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.

SUPERVISORY BOARD REPORT

During the year under review, the Supervisory Board performed its duties in accordance with applicable legislation and the Articles of Association of ASM International N.V. and supervised and advised the Management Board on an ongoing basis.

FINANCIAL STATEMENTS

We present the ASMI 2018 Annual Report in accordance with IFRS, as prepared by the Management Board and reviewed by the Supervisory Board. Our independent auditors, KPMG Accountants N.V., have audited these financial statements and issued an unqualified opinion. Their report appears on pages 155 to 161.

All of the members of the Supervisory Board have signed the financial statements in respect of the financial year 2018.

SUPERVISION

Supervision of the Management Board, its policy decisions and actions are entrusted to the Supervisory Board. In accordance with Dutch law, the Supervisory Board is a separate body, independent of the Management Board. The Supervisory Board supervises and advises the Management Board in executing its responsibilities. The profile of the Supervisory Board describes the range of expertise that should be represented within the Board. The procedures of the Supervisory Board and the division of its duties are laid down in the Supervisory Board rules. Both documents are available on our website www.asm.com.

MEETINGS OF THE SUPERVISORY BOARD

During 2018, the Supervisory Board met with the Management Board on seven occasions, and in one conference call. Jan Lobbezoo, Stefanie Kahle-Galonske, Heinrich Kreutzer, and Ulrich Schumacher attended all Supervisory Board meetings with the Management Board, while Martin van Pernis and Marc de Jong attended all meetings except one.

Supervisory BoardAudit CommitteeNomination, Selection and Remuneration Committee (NSR)
Committee
Jan C. Lobbezoo8/84/43/3
Marc J.C. de Jong3/40/2-
Stefanie Kahle-Galonske8/84/4-
Heinrich W. Kreutzer4/42/2-
Martin C.J. van Pernis7/8-3/3
Ulrich H.R. Schumacher8/8-3/3
  1. Attendance is expressed as the number of meetings attended out of the number eligible to be attended.

In these meetings, the Boards discussed the strategy and the progress of implementation thereof, operations, business risks, product and market developments, the Company’s organization, management and financial structure, and performance, including further profitability improvements. Other topics addressed by the Supervisory Board were the annual budget, the review of quarterly financial results and the preparation of the quarterly earnings press releases. The Supervisory Board also approved the dividend proposal as prepared by the Management Board and proposed (and approved) at the AGM in 2018. Furthermore the Supervisory Board approved the extraordinary capital distribution of €4.00 per common share to the holders of common shares, which was also approved during the AGM.

One of the meetings was specifically earmarked to discuss with the Management Board the long-term strategy of the company, the planned implementation of it, and the risks attached to its realization. In the long-term strategy meeting the Board discussed the semiconductor and semiconductor equipment market and outlook, the development of ASMI’s market share, the development of the competitive environment, technology and market trends, the progress with ASMI’s strategic priorities and ASMI’s long-term revenue and profit or loss forecasts. Also, strategic initiatives to be considered to improve the Company’s long-term value creation strategy were discussed. Certain topics discussed during the long-term strategy discussion will be followed up in subsequent meetings of the Board during 2019.

In addition, the Supervisory Board reviewed and discussed the functioning of the Supervisory Board, its committees, and its individual members through an internal assessment as conducted by the members of the Supervisory Board. The composition, competencies and functioning of the Supervisory Board, as also described in the Supervisory Board profile, and its committees were part of the assessment, as well as the composition of the Management Board, their performance, and the performance of its individual members, and the relationship between the Supervisory Board and the Management Board. The conclusion of the assessment was that both the Supervisory Board as the Management Board function properly and effectively, in addition some suggestions came up for future Supervisory Board meetings.

CORPORATE GOVERNANCE

Included in the responsibilities of the Supervisory Board is to oversee the Company’s compliance with corporate governance standards and best practices. The Supervisory Board is of the opinion that the Company complies with the Dutch Corporate Governance Code.

SHAREHOLDERS

On March 29, 2018, ASMI completed the €250 million share buyback program 2017-2018. This program was funded with the proceeds of approximately €248 million of the partial secondary placement of shares of ASMPT that was executed on April 24, 2017.

On June 5, 2018, ASMI announced the start of a share buyback program of ASMI’s common shares up to €250 million. This program followed on ASMI’s announcement on February 28, 2018, that it intended to use €250 million of the proceeds of the partial sale of a stake of approximately 9% in ASMPT that was executed on November 2, 2017, for a new share buyback program. On October 11, 2018 the program was completed.

In the same month, on June 7, 2018, a dividend of €0.80 per common share was paid, as approved by the 2018 AGM on May 28, 2018.

On August 1, 2018, the cancellation of 6 million treasury shares became effective following earlier approval by the 2018 AGM.

Then on August 10, 2018, ASMI distributed €4.00 per common share to its shareholders through a tax efficient repayment of capital, using part of the proceeds of the partial sale of a stake of approximately 9% in ASMPT in 2017. The proposal for this capital repayment was initially announced on February 28, 2018, and approved by the 2018 AGM.

SUPERVISORY BOARD COMPOSITION

The Supervisory Board is composed of five members. During the AGM on May 28, 2018 Mr. Kreutzer stepped down at the end of his final term and Mr. de Jong was newly appointed. All five members are independent, in line with the Corporate Governance Code.

MANAGEMENT BOARD COMPOSITION

The Management Board remains composed of two members. During 2018, no changes took place in its composition. In the AGM 2018 both members were reappointed for a period of four years.

DIVERSITY

The Supervisory Board recognizes the value of diversity amongst the members of the Supervisory Board and the members of the Management Board as stated in the ASMI diversity policy. Diversity is considered in any event to consist of gender, specific knowledge, work background, nationality, age and ethnic diversity, (technical) experience, and skills.

We strive to have a composition with at least 30% of the seats in the Management Board and Supervisory Board held by either gender. At the same time we aim for the best candidate taking into account the realization on the diversity criteria and match with the Supervisory Board profile. Currently we have a 20% female representation in the Supervisory Board.

In case of open positions in the Supervisory Board or Management Board, the Supervisory Board prepares a profile based on the required educational and professional background and in the search will actively seek for candidates that support the realization of diversity on the earlier mentioned criteria.

INDEPENDENCE

The Supervisory Board is of the opinion that its current members are all independent as defined by the Dutch Corporate Governance Code. Neither the Chairman nor any other member of the Supervisory Board is a former member of ASMI’s Management Board, or has another relationship with ASMI which can be judged 'not independent' of ASMI.

SUPERVISORY BOARD COMMITTEES

Audit Committee

The role of the Audit Committee is described in its charter, which is available on the Company’s website (www.asm.com). The composition of the Audit Committee changed in May 2018 with the retirement from the Supervisory Board of Mr. Kreutzer and the appointment of Mr. de Jong who replaced Mr. Kreutzer in the Audit Committee. Mrs. Kahle-Galonkse (Chairwoman) then assumed the chairmanship of the Audit Committee. During the year, the Audit Committee met with the Management Board and KPMG Accountants, the Company’s independent auditors, on four occasions. Audit Committee discussions included: the Company’s financial reporting including the application of accounting principles; the Company’s financial position and financing programs, and tax structure; the Company’s internal risk management systems; effectiveness of internal controls; the audit performed and its findings, the Annual Report and financial statements; and the budget and the quarterly progress reports prepared by the Management Board. The internal auditor participated in all four Audit Committee meetings, presenting her own actions and findings.

On several occasions, the Audit Committee met with KPMG Accountants, without the members of the Management Board present, to discuss several audit related topics. Furthermore, the Audit Committee discussed the auditor’s performance with the Management Board without KPMG Accountants present.

Nomination, Selection and Remuneration Committee

The role of the Nomination, Selection and Remuneration Committee (NSR) is described in its charter, which is available on the Company’s website, www.asm.com. In general, the NSR Committee advises the Supervisory Board on matters relating to the selection and nomination of new Management Board members, as well as the remuneration of the members of the Management Board. This Committee consists of Messrs. van Pernis (Chairman), Lobbezoo and Schumacher.

In 2018, the NSR Committee held three meetings. The topics discussed included the remuneration of the individual members of the Management Board. During the meetings of the Committee, the Chief Executive Officer was present, except when his own remuneration was discussed.

The remuneration of the members of the Management Board is disclosed in Note 25 to the consolidated financial statements of the Annual Report. The remuneration of the members of the Management Board during 2018 is fully in accordance with the remuneration policy.

WORD OF THANKS

We extend gratitude and appreciation to ASMI employees worldwide for their many contributions and enduring commitment to the Company. It is their commitment and determination that enabled us to make substantial progress in 2018. We recognize that the cumulative efforts of our workforce are truly creating real value for all of our stakeholders.

SUPERVISORY BOARD

J.C. Lobbezoo, Chairman
M.J.C. de Jong
S. Kahle-Galonske
M.C.J. van Pernis
U.H.R. Schumacher

Almere, the Netherlands
March 5, 2019​​​​​​​

 

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

i

s

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.