ASML achieved a total net sales of 7.7 billion euros in the second quarter of 2025, with system sales reaching 5.6 billion euros. The company reported a gross profit margin of 48.7%, exceeding expectations. Additionally, net system bookings in the second quarter reached 5.5 billion euros, indicating strong market demand. As of the end of the second quarter, ASML's order backlog reached approximately 33 billion euros. In terms of finance and operations, ASML paid a final dividend of 1.84 euros per share and announced an interim dividend of 1.6 euros per share for the first quarter of 2025. In addition, the company conducted a total of 1.4 billion euros in share repurchases. Management emphasized the current business environment and future growth prospects, showcasing the company's strong position in the semiconductor manufacturing equipment market.

In 2025, artificial intelligence (AI) will continue to be a key factor driving growth in the memory and logic market. System revenue is expected to increase in 2025 compared to 2024, particularly in the transition to memory nodes supporting the latest generation of Hpm and DDR5 products. For UV business, customers will continue to increase capacity at the leading edge to meet AI demand, with advanced customers expected to increase approximately 30% of EUV capacity in 2025. Despite the relative stability of system quantity, ASP and cost margins will improve. EUV revenue is expected to grow by approximately 30%, while DPV and related system revenue will remain stable. Additionally, installation base management revenue will increase due to an increase in service revenue and contributions from EUV services. Despite an expected revenue growth of approximately 15% in 2025, caution is still advised in growth forecasts for 2026 due to macroeconomic and geopolitical uncertainties.

The conversation discussed the current macroeconomic and geopolitical uncertainties' impact on the semiconductor industry, especially the direct and indirect effects of tariffs on system sales, material imports, and exports. Despite anticipating that these uncertainties may affect business, the company is working with customers and suppliers to limit direct impacts and expects total net sales for the third quarter of 2025 to be between 7.4 billion and 7.9 billion euros. At the same time, the company emphasized technological advancements in Luna and Ina EV products, as well as the critical role of EUV (extreme ultraviolet lithography) technology in meeting customers' advanced technical requirements and reducing costs. Despite short-term uncertainty, in the long run, the semiconductor market is expected to remain strong, driven by growth in artificial intelligence, especially in the advanced logic and DRAM sectors, which require more densely populated advanced lithography systems.

Before the Q&A session at the meeting, the host reminded participants to only ask one main question and one brief follow-up question to allow more people to speak. Afterwards, the host invited the operator to give final instructions and accepted the first question from Francois Bovine from UBS.

ASML explained the changes in sales and configuration of EUV equipment this year, including the growth in the Chinese market exceeding expectations, and some equipment being shipped at lower configurations, later upgraded to a level of 220 wafers per hour through upgrade services. This growth is reflected in the installed base business. Additionally, as customers chose the 3830 and 3860 models of equipment, despite lower unit sales volume, the overall capacity demand was still met, resulting in a higher average selling price (ASP) for the equipment. Furthermore, the share of DPV business in the Chinese market has also increased.

In the discussion, ASML clearly stated that the pricing of its products is based on the value to customers. As the product performance and value increase, such as increased productivity, better coverage, and imaging performance, the price will also increase accordingly. In addition, ASML's tools like Ina simplify customer processes and reduce production cycles, helping customers smoothly transition to the next technology node, further increasing the value of the product. Through these strategies, ASML aims to achieve technological advancement with customers, while ensuring that its product pricing is reasonable and competitive.

It was mentioned in the discussion that although lifting the ban on exporting AI chips to China may not directly lead to a significant increase in sales, this move is seen as positive development for the entire ecosystem and global chip industry ecosystem. In addition, the recent relaxation of restrictions on chip design software was also mentioned, with the belief that this would strengthen the connections and influence of the global chip ecosystem, which is seen as a positive development for the industry as a whole.

The discussion focused on ASML's expectations for DUV technology in the Chinese market, as well as the prospects for the application of Hana technology in the 1.4nm node. Despite potential further restrictions, demand in the Chinese market remains strong, with annual revenue expected to account for over 25%. As for Hana technology, progress has been good, with customers giving positive feedback on the tools and their use, and it is expected to be used for high-volume manufacturing between 2026 and 2027. ASML also mentioned that their EUV orders include a mix of low-end and high-end Hana orders, but specific details have not been publicly disclosed due to customer demand.

The conversation discussed the challenges that customers face when making capital expenditure (CapEx) decisions due to the uncertainty of tariff policies in the past 90 days. This uncertainty stems from the constant changes in policies, making it difficult for customers to assess the actual costs when considering expanding investments in the United States, thereby affecting their investment decisions. In addition, the uncertainty of tariff policies has also raised concerns about GDP growth, making customers more cautious and inclined to postpone investment decisions until clearer market signals are obtained. This uncertainty not only affects direct investments but also indirectly impacts customers' overall business planning and market strategies.

The company explained the reasons for the expected decrease in gross profit margin for the next quarter, mainly including an increase in high NA tool revenue, a decrease in upgrade business, and the absence of one-time cost benefits from the first half of the year in the second half of the year. These factors collectively lead to the expected slightly weaker gross profit margin for the second quarter.

During the discussion, it was mentioned that although there may be fluctuations in booking situations, it does not fully reflect the true trend of the business. At the same time, they also mentioned the allocation of bookings in terms of logic and memory, as well as the booking coverage rate for the current year, indicating that it is close to full coverage and some new orders will be used for the next year.

In this discussion, the participants clarified the growth rate of the company's service business, originally expected to be 40%, and explained in detail how this growth rate has mainly changed from system business to upgrade business, and how this change has affected the tools business, particularly pointing out the growth related to approximately 50 tools.

The discussion focused on the challenges currently facing the semiconductor industry, especially customer concerns and changes in demand caused by tariff uncertainties. The industry has observed that compared to the past, customers are more anxious about tariff discussions, leading them to adopt a more cautious attitude towards confirming demand, thereby affecting overall industry capacity planning and growth expectations. Despite technological advancements such as the introduction of the 3800S tool, which has improved production efficiency, the uncertainty in the macro environment remains a key factor affecting industry development.

During the discussion, it was mentioned that a 30% increase in efficiency would meet the customer's need to expand capacity, indicating that future sales of more tools to customers will depend on their willingness to increase capacity. Previously, demand for lithium tools depended mainly on how much capacity customers were willing to increase.

The dialogue revolves around the definition and monitoring methods of UV production capacity demand in the semiconductor industry, emphasizing the importance of high productivity tools in enhancing customer value and company gross margins. The discussion points out that, despite current uncertainties regarding tariffs and geopolitical issues, strong demand in the field of AI is supporting the industry fundamentals. Industry participants are closely monitoring the outcome of tariff discussions, which may result in delays in decision-making rather than fundamental changes, maintaining a cautiously optimistic outlook for growth prospects in 2026.

In the advanced memory chip manufacturing, particularly for DRAM customers, ASML has observed a significant increase in the adoption rate of Extreme Ultraviolet (EUV) lithography technology. EUV technology is considered an industry trend because it simplifies the manufacturing process and accelerates the achievement of desired performance. In addition, ASML is continuously optimizing the performance and productivity of existing platforms, and expects this improvement work to continue until the end of this century. The development of the next platform is planned to be achieved in the early next decade to further drive the iteration and advancement of lithography technology.

The discussion is focused on market demand trends in the semiconductor industry, especially in the memory and logic chip sectors. It is mentioned that although revenues and bookings for memory chips have slightly declined this quarter, overall demand remains strong, particularly for high-bandwidth memory (HBM) driven by AI. Concerning the Chinese market, despite some worries about demand shifting, there has not been a significant decrease in demand observed at present, with expectations that China will continue to maintain healthy demand for mainstream logic and memory chips in the coming years.

During an international conference call, Edilia Matuu asked if she could be heard clearly and received a positive response.

The discussion mainly focused on the specific situation of company order adjustments, particularly regarding the proportion of order adjustments from EU and Chinese customers, and whether these adjustments involve multiple customers. Additionally, the impact of tariff uncertainty on order and revenue growth was explored, as well as the effect of order intake levels under different assumptions on achieving steady or growth revenue targets.

In the logic market, discussions indicate that although there was no increase in UV layers at the 2 nanometer node, it is expected that at the 1.4 nanometer node and beyond, there will be an increase in lithography intensity with the adoption of new technologies and architectures. In the long term, there is a strong demand from logic customers for increasing UV layers, although there may be temporary pauses at certain nodes, this is to achieve further miniaturization and intensity enhancement. At the same time, the market competition is fierce, and AI-driven innovation will continue to bring more opportunities.

The meeting discussed in detail ASML's financial performance in the second quarter of 2025, including expected changes in installed base management, growth in service revenue, and the adoption and maturity progress of high NA technology. The meeting emphasized the expected decline in upgrade business and focus on service business, particularly the growth in service revenue after EUV tool warranties. Additionally, the discussion covered the three stages of high NA technology, with the current stage being the first stage, which involves technology validation and maturity improvement, with an expectation to gradually transition to high-volume manufacturing in the coming years.