Good afternoon, ladies and gentlemen. I'm Victor Brigno, Head of Investor Relations at ASMI. It's my pleasure to welcome you to our Investor Day. Thank you for taking the time to be here with us today, both to our guests here in Amsterdam and to our investors and other stakeholders on the webcast. We are very pleased that we that it was possible for us to organized this event in a hybrid format.
Our in person meeting here in Amsterdam is in accordance with the COVID measures of the Dutch authorities, and we provided for additional safety measures, such as a meeting room setup with a 1.5 meter distancing. Let me now walk you through the agenda and introduce you to the senior management team members who will be presenting today. We have split the program in 2 sessions. The first session will be opened by Benjamin Lowe, our CEO, who will talk about our opportunities, the unique positioning of ASM and our growth strategy. Next, our Technologies Chief Technology Officer, Ivo Reinmarktas, who will present our R and D strengths and the exciting new technologies on the future road map.
Ivo will be followed by Harm Nestendorf, our Corporate Vice President of Corporate Marketing, who will talk about the outlook for our key markets. After these presentations, we will have a 25 minute break. The second part will then be kicked off by Hisham Mezad, Executive Vice President of Global Products, who will provide an update on innovation in ASM Products. Next, Our CFO, Paul Verhagen, will give a financial update and talk about our targets. After a wrap up by our CEO, we will have a Q and A session of 45 minutes, in which our management will be happy to take questions from both the audience here in the room and from the conference call.
We will have one combined Q and A with the whole panel. So if you have questions during the presentations, please make a note and save them for the Q and A session at the end. Before handing over to Benjamin, let me remind you of the forward looking statements. All of the presentations and the Q and A today may contain information relating to ASM's future business and results in addition to historical information. And please also note today's presentations are webcasted.
A recording will be available after the event. And with that, I'll leave the floor to Benjamin Lowe, CEO of ASMI.
Thank you, Victor. I hope the mic and everything is working well. I want to start off by saying repeating what Victor has just said, a very warm welcome to our Investor Day. I understand there's quite some anticipation about what's going to be shown, and we hope that with the information that we have put together, we'll be able to Share with you more about the company. We have a lot of information actually that we're going to present to you over the next 2, 2.5 hours.
But we would like to, 1st of all, start off with a quick video. This is a new corporate video that we have put together. And this is we are showing this in public for the first time.
We are ASM International, a company challenging convention That is working to shape the future while striving to make a difference sustainably. We're entering an exciting era of innovation. The semiconductor industry is central to the development of new technologies We have been pioneering and mastering technologies devised for the future, which are today Recognized a standard across the industry, leading in atomic layer deposition while expanding in other technologies such as epitaxy. Our tools are able to deposit thin films with such precision that we can use materials that were previously considered impossible and build 3 d nanostructures where every atom counts, helping to satisfy the demand for smaller, faster, more energy efficient semiconductor Our people are our key asset and the foundation of our success. As one team, we work As we co create and unite to sketch out their technology roadmaps from the earliest stages to volume manufacturing.
And it involves investing in growth, such as our new state of the art location in Singapore, designed with the objective To be as energy and water efficient as possible, a facility that substantially expands our production capacity to meet our customers' growing demand for Supply Chain Partners as we prepare for the future. ASM, a unique company that innovates, enables, Rose, where safety is our key priority, striving to minimize our environmental impact, Committing to 100 percent renewable electricity usage by 2024 and targeting to have net 0 emissions by 35. And sustainably to helping our customers achieve their objectives and take the next leap forward and creating long term value
I hope that was good for everybody. And I'm going to start off with the first presentation, growth through innovation. And in this presentation, I'm going to talk about a couple of things. One is what do we see as the market and the opportunities are in front of us? Where are the strengths that ASM has?
And finally, how do we convert the opportunities that we have in front of us Into growth for the company. Sorry. Okay. And before jumping into it, there's a couple of key messages that we would like to convey to everybody. And we hope that this would be the key takeaways that you will bring with you at the end of the session.
1 is, of course, the Strong digitalization growth, which is based on the secular trends that we are seeing, that is driving rapidly increasing usage of semiconductors And it's going to lead to growth in the WFE market. 2nd point is we are the ALD leader, And we are fast expanding in epitaxy. Both of these technologies that are very critical, They will outgrow the WFE market, but at the same time, they are enabling technologies for further advances in semiconductors. Our strengths are in our innovation, in our early customer engagements and our ability to Differentiate our products, leading to the most cost effective solutions for our customers. And in terms of strategic objectives, we want to maintain our leading position in ALD, in logic and foundry.
We want to expand in memory. In terms of epi, we want to increase our market share, actually fairly significantly as we will show you later on. We want to grow our spares and business service business. And at the same time, we want to increase and accelerate our focus On sustainability, as we have done with the statement that we have issued this morning in our press release. All of this is going to lead us To a target growth where we are expecting to reach in terms of revenue Between €2,800,000,000 to €3,400,000,000 by 2025, which represents a CAGR of 16% to 21%, While achieving an operating margin of 26% to 31%.
Before jumping into the First topic of market opportunities. I just want to maybe do a quick recap of the key highlights over the last couple of years, Where are we coming from? So in terms of innovation, we continue to do that, and we have always been at the forefront of advancing Moore's Law. We are the leader for ALD. In fact, we have achieved a share of about 55% according to our own estimates.
We increased our share in Epi from low single digits to about 15% at the end of 2020. Expanded manufacturing capacity, 1st of all, 2018 in Korea and at the end of last year in Singapore. We have grown our revenue over the last 5 years at a 22% CAGR, Resulting in revenue per headcount increase of 44%, improved operating margins by about 11 percentage points. We continue to focus on our R and D and build up our IP. Our IP portfolio has Increased by about 40 plus percent.
And finally, we did our part in terms of sustainability, small part, We reduced greenhouse gas emission by about 15%, and we're going to do more as we have announced this morning. So market and opportunities. What do we see in terms of the market over the next couple of years? And how does this translate into, for example, Addressable markets for ASMI. First of all, I think we all know digital Transformation is going to drive significant increase in the usage of semiconductors.
And with that, there will be quite some additional capacity that needs to be added. The megatrends like 5 gs, electric vehicles, autonomous vehicles, vehicles, AI and so on, I think are all well known to us. In terms of WFE spending, this is going to translate into Additional capacity that needs to be added to make up for the increase in usage that is required. Secondly, and I will show this a little bit later on, there will also be technology inflections that are going to drive additional capacity. And last but not least, there could be sovereign government efforts that might also add further investments, But that's something that is still in the works.
Nothing has been fully confirmed yet. Another way of looking at how the increase in WFE is going to look like is to look at the difference between the advanced nodes And the less advanced nodes. And we see that a lot of the investments will be in the advanced nodes. In fact, that is Structurally, the fastest growing part of the market, which is the 7 nanometer and below, and that plays to our strengths because ASMI is a company placed mostly in the leading edge, especially with our leading edge ALD and epi technologies. In terms of the trends, we look at major inflections coming, whether it's FinFET to get all around, whether it's further 3 d stacking, whether it's new materials, and one which has already actually taken place and is Hi, Keith.
Metal Gate in the DRAM periphery. We have always shared with you that all the 3 major are already using our ALD solutions for this particular application in high volume manufacturing. And of course, Even though it's a little bit further out, planner transition from for DRAM into a 3 d DRAM. New materials, etcetera, this again will be covered in more details later on. So we are very well positioned to address these trends, Which leads us to where or how the addressable markets are going to evolve.
And this is where we have done our projections. So for the single wafer ALD market, we expect that it is going to grow from Around €1,500,000,000 at the end of 2020 to about €3,100,000,000 to €3,700,000,000 at the end of 2025. Now in terms of market share, we based on our own analysis, we have a 55% market share at the end of 2020. And we Aim or target to grow our share so that we will be greater than 55% by the end of 2025. For Epi, we think it's going to grow from €800,000,000 to somewhere between €1,500,000,000 to €1,800,000,000 And we are going to increase our market share From about 15% today, in fact, to double it to greater than 30%.
So that's where we see the addressable market size changing for us And how we want to address and how we target ourselves in terms of market share in this key market for us. Next, we move on to strength and innovation. Innovation has always been at the heart of ASMI. And I will share with you a couple of our key strengths as we go to the next couple of slides. Strengths, so we are very focused.
We only focus on deposition primarily especially in ALD and Epi. So we do not Have many different, let's say, distracting kind of business. Our focus really is on deposition technology, especially in ALD and in Epi. We have a strong track record, a history of innovation, and my colleagues will later on show you what we have done over the past. And this is going to continue to help us be the innovative leader in the areas where the technologies are most needed, which is ALD and epi.
We'll continue to lead with innovative products, innovative solutions and applications, and that's something that we have Continue to do over the last 5, 6 years or maybe even longer. And early customer engagements, which are really, really important for us to start working a very early stage with our customers to make sure that we have the right products in place when they go into high volume manufacturing. Now what has that really given us over the 2016 to 2020 timeframe? We have maintained our position as the market leader For single wafer ALD, in fact, we grew our market share during the period by a couple of percentage points. We expanded our market position in epi.
And compared to the overall WFE market, we have grown 1.5x faster than the market itself. History of innovation, we have a highly globalized network R and D model. We work with a lot of Partners and the partners include customers. As I said earlier, some of the development work that we do is actually done with the customers. And in terms of the technical capabilities that we have, especially in materials, in chemistries, we have more than 2 of developing that and we have built up and accumulated a lot of experience.
At the same time, we have accumulated a lot of experience in ALD, Epi, reactors and Processes, and we will continue to focus on innovation going forward. Leading products and applications, it's a little bit of a lot of tax here. But in terms of ALD, the key thing that stands out Israeli, we have the broadest portfolio of products and applications. And my colleague will show you later on what this means. And all this is leading us to be able to offer our customers the best performing Films that comes from our AOD with the best cost of ownership.
For Epi, we have been very innovative In terms of the processes, the hardware and one of the things that stands out for us is when you look at The newer, let's say, API applications that require very stringent control of monolayers, We are able to do that probably better than anyone else. And in fact, that is really critical when you go into the channel structure for the new gate all around transistors. And we shared a couple of months ago that we have already been selected by one of the leading logicfoundry players as the production tool of ECCORD. When they go into high volume manufacturing, they will be using our solution. And of course, last but not least, the surface clean capabilities that are Early customer engagements, I would say that we are probably working with all the major logicfoundry and memory customers.
And some of these engagements are for, let's say, processes or solutions that will be Only use 3 to 4 years down the road, but we are very early there to build and to develop solutions for them, To develop the critical answers that they need for the forthcoming inflections and their manufacturing requirements. So with all the opportunities that we have, with the strengths that we have, how are we going to translate that into Growth for our company, and there comes our strategy, which is the last part of my presentation. So first of all, Let's look at what our strategic objectives. We want to maintain our leading ALD position in logic and foundry, and we want to expand in memory. We want to increase our share in epi, and actually, we have a fairly aggressive target to even double that.
We will selectively grow Our vertical furnace and PECVD product lines in areas where we have differentiation. So we play in the niches. We are going to grow our spares and service business because it offers us another avenue of significant growth going forward. Now with all the business activities going on, we also want to accelerate our progress in sustainability. And the first step that we have taken today Was in the press release this morning where we are committing to net 0 by 2,035.
Last but not least, we will continue to drive Strong financial performance going forward. So these are the strategic objectives. What about the how? We're going to invest In R and D, and I will show you later on what is going on, especially in ALD and in Epi, the 2 fastest growing Segments of the market, we want to make sure that we continue to engage with our customers early and align to their roadmaps So that the solutions that we are going to create for them will become high volume manufacturing adoptions later on. We want to strengthen our culture and develop our people.
People are our biggest assets, and we have a firm belief that, that is something that we need to do And focus on we also want to accelerate our commitment to sustainability as I've described earlier. We have a growing installed base that we want to maximize the potential. And at the same time, we think that we can grow our spares and service business Also by introducing more outcome based services, which we have just started last year. Last but not least, of our manufacturing capacity and supply chain is, of course, important. And we have done part of that last year, and we will be doing more of that as we go forward.
Expansion in R and D capacity, we have already been expanding in Japan. That's in progress. And we will continue to Expand in Helsinki, in U. S. A.
And in South Korea, not just in terms of headcount, but also in terms of infrastructure such as metrology tools, Lab Development Tools, leading with innovative products and applications. On the left, you see our ALD product that was launched in 2018 that has become the industry workhorse. And on the right, my colleague will share a little bit more innovations in hardware and process that enables even more Strengen API applications, strengthening culture and developing our people. So we want to strengthen our culture based on our core values We grow, we innovate, we deliver, at the same time, develop our people to take on bigger responsibilities, increase our engagement and also increase Inclusion and Diversity. And in terms of sustainability, we are going to accelerate our progress.
And as you have seen in the press release this morning, we are committing to very stringent or, let's say, aggressive challenging targets, And we will continue to do this driving forward. Growing our spares and service, I have already explained, We are going to optimize and maximize from our install base, growing install base and at the same time transform some of our Offerings from a transactional to an outcome based offering. And in terms of expanding our manufacturing capacity, We moved into the new facility in Singapore end of last year, and it's been a real good timing for us. At the same time, we have also started work To start the design on the spare floor that we have with an intention that by 2023, early 2023, That floor will also be ready for manufacturing. In terms of our supply chain, optimizing our supply base and also Increasing our multiple sourcing.
So to end my presentation, I want to just maybe Go through again the 5 key messages that we would really like to convey to you. 1, the strong digitization growth driving a stronger semiconductor growth And increases in WFE, ASMI being the market leader for ALD and fast expanding in epi to Enabling technologies for future technologies, our strengths in innovation in the early customer engagements and product differentiation allowing us to bring to market to our customers most cost effective solutions, our strategic objectives of trying to maintain Our leading market share in ALD and in EPI sorry, in ALD and expanding in memory and one thing to expand our market share further In Epi, growing our spares and service business and increasing our focus on sustainability. And last but not least, financially To reach a revenue target of between €2,800,000,000 to €3,400,000,000 by 2025 with operating margin of 26% to 31%. So that's the first part or the end of my presentation. And I'm going to hand you over now to Ivo Weymakers, our Chief Technology Officer.
Thank you, Benjamin. Good afternoon, ladies and gentlemen. Good afternoon, good evening, good morning also to the audience online, Whatever time zone they are, driving innovation, that's the title of this presentation, And that's also what ASM is about. So I, as the CTO of ASM, will tell you How and what about is driving innovation? Following are the key takeaways from this presentation.
Global R and D Network, already mentioned by Benjamin, an R and D organization driving innovation, More than 2 decades of ALD experience and more than 3 decades at Epi, I should add. Our current R and D portfolio is very well aligned with what our customers need and what our customers need in the future to extend Moore's Law. And then finally, I will address some very important infractions in the industry, which will lead to ALD and Epi opportunities. The first point, I will show you again A small video about our R and D organization explaining the how.
Our story can be summarized in 3 words: Visionary, collaborative, unique. It's about developments that take place at the nanoscale as we Create tools that lead to higher performing, more energy efficient chips. But they're not fiction. We're making them reality. We're about People from diverse backgrounds who work in unison to achieve a common goal.
This is a story about R and D at ASM. And it all starts here and here, here and here. As we acquired and invented key Our teams around the world grew with us, creating a larger R and D footprint With our brightest minds on the ground, close to our customers, allowing us to care, innovate and deliver And how we're reimagining the future with and for our customers. Creating a successful innovation model doesn't happen in isolation. It requires collaboration and partnership, foresight and courage.
From working with research partners such as IMAIC Belgium, with whom we've successfully collaborated for 30 years, together we achieved one of the industry's most notable material changes, The switch from silicon oxide to hafnium based oxides, the most fundamental materials change in CMOS. And with the University of Helsinki, A reliable, long term R and D partner for 20 years, we invented many new chemistries. We transform ideas, research, Chemistries and prototypes into solutions, technologies and systems, helping to successfully bridge the gap between research And product development, we are turning new processes and chemistries into new products, enabling our customers to achieve their goals And further extend Moore's Law. And all of this is masterminded and orchestrated from our CTO office in Almira, the Netherlands, where people of This is R and D at ASM, a unique symmetry of processes to conceive and develop technologies for Our customers leading to advancements that benefit everyone from ALD and PE ALD to epi,
Well, that was a nice little video, how we do our R and D. You see here kind of a summary. The big balls you see there are our R and D sites, where in the U. S. A, in the Netherlands, in Japan and Korea, we have our product development centers.
And then in Finland and Belgium, that's most important For our R and D and Materials Innovation, that's where we have a big effort on really leading the industry. And those sites are co located with important R and D partners, University of Helsinki in Finland and IMAIC in Belgium. Just a few numbers on our R and D effort. More than €170,000,000 spending in 2020, which is about 13% R and D intensity More than 600 permanent R and D employees of 26 different nationalities and of which 44% have an advanced degree. More than 2,000 patents in force already mentioned by Benjamin, and this is just a number, 2,000.
But if you would look to the strength Of these patents, they are very, very strong. Independent analysis by geography and other engines Show that we have one of the strongest patent portfolios in the area of ALD. So let me you a little bit about driving innovation and aligning our R and D effort with the customer roadmaps. Little bit looking backwards in the past, a few of the things where we have led the industry in adopting change. Five things here summarized.
Loke dielectric. We may have the best Loke material. Already 8 generations, successive generations in mass production in the industry. Selective Epi sourced ranges as one Of the first selective technologies in the industry going into production, ASM did it with a customer. And this was for strain, which was the big word then.
High ks Metal Gate, already mentioned in the video. What's more important to realize is that high ks Metal Gate, if that would not have been done with ALD, there would be no FinFET. This is essential for FinFET. Further ALD use in patterning. At that time, EUV was not ready.
We were ready to step in with ALD and do double patterning spacers, blocking layers and so on and so on. So we extended Immersion until EUV was mature enough. And then last but not least, ALD for gap fill and low temperature silicon nitride, a little bit more recent. A lot of new technologies developed with our PELD process. So we will continue to do this, driving new materials, driving new processes.
So how do we align with our customers? This shows a few high level transitions. Aligned with our customers, the top line is N, N plus 1, N plus 2, N plus 3, N plus 4. Those are the Obviously, now it's roughly every 2 years. Some customers move a little bit faster, some will move a little bit slower.
This is about the pace of the industry Continuing till 2030, 3 important transitions, planar DRAM to 3 d DRAM. I will explain you more in a Few subsequent slides. 3 d NAND is going from single to multi tier 3 d NAND. So already the 3 d transition has happened there, and now we're stacking Together, FinFET scaling from 5 to 3 nanometer and then transitioning to gate all around For about 2 nanometer technology node and later to a so called fork sheet gate all around, which is a small modification for the FinFET. So our current R and D well, our R and D really spans this whole spectrum from supporting HVM to the external R and D and scouting.
The center of gravity of our spending is in the N+1, N+2 regions, where mostly Hesheem will tell you a lot more about In the pilot production development, PTOR and DTOR selection. But at all times, we make sure that we have enough Money allocated towards the future node. That's what drives our innovation effort. So putting this graphically, Benjamin already showed these 4 pictures, FinFET to gate all around. Now we have to put a gate all around the silicon.
This is very complex. It's much more complex than doing it in a structure like this. DRAM High ks Metal Gate. DRAM periphery will move to High ks and later maybe to FinFAC. Planar to 3 d land already happened And now just stacking and upcoming PLAYDR to 3 d DRAM.
So if I summarize this, almost everything is going to 3 d To enable scaling, it's no longer shrinking this way. It's going up and going 3 d. And that requires Conformal thickness, composition, electrical properties, etcetera, and that requires more ALD. We see a lot more thin films, Much thinner, complex mistakes, more complex materials. So we need atomically engineered surface clean and preparation technologies, Many new materials and bottom up selective deposition, I will tell you more about that later, to supplement a more top down deposition in X.
So these 3 d transitions will really build on our strength and drive a lot of new opportunities for ASMI In especially the ALD and EP markets, there's one thing I want you to take away is that the two technologies which are most important What is ALD? Let me show you that in this Very quick animation. You see a surface here, covered with atoms with bonds sticking up. There's a new precursor coming in, attaching to the surface. Then a next precursor comes in, a reactant, we call it, taking away the stuff we don't want, and we have one layer Of atoms formed on the surface.
And we do this a number of ways, and then we build up a layer. So it's very digital, very controlled And very easy to make these balls all in different colors and different materials. So the big advantage of this technology is shown in this little animation. You see the blue layer grow And each of these three animations, for CVD, sometimes the step coverage is not okay. So the layer is thicker on the top than it is in the bottom of the structure.
The bottom is almost no blue, top is all blue. Well, you can fix the step coverage. Some CVD processes have a very good step coverage. But then it's very difficult if you make a complex material to make the composition or the properties uniform in this structure. So even if the thickness is uniform, the composition is not uniform.
So only ALD can do this And can make this structure, which is like a 3 d NAND structure, to make it uniform step coverage, composition and properties all the same In a very deep, very complex structure. So we can do that with a lot of different materials. This shows The periodic system and about sorry, about 50% of the elements will be used in the industry in the And we need so called precursors, the chemical development. We need that to make these new materials with PLD with the right qualities. This is where the core strength of our lab in Finland is.
We can make these precursors. We can use these for ALD and invent the right process. So let me go to the next section of the presentation, which inflections do we see and what opportunities do we create. For examples, and this is not exhaustive, for examples I will present, Gate All Around, DRAM V NAND Scaling, 3 d DRAM And Selective ALD. So let me first go to Gate All Around.
I already mentioned that the we pioneered The transition from 65 nanometer, which was planar, to high k metal gate, there's a second picture here, and then there were just a few AOD layers, Maybe 1 or 2. There were some Epi also there, the Epi for the source drain. Then we went to FinFET. Today, there's already 6 generations of FinFET we support with ALD. And I mentioned earlier, AFDI really enabled the FinFET.
So there's a lot more ALD and a lot more AP in FinFET. And then if we go to gate all around, Basically, we need even more ALD and even more happy to make these complex fixtures. And I'm not going to go in detail here. This shows a process flow. It shows a picture on the left of a so called fork sheet.
I mentioned gate all around is first, and then there is fork sheet gate all around. The only difference basically is the dielectric wall in the middle. So that's another 2 extra AOD steps. But look to the process flow in the middle of the chart. The small bubbles are the ones where we already have ALD and epi implemented, the big bubbles are where we will see a strong expansion of ALD and epi use to make these type of structures.
If you put that graphically, Prenar, just one of a few layers, HEPA and ALD, high ks metal gate, Growing substantially, FinFET, another growth step. And gate all around, you see a lot of layers will be to be made With ALD and Epi. It's not only that. It's not That we need the same materials. We also need new materials to do that.
If you go to Gerdol around, using the same materials is not going to suffice. You need to complement this with more materials to form the work functions, etcetera, etcetera. Ishin will tell you a little bit more about that. So this will drive a significant SAM expansion in our ALD and EPYC markets. Memory, one slide about memory here and then going to 3 d DRAM.
DRAM, Basically, the capacitor doesn't scale anymore. That's a problem. V NAND, Also there, we have already gone 3 d, but it's very difficult to edge this deep hole. So what our customers do, they just stack 2 of these stacks together, and then we have to fill them. So even though These holes cannot be etched anymore.
We can still fill them with ALD, And we can still form the new materials in these much deeper structures. So common between DRAM and 3 d NAND is Higher aspect ratios. The other thing is, if you have these higher aspect ratios and more cells per unit area, You see increased parasitics. Parasitics is a difficult word for higher too high resistance And too high capacitance at the places where you don't want it. So these things need to be tackled.
Now if you look to DRAM, first to the left side, You see that a large area of the DRAM is consumed by the periphery, the red area in this green red diagram. So if we tackle that, we can continue to scale the DRAM in surface area. And That's exactly where High K Metal Gate comes in, an epichannel in DRAM to further scale this periphery down. New ALD materials are needed to improve the electrical performance for that. Better conductors, for the word and a bit line, better Insulators to create air gaps at low ks insulators to get rid of the capacitors.
On the right hand side, you see multi tiers, So Tier 1, Tier 2 stacking together, and our periphery is being put under the cell to gain surface area. Also here, Structures are more complex. We need a better vertical channel material because the channel is getting longer. It needs to have better conductance, Otherwise, you can't reach the bottom of this channel. And it has to have better conductors for the world line and better gap fills, I already explained, because The gaps are a lot deeper and a lot smaller.
3 d DRAM, this is something which is imminent to happen, and I'll tell you why. 3 d DRAM is going to follow the same trend as V NAND. V NAND went from planar, we turned it upside down, And we went from bottom to top. 3 d DRAM, we can do the same, use similar technologies and go from planar Vertical, that allows us further scaling. Why is this going to happen?
2 main reasons. 1, If you look to a DIM package, it has a certain size. And you cannot cram more than 64 gigabit of memory In this size. So if you want to go beyond that, then you need to do something different. 2nd reason is that it's eliminating some expensive EUV steps.
If you look to that graph on the right hand side of this picture, Scaling with 2 d DRAM and continued use of EUV will indeed drop the cost per bit, Which is a very important parameter in the memory market. It will drop the cost a bit, but not as fast. So if you introduce a 3 d DRAM, and this picture looks the same if you do for V NAND a few years ago, you see This trend going down in cost per bit much more rapidly, starting with 64 stacks, then 96 stacks, then 128 stacks. We expect the transition to be in between 64, 96
tax around 25, 26.
And what's important is that the channel It's going to go here to Epi. We will need 64 layers of Epi here, and Those will not be 64 times the number of systems. We will do that a little bit smarter. But just to say, Epi will be a very important technology here. And also since we are going vertical right now, we have more space for the capacitor.
And we can start changing the dielectric of the DRAM to form a higher K material. So that will continue to drive the DRAM roadmap. Selective ALD, Two slides on that. Top down, little hedge, that's what we call down. You pat on something, you hedge out and you throw away what you don't need.
That's very inefficient. It's much more efficient to grow things bottom up and grow things on the places where you want them. So that's exactly what selective ALD is about. What this does, it delivers an expanded toolbox for very smart process integration strategies. We can develop that together with our customers.
Early engagement is very important here. The expected customer benefits are reduced cost because it potentially eliminates some of the little edge steps And an improved dye performance and yield because you can eliminate some of the edge placement errors. We can do this 2 different ways: topological selectivity, which means that we, in this case, only deposit it on the flat surfaces And not on the side walls, only on the flat surfaces, so the red layer in the picture. And surface selectivity is where you deposit it On a certain material and not on another material. So in this case, the red on the orange and not on the gray.
Where are we here? We're leading In the adoption of selective ALD. Toposelective silicon nitride is already in production in 3 d NAND. And we have a JDP with an important customer for 2 nanometer foundry logic for what we call dielectric on dielectric. So it's Certain dielectric layer grown on dielectric and not on metal, and that eliminates a lot of edge placement errors.
And interesting to say is that technology here, the dielectric on dielectric is developed also with some atomic layer etch steps, Which play a critical role in maintaining selectivity. So to talk with Richard Feynman, there's a lot of room, plenty of room at the bottom. So selective ALD, I think, really will present a very large SAM expansion for us going forward I could present a very large expansion. So summarizing our road map. The white is what you have already seen.
The other bars show you where we start R and D and where we expect Approximate Manufacturing Adoption. So happy second sorry, second bullet here, enabling gate all around channel. Instead of 1 epilayer, we need 3 epilayers, 4 epilayers. So that's going to It will be very important to form this gate all around. Gate all around also need multi VT, so many different metals and many different Dielectrics, dipole layers, as we call them, to tune the VT.
So here you see that our ALD technology is going from high ks metal gate, enabling FinFET and now enabling gate all around with a lot of different materials. We have enabled or we have extended Immersion until EUV was ready. Now We are capturing layers where we need to support the EUV introduction because the resist is going to get lost in there. And that means We have to drive for new materials also in the patterning steps. I didn't show you this for the sake of time, but I just want to mention that.
Metals for memory, new metals, better conductance. Surface selective ALD, I already mentioned. Topo selective being in production and Surface selective coming into production for 2 nanometer. 3 d DRAM, I explained. And 2 things here I didn't explain yet.
They're a little bit farther around, but I told you we're allocating R and D also to the farther out nodes. 2 d channel gate all around are 2 d materials. That's a bit confusing because I've talked about 3 d all the time. But these are 2 d, very flat, very thin materials, which prefer to grow in a 2 d way, and we apply them in a 3 d structure. So this transition is of similar magnitude as the High k Metal Gate transition.
We champion that in the industry, And we intend also to play a big role in this next big inflection in the transistor. The bottom, you see new memory materials. And I refer here to different types of memory, which are used for artificial intelligence.
We need
a different memory action, a different way to remember the bits in a device. And we are working here on several new materials, which can enable that.
So all in all, if
I look to our R and D portfolio, we are targeting a multibillion euro AOD and EPYCEM expansion. So again, the key points. I showed you our global R and D network, early R and D collaboration with partners and with customers globally. I showed you our R and D organization, how it drives innovation, how it starts with road mapping, how we accumulated over 2 decades of More than 3 decades of Epi. How we align the R and D portfolio with our customers.
And I showed you a few examples of inflections where we think we can play a big role And capturing those and helping the industry moving forward with Moore's Law. So that brings me to the end of my presentation. And then I would like to introduce Han Westendorp, Corporate VP of Global Marketing, and he will present us the market outlook and opportunities.
Thank you, Ivo. I also want to welcome you very much This afternoon, this morning, in your evening, wherever you are in the world, to our Investor Day. And like Ivo mentioned, I will address the markets that we're active in. 2nd topic is I will address Our performance in recent years and give you some more background of what drove the outperformance in those years. And then 3rd, I will talk about our growth opportunities based on what Ivo already mentioned and what Heitgen will present on products later on.
So also in my presentation, some key takeaways I'd like to share in the beginning And recollect at the end for my presentation. So first of all, like Benjamin already mentioned, Strong digitalization trends are ongoing, are driving semiconductor sales to reach $1,000,000,000,000 level by 2,030 And also driving a strong WFE market. 2nd, we grew faster than the market In the last 4 years since 2016, and I'll explain you what drove that. Then 3rd, We released this morning our view in numbers at least on the single wafer ALD market size. By 2025, We are coming to an assessment of $3,100,000,000 to $3,700,000,000 as the market size that we think that market will reach by 2025.
We've done a similar analysis for the epi market, which will, in our view, grow from €800,000,000 in 2020 to Somewhere between $1,500,000,000 to $1,800,000,000 in 2025. And then finally, we have done an extensive analysis of What Gate all around that Ivo talked about will mean for the change from Advanced logic, the size of the advanced logic market from FinFET, mostly FinFET based last year to What will be likely mostly gate all around based in 2025, for ALD and Epi combined, that's going to mean a market Increase of $1,200,000,000 and I'll give you some more background on that. So first on the markets. The markets, as you know, artificial intelligence, security, Many elements are autonomous vehicles are driving a stronger use of semiconductor semiconductors in general And I expect it by 2,030 to reach a $1,000,000,000,000 level, so roughly doubling from where it is today. That will drive a strong growth in our view of wafer equipment wafer fab equipment.
We're sharing here a VLSI research forecast through 2025, split between logicfoundry and memory. So basically, we there is a common consensus that the drive In wafer fab equipment, we'll remain robust because of the strong drive for semiconductors In everything we do in the coming years. Specifically for wafer fab equipment, if you look at the technology nodes, Like we have shown also in previous occasions, structurally, we believe that the largest percentage of that growth Comes from the more advanced technology nodes. All of the inflections that we have seen in the last 10, 5 years, Going from planar to FinFET, now to gate all around, is going to drive basically the advancement of semiconductor performance. And also the equipment needed for that will represent structurally the larger portion of growth in wafer fab equipment.
Let's now look at our performance in the last 4 years. So I'm showing here on this slide the our equipment revenue In 2016 compared to 2020, where a CAGR of 24%, 2016 to 2020 was reached, Where at the same time, over that same period, wafer fab equipment, CAGR, Was sorry, the deposition in wafer fab equipment markets grew at a CAGR of 15%. So our equipment in that period grew By roughly 1.5x faster than those two markets. So the question is what drove that? What drove that stronger growth?
In this slide, you see on the left side the ALD single wafer market Development. So the single wafer ALD market, we forecasted that in 2016, At the time, it was $700,000,000 $800,000,000 We made a forecast at that time, 5 years ago, In the General Shareholder Meeting, that we expected that market to grow to $1,500,000,000 And sure enough, last year, it reached that level. So compared to the growth of the deposition and WFE market in the same period, that is a faster growth. Not only were we participating then and leading in a market that grew faster than the deposition market, But we also gained share in that market because we continue to focus on our strongholds in logicfoundry and expanded in memory. So we basically those two elements drove the were an important factor in outperforming in that period.
On the right hand side, we look at the epitaxy market. The epitaxy market in 2016 was $680,000,000 It reached a level of was 0.6. It reached a level of 0.8 in 2020. That's a relatively low CAGR, and that's mainly it's a little bit a lower level Because in 2019, actually, that market was stronger. We saw a downward period in the 2020 epi market because of a slowdown In Analog and Power, but in our case, we use those years to actually gain share, to triple our share roughly from 5% Share in 2016 to close to 15% in 2020.
We introduced, and Hesham will talk more about that, The Entrepid ES product in 2017, and we gained a lot of traction with that product in the advanced CMOS logic Epi market, and that was a strong contributor to our tripling our share in that period. So both on the ALD and Epi side, we performed Well, and that drove in aggregate our outperformance in those years leading up to 2020. If you now look at our growth opportunities in the coming years, so let me show here first Basically, some example applications that are expected to drive our growth. And I've listed here basically a selection of applications Where we feel rather confident that based on our current position and whether it is already in high volume manufacturing or and early engagement with customers that they will contribute these applications quite strongly to our growth in the coming years. So in the top left, you see ALD HiK Gate moving from FinFET to Gate all around.
So we have a well entrenched Positioned there with all of the leading logic makers, and we are well positioned there to also benefit from The more intense use and the further propagation of ALD HiK Gate Technology in general when the market further develops. We have also developed a strong position in ALD dielectric gap fill. We have very little externally talked about it, But ALD electric gap fill in deep trenches requires specific technologies For ALD, whether it's thermal or plasma enhanced ALD, and there we have developed technologies to seam in a seam free way, Fill certain gaps in sorry, To fill gaps in deep trenches, whether it's in memory or in logic devices. ALD metal is another category where we have been participating in IK Metal Gate for many years, and there is a demand for New metals in general in memory and in logic, and we are also participating there in early engagements with a broad range of customers. On the in the patterning area, the lower left corner, some of you that have followed us for many years know that we participated and led actually in the early years of PLD spacer patterning.
We have basically kept and further developed that position. So also with the advent of EUV, Which requires different types of patterning layers, we are strongly engaged with the leading customers to develop Spacers specifically for patterning using EUV. Siemens EPI is an area where Hesham will talk more about, Where we're also well entrenched and have developed a much stronger position in recent years and also in the upcoming changes in Advanced CMOS, well entrenched in the developments for the future nodes. And then Ivo mentioned selective ALD in the bottom right, also a technology where we have experience with toposelective silicon nitride Already for years and are further participating in when that technology advances in further generations of 3 d NAND, DoD, the JDP that Hivo mentioned, is also making use of our, let's say, strong experience in ALD to further help our growth in the ALD space. So these are 6 example areas where we Feel we can strongly, let's say, further develop our position in ALD and at least maintain share or Further to grow our share in that growing market.
And that is what is shown here on this slide. So on the left in black, you see what I showed earlier, The 45% to 55% share increase in the recent years and with our, let's say, our Experience and insight in how devices will further develop and the ALD technologies that are needed To basically enable the move from FinFET to gate all around, We have done, let's say, a thorough assessment of where that market will further how it will further develop. And that has led us To a growth of $1,200,000,000 participation of logicfoundry in the growth that we are announcing today For the single wafer ALD market from 1.5 to somewhere between 3.1 and 3.7, so that Logic Foundry segment is expected to contribute $1,200,000,000 in that growth. So the key elements are high k gate metals patterning, High aspect ratio gap fill, just to name a few, and there's more specific applications that are that we are working on. In memory, that in absolute sense, the growth participation will be somewhat smaller.
But also there, We are expecting based on our insights and participation in that market today that that segment of the market will develop for further growth By €700,000,000 by 2025, totaling a growth of €1,900,000,000 from €1,500,000,000 To a midpoint of US3.4 billion dollars by 2025. I know that a lot of you that have followed us for many years We're eagerly waiting for an update from us on the size expectation of that market, and we're happy to share it with you today. Then on the epitaxy market outlook, I showed to you already 0.6, 0.8, the number of the Sizes of that market in 2016 2018, our analysis of that market has led us to believe and to Report to you today that we expect that market to grow to somewhere between $1,500,000,000 $1,800,000,000 Driven by various elements, certainly, CMOS EPI, so advanced CMOS, whether it's the channel Our source drain contact application, we are deeply embedded With leading customers, so we have developed a fairly good insight in where that market might develop. That's an important element of that growth that we are Forecasting. Memory will also, as Ivo mentioned, see more use of Epi.
So it's also an important element of that. And then there is a power, analog and wafer segment of the market that is also making increasing use of epitaxy And also the overall general drive of more semiconductors fundamentally will require more, Let's say more capacity and further advancement of capability for Epi specifically, Also being a part of that growth of the epitaxy market to the $1,500,000,000 to the $1,800,000,000 by 2025. So we're happy to share with you today both updates of the ALD and epi market where we have strong positions, Leading in single wafer ALD and growing in Epi with the ambition in Epi based on our current view That we are happy to share with you a target today of market share larger than 30% by 2025 in that growing market. So if we share then as the, let's say, last assessment I wanted to share with you in this presentation Specifically, the ALD and epi market growth in advanced Logic. So we explained to you already that in the development of advanced logic, More ALD is going to be used.
More epi is going to be used. So if you look then in 2020, at The invested capacity that the capacity basically being purchased for Advanced Logic, which is mostly FinFET driven, last year. And based on, let's say, our insight in how the technology will develop, how the various customers will ramp and the timing at which they will ramp, Gate all around or advanced logic in general in 2025, we have made an assessment that, that market We'll grow by $1,200,000,000 by 2025. So roughly, you can see it on this chart, doubling The segment of that combined ALD and Epi market in the coming years. So in conclusion, I'd like to share with you that we that the strong digitalization, just recapping, the strong digitalization is to drive more semiconductor and more wafer fab equipment in the coming years.
I hope I have explained to you What drove our outperformance in the last 4 years, give you a little bit more color so that you can better understand what drove it. 3rd, the size of the single wafer ALD market. Our analysis had led to an assessment of a growth to $3,100,000,000 to $3,700,000,000 by 2025, a similar assessment we have done for the epi market, Growth of $800,000,000 from $800,000,000 to $1,500,000,000 to $1,800,000,000 by 2025. And then finally, the assessment of the specific advanced logic segment of the market From mostly FinFET based last year to what we expect to be mostly gate all around driven in 2025, ALD and Epi combined, a $1,200,000,000 market growth. So that concludes what I wanted to share with you today.
Hesham will, in his next presentation, give you all the insights and about, let's say, competitiveness of our products. But before I give the floor to Hesham, I give the floor back to Victor because he will likely announce a break.
Thank you, Han. And also Ivo and Benjamin for the interesting presentations. So this concludes the first part of the program. We will now have a break of 25 minutes. So to the participants on the webcast, Please be sure to be back in 25 minutes.
And to our guests here in the room, you can go to the room next to the welcome Reception
for coffee.
Okay. Welcome back to the second part of the program. We will first start with Isha Mesad, our Executive Vice President of Global Products. He will walk you through our products and innovations in products. This presentation will be followed by Paul Verhagen, our CFO, who will give you a financial update and talk about the financial targets.
But first, the floor to Vishnu.
Thank you, Victor. Good afternoon, everyone. It's my pleasure, so I'm going to wait. So good afternoon, everyone, and good morning for those of us who are joining us from the United States. It's my pleasure to talk to you about the products and application that are really leading our growth.
First, I'm going to start with ALD. And our leadership in ALD is a reflection of the products and the application that we have developed in the industry. So I'm going to show you some example of those products. 2nd, we have grown our Happy market share the past few years. And I'm going to show you that the growth in our epi market share is due to some innovation We have brought into the industry, especially in the reactor design.
And with the Epi innovation that we have brought in, We are very well positioned in a gate all around transition. 3rd, I'm going to talk about that for both our vertical furnace And PE CVD product lines, we really are selectively moving into this area. We are selectively growing our offering. 4th, because of our drive to sustainability, we have actually embedded sustainability in our product life cycle. And with it, we can actually reduce energy usage and also reduce precursor usage.
Last but not least, in our service business, we have moved from a transitional type of service business model To an outcome based service model to provide better value to our customer. So let's first start with ALD. I'm showing you this graph showing that shows the ALD evolution from 2,003 to 2021. As you can see, in 2003, there are about 3 to 4 layers of ALD. Nowadays, we have over 70 plus ALD layers being used in the industry.
The other message from this presentation, you can see that the past few years, the ALD The growth in ALD has increased a lot. This really reminds me of my days In the mid-1990s as a process engineer in CVD. During those days, CVD was growing in the same way. We have at that time, we have PCVD and we have LPCVD technology. Then all of a sudden, Many CVD technology have come to pace.
For example, HDPCVD, high density plasma chemical vapor deposition, SA CVD, sub atmospheric CVD. We had also ECR CVD or electron cyclotron resonance. And with this new deposition CVV Deposition Technique, we have many new layers. For example, anti reflective coatings, Advanced patterning films and also many low k materials, starting with FAG or fluorinated silicon glass at a k value of 3.5 To all the carbon doped oxide that ASM has been part of with our Aurora technology. So the late 1990s is what we call the golden age of CBD.
Fast forward 20 years, and we are in the midst right now Of the ALD Golden Age. That's why the title of this slide is ALD is a new CBD. And not only ALD is has the same Growth at CVD in 20 years ago, but actually this growth is even stronger. Why? Because of 3 different things That sets ALD apart.
1st, device shrinkage. When you shrink, you want to have thinner films. ALD is the best technology to deposit this various in films. And we see right now in the industry that many of the CBD layer are actually being Transition to ALD. And to a lower extent, some PVD layer are actually moving into ALD.
The second inflection point for ALD is the device structure. As Ivo have shown you earlier, the device structure is moving from 2 d to 3 d. For example, D NAND has moved from 2 d NAND to 3 d NAND. DRAM Has is actually right now is a 2 d DRAM. But by 2025, we're going to have 3 d DRAM.
In the larger part of the industry, We have the FinFET, and the FinFET is moving to gate all around. In all, what's common between all this technology is that We're going vertically. And when you go vertically, then that really favors ALD because ALD is the best technology to for Deposit very high aspect ratio, gap fill. It's good for gap fill and also provide very good step coverage. The third thing that makes sets ALD apart is that right now, Moore's Law is being driven by new material, and ALD is the best technology to deposit So let's show you these the products that we have that are driving this ALD golden age.
First, I'm going to talk about the Pulsar. This is the Pulsar is the industry workhorse for depositing hafn oxide high k gate. Every customer in the industry uses pulsar to deposit hafnium oxide. Next to pulsar, we have the emerald. And the Emerald deposit carbides and nitrides, these are the metal gate, the thick tile aluminum carbide.
Then we have In 2018, we have developed a new architecture. We have developed a new architecture that we call Synergis. And the reason we have developed Synagis is to provide the best reactor technology to the industry with the best productivity. So we took the best reactor design from the Pulsar Emerald. We put them into synergies.
And with that, we also improved our productivity. With that capability, we can deposit any kind of material we can think of. So for Synagis, we have different materials. We call them the metal oxide. These are the petronic films like aluminum oxide, hafnium aluminum silicate and so on and so forth.
And then we have the metal nitride, Like TiO Nitride and Tantan Nitride. Also, we have synergies for metal. We can now deposit metal in our Synergies reactor. But when you see for ALD, we see there is also a trend in ALD to deposit thinner and thinner films. Right now, we even deposit a film as thin as 5 angstroms.
We're talking about 2 monolayers. So when you go very, very thin, then the surface becomes very important. And the surface really controls Your film, ALD film property. So in order for us to have a very good film, we need to make sure that the surface is clean. So that's why we have introduced An ALE based surface beam technology, which is actually integrated with our Synagis ALD processes.
Next, I'll talk about this new architecture, which we call the DCM and QCM architecture. This architecture is actually geared more for our dielectric film. So DCM stands for dual chamber module. QCM stands for Wad Chamber Module. So this architecture is very key in depositing the nitrites, the oxides for memory, for patterning application as sacrificial layer.
We also deposit the nitride and oxide as spacers in the spacers and liners. So as you can see, we have a large portfolio of ALD Products. But what's common between all this ALD technology that we have is our unique reactor technology. It's common between all the products that we have. And what's unique about our ALD reactor technology?
We need to make sure that the reactor technology Provides the best ALD film with the best step coverage. So things about our ALD technology That sets us apart. One of them is that the chamber design is made to provide very good uniformity. So the view graph on the right side here shows you that we can achieve a uniformity of 0.3 angstrom on a Veriskin 48 angstrom film. 0.3 angstrom, that's extremely uniform.
The second thing that we can do with this reactor design Is that the reactor is made to be flexible, to deposit 4, 5, even 6 elements. And why that's important? It's important because Moore's Law is being driven by new material. So we can deposit many materials That are unknown to humanity right now with this ALD technology. It took us about 2 years to develop this kind of flexibility in our reactor.
And here you can see, ternary phase diagram showing that you can any point you want to think about, any materials you can think about, You can deposit it with our ALD technology. 3rd thing for our for the ALD technology is that we can actually Our reactor is very small volume, so we can have very fast cycling times. And also, we can purge the precursor very, very, very fast. What's that important? Why is it important?
It's important because for gap fill application. So as you can see, we can achieve very good gap fill, Voivry, Gatfeld with ALD. At the same time, what Ivo has talked about earlier that we can also deposit liners In very high aspect ratio memories with a very good control, very good uniformity. And this is really shows that this liner here In a 100:one aspect ratio, this film is very uniform. So when you see here that the same attach ratio between top and bottom, It means it's the same film, same quality film between the top and bottom.
So that's really Some of the improvement for our reactor technology. Next, I'm going to go move into epi. And I'm showing you why we are growing in epi deposition. First, I'll start with 2015. In 2015, ASM was only addressing the power electronics part of the market with our E2000, the Epsilon 2000 And the E3200 offering.
In 2017, during Semicon West, we have released the first reduce the pressure And Treppet ES Cluster Tool Platform. And then earlier this year, in July of this year, we have released the first Cluster tool, atmospheric pleasure, epi, which we call the interpret ESA. With these two offering, Now we can address the totality of the epi market, including the advanced CMOS and also wafer makers. So when we moved into this new technology in the advanced CMOS, we were faced with a dilemma. Number one thing is that when you go to CMOS, advanced CMOS, FP has to be deposit at much lower temperature Then power electronics.
We deposit film at 700 degrees Celsius. For power electronics, you have to deposit film Over 1,000 degrees Celsius. So at this low temperature, the surface on which the epi sits It's not very clear. You can have oxide from etch. You can have residue carbon residue from etch.
You can have defectivity. So in order for us to deposit pristine film for the advanced CMOS, we have to remove this impurity. And that's why we have developed an ALD based surface clean technology, which we call PREVIUM. So this is the PREVIUM, and we have about 3 different reactor for PREVIUM, V3, NEXT and VP. So this reactor would Monolayer by monolayer, remove any defectivity before we deposit Epi.
Then We need to integrate this pre clean with the EpiDiposition. We cannot break vacuum because if you break vacuum, then you're going to have some upside on your wafer again. So we have to come up with a platform, which we call the our platform, the XP4 and XPE, which allows us to integrate Both the pre clean and also the epi deposition on the same platform without breaking vacuum. So we have flexibility for us to deposit To have pre clean and epi deposition on the same reactor. And these kind of reactors, some of them are actually in high volume production.
The third thing about epi, which was a dilemma for us and challenge, is really how are we going to get into this Very advanced epi process where the competition is much entrenched and where the barrier to entry is very high. We made a decision early on that the only way for us to penetrate into this market is to provide technical value to our customer. We need to provide them with technical differentiation. For that reason, we have invested heavily in Epi. We have innovated In Epi, we have come up with many innovative feature, which I'm going to talk about some of them right now.
The first feature is what we call Isothermal reactor. What does this mean? Epi is a thermal process. So having exact temperature It's very important. If the temperature changes, your process is not uniform.
So we have made And isothermal reactor to make sure that every wafer at any time in any reactor, anyone in the world sees the same environment. With it, We can achieve very good repeatability for high volume manufacturing. The second innovation that we first introduced In the industry is called AEGIS, which stands for Advanced Gas Injection System. This is the first MFC based Delivery in Epi. With it, we can dope Epi very easily and very uniformly.
So for SiP application, You can introduce phosphorus with extremely good uniformity. And also for compound epi, like silica germanium, you can achieve very good Germanium Uniformity. The 3rd innovation that we have is we call Veraci CL. Veraci in Italian stands for accurate. CL is closed loop.
So we have an accurate closed loop control So not only we can measure the wafer temperature directly, but we also can control The wafer temperature. Why this is important? This is really important for the advanced epi application in the gate all around. So let's look into these advanced PEPI application. So if you look into the data round picture over here, You see many silicon, silicon, germanium nanolayers.
Just deposit silicon and silicon germanium on top of each other. So in black, that's the silicon. In white here, that's the silicon germanium. So you have 4, 8 or 8 of this layer, 1 on top of each other. That's what defines the channel.
Next to it, you have the source drain. And the source drain here like NMOS source drain, for example, What it means here, it means you have to deposit Epi in a gap fill, not only deposit Epi, but you have to gap fill Epi. You have to deposit Epi from the bottom, from the top And so that you have no seam formation. And that's what we call 3 d epi, epi X direction, y direction, The vertical direction. And this picture shows that we can actually deposit epi between all these nanosheet structure.
So why gate turnaround is so important in the device? The reason is really in the next picture. As you can see in the FinFET, You have the FinFET channel thickness is defined by 2 things, litho and etch. So you deposit your silicon, You litho it and then you etch it, and you form your channel thickness. If you flip that around by 90 degrees, you get the gate all around.
So what you can see here, this is the channel film, the silicon channel film that I showed you earlier in this picture here. So right now, the epi is actually what defines the structure. That means that epi thickness is very important. That means the channel thickness is right now defined by epi. So you need to make sure that the epi Thickness within the whole wafer and layer to layer has to be extremely uniform because the channel thickness pretty much Defines your transistor performance.
So going from FinFET to gated around, epi, We go from litho etch definition of the gate to epi definition of the gate. So how do we so in order for us to be able To get very good uniformity, that's really where Viroccia CL comes around. So if you take this layer to layer thickness and you try to measure it With the spec of plus or minus 1 angstrom, with the common technology right now, what you see here is that At the edge of the wafer and a little bit at the center of the wafer, you lose the stack. You cannot meet your specification. And then when you go to Virox CCL, whereby you have a pyro on top measuring the wafer in the middle and in the center.
And not only that, Those pyros really control the wafer temperature to about to delta of 0.1 degrees Celsius. All the conventional technology before control the temperature to plus or minus 1 degree. We have improved our temperature measurement accuracy by 1 order of magnitude. And with it, you can achieve very good uniformity of this channel thickness in the middle, center, middle and edge. Why this is important?
And not only we can achieve the spec of the customer, but we can exceed the specification by 50%. So what does it mean? It means we can control the channel thickness monolayer at a time. This is really enabling Technology for Epi going forward. The second thing to that for Epi, I want to give you an example about our reactor technology.
This is for the Antrepid ESA. This is the atmospheric epi. And here, this is what one of the uses that's happening in power devices. We all know right now In electric vehicle, you want to do fast charging. So you want to need epi, it needs to be thicker, very thick epi for fast charging.
Also in solar energy, we have inverters. And the solar energy is going from 1,000 volt to 1500 volt. So with going to higher voltage, you need thicker epi. So right now, you need epi as thick as 100 micron. But it's very difficult to deposit epi 100 micron epi.
Why? Because as you get sicker and sicker, you on the wafer, you also deposit on your chamber wall. Then you can have defects and residue come on the wafer. So you have to stop your deposition. So the industry right now, this is what happened.
In order for you to deposit 100 micron, you go, for example, deposit 20 micron, you take the wafer out, you need to clean the chamber, dry clean it, Get the wafer back in, deposit to 20 micron and so on and so forth about 5 times. What does it mean? It means it takes you a long time. It's very costly to do that. But most importantly, once you divide your deposition, you have what we call interfaces.
An interface by definition is a crystal defect. An epi is a crystalline film, monocrystalline film. So once you have a defect, then your device performance degrades. So it's very important that we can deposit 100 micron in 1 step. And this is the capability of our reactor.
We can deposit 100 micron in one step. Not only that is that once you open your reactor, After this 100 micron, you can see the ports of the reactor. It's very clean. And this is really an achievement in ATM Epi. 3rd part of my presentation is going through our other product lines, which is our vertical furnace And our PECVD.
And in these two product lines, we have decided that we're going to selectively grow in this area. For example, for furnace, what we have done, the last tool that we have or the last product that we had was about 20 years old. So we have made a decision to update our product line in furnace. And to update our product lines, we need to make we offer value to our customer. Value number 1, the tool needs to be more reliable.
Value number 2, the tool has to be lower cost. Value number 3, the tool has to have Lower throughput, higher productivity. That's why in November of 2019, we have really in which during Semicon Europe, We have released our A400 Duo. This is a 200 millimeter NIO platform. And with this release of this platform, It's really allowed us to expand our market share in China a lot.
We have win many markets in China with this And we expect the same thing as we develop our 300 millimeter platform. For PECVD, What we looked into PECVD is really going into niche application. So what I'm showing you here is in low so we looked into the low k and the carbon based phones. For the low k, what we see, we see as the device shrink in logic, the number of layers of low k, the 3.0, which is Our Aurora film, which is in the industry in production for many years, actually those layers are increasing. So as the device shrinks, Our low k revenue is going to increase.
What you see on the right hand side here is our foray into carbon based films, PCVD, carbon based films. And as you can see, these are PCVD films, carbon based film PCVD that have very good gap fill. If you ask me about this when I was in PECVD about 15 years ago, I tell you that's impossible. But right now, it's possible. So why this is good?
This is good because this PCVD film would replace the spin on carbon. And what they offer, the value here is that the PCVD films have better planarity than the SoC Or the spin on carbon. The second thing is that once you deposit the film with a plasma, those films have higher density and better selectivity, and that's what you need for patterning. All our products that I've shown you today have something in common. We it's our drive To sustainability.
So we have a very aggressive sustainability target. And I have we have used Sustainability, we have embedded the sustainability of our company into our product life cycle In the area of innovation, in the area of design, in the area of system operation and this area of equipment refurbishment. So in innovation, we have innovated in 2 area: an engineering innovation and process innovation. In the engineering innovation, we have For example, we have used the green chiller. We use chiller for some application.
And with it, we actually can reduce energy consumption by over 4%. In Process Innovation, we have focused on cleaning, chamber clean. We have been able To reduce the precursor usage, the clean precursor usage by over 16%. In design, we have Looked into both our product lines. We have 2 product lines.
You can divide them with 2. We have thermal processes products and plasma products. For our thermal products, what's important is temperature. So we actually have Come up with new materials, new insulating techniques and new materials that can reduce the heat losses. And for plasma products, which use RF circuitry.
We actually worked with our supplier to reduce the electrical usage of their power supplies. But not only that, We also have reduced the RF leakage in our systems. In the system operation, we have partnered with abatement company To reduce the effluent usage, we also have developed smart idling techniques to reduce energy by over 15%. In the refurbishment of the tools, we actually have an active program in our company to recycle old equipment and get it back into production. The same thing, we actually are extending the lifetime of the component through development of new cleans.
And we actually have an engineering team that try to develop extended lifetime of products, of components to reduce the cost And also to reduce the energy usage. The next slide here Shows you that how we have in the design part, we have been able to reduce our energy usage. I talked earlier about our DCM and QCM in ALD. So when you go from DCM to QCM, you actually have more reactor Per tool. Of course, your throughput increases.
You have higher productivity when you move to the QCM, but and you lower your cost of ownership. But most importantly is actually you reduce your energy usage. So for a liner process, you actually reduce your energy usage by 16%. And for a gas filled process, you reduce your energy usage per wafer by 19%. And this energy usage is per wafer.
And the reason we can Achieve that because we have more component, common component in the QCM. Last, let's talk about our service business. What we have made a decision to move the business model of our service From a transactional business model to an outbound based service model. And through and the way we can achieve it is actually through some engineered Solution. For example, we can go to a customer and we can commit a certain COC or cost of consumable.
And we drive Ourselves to reduce the cost of this consumable through developing new cleans, having new coatings and New refurbishment techniques. For example, also we can do it to our customer and we can sign up for an uptime of our tool. We can sign up for a certain uptime. Customers are very happy with it because they don't have to worry about it. But for us, we can drive ourselves to come up with a new CIP Our continuous improvement programs to achieve this.
In all cases, ASM actually manage both We manage the inventory and the spares ourselves for our customer. So to summarize my presentation, I hope I have shown you today that we have a very broad product portfolio for ILD, which drives us to new heights. I hope that I showed you that for Epi, we have new technology, new innovation with Epi, which has positioned us very well For the next gate all around transition and also for many use of epi in memory, I hope that I have shown you today that for our product offering, both vertical furnace and PECVD, we are selectively growing there very smartly and very Precisely. 4th, we have embedded innovation and sustainability in all our product lines to make sure that we can reduce energy usage and also reduce precursor usage. Last but not least, we have transitioned our service business From a transactional business model To an outcome based business model to provide better value for our customer.
Thank you very much for your time. Right now, I'm going to give the floor to our CFO, Paul Verhagen, to talk to you about the financials.
Yes. Thank you, Edyce. Welcome. Good morning, good afternoon, good evening, wherever you People here in the room. Please stay with me for another 15 to 20 minutes.
You got a lot To digest this afternoon, a lot of interesting updates, I believe, the growth to innovation strategy, The market outlook and opportunities, the technology road map, the product road map, and what I will try is to share with you what that means in financial Terms. I have 4 key takeaways for you. The first one, as you've seen, I think, in multiple presentations This afternoon. ASM has grown to be a leader in ALD, creating significant value for all stakeholders. ASM has made it possible for our customers to move to more advanced nodes.
You've seen some of the key inflections that the company has managed. We have been growing tremendously, offering more opportunities to our employees, also focusing more on a more inclusive And diverse culture in the last years. We have created a lot of value for suppliers who have grown with us. And last but not least, and I will come back to that, course, I believe the company also creates a lot of value for the shareholders. We have a revenue target.
You've seen that of €2,800,000,000 to €3,400,000,000 by 25, a CAGR of 16% to 21 And with that, outgrowing the WFE market. An operating margin of 26% to 31%, Which, of course, should put us in a position to deliver and generate strong free cash flow. And last but not least, Capital allocation policy unchanged. Investment in growth, because there's a lot of opportunity in growth, Remains the key priority and excess cash one way or the other, as ASM has also done in the past, Will be returned to shareholders, and we'll come back to that later in the presentation. First, a few highlights, And then I will take you a little bit deeper into a few financials of the last 5 years.
And thereafter, I will share the projections for the coming 5 years. So first, from 2016 to 2020, an annualized total shareholder return of 39%, Which compares to our weighted average cost of capital of around 9%. So this is a pretty decent return. Total cash return to shareholders over that period, €1,400,000,000 and free cash flow, €411,000,000 The return on invested capital improved 11 percentage points over the last 5 years, a CAGR of 22%, gross margin up 3%, Operating margin up 11%, and Hisham just shared the focus on sustainability. We've also been able to reduce greenhouse gas emissions by 15% per euro R and D investments we have done over that period.
Overall, I believe ASMI has delivered a very strong performance in the last 5 years. Further to say it's a little bit more detail on the recent 5 years, and then again I go to the projection. The 39% that I just shared with you was annualized annual return. This is the Cumulative return, but not until the end of 2020, but until the 22nd September 2021. More than 1200 And now €123,000 So a pretty good return.
Outperforming the IEX, which is the main index in the Netherlands, outperforming our peers And also outperforming the SOX Index. Also dividends, we've seen Strong growth from €0.40 in 20.10 to €2 in 2020 and even a special dividend in 2019, again, is fully in line with ASM policy to return excess cash to shareholders. Revenue over that period, total revenue, Hans showed earlier on the equipment revenue, that was a CAGR of 24%. Total revenue, a CAGR of 22%. Basically, the company more than doubled from €600,000,000 in to 1,300,000,000 in 2020.
And you've seen all the reasons. There was Growth in end markets, but equally important, ASM also managed to increase share, in particular in ALD and in Epi, And ASM grew the spirits and service businesses. Net earnings on the right hand side Does not show a consistent picture with the revenue increase because you would expect, of course, a decent fall through of the increased revenue to the bottom line. You're not seeing that and it has everything to do with all the lines below, let's say, EBIT mainly. That is the income from ASMPT.
There's material fluctuations from year to year, which make this at least at face value look a little bit strange. There is currency translation differences that cause this trend that you see not fully consistent with revenue. And actually also in terms of tax accrual, in particular in 2019 2020, and I come back to that, that was were actually the 1st years where there were Significant accruals accounted for in the net earnings. Gross margin, as you know, ASM guided Low to mid-40s. Now over the last 5 years, 4 of the 5 ASM has been in that within that guidance.
And it was not a linear line up. You see that. It started at 44%, came down a little bit and actually in the last year, moved outside of this range to 47%. And this is very important to understand because there's a few structural drivers that improve margin like operating leverage Productivity Improvements, I'll come back to that a little bit more later in the presentation, and also supply chain improvements. But there's also Application mix.
And the mix can change from quarter to quarter. You've seen that in Q1 and Q2 of this year, but the mix can also change from year to year. So there will be differences in margin depending on the mix development from year to year. And last but not least, especially in 2017, but even more so in 2018, new products were introduced We have an initial lower margin than the running products, which then in subsequent years Through engineering changes, through commercial negotiations with suppliers and through other actions, ASMI managed to improve these margins again. So sometimes New products come in at a very high margin, but sometimes at somewhat lower margin.
But then, of course, there is opportunity to improve that going forward through the actions that I just talked about. On the right hand side, you see the EBIT operating margin Gradually improving 14%, 15%, 15%, 20% 25%. You see that it did not fully Followed the gross margin. That's mainly because of the growth of revenue, which resulted in a positive operating leverage, in particular in SG and A and R and D. Free cash flow.
Yes, this is a little bit of a volatile picture, and it has everything to do with changes in working capital. As you know, this is a measurement per year end. If I would make this picture for January 7, it looks very different again. So that's one element that Makes the swings from year to year. The other element is CapEx, of course, which brings these changes from year to year.
From 2016, 2017 to 2018, actually in all the years, the operating cash flow, so before changes in working capital, Before CapEx was significantly higher than 20% except for 2018. The decline that you see, in particular, of course, in 'sixteen, 'seventeen, 'eighteen is significant increases in working capital, At least relative to the revenue, which was relatively small at that time and an increase in CapEx, which I will show in subsequent slides. In 2019, almost everything, all the pieces of the puzzle fell in the right direction. Profitability improved. With higher revenue, even working capital came down.
And also in that year, CapEx was lower than 2018. Then you see some leaders 18% popping up. And in 2020, the opposite happened. We saw almost €100,000,000 increase in working capital for only a few weeks because There were some customer payments that just came in at year end. If they would have come in a few weeks earlier, also 'twenty would have looked much better than what you see here.
On the right hand side, you see the cumulative cash. This is over a longer period, 11 years. Euros 2,000,000,000 has been returned to shareholders Through share buyback, through return of capital and dividends. R and D, this is important. This is the lifeline of the company.
This drives innovation. You've seen the presentations. It increased from €100,000,000 in 2016 to €170,000,000 And going forward, I'll show you in a later slide, we plan to grow this even much more. It drives innovation, and we grow through innovation. We grow through enabling our customers to move to the next nodes.
You see the growth in the net. The most relevant number is the gross investment. The net number, of course, is including a capitalization of Cost. And the difference between these two is somewhere between 2% to 3%, typically almost every year as you can see here. CapEx, again, moving quite a lot from year to year, but what is immediately visible is that in the years where we add Capacity, manufacturing capacity, that's when you have the peak in CapEx.
And here it's 2018 when we completed our facility in Korea and 2020 when the facility in Singapore was completed. And here you see the swing in working So as I said already, the 1st 3 years, it went up, down in 'nineteen despite a revenue increase And then significantly up in the 2020. You see the change in working capital days, 82 Was the highest, euros 42,000,000 was the lowest. Now in 2020, one day is around €4,000,000 So 40 days difference over that period is like €160,000,000 And one day of working capital measured in euros, of course, with the company growing, We'll only become larger and larger. But this is mainly driven, as you see the swing, by change in DSO, which moved from 70 plus days 52 at the lowest, back up to 72.
Inventory gradually improved and payables remained more or less stable. Okay. That was the past. Let's now go to maybe the more interesting part, which is the coming 5 years. Quite a lot of these targets you've seen, the revenue targets, the CAGR, gross margin, We have lifted to 46% to 50% from lowtomid40s.
SG and A, We plan to not grow that as fast as revenue and think that should gradually move towards the high single digits. R and D will be high single digit to low teens and an operating margin of 26% to 31%. Furthermore, we don't only have financial targets. We also have non financial targets, Which I believe are in today's world almost equally important. It's, I think, one of the top issues that the world is facing today.
It's a Top issue that our customers are facing today and as a result is also a top issue, of course, that we are facing. And I firmly believe that investments need to become more sustainable. Companies who would not recognize that Put the medium- to longer term prospects of their company at risk. I believe it is vital That again investments become more sustainable. And we have decided and announced today that we will step up And accelerate investments to become more sustainable.
Net 0 by 2,035, Including Scope 1, 2 and 3, which is upstream and downstream. So this is an ambitious target. We have a few interim targets, So 100% renewable electricity by 2024 and already 100% renewable electricity in 2021 for our key sites. And furthermore, we also plan to have by the end of next year the assessment ready of, in particular, Scope 3 and targets, What do we need to agree with our partners to enable us to move to net 0 by 2,035? The other non financial target that I want to highlight is safety.
That's maybe the most important because we want our people to come home safe in the evening. We work with a lot of chemistry, a lot of materials, things can happen in the lab. So we will do whatever reasonably possible, of course, to protect our people and to make sure that they can go home safe every night. Revenue. So as said, we grow to 2.8 To 3.4 percent.
A CAGR of 16% to 21%, which means 1.5 times Yes. The wafer equipment market at the low end and double actually the growth of the wafer equipment market at the higher end. The assumptions that we've used to model this are listed below, and you've heard them a few times today already, We're just maintaining market share in ALD Logic Foundry, growing in memory, growing in epi, selective growth in vertical furnaces and And PECVD, and of course, growing our spares and service business. That all should happen to make this happen. Gross margin, we were at 44% in on average over the recent 5 years.
We believe that we can manage that to 46% to 50%. Actually in 2020, we were already there as you see. And as I mentioned before, there's 2 structural drivers, which is operating leverage and supply chain improvements and one that is Structural but also can fluctuate from year to year, quarter to quarter, which is the mix. Operating leverage in itself will not do a lot from year to year because our manufacturing capacity is, To the very large extent variable, we have an assembly capacity here. We don't really manufacture, we assemble.
But still over a 5 year period, it starts to add up. So the growth that we project and the revenue that you just saw will ultimately contribute to Over this 5 year period to improve the margin. SG and A, as I mentioned There we need to make sure that we don't grow that in line with the revenue. We should see clear productivity improvements. We will set clear productivity targets.
It will move gradually to a high single digit. It might not be A linear line precisely because certain years, we might advance certain things a little bit more than other years. So it will not be one straight line. But over this period, it will come down to around the level I show on this slide. R and D.
As I said, we are now at around 10% net, 13% growth, and that's more or less where we want to keep it. So with the growth in revenue, Applying this number, that means a significant increase in R and D, which we believe is very important. Again, it's growth through innovation. You've seen the examples and you've seen the presentation of my colleagues. This is a lifeline.
This provides auction to the company, And we plan to invest going forward. The nets will be, as I said, high single digit low teens. That's very hard to say what it precisely will be. But I think the key message is that we will invest in R and D, and the vast majority of these investments will go to ALD and Epi. Of course, also selectively, we will invest in vertical furnace and PECVD, but the bulk will go into ALD and happy.
And as Yves also said, a certain amount will, of course, be allocated to the horizon beyond the midterm targets that we talk about. By the way, for capitalization, I know it's a question. We have assumed a similar ratio as what you've seen In the last few years, so no change there as far as we can judge today. Now that results in this Margin improvement, 26% to 31%. Of course, the improved gross margin contributes And in particular, the improvement in productivity and benefiting from operating leverage in SG and A.
Another important element is tax. You see 2016, 2017, 2018 even very low tax rates, And that has everything to do with the fact that ASM used to have quite some net operating losses. They have been fully consumed by now. If there's one disadvantage, you make a lot of money, it might be this one. They have been fully consumed.
So going forward, that means that the tax rate will increase. Actually already in this year, as you can see on the slide, we expect tax rate to go to around high teens and will most likely move to low 20s going forward. Obviously, we will see if we can further optimize this. But of course, within the spirit and the letter of the law and also recognizing, of course, that on the one hand, tax, as you have heard many times, is a Cost to the company, but at the same time also a contribution to the countries in which we operate. So we have to, of course, find the right balance there.
We, of course, will also see if we can qualify for new tax incentive programs. There's a lot of, let's say, news about potential government support, etcetera, etcetera. That's all still very unclear what is going to happen. There would only be speculation now to say something about that. But guaranteed that we will look into all possibilities to see whether or not we can qualify for Yes, new tax incentives or other forms of support.
But based on what we know today, this is the most likely trend Going forward. Working capital, I talked about it. You saw the swing 82 to 42 days. Our targets will be to keep that in a more narrow range, 55 to 75 days. With the current revenue projection in 2020 5, one day working capital is around €9,000,000 So you can imagine 10 days is €90,000,000 So from a cash flow point of view, depending on working capital performance, That will swing a little bit from year to year.
So it's better to maybe to look over a 2 year average or a 3 year average. But with the profitability that we talked about, Yes. We should be able to deliver a pretty healthy cash flow. And you can do the math yourself because all the ingredients that you need have been Presented here in this slide. CapEx, €60,000,000 to €100,000,000 Again, in the years where we have the capacity, it will be at manufacturing capacity will be more than in other years.
But as Benjamin already showed in his presentation, we have to expand some labs. There will be new equipment needed in the labs. We are growing, so the level of investments will be Higher. As we can see it now than what we've seen in the recent past, which was €60,000,000 per year on average. And last but not least, the capital allocation strategy.
Something else showed up on my screen, sorry for that. The capital allocation strategy, so priority 1, invest in growth. There's a huge amount of opportunity ahead of us. We want to capture that. We invest in R and D.
We support it with CapEx. And of course, we scan the market for M and A opportunities, and we'll act if they're there. And if they're not there, of course not. Maintain a strong balance sheet. We target to keep €600,000,000 gradually, up from €300,000,000 was, let's say, the company communicated cash balance before, but that one was, let's say, set At a time when ASM was much, much smaller.
Sustainable dividend payments is, of course, important to us. We don't want to switch on and off every year. Sustainable payments and certainly last but not least, excess cash will be returned to shareholders one way or the other as you've seen and I've shown examples of that. These are my key takeaways. I'm not going to repeat them.
You've seen them many times. Thank you very much for being here again. And I would like now to hand Back the floor to Benjamin, who will do a very brief wrap up and then we will move into Q and A. Thank you, Paul.
So we are now to the end of all the 5 presentations that we have prepared. I hope you will agree with me that this is a lot of information. And we just want to maybe have The opportunity to share with you as much as we can, maybe it's a little bit too much. And we do expect that in the Next Q and A session, we are going to get bombarded. We have a lot of questions, but I think together with my colleagues here, we are prepared to do that.
I just want to do a very short wrap up, which is basically the same five messages that I have conveyed at the beginning. 1, of course, is that digitalization trends is going to drive semiconductors. It's going to drive WFE. It's going to be good for ASMI as a company because That is our business. 2nd, ALD, we are the market leaders, and we are fast expanding in EPi.
2 enabling technologies that are absolutely required for future advances in semiconductors, and They will grow faster than the overall WFE market. Our strengths are in our technology innovation. My colleagues have explained to you what we do in terms of technology and innovation. In terms of customer engagements, we believe in the Early customer engagements. And last but not least, I think my colleague Kishan has shown to you how we differentiate in terms of products, Especially the explanation on the way that we got into the IP market was by technology and product differentiation.
In terms of strategic objectives, we want to maintain our leading share in ALD, in logic and foundry and expand in memory. We want to expand our share in Epi. We want to grow our spares and service business. And at the same time, we want to accelerate Our progress and focus is sustainability. And last but not least, just to follow from where Paul has ended, we to grow to about €2,800,000,000 to €3,400,000,000 by 2025, representing 16% to 21% CAGR, and we want to achieve a 26% to 31% operating margin.
Those are the 5 key messages. We hope you take them and we review. That is all that we have for today. And I'm going to hand you over to Victor, who's going to prep us for the Q and A. Thank you very much.
Thank you, Benjamin, and thank you, Paul and Hisham, for the great presentations. So we will start the Q and A session in a moment with all of the presenters. We will take questions from the audience here in Amsterdam and also from the conference call. So for the persons on the webcast who have registered for the conference call and have not yet dialed in, now is the moment to do so, please. We will prepare the stage for the Q and A, so please bear with us for a moment.
Okay. We are now ready for the Q and A session. I would like to ask everyone to please limit yourself to one question at a time To provide everyone with an opportunity to ask a question. And for our guests here in the room, please mention your name and company name Before asking your question, operator, can you please provide Q and A instructions for the conference call? Okay.
Thank you, operator. We will now take the first question from the room here in Amsterdam.
Maybe we move from the left to the right. I think Nigel has a question.
My name is Nigel van Pattenen with Kempen
and Co.
Thanks for the great presentation, guys. I have one maybe topic that wasn't covered in-depth today, maybe the war for talent. You guys said, I forget the exact numbers, But a lot of advanced degrees in your R and D department. How do you compete with some of your more formidable competitors for maybe that same talent? That will be your question.
So I think the question was how do we compete with some of our more formidable, maybe larger Well, maybe larger peers. And I think the way that we have been competing is, of course, we do have competition, we do respect our competitors. And what we have always been trying to do is to make sure that we are able to provide Something that is better for our customers. And a lot of that is in the innovation engine of the company. We pride ourselves With a lot of innovation, and my colleagues have kind of give you a flavor of the innovation that we do.
And at the same time, trying to Really help our customers resolve what we call high value problems that they have, especially Problems that are related to manufacturing for advanced notes that goes out a couple of years. So this is where early customer engagement comes in and is very I think Ivo has mentioned that it's not just the partners that we have that are the institutes and the research or universities. We look at actually our customers as a very key partner for us because a lot of the solutions that we have, we have to develop with them. And at the end of the day, we have to provide our customers with something that is a better performing solution At a cost of ownership, that is better for them. That's how we have been able to compete over the last couple of years.
Okay. We will take the next question from the conference call. Operator, can we have the next question, please?
Yes. Robert Sanders at Deutsche Bank. Yes. Just a question on Gates all around. I was just wondering if you derisked your estimates for potential delay in the adoption of gay all around from 2024
I believe the question that came from Rob Sandes. And I think the question was, do we see a delay in the adoption of get all around from 2024 2024 to 2025, is that correct, Rob? I believe that was a question. Yes, I believe that was a question. My our take is that I think that the transition from FinFET to gate all around, There's a lot of work that is being done.
You have the 3 major players at different stages, but all are aggressively Trying to develop the process or the technology that is required for gain all around. In terms of when they actually will go into a high volume manufacturing, I think that's still left to be seen. Our point of View is that we are heavily engaged with all three of them. Some of the stuff that they are doing, we have already seen initial successes. For example, with a logicfoundry customer that we have already been qualified as PTOL For the gate all around channel structure or channel application, some of them are still in the process of finalizing their Development.
So I think it's a little bit of too much of a speculation for us if we were to say whether it's delayed or not. But we do think that in terms of timing, It should happen during the course of the planning period or the 2021 to 2025 A pivot that we have just laid out in front of you.
Okay. Let's take the next two questions from the room here.
Yes. Mike Roch, Degroof Petercam. I have a question for Mr. Verhaagen. There will be extra investments in the next 2 years to expand the Singapore factory.
So what it comes down to is the 2nd floor will be made ready for production. If you reach your 2025 sales targets, is that entire extra capacity absorbed? Or can you even grow beyond 2025 with that investment?
Thanks for the question. It's a good question. What we believe is that with the current, let's The expansion, so the utilization of the 2nd floor, which was still not utilized in the new building in Singapore, We should be able to deliver on this plan as we have presented it. At the same time, for growth, Assume growth beyond 2025, most likely, as we see it now, additional capacity will be needed. And that, of course, might trigger some investments already early on because there is a throughput time, of course, we've been starting and ultimately Having a facility ready for production.
But for this plan, if Avidanacrea and now the 2nd floor utilization Singapore, which will be ready early 'twenty three, we believe we have enough capacity in place to at least deliver on this plan.
Yes. Hello. So this is Stephane Oey from ODDO BHF and ABN AMRO. I have a question on the services business because you made a statement that you were transitioning from a transaction To outcome based model, I'm not sure I understand the way it changes, the way you're going to get paid. If you think you can get more and what kind of profitability you can extract from this services Business new model.
Thank you.
I will maybe answer and then Hesheng can elaborate on that. So basically, what we are trying to do, and we actually only started this from last year, Is that instead of just doing a break fix and when the customer need the parts, they call us or when the customer needs service, they call us. I think what we are trying to do is to provide a much more higher value added service to the customers. For example, using the same example that Hisham has mentioned, we go in and put ourselves Into, let's say, longer term arrangement or contract with the customer at a certain, let's say, Commitment in terms of reducing the costs or the prices of the cost of consumables. And one of the ways that we do that is One of the I mean, the customer could be instead of trying to clean certain parts that gets Quoted all gets dirty.
They have been doing what we call the divine new parts. And through the technology that we can introduce, especially with Cleaning technology, ways that we can prolong the life of these parts, we actually help them to reduce the costs. At the end of the day, it's about how much value we can bring to the customers, either helping them to have higher productivity Or reducing the cost of, let's say, operations for them. So that is one way. And usually, this would require That we enter into a longer term, I would say, service contract or contractual agreement with them.
Maybe Hisham can head on to that. Yes.
On the same wavelength, I mean, if you look into the spares, I mean, what we're trying to do is provide value to the customer. So there are many ways to provide value. First thing, like we sign up for specs, which are actually more aggressive than the customer can achieve himself. For example, we have to keep the uptime of the tool, to keep the tool up. I mean, we have our engineers who are very well trained that understand The hardware very, very, very well.
They can easily, much faster with to really fix the tool. So that we can provide lower cost to the customer. Example, for spares, before a customer can just have his own inventory for Spares, right now, he doesn't have to worry about that. We take care of the whole spares inventory. We can buy because we Cover all our customer.
We can have much higher volume to buy the spares, so we have more leverage. We can actually get them cheaper than the customer can get themselves. So that we can really that can also value that we can provide from that point of view. 3rd, but also on the uptime, we can keep the tool up Better than anybody else because we know the tool very, very well. I mean, the other thing is really in this what we have seen in ALD, for example.
ALD is all about new material. We have so many new material. And the material not only gets deposited on the wafer, but they get deposits everywhere On this on the process, Kit. So we know the material more than anybody else. So we know how to remove those materials.
We know how to take that part And clean it better than anybody else. Some customers, after you run like 10,000 wafer, they take the part and throw it out because they don't know how to recycle it. We know the chemistry. We know what's there. We have very good chemistry folks in our team, so we can really recycle that part and put it back to the customer.
That's really lower cost for them. So that's at the end of the day, it's value. It's lower cost to the customer. It's better uptime for the 2.
Okay. And let's take the next question from the conference call. Operator?
Sandeep Deshpande, Agent Morgen. Yes. Hi. Thanks, Colette. Thanks for letting me on.
My question is on the epi market. I mean, you have the new tool shipping now, and you have announced In this tool as well, how do you see I mean, do you see yourself being able to create with this In epi and gate all around, the kind of market share position, at least in that segment, say, with gate all around or any other layer That you were able to create with ALD.
Thank you, Sandeep. And I I'm going to try because it was a little bit hard to listen. But I think your question is directed at how do we see our Being able to, for example, win or create more market share for ourselves In Epi, in the get all around inflection?
That's correct.
Yes. I think I will take a stab at it and perhaps Hesham again can give you more insight. As we have explained, we have a lot of engagements with all the logic Foundry customers in terms of developments for gate all around, and that includes not just ALD, but also in Epi. And the thing that is I think that has been shown about epi for gate all Vaao is that you need to use more epi as far as gate all around is concerned. And I think Hisham had this great example where you turn in 90 degrees And the channel structure is actually going to be epi defined, whereas in the past, it was etch and litho defined.
So that's going to drive that. But I believe that there are also other layers, in fact, more passes or what we call That will require Epi and perhaps Hesham can share with you a little bit more. Yes.
To add on Epi on gate for gate tolerant application, I think what I've shown in my presentation that we really look we have some differentiation in Epi technology for this application. We started into this business, in the advanced CMOS business in 2017. Since 2017, we learned a lot. Our first engagement was on some with the one customer on some application. And then Right now, we have learned a lot.
We have provided many new technology, many new innovation. And this Gate around transition is an area for us, which is transition. It's a disruptive transition. It's an area for us where we should position ourselves from the start. So for this time, for the gate around, we actually position ourselves in the gate around with all 3 leading customer from the start, From the get go.
So we are involved very much with them on this technology. We I cannot mention Market share from that point of view, but what I can tell you, and you have seen in the presentation today that we have differentiation We in our tool, in our technology, in our productivity, and I think that will speak for itself.
Thank you.
Okay. For the next two questions, we move back to the room here.
Yes, sure.
Hi, thank you. Marcus Link, ING. My question is actually about how did you get from the The assumptions on the market growth there is the €100,000,000,000 WFE market. To your addressable markets on ALD and epi, Do you know how many layers there will for any of those products? Is that the discussion that you have?
How good is that feasibility? A little bit a feel about looking on the hood how you get from the top to that addressable market per product.
Marc, thanks a lot for this question. It's very complicated. So I'm good to let my colleague, Han, try to explain to you how we do the modeling. Han?
Yes. Yes, Mark. Yes. So we have indeed a detailed model Using the, let's say, the knowledge we have about how a chip is being built, the different layers, We make certain assumptions about wafer starts per customer, per technology node, by time. So that by itself will also lead to a certain assessment of the wafer fab equipment market.
So part of the whole model is what will the wafer fab equipment market Bottom up, eventually be. So the numbers that we showed today are based on a range of WFE in 2020 $5,000,000,000 between $90,000,000,000 $110,000,000,000 So the midpoint is $100,000,000 But of course, our interest is An assessment of the ALD and epi markets, which we shared. So it's using our knowledge that we have gathered over years Of working in the chip industry, specifically in ALD and epi. And So we're basically also scaling the assessment on a certain number of WFE by 2025, Right. So if investments by that time would be higher, then the ALD and Epi market would be higher.
That's also why we give a range For ALD and Epi by 2025.
Yes. We get back to you, Marc, for a follow-up. But first, let's move to the next question.
Maybe I can add a little bit. Maybe I can add a little bit to what Harald just said. Within the office of the CTO, we have a number of technologies who really try to understand what is the process flow of these customers. I showed you one example in gate all around with small Green bullets and the larger green bullets. So we really try to understand what the specifications are way out, and that's Our departments collaborate to give their input to, yes, as best as possible forecast the sum.
At the back of the room maybe? It's Peter Olufsen of Kepler Cheuvreux.
I have a question on the competitive dynamics. If you look at the bigger players in the deposition market, They have a broader offering than what you have. At least one of those bigger players has been talking about integrated solutions where they bundle different Technologies and it can then process the wafer all in vacuum. To what extent do you see that as Really something differentiating and that's something that could be a disadvantage for you? Or do you think that with Subsequent notes, your client will continue to go for best of pizza solutions.
Sure. I will maybe try to answer that question and have my colleagues add on to that. I think when we talk about integrated processes, for us, our focus, of course, is on deposition. And that doesn't mean that we only do deposition blindly. I think my colleagues have shown that, for example, the more advanced So ALD and Epi deposition process, surface clean is very important.
So we have developed that technology on our own, and it's already being clustered together On our AOD and Epitos and being delivered to our customers. Now one thing that perhaps is also Characteristic of the industry is that you find that the different process steps to be integrated, that is really the core know how of The semiconductor manufacturers, the chip manufacturers. And will they really want to buy something that is Bundle integrated, actually, the preference for them actually is to perhaps make sure that they buy the best of each type of equipment And they do the process integration themselves. I think maybe Hisham can also give you some idea of what he sees in his discussion with our customers.
Yes. I think I showed today in my presentation that some examples of integration. I think what's important is that we are a deposition company, And we play in the deposition market. And everything that can help our deposition process, we use it. For example, when I mentioned ALD becomes very, very thin, 5 action.
You have to have the surface clean. So we have developed a reactor, which is ALD based, atomcladetching based reactor to clean that surface. And the technology, we have both technology. We have radical based technology, which is a soft Way to clean the surface. We also even have a plasma based technology.
We have the know how. Since we're a plasma deposition company, We have that plasma knowledge to apply it to remove material. I mean, we are okay, we are plasma. We also have ALD knowledge. ALD It's atomic level deposition.
And what's most important in ALD is chemistry. And we are leaders in the chemistry. So instead of removing instead of Putting something, you want to remove something, it's very simple for us. So that's how we can use ALV. But we use that ALV for Deposition purposes only.
So that's really the things that we have done. And right now, even for Epi, like the premium reactors, We have hundreds of those in production right now in the industries. So we have the knowledge for that, not only technology, but also HVM manufacturing. Same thing, other thing that we cannot see here, but many of these processes that you see, these huge gap fill, 100 to 1, even 200 to 1 Gas field capability. We actually it's you put your wafer in and get it out.
But during that ALD process, There are many things. Like there is like what we call like in situ integration. So we integrate all the things He's actually in 1 in our reactor. I cannot say much about it in this audience, but those are the kind of things that we do. So integration, yes, we can do in situ integration.
We can do ex situ integration. It's very normal for us. Anything we need to do to allow us to be leaders in the position, we go after and do it.
Okay. Operator, can we have the next two questions from our conference call participants?
Krish Sankar at Cowen and Company. Yes, hi. Thanks for taking my questions. I had a question on the clarification. The core question is on 3E DAP.
You spoke about it being introduced in 2026. So do you think EUV for DRAM is A temporary solution. And when you move to 3 d DRAM, what are the steps that will be really critical in 3 d DRAM? And then on the clarification, Hitchen, you spoke about ALE. Do you have an AMD ALE integrate tool already today With customers or are you developing
it? I think think the question came from Shankar from Cowen. And I got the first part of the question, which is, It's our view that 3 d DRAM or we mentioned that 3 d DRAM is probably a 2025, 2026 thing. Is that going to be replacing or is that going to be a bad for EUV? And what are the steps could ALD play in 3 d DRAM?
I think I got that part of the question, but not the second part. But let's try to answer the first part first. And maybe this is something that, Ivo, you would like to take?
Yes, that's good. So we think this transition, as I explained earlier, turning things on its side, it's getting more Fine by thin films and defined by lithography, it's very similar to what happened in 3 d NAND, where we went from planar to 3 d NAND. Here we go from planar to 3 d DRAM.
So I think,
Yes. Whether that will affect the EUV steps, you should ask that tomorrow at the ASML conference, I think. But certainly, There will be more dimensions in the device defined by the layer thickness and how we do the deposition and directly by lithography.
Thanks, Ivo. And just a clarification was, do you have a Insta created ALD and ALD product already today?
Well, I explained in the selective ALD effort we have, There are some steps which you might call ALE, and indeed they are integrated, yes. So it's a little bit what Christian already said. Whenever we need a technology, whether it's surface clean, whether it's At thermal clay, etching to remove a certain component of the surface, we develop this as long as it supports our deposition process. That's our strategy.
Thank you. Thank you, Christ.
Operator, can we have the
next question? Dominik Olszewski And Morgan Stanley. Hi. I appreciate we are still some time away from Kate's all around introduction. Do you have a sense of what portion of the $1,200,000,000 of advanced market growth But you flagged around the condition that ASMI has already won or is in pole position and strong position to win?
Dominik, really sorry. I didn't catch the question. Anybody caught the question?
I think the question was on the $1,200,000,000 increase in 2025 for ALD and Epi for advanced logic. How much have we won already of that? Or are we in a good position? Is was that the question?
Thank you.
Yes. Thank you. I think you should take that part.
Yes. Yes. So of course, as both Ivo and Hisham and myself explained, we are deeply involved with all key players in that space, working on that transition from FinFET to gate all around. We have won Certain applications, in fact, we have shared a few months ago for 1 player. But it is, of course, too early to say and be more specific on specific wins in that space.
But it's We are well positioned to develop with the customers that technology. So it is definitely an area where we expect To basically play a key role in and have a key share by 2025.
So we can say we are in good shape. We're in good shape.
Okay. Thank you, Dom. For the next two questions, we will move back to the room here.
Valentin, on the second row? Sorry to make you move, Valentin.
It's Bastian Rochmans from Edfelufen. Maybe on segmentation of Your revenue target in 2025 and the growth, if I understand correctly from the presentations, It seems to be more logic driven as your percentage in revenue is already more logic. And then After or in 2025, there's a big inflection with the 3 d DRAM. So maybe in the future, there are more opportunities for memory. Do you see like a difference In the coming years for your segmentation between the 2?
Sure. Our view is that You will see both growth in logicfoundry and also memory. But LogicFoundry being a larger part of our business today, we still do believe that LogicFoundry will still be the bigger part of our business In 2025. Now we hope that as we go on over the next couple of years that we will increase our share in memory And maybe that difference between logic and foundry and memory gets smaller. But we do believe that By 2025, we still would have a larger portion of our revenue in Logic and Foundry.
Now having said that, I think your question was, Is 3 d DRAM going to impact? 2025, we don't think so because at Probably at best, it's just maybe the beginning of 3 d DRAM. As Ivo has mentioned, it's probably a 25, 26 event. So it will take some time. But having said that, we also need to look at how much investments are going into 3 d DRAM And how much or how fast they're going to accelerate their transition because a lot of investments right now It's still being put into a planner, a DRAM.
So we have to see how that plays out.
Martijn Bergenio, the idea. You want to increase your cash to from €300,000,000 to €600,000,000 Should we assume a gradual step up of Some €60,000,000 per annum. Just also to calculate the excess cash. And actually, why would you? Because you still have over €1,000,000,000 In ASMPT.
And linked to that, what's your current thoughts about having your interest in ASMPT? And linked to that, what kind of shareholder engagement attitude do you have towards ASMPT since if I look at its performance, it's clearly lagging
its peers? This is maybe, Paul, do you want to take this?
Yes. No, that's fine. Maybe first on the cash. Indeed, as I mentioned, we want to bring it up from €300,000,000 gradually to €600,000,000 The key reason is financial flexibility, Like it was in the past as well. We are a knowledge intensive company.
It will be good years, and there will be less good years. Of course, the moment and we want to pay sustainable dividend as well. So the moment when that happens, we don't want to immediately trigger a major restructuring effort In our R and D organization because these are key people that we need to retain to, of course, continue The innovation that we talked about today. On the other hand, if opportunities come by, I also talked about M and A, we don't know. It will help to support and to act quickly on opportunities as well.
So the key word is financial flexibility. And actually, I can say the same about ASMPT. The important part here is there is a historic element, and we didn't buy that stake just to have that stake. It's something from the past. ASM has reduced the stake now to 25%.
We see this as a financial investment. It will also provide financial flexibility. You're right. And at the right moment in time, of course, we might act That we don't know. We have no plan for that.
We are pleased with the current holding. It's a financial investment for us. From the figures I've shown, I think it did well in the past. You saw the cash return to shareholders. A big chunk of that again, we'll review it regularly.
And for now, we're pleased with the stake. And as I said, don't forget, there is a historic element to it. Then in terms of performance, yes, we have limited influence. We have 25% stake. We have, of course, Board seats.
So we, of course, participate in that actively. We see what's going on? We supervise what's going on. We help support with the strategy. We clearly Nice that the share price performance is lagging, and the company is taking actions to improve that.
And I think the recent performance Actually, it was significantly better than what you have seen in maybe in the years before that. But unfortunately, the share price didn't move, but that's not in our hands. We can only try to manage the performance of the company.
All right. Operator, can we have the next two questions from the conference call? Operator?
It's Tammy Kueh at Berenberg.
Hi. Thank you for taking my questions. So I have a question regarding the TAM. Do you have any idea about the pace of the TAM expansion, I. E, is foundry logic TAM expansion will come ahead of The memory TAM expansion.
And have you stress tested any WFE scenario versus your TAM expansion, I. E, If the cycle ever become lower than we are today, will your TAM expansion story be delayed as well?
Tammy, thank you very much. I just want to make sure I got your question. I think your question was on the Do we see a difference in terms of TAM expansion between logicfoundry and memory? And if there is going to be, let's say, adverse Movements in either one of them, is it going to impact, for example, our market share significantly? Should that happen?
Yes, exactly. Thank you.
Okay. Thank you very much. I think, Hann, this is another one for you.
Yes. So The term we shared that the growth in the ALD market is for the majority in logicfoundry, but also in memory. So the pace in both is quite gradual. We are in both areas deeply involved with customers. And also in memory, there is some solid development for us.
If there is some CSA delay in 1, so in 1 of the 2, We have a stronger share, a stronger position in logicfoundry. So it could In one instance, if memory all of a sudden theoretically would move a lot faster, that we could see some, Let's say some setback, but again, our recent share in development in or potential development In memory, it's also quite healthy. So pace of both is Quite the same. There is if we put it out in time, we see both markets developing You know quite well.
Han, maybe just to add on that. I think you had one chart that shows that The increase in market size for ALD, about SEK1.2 billion of that Was going to be attributed to LogicFoundry and about 0.7 for memory. So based on that, the LogicFoundry piece is Still a larger piece of glass. Yes, yes, yes. Yes.
Tammy, I hope that answers your question.
Okay. Thank you, Tammy. Can we have the next question, please, operator?
Adam Angelov with Bank of America.
Hi, there. It's actually Didier Serramal For Bank of America, can you hear me, gentlemen?
Yes.
Yes. Brilliant. Two quick questions. My first question is with regards to the design win visibility you have. You mentioned, Obviously, your strong design win momentum in ARD and AP.
Can you just give us a sense of your visibility, EG, how long do you think you will be designing for sure in the recipe of your customers? Is it maybe 3 years, 5 years? Is it longer? And then secondly, very briefly, a real question for Isham. I love the analogy of ALD is the new CVD, Does that mean that you will be able to address a substantially greater portion of the deposition market By let's say 2,030, because right now you address 50% of the acquisition market.
So maybe just give us a sense of where you could be there?
I believe I think the second question was how much do we believe in the let's say, ALD is the new CBD growth or potential. And will ALD maybe perhaps even overtake CBD by 2,030, I think that's the second part of the question. And the first part of the question was how much visibility do we have In terms of designing, I think that was the question. So maybe I will try to take a stab at the first question and then Hesham can talk about the CBD ALD, let's say, question. It really depends.
There's a wide range of, let's say, visibility that we have Because it depends not only on customer, it also depends on the kind of work that we are doing for them. It could be that even For some of the, let's say, more nearer term work that sometimes it's just maybe 9 to 12 months and they want to pull in Something that we have been doing for them or doing with them into high volume manufacturing because they have an issue that they need to fix. It could also be that it's an application that perhaps they know that they will need, but it's 3 to 4 years out. So it's kind of difficult for us to quantify that. But I think what we can say is that we are working with the customers, Both in logic and foundry and in memory on a wide spectrum of, let's say, such applications.
And if you look at Every quarter when we announce our results, there is one item on the balance sheet that tells you about eval tools or evaluation tools, and that's something that has been growing for some time. It's basically because we are doing a lot Evaluations and development with the customers, but that's a good sign because that once they are accepted is Actually an indicator of future revenue. So maybe Hisham can explain or talk to you more about the ALD CBD.
Okay. So when we talked that ALD is a new CBD, what we're trying to say here is that we see that the ALD has the same growth path as the CBD 20 years ago. In that time, in CBD, we have many deposition techniques, many new films. Right now in ALD, we see the same thing. You can deposit ALD in many ways, and we have many new materials coming with ALD.
But I think the key here is that The technology is moving from 2 d to 3 d. So if you're in the position company, you're in good shape. So CBD is going to grow a lot because it's going to 3 d. ALD is going to grow because it's going to go to 3 d. So both of them are going to grow.
So both CVD and ALD are going to grow. But what we are trying to say here is ALD is going to grow much higher pace than CVD.
Got it. Thank you.
Okay. Thank you, Djei. Let's move back to the room for the next two
Yes. Hi. Ruben de Roos from KBC Securities. I had a bit more of a higher level question, touching back upon what you said very early on in the presentation, talking about government Initiatives driving the wafer fab equipment market growth. A few weeks ago, we heard Ms.
Stephane de Leijnd talk about European Ship Act being one of the objectives of supporting development of European mega fabs. So I was curious whether you could provide a bit of your thoughts on, yes, what that would mean for ASMI. And also in terms of the supply chain, bringing those perhaps closer to home, yes, what would be the additional opportunity for you? Thank you.
Sure. I think this is something that is still being played out. There's a lot of discussions by various governments. And as I said earlier in my slide, that could actually be additional investments because governments want to secure, For example, the semiconductor supply chain, so they might be building fabs. But I think we are hearing, of course, Of discussions or initiatives in the U.
S, in Europe, Japan, Korea, even India, But I don't really think that there's anything that is fully decided or concrete yet. Of course, we need to wait until What the U. S, for example, the chipset and so on, what's that going to do? How is that going to help, let's say, companies in terms Investments in semiconductor manufacturing and similarly the EU, I think they are having a lot of discussions at the EU level. But have we seen any kind of firm statement yet?
I think you read a lot of articles, but There's nothing that we can confirm yet. So we as a company, of course, whenever fabs are built, especially fabs At the leading edge or advanced nodes is going to be a significant opportunity for us. We try to track and follow as closely and as much as possible. But at this moment, we are like you. We only know what we read from the papers.
Yes. Hello. This is Stephane Roy again from WHF and ABN AMRO. I know it's a CMG about 2025, but you have also given an update on your orders guidance for the quarter. So Could you maybe tell us what it changes for your outlook for Q4?
Because you just said that Q4 would be at least at the level of Q3. Should we expect that Q4 will be significantly above Q3 for Q4? And what can you say about 2022? Thank you.
Sure. So we our guidance for Q3 has been, I think between 400,000,000 to 4.30,000,000 for revenue, between 510,000,000 to 5.30,000,000 for bookings. And we have already seen NRC continuing the I mean, the quarter is not over yet, but we have really seen very strong order intake. And that's why we kind of revised our guidance for bookings for Q3 that this would be above 600,000,000. And for the revenue part of it, we stick to our guidance, which is between $400,000,000 to $430,000,000 We do not see any change there.
As far as Q4 is concerned, of course, it still is heavily dependent on, I would say, some of the Eye chain lingering supply chain issues that we have. And as we go into October, I think we will have a better view. But we do believe, Especially if you look at the kind of backlog that we have, that Q4, if we do not have, I would say, crazy supply chain issues, Our Q4 revenue should be higher than Q3. So there's no change in that. Now as far as 2022 is concerned, Of course, with the backlog that is building, you see kind of a lag between bookings and revenue.
So of course, Some of the bookings are already going to be delivered in 2022. It's still a little bit out, So Village visibility for the full year is too difficult. But I think the beginning part of at least 2022 because of the backlog, I think we are in a good position. And until we are much more clear about whether there's going to be Any more supply chain issues, we would refrain from giving any guidance about that.
Okay. Let's now go to Marc Hesselink for his promised follow-up.
Thanks. I think it was also discussed a little bit in the discussion afterward. But to really get the idea on what the How do you know how many layers you will have in this 2025? Is that a discussion you have with clients? Is that your own interpretation?
How good is your visibility on the number of ALD layers, the number of epi layers in 2025?
I can take that question. I think we have if I can answer this question, we have good visibility with our customer. So I wish we can have like a magic formula to give you, okay, from one generation to the other, the number of player increases. It's really different from one customer to the other. The reason it's really the implementation of technology from one customer to the other is very different, especially in ALD.
ALD, if you have different integration scheme, then you can reduce the number of ALD layer. So really ALD layer depends on Patterning scheme that you use depends on whether some customers are more aggressive in using new material in ALD, others are not. So we have extremely good visibility with our customer, customer by customer of their road map for on the ALD side, On the Epi side. And based on that, that's how the number that was presented by our CFO and our revenue is really based on Customer by customer, bottom down understanding of their technology roadmap and the integration.
Operator, we take one more question from the conference call.
Adithya, Mete Coe, Credit Suisse.
Yes. Good afternoon, gents. So Two questions, please. Firstly, just looking at the selective ALD that Niwa talked about in the session earlier, You said that it wasn't included in the forecast. So I just wondered if you could give us your thoughts around how we should think about this opportunity From Selective ALD, just any building blocks around how we could think about this opportunity would be very helpful.
Secondly, My question is for Benjamin. So I just wondered if you could clarify how big your revenue from domestic Chinese customers is currently? And how do you see the risk of ALD shipments to China being blocked as gate all around increasingly uses ALD in the channel It's increasingly determined by ALD steps and EUV litho steps. And then I have a follow-up if I'm allowed to ask it. Thank you.
Sure. Adi, I think the first question was on the selective ALD and the opportunity. So I'll perhaps let Ivo answer that first, and then I will do the part on the domestic Chinese.
Okay. Yes, as I told you in selective AOD, you have different ways of implementing that. One of the ways toposelective silicon nitride specifically is Something which is today already in production. We see potentially several new or additional applications of selective Toposelective ALD, but many of these still need to be qualified and developed so that Revenue will not materialize before 2024, 2025. If I look to surface selective ALD, that's A little bit more complex.
We need a little bit more technologies coming together. That's mainly logicfoundry driven. What we see there is 2 nanometer adoption. So it depends how fast our customers will introduce the 2 nanometer technology You know how fast we will see that developing. But the major part of the revenue will be beyond 2025.
And
maybe on the situation in China, especially with the domestic China, Chinese customers and maybe a lack of access to advanced ALD or Epi tools. I think the situation is still very much So one that is in flux in the sense that the restrictions have Not gotten worse, but at the same time, they have not gotten better. So there was a time when the restrictions were hitting us like Our new restrictions or new regulations from the U. S. Government was coming once every 2 months or so.
The last, I would say, half year or so Has been quite normal. We don't see really new stuff coming up. But at the same time, it's not gotten any better. Our view from ASM Is that we follow all the regulations of the U. S.
Government. So if our products are impacted Through the U. S. Legislation or export control, we will follow that 100%, maybe even 101%. But the fortunate thing for us is the majority of our products actually today, they are not required to go The export license requirement, we have we do have a small minority of products that need an export license.
And for those, We are following the same procedure. In terms of China, I think you look at China and last year was a great year for us. First time that revenue was more than 10% of our total equipment revenue. And this year, we are seeing a continued growth. It's actually a great market for us.
The big thing or the good thing about us for China is we are less dependent
Thanks a lot. It's Nigel again at Kempen. Maybe just tagging on to some of the questions answered earlier. How do you think about cyclicality in the industry now? I mean, clearly, there is a strong model underlying your assumptions.
To what extent is that a straight line? And also maybe to complement that question rather than asking another one, To what extent are there significant milestones in the next couple of years where you see maybe your revenue increasing disproportionately?
Thank you.
Paul, maybe I do part of it, you do part of it? Yes. Yes. I think cyclicality, we know it, for some of us who have been in the industry a long time, these days, cyclicality is so much less Compared to 15, 20 years ago when you had the boom bust cycles, does that mean that you're not going to see quarterly or Even yearly variations, you will. But I think by and large, we look at where we are today in 2021, and we look at the growth in the semiconductors, And we look at our customers having made multiyear investment announcements.
It seems like the demand is very strong And that's why they have the confidence to do that kind of investments. So I think over the next couple of years, it's going to continue to grow In terms of, let's say, fab or WFE, whether you have 1 year that is slightly lower and Then the previous year also, I think that's possible. But overall, the trend is it is going to grow. And in terms of milestones for our plan, maybe Paul can share that with you. Sure.
Stones for our plan, and maybe Paul can share that with you.
Yes. I think the major we've talked a lot about it. The major milestone Just to get all around high volume manufacturing starts. I mean, that's a major inflection for us. You've heard the benefits for ALD for Epi.
So depending on the timing, when that happens, if it all comes in one go, customer by customer, it will be a major boom. Maybe it goes in steps, but that inflection This is an important milestone for us.
We are running out of time. So over to you, Benjamin, for any final remarks.
No, I really want to express our appreciation for everybody here in the room and also who have taken the time To listen to our webcast, being a first time for us, we hope we have done a reasonable job In trying to give everybody more information and so that you have a better understanding of ASMI, our, Let's say opportunities, our strengths and our strategy. And we certainly look forward to continuing to update everybody as we go along, investor calls, Some fireside chats that we get involved with. We hope to continue doing that. Once again, Thank you very much today for taking the time. I know it's been a long session, but we hope it has been a satisfactory one for you.
Thank you very much.
Thank you. Operator, can you conclude the call?
Thank you.
That does conclude the call.
Are you going to say that or do I have to say that? We have prepared something which is on the 2nd floor. Please join us. Please join us, yes. We are also the 5 of us are quite happy that this is done.
Trust me.