Our three core values are the theme of this year’s Annual Report, and are the core of everything we do.
Benjamin Loh
President and Chief Executive Officer
ASM delivered a strong performance yet again in 2022. Sales increased by 33% at constant currencies, despite challenging supply-chain conditions, and a weakening economic outlook in the second half of the year. We made good progress against our strategic targets, continuing to invest in the growth of our business and further expanding our engagements with key customers for new applications.
Read moreBenjamin Loh
President and
Chief Executive Officer
ASM delivered a strong performance yet again in 2022. Sales increased by 33% at constant currencies, despite challenging supply-chain conditions, and a weakening economic outlook in the second half of the year. We made good progress against our strategic targets, continuing to invest in the growth of our business and further expanding our engagements with key customers for new applications.
I want to thank all our people at ASM as they went again the extra mile to meet our customers’ requirements, and contributed to another successful year for our company.
The semiconductor market began the year with the expectation of continued solid growth, following strong demand in 2021. But momentum slowed down in several segments during the year. The war in Ukraine, rising inflation and interest rates, and a drop in consumer spending started to impact the smartphone and PC markets. This triggered slowing demand and significant inventory corrections in parts of the market. For the full year 2022, the semiconductor market grew by just 5%, down from approximately 25% growth in 2021.
The wafer fab equipment (WFE) market increased by a high single-digit percentage in 2022, but started to slow down in the course of the year. It was impacted by the weakening semiconductor end-markets, combined with persistent supply-chain constraints. Logic/foundry WFE continued to grow in 2022, driven by advanced nodes investments, while memory WFE, particularly impacted by the weakness in PCs and smartphones, dropped.
Against this backdrop, our company yet again delivered a very solid performance in 2022. Revenue increased by 33% at constant currencies to a record high of €2.4 billion, our sixth consecutive year of double-digit growth. With equipment revenue growth of 38% at constant currencies — despite difficult supply-chain conditions throughout the year — ASM clearly outperformed the WFE market. Operating profit grew by a solid 29%, even with a substantial increase in operating expenses as we stepped up R&D and further strengthened our organization. Excluding the cash used for acquisitions, free cash flow increased by 43% to €381 million. Our company’s financial position remained strong.
Our ALD business continued to be a key growth driver, accounting for more than half our equipment sales. ALD benefited from solid logic/foundry spending on the most advanced nodes, while we also won important new applications in the memory segment. Epi, our second-largest product line after ALD, was our fastest-growing business in 2022. After announcing our second Intrepid ES customer in 2021, we continued to work towards new customer selections in 2022, expanding our position in the advanced CMOS epitaxy market. In the power, analog and wafer market, we also had solid momentum, supported by our new Intrepid ESA tool for 300mm Epi applications. We believe we’re on track to double our Epi market share from 15% in 2020 to at least 30% by 2025. In vertical furnaces and PECVD, our strategy is to invest selectively. A great example of this is SONORA, our new 300mm vertical furnace platform that we introduced last July. We’ve already booked multiple new wins for SONORA, and expect a solid revenue contribution in 2023.
Another highlight was our two acquisitions in 2022. In March, we announced the acquisition of Reno Sub-Systems, a US-based supplier of RF matching subsystems. Reno’s high-performance RF matching networks and RF generators will enhance our plasma products. In July, we announced the acquisition of LPE, an Italian-based supplier of silicon carbide (SiC) epitaxy systems. SiC is a high-growth market with particularly strong demand in power electronics for electric vehicles (EV), given that it offers higher efficiency, and so extended range or smaller battery size. We expect LPE to generate revenue in excess of €130 million in 2023, up from more than €100 million previously expected. The acquisition of LPE fits perfectly with our strategy and positioning. We expect to drive growth in LPE’s business by leveraging our strong customer base in power electronics. We also aim to further differentiate LPE’s tools on the back of our strengths in areas such as 200mm platform expertise, process chemistries, and cost of ownership. In addition, we see opportunities for synergies in leveraging ASM’s scale and capabilities in areas such as supply-chain management, and our global-service network.
As far as our M&A strategy is concerned, we will continue to scan the market for other acquisition opportunities that could further strengthen our position in the deposition equipment market and drive additional growth.
Logic/foundry continued to be our largest customer segment. Leading customers continued to invest in advanced node capacity to prepare for the new end-market products that will be introduced in 2023 and beyond. In the newest logic/foundry node, which some of our customers were ramping into high-volume manufacturing by the end of 2022, the number of ALD layers and applications has increased by a strong double-digit percentage. We saw strong traction in R&D engagement and evaluations, especially in ALD and Epi, for the next logic/foundry technology nodes.
Our memory business also delivered solid double-digit growth, driven in particular by 3D-NAND, and despite the slowdown in market conditions in the second half of the year. Demand continued to be strong for ALD high-k metal gate in advanced DRAM devices, in which we believe we have a leading share. In 3D-NAND, we successfully gained a number of new positions for our advanced ALD gap-fill solutions, driving record-high order intake for us in this segment in 2022. At 19% of equipment sales in 2022, memory is still the smaller part of our business. We are working with customers in R&D on several new opportunities, as we remain focused on further strengthening our position in the memory market in coming years.
In the mature node part of the market, we are mainly active in the niche segments of power, analog and wafer manufacturers, with our vertical furnace and part of our epitaxy portfolio. From a smaller base, this part of our business has expanded significantly over the past few years, and is contributing more and more to overall growth for ASM. Next to solid market increases, our growth in the power, analog and wafer segment has been fueled by successful new products, such as Intrepid ESA, and the A400 DUO, our 200mm vertical furnace. With the addition of LPE, we have further strengthened our position in the power segment.
A key challenge of the year was the tight supply-chain situation, while at the same time our customers’ demand continued to increase significantly. Supply-chain conditions remained tight throughout the year, particularly in the first three quarters. This resulted in extended lead times and a shortage of materials and components for various parts in our tools, with legacy semiconductors being one of the most critical examples. I’m impressed by our team’s execution and dedication, in close collaboration with our suppliers, in meeting our customers’ requirements. Also, supported by earlier actions such as qualification of additional suppliers and maintaining strategic inventories, we were able to grow our shipments quarter to quarter, and reach record-high sales in 2022.
Regarding our own manufacturing capacity, we benefited from timely investments in our new and expanded facility in Singapore, celebrating the official opening in March 2022. Including the second manufacturing floor in this facility, completed in January 2023, we have boosted our global capacity by 3x compared to 2020.
Next to the increase in our manufacturing capacity, we also invested in further upgrading and expanding our R&D facilities. We increased our headcount in R&D by 49%. The number of R&D engagements with customers reached a new record-high in 2022. A key focus in our R&D engagements was the transition in the logic/foundry sector from FinFET to gate-all-around (GAA) device architecture. We expect this transition to result in significant increases in ALD and Epi requirements. As growth opportunities in the mid-term continue to increase, we plan to further increase R&D spending in 2023. In 2022, we also invested in strengthening our organization in many other areas, such as customer field support, IT, supply chain, and HR.
To support growth beyond our mid-term guidance we need to further expand our innovation and manufacturing infrastructure. In February 2023, we announced our intention to significantly increase our R&D and manufacturing facility in Korea. We are also exploring options to expand our activities in Phoenix, Arizona, and in Europe.
We continue to invest in the growth, engagement, and development of our people. We increased the total headcount by 29% to 4,258 in 2022, despite a continuing tight labor market. I am particularly pleased with the progress on our Diversity & inclusion (D&I) agenda, as the number of female employees increased to 17% of total at the end of 2022, up from 15% in 2021. Our core values are We Care, We Innovate, We Deliver — they are central to all we do at ASM and a cornerstone of our culture. In 2022, we continued to take steps to further embed these values throughout the organization. Safety remains our highest priority. We strengthened our safety culture and contributed meaningfully to the safety of our value-chain partners.
In 2022, we continued our focus on sustainability, one of the key pillars of our strategy. After announcing our Net Zero emissions by 2035 target (all scopes) in September 2021, we took an important next step by submitting our Net Zero measurements and targets for Scope 1, 2, and 3 GHG emissions to the Science Based Targets initiative (SBTi) in December 2022. The SBTi is recognized as the leading body for validation of net-zero targets, and this validation is currently scheduled to start in H2 2023. ASM became a founding member of the new Semiconductor Climate Consortium (SCC), playing a key role in its creation, and ASM has now also been elected as the SCC’s first Chair. One of our key circularity programs is the reuse of packaging. In close coordination with our partners in the value chain, we more than doubled the reuse of shipping materials in 2022. In short, we stepped up our investments in sustainability and have been making great strides in the past few years. It is good to see that our increased focus on sustainability has been reflected in improved ESG ratings, such as with S&P CSA and MSCI, as well as industry accolades.
Several ‘Chips Acts’ were proposed and passed in 2022, such as those in the US, Europe and Japan, as governments around the world work to build and strengthen their domestic chip industries. This reflects the growing importance of semiconductors in our society. Several of our customers have announced plans to expand their overseas manufacturing footprint, a response to their customers’ demand for more geographically diversified supply in view of geopolitical tensions and recent supply-chain disruptions. We expect these investments to start contributing to WFE spending in 2023.
At the same time, geopolitical tensions have triggered new export controls, which negatively impacted the WFE market in 2022. The new US export controls that came into force last October also affected our company. With the 2022 Q3 earnings, we conservatively reduced our backlog with all orders for fabs in the Chinese market that could be impacted by the new export restrictions. And at the end of November, we reported our updated assessment that an expected 15%-25% of our sales in the Chinese market would be negatively impacted. Despite an impact in the fourth quarter, we were still able to book solid growth in our equipment sales from China in 2022, which accounted for 16% of our total sales in 2022. This growth was mainly driven by the mature node segments of power, analog and wafer manufacturers in China, which have not been meaningfully impacted by the recent changes in export controls.
Looking at 2023, the global semiconductor market is forecast to contract by some 5% with continued inventory corrections in the first half of the year and a reduced economic outlook. Looking at WFE, logic/foundry spending on the most advanced nodes and automotive-related power/analog demand is expected to remain resilient in 2023. The reduction in memory spending is expected to continue in 2023, while demand for trailing-edge nodes in logic/foundry, especially consumer related, is expected to soften. In total, the WFE market is forecasted to drop by a mid-to-high teens percentage in 2023, a level that we expect to outperform, supported by our strong positions in the leading-edge logic/foundry market, and also by the momentum of newly introduced product and applications. ASM started 2023 with a record-high order backlog of €1.7 billion. On a currency comparable level, we expect revenue for Q1 of €660-700 million, with a slight increase in Q2 revenue compared to this level. Based on the current visibility, we expect revenue in the second half of 2023 to remain at a healthy level, albeit somewhat lower than in the first half of 2023.
Looking at the longer term, we believe the prospects for ASM continue to be bright. Despite the slowdown in 2023, the structural drivers for our industry are still very much intact. Third-party research firms continue to expect the semiconductor market to grow to more than $1 trillion by the early 2030s. Semiconductors have become essential in all aspects of life, and help to create new applications such as in cloud computing, artificial intelligence (AI), and the electrification of cars. Our customers continue to invest in the development of faster and more power-efficient next-generation semiconductors. These will require further scaling, new device architectures such as GAA, and the introduction of new materials — all of which will drive further demand for our advanced deposition technologies, in particular ALD and Epi. We believe ASM is well positioned to deliver a continued healthy performance.
March 2, 2023
Benjamin Loh
President and Chief Executive Officer
A heritage of
of relentless research
and innovation, and
breakthrough technologies
Employees working in R&D
Gross R&D expenses
Target Net Zero by
Number of countries
We have suppliers in more
than 20 countries
Paul Verhagen
Member of the Management Board and
Chief Financial Officer
In 2022, ASM delivered solid financial results yet again, with a 29% increase in operating profits. We also stepped up our spending to prepare ASM for the next growth phase. Our acquisition of Reno and LPE were among our highlights of the year. We believe we are on track to achieve our 2025 Growth through Innovation targets.
Read morePaul Verhagen
Member of the
Management Board and Chief Financial Officer
ASM’s revenue increased by 33% at constant currencies to a new record-high of €2.4 billion, our sixth consecutive year of double-digit growth. Also at constant currencies, equipment sales increased by 38%, for the largest part driven by strong growth in our ALD and Epi product lines. Spares & Services sales continued its own solid growth again — 11% at constant currencies, including an increasing contribution from new outcome-based services.
Coming off strong growth of 25% in 2021, the semiconductor market increased a further 5% in 2022. The WFE market increased by a high single-digit percentage in 2022 (2021: approximately +40%). In the course of 2022, the economic outlook became more uncertain, given the war in Ukraine and sharp increases in inflation and interest rates. This resulted in weakening conditions in several parts of the semiconductor end markets, especially in PCs and smartphones. The memory segment was particularly affected by the end-market slowdown, which also led to a softening in our memory business in the second half of 2022. Our total exposure to memory is, however, still relatively limited at 19% of total equipment sales in 2022. The trend in the other segments — logic/foundry, as well as the power, analog and wafer-manufacturers segments — continued to be healthy throughout the year.
Despite the slowdown in the semiconductor end-market, we increased our revenue by 21% at constant currencies, from the first half to the second half of 2022. This increase was supported by a gradual easing of supply-chain constraints. As a result, we were able to convert more of our backlog, which had strongly increased in the first half due to strong customer demand and supply-chain constraints. We ended the year on a strong note, with record-high revenue of €725 million in Q4, exceeding our earlier guidance. This was driven by further improvement in the supply situation, and also reflected solid execution by our ASM team in close collaboration with suppliers and customers.
The acquisitions of Reno Sub-Systems and LPE were important highlights for us in 2022. Reno will contribute to further improvement of our plasma products. In 2022, considering its smaller size, the impact on financial results was limited. With the takeover of LPE we have entered the silicon carbide epitaxy market, which is expected to grow by a CAGR of more than 25% in the coming years, driven by demand for electric vehicles. We paid for this acquisition with a combination of €283 million in cash and around 631,000 ASM shares (representing 1.3% of ASM’s total share count, and mostly consisting of 580,000 treasury shares). In addition, we will pay earn-outs of up to €100 million, depending on certain performance metrics over a two-year period. The earn-outs will be exclusively paid in cash. LPE is growing strongly, and is expected to generate revenue of more than €130 million in 2023, up from more than €100 million previously expected. Profitability of LPE is well in line with ASM’s own financial-target model. This is excluding integration-related costs and amortization of PPA, which was €8 million in Q4 2022 and is expected to be €46 million in 2023 (Reno and LPE combined). In addition, the earn-out will accrue under financial expenses for an annual amount of €10 million in 2023.
In the second half of 2022, our bookings and revenue were negatively impacted by new export controls announced by the US government in October. With our Q3 results, we announced that we conservatively debooked all potentially impacted orders, which contributed to a decrease in overall bookings in Q3 compared to the record high in Q2. Following further examination, we announced at the end of November that we expected these export controls to negatively impact 15% to 25% of our sales in the Chinese market. In Q4, we again rebooked part of the orders that we had debooked in Q3.
Gross margin decreased slightly from 47.9% to 47.4% in 2022, which was mainly mix related. Cost inflation went up considerably, but we were able to manage it well last year. In 2022, particularly in the first half of the year, we succeeded in reducing, on average, the relative cost of goods of our tools. In the second half of the year, we gradually experienced an increase in cost of goods. For 2023, we project cost of goods to continue to increase. We have responded by continuing commercial price negotiations, and have increased focus on cost-reduction value engineering initiatives. In addition, we are passing on part of the higher costs in the pricing of our own products, also reflecting the higher value we create for our customers through, for instance, continuous improvement programs (CIP). This continues to be an important focus for us in 2023 to manage our gross margins. We remain committed to the targeted gross margin range of 46% to 50% (excluding PPA expense) for the period 2021-2025 that we communicated at our Investor Day. As always, in the shorter term from quarter to quarter, application mix is the main factor explaining the variations in the gross margin. In 2022, the quarterly gross margin fluctuated within a range of 46.4% (in Q4, and 46.9% excluding PPA expense) and 48.1% (in Q3).
SG&A expenses increased by 46% in 2022. For the most part, this increase reflected strong growth in people (up 29% in 2022), with higher headcount in several areas, such as customer field support, IT, and supply chain. The increase was in part also explained by more competitive compensation benefits, both fixed and variable, and an increase in staff-related expense, such as travel. We also stepped up investments to grow in a sustainable manner, and we managed to get 75.6% of our total electricity consumption from renewable energy. Sustainability is one of the key elements of our strategy, and it is good to see that our increased focus in this area is being increasingly recognized. One example is the inclusion of ASM in the AEX ESG index last year. The increase in SG&A in 2022 also reflected our earlier decision to invest in strengthening the organization, and prepare for expected higher activity levels in coming years. Towards the end of the year, we completed most of these investments, and SG&A in Q4 stabilized quarter-to-quarter on a comparable basis, excluding LPE. For 2023, we expect the rate of the increase in SG&A to moderate significantly (excluding PPA expense), and to limit the overall increase in costs at a time of increasing economic uncertainty.
We increased net R&D expenses by 55%. An important reason was the 49% increase in headcount, more competitive benefits, both fixed and variable, and, more generally, a strong increase in the number of R&D projects. Net R&D grew somewhat faster than gross R&D (+46%), due to moderate growth in capitalization of development expenses (+25%). Net R&D grew slightly faster than revenue, and increased as a percentage of revenue from 9% in 2021 to 10%. This is in line with the projections we made at our Investor Day in 2021 to bring R&D to a range of a high single-digit to a low double-digit percentage of sales. R&D is our lifeline. In 2023, we project a further double-digit increase in net R&D expenses. This reflects a strongly increasing number of customer R&D engagements, and expanding opportunities for new applications in the next technology nodes, such as the inflection to the new gate-all-around (GAA) devices in logic/foundry.
Operating profit increased by 29% to €632 million. The operating margin decreased from 28% to 26% in 2022, due to the slight decrease in gross margin, and the increase in operating expenses. On a normalized basis, share in income of investments in associates, which reflect our 25% stake in ASMPT, decreased by 9%. In the third quarter of 2022, we also recognized a non-cash impairment charge of €321 million to account for the reduced market valuation of the stake in ASMPT. This impairment was partly reversed in the fourth quarter, leading to a net impairment charge of €215 million in full year 2022. Excluding the share in income of investments in associates and excluding the impairment of the ASMPT value, the effective tax rate amounted to 17.7% in 2022 (2021: 19.6%). Normalized net earnings increased by 24% to €627 million.
Excluding €314 million in cash spent on acquisitions, we generated free cash flow of €381 million, up 43% from €266 million in 2021. The improvement was driven by improved underlying profitability, and in spite of an increased cash outflow for working capital and higher CapEx. Working capital increased from €316 million to €497 million. This was mainly driven by a substantial increase in inventories. To have more flexibility amid supply-chain conditions, we increased our buffer inventories of critical parts and materials. Supply-chain constraints also resulted in more of our tools waiting for missing parts before we could complete and ship them to customers. The increase in inventories was partly offset by an increase in short-term liabilities.
In 2022, our CapEx increased from €79 million to €101 million. This is in line with our earlier indication that CapEx would be towards the higher end of the target range, as some spending was carried over from 2021. It is also due to increased spending on the further expansion and upgrading of our R&D labs.
ASM’s financial position remained very strong, with €419 million at the end of 2022, and no debt. Cash decreased compared to €492 million at the end of 2021, explained by the cash spent on acquisitions and €122 million paid in dividends during 2022. At Investor Day in 2021, we said we would gradually increase our targeted cash position to €600 million.
Our top priority in our capital allocation is investment in the sustainable growth of our company. That means spending on R&D, but also on CapEx, and on M&A if attractive opportunities arise as they did last year with Reno and LPE. For 2023, we are planning for CapEx of €150-200 million. This is significantly above the mid-term target of €60-100 million annually, and is explained by the further expansion of our innovation and manufacturing infrastructure that we are planning in the next few years. We completed the second manufacturing floor of our Singapore facility, which has substantially increased our flexibility in the near term. To support growth beyond our mid-term guidance, we require increased manufacturing and lab R&D capacity, and need to start preparing for this now. In February 2023, we announced our plan for an investment of around US$100 million, in the period up to 2025, to significantly increase our R&D and manufacturing facility in Korea. We are also exploring options to expand our activities in Phoenix, Arizona, and in Europe.
We remain committed to our sustainable dividend policy. With the publication of Q4 2022 results on February 28, 2023, we announced a proposed dividend of €2.50 per share for approval by the AGM on May 15, 2023. The €100 million share buyback for 2022-2023 that we announced in February 2022 was not started last year, due to the cash we spent on acquisitions in 2022. We plan to execute this buyback program in 2023.
Underlined by our solid performance in 2022, we believe we are on track for our Growth through Innovation targets that we launched at our Investor Day in 2021. One of these targets is to grow revenue to a level of €2.8-3.4 billion by 2025, implying a CAGR of 16%-21% in the period 2020-2025. Important drivers to achieve this include continued growth in our ALD product line, and expansion and share gains in the Epi market. These targets exclude the acquisition of LPE. We are planning to have our next Investor Day in September 2023.
There is increasing uncertainty about the macroeconomy right now, and this is expected to impact the semiconductor market. WFE spending is forecasted to drop by a mid-to-high teens percentage in 2023. We feel confident about ASM’s positioning, however, on the back of our record-high order backlog, our strong share in the leading-edge logic/foundry market, our newly introduced products and applications, and supported by a very strong balance sheet. We expect that the investments we are planning for, combined with the strengths of our customer engagements, our talented people, and our innovation, will position ASM for continued healthy growth.
March 2, 2023
Paul Verhagen
Member of the Management Board and Chief Financial Officer
In 2021, we took an essential step in defining who we are at ASM, and what we stand for, by launching our core values – We Care, We Innovate, We Deliver. In 2022 we continued to take steps to further embed these core values throughout the organization, top-down and bottom-up.
Together we care for our people,
society, and our planet.
Together we act with integrity, compassion, and respect, at all times.
Together we are inclusive, inspired by others, and always growing.
Together we lead our industry and
work towards a common goal.
Together we think creatively, with truly
open minds.
Together we challenge the norms
and embrace diversity of thoughts.
Together we perform at our
best and deliver on our promises.
Together we ensure satisfaction
and exceed expectations.
Together we take ownership
and are accountable for our actions.
Hichem M’Saad
Member of the Management Board and
Chief Technology Officer
Hichem M’Saad was appointed as ASM’s new Chief Technology Officer and a member of the Management Board in May 2022. In the interview below, Hichem shares some insights into technology trends in our industry, such as how new materials and 3D structures will drive increasing ALD adoption, the transition to gate-all-around in logic/foundry, and new applications in memory. He also comments on the contribution of product development to ASM’s Net Zero by 2035 ambition.
Read moreHichem M’Saad
Member of the
Management Board and Chief Technology Officer
We’re confident Moore’s Law is continuing, and we expect it to continue for at least the next decade – and likely longer than that. This will be driven by device and transistor innovations, enabled by new materials and full use of the third dimension (3D). We believe, too, that more functions per chip area can, and will be, integrated in the coming decade, and that we’ll need continuous innovation in semiconductor technologies to make this happen – not only in core logic and memory, but also in heterogeneous integration and advanced packaging.
In the past decade, device structures have been moving from 2D to 3D. For example, NAND has gone from 2D-NAND to 3D-NAND. DRAM today is still 2D-DRAM, but developments are on the way to develop 3D-DRAM. In logic, FinFET is moving to gate-all-around. Beyond GAA, CFET will take over as the new logic device structure. What’s common among all these technologies is that we’re going vertically.
ALD becomes increasingly essential in future nodes, driven by the trend for thinner films, new materials, and vertical scaling. Because the ALD process is self-limiting, the film is deposited one monolayer at a time. By repeating the process, as many more layers as desired can be built up. Since such precision in layer thickness is impossible to achieve with other techniques – such as chemical vapor deposition – ALD is the only option available when the required layer thickness drops below a critical lower limit. Right now, we’re seeing many of the CVD layers transitioning to ALD. ALD is the new CVD.
As mentioned, innovation in new materials is driving Moore’s Law. And ALD is playing a significant role in developing new materials that are still unknown to us today. In fact, the self-limiting nature of the ALD process allows for the unprecedented development of new materials with a precise and repeatable composition. Only ALD is uniquely qualified to deposit these materials with the precise composition and thickness-control necessary for advanced semiconductor devices.
As more device structures evolve into 3D, requirements for conformal layers with homogeneous film composition and excellent electrical and mechanical properties tend to favor ALD, due to its unique control and exceptional step coverage.
Our focus has always been on innovation and early customer engagement. Due to our market-share wins in the past few technology nodes for ALD and Epi, we’ve gained experience over several device generations in supporting tools in high-volume manufacturing. This experience includes a stronger focus on customer satisfaction. As a next step in our development as a close partner to our customers for new technology pathfinding, we recently made infrastructure investments by expanding the advanced metrology capability in our demo labs. This prepares us for even closer collaboration with our customers going forward.
LPE’s SiC reactor is enabling; it’s very similar to ASM’s cross-flow Intrepid ES reactor for silicon epitaxy, which has proven to be very successful in HVM. LPE’s reactor provides SiC epitaxial films with lowest defects, which is a key material property for SiC power devices to function optimally.
In terms of synergies, ASM will use its experience in manufacturing and servicing silicon epitaxy tools in HVM to strengthen that same capability for our SiC products and technology. ASM will also apply its experience in developing high-productivity tools for the silicon semiconductor market to make highly productive SiC products.
In FinFET, ALD is used to homogeneously cover the fin structure on three sides with gate dielectric and metal. Moving to the GAA transistor structure, the gate dielectric and metals now need to completely envelope the channel on four sides, making the configuration truly 3D in a very tight space. ALD is the only deposition technique that still works there.
At the same time, due to requirements for increasing multiple switching voltages within devices, the amount of different applied combinations of dielectric materials and metals around the gate tends to increase. This directly drives additional deposition steps of films that remain in the device, as well as additional sacrificial deposition steps to shield areas where you want other variations of dielectric and metal combinations. All these deposition steps around the GAA structure have to be ALD. So, overall, the transition from FinFET to GAA represents more ALD opportunities.
In the past year, we’ve seen healthy revenue growth in the memory segment, which is being driven by ALD dielectric high aspect ratio gap-fills that require specific technologies. In 2022, we released the production-proven TENZA ALD for ultra-high aspect ratio (>100:1) gap-fill. Further in memory, we continue to be well positioned in the segment of patterning films, with new opportunities where continued scaling and the introduction of EUV drives new requirements.
And, of course, our strength in ALD high-k gate dielectrics used in logic transistors has enabled us to become a leader in this segment in memory as well, with DRAM manufacturers moving to use high-k gate dielectrics in access transistors for high-performance DRAM products.
It will mean requirements up-front for sustainability as part of design specifications, such as those for chemical consumption and energy usage, as well as driving suppliers to meet specific sustainability targets.
For existing products, it means, for example, executing projects like the reduction of system heat-losses, via new insulating materials. Another example is the improvement of the RF plasma efficiency of the plasma reactor, resulting in lower parasitic plasma and reduced energy losses.
An attractive aspect of the acquisition of Reno Sub-Systems has been the faster rate at which the electronically variable capacitor matching network matches the RF power, consequently leading to lower power losses.
The important achievements have been the various product launches: in 2017, the Intrepid ES epitaxy tool for advanced-node CMOS logic and memory; in 2018, Synergis, the high-productivity ALD tool utilizing ASM’s production-proven XP8 platform – for advanced-node logic and memory high-volume production applications; in 2019, the A400 DUO vertical furnace system with dual reactor chambers for 200mm wafers; in 2021, the Intrepid ESA epitaxy tool for power and analog devices, and for epitaxial silicon wafers. And in 2022, the SONORA vertical furnace system with dual reactor chambers for 300mm wafers.
The string of product introductions and their positive reception by the market are testament to our commitment to serve our customers with leading-edge innovative and competitive offerings.
Our talented R&D people are ASM’s innovation engine, and we aim to strengthen the cooperation between our employees in R&D and our products organization. The clear strategic intent is to speed up our rate of innovation, along with the development and productization of those innovations. We’d like our R&D people to have more exposure to our latest products, and leverage those products for the R&D of new materials and process technologies. The aim is to introduce these as high-volume manufacturing solutions for our customers as efficiently and speedily as possible.
March 2, 2023
Hichem M’Saad
Member of the Management Board and Chief Technology Officer
Innovation is in our DNA. Our purpose is to improve people’s lives through advancing technologies that unlock new potential. Our innovations and leading-edge technologies, such as our ALD and Epi products, enable faster and more power-efficient semiconductors. We are focused on close and early collaboration with our customers, thereby continuously improving our products to support their technology roadmaps, to lower cost of ownership, and enable next-generation technologies, such as the inflection to the gate-all-around devices in the logic/foundry sector.
Accelerating sustainability is one of the pillars of our strategy. After announcing our Net Zero by 2035 ambition in 2021, we took an important next step by sizing our Scope 3 GHG emissions and submitting our measurements and targets to the Science Based Targets initiative (SBTi) for validation in 2022. We aim to collaborate with stakeholders across our value chain with the ambition to bring faster and more meaningful change to the environmental challenges facing the world today.
We work at the edge of what is technologically possible, creating an attractive professional and learning environment for our people. We aspire to be an employer of choice for existing and future talents. Our 2022 employee engagement survey revealed a 5% increase in the engagement score. On diversity and inclusion, we are focused on increasing the female participation rate, with a target of 20% of total workforce by 2025, up from 15% in 2021. We made a first step by increasing it to 17% in 2022.
We successfully navigated challenging supply-chain conditions in 2022, reaching record-high shipments, thanks to close collaboration with our suppliers and customers. We are further expanding our manufacturing capacity to prepare for continued solid growth prospects. Together with our suppliers, we can create positive impact for our stakeholders, the planet, and society overall – well beyond our individual scale. We strive to further build on a sustainable, responsible supply chain, with a focus on areas such as worker safety, environmental footprint, human rights, and supplier diversity.