Over the course of 50 years we have grown to become a global company that develops innovative solutions for our customers, and manages the best interests of our investors, our employees, society and other stakeholders. Read on to discover what we achieved in 2018.

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About

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The demand for smaller, faster and cheaper semiconductor chips continues to rise, driven by advancements in cloud computing, artificial intelligence, smartphones and the Internet of Things.

MEETING DEMAND

Our technology is the first step towards making it all possible, as our R&D investment in new materials, new products and new processes means we can help our customers develop their technology roadmap, and further extend Moore’s Law.

CREATING RESULTS

In 2018, this led to the introduction of the Synergis ALD tool, which leverages the core technologies from our Pulsar and EmerALD ALD products for high productivity thermal ALD applications. The new Synergis tool allows us to address more ALD applications and therefore increases our served market. Together with our other products and services, this contributed to our strong financial results, which included:

  • net sales of €818 million;
  • bookings of €942 million;
  • operating result of €124 million; and
  • operating cash flow of €137 million.

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Strategy & business

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We operate in a fast-paced industry that continues to reshape the world, and our innovative technology enables the semiconductor industry to achieve advancements in computing, communications, energy, transportation, medicine and beyond.
To ensure that we can continue to make a difference to our customers, employees, and company stakeholders, in 2018 we concentrated on the following three key elements of our strategy.

INNOVATIVE STRENGTH

In addition to our fundamental R&D efforts, we continuously expand and deepen our strategic cooperation with key customers, suppliers, chemical manufacturers, and research institutes. This approach enables us to remain innovative and swiftly meet the changing demands of our customers.

LEADERSHIP IN DEPOSITION

We are a key player in the deposition equipment segments for ALD and epitaxy, and a focused niche player for PECVD and vertical furnaces. As a leader in the segment, ALD has turned into a key growth driver for our business, from which we support virtually all of the leading customers in the semiconductor industry. Our newest ALD tool, Synergis, is designed to address a wide range of existing and new ALD applications, effectively increasing the market we serve.

OPERATIONAL EXCELLENCE

In addition to our internal optimization programs, we are working with our suppliers to improve fundamental quality through statistical methods and process controls. In addition to addressing the technology needs of our customers, we also focus on further increasing equipment throughput and equipment reliability, thereby lowering the cost per wafer of our wafer processing systems.

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Performance review

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In 2018, we achieved revenue growth of 11% reaching a record high revenue of €818 million, with sales increasing mainly in the logic, DRAM and analog segments. By industry segment, our 2018 revenue stream was led by memory, closely followed by the logic and foundry segments.

MULTIPLE PRODUCT LINES

While our ALD product lines continued to be our key sales driver in 2018, accounting for more than half of total equipment revenue, our other product lines also contributed strongly. In our epitaxy product line we increased sales, following the strong growth we achieved in 2017, and we saw additional sales increases in PECVD and vertical furnaces.

MARKET GROWTH

Our industry experienced continued growth in 2018, with worldwide semiconductor industry sales increasing by around 14%. This was driven by high memory prices and broad-based electronics demand for cloud services, mobile devices, automotive and industrial applications. These drivers helped the wafer fab equipment market grow by around 10% in 2018.

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Governance

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Our 2018 sales grew to record levels, reaching €818 million. ALD continued to be the key driver, although the other product lines also made a strong contribution.
We benefited from a further increase in wafer fab equipment spending following the very strong market growth in 2017. Our operating profit increased to €124.3 million from €113.2 million in 2017, while the operating profit margin remained stable.

OTHER DEVELOPMENTS

New bookings increased by 22% in 2018 to €942 million, with equipment bookings for ASMI as a whole led by logic, followed by foundry and then memory. Total research and development (R&D) expenses, excluding impairment charges, decreased by 1% in 2018 compared to 2017, mainly as a result of higher capitalization of development expenses.

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Financial statements

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Our 2018 sales grew to record levels, reaching €818 million. ALD continued to be the key driver, although the other product lines also made a strong contribution.
We benefited from a further increase in wafer fab equipment spending following the very strong market growth in 2017. Our operating profit increased to €124.3 million from €113.2 million in 2017, while the operating profit margin remained stable.

OTHER DEVELOPMENTS

New bookings increased by 22% in 2018 to €942 million, with equipment bookings for ASMI as a whole led by logic, followed by foundry and then memory. Total research and development (R&D) expenses, excluding impairment charges, decreased by 1% in 2018 compared to 2017, mainly as a result of higher capitalization of development expenses.

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Other Information

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During 2018, we returned approximately €607 million to shareholders in the form of dividends, share buybacks and the capital return. This was up from €281 million in 2017 and €140 million in 2016.
Over the 2010-2018 period, we returned more than €1.6 billion to the financial markets through dividends, share buybacks, return of capital, and buyback of convertible bonds.

SHAREHOLDER DIVIDEND

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DELIVERING RESULTS

In 2018, we paid a dividend of €0.80 per common share and we will propose to the forthcoming AGM to declare a dividend of €1.00 per share for 2019. The proposed 2019 dividend will mark the ninth consecutive year that we have paid a dividend.

MANAGEMENT BOARD

CHARLES D. (CHUCK) DEL PRADO

Chairman of the Management Board, President and Chief Executive Officer

PETER A.M. VAN BOMMEL

Member of the Management Board and Chief Financial Officer

The Management Board, supervised and advised by the Supervisory Board, manages ASMI’s strategic, commercial, financial, and organizational matters, and appoints senior managers.

The Supervisory Board supervises and advises the Management Board in the execution of its tasks and responsibilities and establishes their individual remuneration within the boundaries of the remuneration policies approved by the Annual General Meeting of Shareholders and the recommendations by the Nomination, Selection and Remuneration Committee.

COMPOSITION OF THE MANAGEMENT BOARD

CHARLES D. (CHUCK) DEL PRADO - CEO

Mr. del Prado was appointed as a member of the Management Board in May 2006 and President and Chief Executive Officer on March 1, 2008. Mr. del Prado was reappointed on May 28, 2018 for a period of four years. Between 1989 and 1996, Mr. del Prado held several marketing and sales positions at IBM Nederland N.V. From 1996 to 2001, he worked in various management positions at ASML, in manufacturing and sales in Taiwan and the Netherlands. He was appointed as Director Marketing, Sales & Service of ASM Europe in March 2001. From 2003 to 2007, he was President and General Manager of ASM America. From January 1, 2008 to February 29, 2008, he acted as Executive Vice President Front-end Operations at ASM America. He holds a Master's of Science degree in Industrial Engineering and Technology Management from the University of Twente, the Netherlands. Mr. del Prado is a Dutch national.

PETER A.M. VAN BOMMEL - CFO

Mr. van Bommel was appointed as a member of the Management Board on July 1, 2010 and became Chief Financial Officer on September 1, 2010. Mr. van Bommel was reappointed on May 28, 2018 for a period of four years. Mr. van Bommel has more than twenty years of experience in the electronics and semiconductor industry. He spent most of his career at Philips, which he joined in 1979. From the mid-1990s until 2005, he acted as CFO of several business units of the Philips Group. Between 2006 and 2008, he was CFO at NXP, formerly Philips Semiconductors. He was CFO of Odersun AG, a manufacturer of thin-film solar cells and modules until August 31, 2010. He holds a Master's degree in Economics from the Erasmus University Rotterdam, the Netherlands. Mr. van Bommel is a Dutch national.

On April 13, 2016, Mr. van Bommel was reappointed for a period of four years as a member of the Supervisory Board of Royal KPN N.V. He also became the Chairman of the Audit Committee as per that day. On April 16, 2015, Mr. van Bommel was appointed as a member of the Supervisory Board of Neways Electronics International N.V. Since May 2017, Mr. van Bommel is Executive Director of Stichting Bernhoven.

RESPONSIBILITIES

In addition to the duties of the Management Board stipulated by law and our Articles of Association, the Management Board has the following responsibilities:

  • achieving the aims, strategy, policy and results of the Company;
  • managing the risks associated with the activities of the Company;
  • ensuring proper financing of the Company;
  • establishing and maintaining disclosure controls and procedures that ensure that all major financial information is known to the Management Board in order to ensure that the external financial reporting is achieved in a timely, complete and accurate manner; and
  • determining relevant aspects and achieving aims relating to corporate social responsibility and sustainability.

The Management Board is guided by the interests of the Company, taking the interests of all stakeholders into consideration.

The members of the Management Board are collectively responsible for managing the Company. They are collectively and individually accountable to the Supervisory Board and the Annual General Meeting of Shareholders for executing the Management Board’s responsibilities. The Management Board has the general authority to enter into binding agreements with third parties.

The Management Board held various meetings throughout the year 2018. At least once a month, the Management Board meets to discuss and review the performance of the company.

RISK MANAGEMENT AND CONTROL FRAMEWORK

The Management Board ensures that the Company has an adequately functioning internal risk management and control framework. A comprehensive risk management and control framework, based on the "three lines of defense model", has been established that allows the Audit Committee and the Management Board a clear overview of the effectiveness of internal controls and risk management. This is explained in more detail in the risk management chapter on page 52.

The Management Board periodically discusses the internal risk management and control systems with the Supervisory Board and the Audit Committee. The Management Board provides the Supervisory Board with all information required for the fulfillment of their obligations and the exercise of their powers.

The Management Board provides the Annual General Meeting of Shareholders with all information required for the fulfillment of its obligations and the exercise of its powers in a timely fashion. The Management Board is responsible for the quality and completeness of financial and other reports that are publicly disclosed by or on behalf of the Company, including all reports and documents the Company is required to file.

CONFLICTS OF INTEREST

Each Management Board member shall immediately report any potential conflict of interest to the Chairman of the Supervisory Board and to the other Management Board members. In such cases, a Management Board member shall provide the Chairman of the Supervisory Board and the other Management Board members with all information relevant to the conflict and follow the procedures as set out in the Management Board rules.

APPOINTMENT, SUSPENSION, AND DISMISSAL

The Annual General Meeting of Shareholders (AGM) appoints a Management Board member based on a binding nomination drawn up by the Supervisory Board. The AGM may set aside a binding nomination by a resolution taken with an absolute majority of the votes cast, representing at least one third of the share capital. If such a binding nomination is set aside, a new binding nomination will be drawn up by the Supervisory Board and submitted to a newly called General Meeting of Shareholders. If this binding nomination is set aside, the General Meeting of Shareholders is free to appoint a Management Board member, but only with an absolute majority of the votes cast representing at least one third of our issued capital.

A Management Board member may be suspended at any time by the Supervisory Board. A Management Board member may, in accordance with a proposal by the Supervisory Board, be dismissed by the AGM through a majority vote. A resolution to suspend or to dismiss a member of the Management Board, other than in accordance with a proposal of the Supervisory Board, shall require the affirmative vote of a majority of the votes cast at a meeting. The affirmative votes must represent at least one third of the issued capital.

REMUNERATION

For information regarding the remuneration of the Management Board, please see the remuneration policy which is posted on our website, the remuneration report, which is included in this report, and Note 25 to the consolidated financial statements.

 

TAKING THE NEXT LEAP FORWARD

Over the past 50 years we have grown to become a leading global supplier
of semiconductor wafer processing equipment. A company that develops
innovative process solutions for our customers, and manages itself in the best
interests of our investors, our employees, society, and other stakeholders.

Yet now is the time to enter a new era of innovation, to embark on the next
phase of growth. We understand that this requires commitment and strength
across many areas. From innovation in R&D, to advancing new technologies
and addressing new applications. From developing our people, to creating
even stronger relationships with key customers.

This is how we will take the next leap forward.

The

Of new materials

R

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e

ROADMAP TO THE FUTURE

Our roadmap to the future will enable us to not only
achieve our next phase of growth, it will ensure we
can continue to help our customers achieve their
technology roadmaps for next-generation devices.

INNOVATION

Our technology helps drive innovation, increasing the number of scientific breakthroughs, many of which are achieved from our advanced process equipment that deposits new materials with precision and productivity, positively benefiting society in sectors from healthcare and education, to transport and energy.

SCALING

For semiconductor manufacturers, scaling chips
to smaller dimensions is an ongoing challenge.
Our innovations and equipment are vital in helping make many of these transitions happen.

EFFICIENCY

Striving for efficiency ensures that our
customers get the products, services,
and results they expect. Intensifying
our focus on efficiency will make us a
stronger company, ready to take the
next leap forward.

The

That
matters

m

i

x

Multinational

We are a multinational company that
embraces diversity in every sense
of the word. With 29 different
nationalities working across the
company, we combine our talents
to drive innovation.

INTELLIGENCE

Achieving our ambitions takes intelligence, knowledge, skill,
determination, and dedication. And it is this combination of
qualities that we nurture in our people.

XTRAORDINARY

Our goal is to impact tomorrow’s generation
as positively as we’ve impacted today’s.
Making this happen takes the xtraordinary
talent of our people, who work together
to drive innovation and deliver excellence.

Expanding the

c

o

r

e

COLLABORATION

Collaboration is fundamental to our
continued success; from working
with our customers to optimize our
equipment and processes to enable
their technology roadmaps, to
creating partnerships on cutting-edge
research and development.

OPERATIONAL EXCELLENCE

Operational excellence is one of the essential
pillars of our strategy, which enables us to provide
our customers with the high-quality, leading-edge
products and services they demand.

R&D

R&D is central to our development,
leading to new device architectures,
new materials, and new processes
that strengthen our competitive
positioning and enable our customers
to deliver the next-generation chips.

Extending

By extending our technological scope with a
more diverse product portfolio, we can help our
customers continue to advance their business
while growing our own in new market segments.

Moore with

l

e

s

s

LONG-TERM VALUE

We create long-term value for our
stakeholders in a variety of ways.
From working with our customers
to develop innovative solutions, to
ensuring value creation growth
and positive investor returns.

ENVIRONMENT

We are committed to positively
contributing to society and
reducing our impact on the
environment. Only then can
we truly say we are helping
create more with less.

SUSTAINABILITY

We believe sustainability takes many forms.
From developing sustainable technology
roadmaps for our customers, to creating
a sustainable living environment for all.

SAFETY

Safety is a front-line requirement,
which is why our ZERO HARM!
policy outlines our vision on product
safety, and our CR policy lays out
our commitment and expectations
towards health and safety.