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ASML Holding's CEO Hosts Customer Co-Investment Program Conference Call (Transcript)

Stocks in this article: ASML

We see multiple benefits of this program to our customers, our shareholders, and our employees, as well as the electronics consumer at large by providing advanced lithography solutions sooner that will reduce our customer’s cost of IC manufacturing. Our customers will see an acceleration of delivery of lithography products through the middle of the next decade that will allow cost reductions, a few continued scaling, and larger wafer size migration. It’s important to point out that the products that result from this customer co-investment will be available without any restriction to every semiconductor manufacturer worldwide.

As for the existing shareholders, all money is paid for every new share created in this program, which will be a minimum of 15% and a maximum of 25% of issued shares, will be repaid by way of a combination of a capital repayment and a reverse stock split such there is no earnings per share or EPS dilution as the result of this program.

In addition, this program helps to spread the risks of the significant new development activities. However, not only does the additional funding and customer commitment de-risk the R&D program, the customer co-investment helps ASML in maintaining its consistent policy of return of capital, while at the same time, expanding the long-term growth of the business through increased sales and operating profit opportunities as we expect new commercial opportunities as a result of these additional R&D expenditures.

As both the next generation EUV development and 450 millimeter wafer size, two developments will take place at the same time. We will be creating some challenges in resourcing these programs. We currently see a need to add about 25% more engineering manpower or approximately 1,000 to 1,200 additional engineers both flexed and fixed giving our current and future employees plenty of new opportunities and challenges.

Read the rest of this transcript for free on seekingalpha.com

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