launching an all-employee mandatory e-learning course
which is part of the ethics training curriculum and by
providing additional classroom training 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
2022.
Competition Law Compliance Policy
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.
We published a public version of the policy in 2020.
ASML reviews this policy periodically, and released an
updated version of the internal policy in 2021.
Training and awareness:
Our competition law training program consists of a
combination of different methods, including computer-
based and in-person training sessions. It also promotes
awareness of relevant topics and issues relating to
competition law by periodic communications through, for
example, presentations and articles on our intranet or by
email communications.
We consider compliance with competition law an
essential part of our 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, and 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, co-developers, 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, we have general and specific control
measures in place to prevent, detect and disclose
potential competition law issues, including the following:
Competition law compliance risk assessment:
We regularly perform 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, the controls that have been
put into place, the remaining risks and which measures
will be taken in order to mitigate any remaining risks.
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Responsible business (continued)
Export Controls
Privacy protection
We are committed to compliance with all applicable
export controls laws globally. We have implemented
policies and procedures designed to promote
compliance and prevent unauthorized transactions.
Employees are required to follow our policies and
procedures. Further, we have IT controls and other
measures in place designed to facilitate protection
against inadvertent violations of export control
requirements.
We regularly assess the effectiveness of such policies,
procedures, and controls, and update them as
necessary. For example, we have recently updated our
policies and procedures in connection with the Additional
Export Controls on Semiconductor Manufacturing Items
imposed by the U.S. government in October 2022.
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
intended to prevent 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.
We expect our business partners – customers, suppliers,
consultants, contractors and intermediaries – to
demonstrate high standards of ethical behavior that are
consistent with our own.
A dedicated privacy and personal data protection
program ensures we adhere to high standards of
personal data protection. Among other elements, the
program covers:
– 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 consists 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 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.
– 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 applicants, 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).
Contacts with business partners:
We expect our business partners (such as customers,
suppliers, consultants, contractors and intermediaries) to
demonstrate high standards of ethical behavior that are
consistent with our own. We will not engage in business
or cooperate with business partners that resort to
anticompetitive behavior or suggest entering into illegal
conduct. We firmly condemn any anticompetitive
behavior by our business partners.
Reporting and resolving an issue, violation or complaint:
We will support our 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. We do not
tolerate any form of retaliation or other forms of adverse
consequences against employees who practice strict
adherence to competition law rules or against those who
Speak Up, even if we lose business as a result. We didn’t
incur any fines for breaches of competition law in 2022.
For more information, download our ASML’s public Competition Law
Compliance Policy:
www.asml.com.
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Responsible business (continued)
Respecting human rights
ASML is a keen proponent of intentional integrity,
particularly given its responsibility to society. This means
not just ticking a box when it comes to critical issues
such as upholding 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 not
only to respect human rights but to advocate for them
throughout our organization to help make a positive
impact on society. The work we are doing around our
ESG framework, the steps we are taking with respect to
diversity and inclusion, our well-being program and our
continuous efforts to address integrity as part of our
culture are all attribute to advocating for human rights
within ASML. 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 UN Guiding Principles on
Business and Human Rights. In 2017, we initiated our
Human Rights Policy, which is publicly available on
www.asml.com, which reflects the earlier mentioned
precautionary principle and takes a holistic view on
embedding and protecting human rights within our
organization.
The provisions of this policy are derived from key
international human rights standards including the ILO
Declaration on Fundamental Principles and Rights at
Work and the UN Declaration of Human Rights, the UN
Global Compact and the principles laid down in the
OECD Guidelines for Multinational Enterprises. In 2023,
we will review our existing policy to ensure we are not
only complying with the minimum requirements but
adjust them where necessary and consider whether we
can introduce additional measures to meet our goals of
being leaders in this field. In addition, we will review the
effectiveness of the procedures that have been
implemented in order to identify, manage and prevent
adverse human rights impacts that are material to
ASML's business.
Our Human Rights Policy complements our ASML Code
of Conduct and the RBA Code of Conduct, to which we
adhere. 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.
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
working week must not exceed the maximum set by
local law and should not be more than 60 hours,
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 are continuing to monitor the use of
overtime and to take appropriate measures to manage
the situation.
Health and safety
Our obligation is to provide safe and healthy working
conditions for all our employees and others working on
our premises. In all our products and processes, we
work hard to make ASML a safe place to work. We put
significant effort into creating awareness and maintaining
a proactive safety culture within ASML.
Read more in:
Social – Attractive workplace for all - Ensuring employee safety.
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. 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 through
stakeholder engagement and by assessing human rights
in our own operations, as well as suppliers’ due diligence
and sustainability risk management.
Read more in:
Social – Our supply chain.
We received no grievances about breaches of human
rights in 2022.
Our operations
Following the risk assessment which we conducted to
identify the inherent risks related to human rights within
our own operations, we have decided to review the
current policy and update it during 2023. The results of
our previous analysis showed that the risk of human
rights vulnerabilities inherent in our 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. We continue to monitor
these issues through regular internal EHS audits.
Read more in:
Social – Attractive workplace for all – Best employee experience.
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Responsible business (continued)
We believe that we have the
responsibility not only to
respect human rights but to
advocate for them
throughout our
organization to help make a
positive impact on society.
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 143 nationalities.
This leads to a higher inherent human rights risk around
the issue of workplace harassment.
Read more in:
Governance - Responsible business - 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
Information security
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), 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 identified relate to working
conditions (forced and bonded labor), health and safety,
and trade union rights. However, as they work 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:
Social - Our supply chain.
With ASML’s unique position and the growing
geopolitical tensions in the semiconductor industry, we
see increasing security risk trends, ranging from
ransomware and phishing attacks to attempts to acquire
intellectual property or disrupt business continuity.
In 2022, ASML registered around 2,800 cybersecurity
incidents, excluding phishing. We don’t believe that any
of these incidents has had a material impact on our
business. See “Risk Factors – Cybersecurity and other
security incidents, or other disruptions in our processes
or information technology systems, could materially
adversely affect our business operations”. We have
increased the number of FTEs from 10 around a decade
ago to around 300 FTEs dedicated to security matters in
2022.
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 competitive edge is
based on the knowledge and intellectual property that
has been developed through decades within our
ecosystem. That knowledge sits in various repositories
within the company as well as in the minds of our
employees and the many people we work with within our
collaborative eco-system of hundreds of suppliers,
customers and knowledge institutions. On the one hand
it makes the protection of knowledge a challenge,
because our eco-system is to a large extent based on
exchange of ideas and insights among many individuals.
On the other hand it also means that it is very difficult to
replicate what we do. Without (operating) software,
knowledge about electronics and the behavior of the
different components, the specific knowledge of
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Responsible business (continued)
individuals within ASML and our partners about
integration of different elements of our technology, and
without the very diverse and extensive partnerships
within our eco-system, it is extremely difficult to
effectively build machines as complex as ours.
As we innovate together with our ecosystem partners,
our partners need access to some of our systems.
Because the chain is only as strong as the weakest link,
we need to make sure that this access is enabled in a
secure way. ASML’s Security Circle of Trust is intended
to certify and assist our ecosystem partners to increase
the maturity of their information security, while also
resulting in developments for ASML itself to learn of
effective techniques and technologies in return.
Information security resilience framework
Our vision on security is that it needs to be embedded in
the DNA of our people, processes and technologies. In
our effort to ensure this, we have created a dedicated
security function in order to manage security risks. The
Chief Information Security Officer (CISO) coordinates the
response on information security risks as second line of
responsibility and is supported by security teams in the
sectors as first line of responsibility. Our mission is to
enable ASML to have control over the protection of
information and assets of the company, as well as
confidential information of 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 as we seek to achieve the
highest level of maturity in our security capabilities, and
rolling these out to our assets in a risk-based manner.
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 intended to ensure compliance
and effectiveness. In addition, our incident-reporting tool
seeks to make sure that all IT and information security
issues can be reported, correlated and investigated.
People and knowledge are key to the business success
of ASML. Unauthorized disclosure of our information, or
information of our customers or suppliers in our
innovation ecosystem, could benefit competitors,
negatively affect our ability to file patents or negatively
affect cooperation with customers, suppliers and
regulators. At the same time, our operations are
dependent on reliable information processing, and
unauthorized changes to the information content of these
assets can damage our ability to carry out our 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 training and through the year
host multiple security awareness events, 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 our security solutions are tested
regularly through penetration testing (ethical hacking) to
identify exploitable issues so that effective security
controls can be implemented.
We developed our information security framework by
applying the ISO 27001 Information Security Standard
Given the continuous trend of increasing cyber and
security risk and the increasing geopolitical attention
towards ASML, we are continuously reviewing the
adequacy of our risk control framework and continue to
implement additional controls. However, given the
pervasiveness, sophistication and rapid rise of
cybersecurity and other security risks, the geopolitical
attention towards the semiconductor industry and the
inherent limitations that follow from our collaborative
innovation approach, this may not always be sufficient to
prevent an incident, and reduce this risk entirely. Hence a
relentless drive is required and in place to adopt the
latest best practices.
Read more in:
Risk - How we manage risk.
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 and
the Netherlands. The ‘circle of trust’ is a network of
peers and 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 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. Annually we
hold 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. In 2022, we have expanded the Circle
of Trust to also include semiconductor companies in
the US, Europe and Taiwan, with further roll-out
scheduled for 2023 to other geographies.
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Responsible business (continued)
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 our third
parties, including exploitation by our competitors,
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 matters.
ASML’s general intellectual property (IP) 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
with strengthening our global IP position including our
patent portfolio, as well as protecting our patents. The
department’s mission 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 leadership and our R&D in
leading-edge technology, the department is involved in
the product generation process and assesses new
products to determine whether they would potentially
infringe any relevant third-party intellectual property rights
of third parties.
IP portfolio trend
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.
We have adopted controls, policies and procedures to
safeguard the protection of our trade secrets, proprietary
customer data, and other information, and in order for us
to comply with export controls, economic sanctions and
similar regulations. These controls and procedures may
not always be effective, and we have experienced
unauthorized accessibility of data which enabled
misappropriation of information by a former employee,
which may constitute a violation of such regulations (see
the risk factor “Cybersecurity and other security
incidents, or other disruptions in our processes or
information technology systems, could materially
adversely affect our business operations”). We have
implemented remedial measures to prevent similar
unauthorized access and we are reviewing our security
controls, policies and procedures to determine whether
any further changes are appropriate.
Read more in:
Governance - Responsible business - Information security.
IP portfolio (number of patents)R&D investmentIP portfolioR&D investment2018201920202021202210,00012,50015,00017,500€0.0bn€1.0bn€2.0bn€3.0bn€4.0bn
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Responsible business (continued)
Product safety
We want to innovate, but always with safety at the top of
mind. It is our duty to provide a safe work environment at
all times. We do this by focusing on safety at every stage
of a product life cycle: 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
As we have grown, so has our product complexity and
the number of geographical locations where we operate.
It is therefore 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. ASML is extending
the expertise by hiring country safety regulatory experts.
We have clear systems and processes in place to
support our approach to product safety. Our Global
Product Safety and Regulatory organization is part of
Quality and Excellence, which coordinates the overall
product safety approach within ASML. To support ASML
products, each product line has safety engineers who
are responsible for the product and make a first-level
system risk assessment. To support safe design, we
have defined and implemented 12 key risk areas, with
risk experts supporting individual projects.
Product safety competences
With regard to all of our competences, the role of our
D&E safety competence leads is to provide thorough
knowledge about our ways of working and to design
rules for specific safety hazards in all of our
competences.
Electrical: Making an electrical design safe and
protecting people from electrical shock. This involves
making conductors carrying hazardous voltage
inaccessible, ensuring that accessible conductors do
not carry hazardous voltages and that inaccessible
conductors are sufficiently insulated from accessible
ones through compliance with corresponding
regulations and standards.
Pressure: Interpreting and explaining local legislations
and standards, and also advising on testing and
documentation, and maintaining the manufacturing
record book which is needed for a high-pressure permit
in certain countries.
Human factor engineering (including ergonomics):
Incorporating a human-centered design approach
helping projects maintain access for maintenance and
servicing by laying down rules for issues such as
accessibility, posture, forces and the lifting of parts.
Mechanical: Keeping track of safety factors, as well as
seismic requirements for our machines.
Lifting: Many special requirements (such as the
certification and training of crane operators) are
applicable in countries where we use lifting tools. Our
team can advise when certification is needed. For
example, in South Korea certification is required for
weights of 500 kg or more.
Working at height: This is a new area of expertise which
was required during the design of our EXE:5000, our
first EUV 0.55NA (High-NA) system to guarantee good
access to the various areas.
Radiation: Main focus on lasers with intensities that go
beyond standard. In addition, we consider the impacts
of standard and special lamps and LEDs that we are
using.
Dangerous goods: Prevent shipments being stopped
due to requirements for transport and the importation of
certain hazardous substances such as chemicals,
magnets and batteries.
Safety in procedures: Support of creating written safety
procedures for highly complex operations.
Thermal: The use of tin at high temperatures requires
special precautions to protect people.
Dangerous gases: The use of gases requires safety
systems and procedures to protect machines and
people. For example, nitrogen is an asphyxiation
hazard, and the use of hydrogen in EUV has additional
applicable legislations and standards.
Materials and substances: Monitoring worldwide
legislation to check the legal status of all materials used
on our products, and ensuring that we don’t use or
introduce hazardous materials in our products.
Product safety in design
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. We focus on safety by
design in hardware, followed by safety by procedure –
prevention is key.
Safe products start with a well-thought-out design and with
product safety requirements implemented right at the start of
initial design. The first step to a human-safe design is to
eliminate risk or protect people by product design. Since
human factors play an important role in the safe operation of
a product, we try to guard against these becoming a risk
factor as much as possible. This helps prevent workplace
activities from turning into potential accidents. If there are no
safety precautions available to address potential hazards, we
develop our own.
When we start designing our systems, our engineers
conduct an initial Safety Risk Assessment (SRA). Our
product designers are trained to identify any safety
issues in the early stages of the design process. The
SRA is evaluated throughout the entire product
development process. We evaluate product safety at
each subsequent stage of the product life cycle and
track any reported product-related incidents – including
supply chain incidents – through our incident-reporting
system. We are proud to report that in 2022 there were
no recordable incidents caused by our equipment.
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Responsible business (continued)
Progress on EUV 0.55 NA (High-NA) safety aspects
Ensuring safety compliance
Dangerous goods management
– A multi-disciplinary program embedding processes
EUV 0.55 NA (High-NA) is the latest ASML product on
our EUV roadmap and is recognized as the next
generation of EUV machines. The development of this
system presented new challenges for product safety due
to its size, weight of modules and accessibility. To
support the design, we placed extra focus on
ergonomics and working at height.
For example, our ergonomic experts use 3D simulations
to enable people to practice various actions.
In addition, the new system features built-in service
platforms and platforms which led to the new ‘working at
height’ safety competence.
Due to the complexity of the system, the EU Safety
Directives and semiconductor industry guidelines (SEMI
S2) review was split, with a first design review followed
by a second inspection of the hardware. During 2022,
we began the SEMI S2 third-party safety design review.
Embedding product safety in the organization
In 2021, we established a Safety and Regulatory Office,
tasked with tracking new legislation and standards and
ensuring that our products are compliant with product
safety rules and regulations. The Regulatory Board is
responsible for decision-making on ASML product safety
compliance as well as the strategy to eliminate non-
compliance. It also monitors compliance status and
drives risk mitigation. The Regulatory Board discusses
possible non-compliance cases at its monthly meetings
and takes decisions based on the mitigation plan
presented.
The products and tools we develop comply with the
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 are SEMI S2-compliant for every product type
shipped. In 2022, a report confirming this compliance
was available for every product type we shipped. We
also have a CE ('conformité européenne') declaration of
conformity for all ASML products and tools.
Increasing product safety in our supply chain
Ensuring product safety does not end at our facilities –
we also focus on product safety in the supply chain. A
significant proportion of our innovation and development
takes place 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 and supplied by our
suppliers in the value chain. Our goal is to ensure that
our suppliers 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.
We have defined an end-to-end process in close
cooperation with our suppliers, ensuring that deliveries
meet our safety requirements.
Following the successful completion of our Dangerous
Goods program, dangerous goods management is
structurally embedded across our organization. Policies,
processes, guidelines and IT infrastructures are in place
to enable dedicated specialists to manage dangerous
goods as part of our competence groups. Hazardous
properties are identified at an early stage in the design
process in order to enable us to take measures to ensure
the safe handling, transport and storage of our products
on time and with greater efficiency. As these activities are
overseen by the safety and compliance organization, we
are able to safeguard the active control of regulations
and legislation impacting ASML products.
Materials and substance compliance
We are committed to complying with legislation and
regulations in the markets where we operate. We follow
the most stringent or leading regulations, currently but
not limited to RoHS (Restriction of Hazardous
Substances), REACH (Registration, Evaluation,
Authorization and restriction of Chemicals) and Batteries
Directive in the EU, K-REACH (Act on the Registration
and Evaluation of Chemicals) in South Korea or TSCA
(Toxic Substances Control Act) in the US.
We have implemented multiple initiatives to overcome
compliance challenges due to factors including: the
increasing number of changes in the regulatory
landscape; the number of unique parts used in our
products (>50,000); an extensive global supply chain; the
number of regulated substances we use (>100) we use.
Activities during the course of 2022 include:
throughout our organization – improving our IT
solutions, enabling automated supply chain
communication and delivering flexible reporting
capabilities.
– A global safety focus to strengthen our
communications with new local safety expert teams
and establish a regulatory intelligence team.
– A proactive approach toward upcoming regulations
such as PFAS, TSCA and the Battery directive by
taking part in the Semiconductor PFAS Consortium,
working with our business partners and the supply
chain, and establishing a working relationship with a
well-respected firm of consultants.
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Our approach to tax
ASML is committed to helping build a fairer and more sustainable society through social economic
cohesion, sustainable growth and long-term prosperity. Taxation is a means to that end.
Income tax paid in our five most significant
countries of operation
We consider the taxes that we pay to be
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 business and ESG
strategy.
Last year we already took a significant step in our efforts to
be more transparent on our tax affairs among others by
sharing our tax principles and disclosing information about
the five main countries in terms of business and tax footprint.
This year we have taken it a step further and made
several improvements. We signed up to the VNO-NCW
Tax Governance Code. This Tax Governance Code
should lead to more transparency on the tax position of
Dutch listed companies. In line with this Code, we have
included country-by-country tax information in our tax
report for all countries where ASML is established. We
also have included an explanation of the activities in our
five main countries as well as a brief explanation of the
type and geographic scope of activities of our entities.
We will keep improving our transparency for tax matters.
ASML’s move to sign up to the VNO-NCW Tax
Governance Code reflects this and answers to the call for
companies to respond to shifting expectations from
policymakers, NGOs and the general public.
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 had a straightforward
operating model, with our campus in Veldhoven, the
Netherlands, at the heart of our global operations.
€1.7bn
Income tax paid 2022
(€1.2bn in 2021)
15.0%
Effective tax rate
2022
(15.2% in 2021)
1. Netherlands
2. United States
3. Taiwan
4. South Korea
5. China
€757m
€474m
€209m
€167m
€42m
Read more in:
‘Approach to tax report’ on www.asml.com
12345
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Our approach to tax (continued)
The following principles guide us in how we report and
pay tax in the countries we operate in.
The Board of Management is accountable for ASML’s
tax strategy, tax principles and the overall tax risk
management, which are subsequently reviewed by the
Audit Committee. The ASML Tax & Customs department
is responsible for the execution of the ASML tax strategy
set by the Board of Management.
ASML’s tax strategy is based on our tax principles and is
closely aligned to our business strategy and our
sustainability goals. The tax strategy is approved by the
Board of Management. The tax strategy, tax principles
and the overall tax risk management apply to all group
entities.
Our tax strategy is
closely aligned to our
business strategy and
our sustainability goals.”
Gaby Bes
Head of Tax & Customs
Our tax principles
Compliance
– We act in accordance with the letter, intent and
spirit of tax laws and regulations.
– We make tax disclosures in accordance with
reporting requirements, US GAAP and IFRS.
– ASML’s profit allocation methods are based on
internationally accepted standards as published by
the OECD. We apply these consistently across our
business, contingent on the relevant rules and
regulations in the local jurisdictions we operate in.
Support tax systems
– We report taxable income in a jurisdiction
commensurate with the added value of the business
activities in that jurisdiction.
– We do not use so-called tax havens (as defined by
the European Commission’s ‘blacklist’) for tax
avoidance.
Relationships with authorities
– We pursue an open and constructive dialogue with
the tax authorities, and other relevant authorities, in
the jurisdictions we operate in, based on mutual
respect, transparency and trust, disclosing all
relevant facts and circumstances. We do not use
tax structures intended for tax avoidance, nor will
we engage in the artificial transfer of profits to low-
tax jurisdictions.
Our tax strategy
1 Stakeholder management
Externally, 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 remaining efficient in its administrative
procedures and way of working. We work in an integrated way with other experts within ASML.
2 The future of taxation
This includes developments in ESG (including Tax Transparency) and Tax technology, whereby we closely monitor
the developments in the outside world and continuously translate these into potential requirements or implications
for ASML.
3 Compliance & Control
This includes the development, implementation and continuous monitoring of processes and controls for
appropriate tax risk management and reporting purposes. Furthermore, this includes ensuring timely and accurate
fulfillment of tax compliance obligations in line with applicable tax laws and regulations (incl. timely payment of
taxes due).
4 Tax & Customs organization
In a 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 (challenge, collaborate,
and care).
5 Projects
Our business and the regulatory environment in which we operate change constantly. We work on projects that
deal with these changes to ensure the solutions implemented are compliant and efficient. Likewise, we
continuously strive for simplification and review of existing business models to ensure we remain tax and customs
compliant.
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WEARABLE TECHNOLOGY
Ground-
breaking tech,
life-changing
outcomes
Semiconductors are essential to a new range of
wearable devices with the potential to transform
medical care, particularly for our elderly
populations. From smartwatches to fall detection
services, nano-sensors can monitor patients’
health and alert caregivers – while in conjunction
with artificial intelligence, they can even predict
conditions such as heart disease and cancer.
Read more online
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Corporate Governance at a glance
We champion integrated corporate governance to build a relationship of trust, respect and mutual benefit
with our stakeholders.
Overview
These pages provide an
overview of and a brief
introduction to the Corporate
Governance section of our
Annual Report.
Corporate
Governance Statement
In our Corporate Governance Statement we
report on ASML's corporate governance
structure and the way ASML applies the
principles and best practices of the Dutch
Corporate Governance Code.
Read more
on page 151
– Governance structure
– Board of management
– Supervisory Board
– Board-related matters
– AGM and share capital
– Financial reporting and audit
– Compliance with governance
requirements
Read more
on page 168
Supervisory
Board Report
This report outlines the activities of the
Supervisory Board and its committees,
as well as the key focus areas for 2022,
including stakeholder engagement,
issues relating to people and our supply
chain, and the growing importance of
ESG.
– Message from the Chair
– Supervisory Board
– Board focus in 2022
– Meetings and attendance
– Composition, training and evaluation
– Supervisory Board Committees
– Audit committee
– Technology committee
– Selection and Nomination Committee
Read more
on page 186
Remuneration
Report
Here we explain the progress made
during the year regarding our commitment
to fair and balanced remuneration,
including our work to increase the level of
transparency around how we reward
management in order to attract the right
talent.
– Message from the Chair
– Remuneration committee
– Board of Management remuneration
– Supervisory Board remuneration
Our strategy
Read more
on page 31
Message from the Chair
of our Supervisory Board
Read more
on page 168
Message from the Chair of
the Remuneration Committee
Read more
on page 186
Our business model
Our stakeholders
Read more
on page 33
Read more
on page 37
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Corporate Governance
ASML corporate governance structure
Shareholders
Supervisory Board
Board of Management
Business
sectors
Business
functions
Corporate
functions
Employee
support
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.
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.
We signed up to the VNO-NCW Tax Governance Code
and report on the application of its principles in the
section Our Approach to Tax and in our more
comprehensive Approach to Tax Report on our website.
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.
In February 2022, the Dutch Corporate Governance
Code Monitoring Committee started a consultation
process that has led to a revision of the Dutch Corporate
Governance Code. The amended Dutch Corporate
Governance Code was published on December 20,
2022, and for reporting purposes, applies to the financial
years starting on or after January 1, 2023. As part of the
continued effort of our Supervisory Board and Board of
Management to ensure that our practices and
procedures comply with Dutch corporate governance
requirements, we are currently assessing the implications
of the amended Code for our corporate governance
structure.
Read more in:
Our company,
Our business and ESG strategy,
Our business model and
Risk - How we manage risk.
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Board of Management
Our 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 comprises five
members. On October 19, 2022, the Supervisory Board
announced its intention to expand the Board of
Management to six members effective per the 2023
AGM, adding the Chief Strategic Sourcing &
Procurement function as a Board of Management
position, given the increased strategic importance of this
function for ASML’s strategy.
The Board of Management 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 divides tasks among its members, charging
individual members with specific managerial tasks.
However, 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. In addition to 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. For details, see the Supervisory
Board section of this Corporate Governance chapter.
Further information regarding the general responsibilities
of the Board of Management, its relationships 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 of 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. For persons
aged 65 years or above, a maximum appointment term
of two years applies, with the possibility of reappointment
for consecutive two-year terms.
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
take place after consulting the General Meeting.
More information about changes related to the Board of Management
during 2022 can be found in the
Supervisory Board Report included in this Annual Report.
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Board of Management (continued)
Martin A. van den Brink
(1957, Dutch)
President, Chief Technology
Officer and Vice Chair of Board
of Management
Term expires 2024
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.
Christophe D. Fouquet
(1973, French)
Executive Vice President
and Chief Business Officer
Term expires 2026
Christophe Fouquet was appointed Executive
Vice President EUV and member of the Board
of Management in 2018. In 2022, Christophe
was appointed Executive Vice President and
Chief Business Officer. Since joining ASML in
2008, he has held several positions, including
Senior Director Marketing, Vice President
Product Management, and Executive Vice
President Applications, a position he held
from 2013 until 2018. Prior to joining ASML,
he worked for semiconductor equipment
peers KLA-Tencor and Applied Materials.
Christophe holds a master’s degree in
Physics from the Institut Polytechnique de
Grenoble.
Frédéric J.M. Schneider-
Maunoury (1961, French)
Executive Vice President
and Chief Operations Officer
Term expires 2026
Frédéric Schneider-Maunoury has been
Executive Vice President and Chief
Operations Officer since he joined ASML in
2009. He was appointed to the Board of
Management in 2010. Prior to joining ASML,
Frédéric was Vice President Thermal Products
Manufacturing at power generation and rail
transport equipment group Alstom, having
previously served as General Manager of the
worldwide Hydro Business of Alstom. Before
joining Alstom, Frédéric held various positions
at the French Ministry of Trade and Industry.
He is a graduate of École polytechnique
(1985) and École Nationale Supérieure des
Mines (1988) in Paris.
Roger J.M. Dassen
(1965, Dutch)
Executive Vice President
and Chief Financial Officer
Term expires 2026
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+ and serves on the Board of
the Stichting Brainport.
Peter T.F.M. Wennink
(1957, Dutch)
President, Chief Executive Officer
and Chair of Board of Management
Term expires 2024
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.
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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 business, as well as the
relevant interests of its stakeholders.
In our 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 nine
members, with the minimum being three.
In performing its tasks, 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, 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 2022 in:
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 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 of 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.
Further information about changes to the Supervisory Board's
composition in 2022 and 2023 can be found in the
Supervisory Board Report.
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.
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Supervisory Board (continued)
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 December 2022 she was a
Supervisory Board member at the
Cooperatieve Rabobank UA. She also sits on
the supervisory boards of Jungheinrich AG
and Randstad Holding NV.
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. He also served as a
Supervisory Board member of the Dutch
Central Bank from 2006 until 2012, as Non-
Executive Director at Daimler AG from 2009
until 2014 and as Non-Executive Director at
Dell from 2010 until 2013. 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.
Alexander F.M. Everke
(1963, German)
Member of the Supervisory Board
since 2022
(First term expires in 2026)
Member of the
Remuneration Committee
D. Mark Durcan
(1961, American)
Alexander Everke joined the Supervisory
Board in 2022. He is the CEO of ams-OSRAM
AG, a position he has held since March 2016,
after having joined ams AG in October 2015.
Prior to that, Mr. Everke held a range of
positions in the semiconductor industry
including management positions at Siemens
and Infineon and various leadership positions
at NXP Semiconductors.
Member of the Supervisory
Board since 2020
(First term expires in 2024)
Chair of the Technology Committee,
member of the Selection and
Nomination Committee
Mark Durcan was appointed as a member
of the Supervisory Board in 2020. From
2012 to 2017, he was CEO of Micron
Technology, Inc., having joined the
company in 1984 and held various
management positions before being
appointed as CEO. Furthermore, Mark was
director at Freescale Semiconductor, MWI
Veterinary Supply and Veoneer, Inc. Mark
is a Non-Executive Director at Advanced
Micro Devices, Inc., 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.
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Supervisory Board (continued)
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 N.V. 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.
D. Warren 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 was CEO
of Rolls-Royce Group Plc from 2015 until
December 2022. He spent his early career at
Texas Instruments Ltd from 1985 to 1994.
He then joined ARM Holdings, Plc, where he
held various management positions and was
appointed CEO from 2001 to 2013.
Terri L. Kelly
(1961, American)
Member of the Supervisory
Board since 2018
(Second term expires in 2026)
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 Alfred I.
Dupont Charitable Trust, which provides
oversight of the Nemours Foundation. She is
the Chair of the Board of the University of
Delaware and she is a member of the Board
of Directors of United Rentals, Inc.
Birgit M. 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
N.V. Prior to that, she held various
management positions in finance at Johnson
& Johnson, Heineken, Tenneco and Reed
Elsevier.
An L. Steegen
(1971, Belgian)
Member of the Supervisory
Board since 2022
(First term expires in 2026)
Member of the Technology
Committee
An Steegen joined the Supervisory Board in
2022. She is co-CEO and member of the
Board of Directors of Barco N.V., a position
she has held since October 2021. Prior to
that, An was R&D director at IBM
Semiconductor and Executive Vice President
at the research institute imec in Belgium.
Furthermore, An was CTO and Executive
Vice President Electronic and Electro-Optical
Materials at Umicore.
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Other Board-related matters
The section below addresses a number of
topics that apply to both the Board of
Management and the Supervisory Board.
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.
Board Diversity Matrix
(status per December 31, 2022)
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 for the Board
of Management as adopted by the General Meeting. The
current Remuneration Policy for the Board of
Management was adopted by the General Meeting in
2022.
The remuneration of the Supervisory Board is based on
the Remuneration Policy for the Supervisory Board. The
current Remuneration Policy for the Supervisory Board
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.
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 the:
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 four female and five
male members on our Supervisory Board. The Board
diversity matrix is set out on this page.
Part I: Gender Identity
Directors
Part II: Demographic Background
Underrepresented Individual in Home
Country Jurisdiction
LGBTQI+
Did Not Disclose Demographic Background
Country of Principal Executive Offices
Foreign Private Issuer
Disclosure Prohibited under Home Country Law
Total Number of Supervisory Board members
Female
Male
Non-Binary
4
(2021: 3)
5
(2021: 5)
0
(2021: 0)
0
(2021: 0)
0
(2021: 0)
0
(2021: 0)
0
(2021: 0)
0
(2021: 0)
0
(2021: 0)
0
(2021: 0)
0
(2021: 0)
0
(2021: 0)
Did not
Disclose
0
(2021: 0)
0
(2021: 0)
0
(2021: 0)
0
(2021: 0)
The Netherlands
Yes
No
9 (2021: 8)
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Other Board-related matters (continued)
We recognize
the importance
of diversity and
inclusion.”
Christophe Fouquet
Executive Vice President, Chief Business Officer and
member of the Board of Management
On January 1, 2022, the gender diversity bill came into
force, introducing a quota for the supervisory boards of
Dutch listed companies following which the composition
of the supervisory board should comprise at least one-
third men and one-third 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 and a plan
which outlines the actions needed in order to meet the
gender diversity targets. Based on the gender diversity
bill, companies will have to report on the gender balance
targets, the plan and their progress made in achieving
the gender balance targets to the Dutch Social and
Economic Council within 10 months after the end of the
financial year and in the management report.
Currently, the Supervisory Board meets the gender quota
of the Dutch gender diversity bill, as both men and
women are represented on the Supervisory Board by at
least three out of nine members.
Currently, no seats are taken by women on the Board of
Management. During 2022, the Supervisory Board set a
gender balance target for the Board of Management to in
2026 have at least one female and a at least one male
Board of Management member. Taking into account the
intended appointment of Wayne Allan as member of the
Board of Management per the 2023 AGM, this would
lead to a female representation of at least 17% based on
the size of the Board of Management per the 2023 AGM,
being six members. When setting the gender balance
target for the Board of Management, the Supervisory
Board has considered the technology environment ASML
operates in, with a thinly populated global STEM
(science, technology, engineering and math) talent pool,
making it challenging to recruit female talent. Our R&D
workforce is 16% female. The Supervisory Board has
also considered the female representation of the ASML
group overall, which was 19% (December 31, 2022) and
the female representation in senior leadership (JG 13+),
which was 10% (December 31, 2022). Furthermore,
during 2022 a target was set to reach a representation of
women at senior management level of 12% by 2024, the
current level being 10%. To make this gender target for
senior management tangible, we also set a goal to
increase the hiring and promotion of female leaders (JG
13+), from 12% in 2021 to 20% in 2024. The Supervisory
Board also included performance metrics aimed at
improving the representation of females in senior
leadership in the Board of Management's long term
incentive. During 2022, the Supervisory Board updated
the Board of Management Diversity Policy, which can be
found on our website.
Our diversity and inclusion roadmap focuses on three key
areas within ASML: leadership, culture and talent.
The Supervisory Board fully supports ASML’s Diversity &
Inclusion strategy as set out in this Annual Report. We
recognize that human capital is ASML’s most valuable
asset and that our success is driven by our unique and
diverse teams. Diversity promotes the inclusion of
different perspectives and ideas, mitigates against
groupthink and ensures ASML can benefit from all
available talent. This also applies to the Board of
Management and our senior management, where a
diverse composition contributes to robust decision-
making and proper functioning. Diversity complements
ASML’s company values – challenge, collaborate and
care.
We are building and implementing company-wide
programs to further promote diversity and inclusion at all
levels of our workforce. This includes specific programs
aimed at attracting, retaining and developing diverse
leaders with the purpose of increasing our talent pool of
diverse talent for senior leadership and Board of
Management positions.
Our Global Diversity & Inclusion Council, founded in
2021, 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 leads company-wide
accountability for our goals. We also have a global
diversity and inclusion team, including a Chief Diversity
Officer, who is responsible for driving initiatives that are
related to diversity and inclusion across ASML.
12%
Target 2024
representation of women
at leadership level
To promote diversity and inclusion in our workforce,
including our Board of Management and senior
management, we are building and implementing
programs that lead to measurable and actionable results.
These programs include:
– Organizing internal training sessions for employees,
managers and leaders globally
– Participating in national engineering conferences to
broaden our talent pipeline to be more diverse and
inclusive in all areas of demographics
– Collaborating with universities and organizations
dedicated to building diversity and creating
opportunities for professional development and
engagement
– Executing global D&I engagement activities, such as
International Women’s Day, LGBTQIA+ Pride Month
and Global Diversity Month
– Organizing D&I events with keynote speakers
– Supporting employee networks give back locally in
their community through mentoring programs
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Other Board-related matters (continued)
For the Board of Management specifically, the
Supervisory Board will select candidates for appointment
to the Board of Management with due observance of
ASML's objective to foster a diverse and inclusive
working environment. Accordingly, ASML aims to fill
vacancies by considering candidates that bring the
required expertise and contribute to ASML's diversity.
The Supervisory Board, when assessing the composition
of the Board of Management and identifying suitable
candidates for succession, will consider candidates on
merit against objective criteria and the specific profile for
the job, while having due regard for the relevant aspects
of diversity. This applies in particular to continuously
striving for a more balanced gender representation.
In ASML's internal development efforts for potential
Board of Management members, we strive for
participation of a diverse group of employees, specifically
senior leadership.
Any search firm engaged by the Supervisory Board or its
Selection and Nomination Committee will be specifically
directed to include diverse candidates in general and
multiple female candidates in particular.
In 2022, we made progress in gender diversity at all
levels, including individual contributors and senior
leaders. Female employees now make up 19% of our
workforce worldwide, an improvement of one percentage
point compared with last year. We aim to continue this
upward trend as we move toward 2024.
To do this, we are focusing on the growth of our existing
team members and expanding the diversity of our talent
pool. We had set goals to increase the percentage of
females among our new hires from 20% in 2021 to 23%
by 2024. In 2022, 24% of new hires were females.
The current representation of women at leadership level
is 10%, while our ambition is to reach 12% by 2024. To
make this tangible, we had set a goal to increase the
hiring and promotion of female leaders, from 12% in
2021 to 20% in 2024. In 2022, the % inflow of female
leaders was 35%.
Due to the strong performance of our female inflow of
new hires and recognizing that we want to continue this
ambitious inflow, we have defined a 2025 target of 24%
(which is at the same level as our 2022 performance, but
higher than the original 2024 target of 23%).
This talented pool of female employees will be 'role
models', paving a path for more to follow. We believe
that promoting more diversity in our workforce will help
us to attract and retain smart, talented people, enabling
us to drive technological innovations that meet our
customers’ needs.
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
thinly populated and it is even more challenging to recruit
female talent. Our R&D workforce is 16% female. Nearly
90% of our job positions are STEM-related, whereas
peers in the high-tech industry have more 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.
Read more information on our diversity and inclusion strategy,
initiatives, women in leadership and performance data in:
Social - Attractive workplace for all - Best employee experience
and Non-financial statements - Non-financial indicators -
Attractive workplace for all.
Conflicts of interest and related party transactions
Conflict 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 2022, 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. The remuneration received by members of the
Board of Management from outside positions, if any,
shall be reimbursed to ASML, unless otherwise agreed
with the Supervisory Board in accordance with the Rules
of Procedure of the Board of Management.
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 twice.
During the financial year 2022, all members of the Board
of Management and the Supervisory Board complied
with the requirements described above.
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AGM and share capital
We highly value
the interaction
with our
shareholders.”
Gerard Kleisterlee
Chair of the Supervisory Board
General Meeting
A General Meeting (AGM) is held at least once a year and
generally takes place in Veldhoven, the Netherlands. In
2022, shareholders had the option to attend the 2022
AGM in person in Veldhoven or 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 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 least 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 shareholders with information relevant to the
topics on the agenda by means of an explanation of the
agenda as well as by 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.
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AGM and share capital (continued)
ASML shareholders may appoint a proxy who can vote
on their behalf at the AGM. In addition, we 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.
Hybrid AGM
In view of the ongoing COVID-19 pandemic, we
organized a hybrid AGM in 2022, accommodating
attendance in person as well as 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 in person or virtually was offered
in addition to the opportunity to vote in advance via
written or electronic proxy. As we highly value interaction
with our shareholders, we invited shareholders who
attended the AGM in person to ask questions about the
agenda items during the AGM and we provided holders
of shares traded on Euronext Amsterdam who attended
the AGM virtually the opportunity to ask live questions in
writing through the virtual meeting platform. All questions
were answered during the AGM.
Resolutions are adopted by the General Meeting 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.
During the 2022 AGM, the Board of Management, with
the approval of the Supervisory Board, proposed to the
General Meeting to amend the Articles of Association.
The amendments mainly related to reflecting various
changes in applicable laws and regulations, simplifying
the Articles of Association and applying amendments of
a technical nature. The proposal was adopted by the
General Meeting and the new Articles of Association
became effective as per May 12, 2022. For more detailed
information on the amendments to the Articles of
Association, please see the 2022 AGM page on our
website.
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.
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.
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AGM and share capital (continued)
ASML’s authorized share capital amounts to €126.0 million and is divided into:
Type of shares
Cumulative preference shares
Ordinary shares
Number of shares
Nominal value
Votes per share
700,000,000
€0.09 per share
700,000,000
€0.09 per share
1
1
The issued and fully paid up ordinary shares with a nominal value of €0.09 each were as follows:
Year ended December 31
2020
2021
2022
Issued ordinary shares with nominal value of €0.09
416,514,034
402,601,613
394,589,411
Issued ordinary treasury shares with nominal value of €0.09
2,983,454
3,873,663
8,548,631
Total issued ordinary shares with nominal value of €0.09
419,497,488
406,475,276
403,138,042
87,875,651 ordinary shares were held by 280 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 cumulative preference shares have been issued.
Following the amended Articles of Association that were
adopted by the General Meeting during the 2022 AGM,
the capital structure changed. Due to these changes, we
no longer have the ordinary share class B. With the
removal of the ordinary share class B, each share carries
one vote.
Special voting rights, limitation voting rights and transfers
of shares
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 issued in the CCIP.
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 a 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.
2022 authorization to issue shares
At our 2022 AGM, the Board of Management was
authorized from April 29, 2022 through October 29,
2023, 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,
2022, plus an additional 5% of our issued share capital
at April 29, 2022, that may be issued in connection with
mergers, acquisitions and/or (strategic) alliances. Our
shareholders also authorized the Board of Management
through October 29, 2023, 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.
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AGM and share capital (continued)
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, 2022, of the
following members: Mr. A.P.M. van der Poel, Mr. S.
Perrick, Mr. S.S. Vollebregt and Mr. J. Streppel.
Other than the arrangements made with the Foundation
as described above, ASML has not established any other
anti-takeover devices.
2022 authorization to repurchase shares
At the 2022 AGM, the Board of Management was
authorized, subject to Supervisory Board approval, to
repurchase through October 29, 2023, up to a maximum
of 10% of our issued share capital at April 29, 2022, 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.
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AGM and share capital (continued)
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, 2022. The information set out below with respect to shareholders is based on
public filings with the SEC and AFM as of February 8, 2023.
Capital Research and Management Company1
BlackRock Inc.2
T. Rowe Price Group, Inc.3
Members of ASML’s current Board of Management (5 persons)4,5
Shares
40,615,837
32,539,755
13,527,385
89,892
% of Class6
10.29 %
8.25 %
3.43 %
0.02 %
1. As reported to the AFM on February 7, 2022, Capital Research & Management Company (CRMC) reports 365,542,532 voting rights
corresponding to 40,615,837 ordinary shares (based on 9 votes per share), but do not report ownership rights related to those shares.
2. Based solely on the Schedule 13-G/A filed by BlackRock Inc. with the SEC on March 11, 2022; BlackRock reports voting power with respect to
29,277,159 of these shares. A public filing with the AFM on December 6, 2022 shows an aggregate indirect capital interest of 5.80% and voting
rights of 7.23%, based on the total number of issued shares and voting rights at that time.
3. A public filing with the AFM on November 8, 2022 shows T. Rowe Price Group, Inc. indirectly holding 13,527,385 shares (comprising common
shares and new york shares) and 13,098,195 votes, representing a capital interest of 3.33% and a voting interest of 3.22%, based on the total
number of issued shares and voting rights at that time.
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, 394,589,411 as of December 31, 2022, which excludes
8,548,631 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 or the SEC.
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Financial reporting and audit
ASML annually prepares two sets of annual reports
including financial statements as set out on this page.
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.
For ASML’s internal risk management and control systems read more
in:
Risk - How we manage risk - Enterprise Risk Management.
The Supervisory Board has reviewed and approved, and
all Supervisory Board members signed, ASML’s 2022
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 2022 AGM, KPMG was
appointed as the external auditor for the reporting years
2023 and 2024.
On April 29, 2022, ASML announced the Supervisory
Board’s decision to nominate PricewaterhouseCoopers
Accountants NV (PwC) as its external auditor for the
reporting year 2025. The formal appointment of PwC will
be submitted for voting at ASML’s 2023 AGM.
ASML publishes, among others, the following
annual reports regarding the financial year 2022:
– The statutory Annual Report, prepared in accordance
with the requirements of Dutch law. The financial
statements included therein are prepared in
accordance with Part 9 of Book 2 of the Dutch Civil
Code and EU-IFRS; and
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
– The Annual Report on Form 20-F, prepared in
be analyzed; and
accordance with the requirements of the Exchange
Act. The financial statements included therein are
prepared in conformity with US GAAP.
– Information about the quality, and variability, of our
earnings and cash flow.
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Financial reporting and audit (continued)
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
pre-approved 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 the 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 regard 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 at which the quarterly
financial results are discussed.
The Audit Committee is informed by the external auditor
without delay if the external auditor discovers
irregularities in the content of the audit of the financial
reports.
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 with 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.
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Compliance with Corporate Governance requirements
Corporate information
Practices followed by ASML in lieu of NASDAQ rules
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.
Quorum
Solicitation of
proxies
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 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 on this page sets forth the
practices followed by ASML in lieu of NASDAQ rules the
exception as described above.
Distribution of
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 a record date are entitled to attend and
exercise their rights as shareholders at the General Meeting, regardless of sale of shares after the
record date.
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 and he full Supervisory Board evaluates the quantitative
performance criteria. Equity compensation arrangements for employees are adopted by the Board
of Management within limits approved by the General Meeting.
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
applicable principles and best-practice provisions of the
Dutch Corporate Governance Code as in effect for the
financial year 2022.
The Board of Management and the Supervisory Board,
Veldhoven, February 15, 2023
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Message from the Chair of the Supervisory Board
Another record performance, in challenging circumstances
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.
Dear Stakeholder,
Despite geopolitical turmoil, high inflation and massive
supply chain issues, 2022 has been another record year
for our company. Driven by continuing strong demand for
microchips, we currently enjoy the fullest order book in
our history – and we are in a very good position to
achieve further growth in the years to come.
As a supervisory Board we are of course very pleased
with these achievements that only could be realized
thanks to our highly engaged workforce that always went
the extra mile required. We are satisfied, but not
complacent. The high market demand, especially for
DUV, took us by surprise and our systems and supply
chain issues did not allow us to meet all our customer
requirements.
In order to maintain our success we are working hard to
prepare for the future. Below, I outline some of the key
areas that we focused on during 2022.
Reviewing our capacity plans
The last 12 months again saw unprecedented demand
for semiconductors, both in mature as well as leading
edge technology, resulting in the fullest order book in our
history. This against a backdrop of a declining global
economic growth, driven by geopolitical tensions –
including the war in Ukraine as well as legacy issues
associated with COVID-19 - with resulting high inflation
and the desire for (regional) technological sovereignty.
In this highly volatile and uncertain environment the
Supervisory Board dedicated several of its sessions to
discuss different long term market development
scenarios and agree with management the plans for
structural capacity expansion both at ASML and in our
supply chain with the required flexibility to cope with
market volatility.
The Supervisory Board also discussed in detail with
management the actions required to meet the short term
demand of our customers. Although we could not supply
all that we were asked to deliver, we ensured that our
teams did everything possible to help our customers
continue to meet the demands of their customers. For
example, our fast shipments initiative reduced throughput
time and increased output by having some final testing
and formal acceptance carried out on customer sites
instead of at our own facilities.
Organizing for continued growth
Reviewing our priorities for continued growth, we
confirmed that our current core business presents by far
the biggest opportunity. This requires a further
strengthening of our partnerships with certain key
suppliers, where we are making good progress. In
addition, we see interesting opportunities in adjacent
holistic lithography markets that we will further explore.
We strive to foster a unified culture at ASML based on
our values of challenge, collaborate and care. Making the
impossible possible and always trying to reach the
cutting edge of what is technically doable are core
characteristics of our company. However, ASML’s rapid
growth presents significant challenges for our way of
working, our people and our managerial capacity and
capabilities.
The Supervisory Board is
confident that the full order
book – supported by the
skills and passion of our
outstanding teams – lays a
firm foundation for the
months and years ahead.”
Gerard Kleisterlee
Chair of the Supervisory Board
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Message from the Chair of the Supervisory Board (continued)
We have grown from a small-to-medium-sized company,
operating in one location and relying on a handful of
people to oversee the entire organization, to a global
multinational business. Such expansion requires a
different approach and new structures, so organizational
and people development have been top priorities for the
Supervisory Board. Projects have been agreed to renew
and strengthen both our Customer Management as well
as our Supply Chain Management.
Energy efficiency, climate action, a circular economy,
water management and product safety are key
commitments from an environmental perspective. At the
same time, our management is working hard to ensure
that ASML is an attractive workplace for all and a valued
partner in our communities, while supporting the
innovation ecosystem and the supply chain. Overarching
our Environmental and Social initiatives is a firm
commitment to the highest standards of Governance.
In addition, as a Supervisory Board, we maintained a
strong focus on Management development and
succession planning. We are working hard together with
the Board of Management to identify and develop the
talent we need to ensure that we have qualified
successors both in middle- and senior-management to
deliver continued growth and meet market demands for
cutting edge lithography solutions.
Emphasizing the importance of ESG
Environment, Social and Governance (ESG) matters are
increasingly important to us and all our stakeholders.
With us and all our stakeholders, from customers and
our investors to our people and local communities, there
is a growing awareness of the role that all businesses
must play in society.
The Supervisory Board has spent considerable time
evaluating and discussing the company’s ESG strategy
and is fully supportive of the decisions that management
has made.
Engaging with our stakeholders
The Supervisory Board continued to visit customers and
suppliers during the year in order to learn more about the
challenges they face and build engagement at the
highest level. We visited Intel, one of our major
customers, where we engaged with their senior team to
further improve our customer focus, and Zeiss, the
supply partner for all our optics, to explore how we could
make the supply chain more robust and resilient.
Our visits to internal functions including the 5L
Warehouse project and the High NA factory gave us a
good insights into the expertise we have at ASML and
delivered valuable learnings on further improvement
required. l We also visited one of our key technology
partners, the Advanced Research Center for
Nanolithography (ARCNL), where we were impressed by
their depth of technical capability.
In addition a delegation of the Supervisory Board
regularly meets with the Works Council in order to better
understand the needs and concerns of our people.
Although our thoughts are usually closely aligned with
those of the Works Council, we ensure that we engage
directly with them to provide a clear communications
channel to the feelings of people across our organization.
During our 8 years on the Board, we were part of a
fantastic journey that saw ASML grow with the
breakthrough of EUV from a 6 billion revenue company in
2014 to a 21 billion Company in 2022, driven by absolute
customer focus, technological prowess and an
unbelievably strong “can do” mentality. The journey will
continue under our successors. For us it was a pleasure
and a privilege to serve.
To close, on behalf of the whole Supervisory Board I
would once again like to thank every member of our
39,086-strong team for their hard work and sheer
enthusiasm throughout 2022.You made it happen!
Gerard Kleisterlee
Chair of the Supervisory Board
Also Members of the Supervisory Board regularly meet
with institutional investors. For instance, the Chair of our
Remuneration Committee frequently engages with major
investors to ensure that the Remuneration Policy is
closely aligned with their expectations.
Looking ahead
The Supervisory Board is confident that the full order
book – supported by the skills and passion of our
outstanding teams – lays a firm foundation for the
months and years ahead. While geopolitical matters,
likely mild recession and the aftermath of COVID-19 will
continue to hamper efforts to ensure the supply chain
runs smoothly, ASML is well placed to achieve another
excellent performance in 2023.
At the 2023 AGM, Rolf-Dieter Schwalb and I will step
down after having served on ASML's Supervisory Board
for eight years. On behalf of the Supervisory Board I
would like to express gratitude to Rolf-Dieter for his
important contribution to the Supervisory Board,
especially as Chairman of the Audit Committee and
previously also as Chairman of the Remuneration
Committee.
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Supervisory Board focus in 2022
7
Supervisory Board
meetings (2021: 6)
44%
Female
members (2021: 38%)
95% 4.0
Attendance rate
(2021: 98%)
Years average
tenure (2021: 3.9)
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 of ensuring that the Board of Management
pursues a strategy that secures ASML’s leading position
as a supplier of holistic lithography solutions to the
semiconductor industry. The Supervisory Board
maintains an appropriate system of checks and
balances, provides oversight, evaluates performance and
gives 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 2022.
We are pleased to see that 2022 was another record
year for ASML in terms of turnover, cash flow and
profitability. It was a challenging year as well, since
demand for our products continued to outweigh our
output possibilities. The company has therefore been
working very hard to ramp up capacity. We recognize
that the strong growth of ASML leads to challenges in
the area of people and organizational development.
Furthermore, the geopolitical situation is a sincere factor
of risk and uncertainty. However, with a record order
book and a clear strategy for growth, we believe that
ASML is well positioned to continue to provide its
customers with leading, cost-effective patterning
solutions that drive the advancement of microchips.
Supervisory Board focus in 2022
Throughout 2022, 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 2022, the Supervisory Board devoted a
considerable amount of time to discussing strategic
topics. We carried out our 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’s 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 the 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 ASML’s value strategy and data
strategy. An in-depth review was performed of the short-,
medium- and long-term market developments in the
semiconductor industry and the related capacity ramp-
up required to meet our customers’ demands. Another
session was focused on long-term organic and in-
organic growth opportunities. These sessions enable an
engaged and focused discussion between the
Supervisory Board and Board of Management on key
strategic matters, and we highly value this way of
contributing to the strategic decision-making process.
Deep dive
Market developments and
ASML capacity
The Supervisory Board discussed with the Board of
Management the short-, medium- and long-term
market developments in the semiconductor industry
and the related capacity ramp-up required to meet
our customers’ demands. Key areas of Supervisory
Board attention were the various demand drivers and
their impact on overall demand, potential demand
volatilities and the consequences of increasing
demand in terms of capacity (ASML infrastructure
and FTEs, supply chain). The challenges and risks
related to the capacity ramp-up were also a key focus
area for the Supervisory Board.
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Supervisory Board focus in 2022 (continued)
A special Audit Committee meeting was held, in which
also the majority of the full Supervisory Board was also
present, to discuss the messaging around the 2022
Capital Markets Day. During this meeting, our updated
market outlook and financial model were extensively
reviewed and discussed.
As a Supervisory Board, we are pleased with the financial
performance of the Company and 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 2022, we witnessed continued increase of wafer
demand at both advanced and mature nodes driven by
global megatrends in the electronics industry as well as
countries pushing for technological sovereignty in a
complex geopolitical context. 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 regard 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 closely followed the execution of
the product and technology roadmap and 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.
Alongside the annual
strategy review, the
Supervisory Board
addressed strategic topics
throughout the year via
deep dives, which enabled
focused, in-depth
review.”
Gerard Kleisterlee
Chair of the Supervisory Board
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 dividends paid in 2022.
Furthermore, the Supervisory Board monitored the
execution of the 2021-2023 share buyback program,
which was completed on October 18, 2022. The
Supervisory Board also discussed and approved the
2022-2025 share buyback program, which was
announced on November 10, 2022.
Deep dive
Growth
Growth is a central theme that touches on many
aspects of ASML. For this reason, growth has also
been top of mind for the Supervisory Board during
2022. We discussed with the Board of Management
the challenges resulting from our growth in various
areas, including how to grow our customer trust and
performance, our people and organization, our output
capability, and our innovation, and also how to grow
sustainably. On all of these themes we held open
dialogues in which the Supervisory Board challenged
and advised the Board of Management, not only on
how to deal with the current growth ASML is going
through, but on how to organize for the future
expected growth towards 2030.
People and organization
Given the significant growth of ASML in recent years, the
topics of people and organization continued to be key
areas of focus for the Supervisory Board in 2022, as we
believe that these are of critical importance for the future
success of ASML. On several occasions, we were
provided with updates on Human Resources and
Organization. Topics covered included the ASML
progress made on the ASML leadership program, the
results of the annual employee engagement survey and
the Diversity & Inclusion strategy and progress made.
Specific attention was also paid to ASML's culture and
values the focus of the Supervisory Board was how to
maintain the culture that has made ASML successful
while growing so fast in number of employees. Also,
internal and external perspectives on ASML's culture
were discussed. We also extensively discussed the
organizational setup of ASML in the context of current
and future growth. As a result of this discussion, the
Supervisory Board decided to position the role of the
Executive Vice President and Chief Strategic Sourcing &
Procurement Officer in the Board of Management, as
announced by press release on October 19, 2022.
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.
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Supervisory Board focus in 2022 (continued)
Furthermore, as a Supervisory Board, we find it important
that business processes are fit for growth. We therefore
oversaw various transformation programs such as the
Business Performance Improvement (BPI) initiative,
focused on improving our cross-sectoral, non-product-
related business processes. As part of the BPI initiative,
we also monitored the progress on the ONE Program,
ASML’s 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 there had been less
progress than planned, looking at the challenges and
mitigating actions. We will continue to closely follow the
developments.
Deep dive:
ESG Sustainability strategy
As a Supervisory Board we consider ESG
Sustainability an increasingly important topic. While
the Supervisory Board keeps the overall oversight of
ESG Sustainability, various ESG Sustainability
aspects are discussed at committee level, e.g.
reporting in the Audit Committee, diversity in the
Selection and Nomination Committee, ESG
Sustainability as part of the Board of Management's
incentive scheme in the Remuneration Committee
and product and technology aspects in the
Technology Committee. In 2022, we discussed
ASML’s updated ESG Sustainability strategy and
execution with the Board of Management. In deep
dive sessions specific attention was paid to EUV
energy efficiency, which is a key area of focus also
given ASML's CO2 reduction ambitions, and the
Diversity & Inclusion strategy and the implementation
thereof. To underline the importance of ESG
Sustainability, the Supervisory Board decided to
include in the Board of Management's incentive
scheme metrics directly linked to ESG Sustainability
strategy, with an increased weighting.
Risk management
As risk management is a key element of the Supervisory
Board’s responsibilities, we received periodic risk
management updates during the year. We focused on
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. We
paid particular attention to 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. We also focused on the risk
related to rapid growth of the organization. During the
year, specific risk areas were reviewed in deep dive
sessions. These included the physical and IT security
risk, the risk related to the ability to deliver according to
plan and political risks in light of the global trade
situation.
Read more in:
Risk - How we manage risk.
Relationship with stakeholders
The Supervisory Board regularly discussed ASML’s
relationship with its shareholders, and Supervisory Board
members engaged with shareholders throughout the
year on topics such as ASML’s strategy and
performance, governance and ESG. The Remuneration
Committee engaged with a variety of ASML shareholders
and other stakeholders regarding Board of Management
remuneration. More information can be found in the
Remuneration Report.
A Supervisory Board delegation held two formal
meetings with the Works Council in 2022. 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. In
this context, the effectiveness of new processes
supporting growth and institutionalizing of ASML was
addressed. Other topics of discussion were ESG, the
develop and perform program at ASML, leadership
development and the status and future plans related to
working from home / return to work onsite. The
composition of the Supervisory Board and the Board of
Management was discussed, in particular the changes
per the 2022 and 2023 AGMs. The Works Council and
Supervisory Board also extensively discussed the 2022
Remuneration Policy for the Board of Management; more
information on the interactions with the Works Council on
the topic of executive remuneration can be found in the
Remuneration Report.
In November 2022, the Supervisory Board paid a visit to
one of our key customers, Intel. The Supervisory Board
met with Intel’s management and visited the Intel facility
in Hillsboro, Oregon, US. Topics of discussion included
market outlook, Intel’s technology roadmap and how
ASML can support it, and the relationship between the
two companies. For the Supervisory Board, such visits
are highly valuable because it increases our
understanding of our customers and the challenges they
face.
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Supervisory Board focus in 2022 (continued)
Additional topics
Other topics considered during Supervisory Board
meetings in 2022 included:
– Compliance with rules and regulations: We monitored
compliance with rules and regulations including the
Dutch Corporate Governance Code and were kept
informed on key legal matters, including developments
in the area of export control regulations.
– Supervisory Board composition, profile and
functioning: We extensively discussed our own
composition, profile and functioning, the composition
and functioning of Board committees and 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 composition and 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
reports of the Selection & Nomination Committee and
the Remuneration Committee.
An overview of topics discussed during the year can be
found in the list on the right.
Overview of the year
Q1
– 2021 Annual Results and Annual Report
– 2021 external audit report
– Final dividend 2021
– Remuneration Board of Management and Supervisory
Board
Q3
– 2022 statutory interim report
– Cash return including dividend policy and interim
dividend
– Visit to ASML new logistics warehouse (5L)
– HR&O update
– Risk management: Update risk landscape & deep dive:
– Risk Management including deep dive: ability to deliver
Security
according to plan
– Strategy deep dive: 2023-2027 litho demand and
– ESG strategy, including deep dives on EUV energy
consequences for ASML capacity
efficiency and Diversity & Inclusion
– Expansions beyond current scope and M&A strategy
– Outcome of Supervisory Board evaluation
– Composition of Supervisory Board
– Composition of Board of Management
– Remuneration Policy for the Board of Management
– Amendment to the Rules of Procedure Board of
Management and Supervisory Board
– Amendment of the Articles of Association
– External auditor rotation
– Legal matters report
– AGM agenda
Q2
– Strategy deep dive: Future operating model
– Strategy deep dive: Tool allocation policy
– Strategy deep dive: Scenarios to ramp the end-to-end
supply chain including industrial footprint
– Market outlook and demand drivers
– Update on business sectors: EUV, DUV, Applications
– AGM update
– Business Performance Improvement initiative including
update on Our New Enterprise program
– Revision to insider trading rules
Q4
– Annual strategy review
– Long-term financial plan and Annual Plan 2023
– Update of business plans of the business sectors and
functions
– Cash return including interim dividend and share
buyback program
– Strategy deep dive: Expansion beyond current scope
– Strategy deep dive: Value strategy
– Strategy deep dive: Data
– Transformation projects related to sourcing & supply
chain, Customer and operating model
– Capital Markets Day messaging
– Composition of Supervisory Board
– Composition of Board of Management
– HR&O, including deep dives on Diversity & Inclusion
and Culture
– Customer deep dive: Intel
– Intel visit
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Meetings and attendance
Meetings and attendance
The Supervisory Board meets at least four times per year
in accordance with its annual schedule and whenever the
Chairman, one or more of its members, or the Board of
Management requests a meeting.
In 2022, the Supervisory Board held seven meetings. Of
these meetings, three were held virtually and four were
held in person. Three in-person meetings were held at
ASML's headquarters, one was held offsite in the
Netherlands and one was held in the USA. In addition to
these meetings, there were several informal meetings
and interactions among Supervisory Board and/or Board
of Management members.
Supervisory Board meetings and 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.
The Supervisory Board meetings and the meetings of the
four Supervisory Board committees were well attended,
as is shown in the table on the far right.
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 at the Supervisory Board
meetings in 2022. 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.
Meetings of the Supervisory
Board
While most Supervisory Board and Committee
meetings of 2022 were held in person, the
Supervisory Board also met virtually on some
occasions. Using the experience gained from virtual
meetings during the COVID-19 pandemic, the
Supervisory Board continued to apply a number of
solutions developed to benefit the discussion in the
meetings, such as organizing break-out sessions in
smaller groups to optimize interaction. We also used
video for meeting preparation and provided written
meeting documents, in order to allow as much time
as possible for discussion. The Supervisory Board
members provided positive feedback about applying
these solutions in the annual evaluation.
Supervisory Board meeting attendance overview
95%
Attendance rate
Name
Gerard Kleisterlee (Chair)
Annet Aris
Birgit Conix
Mark Durcan
Warren East
Alexander Everke1
Terri Kelly
Rolf-Dieter Schwalb
An Steegen2
Hans Stork3
Supervisory
Board
7/7
Audit
Committee
7/7
Remuneration
Committee
n/a
Selection and
Nomination
Committee
6/6
Technology
Committee
5/5
6/7
6/7
7/7
6/7
4/4
7/7
7/7
4/4
3/3
n/a
6/7
n/a
5/7
n/a
n/a
7/7
n/a
n/a
4/4
n/a
n/a
n/a
3/3
4/4
4/4
n/a
1/1
6/6
n/a
6/6
n/a
n/a
6/6
n/a
n/a
n/a
5/5
n/a
5/5
n/a
n/a
n/a
n/a
1/2
3/3
1. Appointed at the AGM on April 29, 2022; also appointed as member of the Remuneration Committee.
2. Appointed at the AGM on April 29, 2022; also appointed as member of the Technology Committee.
3. Stepped down per the AGM on April 29, 2022.
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Meetings and attendance (continued)
Composition, training and evaluation
Supervisory Board skills matrix
Composition
The Supervisory Board determines the number of
members required to perform its functions, the minimum
being three members. The Supervisory Board currently
consists of nine 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.
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, see Corporate
governance – Other Board-related Matters.
Gerard
Kleisterlee
(Chair)
Annet
Aris
Birgit
Conix
Mark
Durcan
Warren
East
Alexander
Everke
Terri
Kelly
Rolf-
Dieter
Schwalb
An
Steegen
General skills
Executive board member of (listed)
international company
Finance/governance
Remuneration
Human resources/employee
relations
IT/digital/cyber
ESG
ASML-specific skills
Semiconductor ecosystem
Deep understanding of
semiconductor technology
High-tech manufacturing/integrated
supply chain management
Business in Asia
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 Corporate Governance - Supervisory Board.
Changes in composition in 2022
When his term of appointment expired, Hans Stork did
not stand for re-election and stepped down from the
Supervisory Board at the 2022 AGM, after having served
eight years on the Supervisory Board. The Supervisory
Board decided, with due observance of the Supervisory
Board profile and rotation schedule, to nominate two
candidates, Mr. Alexander Everke and Ms. An Steegen,
for appointment at the 2022 AGM. The nomination for
the appointment of An Steegen was based on the
enhanced recommendation right of the Works Council of
ASML Netherlands B.V. The General Meeting resolved to
appoint Alexander Everke and An Steegen for a term of
four years effective from the date of the 2022 AGM. As a
result, the Supervisory Board consists of nine members
following the 2022 AGM.
Changes in composition in 2023
At the 2022 AGM, the Supervisory Board gave notice
that the appointment terms of Gerard Kleisterlee and
Rolf-Dieter Schwalb would expire per the 2023 AGM.
Gerard Kleisterlee and Rolf-Dieter Schwalb have
informed the Supervisory Board that they will not stand
for re-election and will retire at the 2023 AGM, upon
completion of their current term. The Supervisory Board
extends its thanks to Gerard Kleisterlee and Rolf-Dieter
Schwalb for their valuable contribution over the past
eight years, during which the Supervisory Board has
greatly benefited from their knowledge and experience.
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Meetings and attendance (continued)
On November 23, 2022, the Supervisory Board
announced that it intends to nominate Nils Andersen and
Jack de Kreij as members of the Supervisory Board
effective from the 2023 AGM, with the intention to elect
Nils Andersen as Chair of the Supervisory Board and
Jack De Kreij as Chair of the Audit Committee following
their appointment. Furthermore, Nils Andersen is
intended to be elected as the Chair of the Selection and
Nomination Committee. Jack de Kreij is intended to be
elected as a member of the Remuneration Committee
upon appointment. Both candidate Supervisory Board
members have been present at the Supervisory Board
meetings as observers as of Q4 2022 in order to ensure
a smooth onboarding.
The agenda and explanatory notes for the 2023 AGM will
contain further information about the intended
nominations for appointment of these two Supervisory
Board members.
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, Alexander Everke and An Steegen
completed an induction program, which was partly virtual
and partly in person. Nils Andersen and Jack de Kreij will
also complete their induction program prior to their
appointment.
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 2022, strategy
and risk deep dives were held on a variety of topics: see
the Our Activities 2022 section in this Supervisory Board
Report. Furthermore, external speakers or advisers
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 5L logistics center at
ASML’s headquarters, where we saw the process of the
new logistics center first hand and were impressed by
the achievements made. Visits were also paid to ASML's
office in Hillsboro, Oregon, US, where the Supervisory
Board met with local management and employees, as
well as to Intel, one of our key customers. The
Technology Committee visited the Advanced Research
Center for Nanolithography (ARCNL) to see how ARCNL
works and cooperates with ASML as well as see the
ARCNL facilities in Amsterdam at first hand.
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 and its individual members, and the
education and training needs for the Supervisory Board
and Board of Management members.
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-to-one meetings
between the Chairman and individual Supervisory Board
members.
The 2022 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 met 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. A specific focus was the
follow-up of prior-year recommendations. An upward
review by the Board of Management was also part of the
annual assessment.
The results of the Supervisory Board evaluation were
discussed in early 2023. The conclusion was that the
Supervisory Board and its committees continue to
function well. Suggestions to further improve the
functioning of the Supervisory Board will be implemented
in 2023. These suggestions include further developing
the open and constructive dialogue with the Board of
Management on strategic topics and emerging risks,
and increasing the focus on key priorities identified by the
Supervisory Board. Other recommendations relate to
continuous enhancement of the oversight on
stakeholders, in particular customers and suppliers, and
to increase the understanding of the ecosystem beyond
our direct stakeholders. Obtaining outside-in
perspectives, where relevant, was another
recommendation resulting from the evaluation.
Opportunities for improving the focus and concision of
meeting materials were also identified, for instance by
including executive summaries highlighting the key
discussion items. The Supervisory Board furthermore
decided performing an in-depth analysis of its profile in
2023 and investigating the establishment of an ESG
Sustainability Committee in view of corporate governance
developments.
The Board of Management also conducted a self-
evaluation in 2022, 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 offsite Board of Management
meetings dedicated to this topic. Important aspects
addressed by the Board of Management include the
Board of Management’s strategic focus, stakeholder
involvement, people & organization, Board dynamics and
(future) Board organization. Also in 2023, special Board
of Management sessions 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.
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Supervisory Board committees
The Supervisory Board has four standing
committees, with members 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.
The four committees of the Supervisory Board support
the decision-making by the full Board. In the plenary
Supervisory Board meetings, the chairpersons of the
committees report on the items discussed in their
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.
Further information about the Audit Committee, the
Technology Committee and the Selection and
Nomination Committee can be found in this Supervisory
Board Report. Further information about the
Remuneration Committee can be found in the
Remuneration Report.
Supervisory Board
Audit
Committee
Remuneration
Committee
Technology Committee
Assisting in overseeing the
integrity and quality of our
financial reporting and the
effectiveness of risk
management and controls
Overseeing the development
and implementation of
the Remuneration Policies, in
cooperation with the Audit
and Technology Committee
Providing advice
with respect to our
technology plans required to
execute the business
strategy
Selection and
Nomination Committee
Assisting with the
preparation of the selection
criteria and appointment
procedures for the
Supervisory Board and
Board of Management
3
Members
4
Members
4
Members
4
Members
Read more on page 178 >
Read more on page 190 >
Read more on page 183 >
Read more on page 181 >
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Supervisory Board committees (continued)
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 (Chair)
– Birgit Conix
– Warren East
The members of the Audit Committee are all independent
members of the Supervisory Board.
The Supervisory Board has determined that both Mr. Schwalb
and Ms. Conix qualify as Audit Committee financial experts
pursuant to section 407 of the Sarbanes-Oxley Act and Dutch
statutory rules, taking into consideration their extensive financial
backgrounds and experience.
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 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.
In Q4 2022, the Audit
Committee performed an
accounting deep dive
into ESG reporting
requirements.
Recurring agenda topics (quarterly)
– Financial update and financing
– Review of the quarterly financial results and press release
– Accounting update
– Internal control update
– Observations of 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 2022. The CEO, CFO, EVP Finance, Corporate Chief
Accountant, the Head of Risk and Business Assurance are invited to the
meetings.
The overview below provides a number of topics discussed during Audit Committee meetings in 2022, in
addition to the recurring agenda topics.
Q1
– 2021 Annual Report and financial statements US GAAP and EU-IFRS
– Accounting deep dive: Balance sheet review
– 2021 External audit report
– Annual reporting process
– Cash return: Final dividend 2021
– Fraud-risk assessment
– Results of the external auditor evaluation 2021
– Results of the Audit Committee self-evaluation
– Annual plans of Risk and Internal Audit
– External auditor rotation
Q2
– Approval of external audit plan 2022
– Expense reporting for Board of Management and Supervisory Board
2021
– Security, including IT security
– External auditor rotation
Q3
– Statutory Interim report 2022
– Financing, capital allocation and dividend policy
– Quarterly interim dividend proposal and share buyback program
– Compliance deep dive: Finance
– Finance and IT transformation program
Q4
– Cash return including Q4 2022 interim dividend proposal and share
buyback program
– Capital Markets Day messaging
– 2022 Annual Report process
– Long-term financial plan
– Annual Plan 2023
– Accounting deep dive: ESG reporting requirements including CSRD
– Annual tax update
– External audit update
– Review of Rules of Procedure for the Audit Committee
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Supervisory Board committees (continued)
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 support
judgment regarding 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 2022
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 2022, the Audit
Committee held seven meetings.
Financials
In 2022, 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
with 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 matter also identified as a
critical audit matter by the external auditor. Other
important elements of the Audit Committee’s quarterly
procedures included 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
emerging ESG reporting requirements. 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 and cash generation. ASML’s
financing and cash return policies were reviewed in
detail, in particular the change in dividend policy enabling
quarterly dividend payments, the execution of the
2021-2023 share buyback program and the new share
buyback program for 2022-2025 as announced on
November 10, 2022.
The Audit Committee reviewed and provided the
Supervisory Board with advice regarding the long-term
financial plan, the financing of ASML and ASML’s cash
return policy. Topics specifically discussed included the
proposed final dividend payment in respect of the 2021
financial year and the interim dividends for the financial
year 2022, which were approved by the Supervisory
Board following recommendation by the Audit
Committee. The Audit Committee also extensively
discussed the revised dividend policy that provides for
dividend payments on a quarterly basis. The revised
dividend policy was announced in July 2022.
Emerging risks and risk deep dives
In 2022, 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.
Risk management and internal control
Throughout 2022, 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,
with a focus 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.
Furthermore, a deep dive review of the key risks and
developments related to physical and IT security was
performed paying specific attention to the progress of
risk mitigation actions and the further development of
ASML's security capabilities.
Ethics and compliance
We recognize that acting with the highest standards of
integrity is vitally important to 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. During 2022, we
also discussed ASML’s Compliance Program, including
an in-depth review of finance compliance. Furthermore,
an annual update on fraud and fraud risk management
was provided.
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Supervisory Board committees (continued)
Internal audit
The Audit Committee reviewed the annual internal audit
plan, including the scope of the audit at the start of 2022.
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 2022 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 2022 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 2022, including a review of
their independence. During the 2022 AGM, KPMG was
appointed as the external auditor for the reporting years
2023 and 2024.
Due to the fact that the current lead audit partner, for
independence reasons, can only stay in this role until and
including the reporting year 2024, the current external
auditor will rotate off after the 2024 reporting year. The
Audit Committee considered it important to start the
preparations and selection process in a timely manner,
given the limited number of audit firms available. In
addition, the Audit Committee considered it essential to
have sufficient time for onboarding the new external audit
firm and for transferring any non-audit services currently
performed by the newly appointed external audit firm. In
September 2021, the Audit Committee started the
selection process in connection with the mandatory
external audit firm rotation. 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
invited the other three ‘Big Four’ audit firms (other than
ASML’s current external auditor) as well as one second-
tier audit firm, to participate in the selection process. The
three ‘Big Four’ audit firms decided to participate in the
selection process. Following a series of interviews, as
well as two presentation rounds, in which the
participating firms were offered the opportunity to
present themselves and their audit proposals, the
Selection Committee evaluated the firms based on
certain pre-defined selection criteria. These included the
planned involvement of experts, the fit with the audit
partner and the audit team, the level of innovation in audit
approach, experience in the high-tech industry, quality
and reference rating, the international network of the
audit firm, the onboarding strategy, the competitiveness
of the audit fee and the proposal documentation and
presentations provided by the invited audit firms.
The Selection Committee concluded that Deloitte
Accountants BV (Deloitte) was the preferred audit firm,
with PricewaterhouseCoopers Accountants NV (PwC) as
runner-up. Unfortunately, the Supervisory Board needed
to withdraw the nomination of Deloitte after being
informed by Deloitte that they would not be able to
complete in a timely manner and therefore resolve a
conflicting advisory role involving a company in which
ASML holds an equity stake. The Supervisory Board
immediately re-initiated the selection process and
announced in April 2022 that PwC had been identified as
the preferred audit firm to become ASML’s external
auditor for the reporting year 2025. We intend to submit
the proposal to appoint PwC for the reporting year 2025
for voting at ASML's 2023 AGM.
Other topics
Other topics discussed by the Audit Committee in 2022,
included ASML’s tax planning, the Finance and IT
transformation program, ESG reporting requirements and
the quarterly overviews of legal matters.
The Audit Committee also performed an annual review
and update of its Rules of Procedure.
Following most Audit Committee meetings, the internal
and external auditor each meet 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.
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Supervisory Board committees (continued)
Selection and Nomination Committee
The Selection and Nomination Committee assists the Supervisory
Board in relation to its responsibilities over the composition and
functioning of the Supervisory Board and the Board of Management
and the monitoring of corporate governance developments.
Recurring agenda topics
– Role, composition and functioning of the Board of
Management
– Role, composition and functioning of the Supervisory
Main responsibilities:
– Preparing the selection criteria and appointment
Board
– Corporate governance
Attendance
In addition to the Selection and Nomination Committee
members, the two presidents and the EVP HRO are
regularly invited to attend (parts of) its meetings. An external
adviser is also invited to attend the Selection and
Nomination Committee meetings when deemed necessary.
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.
procedures for members of the Supervisory
Board and Board of Management, and the
supervision of the Board of Management’s
policy in relation to the selection and
appointment criteria for senior management;
– Periodically evaluating the scope and
composition of the Board of Management and
the Supervisory Board, and proposing the profile
of the Supervisory Board;
– Periodically evaluating the functioning of the
Board of Management and the Supervisory
Board, and their individual members;
– Preparing the Supervisory Board’s decisions for
appointing and reappointing members of the
Board of Management and proposing
(re)appointments of members of the Supervisory
Board; and
– Monitoring and discussing developments in
corporate governance.
The overview below provides details on the topics discussed during Selection and Nomination Committee
meetings in 2022.
H1
– Composition of Board of Management, including
H2
– Composition of Board of Management, including diversity
diversity aspects & requirements and succession pipeline
aspects & requirements, and succession pipeline
– Reappointment of Board of Management members
– Profile and composition of Supervisory Board and
composition of its committees
– Nominations for appointment of Supervisory Board
members
– Induction program for new Supervisory Board members
– Amendment of Rules of Procedure Board of
Management and Supervisory Board
– Amendment of Articles of Association
– Outcome of evaluation of Supervisory Board and
committees
– Performance of the Board of Management and individual
members
– Intended appointment of Wayne Allan as member of the
Board of Management per the 2023 AGM
– Profile and composition of Supervisory Board
– Nomination for appointment of Nils Andersen and Jack
de Kreij as Supervisory Board members per the 2023
AGM
– Evaluation of the Supervisory Board and committees
including follow-up on the recommendations of the
Supervisory Board evaluation and approach to the 2022
evaluation
In 2022, the Selection and Nomination
Committee nominated Nils Andersen
and Jack de Kreij for appointment as
Supervisory Board members per the
2023 AGM.
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Supervisory Board committees (continued)
Composition, role and responsibilities of the Board of
Management
In 2022, the Selection and Nomination Committee
devoted significant time to discussing the (future)
composition, role and responsibilities of the Board of
Management. For example, we reviewed the talent
bench and discussed 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, discussions took place with each individual
Board of Management member, the outcome of which
was discussed with the Committee.
During the 2022 AGM, Peter Wennink, Martin van den
Brink, Roger Dassen, Christophe Fouquet and Frédéric
Schneider-Maunoury were reappointed as members of
the Board of Management. Peter Wennink and Martin
van Den Brink were reappointed for a term of two years.
Roger Dassen, Christophe Fouquet and Frédéric
Schneider-Maunoury were appointed for four-year terms.
On October 19, we announced the intention to appoint
Wayne Allan, EVP and Chief Strategic Sourcing &
Procurement Officer, as member of the Board of
Management effective per the 2023 AGM. With this
appointment, the Board of Management will be
expanded to six members. The rationale behind this
intended appointment is the increased strategic
importance of the Strategic Sourcing & Procurement
Officer function for ASML’s strategy.
The Selection and Nomination Committee and the
Supervisory Board are continuously discussing the
succession planning with respect to the Board of
Management.
Composition, role and responsibilities of the Supervisory
Board
The Selection and Nomination Committee spent a
significant amount of time discussing the Supervisory
Board’s composition, profile and rotation schedule,
particularly the appointment and reappointment of
Supervisory Board members to fill vacancies both in the
short and longer term. This discussion resulted among
other things in a decision to increase the number of
Supervisory Board members to nine effective from the
2022 AGM. The rationale behind this extension is that the
Supervisory Board considered it desirable to add an
additional member with a background and experience in
semiconductor technology and the semiconductor
industry. This was seen as particularly important given
the growth of ASML in size and complexity as well as in
view of the Supervisory Board’s rotation schedule. For
the actual changes in composition of the Supervisory
Board, reference is made to the section on Supervisory
Board composition in this Annual Report.
The Selection and Nomination Committee also discussed
changes to the composition of the Supervisory Board
effective per the 2023 AGM. The Selection and
Nomination Committee advised the Supervisory Board
on the nomination for appointment of successors to
Gerard Kleisterlee and Rolf-Dieter Schwalb, who will
retire during the 2023 AGM after having served eight
years on our Supervisory Board.
Read more in:
Supervisory Board report - Meetings and attendance -
Composition.
Changes to Supervisory Board Committees in 2022
The Selection and Nomination Committee also discussed
the composition of the Supervisory Board committees in
light of the retirement of Hans Stork and the appointment
of An Steegen and Alexander Everke. Several changes in
the composition of the Supervisory Board Committees
took effect per the 2022 AGM. Alexander Everke became
a member of the Remuneration Committee upon the
retirement of Hans Stork. In the Technology Committee,
Hans Stork was succeeded by An Steegen.
Read more in:
Supervisory Board report - Meetings and attendance -
Composition.
Corporate governance
As part of its responsibility to monitor corporate
governance developments, the Selection and Nomination
Committee discussed, among other things, the
amendments of the Articles of Association and the Rules
of Procedure for the Board of Management and the
Supervisory Board. In addition, the Selection and
Nomination Committee discussed developments with
regard to the Dutch gender diversity bill that came into
effect on January 1, 2022, and its impact on ASML.
The Committee also discussed the amendment of the
Dutch Corporate Governance Code as well as matters of
interest to investors and shareholder organizations.
At the end of 2022 and early 2023, 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.
Read more in:
Supervisory Board report - Meetings and attendance -
Evaluation.
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Supervisory Board committees (continued)
Technology Committee
The Technology Committee advises the Supervisory Board
with respect to the technology plans required to execute
our business strategy.
Members:
– Mark Durcan (Chair)
– Annet Aris
– Gerard Kleisterlee
– An Steegen
The Technology Committee is supported by
external experts as well as experts from within
ASML who act as advisers on the subjects
reviewed and discussed. External experts may
include representatives of customers, suppliers
and partners to increase the Committee’s
understanding of the technology and research
required to develop our leading-edge systems.
Main responsibilities:
– Advising on technology trends, the study of
potential alternative strategies, the technology
strategy, product roadmaps, required technical
resources and operational performance in R&D;
– Making recommendations to the Supervisory
Board on technology-related projects with
respect to ASML’s competitive position; and
– Discussing the technology targets set to
measure short- and long-term performance as
well as the achievements related to these, and
advising the Remuneration Committee on this
topic.
Recurring agenda topics (quarterly)
– Product roadmap
– Progress Technology Leadership Index
Technology Committee meetings in 2022
In general, the Technology Committee meets at least twice
a year and more frequently when deemed necessary.
In 2022, the Technology Committee held five meetings.
Attendance
In addition to the Technology Committee members, the
Committee’s external and internal advisers regularly
attended committee meetings. The advisers do not have
voting rights.
The overview below provides details on the topics discussed during
Technology Committee meetings in 2022.
Q1
– Business line review: Applications
– Technology target setting for 2022
Q3
– Business line review: EUV (including High-NA)
– Next EUV
Q2
– Review of the Development & Engineering department
– Visit to Advanced Research Center for
Nanolithography in Amsterdam, the Netherlands
Q4
– Roadmap in Logic and Memory
– Business line review: DUV
In Q2 2022, the
Technology Committee
visited the Advanced
Research Center for
Nanolithography in
Amsterdam, the
Netherlands.
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Supervisory Board committees (continued)
Review of technology programs
As in previous years, the Technology Committee’s
primary focus in 2022 was 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, 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. At the beginning of the year, in a meeting
especially planned for this purpose, the Technology
Committee discussed the final achievements on the
technology targets. In the same meeting, new technology
targets were set for the new performance period. The
Technology Committee subsequently provided advice to
the Remuneration Committee and the Supervisory
Board.
The meeting in Q1 was dedicated to the achievements
within the Applications business line. The Technology
Committee was presented with a recap of the
achievements in 2021 and was informed about the
roadmap toward 2027, the market developments,
competitive landscape and the opportunities in that
respect. In addition, updates were provided on
computational lithography, optical metrology, e-beam
metrology and control and data products.
In Q2, the main focus of the meeting was on the
Development & Engineering department of ASML,
including its Research department. In addition, a
presentation was provided on system engineering within
ASML and how this contributes to the product and
technology roadmap. The meeting took place at the
Advanced Research Center for Nanolithography (ARCNL)
in Amsterdam. In addition to a presentation on how
ARCNL works and cooperates with ASML, the
Technology Committee was provided with a tour of
through the ARCNL facilities in Amsterdam.
The primary focus of the meeting in Q3 was the
achievements and challenges in EUV 0.33 NA and
EUV 0.55 NA (High-NA), including an extensive
discussion about the biggest risks and opportunities for
EUV 0.33 NA. Special attention was paid to the overall
roadmap, market developments and EUV field
performance as well as the status of new product
development. The Technology Committee was informed
about the interest and engagement of customers in High-
NA, the customer insertion roadmap and node
requirements and how supply chain challenges are
managed. In addition, the Technology Committee was
presented with input regarding the possibilities and the
landscape beyond EUV 0.55 NA (High-NA).
In Q4, the Technology Committee invited imec to provide
its view on the long-term device roadmap for both Logic
and Memory, and this was followed by a detailed
discussion of the impact of the device roadmap on the
lithography roadmap. In addition, the Technology
Committee discussed the developments and
achievements in DUV. In addition to the product
roadmaps and the technology programs, the Technology
Committee was informed about the product strategy and
the service strategy. Furthermore, the Committee paid
attention to the Mature Products & Services business line
and the related challenges and opportunities.
The Technology Committee’s in-depth technology
discussions and the subsequent reporting of the main
points of these discussions to 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.
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Financial Statements and Profit Allocation
The financial statements of ASML for the financial year
2022, 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
2022 financial statements. We also recommend that our
shareholders adopt the Board of Management’s
proposal to make a final dividend payment of €1.69 per
ordinary share. Together with the interim dividends paid
in respect of the 2022 financial year, which add up to
€4.11 per ordinary share, this leads to a total dividend of
€5.80 per ordinary share for the year 2022.
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
Mark Durcan
Warren East
Alexander Everke
Terri Kelly
Rolf-Dieter Schwalb
An Steegen
Veldhoven, February 15, 2023
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Remuneration
Report
Message from the Chair of the
Remuneration Committee
A fair and balanced
remuneration is our main
priority, and this year we
have looked to increase
the level of transparency
around how we reward
management in order to
attract the right talent.
Dear Stakeholder,
On behalf of the Remuneration Committee, I am pleased
to present the 2022 Remuneration Report, which
provides a summary of the remuneration policies for the
Board of Management and the Supervisory Board. The
following pages explain how these policies were applied
in 2022.
From a personal perspective, my first full year as Chair
has been challenging but highly enjoyable. Throughout, I
have really appreciated the support I have received from
both internal and external stakeholders. The Committee
worked hard to engage with as many stakeholders as
possible during the year. We built a sound understanding
of the major issues around remuneration, particularly
those around disclosure and incentives, and this enabled
us to prepare a fair and balanced Remuneration Policy.
Broad support
These are early days during which we are closely
monitoring the impact of the new policy to ensure that it
has the desired effects. Our initial engagements with
shareholders and shareholder representatives revealed
that they were generally supportive. In particular, they
were appreciative of the increased disclosure and of the
ways in which the Supervisory Board proposed to
address sensitivities around the higher pay levels.
However, some shareholders expressed concerns
regarding our ability to attract and retain the right talent,
given senior executive pay packages at ASML versus
those at companies with which we compete in the global
race for talent. Furthermore, some shareholders have
raised questions around the level of ambition of the
performance metrics in the long-term incentive (LTI),
notably Relative Total Shareholder Return and employee
engagement. We amended the threshold level for the
employee engagement target following this feedback.
In addition, while the Works Council acknowledged the
recruitment challenges we face and was positive about
the Remuneration Policy for the Board of Management in
many respects, it did have reservations regarding some
matters including the short-term incentive (STI) – for
example, the Works Council was concerned that internal
factors such as process efficiency and employee well-
being were not explicitly considered in the STI and that
there were no explicit criteria regarding internal and
societal fairness. Throughout 2022, the Remuneration
Committee and the Works Council continued to engage
constructively about these topics.
Overall, starting from high
standards, ASML’s
leadership set ambitious
targets and was able to
resolve and respond to
many challenges.”
Terri Kelly
Chair of the Remuneration Committee
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Message from the Chair of the Remuneration Committee (continued)
An eventful year, a strong team
The last 12 months have seen ASML continue to go from
strength to strength, supported by a wonderful team of
people who have again come together in uncertain times
and done what is best for our company and for our
customers.
A key factor that motivates our people across ASML is
the opportunity to engage in meaningful work and make
an impact. In an increasingly digital world, the work
carried out at ASML is ultimately enabling innovative
businesses to transform the way in which we all live by
bringing new opportunities in areas from healthcare to
agriculture, interconnectivity to climate change.
Nevertheless, fair and balanced remuneration must
always be the top priority for our Remuneration
Committee, and throughout the year we have continued
to engage with stakeholders, not only ahead of the
presentation of the new ASML Remuneration Policy at
the 2022 AGM, but in the many months since.
During my time as Chair, I am committed to ensuring that
engagement and collaboration continue to be the
hallmarks of the ASML Remuneration Committee.
Changes to the Remuneration Committee
At the 2022 AGM, Hans Stork stepped down from the
Remuneration Committee and the Supervisory Board,
and I would like to thank him for his contribution over the
past years.
We are delighted that Alexander Everke became a
member of the Remuneration Committee after the 2022
AGM. It is important that the composition of the
Remuneration Committee maintains a proper balance
that drives a deep and broad understanding of ASML’s
business environment. Alexander brings with him
valuable and extensive skills from a business and
operational perspective. We have already benefited from
his experience and input and look forward to continuing
to work closely with him in the future.
Decisions made in 2022: Our new Remuneration
Policy
In the first quarter of 2022, we finalized our review of
the Remuneration Policy for the Board of Management.
The Remuneration Committee and Supervisory Board
concluded that it was appropriate to amend the
Remuneration Policy for the Board of Management, as
the last major revision took place in 2017 with only minor
revisions having been made to compensation levels –
primarily associated with the Short Term Incentive and
Long Term Incentive plans. Since 2017, ASML has
grown significantly and the context in which we operate
has changed. The revised Remuneration Policy for the
Board of Management was submitted to the 2022 AGM
and was adopted with 93.18% support.
During our review, we took the opportunity to explore
current market practice, stakeholder views and societal
trends and expectations, as well as developments in
corporate governance. We also asked our Board of
Management members to share their views on the
proposed amendments.
The main changes are outlined in the 2022 Remuneration
Policy changes in the section Board of Management
remuneration.
Transparency around remuneration
The Remuneration Report for the financial year 2021 was
submitted to the 2022 AGM for an advisory vote.
84.59% of the votes were cast in favor. As part of our
efforts to further improve transparency, we have added
the ex-ante disclosure of the STI metrics for 2023 and
the ex-ante disclosure of the LTI metrics and target levels
for the 2023-2025 performance period. We have also
continued to disclose the actual achievement levels. An
exception is made in the case of sensitive information
where disclosure is not in the interests of ASML or our
shareholders.
This process will continue over the coming year. We have
a degree of flexibility in the Remuneration Policy for the
Board of Management to align the metrics with what is
important to drive strategy, as well as an improved ability
to make that vital connection between remuneration and
strategy. We have made good strides toward being more
transparent and are committed to making further
changes to enhance transparency where practicable.
We will also continue to engage with all our stakeholders
as well as with external advisers in 2023, ensuring that
our decisions take account of best practice, stakeholder
views and the wider societal perspectives on executive
remuneration. In addition, we will continue to engage
with the members of the Board of Management to gather
their views on remuneration.
Finally, I would like to thank my fellow Remuneration
Committee members for their support during the last
year. Together, we have put in place a Remuneration
Policy for the Board of Management that I believe will
serve us well for the period to come. In the year ahead,
we will work hard to continue this ongoing process.
Terri Kelly
Chair of the Remuneration Committee
Outlook
The development of an appropriate Remuneration Policy
is an evolutionary process, and during 2022 the
Remuneration Committee continued to evaluate both the
Remuneration Policy itself and the changing landscape in
which ASML operates. Our focus remains on ensuring
that we have the right incentive measures in place and
that we use the right metrics. Only then will we be able to
drive the right behaviors and the correct outcomes.
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Remuneration at a glance
Remuneration is an essential tool to motivate and retain the right talent to continue to
develop our technology.
Our remuneration principles for 2022 performance support long-term success and sustainable value
How we performed in 2022
Competitiveness The remuneration structure and levels intend to be competitive in the relevant labor market,
Financial (based on US GAAP)
while at the same time taking into account societal trends and perceptions.
The remuneration policy is aligned with the short-term and long-term incentive policies for ASML
senior management and other ASML employees and takes into account internal relativities.
The policy and incentives focus on sustainable and long-term value creation.
Alignment
Long-term
orientation
Compliance
ASML adopts the highest standards of good corporate governance.
Simplicity and
transparency
The policy and its execution are as simple as possible and easily understandable to all
stakeholders.
€21.2bn
Total sales
€10.7bn
Gross profit
€6.5bn
Income from operations
(2021: €18.6bn)
(2021: €9.8bn)
(2021: €6.8bn)
€8.5bn
Net cash provided by
operating activities
(2021: €10.8bn)
€14.14
Earning
per share
(2021: €14.36)
48.2%
ROAIC (Non-GAAP
measure)1
(2021: 34.2%)
Non-financial
8.1
Technology Leadership
Index score
(2021: 8.0)
10.8%
Dow Jones Sustainability
Index
(2021: 12.1%)
Linking remuneration to purpose and strategy
1. The ROAIC (Non-GAAP measure) is based on a three-year average by dividing the Income after income taxes by the Average Invested Capital.
Average Invested Capital is calculated by taking the average of Total Assets minus Cash, Short Term Investments, Current liabilities and
Long-term contract liabilities at the start and end of each quarter over three years. We believe that ROAIC is a meaningful measure because it
quantifies our effectiveness in generating returns relative to the capital invested in our business over the past three years.
Purpose
Strategy
Incentive
measures
Pay for
performance
Relative TSR - ASML vs PHLX
Unlocking the
potential of
people and
society by
pushing
technology to
new limits.
Strengthen
customer trust
Financial measures
Holistic lithography
and applications
Customer Orientation
DUV
competitiveness
EUV
industrialization
High-NA
Technology leadership
Leadership in
ESG sustainability
Remuneration
outcomes
ASMLPHLX20192020202120220%100%200%300%400%
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Remuneration at a glance (continued)
Board of Management
Remuneration summary
Stakeholder engagement in 2022
We aim to align the total
remuneration for our Board of
Management to our business
strategy through a combination
of fixed pay and short- and long-
term incentives, underpinned by
stretching performance targets.
€17.0m
Total remuneration
99.1%
Achieved of STI target
182.2%
Achieved of LTI target
34:1
CEO vs. average per FTE
(based on US GAAP)
.
Peter T.F.M. Wennink
Total remuneration 2022 (€’000s)
€4,280
Martin A. van den Brink
Total remuneration 2022 (€’000s)
€4,279
Frédéric J.M. Schneider-Maunoury
Total remuneration 2022 (€’000s)
€2,844
Roger J.M. Dassen
Total remuneration 2022 (€’000s)
€2,834
Christophe D. Fouquet
Total remuneration 2022 (€’000s)
€2,798
During 2022, we consulted with our large
shareholders and other stakeholders. The
Remuneration Committee also consulted the
views of the Board of Management.
Shareholders
Number of organizations met
Number of meetings
Percentage of issued share capital owned
Shareholders representatives
and proxy advisers
Number of organizations met
Number of meetings
Works Council
Number of organizations met
Number of meetings
10
10
22%
3
3
1
>5
Base salary and benefit
STI
LTI
1,2841,2849699611,3612,035TargetActual1,2831,2839699611,3612,035TargetActual8718716256199001,354TargetActual8618616256199001,354TargetActual8258256256199001,354TargetActual
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Remuneration Committee
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
– Alexander Everke
– Rolf-Dieter Schwalb
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; and
– Evaluating the performance of the members of
the Board of Management in view of those goals
and objectives, and – based on this evaluation –
recommending to the Supervisory Board
appropriate compensation levels for the
members of the Board of Management.
The Committee will continue to monitor
the Board of Management’s performance
and make recommendations around
compensation levels.
Recurring agenda topics (quarterly)
– 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 HRO, the Head of Compensation and Benefits and in
some instances also the CFO to attend (parts of) its
meetings. The Remuneration Committee’s external adviser
is also invited to attend the Remuneration Committee
meetings when deemed necessary.
The below overview provides details on the topics discussed during Remuneration Committee meetings in 2022.
Q1
– Short Term Incentive Plan: Performance 2021, pay-out
2021 and targets 2022
– Long Term Incentive Plan: share vesting performance
period 2019-2021, and conditional grant and targets
performance period 2022-2024
– Remuneration Report 2021
– Self-evaluation of Remuneration Committee
– Board of Management Remuneration Policy review
including stakeholder outreach
– Compliance with share ownership requirements
Q2
– No meetings
Q3
– Progress STI and LTI targets and metrics
– Customer Orientation metric
– Latest trends in policies and reporting
– Report on interaction with the Works Council
– Board of Management remuneration 2023, including
selection of STI and LTI metrics
Q4
– Progress STI and LTI targets
– Board of Management remuneration 2023, including
selection of STI and LTI metrics
– Benchmark on Supervisory Board remuneration
– Update on corporate governance developments:
remuneration
– Engagement of external auditor for agreed-upon
procedures on remuneration
– Draft Remuneration Report 2022
– Compliance Board of Management members with share
ownership guideline
– Share planning AGM period 2023-2024
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The Remuneration Committee also reviewed the
Remuneration Report, which details the remuneration of
the members of the Supervisory Board.
Remuneration Committee (continued)
Remuneration of the Board of Management
In Q1 2022, the Remuneration Committee finalized its
fundamental review of the Remuneration Policy for the
Board of Management. During this process, the
Remuneration Committee was supported by an external
remuneration adviser. Before proposing to amend the
Remuneration Policy for the Board of Management to the
General Meeting, the Remuneration Committee
consulted extensively with shareholders, shareholder
representatives and other stakeholders, including the
Works Council of ASML Netherlands B.V. For more
information about the stakeholder feedback, reference is
made to the 2022 AGM page on our website.
On April 29, 2022, the Supervisory Board, upon
recommendation of the Remuneration Committee,
proposed to the General Meeting to amend the
Remuneration Policy for the Board of Management. The
amended policy was adopted at the 2022 AGM. A summary
of the main changes compared with the previous
Remuneration Policy is included in this Remuneration
Report.
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 an STI in cash
and an LTI in shares. The Remuneration Committee
proposed 2022 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 2022 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.
At the end of 2022 we performed a light review of Board
of Management remuneration levels. Since the 2022 STI
and LTI at-target levels were below the maximum at-
targets levels allowed by the 2022 Remuneration Policy,
the RC wanted to determine if an increase of these at-
target levels for 2023 was desirable. The outcome of this
review is that the Supervisory Board decided to increase
the at-target levels for the STI from 95% to 105% for the
Presidents and from 90% to 95% for the non-Presidents.
For the LTI the increase will be from 160% to 170%.
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.
Increased transparency around remuneration
In our engagements with stakeholders during 2022, we
received valuable feedback on the Remuneration Report,
in particular on further improving transparency around
remuneration. We have taken this feedback into
consideration, and as a result, we have implemented
several changes in the 2022 Remuneration Report.
For example, we now include ex-ante disclosures of the
selected STI metrics and of the selected LTI metrics and
target levels (where this is not contrary to the strategic
and/or commercial interests of ASML).
The Remuneration Committee engaged the external
auditor to perform certain agreed-upon procedures
regarding the reported performance by the Board of
Management on the Short Term Incentive Plan 2022 and
Long Term Incentive Plan for performance period
2020-2022.
Remuneration of the Supervisory Board
The current Remuneration Policy for the Supervisory
Board was adopted by the General Meeting at the 2021
AGM. In 2022, the Remuneration Committee discussed
the latest trends in policies and reporting and performed
the recurring bi-annual benchmark of Supervisory Board
remuneration. Based on the outcome of this review, we
intend to submit a proposal for implementing some
adjustments to the Remuneration Policy for the
Supervisory Board at the 2023 AGM. The proposal will
be set out in the convocation notice for the 2023 AGM,
which will be published in March 2023.
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Board of Management remuneration
Remuneration Policy for the Board of Management
enables ASML to attract, motivate and retain qualified
industry professionals for the Board of Management in
order to define and achieve our strategic goals. This is
reflected by our drive to determine a remuneration
structure and remuneration levels that intends to be
competitive in the relevant labor market, while at the
same time being aware of societal trends and
perception. Therefore, the 2022 Remuneration Policy for
the Board of Management acknowledges the internal
and external context as well as our business needs and
long-term strategy.
The 2022 Remuneration Policy for the Board of
Management is designed to encourage 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. The
2022 Remuneration Policy for the Board of Management
is aimed at motivating the Board of Management
members to achieve outstanding results, using a
combination of non-financial and financial performance
measures as well as an appropriate ratio between base
salary and variable compensation. Technology
leadership, customer value creation and employee
engagement are the key drivers of sustainable returns to
our shareholders.
In this section of the Remuneration Report,
we provide an overview of the Remuneration
Policy for the Board of Management, which
was adopted by the General Meeting on April
29, 2022, and has applied as of January 1,
2022 onwards. It also contains information
about the execution of the Remuneration
Policy for the Board of Management as well
as details of the Board of Management
members’ actual remuneration for the
financial year 2022. The 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 2022 Remuneration Policy for the Board of
Management supports the strategy, long-term interests
and sustainability of ASML in a highly dynamic
environment, while aiming to fulfill all stakeholders’
requirements and keeping an acceptable risk profile.
More than ever, the challenges for ASML are to drive
technology, to serve our customers and to satisfy our
stakeholders. These drivers are embedded in the identity,
mission and values of ASML and its affiliated enterprises
and are the backbone of the 2022 Remuneration Policy
for the Board of Management. The Supervisory Board
ensures that the 2022 Remuneration Policy for the Board
of Management and its implementation are linked to
ASML’s objectives. A direct way in which this is achieved
is by determining performance measures and setting
targets with respect to variable compensation that are
linked to our short-term and long-term ambitions.
More indirectly, we want to ensure that our 2022
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 responsibilities. 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 for
the Board of Management. The level of stakeholder
support, including the support of society, for the
Remuneration Policy for the Board of Management that
ASML applies is important to us and is also taken into
account when formulating the various elements of the
policy. While revising the Remuneration Policy for the
Board of Management, the Supervisory Board
considered the external environment in which the
Company operates, the relevant statutory provisions and
provisions of the Dutch Corporate Governance Code and
competitive market practice as well as the guidance
issued by organizations representing institutional
shareholders. The Supervisory Board’s Remuneration
Committee engaged extensively with various
stakeholders to obtain their perspectives. These
stakeholders included ASML’s shareholders, shareholder
interest organizations, proxy advisers and the Works
Council of ASML Netherlands B.V. We received a high
level of support for the revised Remuneration Policy at
the 2022 AGM, with 93.18% of votes in favor. The Works
Council was asked to provide advice on the proposed
amended Remuneration Policy. The Works Council took
the position that it did not fully support the proposed
amendment and had some serious concerns. The Works
Council and a delegation of the Supervisory Board
continued the dialogue on this topic throughout the
course of 2022. A detailed overview of the stakeholder
feedback is published on ASML’s website (asml.com/
agm2022). In line with the Dutch Corporate Governance
Code, the members of the Board of Management have
been asked to share their views on the proposed
amendments of their own remuneration. Furthermore,
advice has been obtained from an external remuneration
expert.
The 2022 Remuneration Policy for the Board of
Management is built on the following principles:
– Competitiveness: The remuneration structure and
levels intend to be competitive in the relevant labor
market, while at the same time taking into account
societal trends and perceptions;
– Alignment: The policy is aligned with the Short-term
Incentive and/or Long-term Incentive Policy for ASML
senior management and other ASML employees and
takes into account internal relativities;
– Long-term orientation: The policy and incentives focus
on sustainable and long-term value creation;
– Compliance: ASML adopts the highest standards of
good corporate governance; and
– Simplicity and transparency: The policy and its
execution are as simple as possible and easily
understandable to all stakeholders.
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Board of Management remuneration (continued)
Reference group and market positioning
Similar to the remuneration philosophy for all ASML
employees, we aim to offer the members of the Board of
Management a remuneration package that is competitive
compared with a relevant labor market. To define this
market, we created a reference group consisting of
companies that are comparable to ASML in terms of size
and complexity, industry or business profile, data
transparency and geographical area. The reference
group may include Dutch and international companies
where members of the Board of Management might be
recruited to and from.
For as long as ASML is positioned around the median of
the group of companies with respect to size (measured
by enterprise value, revenue and number of employees)
and thus complexity, the median market level may serve
as a reference in determining the level of remuneration for
the Board of Management.
As ASML is a Dutch-headquartered company, the
Supervisory Board also takes into account the external
environment in which the Company operates in the
Netherlands, and furthermore considers competitive
market practices as well as guidance issued by
organizations representing institutional shareholders in
the Netherlands, and has decided for the 2022
remuneration policy not to follow the (high) international
market level for long-term incentives (LTI) and to cap the
maximum target LTI award at 200% of base salary. This
means that the reference to a median market level
described above will be used for the cash compensation
only (i.e. the base salary and the short-term incentive
(STI), as the LTI will be capped).
As ASML has a dual presidency and considers the two
presidents of equal weight and importance to the
Company, the Supervisory Board has decided to
continue the Company’s longstanding practice that the
relevant benchmark reference level for the two presidents
is the average of the CEO level and that of the other
members of the Board of Management in the labor
market data, instead of benchmarking against CEO data
only. For the other members of the Board of
Management, the Supervisory Board has applied the
average of all non-CEO members of the Board of
Management in the benchmark as relevant reference,
instead of differentiating between members of the Board
of Management.
In principle, a benchmark of the Board of Management
remuneration is conducted every two years. In the year
without a market assessment, the Supervisory Board
considers the appropriateness of any change of base
salary, taking into account the market environment as
well as the salary adjustments for other ASML
employees. 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. The composition of the
reference group may be adjusted as a result of takeover
transactions, mergers or other corporate activities.
Substantial changes applied to the composition of the
reference group will be proposed to shareholders.
The current reference group consists of the following companies:
Current reference group composition
European companies with focus
on long-term technology/
industrial engineering/R&D
Semiconductor
manufacturing companies Semiconductor equipment companies
Broadcom
Intel
Qualcomm
Applied Materials
Lam Research
ABB
Airbus
Dassault Systèmes
Infineon Technologies
Linde
Medtronic
Novartis
NXP Semiconductors
Philips
Roche
SAP
Schneider Electric
Shell
Siemens
Siemens Healthineers
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Board of Management remuneration (continued)
Maximum variable
compensation (on-target)
Short-term incentive
Long-term incentive
Total
Market reference
Determined based on
ASML’s relative position in
the reference group capped
at 50th percentile
Maximum on-target LTI is
capped at 200% of base
salary
Variable pay as % of base salary
(maximum)
Presidents: 120%
Other members: 100%
2022 Variable pay as % of base
salary (on-target)
Presidents: 95%
Other members: 90%
200.0 %
160.0 %
Presidents: 320%
Other members: 300%
Presidents: 255%
Other members: 250%
The 2022 Remuneration Policy for the Board of
Management contains maximum levels for the STI and
the LTI for on-target performance. These maximum levels
can be implemented if ASML’s relative positioning in the
reference group is at least equal to the median (in terms
of size). For 2022, the target STI levels were lower,
namely 95% for the presidents and 90% for the other
members of the Board of Management, aligned with a
positioning in the reference group slightly below the
median (in terms of size) at the time of designing the
Remuneration Policy, and applying a gradual transition
into the new policy levels. For the same reason, the
target LTI level for 2022 was 160% of base salary for all
members of the Board of Management.
The Supervisory Board has the discretionary power to
adjust the incentive pay-out upward or downward if it
feels that the outcome is unreasonable due to
exceptional circumstances during the performance
period.
Scenario analyses of the possible outcomes of the
variable remuneration components and their effect on the
remuneration of the Board of Management have been
conducted.
The following table represents the variable pay as
percentage of base salary for the Board of Management
in the case of on-target performance.
Total direct compensation
The remuneration levels are determined using the Total
Cash Compensation (TCC). TCC consists of base salary
and variable remuneration in the form of an STI. A
capped LTI is added to the TCC, which together
constitutes the total direct compensation.
Base salary
The 2022 Remuneration Policy for the Board of
Management prescribes a benchmark that will only be
conducted for the TCC level. The base salary of Board of
Management members is derived from this TCC level.
The actual base salary and annual increases will be
reported in the Remuneration Report. The base salary for
the Board of Management for the reporting year 2022 is
disclosed in the table ‘Total remuneration Board of
Management.
Variable compensation
The variable compensation consists of the STI and the
LTI. The performance metrics are set by the Supervisory
Board and consist of financial and non-financial metrics
in such a way that an optimal balance is achieved
between the various Company objectives, both in the
short term and the long term. By doing so, we ensure
that the variable compensation contributes to the
strategy, long-term interests and sustainability of the
Company. The Supervisory Board may adjust the
performance metrics and their relative weighting of the
variable income based on the rules and principles as
outlined in the 2022 Remuneration Policy for the Board
of Management of ASML Holding N.V., if required by
changed strategic priorities in any given year. The
Supervisory Board assesses the extent to which
performance metrics are met at the end of a
performance period.
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Board of Management remuneration (continued)
Summary of 2022 Remuneration Policy Board of Management
The elements of the 2022 Remuneration Policy for the Board of Management and their link to the strategy of ASML
are summarized below.
LTI (share-based incentive)
Link to strategy/rationale
2022 policy
Summary of 2022 Remuneration Policy
Base
salary
+
STI
Cash bonus +
LTI
Share-based
incentive
+ Pension and
other benefits =
Total
remuneration
Contribute to the strategy, long-term interests and sustainability of
ASML using performance measures which balance the direct interest
of ASML’s investors, the long-term financial success of ASML, the
long-term continuation of technological advancement and the
environmental and social dimensions of sustainability.
Maximum target LTI: capped at 200% of base salary
2022 target LTI: 160% of base salary
The weight of the individual LTI performance metrics is as follows:
– 30% Relative TSR
– 20-30% ESG measures; 2022 weight: 20%
– 20-30% Technology Leadership Index; 2022 weight: 20%
– 20-30% Strategic value drivers; 2022 weight: 30%
Fixed remuneration (base salary)
Link to strategy/rationale
Attract, motivate and retain qualified industry professionals for the
Board of Management in order to define and achieve strategic goals.
2022 policy
Benchmark
Other elements of fixed remuneration (pension and other benefits)
– Consisting of 20 most relevant technology and R&D oriented
Link to strategy/rationale
2022 policy
companies, including ASML’s talent competitors and business
peers and (indirect) customers
– Composition of companies in the reference group takes into
account ASML’s geographic location – it’s weighted toward
European companies (75% weighting), with some US companies
(25% weighting)
Contribute to the competitiveness of the overall remuneration
package and create alignment with market practice.
STI (cash bonus)
Link to strategy/rationale
2022 policy
Share ownership guidelines
– 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
Ensure a balanced focus on both the (financial) performance of
ASML in the short term, and the sustained company future in terms
of technological advancement and customer satisfaction, fueling
long-term success.
– Maximum target STI: 120% of base salary for the presidents and
100% for the other BoM members
– 2022 target STI: 95% of base salary for the presidents and 90% for
the other BoM members
The weight of the individual STI performance metrics is as follows:
– 60% Financial
– 20% Technology Leadership Index
– 20% Customer Orientation
Link to strategy/rationale
2022 policy
Requirement for a minimum share ownership by members of the
Board of Management. Ensure alignment between the interests of
the Board of Management members and ASML’s long-term value
creation.
– Presidents three times annual base salary, other Board members
two times annual base salary
– 5-year period to comply for new members
– Supervisory Board has discretion to allow a temporary deviation in
extraordinary circumstances
– Any shortfall will be remediated through the next vesting of shares
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Board of Management remuneration (continued)
2022 Remuneration Policy changes
Remuneration benchmarking
Performance measures
Reference group
2021 policy
2022 policy
2021 policy
2022 policy
– Consisting of similar-sized European companies
– Consisting of 20 most relevant technology and R&D
The weight of the individual performance metrics:
The weight of the individual performance metrics:
from various industry sectors
orientated companies, including ASML’s
competitors and business peers and (indirect)
customers
– Composition of companies in reference group takes
into account ASML’s geographic location – it’s
weighted toward European companies (75%
weighting), with some US companies (25% weighting)
Incentive levels
STI
LTI
2021 policy
2022 policy
– Target: 80% base salary (presidents and other
– Phased increase from 80% of base salary to
BoM members)
120% of base salary for presidents and 100% for
the other BoM members
– Target: 120% base salary (presidents and other
BoM members)
– Phased increase from 120% of base salary to
200% of base salary for presidents and other
BoM members
STI
LTI
– 60% Financial
– 60% Financial
– 20% Technology Leadership Index
– 20% Technology Leadership Index
– 20% Market Position
– 20% Customer Orientation
– Threshold pay-out at -20% versus the PHLX index
– Proposed performance incentive zone adjusted
– (Threshold pay-out as 50% of target)
into percentile-based relative TSR ranking
approach instead of fixed range
– Reduced vesting level pay-out with 25th
percentile performance at 25% of target
The weight of the individual performance metrics:
The weight of the individual performance metrics:
– 40% ROAIC
– 30% Relative TSR
– 30% Strategic value drivers
– 30% Relative TSR
– 20% Technology Leadership Index
– 20% Technology Leadership Index
– 10% Sustainability
– 20% ESG
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Board of Management remuneration (continued)
After the end of the performance period, the Supervisory
Board assessed the performance achieved against the
targets, in cooperation with the relevant subcommittees:
the 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, excluding information which
qualifies as commercially or strategically sensitive. 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.
Remuneration of Board of Management in 2022
The remuneration of the Board of Management for the
financial year 2022 is an implementation of and complies
with the 2022 Remuneration Policy for the Board of
Management, as further explained below. As such, the
remuneration of the Board of Management in 2022
contributed to the objectives of the 2022 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 have been
conducted.
Base Salary
The base salaries of the members of the Board of
Management were set at the beginning of 2022. The
Supervisory Board decided not to apply a base salary
increase for 2022 compared with 2021 levels, as the
base salary was considered competitive compared with
the reference group. For 2022 base salary levels,
reference is made to the section Total remuneration
Board of Management.
– Technology Leadership Index: A set of internal targets
related to ASML’s product and technology roadmaps.
The index 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 2022 consisted of a list of 18 key
projects in Applications, DUV and EUV. Among others,
these projects related to improvements in inspection
and metrology systems, manufacturing capacity
expressed in wafers per day, component commonality
to decrease costs and the power of the (EUV) light
source. 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 18 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.
Short-term incentive 2022
The financial and non-financial target levels for the STI
were set at the beginning of the 2022 financial year in
accordance with the 2022 Remuneration Policy for the
Board of Management and taking into account the
annual plan (forecast) for 2022. The rationale for
amending the Remuneration Policy of the Board of
Management including replacement of certain STI
metrics is included in the 2022 Remuneration Policy for
the Board of Management of ASML Holding N.V.
For the STI, the Supervisory Board selected the financial
performance metric below, taking into consideration
ASML’s business challenges and circumstances in 2022:
– EBIT Margin %, measuring Income from operations as
percentage of Total net sales
In addition, the following non-financial performance
metrics applied for the STI in 2022:
– Customer Orientation: This metric consisted of four
equally weighed sub-targets measuring ASML’s
positioning in the market and its performance in terms
of customer experience, customer satisfaction and
quality. The sub-targets were: the Applications market
share of YieldStar and HMI Single Beam, as these are
segments of the Applications market where ASML
faces intense competition; DUV output in terms of
systems, in light of the 2022 supply-demand situation;
EUV availability of the NXE:3600D tool, which is a key
metric reflecting the quality of the performance of our
tools at the customer site and as such is considered an
appropriate metric to measure customer satisfaction;
and overall customer satisfaction, which was measured
using an external benchmark: the VLSI Survey.
ASML ANNUAL REPORT 2022
REMUNERATION REPORT CONTINUED
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198
Board of Management remuneration (continued)
Performance targets1
Weight
Threshold
60%
33%
Target
35%
Actual
outcome
Pay-out2
% target
Stretch
37%
34.5 % 88.1 %
The total STI outcome for current Board of Management results in a cash pay-out of €3.8 million, representing a
payout as % of target of 99.1%.
Short-Term Incentive 2023
For 2023, the Supervisory Board has decided to apply the following STI performance measures:
EBIT Margin (%) (Non-GAAP measure)
Customer Orientation
Consisting of the following equally weighted sub-targets:
Applications market share
DUV output (systems)
EUV availability
VLSI customer survey
20%
5%
5%
5%
5%
*
*
*
105.0 %
120.0 %
— %
150.0 %
Top 5
Top 3
Top 2
Top 2 150.0 %
Technology Leadership Index
20%
4
6
10
8.1
126.3 %
Total
100%
99.1 %
1. Certain performance targets (*) are not disclosed due to strategic or commercial sensitivity.
2. The pay-out % is based on the pay-out levels as included in the Summary of 2022 Remuneration Policy Board of Management.
The 2022 EBIT Margin % (Non-GAAP measure) of 30.7% is calculated as Income from operations of €6,501 million
divided by Total net sales of €21,173 million.
The Supervisory Board applied an adjustment for fast shipments on the STI financial performance metric EBIT Margin
% result. The rationale behind this decision is that fast shipments are a change in the business model made on
request of our customers; the Board of Management decided to honor these customer requests, as this was
considered the best decision in the interest of ASML and its stakeholders, especially also in light of the global chip
shortage; however, fast shipments lead to a delay in revenue recognition and as such have a negative impact on the
EBIT Margin %. Considering the foregoing, the Supervisory Board decided to normalize the EBIT Margin % result for
these fast shipments. The adjustment for the delay in revenue recognition due to fast shipments results in an EBIT
margin % of 34.5% and a total STI pay-out as % of target of 99.1% compared with 46.3% without adjustment.
The composition of customer performance changed, since DUV is now measured based on output in systems.
Performance in the other sub targets was comparable to last year.
The actual outcome for Technology Leadership Index of 8.1 is in line with last year performance.
EBIT Margin (%) (Non-GAAP measure)
Customer Orientation
Consisting of the following equally weighted sub-targets:
Applications market share
DUV output (systems)
EUV availability
TechInsights (f.k.a. VLSI) customer survey
Technology Leadership Index
Total
Weight
60%
20%
5%
5%
5%
5%
20%
100%
In setting the target levels for the performance metric EBIT Margin % for 2023, the Supervisory Board has taken the
assumption that the timing of revenue recognition of fast shipments will be the same as it was in 2022, in line with the
2022 normalization applied for fast shipments. In case of any change in accounting treatment, which would no longer
result in a delay in revenue recognition, the Supervisory Board intends to increase the EBIT Margin % target levels
accordingly.
ASML ANNUAL REPORT 2022
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FINANCIALS
199
Board of Management remuneration (continued)
Board of Management Remuneration in 2022 – Long-term incentive
Conditionally granted Long-term incentive 2022–2024 Plan in 2022
At the beginning of 2022, 19,105 performance shares were conditionally granted to the current members of the
Board of Management for the 2022-2024 LTI performance plan. These conditional grants are based on the maximum
achievable opportunity.
At the beginning of 2022, the Supervisory Board, in line with the recommendation of the Remuneration Committee,
selected the performance metrics to be used to measure ASML’s performance related to strategic value drivers and
ESG Sustainability. The Supervisory Board also set the target levels related to all performance metrics for the
2022–2024 LTI Plan, as listed below. This was done taking into account the long-term product roadmap, ESG 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. The rationale for amending the
Remuneration Policy of the Board of Management including replacement of certain LTI metrics is included in the
2022 Remuneration Policy for the Board of Management of ASML Holding N.V.
For the 2022-2024 LTI Plan, the following performance metrics apply, in accordance with the 2022 Remuneration
Policy for the Board of Management:
– Total shareholder return vs. Index (TSR): Measuring ASML’s relative change in share price, plus dividends paid over
the relevant performance period. The TSR is calculated as the difference between (i) the average (closing) share
price during the last quarter of the performance period and (ii) the average (closing) share price during the quarter
preceding the performance period; in the calculation, dividends are reinvested at the ex-dividend date. The TSR of
ASML (calculated with the ASML New York share) is compared with the PHLX Semiconductor Sector Index. This
NASDAQ index is designed to track the performance of a set of companies engaged in the design, distribution,
manufacture and sale of semiconductors. There are two versions of this index, a price return index and a total
return index, the latter of which has been chosen (NASDAQ: X.SOX), as this index reinvests cash dividends,
equivalent to the TSR definition described above.
– Strategic value driver: Normalized three-year average cash conversion rate is a measure to ensure a focus on
balance sheet and cash generation, in addition to the focus on margin that is already part of the 2022 STI (by
including EBIT Margin). The Normalized Cash Conversion Rate percentage is calculated over a three-year average
by dividing Normalized Free Cash Flow (non-GAAP measure) by Net Income. Free Cash Flow is a non-GAAP
measure and is defined as net cash provided by operating activities minus purchase of property, plant and
equipment and purchase of intangible assets. Normalized Free Cash Flow (non-GAAP measure) is Free Cash Flow
(non-GAAP measure) excluding early payments received in a certain financial year from customers without a
contractual payment obligation in that financial year.
– Technology Leadership Index: A qualitative measure which is also applied for the STI. As a metric for the LTI, the
Technology Leadership Index 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 time) 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 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.
– ESG: A qualitative measure consisting of three equally weighted sub-targets: (1) EUV energy use per wafer pass,
(2) employee engagement and (3) the percentage of female employees in a job grade 13+.
Performance metric
Relative TSR
Normalized three-years average Cash
Conversion Rate %1
ESG Measures
Consisting of:
EUV energy use per wafer pass
Employee engagement
% female representation in JG13+
Technology Leadership Index
Total
Performance targets
Weight
Threshold
Target
Maximum
30% Lower quartile
Median Upper quartile
80.0%
90.0%
95.0%
7.0 kWh
6.5 kWh
6.0 kWh
X2 – 4% point X2 – 3% point
10%
12%
4
6
X2
14%
10
30%
20%
20%
100%
1. The Normalized three-year average Cash Conversion Rate % (CCR) is calculated by dividing Normalized Free Cash Flow (Non-GAAP measure)
by Net Income (three-year average). Free Cash Flow (Non-GAAP measure) is normalized by excluding early payments received in a certain
financial year from customers without a contractual payment obligation in that financial year.
2. X = top 25% companies.
ASML ANNUAL REPORT 2022
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200
Board of Management remuneration (continued)
For the 2023-2025 performance period, the Supervisory Board has decided to apply the following LTI performance
measures and target setting:
Vesting under the Long-Term Incentive 2020–2022 Plan
Following the end of the three-year performance period 2020-2022, the Supervisory Board assessed the
performance achieved against the LTI targets, in cooperation with the Technology Committee, Audit Committee and
Remuneration Committee. The performance metrics that applied to the LTI 2020-2022 Plan were Relative Total
Shareholder Return vs. Index, Return on Average Invested Capital (ROAIC), Technology Leadership Index and
Sustainability, in accordance with the 2020 Remuneration Policy for the Board of Management. The target and actual
achievement levels for the LTI performance criteria based on the Remuneration Policy for the Board of Management
are set out in the table below.
Performance metric
Weight
Threshold
Target
Exceed
Stretch
Performance targets
Actual
performance
Pay-out %2
Relative TSR
ROAIC1
Technology Leadership Index
Sustainability
Total
30%
40%
20%
10%
100%
(20%)
0%
n/a
20%
29.5% 31.0% 32.5% 34.0%
4
6
≤13.5% ≤11%
8
n/a
10
≤6%
41.4%
48.2%
8.3
10.8%
200%
200%
158.3%
104.9%
1. The ROAIC (Non-GAAP measure) is based on a three-year average by dividing the Income after income taxes by the Average Invested Capital.
Average Invested Capital is calculated by taking the average of Total Assets minus Cash, Short Term Investments, Current liabilities and
Long-term contract liabilities at the start and end of each quarter over three years. We believe that ROAIC is a meaningful measure because it
quantifies our effectiveness in generating returns relative to the capital invested in our business over the past three years.
2. The Pay-out % is based on the pay-out levels as included in the 2020 Remuneration Policy Board of Management.
3. Total Actual Performance score of 182.2% is based on weighting of individual performance metrics multiplied by the pay-out %.
The total LTI outcome results in a share vesting of 182.2% of target.
LTI Plan 2023-2025
At the beginning of 2023, 28,604 performance shares were conditionally granted to the current members of the
Board of Management for the 2023-2025 LTI performance plan. These conditional grants are based on the maximum
achievable opportunity for 2023.
Total
Performance metric
Relative TSR
Normalized three-year average Cash Conversion
Rate %1
ESG measures
Consisting of:
Net zero emission (Scope 1+2) with minimum
compensation
Employee engagement
Total and JG9+ female Inflow
182.2% 3
Technology Leadership Index
Performance targets
Threshold
Target
Maximum
As per remuneration policy
85%
90%
95%
<37kT
compensation
X2 – 4% point
<30kT
<20kT
compensation
X2 – 2% point
compensation
X2
22%
24%
4
6
26%
10
Weight
30%
30%
20%
20%
100%
1. The Normalized three-year average Cash Conversion Rate % (CCR) is calculated by dividing Normalized Free Cash Flow (Non-GAAP measure)
by Net Income (three-year average). Free Cash Flow (Non-GAAP measure) is normalized by excluding early payments received in a certain
financial year from customers without a contractual payment obligation in that financial year.
2. X = top 25% companies.
ASML ANNUAL REPORT 2022
REMUNERATION REPORT CONTINUED
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FINANCIALS
201
Board of Management remuneration (continued)
Other remuneration
In 2022, members of the Board of Management 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 €115k) and a net pension element (for a salary above €115k). Some members opted
out of the net pension due to different tax treatment of this outside the Netherlands. Details of the incurred
accounting expenses relating to the application of the pension arrangement in 2022 can be found in the table Total
Remuneration Board of Management.
Board of Management
P.T.F.M. Wennink
Ownership guidelines
3x base
M.A. van den Brink
F.J.M. Schneider-
Maunoury
R.J.M. Dassen
C.D. Fouquet
3x base
2x base
2x base
2x base
2022 base salary in €
thousands
Number of outstanding
vested shares
1,020
1,020
694
694
694
38,047
11,923
17,903
15,549
6,470
Ownership ratio1
18.79
5.89
13.00
11.29
4.70
Expenses reimbursed by ASML in 2022 included company car costs, representation allowances, social security costs
and health and disability insurance costs.
1. The Ownership ratio is calculated by multiplying the number of outstanding vested shares with the share price of €503.80 (based on the closing
share price of December 30, 2022) and dividing this by the base salary.
Share ownership guidelines
The table below shows the share ownership guidelines, number of outstanding vested shares and share ownership
ratio of each Board of Management member as per December 31, 2022. All members of the Board of Management
complied with the minimum ownership guidelines per year end 2022.
ASML ANNUAL REPORT 2022
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STRATEGIC REPORT
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FINANCIALS
202
Board of Management remuneration (continued)
Total remuneration Board of Management
The remuneration of the members of the Board of Management based on incurred accounting expenses in 2022, 2021 and 2020 was as follows (amounts are in € thousands):
Board of
Management
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
Financial
Year
2022
2021
2020
2022
2021
2020
2022
2021
2020
2022
2021
2020
2022
2021
2020
2022
2021
2020
Base salary
Pension
Other benefits
1,020
1,020
1,020
1,020
1,020
1,020
694
694
694
694
694
694
694
694
694
4,122
4,122
4,122
206
206
216
206
206
216
141
115
122
116
115
100
78
78
83
747
720
737
58
57
57
57
56
57
36
36
36
51
51
51
53
52
51
255
252
252
Total fixed
1,284
1,283
1,293
1,283
1,282
1,293
871
845
852
861
860
845
825
824
828
5,124
5,094
5,111
% Fixed
30.0 %
26.6 %
28.3 %
30.0 %
26.6 %
28.3 %
30.6 %
26.8 %
29.1 %
30.4 %
22.6 %
22.2 %
29.5 %
26.3 %
27.8 %
30.1 %
25.8 %
27.1 %
STI
961
1,098
1,135
961
1,098
1,135
619
747
773
619
747
773
619
747
773
3,779
4,437
4,589
LTI
2,035
2,439
2,136
2,035
2,439
2,136
1,354
1,566
1,302
1,354
2,193
2,186
1,354
1,566
1,374
8,132
10,203
9,134
Total variable
2,996
3,537
3,271
2,996
3,537
3,271
1,973
2,313
2,075
1,973
2,940
2,959
1,973
2,313
2,147
11,911
14,640
13,723
% Variable
70.0 %
73.4 %
71.7 %
70.0 %
73.4 %
71.7 %
69.4 %
73.2 %
70.9 %
69.6 %
77.4 %
77.8 %
70.5 %
73.7 %
72.2 %
69.9 %
74.2 %
72.9 %
Total
Remuneration
4,280
Relative
proportion fixed
vs. variable
0.43
4,820
4,564
4,279
4,819
4,564
2,844
3,158
2,927
2,834
3,800
3,804
2,798
3,137
2,975
17,035
19,734
18,834
0.36
0.40
0.43
0.36
0.40
0.44
0.37
0.41
0.44
0.29
0.29
0.42
0.36
0.39
0.43
0.35
0.37
The remuneration reported as part of the LTI (share awards) is based on costs incurred under accounting values. The costs of share awards are charged to the Consolidated Statements of Operations over the three-year vesting period
based on the number of awards expected to vest for non-market-based elements. For the first two 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 number of awards 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.
ASML ANNUAL REPORT 2022
REMUNERATION REPORT CONTINUED
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FINANCIALS
203
Board of Management remuneration (continued)
Total remuneration Former Board of Management
F.J. van Hout is no longer part of the Board of Management as he retired from ASML in 2021.
Former Board of Management
F.J. van Hout1
Financial
Year
2021
2020
Base salary
Pension
Other benefits
231
694
47
122
16
47
Total fixed
294
863
% Fixed
11.4 %
29.4 %
STI
243
773
LTI
2,036
1,302
Total variable
2,279
2,075
% Variable
88.6 %
70.6 %
1. The 2021 total remuneration of F.J. van Hout excluded an estimated 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
2,573
Relative
proportion fixed
vs. variable
0.13
2,938
0.42
ASML ANNUAL REPORT 2022
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204
Board of Management remuneration (continued)
Share-based payments
Performance-based share-based remuneration for current members of the Board of Management is disclosed in the table below. Fractional shares are rounded down to full shares for reporting purposes.
Board of
Management
P.T.F.M. Wennink
Grant date
4/29/22
M.A. van den Brink
F.J.M.
Schneider-Maunoury
R.J.M. Dassen
C.D. Fouquet
1/22/21
1/24/20
7/19/19
1/19/18
4/29/22
1/22/21
1/24/20
7/19/19
1/19/18
4/29/22
1/22/21
1/24/20
7/19/19
1/19/18
4/29/22
1/22/21
1/24/20
7/19/19
1/25/19
7/20/18
4/29/22
1/22/21
1/24/20
7/19/19
7/20/18
Status
Conditional
Conditional
Unconditional
Unconditional
Unconditional
Conditional
Conditional
Unconditional
Unconditional
Unconditional
Conditional
Conditional
Unconditional
Unconditional
Unconditional
Conditional
Conditional
Unconditional
Unconditional
Unconditional
Unconditional
Conditional
Conditional
Unconditional
Unconditional
Unconditional
Full control
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
Market-based element
Non-market-based elements
Number of
shares at target
Fair value at
grant date
Number of
shares at target
Fair value at
grant date
Total number of
shares at target
709
1,053
1,387
2,217
1,958
709
1,053
1,387
2,217
1,958
483
717
858
1,371
1,125
483
717
858
1,371
3,000
657
483
717
858
1,371
844
596.0
635.6
286.9
245.4
215.1
596.0
635.6
286.9
245.4
215.1
596.0
635.6
286.9
245.4
215.1
596.0
635.6
286.9
245.4
169.0
274.6
596.0
635.6
286.9
245.4
274.6
1,655
2,455
3,235
5,173
4,570
1,655
2,455
3,235
5,173
4,570
1,126
1,670
2,001
3,198
2,626
1,126
1,670
2,001
3,198
7,000
1,531
1,126
1,670
2,001
3,198
1,969
533.5
454.9
263.7
194.4
162.8
533.5
454.9
263.7
194.4
162.8
533.5
454.9
263.7
194.4
162.8
533.5
454.9
263.7
194.4
148.3
185.0
533.5
454.9
263.7
194.4
185.0
2,364
3,508
4,622
7,390
6,528
2,364
3,508
4,622
7,390
6,528
1,609
2,387
2,859
4,569
3,751
1,609
2,387
2,859
4,569
10,000
2,188
1,609
2,387
2,859
4,569
2,813
Total number of
shares at
maximum (200%)
4,727
Vesting date
1/1/25
Number of
vested shares
on publication
date
n/a
Year-end
closing share
price in year of
vesting
n/a
End of lock-up
date
1/1/27
7,016
9,245
14,780
13,056
4,727
7,016
9,245
14,780
13,056
3,217
4,774
5,718
9,137
7,502
3,217
4,774
5,718
9,137
20,000
4,376
3,217
4,774
5,718
9,137
5,626
1/1/24
1/1/23
1/1/22
1/19/21
1/1/25
1/1/24
1/1/23
1/1/22
1/19/21
1/1/25
1/1/24
1/1/23
1/1/22
1/19/21
1/1/25
1/1/24
1/1/23
1/1/22
1/1/22
1/19/21
1/1/25
1/1/24
1/1/23
1/1/22
1/19/21
n/a
8,420
13,326
9,566
n/a
n/a
8,420
13,326
9,566
n/a
n/a
5,208
8,239
5,496
n/a
n/a
5,208
8,239
18,032
3,207
n/a
n/a
5,208
8,239
4,122
n/a
503.8
706.7
439.9
n/a
n/a
503.8
706.7
439.9
n/a
n/a
503.8
706.7
439.9
n/a
n/a
503.8
706.7
706.7
439.9
n/a
n/a
503.8
706.7
439.9
1/1/26
1/1/25
1/1/24
1/19/23
1/1/27
1/1/26
1/1/25
1/1/24
1/19/23
1/1/27
1/1/26
1/1/25
1/1/24
1/19/23
1/1/27
1/1/26
1/1/25
1/1/24
1/1/24
1/19/23
1/1/27
1/1/26
1/1/25
1/1/24
1/19/23
ASML ANNUAL REPORT 2022
REMUNERATION REPORT CONTINUED
STRATEGIC REPORT
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FINANCIALS
205
Board of Management remuneration (continued)
Performance-based share-based remuneration for former members of the Board of Management is disclosed in below table. Fractional shares are rounded down to full shares for reporting purposes.
Former Board of Management
F.J. van Hout
Grant date
1/22/21
1/24/20
7/19/19
1/19/18
Status
Conditional
Full control
No
Unconditional No
Unconditional No
Unconditional No
Market-based element
Non-market-based elements
Number of
shares at
target
Fair value at
grant date
Number of
shares at
target
Fair value at
grant date
Total number
of shares at
target
239
858
1,371
1,125
635.6
286.9
245.4
215.1
557
2,001
3,198
2,626
454.9
263.7
194.4
162.8
Total number of
shares at
maximum
(200%)
1,592
796
2,859
4,569
3,751
5,718
9,137
7,501
Number of
vested shares
on publication
date
n/a
5,208
Year-end
closing share
price in year of
vesting
n/a
503.8
8,239
5,496
706.7
439.9
End of lock-up
date
1/1/26
1/1/25
1/1/24
1/19/23
Vesting date
1/1/24
1/1/23
1/1/22
1/19/21
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 Summary of 2022 Remuneration Policy Board of Management and to the section Board of
Management Remuneration in 2022 – Long-term incentive as included in this Remuneration Report.
The principal conditions applicable to the 2022 performance shares are described below. These apply to each member of the Board of Management.
Instrument:
Grant
Grant date
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.
Date on which the performance shares are conditionally granted.
Performance period
Period of three-years over which the achievement of the pre-defined performance targets is measured.
Vesting
The shares will become unconditional after the end of the performance period, depending on the level of achievement of the predetermined performance targets.
Lock-up period
The minimum holding period is two years after the vesting date.
Upon termination of contract, the transfer restrictions will remain in place during the holding period except in case of decease.
In case a tax payment is due by the members of the Board of Management over the retrieved variable income, performance shares may be partially sold at vesting (‘sell to cover’) in accordance with the law and internal
regulations.
ASML ANNUAL REPORT 2022
REMUNERATION REPORT CONTINUED
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206
Board of Management remuneration (continued)
Relationship between accounted remuneration and company’s performance
The following table provides 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)
20181
Change (in %)1
2019
Change (in %)
2020
Change (in %)
2021
Change (in %)
2022
Change (in %)
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
Remuneration P.T.F.M. Wennink (CEO)
Remuneration M.A. van den Brink
Remuneration R.J.M. Dassen
Remuneration C.D. Fouquet
Remuneration F.J.M. Schneider-Maunoury
Average remuneration per FTE2 based on US GAAP
Average remuneration per FTE2 based on EU-IFRS
Internal pay ratio (CEO versus employee remuneration based on US GAAP)2
Internal pay ratio (CEO versus employee remuneration based on EU-IFRS)2
Ratio of the percentage increase in annual total compensation for CEO to the
percentage increase in average annual remuneration for all employees3 based on
US GAAP
Ratio of the percentage increase in annual total compensation for CEO to the
percentage increase in average annual remuneration for all employees3 based on
EU-IFRS
10,944,016
2,591,614
2,525,515
137.2
18,204
3,433
3,431
897
1,125
2,169
115
115
30
30
22 %
25 %
16 %
(6) %
20 %
(1) %
(1) %
—
—
(4) %
(2) %
(2) %
— %
— %
11,820,001
2,592,252
2,581,107
263.7
22,192
4,361
4,360
2,956
2,203
2,724
114
114
38
38
8 %
— %
2 %
92 %
22 %
27 %
27 %
230 %
96 %
26 %
(1) %
(1) %
27 %
27 %
13,978,452
3,553,670
3,696,813
397.6
24,727
4,564
4,564
3,804
2,975
2,927
120
120
38
38
18 %
37 %
43 %
51 %
11 %
5 %
5 %
29 %
35 %
7 %
5 %
5 %
— %
— %
18,610,994
5,883,177
6,134,595
706.7
28,223
4,820
4,819
3,800
3,137
3,158
122
122
40
40
33 %
66 %
66 %
78 %
14 %
6 %
6 %
— %
5 %
8 %
2 %
2 %
5 %
5 %
21,173,448
5,624,209
6,395,775
503.8
33,071
4,280
4,279
2,834
2,798
2,844
125
118
34
36
(5.5)
3.7
14 %
(4) %
4 %
(29) %
17 %
(11) %
(11) %
(25) %
(11) %
(10) %
2 %
(3) %
(15) %
(10) %
n/a
n/a
1. The remuneration of the R.J.M. Dassen and C.D. Fouquet was 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).
3. The ratio of the percentage increase in annual total compensation for CEO to percentage increase in average annual remuneration for all employees is calculated by dividing the % annual increase in the remuneration of the CEO by the % annual increase in the average remuneration per FTE. This
ratio is only applicable as of 2022 to comply with the GRI Standards 2021.
ASML ANNUAL REPORT 2022
REMUNERATION REPORT CONTINUED
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207
Board of Management remuneration (continued)
Relationship between CEO and average remuneration
(pay ratio)
The internal pay ratio consists of the CEO’s total
remuneration (including all remuneration components)
during 2022 of €4,280 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 = €4,128 million / 33,071 =
€125 thousand. This ratio has not been prepared to
comply with the Pay Ratio Disclosure requirements under
SEC regulations. The ratio is based on the highest paid
individual according to accounting values consisting of
fixed and variable remuneration elements compared to
the average remuneration of all employees that are in
service with the company, which excludes all other
Board Members. This calculation approach brings the
ratios more in line with the requirements from the
Corporate Governance Code.
The internal pay ratio (CEO versus employee
remuneration) based on US GAAP decreased towards
34:1 in 2022 (2021 40:1) and based on EU-IFRS
decreased towards 36:1 in 2022 (2021 40:1). Decrease
is driven by lower remuneration for the Board of
Management in 2022, due to the impact of supply chain
issues and inflation on the STI score, and due to a lower
number of granted shares at issuance date for the
2020-2022 LTI plan. In 2022, the remuneration of the
employees was adjusted for CLA and merit increases in
2022. Furthermore, in addition to normalizing the STI
score for fast shipments, the 2022 STI score for
employees was also adjusted for the impact of supply
chain issues and inflation in 2022, which is reflected in
the 2022 US GAAP figures. 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 34:1 to be equitable, considering
the current performance of the company.
Explanation of changes in company’s performance versus
remuneration
The foregoing table aims to provide insight into the
Company’s performance over the past five years and the
development of the remuneration. The metrics net 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 recent years,
not only reflected in the number of employees but also in
terms of net sales. Since 2018, net sales have increased
by 93%. The performance of the Company in that same
period has increased significantly as well, reflected for
example in Net Income (117% growth since 2018 based
on US GAAP and 153% growth since 2018 based on
EU-IFRS) and ASML share price (267% 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, 2021 and 2022, resulting in higher base salaries as
well as higher levels of STI (at target) and LTI (at target).
Total remuneration for the Board of Management in 2022
was lower compared to 2021, due to the impact of
supply chain issues and inflation on the STI score, and
due to a lower number of granted shares at issuance
date for the 2020-2022 LTI plan. 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.
ASML ANNUAL REPORT 2022
REMUNERATION REPORT CONTINUED
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208
Supervisory Board remuneration
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 from April 1, 2021
onwards. It provides information about the
implementation of the 2021 Remuneration Policy for the
Supervisory Board in 2022 and contains the details of the
Supervisory Board members’ actual remuneration in
2022. 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, who 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 with 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.
ASML ANNUAL REPORT 2022
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209
Supervisory Board remuneration (continued)
Summary of Remuneration Policy Supervisory Board
This table provides an overview and description of the elements of the 2021 Remuneration Policy for the Supervisory Board.
Fixed remuneration
Description
Basic membership fee
Value
Chair of Supervisory Board
Vice Chair of Supervisory Board
Member of Supervisory Board
Chair Audit Committee
Member Audit Committee
Chair of other Committees
Member of other Committees
Extra allowance for intercontinental meetings
Description
Value
Extra, fixed allowance paid in connection with additional time
commitment for intercontinental travel
€ 5,000 for each meeting that involves intercontinental travel
Expenses
Description
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
Value
Depending on level of expenses
Chair of Supervisory Board
Member of Supervisory Board
€130,000
€94,000
€75,000
€25,500
€18,000
€20,000
€14,500
€1,980
€1,380
Loans and guarantees
Description
Value
No (personal) loans or guarantees or the like will be granted
Not applicable
Shares and share ownership
Description
No (rights to) shares are granted by way of remuneration. Any holding
of ASML shares is for the purpose of long-term investment. Any
trading activity is subject to ASML’s Insider Trading Rules
Other arrangements
Description
(Re)appointment based on Dutch law and ASML’s Articles of
Association. No claw-back, severance or change in control
arrangements are in place
Value
Not applicable
Value
Not applicable
ASML ANNUAL REPORT 2022
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210
Supervisory Board remuneration (continued)
Remuneration of the Supervisory Board in 2022
Overview of the remuneration of 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
A.F.M. Everke
A.L. Steegen
Total
Membership fees
2022
Committee fees
2022
Allowances 2022
Proportion fixed vs.
variable 2022
Total remuneration
2022
Total remuneration
2021
Total remuneration
2020
Total remuneration
2019
Total remuneration
2018
130
94
75
75
75
75
75
50
50
53
44
18
35
18
35
40
10
10
699
263
7
6
6
16
6
16
1
6
6
70
100:0
100:0
100:0
100:0
100:0
100:0
100:0
100:0
100:0
100:0
190
144
99
126
99
126
116
66
66
1,032
178
127
63
112
93
107
113
n/a
n/a
793
157
95
n/a
57
59
88
104
n/a
n/a
560
154
98
n/a
n/a
n/a
101
101
n/a
n/a
454
138
80
n/a
n/a
n/a
60
88
n/a
n/a
366
1. Allowances consist of fixed-expense allowances and allowances for intercontinental meetings.
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 of former Supervisory Board members
Overview of the remuneration awarded to the former Supervisory Board members in 2022, 2021 and 2020 (amounts are in € thousands):
J.M.C. Stork
D.A. Grose
C.M.S. Smits Nusteling
W.H. Ziebart
Total
1. Allowances consist of fixed-expense allowances and allowances for intercontinental meetings.
Membership fees 2022
Committee fees 2022
Allowances 2022
variable 2022 Total remuneration 2022
Total remuneration 2021
Total remuneration 2020
Proportion fixed vs.
25
n/a
n/a
n/a
25
10
n/a
n/a
n/a
10
5
n/a
n/a
n/a
5
100:0
n/a
n/a
n/a
40
n/a
n/a
n/a
40
113
36
31
n/a
180
100
117
95
30
342
ASML ANNUAL REPORT 2022
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211
Remuneration Report - Other Information
Other information
Total remuneration
The total annual remuneration for the members of the
Board of Management and the Supervisory Board,
including former members, during 2022 amounts to
€18.1 million (2021: €23.3 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 2022
and no variable remuneration has been clawed back.
Deviations
In 2022, no deviations took place from the decision-
making process for the implementation of the 2021
Remuneration Policy for the Supervisory Board and the
2022 Remuneration Policy for the Board of Management
and no temporary deviations took place from the 2022
Remuneration Policy for the Board of Management and
the 2021 Remuneration Policy for the Supervisory Board.
Shareholder voting
At the 2022 AGM, the 2022 Remuneration Policy for the
Board of Management was adopted with 93.18% of the
votes cast in favor of the proposal.
The Remuneration Report for the financial year 2021 was
submitted to the 2022 AGM for an advisory vote.
84.59% 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
taken into account the feedback received on Board of
Management remuneration.
This Remuneration Report will be submitted to the 2023
AGM for an advisory vote in line with Dutch law.
ASML ANNUAL REPORT 2022
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
212
Financials &
Non-financials
IN THIS SECTION
Consolidated Financial Statements
214 Report of Independent Registered Public
Accounting Firm
216 Consolidated Statements of Operations
217 Consolidated Statements of Comprehensive Income
218 Consolidated Balance Sheets
219 Consolidated Statements of Shareholders’ Equity
221 Consolidated Statements of Cash Flows
222 Notes to the Consolidated Financial Statements
Non-financial statements
264 Assurance Report of the Independent Auditor
266 About the non-financial information
272 Non-financial indicators
ASML ANNUAL REPORT 2022
STRATEGIC REPORT
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213
Consolidated
Financial
Statements
IN THIS SECTION
214 Report of Independent Registered Public
Accounting Firm
216 Consolidated Statements of Operations
217 Consolidated Statements of Comprehensive
Income
218 Consolidated Balance Sheets
219 Consolidated Statements of Shareholders’
Equity
221 Consolidated Statements of Cash Flows
222 Notes to the Consolidated Financial
Statements
ASML ANNUAL REPORT 2022
CONSOLIDATED FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
214
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, 2022 and 2021, 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,
2022, 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, 2022, 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, 2022 and 2021, and the results of its operations and its cash
flows for each of the years in the three-year period ended December 31, 2022, 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, 2022 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.
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.
ASML ANNUAL REPORT 2022
CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
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215
Report of Independent Registered Public Accounting Firm (continued)
Revenue recognition – Identification of distinct performance obligations and allocation of the total
contract consideration
As disclosed in note 2 to the consolidated financial statements, net system sales was EUR 15,430.3 million for the
year ended December 31, 2022. 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 certain 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 15, 2023
ASML ANNUAL REPORT 2022
CONSOLIDATED FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
216
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
Cost of system sales
Cost of service and field option sales
Total cost of sales1
Gross profit
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. Cost of sales includes amounts with related parties of €2,206.1 million, €1,855.2 million and €1,457.4 million in 2022, 2021, and 2020, respectively.
Notes
2020
2021
10,316.6
13,652.8
3,661.9
4,958.2
2, 3
13,978.5
18,611.0
2022
15,430.3
5,743.1
21,173.4
(5,169.3)
(2,012.0)
(7,181.3)
(6,482.9)
(2,319.1)
(7,582.3)
(2,891.0)
(8,802.0)
(10,473.3)
6,797.2
9,809.0
10,700.1
(2,200.8)
(2,547.0)
(3,253.5)
(544.9)
(725.6)
(945.9)
10
—
4,051.5
213.7
6,750.1
16
(34.9)
(44.6)
4,016.6
6,705.5
21
(551.5)
(1,021.4)
3,465.1
5,684.1
9
23
23
23
23
88.6
3,553.7
199.1
5,883.2
8.49
8.48
418.3
419.1
14.36
14.34
409.8
410.4
—
6,500.7
(44.6)
6,456.1
(969.9)
5,486.2
138.0
5,624.2
14.14
14.13
397.7
398.0
ASML ANNUAL REPORT 2022
CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
217
Consolidated Statements of Comprehensive Income
Year ended December 31 (€, in millions)
Net income
Other comprehensive income:
Proportionate share of OCI from equity method investments
Foreign currency translation, net of taxes:
Gain (loss) on foreign currency translation
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
Notes
2020
2021
3,553.7
5,883.2
2022
5,624.2
(1.3)
22.0
37.7
(73.8)
93.3
66.0
25
25
(21.0)
(2.3)
(98.4)
16.6
22.2
154.1
57.6
(66.5)
94.8
3,455.3
3,455.3
6,037.3
6,037.3
5,719.0
5,719.0
ASML ANNUAL REPORT 2022
CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
218
Consolidated Balance Sheets
As of December 31 (€, in millions, except share and per share data)
Notes
2021
2022
As of December 31 (€, in millions, except share and per share data)
Notes
2021
2022
Assets
Cash and cash equivalents
Short-term investments
Accounts receivable, net
Finance receivables, net
Current tax assets
Contract assets
Inventories, net
Other assets1
Total current assets
Finance receivables, net
Deferred tax assets
Loan receivable2
Other assets3
Equity method investments
Goodwill
Other intangible assets, net
Property, plant and equipment, net
Right-of-use assets
Total non-current assets
4
4
5
6
21
2
7
8
6
21
26
8
9
11
12
13
14
6,951.8
638.5
3,028.0
1,185.6
42.0
164.6
5,179.2
1,000.5
7,268.3
107.7
Liabilities and shareholders’ equity
Accounts payable4
Accrued and other liabilities5
5,323.8
Current tax liabilities
1,356.7
Current portion of long-term debt
33.4
Contract liabilities
131.9
Total current liabilities
7,199.7
1,643.4
Long-term debt
18,190.2
23,064.9
Deferred and other income tax liabilities
Contract liabilities
—
Accrued and other liabilities
1,672.8
Total non-current liabilities
383.0
1,098.7
124.4
887.0
892.5
4,555.6
952.1
2,982.7
164.8
364.4
739.8
923.6
4,555.6
842.4
3,944.2
192.7
12,040.8
13,235.5
Share premium
Treasury shares at cost
Retained earnings
Accumulated other comprehensive income
Total shareholders’ equity
15
21
16
2
16
21
2
15
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
2,565.2
1,875.9
315.3
746.2
12,481.0
17,983.6
3,514.2
267.0
5,269.9
454.9
9,506.0
36.5
3,876.1
36.3
3,940.8
(2,422.8)
(4,641.3)
8,317.3
333.5
22
10,140.6
9,046.7
428.3
8,810.8
Total liabilities
20,090.4
27,489.6
Ordinary shares; €0.09 nominal value;
700,000,000 shares authorized at December 31, 2022 (2021: 699,999,000)
394,589,411 issued and outstanding at December 31, 2022 (2021:
402,601,613)
Issued and outstanding shares
Total assets
30,231.0
36,300.4
Total liabilities and shareholders’ equity
30,231.0
36,300.4
1. Other assets – current includes amounts with related parties of €479.9 million and €288.5 million at December 31, 2022 and 2021, respectively.
2. Loan receivable includes amounts with related parties of €364.4 million and €124.4 million at December 31, 2022 and 2021, respectively.
3. Other assets – non-current includes amounts with related parties of €620.4 million and €694.3 million at December 31, 2022 and 2021, respectively.
4. Accounts Payable includes amounts with related parties of €269.2 million and €482.7 million at December 31, 2022 and 2021, respectively.
5. Accrued and other liabilities – current includes amounts with related parties of €111.2 million and €0.0 million at December 31, 2022 and 2021,
respectively.
ASML ANNUAL REPORT 2022
CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
219
Consolidated Statements of Shareholders’ Equity
(€, in millions)
Balance at January 1, 2020
Components of comprehensive income:
Net income
Proportionate share of OCI from equity method investments
Gain (loss) on 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
Proportionate share of OCI from equity method investments
Gain (loss) on 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
Treasury Shares
Notes
Number
419.8
Amount
Share Premium
at Cost Retained Earnings
38.2
3,772.0
(1,019.6)
9,523.8
OCI1
277.8
Total
12,592.2
—
—
—
—
—
—
—
—
—
—
3,553.7
—
3,553.7
—
—
—
—
—
(3.9)
—
—
0.6
—
—
—
—
—
—
—
(0.7)
—
0.1
—
—
—
—
—
—
—
—
53.9
(45.8)
—
—
—
—
3,553.7
(1,207.5)
—
1,262.3
(1,261.6)
—
101.6
—
(18.0)
—
(1,066.4)
(1.3)
(73.8)
(23.3)
(98.4)
—
—
—
—
—
416.5
37.6
3,780.1
(863.2)
10,731.5
179.4
5,883.2
—
—
—
—
22.0
93.3
38.8
5,883.2
154.1
6,037.3
—
—
—
—
—
(14.4)
—
—
0.5
—
—
—
—
—
—
—
(1.2)
—
0.1
—
—
—
—
—
—
—
—
(8,560.3)
—
6,926.6
(6,925.4)
117.5
(21.5)
—
—
74.1
—
—
(3.7)
(1,368.3)
8,317.3
—
—
—
—
—
333.5
(8,560.3)
—
117.5
49.0
(1,368.3)
10,140.6
402.6
36.5
3,876.1
(2,422.8)
(1.3)
(73.8)
(23.3)
3,455.3
(1,207.5)
—
53.9
37.9
(1,066.4)
13,865.4
5,883.2
22.0
93.3
38.8
25
22
22
20
20
22
25
22
22
20
20
22
ASML ANNUAL REPORT 2022
CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
220
Consolidated Statements of Shareholders’ Equity (continued)
(€, in millions)
Balance at December 31, 2021
Components of comprehensive income:
Net income
Proportionate share of OCI from equity method investments
Gain (loss) on 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, 2022
Issued and Outstanding Shares
Treasury Shares
Notes
Number
402.6
Amount
Share Premium
at Cost Retained Earnings
36.5
3,876.1
(2,422.8)
8,317.3
OCI1
333.5
Total
10,140.6
—
—
—
—
—
(8.5)
—
—
0.5
—
—
—
—
—
—
—
(0.3)
—
0.1
—
—
—
—
—
—
—
—
68.9
(4.2)
—
25
22
22
20
20
22
—
—
—
—
—
5,624.2
—
—
—
5,624.2
(4,639.7)
—
2,333.7
(2,333.4)
—
87.5
—
—
(1.6)
(2,559.8)
9,046.7
—
37.7
66.0
(8.9)
94.8
—
—
—
—
—
428.3
5,624.2
37.7
66.0
(8.9)
5,719.0
(4,639.7)
—
68.9
81.8
(2,559.8)
8,810.8
394.6
36.3
3,940.8
(4,641.3)
1. As of December 31, 2022, accumulated OCI consists of €32.8 million gain relating to our proportionate share of other comprehensive income from equity method investments (2021: €4.9 million loss; 2020: €26.9 million loss), €387.9 million relating to foreign currency translation gain (2021:
€321.9 million gain; 2020: €228.6 million gain) and €7.6 million relating to unrealized gains on financial instruments (2021: €16.5 million gains; 2020: €22.3 million losses).
ASML ANNUAL REPORT 2022
CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
221
Consolidated Statements of Cash Flows
Year ended December 31 (€, in millions)
Notes
2020
2021
2022
Year ended December 31 (€, in millions)
Notes
2020
2021
2022
Cash Flows from Operating Activities
Net income
Adjustments to reconcile net income to net cash flows from
operating activities:
Depreciation and amortization1
Impairment and loss (gain) on disposal
Share-based compensation expense
Gain on sale of subsidiaries
Inventory reserves
Deferred tax expense (benefit)
Equity method investments2
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 equipment3
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
12, 13
18, 20
10
7
21
9
5
6
7
8
15
21
2
13
12
4
4
26
10
10
3,553.7
5,883.2
5,624.2
Dividend paid
Cash Flows from Financing Activities
Purchase of treasury shares
Net proceeds from issuance of shares
Net proceeds from issuance of notes, net of issuance costs
22
22
20
16
(1,066.4)
(1,207.5)
37.9
1,486.3
(1,368.3)
(8,560.3)
49.0
—
(2,559.8)
(4,639.7)
81.8
495.6
(516.2)
Repayment of debt and finance lease obligations
14, 16
(3.3)
(12.1)
Net cash used in financing activities
(753.0)
(9,891.7)
(7,138.3)
12, 13, 14
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)
583.6
39.3
68.9
—
278.5
(564.2)
15.3
Net cash flows
Effect of changes in exchange rates on cash
Net increase (decrease) in cash and cash equivalents
507.5
(1,754.9)
(2,338.0)
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
4
4
2,522.4
(5.3)
2,517.1
3,532.3
6,049.4
882.1
20.3
902.4
6,049.4
6,951.8
319.6
(3.1)
316.5
6,951.8
7,268.3
(46.9)
32.1
(64.1)
29.3
36.6
(83.0)
50.3
42.4
(82.2)
(650.2)
(1,235.0)
(1,734.6)
Supplemental Disclosures of Cash Flow Information:
Unpaid portion of property, plant and equipment, excluded in
investing activities, included in Accounts payable
Interest received
Interest paid
Income taxes paid, net of refunds
1. Depreciation and amortization include 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 relates to our 24.9% equity interest in Carl Zeiss SMT Holding GmbH & Co. KG and includes our share of the net
result, dividends received and other equity movements, as well as the capitalization of R&D and supply chain support funding as disclosed in
Note 26 Related parties and variable interest entities. The dividend received is a cash inflow of €178.7 million (2021: €168.0 million, 2020:
€128.1 million).
3. Purchase of property, plant and equipment includes a cash outflow of €33.8 million (2021: €69.2 million, 2020: €203.7 million) to related parties,
which was initially recognized as part of Other assets.
(1,125.4)
(706.7)
(75.1)
47.5
334.3
131.5
542.3
(483.2)
(222.2)
347.6
718.6
214.4
1,418.0
4,627.6
5,529.8
10,845.8
212.2
(2,080.9)
(864.3)
439.7
406.2
33.6
6,632.7
8,486.8
(962.0)
(38.8)
(1,475.5)
1,359.1
(12.2)
—
(222.8)
(1,352.2)
(900.7)
(1,281.8)
(39.6)
(1,162.7)
1,826.4
(124.4)
329.0
—
(37.5)
(334.3)
864.7
(240.0)
—
—
(72.0)
(1,028.9)
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
222
Notes to the Consolidated Financial Statements
1. General information / summary of general accounting policies
Principles of consolidation
ASML is a leading supplier to the semiconductor industry. The company provides chipmakers with hardware,
software and services to mass produce the patterns of integrated circuits (microchips). Together with its partners,
ASML drives the advancement of more affordable, more powerful and more energy-efficient microchips. ASML
enables groundbreaking technology to solve some of humanity’s toughest challenges, such as in healthcare, energy
use and conservation, mobility and agriculture. Headquartered in Europe’s top tech hub, the Brainport Eindhoven
region in the Netherlands, we are a global team of over 39,000 FTEs with 143 different nationalities across 3
continents. ASML’s principal operations are in EMEA, 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 for the
reported periods. The inputs into our estimates and assumptions consider economic implications including supply
chain constraints, inflation, the Russia-Ukraine conflict, COVID-19 and uncertainty in the macroeconomic
environment. We believe that the critical accounting estimates and assumptions are appropriate. ASML will continue
to monitor the impacts of economic implications 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 (see Note 2 Revenue from contracts with customer)
– Recoverability of deferred taxes for capitalized R&D expenditures (see Note 21 Income taxes)
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. 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 should
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.
New US GAAP accounting pronouncements adopted
During 2022, 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, 2022, 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, 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.
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
223
Notes to the Consolidated Financial Statements (continued)
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 sales 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.
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 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 communication 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.
Most 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.
The total consideration of the contract is allocated between all distinct performance obligations in the contract based
on their standalone selling prices. The standalone selling prices are determined based on other standalone 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 standalone selling price is determined using the adjusted
market assessment approach, which requires judgment and is based on multiple factors including, but not limited to,
historical pricing practices and discounting trends for products and services.
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 standalone selling price is considered a
material right. The discount offered from the standalone 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. If material, 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
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
224
Notes to the Consolidated Financial Statements (continued)
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.
Goods or services
Goods or services
New systems (established
technologies)
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.
Field upgrades and options
(system enhancements)
Prior to shipment, the majority of our systems undergo a Factory Acceptance Test (FAT)
in our cleanroom facilities, effectively replicating the operating conditions that will be
present on the customer’s site, in order to verify whether the system meets its standard
specifications and any additional technical and performance criteria agreed with the
customer.
A system undergoing FAT, is shipped only after all contractual specifications are met or
discrepancies from agreed upon specifications are waived and customer sign-off is
received for delivery. Each system’s performance is re-tested through a Site
Acceptance Test (SAT) after installation at the customer site. We have never failed to
successfully complete installation of a system at a customer’s premises; therefore,
acceptance at FAT is considered to be proven for established technologies with a
history of successful customer acceptances at SAT (equal or better than FAT).
Transfer of control of a system undergoing a FAT, and recognition of revenue related to
this system, will occur upon delivery of the system.
A system not undergoing a FAT or for which some of the testing in our factory is
skipped (fast shipments), transfer of control of such a system and revenue recognition
will occur upon customer acceptance of the system at SAT after installation is
complete.
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.
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)”.
New product introduction
Installation
Warranties
Used systems
Nature, timing of satisfying the performance obligations, and significant
payment terms
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.
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”.
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. Installation is not considered to be distinct when recognition of
revenue related to a system occurs upon customer acceptance of the system at SAT
after installation is complete.
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.
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
225
Notes to the Consolidated Financial Statements (continued)
Goods or services
Time-based licenses and
related service
Application projects
Service contracts
Billable parts and labor
Field projects (relocations)
OnPulse Maintenance
Nature, timing of satisfying the performance obligations, and significant
payment terms
Time-based licenses relate to software licenses and the related service which are sold
for a period of time. The licenses and the related service are not considered to be
individually distinct as the support services are integral to the customer’s ability to
continue to use the software license in the rapidly changing technological environment.
The transfer of control takes place over the license term, measured on a straight-line
basis, as our performance is satisfied evenly over this period of time. Payments are
generally made in installments throughout the license term.
Application projects 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 life cycle, typically in the form of full-service
agreements, limited manpower agreements, other labor agreements, parts availability or
parts usage agreements. These services are for a specified period of time and typically
have a fixed price. Control transfers over this period of time, measured on a straight-line
basis, as these are stand-ready obligations. For service contracts where the price is not
fixed, the transaction price has a variable component that is based on the performance
of the system.
Billable labor represents maintenance services to our systems installed in the
customer’s factories while in operation, through purchase orders from our customer.
Control over these services is transferred to the customer upon receipt of customer
sign-off.
Billable parts represent spare parts including optical components relating to our
systems installed in the customer’s factories while in operation, through purchase
orders from our customer.
Billable parts can be:
– Sold as direct spare parts, for which control transfers point in time upon delivery; or
– Sold as part of maintenance services, where control transfers point in time upon
receipt of customer sign-off.
Field projects 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 services are provided over a specified period of time on our light
source systems. Payment is determined by the number of pulses counted from each
light source system, which is variable. Invoicing is monthly based on the pulses
counted. Revenue is recognized in line with invoicing using the practical expedient in
ASC 606-10-55-18.
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
Net system sales
in units
Net system sales
in € millions
2022
EUV
ArFi
ArF dry
KrF
I-line
Metrology & Inspection
Total
2021
EUV
ArFi
ArF dry
KrF
I-line
Metrology & Inspection
Total
2020
EUV
ArFi
ArF dry
KrF
I-line
Metrology & Inspection
Total
40
81
28
151
45
216
561
42
81
22
131
33
196
505
31
68
22
103
34
137
395
7,045.3
5,236.5
623.7
1,653.7
211.5
659.6
15,430.3
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
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
226
Notes to the Consolidated Financial Statements (continued)
Net system sales per end-use were as follows:
Significant changes in the contract assets and the contract liabilities balances during the periods are as follows.
Year ended December 31
Net system sales
in units
Net system sales
in € millions
Year ended December 31 (€, in millions)
2021
2022
2022
Logic
Memory
Total
2021
Logic
Memory
Total
2020
Logic
Memory
Total
357
204
561
327
178
505
260
135
395
9,977.6
5,452.7
15,430.3
9,588.5
4,064.3
13,652.8
7,393.0
2,923.6
10,316.6
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
Contract
Liabilities Contract Assets
Contract
Liabilities
119.2
5,594.1
164.6
11,160.9
(268.2)
199.7
—
—
(393.4)
116.5
—
—
—
(3,767.0)
—
(6,326.6)
—
39.7
—
(118.0)
—
9,180.2
—
12,790.4
113.9
164.6
113.9
11,160.9
244.2
131.9
244.2
17,750.9
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 for systems not yet recognized in revenue, as well as deferred
revenue from system shipments, based on the allocation of the consideration to the related performance obligations
in the contract.
The majority of our customer contracts result in 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.
The increase in the net contract liabilities to €17.6 billion as of December 31, 2022 compared to €11.0 billion as of
December 31, 2021 is mainly driven by the recognition of down payments for systems which will be shipped in the
future, and consideration received for fast shipment systems that have been delivered, but for which revenue has not
yet been recognized. 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 delivered 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.
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
227
Notes to the Consolidated Financial Statements (continued)
Year ended December 31 (€, in millions)
Total net sales
Long-lived assets
As of December 31, 2022, the remaining performance obligations amount to €45.4 billion (December 31, 2021:
€28.9 billion). We estimate that 56% (December 31, 2021: 61%) 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 expected to be recognized in revenue in 2024 or later.
3. Segment disclosure
ASML has one reportable segment, since we are an integrated holistic lithography solution provider, for the
development, production, marketing, sales, upgrading and servicing of advanced semiconductor equipment systems,
consisting of lithography, metrology and inspection systems. The Chief Operating Decision Maker regularly sets and
monitors goals and boundaries on a consolidated basis 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.
Net system sales for new and used systems were as follows:
Year ended December 31 (€, in millions)
2020
2021
2022
New systems
Used systems
Net system sales
10,160.8
13,446.1
15,152.3
2020
155.8
206.7
278.0
Japan
10,316.6
13,652.8
15,430.3
South Korea
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 by geographic region were as follows:
Year ended December 31 (€, in millions)
2022
Japan
South Korea
Singapore
Taiwan
China
Rest of Asia
Netherlands
EMEA
United States
Total
Total net sales
Long-lived assets
1,008.6
6,045.6
475.5
8,095.5
2,916.0
7.2
9.2
624.5
1,991.3
21,173.4
7.9
85.4
5.5
216.3
40.8
0.2
2,748.5
228.5
803.8
4,136.9
2021
Japan
South Korea
Singapore
Taiwan
China
Rest of Asia
Netherlands
EMEA
United States
Total
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
5.5
61.2
7.3
163.6
17.0
0.2
2,048.1
124.0
555.8
18,611.0
2,982.7
542.8
4,151.6
84.9
4,731.3
2,324.4
1.6
1.6
483.3
1,657.0
8.3
34.1
2.1
164.3
17.8
0.4
1,625.2
129.2
488.9
13,978.5
2,470.3
In 2022, 2 customers exceed more than 10% of total net sales, totaling €11.8 billion, or 55.8%, of total net sales. In
2021, 2 customers exceeded more than 10% of total net sales and in 2020, 3 customers exceeded more than 10%
of total net sales, in 2021 totaling €12.5 billion, or 67.2% (2020: €9.9 billion, or 71.2%). Our three largest customers
(based on total net sales) accounted for €5.3 billion, or 78.6%, of accounts receivable and finance receivables at
December 31, 2022, compared with €3.9 billion, or 83.7%, at December 31, 2021 and €2.8 billion, or 80.1%, at
December 31, 2020.
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
228
Notes to the Consolidated Financial Statements (continued)
The increase in total net sales of €2.6 billion, or 13.8%, to €21.2 billion in 2022, from €18.6 billion in 2021 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 for DUV systems, whereas the increase in EUV sales is mainly attributable to the NXE:3600D value
proposition. It has also led to growth in our service and field options business, which has benefited from a growing installed
base. The Logic sector continued to be strong in 2022 and was the largest consumer of our most advanced EUV systems.
Memory demand continued growing in 2022, resulting from strong data center demand. Taiwan and Japan saw the largest
geographic sales growth in support of expanding capacity to meet worldwide demand.
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.
The carrying amount of these assets approximates their fair value.
As of December 31, 2022, no restrictions on usage of cash and cash equivalents exist (2021: no restrictions).
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.
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:
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
2021
2,131.7
2,928.3
1,891.8
6,951.8
638.5
638.5
2,548.1
3,196.7
1,523.5
7,268.3
107.7
107.7
Cash and cash equivalents and short-term investments are mainly impacted by strong net cash provided by
operating activities, driven by net income and down payments, mainly offset by purchase of property, plant and
equipment, purchase of treasury shares and dividend paid.
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
Year ended December 31 (€, in millions)
2022
Accounts receivable, gross
Allowance for credit losses
Accounts receivable, net
2021
3,032.5
(4.5)
2022
5,327.9
(4.1)
3,028.0
5,323.8
The increase in accounts receivable as of December 31, 2022, compared to December 31, 2021, is mainly due to an
increase in our sales, the timing of cash receipts and systems purchased at the end of the free-use or evaluation
period, and an increase in down payment receivables related to future system deliveries.
In 2022, no receivables were sold through factoring arrangements (2021: €2.3 billion).
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
229
Notes to the Consolidated Financial Statements (continued)
6. Finance receivables, net
Accounting Policy
In 2022, 2021 and 2020 we did not record any expected credit losses from finance receivables. As of December 31,
2022, the finance receivables were neither past due nor impaired.
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.
7. Inventories, net
Accounting Policy
The following table lists the components of the finance receivables as of December 31, 2022 and 2021:
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
2021
2022
1,570.0
1,356.7
(1.4)
1,568.6
1,187.0
(1.4)
383.0
—
1,356.7
1,356.7
—
—
The decrease in finance receivables as of December 31, 2022, compared to December 31, 2021, 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 or evaluation period. These sales-type leases support the capacity ramp-up of
high-end systems which are part of the early-insertion life cycle of the technology or system type. It is expected these
systems will be purchased at the end of the free-use or evaluation period.
Gross profit recognized at the commencement date of the lease for our sales-type leases amounts to €429.1 million
during 2022 (2021: €514.2 million; 2020: €830.2 million).
At December 31, 2022, payment of the finance receivables in the next five years and thereafter are:
Inventories consist of the following:
Year ended December 31 (€, in millions)
Raw materials
Work-in-process
Finished products
Inventories, gross
Inventory reserves
Amount
Inventories, net
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 overhead. The valuation of inventory includes determining
which fixed production overhead 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
level, a portion of our fixed overhead costs are not included in the cost of inventory; instead, it is recognized as 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.
2021
2,668.3
1,749.9
1,179.0
5,597.2
(418.0)
5,179.2
2022
3,198.9
2,163.9
2,303.8
7,666.6
(466.9)
7,199.7
(€, in millions)
2023
2024
2025
2026
2027
Thereafter
Finance receivables, gross
The increase in inventory in 2022, compared to 2021, is driven by the increased demand from customers reflected
through an increased number of fast shipments during 2022. Systems that are fast shipped to our customers are not
recognized into revenue until formal customer acceptance at SAT and thus remain part of ASML Finished products.
Additionally, inventory increased in 2022 due to higher costs of our latest technologies and growing install base.
1,356.7
—
—
—
—
—
1,356.7
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
230
Notes to the Consolidated Financial Statements (continued)
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
2021
(473.2)
(180.7)
(6.1)
242.0
(418.0)
2022
(418.0)
(278.5)
(1.1)
230.7
(466.9)
The additions for 2022, 2021 and 2020 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.
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 GmbH1
Prepaid expenses
Derivative financial instruments2
VAT receivable
Other assets
Other current assets
Advance payments to Carl Zeiss SMT GmbH1
Prepaid expenses
Derivative financial instruments2
Compensation plan assets
Non-current accounts receivable
Other assets
Other non-current assets
2021
288.5
374.3
52.2
136.7
148.8
2022
479.9
678.6
17.3
201.2
266.4
1,000.5
1,643.4
694.3
41.0
47.3
81.4
8.0
15.0
887.0
620.4
32.4
—
71.1
—
15.9
739.8
1. For further details on advance payments 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 of intercompany profit on inventory that has not been realized
by ASML of €515.3 million (2021: €261.2 million). Prepaid expenses further include prepayments for maintenance
and the contract balance related to the joint development program with imec of €16.3 million as of December 31,
2022 (2021: €30.3 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 over 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 in 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 on 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 14.1 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 in 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 in 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.
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.
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
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231
Notes to the Consolidated Financial Statements (continued)
For the year ended December 31, 2022, we recorded a profit from equity method investments of €138.0 million
(2021: €199.1 million) in our Consolidated Statements of Operations. This profit includes the following components:
– Profit of €169.1 million (2021: €246.5 million) related to our share of Carl Zeiss SMT Holding GmbH & Co. KG’s net
income after accounting policy alignment
– Cost due to basis difference amortization related to intangible assets of €26.7 million (2021: €26.7 million)
– Cost due to intercompany profit elimination of €4.4 million (2021: €20.7 million)
In 2022, we received a dividend of €178.7 million (2021: €168.0 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.
Divestitures
During 2021, we sold the non-semiconductor businesses of the acquired Berliner Glas (ASML Berlin GmbH) group.
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 in 2021.
11. Goodwill
Accounting Policy
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 (ASML Berlin GmbH), a provider of optical key
components. We obtained control through acquiring 100% of the issued share capital for a total consideration of
€257.1 million.
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 (ASML Berlin GmbH) 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.
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, 2022, is €4,555.6
million (2021: €4,555.6 million).
We have identified two reporting units: Reporting Unit ASML and Reporting Unit Cymer Light Sources. As of
December 31, 2022, the goodwill allocated to Reporting Unit ASML amounts to €4,093.3 million (2021: €4,093.3
million) and Reporting Unit Cymer Light Sources amounts to €462.3 million (2021: €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, 2022. The accumulated impairment as of December 31, 2022 is nil (2021: nil).
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
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232
Notes to the Consolidated Financial Statements (continued)
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, annually or 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
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
233
Notes to the Consolidated Financial Statements (continued)
As of December 31, 2022, 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, 2021
Additions
Divestment
Disposals
Effect of changes in exchange rates
Balance at December 31, 2021
Additions
Disposals
Effect of changes in exchange rates
Balance at December 31, 2022
Accumulated amortization
Balance at January 1, 2021
Amortization
Divestment
Disposals
Effect of changes in exchange rates
Balance at December 31, 2021
Amortization
Impairment charges
Disposals
Effect of changes in exchange rates
Balance at December 31, 2022
Carrying amount
December 31, 2021
December 31, 2022
Brands
Intellectual
property
Developed
technology
Customer
relationships
Other
Total
38.9
—
—
—
—
38.9
—
—
—
38.9
11.1
1.9
—
—
—
13.0
1.9
—
—
—
14.9
25.9
24.0
144.8
—
—
—
—
144.8
1.5
—
0.8
147.1
78.8
8.4
—
—
—
87.2
8.6
—
—
—
95.8
57.6
51.3
1,230.1
—
(9.9)
—
—
1,220.2
—
—
—
1,220.2
510.7
84.2
(0.9)
—
—
594.0
83.4
—
—
—
677.4
228.6
—
—
—
—
228.6
—
—
—
228.6
95.9
12.7
—
—
—
108.6
12.7
—
—
—
121.3
145.9
45.6
(0.8)
(0.5)
(0.2)
190.0
32.5
(1.6)
1.6
222.5
42.9
25.8
(0.4)
(0.4)
(0.3)
67.6
28.5
9.2
(1.4)
1.6
105.5
1,788.3
45.6
(10.7)
(0.5)
(0.2)
1,822.5
34.0
(1.6)
2.4
1,857.3
739.4
133.0
(1.3)
(0.4)
(0.3)
870.4
135.1
9.2
(1.4)
1.6
1,014.9
626.2
542.8
120.0
107.3
122.4
117.0
952.1
842.4
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
234
Notes to the Consolidated Financial Statements (continued)
The Consolidated Statements of Operations include the following amortization charges:
13. Property, plant and equipment, net
Year ended December 31 (€, in millions)
Cost of Sales
R&D Costs
SG&A
Total Amortization
2020
101.8
12.0
9.7
123.5
2021
107.8
14.5
10.7
133.0
2022
Accounting Policy
105.9
18.2
11.0
135.1
Property, plant and equipment is 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.
As of December 31, 2022, the intangible assets not yet available for use, as included in Other, amount to €34.0
million (2021: €23.6 million) and are allocated to Reporting Unit ASML.
During 2022 we recorded €9.2 million impairment charges (2021: €0.0 million; 2020: €0.0 million).
As of December 31, 2022, the estimated amortization expenses for intangible assets for the next five years and
thereafter is as follows:
€, in millions
2023
2024
2025
2026
2027
Thereafter
Total
Amount
130.8
124.8
119.3
113.0
109.1
245.4
842.4
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
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
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235
Notes to the Consolidated Financial Statements (continued)
Property, plant and equipment consists of the following:
€, in millions
Cost
Balance at January 1, 2021
Additions
Divestment
Disposals
Net non-cash movements to/from Inventories
Effect of changes in exchange rates
Balance at December 31, 2021
Additions
Disposals
Net non-cash movements to/from Inventories
Effect of changes in exchange rates
Balance at December 31, 2022
Accumulated depreciation and impairment
Balance at January 1, 2021
Depreciation
Impairment charges
Divestment
Disposals
Net non-cash movements to/from Inventories
Effect of changes in exchange rates
Balance at December 31, 2021
Land and
buildings
Machinery
and equipment
Leasehold
improvements
Furniture, fixtures
and other
Total
420.6
5,022.0
2,432.2
1,828.9
372.7
(17.9)
(0.5)
—
17.2
389.6
(13.4)
(199.1)
11.9
10.8
340.3
33.2
—
(7.5)
—
2.6
65.3
(4.7)
(70.3)
—
3.2
2,803.7
2,028.7
368.6
414.1
510.9
(1.3)
—
0.7
665.4
(42.2)
129.2
(3.5)
34.4
(1.0)
—
(1.2)
87.6
(3.0)
—
(1.7)
860.8
(36.0)
(277.4)
11.9
33.8
5,615.1
1,298.3
(47.5)
129.2
(5.7)
3,314.0
2,777.6
400.8
497.0
6,989.4
842.6
95.6
3.1
(0.6)
(0.4)
—
7.4
1,126.2
167.1
8.2
(4.4)
(181.2)
(7.9)
7.6
297.3
15.9
0.2
—
(3.9)
—
1.5
285.6
43.0
—
(2.5)
(69.7)
—
1.7
2,551.7
321.6
11.5
(7.5)
(255.2)
(7.9)
18.2
947.7
1,115.6
311.0
258.1
2,632.4
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
236
Notes to the Consolidated Financial Statements (continued)
€, in millions
Depreciation
Impairment charges
Disposals
Net non-cash movements to/from Inventories
Effect of changes in exchange rates
Balance at December 31, 2022
Carrying amount
December 31, 2021
December 31, 2022
As of December 31, 2022, the carrying amount includes assets under construction of €869.8 million (2021: €695.9
million) consisting of primarily buildings, as well as Machinery and equipment.
As of December 31, 2022, the carrying amount of land amounts to €178.7 million (2021: €137.5 million).
The additions in 2022 in Land and buildings, as well as Furniture, fixtures and other mainly relates to the construction
of the 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 2022 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 2022 in Leasehold Improvements mainly relate to installation of cleanrooms and office space for
leased properties in both the United States and Taiwan. During 2022, we entered into 23 leases that will require
further Leasehold Improvement investments amounting €33.3 million.
Land and
buildings
Machinery
and equipment
Leasehold
improvements
Furniture, fixtures
and other
134.8
10.9
(2.3)
—
(0.5)
232.6
6.4
(29.5)
(10.9)
(1.9)
21.9
0.5
(0.9)
—
(0.6)
55.9
—
(2.4)
—
(1.2)
Total
445.2
17.8
(35.1)
(10.9)
(4.2)
1,090.6
1,312.3
331.9
310.4
3,045.2
1,856.0
2,223.4
913.1
1,465.3
57.6
68.9
156.0
186.6
2,982.7
3,944.2
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
2020
205.9
119.9
25.9
351.7
2021
188.6
101.4
31.6
321.6
2022
248.2
163.7
33.3
445.2
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
237
Notes to the Consolidated Financial Statements (continued)
14. Right-of-use assets and lease liabilities
Accounting Policy
We determine whether an arrangement contains a lease at inception. Leases are included in Right-of-use assets,
Accrued & other current liabilities, Accrued & other non-current liabilities, 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 and lease liability
valuation may include options to extend or terminate the lease when it is reasonably certain that we will exercise that
option. Lease expenses for operating leases 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 standalone prices of lease components included in the lease contracts.
Year ended December 31 (€, in millions)
Current
Non-current
Lease liabilities
2021
46.6
120.3
166.9
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
2020
51.7
5.5
7.0
6.6
5.9
2021
52.2
4.8
—
3.0
2.4
Depreciation charge right-of-use assets
76.7
62.4
The total cash flows relating to the lease liabilities are as follows:
Year ended December 31 (€, in millions)
Total Cash Flows
2020
61.7
2021
68.9
2022
47.6
151.5
199.1
2022
52.3
2.7
—
4.0
1.4
60.4
2022
57.9
2021
149.7
6.7
—
7.5
0.9
2022
148.9
5.1
—
38.0
0.7
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 (%)
2020
147
1.3 %
2021
62
1.9 %
2022
67
2.2 %
Right-of-use assets consist of the following leases:
Year ended December 31 (€, in millions)
Properties
Cars
Equipment
Warehouses
Other
Right-of-use assets
164.8
192.7
ASML owns the majority of real estate we utilize for manufacturing, supply chain management and general
administration at our headquarters in Veldhoven, the Netherlands. At our other locations worldwide, most of the
properties we occupy are leased.
Lease liabilities are split between current and non-current. The non-current portion mainly consists of properties and
warehouses. For the year ended December 31, 2022, Lease liabilities under an operating lease arrangement
increased by €35.0 million, mainly due to new leases of warehouses that commenced during 2022.
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
238
Notes to the Consolidated Financial Statements (continued)
15. Accrued and other liabilities
Accrued and other liabilities consist of the following:
Year ended December 31 (€, in millions)
Costs to be paid1
Personnel-related items
Derivative financial instruments2
Operating lease liabilities3
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
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 2022 and 2021, 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
2021
119.1
188.6
(162.8)
0.4
145.3
2022
145.3
191.5
(193.5)
0.3
143.6
2021
352.0
864.7
2.8
161.7
91.2
145.3
68.9
1,686.6
251.1
1,435.5
2022
511.6
1,070.9
261.2
196.7
90.5
143.6
56.3
2,330.8
454.9
1,875.9
1. Costs to be paid includes an amount payable to related parties. For further details see Note 26 Related parties and variable interest entities.
2. For further details on derivative financial instruments see Note 25 Financial risk management.
3. For further details on lease liabilities see Note 14 Right-of-use assets and lease liabilities.
Costs to be paid as of December 31, 2022, include VAT payables and accrued costs for unbilled services provided
by suppliers including contracted labor, outsourced services and consultancy. Cost to be paid represent ASML’s
estimate of contractual liability as of the reporting date, to be settled in a future period, based upon the underlying
terms and conditions.
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-related items compared to prior year is mainly of an increase in the number of our employees to support
the continued growth of our business.
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
239
Notes to the Consolidated Financial Statements (continued)
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.
Our obligations to make principal repayments under our senior notes and other borrowing arrangements excluding
interest expense as of December 31, 2022:
€, in millions
2023
2024
2025
2026
2027
Thereafter
Total debt maturities
Amount
753.8
2.0
2.0
1,002.0
752.0
2,012.9
4,524.7
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
€500 million 2.250% senior notes issued May 2022 and principal due May 17th 2032
interest annually payable on May 17th, carrying amount
Debt acquired from Berliner Glas (ASML Berlin GmbH)
Other
Long-term debt
Less: current portion of long-term debt
Non-current portion of long-term debt
2021
500.5
780.6
1,003.2
769.3
741.7
747.1
—
36.4
5.3
4,584.1
509.1
4,075.0
2022
—
744.6
893.9
666.8
742.7
747.5
440.3
22.3
2.3
4,260.4
746.2
3,514.2
For the year 2023, the obligations mainly relate to principal repayment of the senior notes due on September 19,
2023. 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 swaps1
Carrying amount
1. The fair value of the interest rate swaps excludes accrued interest.
2021
4,478.5
63.9
4,542.4
2022
4,479.0
(243.2)
4,235.8
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 Current and Non-Current Accrued and other liabilities 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.
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.
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
240
Notes to the Consolidated Financial Statements (continued)
The following table summarizes the estimated fair value of our Eurobonds:
17. Commitments and contingencies
Year ended December 31 (€, in millions)
Principal amount
Carrying amount
Fair value1
1. Source: Bloomberg Finance LP.
2021
4,500.0
4,542.4
4,673.9
2022
Commitments
4,500.0
4,235.8
4,072.8
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
unconditional purchase obligations, are generally not required to be recognized as liabilities but are required to be
disclosed.
Our contractual obligations as of December 31, 2022 can be summarized as follows:
The fair value of our Eurobonds is estimated based on quoted market prices as of December 31, 2022. 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 from Berliner Glas (ASML Berlin GmbH)
The loan of Berliner Glas (ASML Berlin GmbH) is a mortgage loan of €22.3 million with an annual interest rate of
0.5%, repayable in 2034. Debt decreased compared to 2021, due to repayments made in 2022.
Lines of credit
We maintain an available committed credit facility, with a group of banks, of €700.0 million as of December 31, 2022
and as of December 31, 2021. No amounts were outstanding under the committed credit facility at the end of 2022
and 2021. 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 one-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 December 31, 2022, an
amount of €23.4 million has been provided as guarantee. In addition, ASML has 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. 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 2022, the interest expense
component is €60.8 million (2021: €54.6 million; 2020: €43.3 million). The expenses mainly relate to interest expense
on our Eurobonds, interest rate swaps and hedges, amortized financing costs, and to negative interest on Cash and
cash equivalents.
Total
1 year
2 year
3 year
4 year
5 year
>5 years
Payments due by period (€, in millions)
Long-Term Debt Obligations, including
interest1
Lease Obligations2
4,837.1
823.5
199.1
49.9
46.3
37.4
28.8
24.7
46.4 1,046.3
782.4 2,092.2
21.1
51.1
37.2
12.2
Purchase Obligations
11,815.1 9,703.9 1,152.5
729.9
165.5
Total Contractual Obligations
16,851.3 10,577.3 1,236.2
805.1 1,236.5
854.6 2,141.6
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, 2022, 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 cyclicality and technological developments inherent in the industry in
which we operate.
Contingencies
ASML is subject to proceedings, litigation and other actual or potential claims, including those related to a potential
violation of laws and regulations. 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. Further, ASML has been subject to
misappropriation of data relating to proprietary technology by a (now) former employee in China. Although we do not
believe that the misappropriation is material to our business, certain export control regulations may have been
violated. ASML has reported the incident to relevant authorities.
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
241
Notes to the Consolidated Financial Statements (continued)
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, 2022, management has determined that ASML does not have any material contingencies which
are considered probable or reasonably probable for each year presented in our Consolidated Balance Sheets.
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
2020
2021
2,519.6
2,842.7
208.1
182.6
53.9
249.8
229.2
117.5
2022
3,502.5
300.7
255.9
68.9
Year ended December 31 (€, in millions)
Board of Management
Former Board of Management
2,964.2
3,439.2
4,128.0
Other employees
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 from Berliner Glas
(ASML Berlin GmbH), since ASML consolidated Berliner Glas (ASML Berlin GmbH) using a one-quarter lag.
Total STI bonus expenses
The average number of payroll employees in FTEs was:
Average number of payroll employees in FTEs
Netherlands
Worldwide (including Netherlands)
2020
12,812
24,727
2021
14,222
28,223
2022
16,722
33,071
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
Short-term incentive bonus plans
2020
6,429
7,680
346
2,061
744
10,813
28,073
1,459
26,614
2021
7,485
8,237
707
2,761
766
12,060
32,016
2,155
29,861
2022
8,901
9,953
1,541
3,768
742
14,181
39,086
2,974
36,112
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% and
126% of their annual base gross salary. The 2022 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 2023.
The STI bonus expenses for the (former) Board of Management and other employees were as follows:
2020
5.4
—
402.5
407.9
2021
4.4
0.2
423.5
428.1
2022
3.8
—
629.6
633.4
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
242
Notes to the Consolidated Financial Statements (continued)
19. Employee benefits
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.
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, 2022, 2021 and 2020,
were:
Year ended December 31 (€, in millions)
Pension plan based on multi-employer union plan
Pension plans based on defined contribution and other plans
Pension and retirement expenses
2020
126.8
55.8
182.6
2021
161.7
67.5
229.2
2022
181.2
74.7
255.9
27.6%, 2020: 22.7%). For 2022, our contribution to this multi-employer union plan (including the premiums paid by
employees), was 15.7% (2021: 13.6%, 2020: 14.0%) of the total contribution to the plan. For 2023, we expect to
contribute around €300.0 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. The legally required minimal coverage ratio is 104.3% (2021: 104.3%). During 2022, the coverage ratio of PME
improved to 110.4% as per December 31, 2022 (December 31, 2021: 107.9%).
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 more senior US employees we have a non-qualified deferred compensation plan that allows 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 2022, 2021 and 2020. As of December 31,
2022, our liability under deferred compensation plans was €70.5 million (2021: €82.4 million). The related
compensation plan assets are €71.1 million (2021: €81.4 million).
The accrued pension premiums were €53.2 million as at December 31, 2022 and €10.8 million as at December 31,
2021.
20. Share-based compensation
Multi-employer union plan
ASML has the following plans in place for its employees:
In accordance with the collective bargaining agreements effective for the industry in which we operate, which has no
expiration date, there are 18,631 number of eligible payroll employees in the Netherlands (51.6% of our total payroll
FTEs) 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.
– Long-term incentive bonus plans
– Option plans
– Employee purchase plan
Long-term incentive bonus plans
This multi-employer union plan is managed by PME (Stichting Pensioenfonds van de Metalektro) and this plan covers
approximately 1,565 companies and approximately 173,743 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 2022, the contribution percentage was 28.0% (2021:
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.
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
243
Notes to the Consolidated Financial Statements (continued)
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 2022.
LTI performance plan criteria
Market/Non-Market element
Relative TSR
Cash Conversion Rate % (3-year average)
Technology Leadership Index
ESG Measures
Total
Accounting Policy
Market
Non-Market
Non-Market
Non-Market
Weight
30%
30%
20%
20%
100%
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.
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.
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
Average volatility of the peer group (market practice)
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
Details with respect to shares granted and vested during the year are set out in the following table:
2020
270.7
28.9 %
24.7 %
n/a
2021
462.9
38.5 %
35.3 %
n/a
2022
548.0
41.8 %
n/a
47.8 %
2.9 years
2.9 years
2.7 years
0.9 %
(0.6) %
1.5 %
2020
53.9
6.6
85.9
0.6 %
(0.8) %
0.2 %
2021
117.5
8.2
125.4
1.0 %
0.5 %
2.8 %
2022
68.9
10.2
113.0
1.6 years
1.7 years
1.4 years
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
Year ended December 31
Total fair value at vesting date of shares vested during the year
(in millions)
EUR-denominated
USD-denominated
2020
2021
2022
2020
2021
2022
124.9 156.9
120.6 133.9 164.0
149.6
Weighted average fair value of shares granted
297.05 547.79
578.65 302.75 498.64
553.61
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
244
Notes to the Consolidated Financial Statements (continued)
A summary of the status of conditionally outstanding shares as of December 31, 2022, and changes during the year
ended December 31, 2022, is presented below:
Details with respect to stock options exercised and outstanding are set out in the following table:
EUR-denominated
USD-denominated
Number
of shares
Weighted
average
fair value at
grant date
Number
of shares
Conditional shares outstanding at January 1, 2022
452,205
303.32
297,001
Granted
Vested
Forfeited
Conditional shares outstanding at December 31, 2022
Option plans
88,432
578.65
230,568
(239,685)
247.17
(273,861)
(8,187)
292,765
239.82
434.10
(15,314)
238,394
Weighted
average
fair value at
grant date
416.07
553.61
418.03
487.93
542.22
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.
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
USD-denominated
2020
2021
2022
2020
2021
2022
302.20 583.33
494.14 355.44 658.16
565.39
4.8
5.7
4.4
3.7
4.1
1.6
3.55
2.81
2.08
3.66
2.93
2.09
22.4
36.7
20.3
16.9
24.9
14.6
22.4
36.7
20.3
16.9
24.9
14.6
The number and weighted average exercise prices of stock options as of December 31, 2022, and changes during
the year then ended are presented below:
Outstanding, January 1, 2022
Granted 1
Exercised
Forfeited
Expired
Outstanding, December 31, 2022
Exercisable, December 31, 2022
1. As of 2017, we no longer grant options to our employees.
EUR-denominated
USD-denominated
Weighted
average
exercise price
per ordinary
share (EUR)
Weighted
average
exercise price
per ordinary
share (USD)
Number
of options
Number
of options
57,923
73.87
35,251
—
(10,016)
—
(300)
47,607
47,607
—
55.49
—
40.03
77.95
77.95
—
(3,113)
—
—
32,138
32,138
90.36
—
64.73
—
—
92.84
92.84
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
245
Notes to the Consolidated Financial Statements (continued)
Details with respect to stock options exercised in the relevant year and outstanding stock options as of December
31, 2022, are set out in the following table:
21. Income taxes
Accounting Policy
EUR-denominated
USD-denominated
Range of exercise
prices (€)
Number of
outstanding options
Weighted average
remaining
contractual life of
outstanding (years)
Range of exercise
prices (USD)
Number of
outstanding options
Weighted average
remaining
contractual life of
outstanding (years)
50–60
60–70
70–80
80–90
90–100
100–110
Total
5,268
10,773
10,109
10,791
10,666
—
47,607
0.96
0.96
2.35
2.83
2.73
0.00
2.08
50–60
60–70
70–80
80–90
90–100
100–110
Total
—
278
828
8,855
15,308
6,869
32,138
0.00
0.06
0.30
1.90
2.05
2.74
2.09
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 through 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 issued from our treasury shares.
In 2022, ASML received €81.8 million (2021: €49.0 million and 2020: €37.9 million) from issuance of shares for this
plan.
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 loss and tax credit carry forwards 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, operating loss carry forwards 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, whereby ‘Income tax expense Netherlands’ represents
the total tax expense on taxable income generated by our entities in the Netherlands and ‘Income tax expense
Foreign’ represents the total tax expense on taxable income generated by our non-Dutch group entities. Hereby ‘total
income tax expense Netherlands’ includes withholding tax expense withheld at source on income paid by non-Dutch
entities to the Netherlands.
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
246
Notes to the Consolidated Financial Statements (continued)
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
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
Total current tax expense
Year ended December 31 (€, in millions)
Changes to recognition of operating losses and tax credits
Prior year tax expense
Tax rate changes
Origination and reversal of temporary differences, operating losses and
tax credits
Total deferred tax expense
2020
3,574.6
442.0
4,016.6
2021
5,982.8
722.7
6,705.5
2022
5,881.0
575.1
6,456.1
(818.4)
(44.4)
(862.8)
(678.3)
571.2
(107.1)
The effective tax rate decreased to 15.0% in 2022, compared with 15.2% in 2021. The lower rate is mainly driven by
adjustments of estimated tax positions for prior years following from final tax returns filed.
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)
2020
%1
2021
%1
2022
%1
Income before income taxes
4,016.6
100.0 % 6,705.5
100.0 % 6,456.1
100.0 %
Income tax expense based on ASML’s domestic rate
(1,004.1)
25.0 % (1,676.4)
25.0 % (1,665.7)
25.8 %
Effects of tax rates in foreign jurisdictions
Adjustments in respect of tax-exempt income
0.9
0.2
— %
— %
(4.6)
0.1 %
13.0
(0.2) %
—
— %
—
— %
Adjustments in respect of tax incentives
510.4
(12.7) %
727.3
(10.8) %
741.2
(11.5) %
Adjustments in respect of prior years’ current taxes
(39.3)
1.0 %
(21.3)
0.3 %
(55.8)
0.9 %
Adjustments in respect of prior years’ deferred taxes
27.0
(0.7) %
(2.4)
— %
79.2
(1.2) %
(865.0)
(28.6)
(893.6)
(523.5)
395.7
(127.8)
(1,388.5)
(1,496.7)
367.1
(1,021.4)
526.8
(969.9)
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
2021
2022
Other (credits) and non-tax deductible items
(41.0)
1.0 %
(21.6)
0.3 %
(9.9)
0.2 %
—
— %
35.9
(0.5) %
—
(56.9)
(20.9)
15.0
57.2
1.4 %
0.5 %
(0.4) %
(1.4) %
(37.2)
(46.7)
1.5
24.1
0.6 %
(41.2)
0.7 %
(38.3)
— %
(1.1)
— %
0.6 %
0.6 %
— %
(0.4) %
8.7
(0.1) %
(1,367.2)
(1,440.9)
Income tax expense
(551.5)
13.7 % (1,021.4)
15.2 %
(969.9)
15.0 %
(21.3)
(55.8)
(1,388.5)
(1,496.7)
1. As a percentage of income before income taxes.
The individual line items in the table above are explained in more detail below.
2021
(37.2)
(2.4)
1.5
405.2
367.1
2022
(41.2)
79.2
(1.1)
489.9
526.8
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.
(407.7)
1.4
(406.3)
(375.3)
230.1
(145.2)
(783.0)
231.5
(551.5)
2020
(743.7)
(39.3)
(783.0)
2020
(56.9)
27.0
15.0
246.4
231.5
The Dutch statutory tax rate was 25.8% in 2022 (25.0% for 2021 and 2020). Tax amounts in other jurisdictions are
calculated at the rates prevailing in the relevant jurisdictions.
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
247
Notes to the Consolidated Financial Statements (continued)
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.
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% as of 2021. The effective innovation box tax rate was 7.0% in 2020.
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 and 2022 compared to 2020 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.
The increase in relative weight of this item in the effective tax rate reconciliation for 2022 as compared to 2021 is
mainly caused by increase in the general Dutch CIT rate to 25.8% as of 2022 (2021: 25%).
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. To the main
extent these are caused by modifications in temporary differences on contract liabilities and are offset by similar
movements in prior year deferred tax balances.
Adjustments in respect of prior years’ deferred taxes
The movements in the adjustments in respect of prior years’ deferred taxes mainly relate to differences between the
initially estimated income taxes and final corporate income tax returns filed. This is mainly caused by modifications in
temporary differences on contract liabilities.
Movements in the liability for unrecognized tax benefits
In 2022, similar to prior years, the effective tax rate was impacted by movements in the liability for unrecognized tax
benefits. The movement for 2022 is mainly driven by continued dialogues with Dutch and foreign tax authorities in the
area of transfer pricing, as well as by uncertainties in FDII deduction and R&D credits claimed at the level of our US
group companies. Additionally, some prior year positions have been released as a result of the lapse of statute.
Tax effects in respect to acquisition/restructuring-related items
The 2021 effect relates to divestment of part of the Berliner Glas (ASML Berlin GmbH) entities, whereby the
commercial transaction result is, to a large extent, exempt for income tax purposes. No such transaction has taken
place in 2020 or 2022.
Change in valuation allowance
Changes in valuation allowance mainly relate to newly recognized R&D and withholding tax credits for the respective
year at the level of our group companies in the Netherlands and the US for 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 and 2022 compared to 2020 is mainly caused by an increase in the profit from the equity
method investment as well as – for 2021 – tax accounting consequences following from adjustment in the outside
basis difference for the equity investment.
Effect of change in tax rates
The 2022 tax rate change impact relates to reduction in the corporate income tax rate in South Korea, slightly
impacting the valuation of deferred tax positions at the level of our South Korean group entities. The impact on the
effective tax rate for the years 2020 and in 2021 is mainly caused by changes in the general Dutch corporate income
tax rate as well as the innovation box rate enacted in respective years.
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 (e.g. US R&D credits) on
our income tax expense.
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
248
Notes to the Consolidated Financial Statements (continued)
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.
On August 9, 2022, the U.S. enacted the CHIPS and Science Act which, among other things, implemented a 25%
investment tax credit on semiconductor and semiconductor equipment manufacturing assets. Pending the release of
expected regulations, it is currently uncertain whether the Company will claim the investment tax credit to which we
may be entitled as of 2023.
Additionally, on August 16, 2022, the US enacted the Inflation Reduction Act of 2022, which, among other things,
implements a 15% minimum tax on book income of certain large corporations, a 1% excise tax on share buybacks,
several clean energy provisions, and additional funding for the IRS. Based on our current analysis of the law, we do
not believe the IRA will have a material impact on our consolidated financial statements for years 2022 and onwards.
Global minimum tax
To address concerns about uneven profit distribution and tax contributions of large multinationals corporations,
various agreements have been reached at global level, including an agreement by over 135 jurisdictions to introduce
a global minimum tax rate of 15%. We continuously monitor the developments with regard to Global Minimum Tax. At
December 31, 2022, only jurisdiction in which we operate that already has made some legislative changes related to
top-up tax is South Korea, with effective date of January 1, 2024. The same is expected however for other countries
where we operate, like the EU and the UK. At this moment we are not able to assess quantitative impact of these
(potential) new rules in full detail yet, but in general the impact is expected to be limited.
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
2022
(215.5)
1,672.8
(51.5)
1,405.8
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, 2022, the liability for unrecognized tax benefit
(excluding interest and penalties) amounts to €160.0 million (2021: €144.3 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 €139.2 million benefit (2021: €190.9 million benefit).
Interest and penalties related to the liability for unrecognized tax benefits amount to €55.5 million (2021: €61.6 million)
and are included in the total liability position as specified below. P&L impact of accrued interest and penalties in 2022
amount to a benefit of €5.0 million (2021: €9.7 million benefit; 2020: €14.2 million benefit).
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
249
Notes to the Consolidated Financial Statements (continued)
A reconciliation of the beginning and ending balance of the liability for unrecognized tax benefits (excluding interest
and penalties) is as follows:
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:
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)
2021
(138.0)
—
(21.6)
8.9
(18.8)
2.5
32.0
(9.3)
(144.3)
(61.6)
2022
(144.3)
Country
—
Netherlands
(11.7)
US
2.0
Taiwan
South Korea
China
(23.1)
6.8
13.2
(2.9)
(160.0)
(55.5)
(200.4)
(205.9)
(215.5)
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 €11.9 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. Settlements in 2022 mainly relate to final
settlement of 2018 and 2019 corporate income tax returns of our Dutch fiscal unity.
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.
Years
2019-2022
2017-2022
2017-2022
2019-2022
2012-2022
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
250
Notes to the Consolidated Financial Statements (continued)
Deferred taxes
The composition of total deferred tax assets and liabilities reconciled to the classification in the Consolidated Balance Sheets is:
Deferred taxes (€, in millions)
Deferred tax assets:
Capitalized R&D expenditures
R&D & other tax credit carry forwards
Inventories
Contract liabilities
Accrued and other liabilities
Standard warranty reserve
Operating loss carry forwards
Property, plant and equipment
Lease liabilities
Other intangible assets
Share-based payments
Other temporary differences
Total deferred tax assets, gross
Valuation allowance 1
Total deferred tax assets, net
Deferred tax liabilities:
Other intangible assets
Goodwill
Right-of-use assets
Property, plant and equipment
Contract liabilities
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)
1. The valuation allowance disclosed above relates to R&D and other tax credit carry forwards and operating loss carry forwards that may not be realized.
January 1, 2022
Credits and
other
Consolidated
Statements
of
Operations
Income tax
recognized in
Other
Comprehensive
Income
Effect of
changes
in exchange
rates
December 31,
2022
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
—
23.7
—
—
—
—
—
—
—
—
—
—
23.7
—
23.7
—
—
—
—
—
—
—
—
23.7
151.2
20.6
12.5
400.8
4.4
(4.1)
(2.8)
1.7
3.1
(18.7)
1.2
3.7
573.6
(41.2)
532.4
19.8
(7.9)
(3.1)
1.5
(8.4)
—
(7.5)
(5.6)
526.8
—
—
—
—
—
—
—
—
—
—
—
(6.5)
(6.5)
—
(6.5)
—
—
—
—
—
—
(2.1)
(2.1)
(8.6)
20.5
6.4
1.2
(3.2)
3.3
0.9
(0.1)
(1.4)
1.1
—
0.6
(1.4)
27.9
(6.6)
21.3
(5.3)
—
(1.1)
(0.4)
—
—
0.9
(5.9)
15.4
592.1
213.4
45.2
820.8
105.8
8.1
4.5
18.9
27.4
124.8
11.4
23.3
1,995.7
(215.4)
1,780.3
(65.4)
(28.8)
(27.4)
(9.8)
(16.3)
(1.5)
(9.8)
(159.0)
1,621.3
1,672.8
(51.5)
1,621.3
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
251
Notes to the Consolidated Financial Statements (continued)
Deferred taxes (€, in millions)
Deferred tax assets:
Capitalized R&D expenditures
R&D & other tax credit carry forwards
Inventories
Contract liabilities
Accrued and other liabilities
Standard warranty reserve
Operating loss carry forwards
Property, plant and equipment
Lease liabilities
Other intangible assets
Share-based payments
Other temporary differences
Total deferred tax assets, gross
Valuation allowance1
Total deferred tax assets, net
Deferred tax liabilities:
Other intangible assets
Goodwill
Right-of-use assets
Property, plant and equipment
Contract liabilities
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)
1. The valuation allowance disclosed above relates to R&D and other tax credit carry forwards and operating loss carry forwards that may not be realized.
January 1, 2021 Credits and other
Consolidated
Statements
of
Operations
Income tax
recognized in
Other
Comprehensive
Income
Effect of
changes
in exchange
rates December 31, 2021
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
—
21.4
—
—
—
—
—
—
—
—
—
—
21.4
—
21.4
2.9
—
—
—
—
—
2.5
5.4
26.8
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
—
—
—
—
—
—
—
—
—
—
—
(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
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
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
252
Notes to the Consolidated Financial Statements (continued)
Operating loss carry forwards and Tax credit carry forwards
The deferred tax assets from operating loss carry forwards and R&D & other tax credit carry forwards recognized as
per December 31, 2022, are almost fully reserved. R&D & other tax credit carry forwards for the amount of €178.9
million have no expiration date. The remaining R&D & other tax credit carry forwards of €34.4 million have an
expiration date between 2023 and 2036. The operating loss carry forwards of €12.2 million have an expiration date
between 2023 and 2029.
Unrecognized Deferred Tax Liability Related to Investments in Foreign Subsidiaries
ASML periodically reviews the capital structure of each group entity and may distribute retained earnings, repay
capital or inject fresh capital in case the projected cashflows, freely available funds of the respective entity and the
capital adequacy requirements in the respective country allow/require for this. At December 31, 2022 no plans exist
to distribute taxable undistributed retained earnings of our non-Dutch subsidiaries. As such no deferred tax liability
has been recognized in respect of undistributed retained earnings of our non-Dutch subsidiaries. As the tax
implications of such distributions are dependent on local tax and accounting regulations applying at the moment of
distribution, these can also not practically be determined. As per December 31, 2022, the aggregate amount of
unrecognized temporary differences approximately amounts to €451.3 million (2021: €283.4 million).
22. Shareholders’ equity
Share capital
ASML’s authorized share capital amounts to €126.0 million and is divided into:
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 cumulative preference shares have been issued. Following the amended Articles of Association that were adopted
by the General Meeting during the 2022 AGM, the capital structure changed. Due to these changes, we no longer
have the ordinary share class B. With the removal of the ordinary share class B, each share carries one vote.
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 issued in the CCIP. 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.
Type of shares
Cumulative preference shares
Ordinary shares
Number of shares
Nominal value
Votes per share
700,000,000 €0.09 per share
700,000,000 €0.09 per share
1
1
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.
The issued and fully paid up ordinary shares with a nominal value of €0.09 each were as follows:
Year ended December 31
2020
2021
2022
Issued ordinary shares with nominal value of €0.09
416,514,034 402,601,613
394,589,411
Issued ordinary treasury shares with nominal value of €0.09
2,983,454
3,873,663
8,548,631
Total issued ordinary shares with nominal value of €0.09
419,497,488 406,475,276
403,138,042
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 a proposal.
87,875,651 ordinary shares were held by 280 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.
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
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
253
Notes to the Consolidated Financial Statements (continued)
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.
and holding cumulative preference shares in the capital of ASML and by exercising the rights attached to these
shares, particularly the voting rights.
At our 2022 AGM, the Board of Management was authorized from April 29, 2022 through October 29, 2023, 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, 2022, plus an additional 5% of our issued share capital at April 29, 2022, that
may be issued in connection with mergers, acquisitions and/or (strategic) alliances. Our shareholders also authorized
the Board of Management through October 29, 2023, 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.
At the 2022 AGM, the Board of Management was authorized, subject to Supervisory Board approval, to repurchase
through October 29, 2023, up to a maximum of 10% of our issued share capital at April 29, 2022, 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
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, 2022, of the following members: Mr. A.P.M. van der Poel, Mr. S. Perrick, Mr. S.S.
Vollebregt and Mr. J. Streppel.
Other than the arrangements made with the Foundation as described above, ASML has not established any other
anti-takeover devices.
Dividend policy
ASML aims to distribute a dividend that will be growing over time, paid quarterly. 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 ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
254
Notes to the Consolidated Financial Statements (continued)
ASML intends to declare a total dividend in respect of 2022 of €5.80 per ordinary share. Recognizing the interim
dividend of €1.37 per ordinary share paid in August 2022, November 2022 and February 2023, this leads to a final
dividend proposal to the General Meeting of €1.69 per ordinary share. The total 2022 dividend is a 5.5% increase
compared to the 2021 total dividend of €5.50 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 November 10, 2022, we announced a new share buyback program to be executed by 31 December 2025. As
part of this program, ASML intends to repurchase shares up to an amount of €12 billion, of which we expect a total
of up to 2 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 €9 billion share buyback program 2021-2023
which was completed on October 18, 2022.
In 2022, we repurchased 8,538,787 shares (2021: 14,358,838 shares) for a total consideration of €4,639.7 million
(2021: €8,560.3 million) of which 355,324 shares for a consideration of €200.0 million were purchased under the new
program. In 2022, we canceled 3,337,825 shares (2021: 13,023,016 shares canceled), of which 3,337,825 shares
that 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 2022:
Period
January 3 - 31, 2022
February 1 - 28, 2022
March 1 - 31, 2022
April 1 - 30, 2022
May 1 - 31, 2022
June 1 - 30, 2022
July 1 - 31, 2022
August 1 - 31, 2022
September 1 - 30, 2022
October 1 - 31, 2022
November 1 - 30, 2022
December 1 - 23, 2022
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)
1,107,187
1,150,011
1,241,647
808,095
675,117
717,092
666,112
673,412
907,391
237,399
152,323
203,001
8,538,787
630.21
572.80
575.99
573.12
522.70
488.27
467.26
541.36
466.94
431.23
568.91
558.33
543.37
1,107,187
2,257,198
3,498,845
4,306,940
4,982,057
5,699,149
6,365,261
7,038,673
7,946,064
8,183,463
8,335,786
8,538,787
3,741.9
3,083.2
2,368.0
1,904.9
1,552.0
1,201.9
890.6
526.1
102.4
—
11,913.3
11,800.0
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.
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
255
Notes to the Consolidated Financial Statements (continued)
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
2020
2021
3,553.7
5,883.2
2022
5,624.2
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
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
418.3
8.49
418.3
0.8
419.1
8.48
409.8
14.36
409.8
0.6
410.4
14.34
397.7
14.14
397.7
0.3
398.0
14.13
Our Consolidated 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 Consolidated 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.
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 sufficient liquidity to ensure continued business growth and to provide buffer for cash flow
volatility
– 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 quarterly, while returning
excess cash to shareholders through share buybacks or capital repayment
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)
2021
2022
US dollar
Japanese yen
Taiwanese dollar
Other currencies
Total
Impact on net
income
Impact on
equity
Impact on net
income
Impact on
equity
(6.9)
(2.2)
(3.7)
6.2
(6.6)
51.5
(32.9)
—
—
18.6
(7.2)
(0.1)
(12.8)
(1.3)
(21.4)
65.3
(16.6)
—
—
48.7
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 2022.
The negative effect on net income as presented in the table above for 2022 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 and Japanese yen transactions
are recognized in equity. The effect on 2022 compared to 2021 for both US dollar and Japanese yen is mainly the
result of the change in outstanding cash flow hedges.
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
256
Notes to the Consolidated Financial Statements (continued)
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, South Korean won and Chinese yuan at December 31, 2022 are respectively
USD 1.0 billion, JPY 43.9 billion, TWD 18.5 billion, KRW 99.0 billion and CNY 1.0 billion (2021: USD 0.6 billion, JPY
44.5 billion, TWD 2.5 billion, KRW 11.9 billion and CNY 0.6 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 2022, we recognized a transfer to net income of €66.5 million gain (2021: €22.2 million loss; 2020: €2.3 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 €3.6 million gain in the
Consolidated Statements of Operations resulting from derivative financial instruments measured at fair value through
profit or loss (2021: €7.9 million loss; 2020: €28.2 million gain), which is mainly offset by the revaluation of the hedged
monetary items.
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, 2022, outstanding accumulated OCI includes €5.5 million representing the total anticipated gain to
be released to cost of sales (2021: gain €20.8 million and 2020: loss €26.1 million), (net of taxes: 2022: gain €4.7
million 2021: gain €17.7 million; 2020: loss €22.7 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, 2022, outstanding accumulated OCI
includes gain €3.4 million (2021: loss €1.2 million; 2020: gain €0.4 million), (net of taxes: 2022: gain €2.9 million
2021: loss €1.0 million; 2020: gain €0.4 million), representing the total anticipated gain 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 2022, 2021 and 2020, 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
2021
Impact on net
income
45.9
2022
Impact on
equity
—
Impact on net
income
43.8
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, 2022 was €3.0
billion (2021: €3.0 billion). During 2022, 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.
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
257
Notes to the Consolidated Financial Statements (continued)
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 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 the objective to maintain sufficient liquidity to ensure continued business growth and to provide buffer
for cash flow volatility. 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 ongoing operations of the
business, and others that relate to the uncertainties of the global economy and the semiconductor industry. Although
our cash requirements fluctuate based on the timing and extent of 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 repayment.
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), which is consistent with the rating on December 31, 2021. Our
current credit rating from Fitch is A (Stable), this rating was upgraded in April 2022 from A-.
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).
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.
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
258
Notes to the Consolidated Financial Statements (continued)
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
2021
Notional
amount
27.5
3,000.0
Fair Value
12.8
83.9
2022
Notional
amount
158.5
3,000.0
Fair Value
(18.8)
(225.1)
The following table summarizes our derivative financial instruments per category:
Year ended December 31 (€, in millions)
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
2021
Assets
83.9
15.0
0.6
99.5
47.3
47.3
52.2
Liabilities
Assets
Liabilities
2022
—
2.2
0.6
2.8
—
—
2.8
1.7
3.0
12.6
17.3
—
—
17.3
226.8
18.1
16.3
261.2
179.0
179.0
82.2
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.
ASML ANNUAL REPORT 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
259
Notes to the Consolidated Financial Statements (continued)
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.
The following tables present our financial assets and financial liabilities that are measured at fair value on a recurring
basis:
Year ended December 31, 2022 (€, in millions)
Level 1
Level 2
Level 3
Total
Our Short-term investments consist of deposits with original maturities to the entity holding the investments longer
than three 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.
Assets measured at fair value
Derivative financial instruments1
Money market funds2
Short-term investments3
Total
Liabilities measured at fair value
Derivative financial instruments1
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 Eurobonds 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.
—
3,196.7
—
3,196.7
17.3
—
107.7
125.0
—
261.2
—
—
—
—
—
17.3
3,196.7
107.7
3,321.7
261.2
—
4,072.8
—
—
307.9
—
307.9
4,072.8
Assets and Liabilities for which fair values are disclosed
Loan receivable
Long-term debt4
Year ended December 31, 2021 (€, in millions)
Level 1
Level 2
Level 3
Total
Assets measured at fair value
Derivative financial instruments1
Money market funds2
Short-term investments3
Total
Liabilities measured at fair value
Derivative financial instruments1
Assets and Liabilities for which fair values are disclosed
Loan receivable
Long-term debt4
—
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
124.4
—
124.4
4,673.9
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, 2022 and December 31, 2021.
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Notes to the Consolidated Financial Statements (continued)
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.
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, 2022.
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 one year 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 2021 and 2022, 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 2021 and
2022. For fair value measurements in relation to the acquisition of Berliner Glas (ASML Berlin GmbH) in 2020 and the
subsequent divestment of the non-semiconductor businesses in 2021, we refer to Note 10 Business combinations
and divestitures.
26. Related parties and variable interest entities
We have a 24.9% interest in Carl Zeiss SMT Holding GmbH & Co. KG (ultimate parent is Carl Zeiss AG), 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.
2021 Framework Agreement
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, which we refer to as the 2021 framework agreement, replaced our key existing
framework agreements and aligned our business interests in order to focus on supporting our end customers. The
key components to the 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 Carl Zeiss
SMT GmbH's investments required to execute on the lithography business roadmap exceed certain thresholds,
measured annually
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.
The financing takes place through loan agreements, with the key terms being:
– Ten years term loans with linear annual repayment after a three years grace period
– Interest rate subject to a floor of 0.01% and a cap of 1%
– Voluntary prepayment option without penalty
– The loan is secured by a parental guarantee from Zeiss AG
The two companies agreed in the 2021 framework agreement to perpetually continue their strategic alliance in order
to meet end customer demand, even in case of termination of the new framework agreement.
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Notes to the Consolidated Financial Statements (continued)
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 to Carl Zeiss SMT
GmbH, for which these costs are presented within Research and development costs. For 2022, this amount was
determined to be €76.6 million (€61.2 million in 2021). Under the previous High-NA agreement, we incurred R&D
costs of €96.1 million in 2020.
An initial loan of €124.4 million has been provided on September 29, 2021 and a second loan of €240.0 million has
been provided on September 30, 2022. The loan to Carl Zeiss SMT GmbH is valued at amortized cost and presented
within the Consolidated Balance Sheet as Loan receivable. Under the previous High-NA agreement, we provided
support for capital expenditures and supply chain investments in 2020 of €221.4 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 agreement 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 below table shows 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:
Year ended December 31 (€, in millions)
Advance payments included in Other assets
Advance payments included in Property, plant & equipment
Loan receivable
Investment agreement for 24.9% equity
Accounts payable
Cost to be paid included in Accrued and other liabilities
2021
982.8
82.1
124.4
892.5
482.7
—
2022
Maximum
exposure to loss
1,100.3
1,100.3
70.0
364.4
923.6
269.2
111.2
70.0
364.4
923.6
—
—
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 total purchases from Carl Zeiss SMT Holding GmbH & Co. KG and its subsidiaries are as follows:
Year ended December 31 (€, in millions)
Total purchases
Other related party considerations
2020
2021
1,623.9
2,070.3
2022
2,693.6
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 arrangements in the ordinary course business. 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.
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Notes to the Consolidated Financial Statements (continued)
27. Subsequent events
Subsequent events were evaluated up to February 15, 2023, which is the date the Consolidated Financial
Statements included in this Annual Report were approved.
On January 25, 2023 a total dividend for the year 2022 of €5.80 per ordinary share was announced.
An interim dividend of €1.37 per ordinary share will be made payable on February 15, 2023.
Recognizing this interim dividend and the two interim dividends of €1.37 per ordinary share paid in 2022, this leads to
a final dividend proposal to the General Meeting of €1.69 per ordinary share.
Veldhoven, the Netherlands
February 15, 2023
/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
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Non-financial
statements
IN THIS SECTION
264 Assurance Report of the Independent Auditor
266 About the Non-financial information
272 Non-financial indicators
ASML ANNUAL REPORT 2022
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Assurance Report of the Independent Auditor
To: the General Meeting of Shareholders and the Supervisory Board of ASML Holding N.V.
Materiality
Our conclusion
We have reviewed the non-financial information of ASML Holding N.V. (hereafter:’ the Company’) for the year ended
31 December 2022 (hereafter: the non-financial information) included in the Annual Report 2022 of ASML Holding
N.V. (hereafter: the Annual Report). A review is aimed at obtaining a limited level of assurance.
Based on the procedures performed nothing has come to our attention that causes us to believe that the non-
financial information included in the Annual Report is not prepared, in all material respects, in accordance with the
reporting criteria as described in the ‘Reporting criteria’ section of our report.
The non-financial information is included in the Strategic Report chapter (pages 4-149) as well as the Non-financial
statements (pages 263-289) of the Annual Report. The following specific paragraphs are out of scope for the
assurance engagement: Forward-looking statements (page 4), Q&A with the CTO (pages 20-21), Q&A with the CFO
(pages 41-43), Financial performance (pages 44-50), Risk (pages 52-68) and Our stories (pages
8,22,30,40,51,69,149).
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 applying these reporting criteria, taking into account applicable law and
regulations related to reporting.
The reporting criteria used for the preparation of the non-financial information are the Universal 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.
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.
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.
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 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 the Board of Management regarding the
scope of the non-financial information Report name and the reporting policy are summarized within the section
“About the non-financial information” (pages 266-271 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.
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Assurance Report of the Independent Auditor (continued)
The Supervisory Board is, among other things, responsible for overseeing the Company’s reporting process.
– 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.
Amstelveen, 15 February 2023
KPMG Accountants N.V.
P.J. Groenland- van der Linden RA
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.
We have exercised professional judgement and have maintained professional skepticism throughout the review, in
accordance with the Dutch Standard 3810N, ethical requirements and independence 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.
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About the non-financial information
Reporting scope
Emissions
The content disclosed in this Annual Report1 is based on the material topics identified for both ASML and our
stakeholders through the 2022 materiality assessment. As part of the materiality assessment, we asked internal and
external stakeholders to identify where in the value chain the theme has an impact. This process was conducted
within the boundaries required by the 2021 GRI Universal Standards.
Read more in:
Our material ESG sustainability topics.
The scope of the information and indicators reported for each material topic is consistent with the financial reporting
scope. Relevant exceptions and specifications can be found in the reporting scope table at the end of this chapter.
This Annual Report generally covers the performance of ASML from January 1, 2022 to December 31, 2022, and will
be published on February 15, 2023.
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 the performance of our ESG sustainability strategy is prepared
in accordance with the 2021 GRI Universal Standards.
The 2021 GRI Universal Standards became effective as of FY22. The revised approach to materiality and the use of
topic standards resulted in a significant increase in GRI-indicators considered to be relevant to be reported by ASML.
Details of our compliance with the 2021 GRI Universal 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. Starting in 2022 a new team was set up for ESG reporting, with
the aim of tracking compliance with relevant standards.
Reporting methodology
General remarks on methodology
The CO2e emissions reported are in line with the Greenhouse Gas (GHG) Protocol. The base year for calculating
scope 1 and 2 emissions (including GHG reductions from energy savings in projects) is 2021, when a new master
plan was started. The base year for calculating GHG emissions related to Scope 3 is 2019 (based on 2018 data), as
this was the first year in the 2019-2025 sustainability strategy planning period. During the year, no significant changes
in emissions occurred that triggered recalculations of base year emissions. The DEFRA (UK Department for
Environment, Food & Rural Affairs) 2021 emission factors are applied to convert the specified amount of energy or
activity factor to kg CO2. For scope 3 additional sources are used for conversion, with details provided in the section
on scope 3.
For scope 1 and scope 2 emissions, an operational control consolidation approach is applied to determine the
locations included in the calculation. ASML manufacturing locations considered include Veldhoven (including
Oirschot), Wilton, San Diego and Linkou, ASML Tainan and Silicon Valley. Other locations include China (Beijing and
Shanghai), South Korea (Hwasung, Icheon and Pyeong-Taek), Taiwan (Hsinchu, Tainan office), US (Chandler and
Hillsboro) and the Netherlands (Delft). This scope encompassed 95% of company GHG emissions from
manufacturing locations as well as office locations with more than 250 FTEs.
Direct (Scope 1) GHG emissions
Scope 1 emissions are expressed in kt. The CO2 footprint consists of the combustion of fossil fuels (of which only
natural gas is relevant for ASML). It is calculated by multiplying the specific consumption by local conversion factors (x
kg CO2 per m3 natural gas). In our previous annual reports, we reported on gross and net emissions, but as ASML
does not offset any of the remaining emissions, there is no difference between gross and net emissions, so the split is
no longer reported.
Energy indirect (Scope 2) GHG emissions
Scope 2 emissions are also expressed in kt and the CO2 footprint is calculated by multiplying electricity consumption of the
manufacturing locations by the market- or local emission factors (x kg CO2 per kWh). Market-based emission factors are
based on supplier emission rates. Location-based emission factors are based on information from the national, sub-national
and grid level. All emission factors are stored and checked annually by the Corporate Real Estate team within the
Sustainability Performance Indicator system (in myEHS) and calculations are done automatically in this system. Market-
based and location-based emission factors are updated annually, where applicable.
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. Please refer to the next sections where we elaborate on the methodology and assumptions
used in the reporting of our indicators.
In our previous annual reports, we reported as gross our emissions before purchase of EACs via the market-based
method. We also included the market-based emissions (after purchase of EACs) as net. As ASML currently does not
offset any of the remaining emissions, there is no difference between our gross and net emissions and we only report
the market-based emissions (after purchase of EACs). This is the first year location-based emission factors are also
being reported.
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About the non-financial information (continued)
Other indirect (Scope 3) GHG 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. According to the GHG protocol Corporate Value Chain (scope 3)
Accounting and Reporting Standard, scope 3 emissions include 15 categories, of which nine are material for ASML.
The CO2 emissions for each category are calculated by multiplying the energy consumption of activities or activity
factors by specific emission factors (e.g., x kg CO2 per kWh or euro spend).
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 for nine months with three months estimate. In prior years, emissions
reported were calculated by use of the actual data sources from one year earlier.
– Cat.1 Purchased goods and services, Cat.2 Capital goods: Using the spend-based method, we estimate emissions for
goods, services and capital goods by collecting data on the economic value of goods and services purchased and
multiplying it by relevant secondary (e.g. industry average) emission factors (e.g. average emissions per monetary value of
goods). The DEFRA emission database is used.
– Cat.7 Employee commuting: we use the distance-based method, which involves collecting data on commuting
patterns from employees in the Netherlands (distance travelled and mode of transportation) and applying the
appropriate emission factors for the modes used. We take the badge swipe numbers to count the average number
of employees that come to the office. For employees outside of the Netherlands, mode of transportation data is not
yet available, so we assume they all drive by car with the same driving distances as in the Netherlands. The DEFRA
emission database is used.
– Cat.11 Use of sold products: We count the direct use-phase emissions by measuring the energy use of our
products. We estimate common full time and idle time machine user scenarios by discussing Customer Survey
data with Development and Engineering and the Marketing team. On this basis, we calculate the annual energy
consumption of each product and multiply this by the products sold in the reporting year. The figure obtained is
then multiplied by a lifetime of 20 years. Lastly, we apply the country-based emission factors from the IEA database
to convert energy consumption into emissions.
– Cat.12 End-of-life treatment of sold products: We apply the waste-type-specific method. On the basis of a high-
level estimation of the material composition of our products, we apply emission factors for specific waste types and
waste treatment methods. The Ecoinvent database is used.
GHG emissions intensity
– Cat.3 Fuel- and energy-related activities: Using the average-data method, we estimate emissions by using secondary
emission factors. BEIS, DEFRA, and The National Renewable Energy Laboratory emission databases are used.
GHG emission intensity is calculated as the total of net scope 1, 2 and 3 emissions divided by total ASML revenue.
The only gas included is CO2, since the other GHGs are negligible.
– Cat.4 Upstream transportation & distribution: In general, around 90% of the emissions are calculated with the
distance-based method, for which we directly receive emissions reports from major logistics suppliers. The
remaining emissions are from smaller logistics suppliers and are estimated by taking the average ASML road freight
emission factor.
– Cat.5 Waste generated in operations: Using the waste-type-specific method, we use emission factors per waste
type and treatment method. The emission factors of Ecoinvent are used.
– Cat.6 Business travel: The DEFRA emission database is used and the following methods are applied:
– Air travel: We use the distance-based method and select the appropriate emission factors based on the distance
and travel class.
– Hotel stay: using the fuel-based method, we take hotel nights stayed and apply emission factors for the average
energy use per night in different countries.
– Car rental: we use the fuel-based and distance-based method, for which we directly receive emissions reports
from car rental companies.
– Taxi and public transportation: we apply the spend-based method, which involves determining the amount of money
spent on transport and applying secondary (Environmentally-Extended Input-Output or EEIO) emission factors.
Reduction of GHG emissions
We measure and report on reductions in GHG emissions resulting from energy savings. For details of the process
used to estimate energy savings see the section Energy savings worldwide through projects in this chapter. In order
to calculate the CO2 reduction, the estimated energy savings are multiplied by local emission factors for electricity
and by gas emission factors for gas usage.
Nitrogen oxides (NOX), sulphur oxides (SOX), and other significant air emissions
We currently measure and report on Volatile Organic Compounds (VOCs) for the Netherlands and Wilton. The data
are reported in myEHS. For VOC's we calculate the air emissions to be the difference between what we have
purchased and what we have disposed to the waste vendor. For Veldhoven, the purchase value comes from our
SAP system and the disposed figures are confirmed by the waste vendor. For Wilton, the usage is monitored
manually. We plan to assess the materiality of VOCs for San Diego, San Jose, Linkou and Taiwan in 2023. We also
plan on reassessing the materiality of this indicator in 2023 to identify whether it is relevant to report on other
significant air emissions going forward.
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About the non-financial information (continued)
Energy
Energy savings worldwide through projects
We report on the cumulative savings for ASML manufacturing locations through improved technical installations over
the five year energy savings masterplan period. The current masterplan runs from 2021 to 2025. The energy savings
presented in the report represent the measured or estimated savings. We measure our energy savings compared to
the energy we estimate we would have used in a business as usual scenario without the efficiency improvements
realized through dedicated energy saving projects. Energy savings include mainly reductions in the consumption of
natural gas and electricity. The reported energy savings are annualized savings from projects finalized in the reporting
year and projects implemented and are reported in TJ.
Energy consumption within the organization
Energy consumption inside the organization is expressed in TJ and includes fossil fuel and electricity consumption,
for energy purposes in the reporting period for ASML manufacturing locations. The scope encompasses 95% of
company GHG emissions from manufacturing locations as well as office locations with more than 250 FTEs. The unit
in which the energy consumed is expressed is then converted to TJ using standard conversion factors.
Energy consumption outside of the organization
Energy consumption outside the organization is expressed in TJ and is defined as the energy use throughout ASML’s
upstream and downstream activities associated with its operations. The scope is aligned with the categories reported
in our scope 3 emissions according to the GHG protocol.
The calculations will be according to the categories reported in the scope 3 emissions. For each category the
following methodology is applied:
– Cat.1 Purchased goods and services, Cat.2 Capital goods: Using the spend-based method, we estimate emissions for
goods and services, and capital goods by collecting data on the economic value of goods and services purchased and
multiplying its economic value by relevant secondary (e.g., industry average) emission factors (e.g., average emissions per
monetary value of goods [gCO2/Euro]). The emission factors from the DEFRA database are used. Total emissions are
divided by the average world emission factor for electricity and heat generation from the IEA [gCO2/kWh] to obtain the total
energy. This amount is then adjusted to the correct unit [TJoules] using energy conversion factors.
– Cat.3 Fuel- and energy-related activities: activities in this category are reported in MWh and TJ. In the case of
electricity, the energy consumption is adjusted by 5% due to the transmission and distribution losses (Worldbank),
and the total energy is calculated based on the average energy needed to produce electricity from natural gas from
EIA. Then the value is converted to TJ using the corresponding energy conversion factor. In the case of natural gas
transmission and distribution losses are assumed to be minimal and are disregarded. Then the energy calculated is
based on the cumulative energy demand, i.e. the sum of the primary energy demand to obtain the natural gas.
Finally the value is converted to TJ using the corresponding energy conversion factor.
– Cat.4 Upstream transportation & distribution: Emissions are reported in five categories: air, other, rail, road and sea.
These emissions are then divided by the corresponding fuel emission factor [kg CO2e/ kWh (Net CV)] from DEFRA.
For air it is assumed that all planes consume Aviation Spirt from fossil fuels. For sea it is assumed that the ships
consume MGO due to the restrictions in the ECA zones. For rail, it is assumed that electricity is used to power the
trains. For road and others, it is assumed that transportation is done using diesel. Finally the value is converted to
TJ using the corresponding energy conversion factor.
– Cat.5 Waste generated in operations: the emissions are reported according to the method of processing. The
methods are incineration without energy recovery and landfill. The emissions are divided by the average waste
factor emissions per tonne from DEFRA, and then multiplied by the energy consumed for the method of processing
used (factor for landfill is obtained from DEFRA and for incineration from the Minnesota Pollution Control Agency).
Recycling and incineration with energy recovery are disregarded. Finally the value is converted to TJ using the
corresponding energy conversion factor.
– Cat.6 Business travel: The DEFRA emission database is used and the following methods are applied:
– Air travel: The emissions reported for air travel are divided by the emissions per kWh of the fuel used assuming
that all planes consume Aviation Spirit from fossil fuels. The value obtained is then adjusted to the correct unit
[TJ].
– Hotel stay: The hotel nights stayed are multiply by the average hotel energy consumption per night by hotels
around the world (source: Cornell hotel sustainability benchmarking index). Then the value is adjusted to the
correct unit [TJ].
– Car rental, taxi and public transport: a similar approach to air travel is used, but instead of Aviation Spirit it is
considered that the fuel is Gasoline (DEFRA, Petrol 100% mineral).
– Cat.7 Employee commuting: the emissions are reported based on the mode of transportation used. It is assumed
that transportation by car causes 100% of these emissions, other modes are disregarded due to their low
contribution. These emissions are divided by the emissions per kWh of the fuel assuming that all cars consume
Gasoline (DEFRA, Petrol 100% mineral). Finally, the value obtained is adjusted to the correct unit [TJ].
– Cat.11 Use of sold products: The energy use of our products is known. This energy usage is multiplied by the
number of systems sold, and a lifetime of 20 years (following the GHG Protocol). The value is then adjusted to the
correct unit [TJ].
– Cat.12 End-of-life treatment of sold products: Only Landfill activities are considered, others are disregarded. The
total amount of waste is calculated from the emissions over the emission per tonne of metal waste from DEFRA,
and the energy is estimated based on the energy consumed for each tonne of waste.
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About the non-financial information (continued)
As this is the first year of reporting, this indicator is based on data currently available in open-source databases.
Some of the conversion factors used may have low accuracy or represent a particular case, instead of an average.
The energy conversion factors will need to be reassessed each year to improve the accuracy and reduce estimation
uncertainty.
Energy intensity
Energy intensity is the total energy consumption within the organization normalized to revenue (TJ/million EUR). Total
energy consumption includes fossil fuels consumed for energy purposes and total purchased electricity. Diesel is
considered immaterial and not included in this calculation.
Occupational Health and Safety
Workers covered by an occupational health and safety management system
The indicator is calculated by summing the number of employees and contractors who are covered by the reporting
system and dividing the total of this sum by the total number of employees and contractors, including those not
covered in the system. No workers have been excluded. The number of total visitors is out of scope. The definition
includes:
– Employees, permanent and temporary.
– Contractors: workers who are not employees but whose work and/or workplace is controlled by the organization,
Reductions in energy requirements of products and services
including consultants, interns and outsourcing.
We measure and report on our machines’ energy efficiency. To do so we measure power consumption based on
SEMI S23 standards for our latest NXE and NXT machine, scaled to 100% availability. For NXE we include source,
scanner, laser, PVAC & abatement and relevant cabinets. For NXT we exclude laser but include gas and water
supplies. Energy is reflected in kWh per wafer pass.
To calculate our machines’ energy efficiency (i.e., energy consumption per wafer pass) we divide Annual TEE (Total
Energy Equivalent) consumption by wafers used per year (assuming 100% availability of the system).
We report on the percentage reduction of energy consumption from a 2018 baseline which is the year we started to
work on energy savings for EUV systems.
Circular Economy
Percentage of systems sold in the past 30 years still active in the field
We monitor the number of active systems in our installed base. This includes our EUV, DUV and PAS5500 systems.
We calculated the percentage of all systems ever sold 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.
Attractive workplace for all
Ratio of base salary and total cash female / male
We report on the ratio of base salary and total cash between female and male employees. For this indicator
significant locations of operations are Asia, the US and Europe. With some exceptions, this mirrors most of the other
HR reporting.
In an update from last year, we now report this indicator more granularly. We report per employee category per
region, as opposed to reporting per employee category and per region separately.
The EHS reporting system is assessed against the ISO 14001 standard as part of the internal audit. It is not certified
by an external party. The outsourced contractors that work offsite are out of the scope of the ASML EHS
management system according to the GRI definition, since ASML doesn't control their work or workplace.
Work-related injuries
We measure and report on the recordable incident rate and the number and rate of recordable injuries and high
consequence injuries. The indicators relate to all employees and contractors working under supervision of ASML and
are split by worker type (with no workers excluded).
Definitions
– A recordable incident is a work-related incident of personal injury and/or illness from events or exposures occurring
in the work environment in the reporting period for all ASML locations worldwide, which require medical treatment
beyond first aid, or cause death, or days away from work, restricted work or transfer to another job. A recordable
injury has the same definition as a work-related incident but excludes illness.
– High consequence work-related injuries are the number of work-related incidents of personal injury from events or
exposures occurring in the work environment in the reporting period for all ASML locations worldwide, which result
in days away from work or job transfer equal to or longer than 180 days.
– An injury or illness is considered work-related if an event or exposure in the work environment caused or
contributed to the condition or significantly aggravated a preexisting condition. Work-relatedness is presumed for
injuries and illnesses resulting from events or exposures occurring in the workplace, unless an exception specifically
applies. The work environment includes the establishment and other locations where one or more employees are
working or are present as a condition of their employment.
– For incidents, injuries, and high consequence work-related injuries, the rate is calculated following OSHA guidelines:
– The number of recordable incidents or injuries or high consequence work-related injuries is multiplied by 200,000
and divided by the number of employee labor hours worked. The result is then multiplied by 100%.
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About the non-financial information (continued)
– Rate indicators are calculated for employees only. For contractors, no incident rate can be calculated because of a
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
Scope
lack of baseline HR data regarding the number of hours worked. For this category, only the absolute value is
reported.
Work-related ill health
This indicator is defined as the number of work-related ill health reported within reporting period, split by worker types
(employees and contractors), with no workers excluded.
Work-related ill health encompasses acute, recurring, and chronic health problems caused or aggravated by work
conditions or practices. These include musculoskeletal disorders, skin and respiratory diseases, malignant cancers,
diseases caused by physical agents. This disclosure covers, but is not limited to, the diseases included in the ILO List
of Occupational Diseases.
Cases of ill health are reported as the:
– Number of cases of recordable work-related ill health
– Main types (hazard groups) of work-related ill health
We apply the following definitions of worker types:
– Employees, permanent and temporary.
– Contractors: workers who are not employees but whose work and/or workplace is controlled by the organization
My EHS incident data is used to extract ill health related incidents. Mental illnesses are out of scope of EHS
management system.
Local Communities
Our company
How we innovate
Customer intimacy
Financial performance
Financial performance indicators
Energy efficiency and climate action
Energy management and carbon footprint
(scope 1 and 2)
Energy management and carbon footprint
(scope 3)
Energy management and carbon footprint:
Product use at our customers
Circular economy
Reduce waste in our operations
Operations with local community engagement, impact assessments, and development programs
Re-use parts and materials
We measure and report on the percentage of operations with implemented local community engagement, impact
assessments, and development programs. In order to determine the percentage of total operations that each of our
locations represents, we look at the employee headcount in that location divided by the total employee headcount.
The employee headcount was chosen because it is assumed that the number of employees in a location is a strong
determinant of the impact on the local community. The calculation for this indicator entails summing the employee
counts for applicable locations and then dividing this sum by the total employee count. Currently, we have five
applicable locations with community engagement initiatives (Veldhoven (NL), Wilton, Connecticut (USA), Silicon Valley,
California (USA), San Diego, California (USA), Hsinchu (TW)). Other ASML locations with smaller community
engagement initiatives but no dedicated community engagement FTEs and programs are excluded.
Refurbish mature products
Water management
Attractive workplace for all
Inspiring a unified culture
Best employee experience
ASML worldwide
ASML worldwide, excluding Cymer and Berliner Glas (ASML Berlin
GmbH)
NOTE: Techinsights ASML only
ASML worldwide
ASML locations above 250 FTE, excluding Berliner Glas (ASML Berlin
GmbH)
ASML worldwide: except category 8,9,10,13,14 and 15
ASML Products that reached a certain stage of maturity and have been
measured
ASML locations above 250 FTE, excluding Berliner Glas (ASML Berlin
GmbH)
ASML worldwide material flows
NOTE: Re-use rate and Savings from re-used parts are excluding
packaging
ASML products, excluding YieldStar and SBI/MBI metrology tools.
ASML locations above 250 FTE, excluding Berliner Glas (ASML Berlin
GmbH) – 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, excluding Berliner Glas (ASML Berlin GmbH)
ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH)
NOTE: The scope for indicator Open positions filled by internal
candidates (in %) includes only open positions for which a formal
vacancy has been created
Enabling strong leadership
ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH)
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About the non-financial information (continued)
ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH)
Review of this report
The Consolidated Financial Statements included in this report are audited.
Read more in:
Consolidated Financial Statements - Report of Independent Registered Public Accounting Firm.
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.
Ensuring employee safety
Valued partner in our communities
Community engagement program
ASML Foundation
Innovation ecosystem
ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH)
NOTE: Volunteering hours Technology promotion and Campus
promotion ASML Netherlands only
Volunteering hours for Community engagement: excludes HMI
ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH)
Public-private partnerships
ASML worldwide
Partnerships with academia and research institutes ASML worldwide
Supporting startups and scaleups
ASML Netherlands
Our supply chain
Supply Chain
ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH)
Supplier performance management
ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH)
Supply chain risk management
Responsible Supply Chain
Responsible business
ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH)
ASML worldwide, excluding Cymer, HMI and Berliner Glas (ASML Berlin
GmbH)
Business ethics and Code of Conduct
ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH)
Product safety
Rest
ASML worldwide, excluding HMI
ASML worldwide
Scope changes and restatements
Compared to the 2021 Annual Report, the following scope changes have occurred:
– For Community engagement we have expanded our reporting scope to include the US and Asia, as well as the
Netherlands, regarding the value of donations.
– As of 2022, our scope 3 emission consists of nine months of actual data and three months of estimated data. In
the 2023 reporting year, we will adjust the 2022 figure reported with full-year actual 2022 data. In past years, we
have reported scope 3 emission data with a one-year lag.
– We have also started reporting on our population for which gender is unknown in all of our workforce indicators.
– Finally, the methodology was changed for the attractive employer ranking for the US for 2020/2021, so the
comparative figures have been revised based on the new segmentation.
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Non-financial indicators
The non-financial Key Performance Indicators (KPIs) are reported in the different chapters of our sustainability reporting within ESG. The other non-financial performance indicators (PIs) are reported in the tables below.
Customer intimacy
Description
Overall Loyalty Score (Customer Feedback Survey)
TechInsights
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)
2020
72.6 %
9.3
9.3
9.7
2021
n/a
9.2
9.2
9.5
2022
78.3 %
Comments
The survey takes place every 24 months (the last survey was held in September 2022).
As of 2022, the score shows consolidated and weighted results for ASML, Brion and HMI surveys.
9.4
9.4
9.8
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Non-financial indicators (continued)
Energy efficiency and climate action – Energy
Description
Energy consumption (in TJ)
Energy savings worldwide through projects (in TJ)
2020
1,412
114
2021
1,689
13
2022
Comments
1,633
19
Energy intensity (per €m revenue)
Energy consumption outside of the organization (in TJ)
Electricity purchased per location (in TJ)
Veldhoven
Wilton
Linkou
San Diego
San Jose
Tainan
Other
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)
n/a
n/a
802
114
35
167
—
—
—
n/a
0.08
n/a
93,962
881
120
34
176
28
36
47
837
130
34
188
25
43
50
1,118
1,322
1,307
141
112
—
40
—
—
—
293
—
184
127
—
43
5
—
8
367
—
149
121
—
43
6
—
7
326
—
1. The sources of the conversion factors used are the Dutch Emissions Authority and the US Energy Information Administration.
In 2021, we started a new masterplan 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 figure from 2020 is related to the masterplan 2016-2020. The savings reported are cumulated compared
with the base year; therefore, they are not comparable.
The denominator is revenue and the numerator represents total energy consumption within the organization
made up of total electricity consumption (in TJ) and Fossil fuels (natural gas (consumed) (in TJ).
In scope for this indicator since 2021.
In scope for this indicator since 2021.
In scope for this indicator since 2021. Other includes the locations with more than 250 FTE combined.
Fossil fuels consumed consists of only natural gas.
No natural gas is used by this manufacturing location.
In scope for this indicator since 2021.
In scope for this indicator since 2021. No natural gas is used by this manufacturing location.
In scope for this indicator since 2021. Other includes the locations with more than 250 FTE combined.
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Non-financial indicators (continued)
Energy efficiency and climate action – CO2e emissions
Description
Emission intensity net scope 1+2+3 (in kton/€m revenue)
2020
0.63
2021
0.62
2022
0.56
Net emission footprint change in % (Scope 1+2) - Market-based
Scope 2 CO2e emissions (in kton) Location-based
Purchased CO2 (in kton)
Type of Energy Attribute Certificates (in TJ)
Guarantee of Origins (GOs)
Renewable Energy Certificates (RECs)
I-RECs
Total
Reduction in greenhouse gas emissions (GHG) split by (in kton):
Scope 1
Scope 2
Total
Significant air emissions – VOC
Number of significant fines and non-monetary sanctions
The monetary value of significant fines for non-compliance with environmental
laws and regulations (in € thousands)
(31) %
n/a
0.9
802
281
35
156 %
n/a
0.9
883
331
—
1,118
1,214
n/a
n/a
n/a
n/a
1
70
n/a
n/a
n/a
n/a
—
—
(3) %
193
0.7
840
351
3
1,194
0.16
2.41
2.57
13,289
—
—
Comments
Comparison figures have been recalculated to eliminate the one-year lag in scope 3 emission data. In 2022,
we made efforts to collect the emissions data in a more timely manner so we are able to report for the
2022 year, nine months of actual data and three months of estimate. Gases included is only CO2, as the
other gases are negligible.
In 2020, there was one fine for HMI Beijing due to the fact that they had no environmental permit.
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Non-financial indicators (continued)
Circular economy – Waste management
Description
Total waste generated (in 1,000 kg)1 & 2
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: Recycling (in 1,000 kg)1
Total non-hazardous waste
Total hazardous waste
Total construction waste
Total
Waste directed to disposal: Incineration (with energy recovery)
(in 1,000 kg)1
Total non-hazardous waste
Total hazardous waste
Total construction waste
Total
Waste directed to disposal: Incineration (without energy recovery)
(in 1,000 kg)1
Total non-hazardous waste
Total hazardous waste
Total construction waste
Total
2020
2021
2022
Comments
4,654
372
231
5,257
4,466
791
5,257
3,911
349
206
4,466
411
9
20
440
3
13
0
16
5,284
395
199
5,878
4,544
1,334
5,878
4,028
346
170
4,544
938
16
17
971
51
27
0
78
6,295
380
238
6,913
Total waste is treated offsite, no waste treatment onsite.
We apply recycling of waste. Other categories like preparation for re-use and composting are not applicable
to ASML.
2021 and 2022 saw an increase due to change in waste treatment by supplier. We have engaged with
vendors and suppliers to improve the recycling rate in the future.
5,186
1,727
6,913
4,719
309
158
5,186
1,246
37
74
1,357
66
24
0
90
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Non-financial indicators (continued)
Circular economy – Waste management
Description
Waste directed to disposal: Landfill (in 1,000 kg)1
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
2020
2021
2022
Comments
329
1
5
335
8 %
— %
7 %
15 %
267
6
12
285
17 %
1 %
5 %
23 %
264
10
6
280
19 %
2 %
4 %
25 %
1. The waste disposal methods are determined by information provided by the waste disposal contractor. As of 2021, we split total waste into waste directed to disposal and waste diverted from disposal, as required by the GRI. The comparison figures for 2020 are adjusted to disclose
this split.
2. During the dismantling of the Combined Heat and Power (CHP) system in Wilton, a spill of glycol onto the soil surface occurred. Because of this spill, we disposed 12.7 tons of glycol impacted soil and 3.6 tons of glycol impacted water to ensure minimum impact to the environment. This soil and
water removal is included in our waste figures of 2022.
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Non-financial indicators (continued)
Circular economy – Water management
Description
Water consumption (in 1000 m3), split by:
Veldhoven
San Diego
Wilton
Linkou
San Jose
Tainan
Other
Total
Total ultrapure water consumption (in 1000 m3)
Total water recycled and re-used (in %)
Water intensity (in 1000m3/€m revenue)
2020
658
80
94
28
—
—
—
860
127
1.8 %
62
2021
728
105
95
26
21
30
36
1,041
84
1.2 %
56
2022
Comments
834
115
90
22
32
33
36
1,162
86
1.6 %
55
In scope for this indicator since 2021.
In scope for this indicator since 2021.
In scope for this indicator since 2021. Other includes the locations with more than 250 FTE combined.
Municipal water supply.
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.
Only Veldhoven, Linkou and HMI Tainan are in scope for this indicator. The other locations are excluded from
the scope because the data to report on the indicator is not yet available.
Water intensity is calculated as total water consumption (in m3) divided by total revenue (in millions).
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Non-financial indicators (continued)
Attractive workplace for all – Workforce indicators1
Number of FTEs (payroll and temporary)
Total ASML
Temporary employees (in FTE)
1,399
2,095
2,924
Payroll employees (in FTE)
Female (in %)
Male (in %)
Unknown (in %)
Female (in %)
Male (in %)
Unknown (in %)
Total
Total number of FTEs (by age group)
<30
30-50
>50
Unknown
Total
Total number of FTEs (payroll and temporary)
Female (in %)
Male (in %)
Unknown (in %)
2020
25,082
2021
28,747
2022
34,719
2020
6,027
2022
8,840
2020
13,627
2022
18,660
2020
5,428
17
83
n/a
18
82
n/a
19
81
—
16
84
n/a
18
82
n/a
19
73
8
Asia
2021
7,404
17
83
n/a
26
19
81
n/a
17
83
n/a
30
28
72
n/a
EMEA
2021
15,444
18
82
n/a
17
83
n/a
20
80
—
1,087
1,786
2,607
19
81
n/a
20
80
n/a
20
80
—
18
82
—
31
23
71
6
US
2021
5,899
17
83
n/a
283
8
92
n/a
2022
7,219
19
81
—
286
2
18
80
17
83
n/a
282
7
93
n/a
26,481
30,842
37,643
6,057
7,430
8,871
14,714
17,230
21,267
5,710
6,182
7,505
4,798
16,848
4,556
279
26,481
17
83
n/a
6,344
19,058
5,158
282
30,842
18
82
n/a
8,837
22,736
5,792
278
37,643
19
80
1
1,518
4,300
238
1
6,057
n/a
n/a
n/a
2,191
4,933
305
1
7,430
n/a
n/a
n/a
2,736
5,778
355
2
8,871
18
82
—
2,381
9,615
2,718
—
14,714
n/a
n/a
n/a
3,041
11,007
3,182
—
17,230
n/a
n/a
n/a
4,449
13,170
3,647
1
21,267
20
80
—
899
2,933
1,600
278
5,710
n/a
n/a
n/a
1,112
3,118
1,671
281
6,182
n/a
n/a
n/a
1,652
3,788
1,790
275
7,505
18
79
3
Attractive workplace for all – Workforce indicators1
Number of payroll FTEs (split into full-time and part-time)
Full-time payroll FTEs
Female (in %)
Male (in %)
Unknown (in %)
Total
Total ASML
Asia
EMEA
US
2020
2021
2022
2020
2021
2022
2020
2021
2022
2020
2021
2022
15
85
n/a
16
84
n/a
18
82
—
17
83
n/a
17
83
n/a
18
82
—
14
86
n/a
15
85
n/a
17
83
—
17
83
n/a
17
83
n/a
19
81
—
23,317
26,847
32,635
6,024
7,401
8,835
11,878
13,560
16,594
5,415
5,886
7,206
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Non-financial indicators (continued)
Number of payroll FTEs (split into full-time and part-time)
Total ASML
Asia
EMEA
US
Part-time payroll FTEs
Female (in %)
Male (in %)
Unknown (in %)
Total
37
63
n/a
37
63
n/a
38
62
—
1,765
1,900
2,084
—
100
n/a
3
—
100
n/a
3
28
72
—
5
37
63
n/a
37
63
n/a
38
62
—
1,749
1,884
2,066
46
54
n/a
13
1. There are no non-guaranteed hour employees. FTEs are reported at the end of the reporting period and excludes Berliner Glas (ASML Berlin GmbH).
Attractive workplace for all – 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
Unknown
Total
Age group
<30
30-50
>50
Unknown
Total
Total ASML
Asia
EMEA
US
2020
1,932
8
454
1,478
n/a
1,932
854
947
131
—
2021
4,373
15
896
3,477
n/a
4,373
2,392
1,789
190
2
1,932
4,373
2022
2020
7,130
21
1,724
5,400
6
7,130
3,581
3,241
308
—
7,130
598
10
123
475
n/a
598
338
253
7
—
598
2021
1,848
25
313
1,535
n/a
1,848
1,213
627
6
2
1,848
2022
2020
2,057
23
415
1,641
1
2,057
1,321
730
6
—
2,057
879
6
216
663
n/a
879
329
491
59
—
879
2021
1,737
11
432
1,305
n/a
1,737
783
848
106
—
1,737
2022
2020
3,306
18
903
2,402
1
3,306
1,457
1,708
141
—
3,306
455
8
115
340
n/a
455
187
203
65
—
455
27
73
n/a
13
2021
788
13
151
637
n/a
788
396
314
78
—
788
30
70
—
13
2022
1,767
25
406
1,357
4
1,767
803
803
161
—
1,767
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Non-financial indicators (continued)
Attractive workplace for all – Workforce indicators
Employee attrition (in FTE)
Number of involuntary employee attrition
Number of voluntary employee attrition
Total
Gender
Female
Male
Unknown
Total
Age group
<30
30-50
>50
Total
Total ASML
Asia
EMEA
US
2020
186
723
909
189
720
n/a
909
218
479
212
2021
199
1,234
1,433
258
1,175
n/a
1,433
337
806
290
2022
2020
226
1,678
1,904
372
1,532
—
38
201
239
56
183
n/a
1,904
239
516
1,063
325
73
149
17
909
1,433
1,904
239
2021
41
421
462
78
384
n/a
462
143
292
27
462
2022
2020
34
530
564
107
457
—
102
239
341
69
272
n/a
564
341
220
326
18
67
179
95
564
341
2021
101
341
442
89
353
n/a
442
69
257
116
442
2022
2020
119
503
622
129
493
—
46
283
329
64
265
n/a
622
329
121
383
118
78
151
100
622
329
2021
57
472
529
91
438
n/a
529
125
257
147
529
2022
73
645
718
136
582
—
718
175
354
189
718
Attractive workplace for all – Workforce indicators
Description
Workers who are not employees (in FTE)1
2020
n/a
2021
n/a
2022
1,682
Comments
1. Included in this category are consultants that are hired to perform a specific time-bound assignment based on a specific area of expertise needed, students who follow a work/learning program within ASML and students doing an internship at ASML. FTEs are reported at the end of the reporting
period.
Attractive workplace for all – Employee engagement
Engagement score we@ASML by gender
Female
Male
Benchmark
2020
80 %
80 %
73 %
2021
78 %
78 %
76 %
2022
77 %
78 %
74 %
Comments
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Non-financial indicators (continued)
Attractive workplace for all – Employee engagement
Description
Employee Attrition (in %)
Open positions filled by internal candidates (in %)
Attractive workplace for all – Employee engagement
Description
Total training expenses (in € millions)
2020
3.8
30
2020
12
2021
5.4
29
2021
27
2022
Comments
6.0
27
2022
47
Comments
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 (€)
494
1,020
1,491
Total number of training hours per FTE
Includes technical and non-product-related training hours (including nomination courses).
Female
Male
Unknown
Weighted average
Number of technical training hours per technical FTE
Female
Male
Unknown
Weighted average
Number of non-product-related training hours per FTE
Female
Male
Unknown
Weighted average
Nomination courses: Leadership development programs
Number of training hours
Number of employees attending (unique)
26
29
n/a
28
22
27
n/a
26
7
4
n/a
5
25
30
n/a
29
22
29
n/a
28
8
5
n/a
5
41
52
304
50
41
50
347
49
11
8
27
8
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).
22,896
216
6,264
48
47,454
Due to COVID-19 only two ECAP programs started in 2021.
322
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Non-financial indicators (continued)
Attractive workplace for all – Diversity &
inclusion
Description
Male/female in managerial positions and on 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 and Development
General and Administrative
Sales and Mature Product Services
Strategic Supply Management
Total
1. Temporary employees are not included in the headcount numbers.
Gender
Gender ratio
Age group
Comments
Female
Male
Unknown
Total
Female
30 - 50
>50
Unknown
Total
< 30
—
—
—
1
64
—
1
311
1,994
1,480
7,714
18,001
7,779
21,787
9
4
390
1,344
270
3,620
5,637
—
—
—
—
—
—
—
9
5
701
3,339
1,814
29,335
35,203
4
—
78
469
312
5
5
623
2,869
1,502
5,962
23,369
6,825
28,373
—
—
—
1
—
4
5
Gender
Male
Unknown
Female
1,055
1,732
7,741
7,142
2,203
11,598
1,520
2,217
116
545
552
983
8
91
121
7
—
12
9
5
701
3,339
1,814
29,335
35,203
Total
8,804
8,965
13,922
3,744
668
1,540
7,171
30,233
239
37,643
44 %
— %
11 %
14 %
17 %
20 %
19 %
Gender ratio
Female
12 %
19 %
16 %
41 %
17 %
35 %
19 %
Male
56 %
100 %
89 %
86 %
83 %
80 %
81 %
Male
88 %
80 %
83 %
60 %
83 %
64 %
80 %
Unknown
— %
— %
— %
— %
— %
— %
— %
Unknown
— %
1 %
1 %
— %
— %
1 %
1 %
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283
Non-financial indicators (continued)
Attractive workplace for all – Diversity & inclusion
Description
Number of nationalities working for ASML
Asia
EMEA
US
Worldwide total
Foreign nationals working for ASML (in %)
Asia
EMEA
US
Worldwide total
2020
2021
2022
Comments
35
103
86
120
6
32
27
25
33
108
90
122
5
33
28
26
40
124
101
143
5
38
25
28
Foreign nationals working for ASML (in %) is the percentage of payroll and temporary employees with a
nationality other than the country in which the employee is working.
Attractive workplace for all – Labor relations
Description
Percentage of employees covered by collective bargaining agreements
2020
53 %
2021
52 %
Comments
2022
53 %
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284
Non-financial indicators (continued)
Attractive workplace for all – Fair remuneration2
Description
Ratio of base salary of women to men total1
2020
2021
2022
Comments
Senior management
Middle management
Non-management
Ratio of base salary of women to men Asia1
Senior management
Middle management
Non-management
Ratio of base salary of women to men EMEA1
Senior management
Middle management
Non-management
Ratio of base salary of women to men US1
Senior management
Middle management
Non-management
Ratio of total cash of women to men total1
Senior management
Middle management
Non-management
Ratio of total cash of women to men Asia1
Senior management
Middle management
Non-management
Ratio of total cash of women to men EMEA1
Senior management
Middle management
Non-management
99 %
98 %
98 %
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
99 %
98 %
97 %
n/a
n/a
n/a
n/a
n/a
n/a
99 %
99 %
98 %
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
99 %
99 %
98 %
n/a
n/a
n/a
n/a
n/a
n/a
100 %
99 %
98 %
102 %
98 %
95 %
99 %
98 %
98 %
100 %
100 %
100 %
102 %
98 %
97 %
110 %
92 %
96 %
101 %
98 %
98 %
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285
Non-financial indicators (continued)
Attractive workplace for all – Fair remuneration2
Description
Ratio of total cash of women to men US1
Senior management
Middle management
Non-management
Internal pay ratio (CEO versus employee remuneration)3
2020
2021
2022
Comments
n/a
n/a
n/a
38
n/a
n/a
n/a
40
96 %
100 %
100 %
34
For more information, see 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. Total cash is base salary plus short-term incentive.
2. From 2022, we disclose the fair remuneration per employee group split by region.
3. 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 in 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 if we were to incorporate the temporary
employees, as they earn on average a higher remuneration.
Attractive workplace for all – Benefits which are standard for full-time and part-time employees of the
organization but are not provided to temporary employees1
Type of employee benefit:
Type of employee
Full-time employees
Part-time employees
Temporary employees 2
i. life insurance3
ii. healthcare3
iii. disability and invalidity coverage3
iv. parental leave3
v. retirement provision
vi. stock ownership
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
no
no
no
no
no
no
1. This table include the significant locations of operations: Taiwan, Netherlands, China, South Korea and the US. There are no part-time employees in Taiwan.
2. Generally temporary employees are not entitled to the same benefits as full-time and part-time employees because their benefits are covered by the benefit plans of their formal employer.
3. In the US part-time employees are not entitled to life insurance, healthcare, disability and invalidity coverage and parental leave benefits.
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Comments
Includes illness and injuries.
This relates to both employees and workers who are not employees.
Non-financial indicators (continued)
Attractive workplace for all – Employee safety
Description
ASML recordable incident rate1
Number of recordable incidents (employees)
Number of recordable incidents (contractors)
Number of fatalities
Employees with work-related injuries split by:
Rate of fatalities
Number of recordable injuries
Rate of recordable injuries
Number of high-consequence injuries
Rate of high-consequence injuries
Main types of work-related injuries by employees (split by hazard group)
Electrical
Ergonomics
Facilities
Hazardous substances & materials
Hoisting & lifting
Mechanical
Pressure systems
Thermal
Travel
# hours worked
Workers who are not employees with work-related injuries split by:
Number of recordable injuries
Number of high-consequence injuries
2020
0.18
46
n/a
—
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2021
0.17
48
n/a
—
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2022
0.18
63
9
—
—
48
0.14
2
0.01
1
17
88
9
10
147
1
2
10
68,746,820
8
—
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Non-financial indicators (continued)
Attractive workplace for all – Employee safety
Description
Main types of work-related injuries by workers who are not employees
(split by hazard group)
2020
2021
2022
Comments
Electrical
Ergonomics
Facilities
Hazardous substances & materials
Hoisting & lifting
Mechanical
Pressure systems
Travel
Employees with work-related ill health split by:
Number of recordable ill-health
Main types of work-related ill health by employees (split by hazard group)
Ergonomics
Facilities
Hazardous gasses
Hazardous substances & materials
Hoisting & lifting
Mechanical
Pressure systems
Workers who are not employees with work-related ill health split by:
Number of recordable ill-health
Main types of work-related ill health by workers who are not employees
(split by hazard group)
Ergonomics
Hazardous gasses
Mechanical
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
1
3
18
1
5
29
2
1
15
—
22
4
—
4
2
1
1
1
2
1
1
1. The 2020 and 2021 recordable incident rates include recordable incidents related to workers who are not employees. From 2022, and in line with GRI 403 standard, we separate incidents related to employees and workers who are not employees so the 2022 recordable incident rate only
includes recordable incidents related to employees.
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Non-financial indicators (continued)
Our supply chain – Responsible supply chain
Description
Suppliers assessed on sustainability (in #), split by:
Audits
RBA Self-Assessment Questionnaire (SAQ)
Our supply chain – Supply chain
Description
Total number of suppliers
Number of suppliers per 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 EUR)
Sourcing spend per supplier group (in %)
Product-related
Non-product-related
2020
2021
2022
Comments
—
59
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
—
56
2021
4,657
1,319
702
1,459
1,177
4,657
772
3,885
4,657
229
4,428
4,657
197
32
229
243
2
59
2022
4,984
1,348
745
1,584
1,307
4,984
789
4,195
4,984
245
4,739
4,984
216
29
245
264
7,645
9,045
12,402
68 %
32 %
70 %
30 %
69 %
31 %
In 2020 and 2021, the audits were put on hold due to the COVID-19 restrictions.
Comments
The majority are Tier 1 suppliers.
Critical suppliers are Tier 1 suppliers of strategic importance.
This includes 19 critical Tier 2 suppliers.
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289
Non-financial indicators (continued)
Our supply chain – Supply chain
Description
Proportion of spending on local suppliers (in %)
Veldhoven
Linkou
San Diego
Wilton
Governance – Business ethics
Description
Total number of Speak Up messages, split by:
Anti-corruption & bribery Speak Up messages
Human rights
- of which discrimination and harassment
2020
2021
2022
47 %
48 %
94 %
71 %
2020
229
19
69
n/a
45 %
50 %
92 %
64 %
2021
396
37
187
n/a
45 %
53 %
92 %
71 %
2022
414
31
165
106
Comments
We define ‘local’ as the country in which a significant location of operation is located. The significant locations
of operations are the main manufacturing sites of ASML, which are located in Veldhoven, the Netherlands;
Linkou, Taiwan; San Diego and Wilton, both in the United States. The manufacturing location in Tainan is
immaterial for this indicator.
A relatively large amount of the total supplier spend for Veldhoven relates to Carl Zeiss (non-local).
Comments
None of the Speak Up messages indicated any violation of anti-corruption laws.
Governance – Product safety
Description
Number of (significant) fines for non-compliance with product design related laws
and regulations
Monetary value of significant fines for non-compliance with product design related
laws and regulations
2020
2021
2022
Comments
—
—
—
—
—
—
ASML ANNUAL REPORT 2022
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290
Other
appendices
IN THIS SECTION
290 Other appendices
309 Definitions
317 Exhibit index
ASML ANNUAL REPORT 2022
OTHER APPENDICES
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
291
Appendix - Principal accountant fees and services
KPMG has served as our independent registered public accounting firm for the years ended December 31, 2022 and
2021. 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 2022 and 2021:
Year ended December 31
2021
(€, in thousands)
Audit fees
Audit-related fees
Tax fees
All other fees
KPMG
Accountants
N.V. KPMG Network
2,449
1,047
Total
3,496
90
—
27
—
—
—
90
—
27
KPMG
Accountants
N.V.
3,203
150
—
47
2022
KPMG
Network
1,064
—
—
9
Total
4,267
150
—
56
Principal accountant fees
2,566
1,047
3,613
3,400
1,073
4,473
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, 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.
All other fees relate to certain agreed-upon procedures that are requested by the Supervisory Board or external
parties.
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 2022 and 2021.
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.
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Facilities in Asia
Our key locations in Asia are Taiwan, South Korea, and China, where we have local service, sales, training centers,
and manufacturing activities. Our facility in Linkou, Taiwan is comprised of a manufacturing area that is approximately
3 thousand square meters and office space that is approximately 6 thousand square meters. Our facility in Tainan,
Taiwan consists of 20 thousand square meters utilized for manufacturing and office space. Our campus in Hwasung,
South Korea is comprised of 11 thousand square meters spread over 6 buildings for mainly office use and a small
portion of clean room and lab space. Our Cymer facility in Pyeongtaek, South Korea is a manufacturing site mainly
used for refurbishment activities of light sources. In Beijing, China, we have an HMI facility and a local repair center
with a combined floor area of 4 thousand square meters for manufacturing and office space. We also lease several
sales and service/field offices across Taiwan, South Korea, China, Japan, Singapore, and Malaysia consisting of 49
thousand square meters.
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 €2,223.4 million as of December 31, 2022,compared with €1,856.0 million as of December 31, 2021.
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 2022, 2021 and 2020, amounted to €1,281.8
million, €900.7 million and €962.0 million, respectively. Capital expenditures in 2022 increased compared to 2021
and relates to the expansion and upgrades of facilities, prototypes, evaluation and training systems.
We expect that our capital expenditures (purchases of property, plant and equipment) in 2023, will be approximately
€2.4 billion. These expenditures are expected to 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 EMEA
Our headquarters, mainly manufacturing and R&D facilities are located in Veldhoven, the Netherlands. This state-of-
the-art campus includes 204 thousand square meters of office space, 59 thousand square meters of clean room
used for manufacturing and R&D activities, 12 thousand square meters of labs, and 63 thousand square meters of
warehouse/storage space. Our main facilities in Veldhoven (and other buildings in the greater Eindhoven area) in the
Netherlands are partly owned and partly leased office and industrial buildings. From 2021, we have added a
manufacturing site in Berlin to our portfolio. Our Berlin campus consists of 10 buildings and are mainly owned
properties with a total floor area of 53 thousand square meters. We also lease several sales and service/field offices
across Europe consisting of 4 thousand square meters.
Facilities in the US
Our US head office is located in a 3 thousand square meters office building in Chandler, Arizona. We maintain R&D
and manufacturing operations in a 57 thousand square meters campus which consists of 5 buildings in Wilton,
Connecticut. In December 2022, we acquired an additional building of 31 thousand square meters to be utilized as
office and lab space in Wilton. Our campus in San Jose, California consists of 2 buildings totaling 18 thousand
square meters mainly for office and R&D activities. Furthermore, our campus in San Diego, California comprises 45
thousand square meters for office, R&D, manufacturing and warehouse purposes. We also lease several sales and
service/field offices across the US consisting of 19 thousand square meters.
ASML ANNUAL REPORT 2022
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FINANCIALS
293
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. Moreover, this summary does not discuss the
Dutch tax treatment of individual Non-Resident Holders who receive income or derive capital gains from the ordinary
shares and the income received or capital gains derived are attributable to the past, present or future employment
activities of such holder. As to individual tax consequences, each investor in our ordinary shares should consult his or
her tax counsel.
– 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:
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;
– 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);
– 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.
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Appendix - Dutch taxation (continued)
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; and
– 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 10 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 the Netherlands if he/she has resided therein at any time in the 12
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.
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Appendix - Dutch taxation (continued)
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 advisers 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 2022 and that
we will not be a passive foreign investment company in 2023. 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 advisers 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 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.
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Appendix - Dutch taxation (continued)
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 adviser 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 advisers 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 adviser 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.
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 advisers 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.
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Appendix - Financing policy
Financing policy
We continue to hold on to our long-held prudent financing policy, which is based on three foundational elements:
– Liquidity: Maintain sufficient liquidity to ensure continued business growth and to provide buffer for cash flow
volatility
– 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 quarterly, 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 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.
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
2021
2,131.7
2,928.3
1,891.8
6,951.8
638.5
638.5
2022
2,548.1
3,196.7
1,523.5
7,268.3
107.7
107.7
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 2022 and 2021. 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), which is consistent with the rating on December 31, 2021.
Our current credit rating from Fitch is A (Stable), this rating was upgraded in April 2022 from A-.
We have Eurobonds outstanding with an aggregate principal amount of €4.5 billion, having the following
maturities:
Outstanding Eurobond Maturity Amounts
Amount outstanding (€ million)7501,00075075075050020232024202520262027202820292030203120320.00.20.40.60.81.0
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Appendix - Financing policy (continued)
Cash return policy
ASML aims to distribute a dividend that will be growing over time, paid quarterly. 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 2022 of €5.80 per ordinary share. Recognizing the interim
dividend of €1.37 per ordinary share paid in August 2022, November 2022 and February 2023, this leads to a final
dividend proposal to the General Meeting of €1.69 per ordinary share. The total 2022 dividend is a 5.5% increase
compared to the 2021 total dividend of €5.50 per ordinary share.
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 November 10, 2022, we announced a new share buyback program to be executed by 31 December 2025. As
part of this program, ASML intends to repurchase shares up to an amount of €12 billion, of which we expect a
total of up to 2 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 €9 billion share buyback program
2021-2023 which was completed on October 18, 2022.
In 2022, we repurchased 8,538,787 shares (2021: 14,358,838 shares) for a total consideration of €4,639.7 million
(2021: €8,560.3 million) of which 355,324 shares for a consideration of €200.0 million were purchased under the
new program.
Dividend per share history
(Dividend for a year is paid in the subsequent year, except interim)
Cumulative cash returns
(Cash return is cumulative share buyback + dividend)
Annualized dividend (€)0.610.701.051.201.402.102.402.755.501.371.371.371.69Dividend paidDividend proposed201320142015201620172018201920202021202200.511.522.533.544.555.56€ Billion3.74.44.95.35.87.07.48.617.221.80.91.11.41.92.43.04.35.46.79.3Share buybackDividend paidUp to2013201420152016201720182019202020212022048121620242832
ASML ANNUAL REPORT 2022
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299
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. Such regulations include
environmental regulation, workplace safety regulation, regulation under securities laws and stock exchange rules,
anti-corruption regulation, anti-trust regulation, national security regulations, trade restrictions, export controls
including licensing or authorization requirements, requirements to obtain authorizations for use of US technology and
for employees producing and developing such technology. The implementation of new safety, environmental or other
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 where we can deliver our products and services, 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:
Risk - Risk factors - 6. Legal and compliance.
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300
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, 2022, the Transfer Agent contributed USD 0.7 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).
ASML ANNUAL REPORT 2022
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301
Appendix - Material contracts
Framework agreement between ASML and Carl Zeiss SMT GmbH
On September 14, 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:
Consolidated Financial Statements - Notes to the Consolidated Financial Statements - Note 26 Related parties and variable interest
entities.
ASML ANNUAL REPORT 2022
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302
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.
ASML ANNUAL REPORT 2022
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303
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 four 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 US 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.
ASML ANNUAL REPORT 2022
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304
Appendix - Controls and procedures
Disclosure controls and procedures
As of December 31, 2022, 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, 2022, 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, 2022, 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, 2022, 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, 2022, 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.
ASML ANNUAL REPORT 2022
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305
Appendix - Financial calendar and investor relations
Financial Calendar
April 19, 2023
Announcement of First Quarter results for 2023
April 26, 2023
Annual General Meeting
July 19, 2023
Announcement of Second Quarter results for 2023
October 18, 2023
Announcement of Third Quarter results for 2023
Fiscal Year
ASML’s fiscal year ends on December 31, 2023
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.
ASML ANNUAL REPORT 2022
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306
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.
ASML ANNUAL REPORT 2022
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307
Appendix - Reference table 20-F
Form 20-F Caption
Item
Part I
Location in this document
Page
Item
Form 20-F Caption
1
2
3
4
4A
5
Identity of Directors, Senior Management
and Advisors
Offer Statistics and Expected Timetable
Not applicable
Not applicable
Key Information
B. Capitalization and Indebtedness
C. Reasons for the Offer and Use of Proceeds
D. Risk Factors
Information on the Company
A. History and Development of the Company
B. Business Overview
C. Organizational Structure
D. Property, Plant and Equipment
Not applicable
Not applicable
Risk - Risk factors
Cover Page
Our company
Appendix - Property, plant and equipment
Appendix - Documents on display
Appendix - ASML contact information
Our company
Marketplace
Note 2 Revenue from contracts with
customers
Note 3 Segment disclosure
Appendix - Government regulation
Corporate Governance - Compliance with
Corporate Governance requirements -
Corporate Information
Note 13 Property, plant and equipment,
net
Appendix - Property, plant and equipment
Unresolved Staff Comments
Not applicable
Operating and Financial
Review and Prospects
A. Operating Results
B. Liquidity and Capital Resources
Financial performance - Performance KPIs
Financial performance - Performance KPIs
Financing policy
Consolidated Statements of Cash Flows
Note 4 Cash and cash equivalents and
short-term investments
56
##
9
292
303
306
9
23
222
227
299
167
234
292
44
44
297
221
228
C. Research and Development,
and Licenses, etc.
D. Trend Information
E. Critical Accounting Estimates
Location in this document
Note 16 Long-term debt and interest and
other costs
Note 17 Commitments and contingencies
Note 25 Financial risk management
Q&A with the CTO
How we innovate
Financial performance - Research and
development costs
Innovation ecosystem
Responsible business - Intellectual
Property protection
Long-term growth opportunities
Risk - Risk factors
Consolidated Financial Statements - Notes
to the Consolidated Financial Statements -
Note 1 General information / summary of
general accounting policies
6
Directors, Senior Management and Employees
A. Directors and Senior Management
B. Compensation
C. Board Practices
Corporate Governance
Remuneration Report
Corporate Governance
D. Employees
E. Share Ownership
7
Major Shareholders and Related Party Transactions
A. Major Shareholders
B. Related Party Transactions
Corporate Governance – Supervisory
Board Report – Supervisory Board
committees
Social - Attractive workplace for all
Corporate Governance - AGM and share
capital - Major shareholders
Remuneration Report - Board of
Management remuneration
Note 20 Share-based compensation
Corporate Governance - AGM and share
capital - Major shareholders
Note 26 Related parties and variable
interest entities
Page
239
240
255
20
12
46
118
144
49
56
222
151
186
151
177
97
164
192
242
164
260
ASML ANNUAL REPORT 2022
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Appendix - Reference table 20-F (continued)
Item
Form 20-F Caption
C. Interests of Experts & Counsel
8
Financial Information
A. Consolidated Statements and Other Financial
Information
B. Significant Changes
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
Not applicable
Not applicable
Not applicable
Not applicable
Location in this document
Not applicable
Consolidated Financial Statements
Long-term growth opportunities
Notes to the Consolidated Financial
Statements
Appendix - Offer and listing details
Not applicable
Page
212
49
222
300
Appendix - Offer and listing details
300
16E
Item
14
15
16A
Form 20-F Caption
Material Modifications to the Rights of Security
Holders and Use of Proceeds
Controls and Procedures
Audit Committee Financial Expert
16B
Code of Ethics
16C
Principal Accountant Fees and Services
16D
16F
Exemptions from the Listing Standards for Audit
Committees
Purchases of Equity Securities by the Issuer and
Affiliated Purchasers
Change in Registrant’s Certifying Accountant
B. Memorandum and Articles of Association
Corporate Governance
C. Material Contracts
D. Exchange Controls
E. Taxation
F. Dividends and Paying Agents
G. Statement by Experts
H. Documents on Display
I. Subsidiary Information
J. Annual Report to Security Holders
Appendix - Material contracts
Appendix - Exchange controls
Appendix - Dutch taxation
Not applicable
Not applicable
Appendix - Documents on display
Not applicable
Not applicable
11
Quantitative and Qualitative Disclosures About
Market Risk
Note 16 Long-term debt and interest and
other costs
Note 25 Financial risk management
12
Description of Securities Other Than Equity Securities
Appendix - Offer and listing details
151
301
302
293
303
239
255
300
Part II
13
Defaults, Dividend Arrearages and Delinquencies
None
16G
Corporate Governance
Mine Safety Disclosure
16H
16I
Part III
17
18
19
Disclosure Regarding Foreign Jurisdictions that
Prevent Inspections
Not applicable
Financial Statements
Financial Statements
Exhibits
Not applicable
Consolidated Financial Statements
Exhibit index
This document contains information required for the Annual Report on Form 20-F for the year ended December 31,
2022, of ASML Holding N.V. Reference is made to the Form 20-F cross reference table above’. 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 2022 Annual Report on Form 20-F and is furnished to the
Securities and Exchange Commission for information only.
This document also includes references to certain information contained on ASML's website: the information
contained on ASML's website is not incorporated by reference and does not form part of this document.
Location in this document
None
Appendix - Controls and procedures
Supervisory Board Report - Supervisory
Board committees - 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 – Compliance with
Corporate Governance requirements – US
listing requirements
Not applicable
Page
304
178
136
291
252
167
212
317
ASML ANNUAL REPORT 2022
DEFINITIONS
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
309
Definitions
Name
0-9
3TG
3D NAND
A
A&M
Description
Tin, tantalum, tungsten and gold
A type of non-volatile flash memory in which the memory cells are stacked vertically in multiple
layers.
Access & Mobility
ABC compliance review Anti-bribery and corruption compliance review
ADAS
ADI
AFM
AGM
AI
AIoT
Advanced driver-assistance systems
After development inspection
The Dutch Authority for the Financial Markets (Autoriteit Financiële Markten)
Annual general meeting
Artificial intelligence
Artificial intelligence of things
Annual Report
Annual Report on Form 20-F
Applied Materials Inc.
Semiconductor equipment company
ARCNL
ArF
ArFi
ASC
ASC 740
ASML
Advanced Research Center for Nanolithography
Argon fluoride
Argon fluoride immersion
Accounting Standards Codification
Accounting Standards Codification provision for income taxes
ASML Holding N.V. and/or any of its subsidiaries
Name
Brainport Eindhoven
BREEAM
Brion
C
CAGR
Canon
CAPEX
Capital resources
Carl Zeiss SMT
Cash conversion rate
CCIP
CCPA
CCR %
CD
CDP
CEO
CERN
CFO
CGU
Description
A technology region in the south of the Netherlands comprising companies, educational
institutions and governmental organizations.
Building Research Establishment Environmental Assessment Method
Brion Technologies, Inc.
Compound annual growth rate
Canon Kabushiki Kaisha
Capital expenditures, defined as additions in property, plant and equipment plus additions in
intangible assets plus additions in right-of-use assets (operating and finance).
Financial, manufactured, intellectual, human, social and relationship, and natural elements
employed to produce goods and services.
Carl Zeiss SMT GmbH
An economic statistic in controlling that represents the relationship between cash flow and net
profit.
Customer Co-investment Program
California Consumer Privacy Act (US)
Cash Conversion Rate Percentage
Critical dimension
The Carbon Disclosure Project
Chief Executive Officer
The European Organization for Nuclear Research
Chief Financial Officer
Cash-generating unit
ASML Foundation
An independent charity with strong ties to ASML that supports educational initiatives for
disadvantaged 4- to 18-year-olds in regions where ASML operates.
B
BAPA
BEAT
Big data
Big Four accounting
firms
BoM
Bilateral advance pricing agreements
Base erosion and anti-abuse tax
Extremely large data sets that may be analyzed computationally to reveal patterns, trends and
associations.
Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers
Board of Management
BOM
Brabantse Ontwikkelings Maatschappij
CGU ASML
ASML excluding CGU Cymer Light Sources
CHIPS and Science Act The Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 (CHIPS
Act), signed into law in August 2022, designed to boost US competitiveness, innovation, and
national security.
Chief Information Security Officer
CISO
CIT
CLA
Cleanroom
CMD
CMO
Corporate income tax
Collective labor agreement
The central part of a wafer fab where wafers are processed and the environment is carefully
controlled to eliminate dust and other contaminants.
Capital Markets Day
Chief Marketing Officer
ASML ANNUAL REPORT 2022
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310
Definitions (continued)
Name
CMOS
CO2
Code
Description
Complementary metal–oxide semiconductor
Carbon dioxide
The Dutch Corporate Governance Code
Code of Conduct
Code of ethics and conduct
Company
Computational
lithography
COO
COSO
COVID-19
CRC
CRE
CRMC
CSRD
CTO
Cyber
Weerbaarheidscentrum
Brainport
Cymer
D
D&E
DEFRA
Deloitte
D&I
DJSI
DRAM
DUV
E
EAC
EBIT
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
Committee of Sponsoring Organizations of the Treadway Commission
Coronavirus disease 2019
ASML’s corporate risk committee
Corporate Real Estate department of ASML
Capital Research & Management Company
Corporate Sustainability Reporting Directive
Chief Technology Officer
Foundation in the Brainport Eindhoven region that offers companies in the high-tech and
manufacturing industry the opportunity to enhance their protection against cybercrime
Cymer Inc., Cymer LLC and its subsidiaries
Development and engineering
Deloitte Accountants B.V.
Diversity and inclusion
Dow Jones Sustainability Index
Dynamic random-access memory
Deep ultraviolet
Energy attribute certificates
Earnings before interest and taxes
Name
EHS
Description
Environment, health and safety
EHS Competence
Center
EIM
A group within ASML that defines EHS standards, gathers best practices and helps managers
implement them.
External interface module
EMEA
EMS
EPE
EPS
ERM
ERP
ESA
eScan
ESG
ESG score
ETR
EU
EU-IFRS
EURIBOR
Eurobond
Europe, the Middle East and Africa
Environmental management system
Edge placement error
Earnings per share
Enterprise risk management
Enterprise resource planning system
European Space Agency
ASML’s e-beam wafer inspection system family for targeted in-line defect detection.
Environmental, social and governance
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
Euroclear Nederland
Euronext Amsterdam
EUV
EVP
EVP HRO
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.
Executive Vice President
Executive Vice President Human Resources and Organization
Exchange Act
US Securities Exchange Act of 1934
ExCom
F
Fab
Executive Committee
Semiconductor fabrication plant
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311
Definitions (continued)
Name
Fast shipment
Description
A fast shipment process 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
FAQ
Frequently asked questions
Farmout supplies
Our suppliers that we work with as co-investors
FAT
FDII
Feature
FFHA
Fitch
Flash
Foundry
Fraunhofer
FTEs
Factory acceptance test
Foreign-derived intangible income
The elements that make up the pattern for a given layer of a microchip
Foundation for Hospital Art
A leading provider of credit ratings, commentary and research for global capital markets
A type of non-volatile memory used for storing and transferring information
A contract manufacturer of logic chips
Applied research organization in Germany
Full-time equivalents
FTSE4Good
Series of ethical investment stock market indices launched in 2001 by the FTSE Group.
G
G-SEED
GAAP
GDP
GDPR
GeSI
GHG
GILTI
GPU
GRI
Green Standard for Energy and Environmental Design
Generally accepted accounting principles
Gross domestic product
General data protection regulation
Global e-Sustainability Initiative
Greenhouse gas
Global intangible low-tax income
Graphics processing unit
Global Reporting Initiative
GRI standards
GRI sustainability reporting standards
H
H2
HDD
HMI
Molecular hydrogen
Hard disk drive
Name
Holistic lithography
Horizon Europe
Program
HR&O
HTSC
Huisman
HVAC
I
IAS
IBM
IC
ICT
ID2PPAC
IDM
IFRS
Internal Control -
Integrated Framework
2013
IP rights
IRA
IIRC
I-REC
IRS
i-line
ILO
Imaging
imec
Description
Our approach to optimizing the entire microchip printing process and enabling affordable scaling
in chip technology by integrating lithography systems with computational modeling and wafer
metrology solutions to analyze and control the manufacturing process in real time
A public-private partnership that facilitates collaboration and strengthens the impact of research
and innovation in developing, supporting and implementing EU policies while tackling global
challenges
Human Resources & Organization
High Tech Systems Center
Huisman Equipment BV
Heating, ventilation, and air conditioning
International accounting standards
Installed base management
Integrated circuit
Information and communication technology
Integration of processes and modules for the 2 nm node meeting Power Performance Area and
Cost requirements
Integrated device manufacturer
International financial reporting standards
Criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Intellectual property rights
Inflation Reduction Act of 2022
International Integrated Reporting Council
International renewable energy certificate
Internal Revenue Service of the United States
Light with a wavelength of 365 nm, generated by mercury vapor lamps and used in some
lithography systems
International Labor Organization
The transfer of a pattern onto the photoresist on a wafer using light
Interuniversitair Micro-Elektronica Centrum
The brand name for ASML’s range of electron beam (e-beam) wafer inspection and metrology
systems
Immersion lithography
A lithography technique that uses a pool of ultrapure water between the lens and the wafer to
increase the lenses numerical aperture (ability to collect and focus light). This improves both the
resolution and depth of focus for the lithography system.
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312
Definitions (continued)
Name
Inclusion Index
Intel
Internet of Things (IoT)
IT2
IPR
ISO
J
Description
The overall score related to the questions included in the we@ASML survey that specifically relate
to ‘inclusion'
Intel Corporation
A network of physical objects embedded with sensors, actuators, electronics and software that
allow the objects to collect and exchange data
IC Technology for the 2nm Node (EU project)
Intellectual property rights
International Organization for Standardization
JG+13
Job grade 13 and higher
JP Morgan Chase
A US-based global leader in financial services offering solutions to the world's most important
corporations, governments and institutions
K
KLA-Tencor
KLA-Tencor Corporation
KPI
KPMG
K-Reach
KrF
kt
kWh
L
LED
LEED
LGBTQIA+
LIBOR
Lithography
Logic
LTI
LXP
M
MBA
Key performance indicator
KPMG Accountants N.V.
Act on the Registration and Evaluation of Chemicals in South Korea
Krypton fluoride
Kilotonne or 1,000 tonnes (1 tonne = unit of mass equal to 1,000 kilograms)
Kilowatt-hour
Light-emitting diode
Leadership in Energy and Environmental Design
Lesbian, gay, bisexual, transgender, queer, intersex, asexual and other identities
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
NGO
NIIT
Nikon
NL
nm
Node
Learning eXperience Platform
Master of Business Administration
Name
Memory
Metalektro
Metrology
mm
MNP
Moody's
MPS
MSCI
Mt
MW
N
NA
NAND
Nanoscale
NASDAQ
Net bookings
Net zero emissions
Description
Microchips, such as NAND Flash and DRAM, that store information. Also refers to companies
that manufacture such chips.
Multi-employer union plan is managed by PME (Stichting Pensioenfonds van de Metalektro).
The science of weights and measures or of measurement.
Millimeter (one thousandth of a meter)
Make Next Platform
An American credit rating agency that provides corporate ratings.
Mature Products and Services
Morgan Stanley Capital International
Megatonne, a metric unit equivalent to 1 million (106) tonnes, or 1 billion (109) kilograms
Megawatt, a metric unit equivalent to one million (106) watt
Numerical aperture
A binary logical operator that gives an output when it receives one or no input; a composite of
‘NOT AND’.
The nanoscopic scale (or nanoscale) usually refers to structures with a length scale applicable to
nanotechnology, usually cited as 1–100 nanometers.
NASDAQ Stock Market LLC
e
Net bookings include all system sales orders and inflation related adjustments, for which written
N
authorizations have been accepted.
Reaching a state of net zero emissions involves: (a) reducing scope 1, 2 and 3 emissions to zero
or to a residual level that is consistent with reaching net-zero emissions at the global or sector
level in eligible 1.5°C scenarios or sector pathways and; (b) neutralizing any residual emissions at
the net zero target date and any GHG emissions released into the atmosphere thereafter.
Nongovernmental organization
Net investment income tax
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.
Non-GAAP
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.
ASML ANNUAL REPORT 2022
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Definitions (continued)
Name
NPR
NRE
NXE
NXT
O
OCI
ODM
OECD
OEM
ONE
Description
Non-product-related
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
Name
Preference share option An option to acquire cumulative preference shares in our capital
Description
Q
Q&As
QLTCS
R
R&D
RBA
RC
REACH
Questions and answers
Quality, logistics, technology, cost and sustainability
Research and development
Responsible Business Alliance
ASML’s Remuneration Committee
Registration, evaluation, authorization and restriction of chemicals
Recoverable amount
The greater out of an asset’s fair value less costs to sell and its value in use
REMA
EUV reticle masking module
Operations employees Customer support and Manufacturing and Supply Chain Management employees
Remuneration policy
The remuneration policy applicable to the Board of Management of ASML Holding N.V.
Overlay
P
P&L
PAS
The layer-to-layer alignment of chip structures
Statement of profit and loss
Philips Automatic Stepper
Pattern fidelity
A holistic measure of how well the desired pattern is reproduced on the wafer
Pattern fidelity control
A holistic approach to controlling the whole process of manufacturing advanced microchips in
high volumes that aims to improve overall yields. It draws data from production equipment and
computational lithography tools, analyzing it with techniques such as machine learning to provide
real-time feedback.
Patterning
PCAOB
PFAS
PGP
Philips
The process of creating a pattern in a surface to build microchips
Public Company Accounting Oversight Board
Perfluoroalkyl chemicals
Product generation process
Health technology company, headquartered in the Netherlands
PHLX Index
Semiconductor sector index
Pin3S
PIs
PME
Pilot Integration of 3nm Semiconductor Technology
Performance Indicators
Bedrijfstakpensioenfonds Metalektro
Preference shares
foundation
Stichting Preferente Aandelen ASML
Reticle
ROAIC
RoHS
S
S&P
Samsung
SAQ
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
Standard & Poor's, a stock index of the United States that, due to its broad composition, gives a
reliable picture of developments in the American stock market.
Samsung Electronics Corporation
Self-assessment questionnaire
Sarbanes-Oxley Act
The Sarbanes-Oxley Act of 2002
SAT
SB
SBTi
Scope 1 CO2e
emissions
Scope 2 CO2e
emissions
Scope 3 CO2e
emissions
Scope 3 CO2e
emissions intensity
SDGs
Site acceptance test
ASML’s Supervisory Board
Science-Based Targets initiative
Direct carbon dioxide emissions from resources an organization owns or controls
Indirect carbon dioxide emissions due to the energy an organization consumes
All other indirect carbon dioxide emissions that occur in an organization’s value chain
All other indirect carbon dioxide emissions that occur in an organization’s value chain expressed
as a percentage of revenue or gross profit
United Nations' Sustainable Development Goals
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Definitions (continued)
Name
SEC
SEMI
SEMI S2
SEMI S23
SG&A
Shrink
Description
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 expenses
The process of developing smaller transistors for more advanced chips.
Name
Technical competence
Thales NL
Throughput
Tier 1 (2,3) supplier
TJ
TNO
Description
The capabilities and spread of technical expertise among our people, and the extent to which
they are embedded in our processes and operations
Dutch branch of the international Thales Group
The number of wafers a system can process per hour
Tier 1 suppliers are direct suppliers whereas Tier 2, 3 and beyond refer to suppliers of our
suppliers
Terajoule (one trillion joules)
Nederlandse Organisatie voor Toegepast Natuurwetenschappelijk Onderzoek (Netherlands
Organisation for Applied Scientific Research)
Transistor
A semiconductor device that is the fundamental building block of microchips
SMART Photonics
Foundry for integrated photonic circuits
SoC
System on a chip
SPE Shareholders
A syndicate of three banks for the purpose of leasing ASML’s headquarters in Veldhoven.
SPIE
S&SC
SSD
International society for optics and photonics
Sourcing and supply chain
Solid-state drive
Springplank 040
Social care organization in Eindhoven offering support and guidance to homeless people
Safety risk assessment
Science, technology, engineering and mathematics
Short-term incentive
Stichting Technology Rating, a non-profit organization.
Located under the cleanroom floor, the sub fab contains auxiliary equipment such as the drive
laser
Strengths, weaknesses, opportunities and threats
TSCA
TSMC
TSR
TWINSCAN
U
UNGP
US
US GAAP
US ITC
V
Toxic Substances Control Act
Taiwan Semiconductor Manufacturing Company Ltd.
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, thereby 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
Vanderlande
A material handling and logistics automation company based in the Netherlands
VAT
VIE
VLSI
Value-added tax
Variable interest entity
VLSI Research Inc.
Technology Advances for Pilot line of Enhanced Semiconductors for 3nm
VNO-NCW
The Confederation of Netherlands Industry and Employers
Task force on climate-related disclosures
ASML’s Technology Committee
Total Cash Compensation
Task Force on Climate-related Financial Disclosures
Tax Cuts and Jobs Act
Total direct compensation
VOC
VP
VPA
VPC
W
Volatile organic compound
Vice president
Volume purchase agreement
Volume parts contract
WACC
Weighted average cost of capital
Wafer inspection
The process of locating and analyzing individual chip defects on a wafer
SSRA
STEM
STI
STR
Sub fab
SWOT
T
TAPES3
TCFD
TC
TCC
TCFD
TCJA
TDC
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Definitions (continued)
Name
Wafer metrology
Waste intensity
Wavelength
Website
WHT
Description
The process of measuring the quality of patterns on a wafer
The total waste in millions of kilograms (excluding construction waste) divided by revenue (in
millions of euros)
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
Withholding tax
Works Council
Works Council of ASML Netherlands B.V.
wph
X
XTAL
Y
YieldStar
Z
ZEISS
Wafers per hour
XTAL, Inc.
ASML’s diffraction-based wafer metrology platform
Carl Zeiss AG
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Signatures
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 15, 2023
/s/ Roger J.M. Dassen
Name: Roger J.M. Dassen
Title: Executive Vice President, CFO and member of the Board of Management
Dated: February 15, 2023
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317
Exhibit index
Exhibit No.
1
Description
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)
2.1
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
Description of Securities registered under Section 12 of the Exchange Act (Incorporated by reference to the
Registrant's Annual Report on Form 20F for the year ended December 31, 2021)
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 GmbH3
Exhibit No.
8.1
12.1
13.1
15.1
101.INS
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE
104
Description
List of Main Subsidiaries2
Certification of CEO and CFO Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 19342
Certification of CEO and CFO Pursuant to Rule 13a-14(b) of the Securities Exchange Act of 19342
Consent of Independent Registered Public Accounting Firm2
XBRL Instance Document2
XBRL Taxonomy Extension Schema Document2
XBRL Taxonomy Extension Calculation Linkbase Document2
XBRL Taxonomy Extension Definition Linkbase Document2
XBRL Taxonomy Extension Label Linkbase Document2
XBRL Taxonomy Extension Presentation Linkbase Document2
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)2
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) the registrant customarily and actually treats the
information as private or confidential.
ASML is party to six 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. ASML's senior notes are:
– 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;
– 0.250% ASML Holding NV Fixed Rate Senior Notes due 2030 (XS2010032378) at Luxembourg Stock Exchange;
and
– 2.250% ASML Holding NV Fixed Rate Senior Notes due 2032 (XS2473687106) at Luxembourg Stock Exchange.