Title: Watch CNBC's full interview with ASML CEO Christophe Fouquet
Author: CNBC International Live

Transcript:
the market is very much looking at 2025
you have guided for another record year
in terms of Revenue what's going to
drive that in your view well I think if
we look at
2025 I think we have said that AI has
created a major shift on the market so
AI is going to continue to drive the
market in
2025 and indeed we have guided for
another record year next year we have
given a certain range because we still
have some uncertainty on our well AI is
going to to do but AI is the driver at
this point of time and the backlog
you've also quoted is 36 billion EUR
approximately um again where is that
above your expectations and where is
that backlog uh sitting at this point
well I think the backlog is uh now
supporting 2025 pretty nicely so we have
seen some of our customer really
committed for their capacity next year
which is a very good news uh to remind
you we still see a bit of shift in the
market and two different Camp the AI
customer are doing very well I think
they are bullish we even see some upside
opportunity there uh but some other
customer that are still trying to catch
up this AI opportunity they not doing as
well so that's why we're all a bit still
careful and providing a range for next
year yes so you mentioned that range and
the potential uncertainty what are those
specific un uncertainty as you see them
well the first one is how strong AI will
continue to go right uh is the market
still very hot everyone investing as
we've seen it in
2024 if this is happening we see some
positive
opportunity the rest is the rest of the
market so there I think in 2024 this has
not been great uh in 2025 there's still
a lot of uncertainty and if we see our
customer hesitating if we see the market
the overall industry hesitating I think
then we have a bit of a risk there and
so as we talk about certainty I think it
we have to mention the Deep seek story
over the past few days this Chinese
company has come out and talked about
training these large language models on
what people see as uh less Advanced
semiconductors and with less Resource as
well many have question whether this
will mean less capex spending from the
big players uh as well in terms of on AI
infrastructure and that will trickle
down the supply chain as well what's
your read well I'm not a model expert so
I'm not going to comment on the the
model itself but uh what we said in our
Capital Market day is that AI is
creating a shift it's creating a huge
opportunity if you look at it moving
forward so what we expect in the next
few months is that a lot of people will
want to grab this opportunity we want to
play in this business so we are going to
see a lot of new player and that's maybe
what we saw this week the other thing we
said is that for AI to really come to
life in the next few years not only with
you know the E scaler but with all of us
in our for PC we need AI to address two
things cost and energy consumption we
believe that anything that will go in
the direction of lowering cost of AI is
in fact most probably a good news
because this will allow the application
to go to many many more devices so we
expect I would say a lot of activity
around AI I think a lot of news and this
could be confusing at some point for
people who watch this industry but
that's a great opportunity so I think
everyone should expect that a lot of
things happen in the next few months so
so in terms of the sort of capex story
more specifically you you you don't
expect massive changes in in the capex
outlet particularly from hyperscalers
and also from uh some of the the large
semiconductor players like tsmc as well
well I think uh for the a SC the capex
is today spend for investment they are
investing heavily in R&D I think they
want to continue to do that I think you
have to ask them if their mind is
changing on that when it comes to uh the
people who makes chips uh again a lower
cost of AIS could mean more application
more application means more demand and
over time we see that as an opportunity
for more chips demand but just over the
past three days have you had any calls
from customers asking questions about
what's happened over the over with deep
seek and and what impact that will have
on them well I think there's a lot of
discussion around it because of course
what we see is that people maybe can
come and innovate so this create a lot
of burs we didn't get any call from
customer you know we we always look at
the long term when it comes to this
industry and uh we try to not get too
excited by you know the the short-term
variation can we just talk about China a
bit uh Christoff a very very important
market for you as well uh just given uh
the new Administration in the US and the
continued geopolitical tensions between
the US and China are you at this point
expecting any further restrictions in
terms of EXP exports of your equipment
to China particularly uh on the the duv
uh side of the equation well I think
what we expect is that this discussion
uh will continue I think that the
tension between China and the US with
state of unit a few times is most really
there to stay that we expect uh in which
form uh this may come we don't know to
be honest I think there's been a major
change in the US
Administration um we still have to see
uh our
how they will address uh this challenge
so I don't think we expect anything I
think today we don't know uh but we are
very much engage of course with the
different government so to make sure
that you know we can be part of that
discussion when this discussion will
happen and what one of the interesting
developments we've seen over the past
year and a half is uh Chinese
manufacturer's ability to to manufacture
slightly more advanced chips now at 7
nanometers using uh sort of Legacy uh
equipment as well what kind of demand
are you expecting uh from China this
year they are a large part of your your
business on a on a revenue basis well I
think you know China has been very
strong in 2023 2024 that created a lot
of question on the exact size of China
this was driven mostly by the fact that
we had a huge backlog in China at the
end of 2022 because if you remember 22
was a year we couldn't feed the market
uh with all the tool then the market
needed this has kind of been absorbed uh
last year so we go back to more normal
ratio so China you know part of our
business ratio will become closer to
what we used to see before
2023 that demand will continue because
China as you know is still focusing on
developing what we call Mainstream
semiconductor the demand is still very
strong and today China is the main place
for for this type of semiconductor so
are you expecting grow in China to to to
slow down uh as as you as it normalizes
we expect the ratio of our business in
China to be lower than what it has been
for sure in 23 24 do you think uh China
will be able to continue to sort of
bring down uh or or advance in its chip
production even with some of the the the
Legacy machines so we've seen seven
nanom chips do you think they'll be able
to progress to five and three well you
know at some point of time uh physics is
physics and I think the the world uh you
know the the customer in the western
world has demonstrated that without euv
going Beyond 5 nanometer in high volume
manufacturing is extremely difficult so
you can always of course make a few
chips uh but to do that at the right
cost uh at the right volume is very very
difficult and I think if you look at
some of the story of other key player in
the US in Taiwan of course they have
demonstrated that and and geographically
as well ch stuff when you look across
the world we see the us and we saw the
recent announcement with the Stargate
project this 500 billion infrastructure
project in AI uh of course a large part
of that is going to have to revolve
around the the chips that are going to
power some of that as well um where are
the markets where you are expecting you
know this year and certainly into next
year as well the biggest demand well you
know we we've been talking in November
about AI everywhere moving forward this
is why we're so bullish about ai ai
technology provide opportunities for
many many application and what you see
right now is a bit of a race to make
sure that you know the the major company
are all capable to have access to uh the
training computer they need to develop
those application so I think this will
happen everywhere we have seen major
company but also countries really
investing to get access to the
technology then there will be a phase
where people use those superc computer
to develop their product and those
products will mostly come up in the next
two 3 years and there I think they will
fuel again the demand from all the
people who Mak chips and today that's
still of course a lot Taiwan I think the
US is picking up uh a bit Europe but
this would come from from our say our
usual customers and the Stargate project
are you going to feel any immediate
impact from that in terms of pick up in
orders or
well I I I think you know those order
are being uh integrated over time so of
course the the order for the chip
themselves will go most to company like
Nvidia or one of their competitor this
drive demand at our customer either tsmc
Intel Samsung which as a result Drive
demand for us but also there you know we
work with those partner on a on a
long-term view so we're trying to plan
the capacity for the industry years
ahead uh so yes this if you want the
pipeline this is good news the more
demand the better the the the the
opportunity for us moving forward
Kristof can I just pick on on some of
this sort of Technology going forward
particularly around euv at this point I
I noticed in the report that euv sales
declined slightly in in 2024 uh should
that be a concern for the market well
it's it's directly related to the ramp
profile of our client so if you look at
2024 for example we didn't see a major
ramp in logic we see that starting in
2025 with two nanometer so in many way
we we follow the cycle of the market and
some year we be stronger than other so
yes you will have
cycle but if you look at how much UV is
being used for a certain amount of chips
being made that number is increasing
right so you will see the cycle maybe on
the market demand or the capacity ramp
but when it comes to the use of UV uh as
we mentioned in November we see that
continuing to increase moving forward
and there and there's been a lot of
focus on on high bandwidth memory and
memory more broadly this year and and
the hope that there may be a Revival of
that market is that something you're
anticipating as well well memory has
been stronger in 24 we still expect
memory to be strong in 25 we see of
course a major drive with a high BWI
memory because you have to feed
basically those super computer with the
right memory so that Dynamic is still
positive as we speak Kristoff we see
challenges trying to come up with an
alternative to what asml does you have
for example canon in Japan and others as
well do you at any point see any viable
Alternatives that can challenge your
business in which you hold an extremely
strong position well you know I always
gave the story when we chose to do euv
this was uh more than 20 years ago and
we had a choice between different things
Nano imprints ebam these are the usual
technology being mentioned we picked UV
not because we knew how to do it but
because we thought this was the only
technology that could scale over time in
term of performance and cost and we
spent as you know many many years to
make it work so this was a real
challenge but today we are very happy we
pick this technology because you know
this industry is about cost it's about
performance and it's not enough to have
a tool today you need to be able to have
a tool in 20 years from now and today
euv allow us to really look at the next
you know 10 15 20 years with the belief
that we can continue to improve our
product so we are very happy with our
choice and the rest I think is very
difficult