Thank you for standing by. Welcome to ASML's 2020 First Quarter Financial Results Conference call on April 15, 2020. Throughout today’s introduction all participants will be in a listen-only mode. After ASML's introduction, there will be an opportunity to ask questions. I would now like to open the question-and-answer queue [Operator instructions]. I would now like to turn the conference call over to Skip Miller. Please go ahead, sir.

Thank you, operator. Welcome everyone. This is Skip Miller, Vice President of Investor Relations at ASML. Joining me today on the call is ASML's CEO, Peter Wennink; and our CFO, Roger Dassen. The subject of today's call is ASML's 2020 first quarter results. The length of this call will be 60 minutes and questions will be taken in the order they are received. This call is also being broadcasting live over the Internet at asml.com. A transcript of management's opening remarks and a replay of the call will be available on our Web site shortly following the conclusion of this call. Before we begin, I'd like to caution listeners that comments made by management during this conference call will include forward-looking statements within the meaning of the federal securities laws. These forward-looking statements involve material risks and uncertainties. For a discussion of risk factors, I encourage you to review the Safe Harbor statement contained in today's press release and presentations found on our Web site at asml.com, and in ASML's report on Form 20-F and other documents as filed with the Securities and Exchange Commission. With that, I'd like to turn the call over to Peter Wennink for a brief introduction.

Thank you, Skip. Welcome, everyone. I thank you for joining us for our Q1 2020 results conference call. I hope all of you and your families are healthy and safe. And before we start our normal quarterly results review, I would like to first talk about the topic on everybody's mind, which is the COVID-19 pandemic and the situation. While these are unprecedented and challenging times, and the COVID-19 pandemic affects all of us. Our primary goal at ASML continues to be to ensure as best we can that our colleagues and their families stay safe. Our second goal is to ensure that we continue to serve our customers and to secure the delivery of our product roadmap, including the continuity of our supply. We have been taking and continue to take precautionary measures to limit the risks. Most of our non-manufacturing employees now work from home and travel is restricted. In China, our colleagues are returning to the office but also there we remain vigilant. In our own facilities, we have implemented restricted access to our manufacturing facilities worldwide, and in particular our clean rooms to ensure our colleagues can work safely. We’ve put in place measures to help ensure isolation between shifts. We've also implemented additional safety and cleaning protocols to minimize contamination risks. We work closely with our customers, suppliers, and partners to share information and determine best practices. We see a lot of creativity, resilience, and dedication at ASML, and the industry in overall as we work to manage through this crisis. To-date, we have experienced limited impact on ASML's manufacturing capability, although there have been additional challenges with absenteeism, transportation, and support logistics that we have had to manage. Some of the quarantine requirements have had an impact on our efficiency, while travel restrictions have…

Thank you, Peter. Welcome everyone. I hope you're all safe and healthy. And I will first review the first quarter financial results and then make some comments on the second quarter of 2020. I would also provide more detail around measures we are taking with regards to cash management. Net sales came in at €2.4 billion below our original guidance of €3.1 billion to €3.3 billion, which was primarily related to COVID-19 impact. Net system sales of €1.6 billion was again heavily weighted toward Logic at 73% with the remaining 27% from Memory, clearly showing the continued strength of Logic business. We actually shipped four EUV systems in Q1, but were only able to recognize revenue on two systems, which I will explain in more detail later. Installed base management sales for the quarter came in at €857 million. This was around €100 million lower than guided due to lack of access to machine time as well as a delay in acceptance of upgrades. We expect these upgrades to translate to revenue in Q2. Let me provide a bit more detail on the items that occurred in the quarter that resulted in a system revenue shift of around €700 million, consisting of a Deep UV related revenue shift over €200 million and EUV related revenue shift of over €500 million, primarily related to COVID-19 impact. First, we experienced some delays in Deep UV shipments to customers in Wuhan, China, as well as other customers due to operational and travel restrictions regarding COVID-19. We are working with our customers to prepare for these shipments in the next quarters. Second, we experienced some issues in our supply chain as a result of a temporary disruption from EUV component suppliers that encountered operational restrictions due to COVID-19 regulations. These supply chain issues have…

Thank you. Roger. As Roger highlighted, our order intake is strong and we have not yet seen any significant push outs or cancellations this year. Many investments of our customers are strategic and support their technology roadmaps, lifeline for our leading edge customers. These strategic investments are therefore primarily related to leading edge equipment, such as EUV and high end immersion scanners, requiring longer lead times and qualification schedules. This was also confirmed recently by leading edge customers that have also told us that they see an unabated demand for leading edge devices at least throughout this year. Keep in mind the lead time and the qualification of lithography systems are the longest in the fab and customers will not want to jeopardize any adjustment to their technology and capacity ramps that will negatively affect their ability to keep serving the leading edge customers. As the current situation is very fluid, we’re meeting with our customers on a more frequent basis to understand any changes they may be seeing regarding demand outlook. In general, most customers are still indicating that they are continuing relatively normal fab operations so far. Logic customers are currently continuing to ramp their seven and five nanometer nodes in support of end market application like 5G, AI and high performance compute. There are also some positive sign being reported on data center demand, as well as demand from notebook and communication infrastructure, driven by the significant increase in work from home and virtual learning activities. These applications drive the demand for both Logic and Memory. However, it can also be expected that consumer related electronics, for example, smartphones may be under stress, in addition to the potential negative impact the COVID-19 crisis will have on GDP. We expect install base business to continue to scale with…

Thank you, Peter and Roger. The operator will instruct you momentarily on the protocol for the Q&A session. Beforehand, I would like to ask that you kindly limit yourself to one question with one short follow-up if necessary. This will allow us to get as many callers as possible. Operator, could we have your final instructions and then the first question please.

Thank you. At this time, we will begin the question-and-answer session [Operator Instructions]. The first question comes from Mr. Sandeep Deshpande. Please state your company name followed by your question.

Sandeep Deshpande, JP Morgan. Thanks for having me on the call. I have -- my first question to you, Peter, is that you've seen very great order strength in the first quarter. Is this order strength essentially, you know what, if you remember in January, you’ve said that you’re hoping the memory orders would come in through the year. It was these memory orders coming in which caused this order strength or was it something else like, customers were worried that they couldn’t -- they may not get tools from you, and so they expedited their orders and brought them forward from later in the year, which is what caused this order strength? And my second question, which is a follow -- not a follow-up, but with regard to your 40% gross margin indication in EUV for the year is, I mean, given the social distancing, et cetera, associated which you may be implementing even in manufacturing, will that not have an impact on the cycle times and thus the gross margin? Thank you.

Let me answer this first question. I think the order strength, and I think Roger said it, about two thirds of the order intake was Logic and one third was memory. So, I don't think it is an acceleration of it. It is something that we would -- that we expected, also driven by, I think what we observed as a continued increase in utilization in the memory space of our machines, so that actually fits in quite nicely. I don't think there were pull-ins either. These orders are there to support our outlook for 2021, and this was planned. So basically, you could say it's more a confirmation of the technology roadmap that our customers have in front of them, so in that sense good. On the gross margin indication of 40%, the cycle time impact, we've been able to manage. I mentioned that we did see an increase in absenteeism in the factories because of the guidelines that people followed by the government, the health authorities saying if you have symptoms like some of the COVID-19 symptoms, you should stay at home, which people did even when they had a cold which actually meant that we did have indeed some shortages in the factory, but we've been able to re-order shift patterns. And also, what we're seeing is that people that are eligible to work in the factory, for instance, from R&D environment, they are now also working in the factory to make sure that we can do the output. So, I think we can manage, and I don't think it will have an impact on the 40% gross margin indication that we gave you.

The next question is from Mr. David Mulholland. Please state your company name followed by your question.

It’s David from UBS. Just following up on one of the comments that Roger made in terms of how you're looking to I guess, in some respect, support your supplier base, can you just give us a little bit more detail about what you're considering there? And are there any particular suppliers that you might be worried about where a particular other part of their business might be, I guess, heavily autos exposed that we’ve seen a very sudden downturn. Just a little more color on how you're planning to support your supplier base.

Let me answer that. I think we are managing our suppliers almost on a day-to-day basis and most of what we see in the supply chain currently are delays in delivery of modules, and as a result of those, let's say lockdown situations or shelter-in-place situation where we need to find different solutions leading to delay of parts. However, as you pointed out, when this situation lasts longer, we also could see that some of our suppliers that are also exposed to other industries that they're currently are not in in the perhaps somewhat of a enviable position where we are. They might be looking for help from our side, and that help would largely be requests for prepayments. Now, we don't see that yet, but I would expect if this lasts longer that it would come, and they want some prepayments on orders when our demand profile stays as strong as it is. Having said that, you have to look at our integral supply chain, which includes our customers. I mean, what is true for our supplier is also true for us. So, we are of course also in discussion with our customers to say, listen, we need to look at the continuity of the supply chain from an integral point of view. So, if we need to prepay suppliers, I need pre-payments from our customers. So, it is almost, you could say, it's a back-to-back link in terms of potential financing requests. And I'm pretty sure that some of them will come, especially in those areas where, as you pointed out, some of our suppliers are losing significant business in other industries. So, this is what we are -- we don't see it yet. And I mean I've been around long enough and also in some other crisis going back to the Internet bubble burst, and then the financial crisis and 9/11 that will in the supply chain, some potential issues will pop up, it will just happen. But again, we need to look at this from an integral point of view, from an integral supply chain point of view and our customers play a significant role there also, which by the way we are in discussion with them and I think these are good discussions. So I'm pretty positive that we can help those areas in our supply chain, which could become critical going forward.

And just one follow up on the R&D side of the business. As you said as many as can are working from home, I presume you haven't closed down R&D facilities, because I guess a lot of the work you do still needs to be I guess physical tests, particularly in the case of High-NA and work that's going on there.

Yes, I think, if you really talk about the physical tests, I mean, that is done in clean rooms and we build modules, so that's an agreement which we talked about this. I mean, we have very strict regulations there now almost for, I would say, almost for two months. And they are effective on the R&D side itself. It is when we look at the latest productivity numbers, which we follow on a day-to-day basis, I think 90% of our R&D engineers, they work from home. But with the current possibilities that we have in creating virtual teams, they’re working offsite, I can say that I'm pleasantly surprised with the productivity numbers that I see whether it's the number of design signups, whether it's the number of software builds, the software compilations, our IT infrastructure is holding up very well, which we prepared by the way. So that's going well. And when we look at those productivity numbers, they actually are very similar to the productivity numbers that we saw before starting to work at home, which I think is very good, which is also attributed to the flexibility of our people. You see also, in the log on numbers that people make much longer hours. I mean, they log on the same time but they log off much later. So, there's a lot of working in the evening, and we check very regularly with our managers across the company on how we are doing and there's a lot of virtual teamwork going on, even leading to virtual drinks on Friday afternoon where they all sit together in front of the camera with a glass of beer.

The next question is from Mr. Joe Quatrochi. Please state your company name followed by a question.

Yes, thanks. It's Wells Fargo. I was hoping you could kind of give us some more color on the strong memory bookings that you've reported. Can you help us understand, are you starting to see demand largely driven by NAND or DRAM? And then to the extent that you can help us understand what was EUV in terms of the memory bookings, and was that also a driver this quarter?

Yes, EUV, the last question is, it's really Logic. So, very few EUV orders that will come. Sorry, very few EUV orders for Memory and that will come, so it is predominantly Logic. And the strong memory bookings are and I actually said it earlier, they are also the result of what at least we’re seeing in terms of utilization of our systems in the memory space both in DRAM and in NAND, the trend -- cautious trend that we saw at the end of Q4 of last year has continued in terms of increased utilization throughout Q1 until very recently until last week. So, the trends are upward, so that explains why memory bookings are going up also, because customers see this also.

And then you talked a lot about, what ASML is doing in terms of services to meet your customers need. Is there any kind of updated thoughts you can give us on, I think you talked about €3.4 billion for revenue for 2020 for services. And should we think about, like the first quarter or March quarter being kind of the low point for services this year?

Yes, I think we mentioned why Q1 was about 100 million below our guidance, and we gave you the reason for that. It is the lack of machine time that we had on particular upgrades that we were doing, and as a result of that that will that will fall into Q2. Other than that in the install base business still look good. So the number that we talked about in the past is a number that has still relevance with all the caveats that we talk about in the entire call around the current uncertainty. And the 3.4 billion is the number that we talked about on the Q4 call, so that's a good recollection of what we mentioned there.

The next question is from Mr. C. J Muse. Please state your company name followed by your question.

Yes, Evercore ISI. Good afternoon and good morning. Thank you for taking the question. I guess Peter, first question just to follow up on the memory side of things. It looks like ex-EUV, your orders were up like 80% Q-on-Q and so curious on that front. Is that more NAND versus DRAM? And then on the last call, you talked about optionality to stronger DRAM recovery into the second half of the year. I'm curious what your thoughts are as it relates to that potential reality?

Yes, I think [Technical Difficulty], the memory intake is driven by DRAM and then with the caveat that we do also see some relocation out of DRAM into NAND. But I would say if you would have to answer and say what's the emphasis, the emphasis is on DRAM.

My follow-up, can you speak directly to how you're thinking about cycle time improvements on EUV. And as part of that, what will it take to get the ability for you to have double-digit shipments on a quarterly basis, which it looks like you need to do to hit that 35 unit forecast? And I guess as part of that, should we be thinking about the potential for customers to expedite again in the coming quarters and therefore perhaps maybe revenue on one or two tools gets delayed into '21? Thank you.

Well, on the last point, I mean, its April 15 as I don't know what's going to happen in December. So that's not what our customers tell us today. Our customers tell us today that they want the 35 systems. On the cycle time improvement and our ability to ship double-digit numbers, we are planning and without any supply chain or capacity disruptions because of COVID, we will ship double digit numbers in this quarter, in Q2 of 2020. So we have that capability. And when you look at this and let's say customers have a number of 36 units that they want, it's not 9, 9, 9, 9, every quarter, that's not how it works. And it works whether the customers need it, because it's their rep schedule that is going to determine when we ship. For instance in Q1, we only shipped four systems. But what we plan to be for the COVID-19 impact 6 in Q1, not that we couldn't make more. It just, it also has to do with when the customers need the machines. So we will do double-digit in this quarter and actually it means that we have the capability, which is of course very important to get to the 35 number. I think the cycle time reductions was, and was one earlier comment, you have some absenteeism in the factory. We're dealing with that. I think we'll get to the cycle time reductions as planned and we will have the capability to do 35 systems this year.

And our next question is from Mr. Krish Sankar. Please state your company name followed by your question.

It’s Krish from Cowen. Thanks for taking my question, I have two of them. First one, Peter, to the extent you can answer this. What do you think you would ship in terms of DUV unit this year in absolute unit numbers or relative to 2019?

Relative to 2019, you will see that's just a general comment. I’m not going to guide you on a specific DPV number. But as we said before and I’ve said for some time now that when you look at EUV, EUV is cannibalizing you could say multiple patterning layers. So there will be a reduction of DPV systems in 2020, and that will be more than compensated by the sales number in EUV, and that's logical that's what we've always said. EUV is there to cannibalize multiple pattern or layers. Now how much that in the end will be is going to be somewhat now lower. It’s not going to be significant, but that is the trend. It's a trend going forward. As you can also see from our 2025 capital markets day information where you also see that in 2025 the DPV numbers are lower than what they used to be and that's because EUV is going to replace those.

And then as my follow up, if I look at your -- for the last two quarters, if I look at your memory shipments and compare, it's very similar to the sales into China. So A, is most of your memory shipment in the last two quarters coming mainly from China and B, how do you expect that to trend over the next couple of quarters?

Well, it's as you know and is that we actually mentioned that, the shipments in Q1 were impacted by the COVID-19 crisis in China, especially Wuhan where you know as I said, memory customer there. Well, if you can imagine, we didn't ship anything to that customer. The other customer took a few tools according to plan but the majority of course of everything that we ship was outside China.

The next question comes from Mr. Pierre Ferragu. Please state your company name followed by your question.

It’s Pierre at New Street. So Peter and Roger from your prepared remarks, I understand like the near-term of COVID-19 plays out clearly not so bad for you and your value chain, and you’re managing very well logistics disruption and or like the supply side of the story. Now of course, my next concern is what happens next and I hear you that we have very little visibility so it's very, it’s impossible to make like a near-term forecast. But my question would be like what is question. So let's assume that in the second half of the year, given for PCs, servers and smartphones are down 20%, 25% year-on-year and if that happens at the high level. How do you see your clients impacted and how do you see that’s impacting ASML? And I have two specific like question marks in mind. One is in that kind of scenario would your clients push out EUV orders, or do you think they need to take orders anyway, because they need to secure supply of the technology? And then the second one I had in mind was what about the very steep decline or risk in DUV, because I imagine that if volumes are not where they were expected when roll out plans were made six months ago, I would expect a lot of reuse of the DUV tools as node migrations continue?

Let me first answer your question. How has it impact ASML on a certain scenario? Basically, I couldn't answer that. I mean I could be a bit mean if I say that's your work, not mine, yes. So, but what I would answer is that, if you don't know where you're going, you'd better be flexible, and this is what we're organizing. We're organizing for flexibility in the supply chain. As you know, 80% or 80% plus is in their supply chain. That means that we've been like with like with every crisis we hardly ever saw cancellations. We saw push outs. So it basically means you would be looking at in the supply chain financing of working capital, which is also particularly important in the context of the answer I gave to a question earlier what do you want to do in the supply chain, which I think is an integral supply chain problem, which includes our customers. I mean, they cannot do without supply in the end either. So it's working capital issue, which I think is manageable. I think from a flexibility point of view, we have a lot of cost flexibility here with our variable cost on labor, and it was a lot of variable cost. It is like variable income to our people, which of course when the business goes down that'll go down also. I don't think there will be a lot of push outs for EUV orders. What our customers are telling us now and when I listened well to them, they're not blind. They see that the impact on GDP will be recessionary and that will very likely have an impact on consumer spending and on the consumer electronics. What they do notice is that the customers of our customers are not…

The next question is from Mr. Mehdi Hosseini. Please state your company name followed by your question.

Peter, going back to the topic of where we go into, I'm still confused. You talked about improving the supply chain. You talked about sequential revenue growth that could exceed 50%, but you're not providing a guide not even for Q2. What is it out there and we're halfway through April. What is it out there that makes you uncomfortable given what you see in the next few months? I'm not asking about the second half, I'm asking about just the Q2 and I have a follow-up.

If I fully understand your question, Mehdi, because we always say, well, we have very long lead times in the supply chain, which is true for the critical supplies like, for instance, ZEISS. We have, in the end if you take to also thousands of suppliers, which some of them have lead times which are a lot shorter. We've had delays in EUV in Q1 of a couple of weeks, because one particular supplier couldn't provide rings, that your flow rings, which is not a most advanced part that we need, but if you don't have it, you don't have it. So, this is where our concern comes from. It's the tiered supply chain, which is not always that visible to us. We have tiered suppliers coming from Malaysia, Mexico, you name it and they are supplying to our 2 and Tier 1 suppliers. And if that supply basically stops then even apart that has a relatively short lead time, doesn't arrive on time and we get a delay. I think ultimately we get those parts, it just a delay. And if we tell you and give you a number and we get a significant delay in some of those short lead time parts, we cannot ship tools and that can be significant. You may remember that a 3500C now is €130 million tool, that's a big number. And I don't want to give you a range from X billion to Y billion, that doesn't make sense. So, this is where it comes from. And I think it is really based on the experience that we've had in Q1 where we were able to manage it but we did see some delays. And since we cannot judge what the impact will be of these governmental orders in different parts of the world, we cannot assess what that risk is but it's there because we've seen it. We've been able to manage it with a lot of creativity. It doesn't give me any assurance or certainty that we will be able to manage it going forward always. So this is where it comes from.

And if you could give us an update on Hermes multi-beam shipment, I think the beta tool was supposed to be shipped to the customer in Q1 and what’s the update there?

Yes, I think it was ready. It was in packing and then the shelter in place in the Bay Area, because that's where it comes from, it comes from San Jose, just stopped the tool. So it was a, the trucks were pulling up and they had to return.

But do you think the trucks are going to resume their destination in Q2, or they’re going to be more [Multiple Speakers]?

I mean, what we are doing now, we are assessing whether we and this particular tool falls under the definition of a critical business. And actually, we're looking into what the possibilities are to actually ship the tool. And I would love to ship the tool ASAP, because it's ready and the customer wants it, so let's see how things go.

The next question is from Mr. Mitch Steves. Please state your company name followed by your question.

This is Mitch Steves from RBC. I just had a question on the services business I’m trying to understand it a little better. So I'm guessing you guys are able to do some of this remotely. But can you maybe walk us through how much revenue you guys think will come back, how much revenue you may have lost in Q1 and then how it would work if like we get out of the shelter in place, let’s say earlier. Would that be a lot of pent up demand where you see a snap up, or whether the services business kind of actually get hit and some of the revenues are lost?

I think the revenue, Mitch that we lost in Q1 as we mentioned is around 100 million and it's primarily related to certain upgrades. I would say it's not even related to COVID-19, in particular, it was related to the fact that we didn't get sufficient machine time from customers. So that revenue we missed for Q1 will get us in Q2. There's hardly any doubt in my mind we will get that in Q2. And other than that I don't think, as far as we can see right now, we don't see any anomalies so at this stage, still on track for the 3.4 billion in IBM revenue that we talked about in the previous quarter. As we also mentioned in the video and as Peter talked about in the introduction, we are deploying new technologies. So of course, we're less able than we were in the past to have people go from Veldhoven from Wilton, et cetera and go to the customer locations for obvious reasons before the travel restriction and what have you. But by using artificial, by using virtual reality, augmented reality type technology, we are able to support the huge local support teams that we have with very specialized knowledge that we have at our different hubs. And in that way, so far, we think we're still well positioned to keep up providing the service and the upgrade work that we need to do.

One additional comment is more anecdotal that’s actually we were preparing, as a kind of a prototype project somewhere deep in the organization, how can we support remotely through augmented reality and HoloLens’s. Basically, people setting 6,000 kilometers from the actual service action and then we have now over the shoulder 3D augmented reality support that service engineers with six months of training that would normally have to do this after two to three year training were now operating and doing service actions with the support of experts that were sitting 6,000 kilometers away. And basically providing them with 3D images, how they should do the service actions and it works. So, this is also something that amazes also. And actually, our service levels, we keep up all our service levels up in terms of maintenance and servicing of our tools, which I think is a really good achievement.

The next question is from Mr. Achal Sultania. Please state your company name followed by your question.

Hi, good morning, it's Credit Suisse. Peter, maybe one question from my side on the services you mentioned that so far you tried to do a lot of remote working and local team assisting to get maintenance and upgrades done. How should we think about the EUV installation part? Do you have teams in place at customer fabs or customer locations to make sure that EUV installation can still go ahead as per plan at least during Q2, if the restrictions are not lifted?

Yes, that's a very good question. Luckily, we have three main sites where we do EUV and that's also the sites where we have most of our service engineers. I mean, we have to think of thousands plus. So there is lot of experience there. And this is exactly where this remote support comes in. We do send people across the globe but that's where we have hundreds of people, hundreds of people traveling. It's now probably not more than 50, 60. They have to go into two weeks of quarantine. They have to get special travel visa. So we need to plan and prepare this much more rigorously than we did in the past. And this is where we do set experts. But I think a lot of these service actions that are not of the really top notch expert level are being trained and being done with the kind of novel remote support technologies that I just mentioned. So it's a combination of both, and I think we'll be able to do all the installations. We've been able to actually do that and we are. So, yes, we still do travel. It's not if it goes back to CRO, but it's a fraction of what we were able to do, but it works.

And maybe one follow-up for Roger. Roger, on the services side you mentioned 3.4 billion is still in sight for the full year. Can you help us understand like how much of that, within that will be EUV specifically and also how much of losses for EUV services can we expect? I know you mentioned breakeven, hopefully, by the end of the year. Because the thing that I'm trying to understand is how much of a drag on services gross margin has EUV been last year or maybe this year, just to help us get to what the number should be going forward.

Yes, let me be very, very short on that. So for this year, I think quarter-over-quarter what -- so if you if you compare the last quarter, so Q4 to today, that would probably account for 0.5% in gross margin. So the improvement in EUV this year is going to account for about 0.5% in gross margin for the year. So that's an answer to that question. In general, if you look at the 3.4, it's about 50, 50 in terms of regular service and maintenance if you like and upgrades and the regular service and maintenance, EUV is still fairly small number, given of course the install base for DPV is so much larger, but the impact on the gross margin percentage about 0.5%.

All right, we have time for one last question. If you were unable to get through on this call and still have questions, please feel free to contact the ASML investor relations department with your question. Now, operator, may we have the last caller please?

And our last question is from Mr. Andrew Gardiner. Please state your company name followed by your question.

It's Andrew from Barclays. Thanks for squeezing me in here at the end. Just a follow-up really on the comments you guys have been making on the memory tool utilization. Peter, you said you've seen it improve sort of from late fourth quarter into first quarter and just out this quarter. I'm just wondering how much flex do you think the industry still has to continue to grow bit output by raising utilization and when are they going to get close to full utilization, again based on the current trends? Obviously, I know we've got the global caveats, but just if trends were to continue. How close are we to that full utilization where they need to start adding capacity again?

I mean, I think that will be this quarter. When I look at the trend, it’s going to be -- it's pretty close. They still have a bit of under-utilization to go but it will be this quarter

Thank you. Now on behalf of ASML, I would like to thank you all for joining us today. Operator, if you could formally conclude the call, I'd appreciate it. Thank you.

This concludes the ASML 2020 first quarter financial results conference call. Thank you for participating. You may now disconnect.