How to drive open innovation in front end research the ASML model Tony Chao

1. How to drive open innovation in front end research the ASML model Tony Chao Managing Director ASML Center of Excellence (ACE) 22 August 2008

2. Agenda • ASML’s global success based on solid fundamentals • ASML’s key success factors – open innovation • ASML Center of Excellence in Linkou, Taiwan

3. ASML: a short profile • World’s leading manufacturer of lithography systems for the semiconductor industry with 65% market share • A global company founded in 1984 and headquartered in the Netherlands • Located in 16 countries around the world • Worldwide research, production and support centers • Net sales in 2007 of €3.8B (USD5.7B) and more then 6500 employees • Unique business model to enable innovation

4. Q1 08 Revenue €919M (US1.4B) Korea 32% Taiwan 15% China 14% Europe 7% USA 24% Japan 7% Other 1% ASML – leading semiconductorlithography provider with 65% worldwide market sharewith ~70% total revenue from Asia today 24% sales to US 7% sales to Europe 69% sales to ASIA ASML employees in US:1,744 ASML employees in Europe:3,705 ASML employees in Asia:1,316 Over 60 sales and service offices located worldwide in 16 countries Source: ASML Q1 2008

5. From silicon to smart electronics $8,6 BSemiconductor Litho market $1,550 BElectronic Applications $256 BSemiconductor Chips Source: VLSI, SIA, Gartner

6. Lithography is the key to smaller and more powerful chips The Semiconductor Manufacturing Process A variety of complementary suppliers provide the other tools, materials and packaging equipment necessary to make ICs

7. Gate 1 µm CD+∆CD Spacing > OV + ∆CD CD+∆CD Lithography determines chip and feature size Pitch + OV OV: Overlay CD: Critical dimension ∆CD: CD variation Source: ICE

8. 300 km 300 km Corresponds to 4 cm Positional accuracy +/- 0.4 cm Enlarging a 300 mm wafer 1 million times X1 million 300 mm Minimum feature size 40 nm Positional accuracy +/- 4 nm Note: 1nm = 1/1,000,000 mm Source: ASML

9. Two TWINSCANTM scanner stages operate at a speed of 550 mm/s with an accuracy of 2 nanometer, which compares to two 747 jumbo jets flying at 1000 km/hr the exact same route to an accuracy of 0.001 millimeter ASML system deliverables Reticle stage The reticle stage accelerates from 0 to 100 km/hour in 0.7 seconds, leaving every sports car behind. Wafer stages

10. The chip industry is growingASML is not dependent on chip revenue but on chip unit salesChips become more complexChip processing becomes more challengingTechnology leadership brings increased market share Multiple opportunities for growth

11. 1500 1400 1300 1200 1100 1000 900 800 700 600 500 400 300 200 100 0 Smaller and cheaper chips means growthexample: NAND Flash memory Solid state disk-based laptops FLASH units history FLASH units forecast FLASH camcorders 80 - 150 GB Hybrid HDD 3G smart-phones MP3 player 60 - 80 GB Digital cameras FLASH IC Market (millions of units) 2 -16 GB USB stick 10 - 20 GB Several new NAND-based applications on the horizon 8 GB 4 GB 1 GB ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 Year Source: ASML MCC, WSTS, Gartner

12. Chip shrink will continue (based on the average of multiple customers’ input) 200 DRAM Logic 100 80 NAND Flash AT:1200 60 Resolution, "Shrink" (nm) XT:1400 50 XT:1700i 40 XT:1900i ASML products 30 XT:1950i EUV 20 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 Year of production start* *Process development 1.5 ~ 2 years in advance (updated 12/07)

13. Agenda • ASML’s global success based on solid fundamentals • ASML’s key success factors – open innovation • ASML Center of Excellence in Linkou, Taiwan

14. Open innovation: a definition Open innovation is a way of working which creates an international, cross-company environment that enables out-of-the-box thinking to create a better product or service than any company can achieve separately.

15. The key success factors • Factor 1: Investments in Research and Development • Factor 2: Very large network of suppliers and research institutes • Factor 3: Unique company culture which stimulates innovation • Factor 4: Relentless focus on customers

16. 500 4000 R&D investmentM€Total sales M€ 450 3500 400 3000 350 2500 300 2000 250 1500 200 1000 150 500 0 0 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 Source: ASML Factors of Success: 1. Research & Development • R&D budget >500M€ per year (13 – 15% of revenue) • Second largest, non-government R&D investor in the Netherlands • >1800 R&D employees (27% of total) plus 900 contractors and specialists

17. Factors of Success: 2. Integrated knowledge network Reticle Stage Reticle Handler Illumination Optics Projection Optics User Interface Wafer Stage (Expose) Measurement Systems Wafer Stage (Measure) Wafer Handler

18. TI Samsung TSMC Semiconductor producers Customer Govern- ment funding Total solution partners Reticles Resist Tracks Metrology R&D partner OEM partner Zeiss SMT Agilent Cymer > 700 others Philips Natlab AppTech TNO Technical Universities IMEC Albany nanotech Factors of Success: 2. Integrated knowledge network Source: ASML

19. 200 PhD/Dr. R&D: >1,800 payroll + >900 contracted Integrated knowledge network: another 20,000 jobs More than 600 suppliers compete to offer the best technology first Factors of Success: 2. Integrated knowledge networkASML works with best research and development partners:network of high tech companies and suppliers boosts competences Worldwide 6.765 employees (Q1) Source: ASML

20. Factors of Success: 3. Company culture that stimulates innovation • “Flat” organisation without much hiërarchy • Consensus based with the following characteristics: • Preparation time is longer, but overall project time is shorter with less errors • Work in multidisciplinary teams which is opportunity for learning and mutual understanding Research Develop Feasibility Validation Innovation Forward

21. Factors of Success: 4. Relentless focus on customers • Extensive worldwide customer support network: Taiwan, China, Singapore, Japan, Korea, Malaysia, France, Germany, Ireland, Italy, the UK and the USA • Training facilities in Asia, Europe and the USA • Applications support centers to help customers optimize systems in their production process • Advanced customer joint development projects • New investment of ASML Center of Excellence (ACE) in Taiwan is an long term expansion of worldwide support

22. Factors of Success: 4. Relentless focus on customers For the sixth consecutive year, ASML is in the top three of VLSI’s “10 Best” list, the highest rating of any lithography exposure system supplier Source : VLSI Research, June 2008

23. 18 of top 20 wafer fabs choose ASML Top 20 CapEx budgets for 2007 Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Company Samsung Intel Hynix Micron Technology Toshiba TSMC Nanya Powerchip Infineon ProMOS AMD SanDisk Elpida Sony UMC STMicroelectronics Fujitsu IBM Chartered Texas Instruments Capex (M$) 8330 4900 4600 3600 2805 2600 2475 2150 1875 1875 1700 1375 1350 1085 1000 960 850 750 750 700 ASML Customer 90% is ASML customer Source: IC Insights 2008, McClean report, 2008 edition

24. Agenda • ASML’s global success based on solid fundamentals • ASML’s key success factors • ASML Center of Excellence in Linkou, Taiwan

25. 25 • Vision An innovative, forward-looking ASML organization providing worldwide resources in new technology development, process methodology, and talent incubation • Worldwide Talent • More systematic customer feedback • ASML • HQ • Korea • China • ASML center of excellence • (ACE) • Worldwide customers • Taiwan • Singapore • Japan • Better design and delivery of product and services • Worldwide • Suppliers • Worldwide ASML customers ACE vision and key objectives • Objectives • Provide closer proximity support to worldwide customers • Increase customer intimacy and satisfaction • Attract and retain worldwide talent • Provide access to global sourcing of modules, components, and services • Provide potential nucleus for future ASML growth initiatives

26. Organization ASML Center of Excellence (ACE) Global Support Center Equipment Performance & Maintenance Engineering Training Sourcing Development & Engineering Applications Services Logistics Repair & Refurbishment • Remote diagnostic and technical support • Competency development and management • Equipment performance management • Best know methods • TWINSCAN training • Training program development • Learning management • Supply chain engineering • Procurement • Supply chain expansion • Sourcing support • Application development • Application optimization services • New applications support and development • Business operations infrastructure • Supply chain logistics • Parts quality • Factory parts repair • System refurbishment Facilities Management Facility operational by Q4 2008 • Facility operations • EHS compliance • ISO certification • General affairs • Community relations

27. About the future

28. Key specifications Wavelength  13.5 nmNumerical Aperture 0.25Exposure field 26 x 33 mm2Magnification 4x reductionResolution ≤ 32 nmOverlay ≤ 4nm The future of lithography: EUV Reticle stage and handling for 6” reticles 13.5 nm laser or plasma produced lightsource Reflective optics in vacuum chamber Twinscan 300 mm waferstage

29. Two alpha tools in IMEC & Nanotech Reticle stage and handling for 6” reticles Average height Dutchman 13.5 nm laser or plasma produced lightsource Reflective optics in vacuum chamber Twinscan 300 mm waferstage

30. Commitment