asml-2022-12-31-en

ASML ANNUAL REPORT 2022

STRATEGIC REPORT

GOVERNANCE

FINANCIALS






	Message from the CEO on page 4 >


	Q&A with the CTO on page 19 >


	Q&A with the CFO on page 40 >


	View our Highlights online >


STRATEGIC REPORT

4		Message from the CEO
8		Our company
19		Q&A with the CTO
22		Marketplace
30		Our business and ESG strategy
32		Our business model
40		Q&A with the CFO
		Financial performance
43		Performance KPIs
48		Long-term growth opportunities
		Risk
51		How we manage risk
55		Risk factors
		Environmental, Social and Governance
		Environmental, Social and Governance
69		ESG at a glance
70		Our material ESG sustainability topics

A definition or explanation of abbreviations, technical terms and other terms used throughout this Annual Report can be found in the chapter Definitions. In some cases, numbers have been

rounded for readers’ convenience.

This report comprises regulated information within the meaning of articles 1:1 and 5:25c of the Dutch Financial Markets Supervision Act (Wet op het Financieel Toezicht).

The sections Strategic Report, Corporate Governance, Supervisory Board report, Directors’ Responsibility Statement and EU Taxonomy together form the Management Report within the

meaning of Section 2:391 of the Dutch Civil Code (and related Decrees).

In this report the name ‘ASML’ is sometimes used for convenience in contexts where reference is made to ASML Holding N.V. and/or any of its subsidiaries, as the context may require.

References to our website and/or video presentations in this Annual Report are for reference only and none nor any portion thereof are incorporated by reference in this report.


		Environmental
75		Energy efficiency and climate action
84		Circular economy
		Social
96		Attractive workplace for all
108		Our supply chain
117		Innovation ecosystem
123		Valued partner in our communities
		Governance
133		Managing ESG Sustainability
134		Responsible business
146		Our approach to tax


		Our stories
7		Tackling pollution
21		Global well-being
29		Food security
39		Energy transition
50		Smart mobility
68		Virtual and augmented reality
148		Wearable technology


CORPORATE GOVERNANCE
		Corporate Governance
151		Board of Management
153		Supervisory Board
156		Other Board-related matters
159		AGM and share capital
164		Financial reporting and audit
166		Compliance with Corporate Governance requirements
		Supervisory Board report
167		Message from the Chair of the Supervisory Board
169		Supervisory Board focus in 2022
173		Meetings and attendance
176		Supervisory Board committees
184		Financial Statements and Profit Allocation
		Remuneration Report
185		Message from the Chair of the Remuneration Committee
187		Remuneration at a glance
189		Remuneration Committee
191		Board of Management remuneration
207		Supervisory Board remuneration


FINANCIALS & NON FINANCIALS

211		Directors’ Responsibility Statement
		Consolidated Financial Statements
214		Consolidated Statement of Profit or Loss
215		Consolidated Statement of Comprehensive Income
216		Consolidated Statement of Financial Position
217		Consolidated Statement of Changes in Equity
219		Consolidated Statement of Cash Flows
220		Notes to the Consolidated Financial Statements
		Company Financial Statements
272		Company Balance Sheet
273		Company Statement of Profit or Loss
274		Notes to the Company Financial Statements
		Other Information
280		Appropriation of profits
280		Adoption of Financial Statements
280		Voting rights
280		Branch offices
281		Independent auditor’s report
		Non-financial statements
288		Assurance Report of the Independent Auditor
290		About the non-financial information
296		EU Taxonomy
298		Non-financial indicators
316		Other appendices
320		Definitions

Dear Stakeholder,

The figures speak for themselves: record sales

of €21.2 billion, up by 13.8% compared with

2021, a gross margin of 49.7% and a dividend

per share of €5.80 add up to another

outstanding year for ASML. Our net bookings

stand at an unparalleled €30.7 billion for the

year 2022, our pipeline is flowing freely, with a

number of new products launched, set to

launch or in development, and our people are

talented, energized and engaged. Not

surprisingly, we are looking forward to a very

bright future with strong growth. I would like to

thank all our stakeholders for their support

during the year – and in particular I wish to pay

tribute to our people, who have again displayed

outstanding commitment and expertise, and

without whom none of our achievements would

have been possible.

Yet despite the positive numbers, the reality

is that 2022 could actually have been even

better. Our ability to meet customer demand

continued to be impacted by a set of

circumstances that were not fully in our

control. The aftermath of COVID-19, the

ongoing war in Ukraine and struggles among

some of our supply chain partners to deliver

according to our agreed plans due to

material shortages have combined to cause

significant turbulence and meant that we

were unable to give our customers what they

needed all of the time.

Ultimately, we have seen the global chip

shortage that first appeared in 2020 continue

through 2022. We have all encountered this in

one way or another in our personal lives,

whether through delays in taking ownership of a

new vehicle or reduced availability of technology

such as solar panels.

Delivering on our business strategy…

Although we have at times struggled

operationally, from a strategic standpoint we

have continued to deliver. Our

comprehensive product portfolio is aligned to

our customers’ roadmaps, delivering cost-

effective solutions in support of all

applications, from leading-edge to mature

nodes. Among many highlights of the year,

we shipped the first TWINSCAN NXT:2100i,

received new orders for the TWINSCAN

EXE:5200 and saw several customers adopt

Alignment Optimization 12 Color.

Our investments are set to

increase capacity.”

Peter Wennink

President, Chief Executive Officer and Chair of the Board of Management

While we had more unhappy customers than

I would have liked, we have also experienced

empathy and support. We have always kept

customers fully informed of any delays to

shipments, and they can see for themselves

how our investments are set to increase

capacity. Cranes stand across the skylines of

our sites as our investment to increase our

manufacturing capacity to 90 EUV 0.33 NA

and 600 DUV systems by 2025-2026 begins

to take shape, while we are also ramping our

EUV 0.55 NA (High-NA) capacity to 20

systems by 2027-2028. And key partners

such as Carl Zeiss are also busy adding

capacity, doing everything they can to free

the logjam in the supply chain.

It is true that some customers, concerned

about the global economic environment, are

choosing to delay shipments. But as

evidenced by our order book, most are

continuing to push us to get the tools they

need and are eager to take up any spare

capacity we can release to get deliveries

even earlier than scheduled if possible.

We have also been working to improve the

flexibility of our manufacturing capacity, our

workforce and our supply chain to enable us

to respond quickly and appropriately to the

current waves of uncertainty.

…and on our ESG strategy

The theme for this annual report is Small

patterns. Big impact. The things we do at ASML

have a wide-ranging impact, not only on our

customers but on society at large. The

technology pioneered by our R&D teams and

partners sits at the heart of global

digitalization, and has the potential to

transform how we all live and work, from

enabling predictive healthcare, energy

transition and smart cities to wearables, self-

driving cars and robotics.

Launched in 2021, our ESG strategy

acknowledges and addresses the impact we

have on society. It underpins our drive to be

a responsible organization and a force for

good in the world.

Of course, we are not unique in this. All

responsible companies now dedicate

significant resources to ESG matters,

reflecting how the world is coming to terms

with its major challenges, notably climate

change and the energy transition. For us,

ESG is about helping to create a responsible

society – one where as many people as

possible have a safe and healthy

environment, a job, a home and access to

food, good schools and quality medical care.

These are important basic conditions for

businesses to flourish and for economies to

grow. As we outline in 'Environmental, Social

and Governance - ESG at a glance', we have

made good progress over the last 12

months.

We have always been very vocal about the

fact that we’re running this company to a

stakeholder model, not per se only a

shareholder model. We have five stakeholder

groups – our people, our customers, our

suppliers, our shareholders and society. It is

the balance between those five that actually

makes a company credible. If you focus only

on one or two of those stakeholders, the

others are likely going to suffer. So we work

very hard to get the balance right. We are not

perfect and there remains much to do – but

our ESG strategy is an important beacon that

is lighting up the way ahead.

Working with our partners

We can’t survive without our partnership

ecosystem, and this goes right to the heart

of our values – challenge, collaborate and

care. We love being challenged, and we rise

to challenges much better when we

collaborate with others, from academia and

research institutions to leading-edge

companies from all over the world, creating

trust and sharing both risks and rewards.

Together, we are developing technology that

can have a positive impact – caring for the

ecosystem, for all our stakeholders and for

our planet.

We work together in a strong global

semiconductor innovation ecosystem with

our suppliers and innovation partners, as well

as with other equipment providers such as

etch and deposition partners, to understand

patterning and how we can provide the

solutions that our customers, our customers’

customers and our end users demand.

As architects and integrators, we orchestrate

this process – building on our values to help

fill our innovation funnel and keep the ASML

pipeline flowing freely. The Brainport

Eindhoven innovation ecosystem, in which

we operate from our headquarters in

Veldhoven, is a good example of this level of

cooperation, which is based on trust,

transparency and a willingness to share

expertise and knowledge.

Our ESG strategy is

an important beacon

that is lighting up the

way ahead.”

Peter Wennink

President, Chief Executive Officer and Chair of the

Board of Management

Driving the search for global talent

It may be a cliché that people are a

company’s greatest asset, but it is also very

true – and the shortage of talent is a factor

that is impacting every industry on the planet,

including ours. To meet the chip industry’s

ambitions, globally and within the European

ecosystem, we need to significantly increase

the inflow of engineering talent in the coming

decade.

The governments of South Korea, the US,

Taiwan and Japan are all investing heavily in

chip-related education and vocational

training. We need to see the Dutch and other

European governments doing the same. At

ASML, we’re playing our part. Education is a

key pillar of our community engagement

activities, and during 2022 we again

supported programs to boost interest in

technology among young people and

increase local talent pools in [all the main]

geographies where we operate.

Read more in:

Social

In 2022 we welcomed 7,130 new people into

ASML, so our efforts to attract talented

individuals are paying dividends, supported

by the fact that we’re able to offer them the

opportunity to work at the cutting edge of

technology. Today, we have more than 140

nationalities at ASML – but we know that

young people move often and may not stick

around for 20 years or so as previous

generations did. So our challenge is to make

sure that ASML is an attractive long-term

option where people can contribute and

enjoy the benefits of doing so and develop

themselves. That is where our 'can do'

culture is so important. We have a workplace

environment here where people can drive

innovation forward, inspire each other and

help make sure that digital technology fulfills

its potential.

Looking ahead to 2023 and beyond

At the 2023 AGM, Gerard Kleisterlee, the

Chairman of our Supervisory Board, will step

down after having served on the Supervisory

Board since 2015. I would like to express our

gratitude to Gerard for his valuable

contributions as Chairman of the Supervisory

Board and the Selection and Nomination

Committee, and member of the Technology

Committee. He has brought profound

experience to the Supervisory Board during

his eight years of service and has been a

great source of guidance and advice for

ASML. We wish Gerard all the best for the

future.

When looking at our business environment,

in the short term it is clouded by uncertainty

due to a number of macroeconomic

concerns including energy shortages,

inflation, reduced consumer confidence and

recession. On a geopolitical level, the

bifurcation of socio-economic blocks – with

the associated export and import controls –

is threatening the development of the global

village that contributed so much to a lot of

the innovation we have seen in recent years.

If countries or trade blocks withdraw into

their own territories, then innovation will be

less effective and more expensive.

Several news organizations reported end of

January 2023 that the US, the Netherlands

and Japan agreed to further restrict the

export of semiconductor manufacturing

equipment to China. We understand that

steps have been taken that would cover

advanced lithography tools as well as other

types of equipment. The terms of this

agreement have not been publicly disclosed

and remain confidential for now. We expect

that it will take many months for the

governments to write and enact new rules.

Combined with the current market situation,

we do not expect these measures to have a

material effect on our expectations for 2023.

Looking at the immediate future, we will have

to deal with the shocks in the system, and I

am confident that we will do so, supported

by growing demand for semiconductors and

semiconductor equipment. Over the next 12

months, I anticipate that we will yet again

break records.

Beyond 2023, I am very positive about our

industry in general and about ASML in

particular. Some industry analysts believe

that our semiconductor industry will grow to

be worth a trillion dollars by 2030 – and we

do not disagree. Our own expectation is that

our combined systems and installed base

revenue could provide an annual revenue

growth rate of around 14%1 for the period

2020-2030.

Teamwork, both within ASML and externally

with our partners and suppliers, will be a

crucial component if we are to achieve that

ambition. By challenging, collaborating and

caring, we will play a leading role in meeting

customer demands, delivering the right

technology at the right time to enable the

semiconductor industry to thrive while taking

to heart the interests of the communities

around us.

Peter Wennink

President, Chief Executive Officer and Chair of the Board

of Management

By challenging,

collaborating and

caring, we will play a

leading role in

meeting customer

demands, delivering

the right technology

at the right time.”

Peter Wennink

President, Chief Executive Officer and Chair of the

Board of Management

1.Using the midpoint of the 2030 revenue scenarios

ASML models over the period 2020-2030, we expect

a potential compound annual growth rate of around

14% from our base 2020 revenue, around €14.0

billion. This is a combination of growth in our systems

sales as well as our installed base management

revenue.




		TACKLING POLLUTION
		Nano innovations, macro challenges
		Our lithography solutions not only help to reduce chip size – they also increase performance and energy efficiency. That’s opened the door to nano-innovations such as the ‘winged microchip’ – inspired by the way seeds disperse through the air, these ultra-miniaturized electronic devices can ride the wind to track air pollution, airborne disease and environmental contamination.
		Read more online



ASML ANNUAL REPORT 2022	SMALL PATTERNS. BIG IMPACT.	STRATEGIC REPORT	GOVERNANCE	FINANCIALS	7


	Key facts

	€21.2bn		€3.3bn
	Total net sales		R&D investments (based on US GAAP)
	€18.6bn Asia €2.0bn US €0.6bn EMEA		We innovate across our entire product portfolio through strong investment in R&D
	Read more on page 43 >		Read more on page 43 >



		39,086		>60
		Employees (FTE)		Locations
		18,854 in Operations 14,181 in R&D 6,051 in Sales and Support		Across three continents Headquartered in the Netherlands since 1984
		Read more on page 96 >		Read more on page 8 >



		10		143
		Material sustainability topics		Nationalities
		Responsibility and good governance are fundamental to how we do business		We strive to maintain an environment where all feel valued and respected
		Read more on page 70 >		Read more on page 96 >


	Key products and services

	Lithography systems

	Extreme ultraviolet (EUV). We are the world’s only manufacturer of EUV equipment, the most advanced system with the capability of printing smaller features with higher density.		Deep ultraviolet (DUV). As the workhorse of the semiconductor industry, DUV produces the majority of layers in a customer device today, and will remain important for future devices.

	Metrology and inspection systems		Computational lithography

	Using optical and e-beam technology, these systems enable chipmakers to assess their performance across the chip manufacturing process, helping to improve accuracy, performance and quality control.		This process is used in the development of new chips to optimize reticle designs and enable more precise monitoring and control.

	Software

	Lithography process and control software solutions.

	Refurbishment		Customer support

	We measure a machine’s life in decades, not years. We refurbish and upgrade our older lithography systems to extend their lives, and we offer associated services.		We support our customers with a broad range of applications, services, technical support products and upgrades to ensure our equipment works reliably in their production process.


Our global presence

	Asia
	China
	Hong Kong
	Japan
	South Korea
	Malaysia
	Singapore
	Taiwan



	North America
	Arizona	Oregon
	California	Texas
	Colorado	Utah
	Connecticut	Virginia
	Idaho
	Massachusetts
	New Mexico
	New York

	EMEA
	Belgium
	France
	Germany
	Ireland
	Israel
	Italy
	Netherlands
	United Kingdom


	Our purpose

	Why we exist
	Unlocking the potential of people and society by pushing technology to new limits
	Society has made huge advances over the years, but the world still faces crucial challenges for the future. We must change how we think and act on themes that impact everyone. That’s why we seek to innovate at least at the same pace as our customers, focusing our intellect and resources to constantly look for new ways that will help improve society in areas such as energy use, climate change, mobility, healthcare, education and nutrition.


	Our vision

	What we try to achieve
	We enable ground-breaking technology to solve some of humanity’s toughest challenges
	At ASML, we believe that the microchip industry is in a unique position to help tackle these challenges. From artificial intelligence (AI) to a vast internet of things (IoT), microchips are at the heart of modern technology that’s enabling the transition to sustainable energy, improving global health, increasing the safety and efficiency of transport, tackling pollution, bridging the digital divide or feeding close to eight billion people without exhausting the earth’s resources.


	Our mission

	What we uniquely do
	Together with our partners, we provide leading patterning solutions that drive the advancement of microchips
	The long-term growth of the semiconductor industry is based on the principle that the energy, cost and time required for electronic computations can be reduced by shrinking transistors on microchips. To enable shrink, what we do – lithography – is key. Through our sustained investment in and dedication to research and development, we have become the innovation leader and a focused supplier of holistic lithography solutions to all of the world’s major chipmakers.


Our core values

To help solve humanity’s toughest challenges while at the same time addressing our own, we must continue to amplify ASML’s core values that created our success – challenge, collaborate and care. We believe that these values help to provide opportunities for our employees in a safe, inclusive environment to develop their talent, feel respected and thrive, which enables them to make smart decisions that benefit all stakeholders.


We challenge	We collaborate	We care
Say it can’t be done, we dare you. We bravely challenge boundaries and question the status quo. We continuously refine our ideas and processes, which enables us to keep pushing technology forward.	We collaborate to tap into our collective potential. Together with our partners in our ecosystem, we expand our knowledge and skills, learn from each other and share approaches to deliver the best results. This way, we create solutions that are optimized for ASML as a whole.	As an industry leader, we act with integrity and respect, realizing that our impact extends beyond technology to people, society and the planet. We take personal responsibility to create a safe, inclusive and trusting environment where people from all backgrounds are encouraged and enabled to speak up, contribute, make mistakes, learn and grow.

We bravely challenge boundaries,	we expand our knowledge and skills,	to people, society and the planet.
Watch 'Our values' video

Tiny microchips, driving a global

ecosystem

Every moment of every day, people make

use of technology that contains microchips.

These are small but mighty devices, and

fabricating the layers on even the simplest

chip requires an elaborate process that few

companies in the world have mastered. This

can take months from start to finished

product, as the silicon wafer travels through

dozens of different machines in a

chipmaker’s fab (semiconductor fabrication

plant) before it finds its way into electronic

products.

This multifaceted production process has

led, over decades, to the semiconductor

industry becoming a global ecosystem. This

ecosystem includes specialized chip design

companies, equipment and infrastructure

suppliers and the chipmakers themselves.

A strong collaborative network at the

cutting edge of our digital future

As a crucial manufacturer of lithography

equipment, ASML is a vital part of this

ecosystem chain. The fabrication of the

circuitry patterns on silicon wafers, made

possible by our lithography systems, can be

found in the factories of every major

chipmaker in the world.

But our systems are just one part of a

network and process involving numerous

suppliers and the latest chipmaking

equipment. Every step and every machine in

the process is important. That’s why

collaboration and innovation are key. At

ASML, we collaborate to succeed – from the

academics who help us understand and

push the laws of physics, to our customers

who identify new possibilities and the

suppliers that translate our ideas into

products and technology.

Our ecosystem partners

We innovate through partnerships. By

developing our technology in close

collaboration with our customers, we seek to

build today what they need tomorrow. We

develop our machines based on their input,

and engage closely with them to help pursue

their technology and cost roadmaps.

We also work closely with our suppliers,

trusting them to manufacture parts and

modules for our systems. Many of them are

deeply involved in developing new

technology and achieving the innovations we

seek. With some of these so-called ‘farmout

suppliers’, we work as co-investors.

Our partnership with Carl Zeiss SMT has

spanned more than three decades, and we

also hold an important strategic interest in

the company. We apply the principle of ‘two

companies, one business’, working together

to drive operational excellence in innovation

and technology.

We co-develop expertise through a wide

network of technology partners, including

universities and research institutions such as

imec in Belgium and the technical universities

in Twente, Delft and Eindhoven and

Advanced Research Center for

Nanolithography (ARCNL), all in the

Netherlands.

Generating ideas and finding

technological innovations and solutions

With more than 14,000 of the brightest

minds in the industry in our R&D department,

ASML is uniquely placed to innovate the

most advanced lithography systems in the

world. We continue to invest heavily in R&D –

in 2022, we spent €3.3 billion (based on US

GAAP) in this vital area, compared with €2.5

billion (based on US GAAP) in 2021, while

balancing our customers’ needs, product

capabilities and technology solutions.

Our R&D teams focus on generating and

exploring exciting new ideas and

demonstrating their feasibility in the long

term, as well as finding technological

solutions to the challenges colleagues may

face with any products and applications that

have already moved into development.

Our researchers continuously scout for

technological innovations and solutions –

within the semiconductor industry and

beyond – to assess if they can be applied in

ASML’s technology roadmap to support our

customers and help drive their own

semiconductor device roadmaps.




	We innovate through partnerships. By developing our technology in close collaboration with our customers, we seek to build today what they need tomorrow.

Filling the ‘innovation funnel’

We encourage our experts to build a wide

network in the broader technology space.

This supports the constant stream of new

ideas to our technology pipeline that flows

through what we call our ‘innovation

funnel’ (see diagram on the right). This helps

us select new ideas that have the potential to

advance our products and their customer

application.

Ideas that pass the feasibility assessment go

into our product generation process (PGP), a

decision-based process for product

development that includes building and

testing system prototypes in the necessary

environments. Prototypes that pass these

tests may eventually lead to new product

releases.

–Our research teams scout for new ideas

–These ideas are taken through the ‘proof

of concept’ stage

–Those that pass the feasibility

assessment are transferred to our

Development and Engineering (D&E)

department


	–Guided by the PGP, our D&E engineers create new components or subsystems, integrating them into the functional system –They also develop new applications –They ensure we innovate with a strong focus on time-to-market

Innovation achievements in 2022

Every day, our teams take on the exciting

challenge of building and driving innovation

to enhance our reputation as the providers

of the most advanced lithography systems

in the world. To do this, we apply

concurrent engineering, often starting new

system development before the previous

generation has even reached the customer.

At the same time, we continuously seek to

improve our products and capabilities, while

safeguarding their reliability,

manufacturability and serviceability.

In DUV, we shipped the first TWINSCAN

NXT:870 – the first NXT KrF system – and

the first TWINSCAN NXT:2100i – enabling

over 20% improvement of on-product

overlay to a customer.

In our EUV High-NA business, we

received both the first High-NA

mechanical projection optics and

illuminator and the new wafer stage from

suppliers. These modules will be used for

initial testing and integration, an important

step for the EXE:5000 program.

In addition, to further strengthen our

product offering, we released ALO12C – a

hardware-software combination – that

enables our customers to optimize wafer

alignment performance using 12 colors

instead of four.

We have also continued to progress our

metrology and inspection roadmap. For

example, the HMI eScan 1100 multibeam

system, our first-generation multibeam

system with 25 beams (5x5), has been

shipped for customer evaluation.

In 2022, we also shipped our first

eScan460 system, which is our next-

generation single-beam inspection system.

Engaging with our customers at all

levels and focusing on long-term

challenges

We are one of the world’s leading

manufacturers of chipmaking equipment,

while our customers are the world’s leading

microchip manufacturers. We enable them to

create the patterns that define the electronic

circuits on a chip, and consequently our

success is inextricably linked with theirs.

That’s why we collaborate with our

customers to understand how our

technology best fits their needs and

challenges. That means engaging with our

customers at all levels: building partnerships,

sharing know-ledge and risks, aligning our

investments in innovation and increasingly

focusing on the long-term challenges for the

next five to ten years and beyond. We

develop our

solutions based on their input, help them

achieve their technology and cost roadmaps,

and work together, often literally in the same

team, to make sure our solutions fit together

perfectly.

Engaging fully with customers is also an

important part of working toward securing

the full product portfolio that will sustain our

company into the future – which includes

increasing the adoption of EUV in high-

volume manufacturing environments. In

2022, we received additional orders for the

TWINSCAN EXE:5200, the high-volume

manufacturing version of our EUV 0.55 NA

(High-NA) platform. All current EUV

customers have submitted orders for High-

NA, demonstrating the demand for

continuing shrink.

Complete customer satisfaction

When we talk about customer intimacy, we

mean the entire customer relationship across

all channels, from the early stages of

innovation onward. At each stage, we aim to

foster trust, advocacy and continuous

engagement, with the goal of achieving

complete customer satisfaction.

As customer requirements become more

complex, it takes longer to align with a shared

vision, so we seek to start earlier in the process.

Transparency is key, and our customer intimacy

strategy helps us to leverage our innovations

and develop even more sophisticated solutions

with our customers.

Close customer alignment

We have built a structure of customer

interactions across various channels in the

organization to support and sustain our

partnerships with customers. For example,

we run regular meetings with our key

customers to align our product development

plans with their business goals and needs.

These meetings include Executive Review

Meetings, at which members of our senior

management team and Board of Management

discuss business and strategies with

customers; Technology Review Meetings, at

which our senior technology experts, our Chief

Technology Officer and our Chief Business

Officer discuss technology roadmaps and

requirements with customers; and Operational

Review Meetings, where we review topics

related to our customers’ operational activities.

Building on our customer relationships

We market and sell our products directly to

customers, without agencies or other

intermediaries. Our dedicated Sales and

Customer Management department is

responsible for building and maintaining our

customer relationships and ensuring all

relevant ASML departments contribute to

meeting customer needs. Our account

managers, field and application engineers

and service and technical support specialists

are located close to our customers

throughout Asia, the US and EMEA.

We know how essential it is for us to have

well-trained engineers in the regions where

we operate, so we offer training designed to

boost the capabilities of our local customer

service teams as well as enhance local

technical expertise. Alongside good remote-

control capabilities, this ensures that we

continue to increase the self-sufficiency of

the local field engineers.

Working with customers in 2022

While we maintained a high level of

engagement with our customers throughout

the pandemic, we were pleased that the

physical interactions started to return to

‘normal’ this year. With travel restrictions,

quarantine and workforce constraints coming

to an end in many countries, we were able to

hold physical meetings with more customers

around the world, and they were able to visit

us at the Veldhoven campus more and more.




	We collaborate with our customers to understand how our technology best fits their needs and challenges.

However, some restrictions remained around

the world during the year.

Our customer relationships have been

important in trying to manage the significant

ramp-up of demand in the first part of the

year. The market remained strong, but the

overheated nature of the market this year,

combined with the challenges we

experienced in delivering systems as fast as

our customers needed, impacted the

conversations we had with them. While we

went through the delivery challenges

together, we did our best to keep our

customers fully informed of shipment status

and progress in our capacity plans.

Given the shortages that built up in the early

part of 2022, our customers still needed our

equipment urgently. We have worked with

them to achieve this, focusing on the

dynamics of different customers in various

areas in the industry. As part of our

commitment to responding rapidly to our

customers’ needs, we also introduced ‘fast

shipments'.

The market continues to be influenced by

governments, for example through the CHIPS

and Science Act in the US and EU, which

focuses on federal aid to encourage the

construction of microprocessor manufacturing

facilities. This type of governmental attention

requires major investments in specific regions,

which also require delivery of our equipment for

new fabs.

Measuring our approach

Our Voice of the Customer program helps to

ensure our employees hear firsthand about

our customers’ needs and challenges. This is

especially important for employees without

direct access to customers. To reach as

many of our people as possible, the program

makes use of different channels of

communication: live presentations and Q&As

with senior customer representatives,

recorded customer interviews, online articles

and personal engagement with customer

representatives.

While we still face the long tail of COVID-19

restrictions in some areas, we continue to

run local Voice of the Customer initiatives

and remote customer interviews. Our regular

schedule of interactions continued

throughout the year, and we are starting to

reintroduce live presentations with larger

audiences and combining remote with face-

to-face interactions where we can.

We also ask our customers to rate our

performance through our Customer

Feedback Survey. Their direct ratings and

frank comments provide valuable insight into

how we can contribute to our customers’

successes and help them to overcome

challenges. We carefully analyze the results,

check the insights gained with each

customer and then define targeted,

continuous improvement plans with their

input to ensure we take their priorities into

account.

We have been busy deploying the

improvement actions identified in our 2020

survey. This has helped us focus on truly

understanding what customers need from

us, and validating that we are on the right

track with the right improvements. We have

updated our customers regularly on the

progress being made, and in September

2022 we sent out our latest survey. The

results of the 2022 survey show us that our

customers are satisfied with our teams, and

products, performance and the business

support we provide for them. They also ask

us to closely listen to their feedback, provide

them with shorter delivery times and continue

pushing the technology forward in

collaboration with them and in line with their

needs.

Externally, TechInsights, through its annual

Customer Satisfaction Survey, benchmarks

the performance of suppliers across the

semiconductor industry based on three key

factors: supplier performance, customer

service and product performance. Our target

is to achieve a top-three ranking among large

suppliers of semiconductor equipment. In the

2022 TechInsights benchmark, we again

achieved a second place Customer

Satisfaction ranking among the ‘10 Best

Large Suppliers of Chip Making Equipment’,

and first place in the best suppliers of fab

equipment category.

Holistic lithography product and

service portfolio

The semiconductor industry is driven by

affordable scaling – the ability to make

smaller, more energy-efficient transistors at

the right price. Our holistic lithography

product portfolio is geared toward

lithography-enabled shrink that goes far

beyond the current decade, allowing our

customers to generate the greatest value per

silicon wafer for many years to come.

Our comprehensive portfolio supports

customers with a broad range of products

and services, from mass-producing

advanced Logic and Memory chips to

creating novel ‘More than Moore’

applications or cost-effective mature chip

technologies. Our product offerings provide

patterning solutions for various industry

wavelengths – from the most advanced

13.5 nm EUV wavelength to the industry’s

workhorse DUV wavelengths of 193 nm,

248 nm and 365 nm.

As chipmakers continue to scale nodes, they

face unprecedented engineering, material,

structural and manufacturing difficulties.

Our applications products support our

lithography platforms, driven by our unique

capability to help customers maximize

patterning performance. This portfolio

includes optical and e-beam metrology, high-

resolution e-beam inspection, computational

lithography and scanner and process control

software solutions.

We also support our growing installed base

with best-in-class customer support,

providing our customers with upgrade

solutions for higher productivity and

improved imaging, overlay and availability.

Our holistic lithography approach

See page 34 >

In more than two decades since we started

developing EUV technology, we have

invested billions in R&D and acquired

Cymer, a San Diego-based maker of light

sources, to accelerate our EUV source

technology. This has helped us solve

several technical challenges to enable the

EUV infrastructure our customers need for

high-volume manufacturing.

Our success has come through close

cooperation with our customers and

suppliers, and ASML is currently the world’s

only manufacturer of EUV lithography

systems. Since its introduction, our EUV

installed base produced more than 111

million wafers, compared with 59 million

wafers produced by end of 2021.

EUV 0.33 NA

Our EUV platform extends our customers’

Logic and Memory roadmaps by delivering

resolution improvements and state-of-the-art

overlay performance, enabling year-on-year

cost reductions. EUV lithography uses light

with a wavelength of just 13.5 nm and a

numerical aperture of 0.33. This is a

wavelength reduction of almost 15 times

compared with the next most advanced

lithography solution used in advanced

chipmaking – deep ultraviolet (DUV) argon

fluoride (ArF) lithography, with its 193 nm

light. This allows our customers to use EUV

in a single exposure, rather than complex

multiple-patterning strategies with ArF

immersion, and enables them to further

shrink microchip structures. Our EUV

product roadmap is intended to drive

affordable scaling to 2030 and beyond.

The TWINSCAN NXE:3600D is our latest-

generation EUV 0.33 NA lithography system.

It combines the highest resolution with

15-20% increased productivity and around

30% better overlay compared with its

predecessor, the TWINSCAN NXE:3400C,

while also improving system availability.

EUV 0.55 NA (High-NA)

After six years of engineering, we have

started to build the next generation of EUV

lithography systems – further improving

resolution with a higher numerical aperture

(NA) of 0.55 NA compared with the 0.33 NA

of our current EUV platform. To reduce

technological introduction risk and R&D

costs, the EUV 0.55 NA (High-NA) platform

maximizes commonality with the EUV 0.33

NA platform.

Our EUV 0.55 NA systems – TWINSCAN

EXE:5000 and EXE:5200 – are an

evolutionary step in EUV technology,

introducing a novel optics design and

significantly faster reticle and wafer stages.

Their 0.55 NA provides a resolution increase

compared with the 0.33 NA lens used in our

previous EUV machines, and this enables

higher-resolution patterning for even smaller

transistor features.

These enhancements offer considerable

benefits to our customers, enabling

lithography simplification for future nodes,

higher yield and decreased defect density

for both Logic and dynamic random-access

memory (DRAM). With its larger optics, the

EXE platform can print smaller features with

higher density, reducing patterning costs for

customers. EUV 0.55 NA helps our

customers to extend their shrink roadmap

and minimize double or triple patterning

compared with 0.33 NA, leading to reduced

patterning complexity, lower risk of defects

and a shorter cycle time.

EUV 0.55 NA has also been designed to

enable multiple future nodes, with the

industry’s first deployment expected in

2025, followed by memory technologies at

similar density. We expect EUV 0.55 NA

(High-NA) technology to start supporting

high-volume manufacturing in 2025/2026.

In 2022, we received purchase orders from

all of our current EUV customers for the

delivery of the industry’s first TWINSCAN

EXE:5200 system – EUV high-volume

production system with a high NA and a

productivity of 220 wafers per hour.

DUV lithography systems are the

workhorses of the industry. Supporting

numerous market segments, DUV systems

produce the majority of layers in a customer

device today and will remain important for

future devices. We offer immersion as well

as dry lithography solutions for all

wavelengths currently used in the

semiconductor industry – i-line using

365 nm wavelength, KrF using 248 nm

and ArF using 193 nm. These systems

help manufacture a broad range of

semiconductor nodes and technologies,

and support the industry’s cost- and

energy-efficient scaling.

Our DUV immersion and dry systems lead

the industry in productivity, imaging and

overlay performance for high-volume

manufacturing of the most advanced Logic

and Memory chips in combination with

EUV, while continuing to deliver value for

mature nodes and lower-volume

applications.

Immersion systems

ArF immersion lithography maintains a thin

film of water between the lens and the

wafer. Using the refractive index of water to

increase NA improves resolution to support

further shrink. Our immersion systems are

suitable for both single-exposure and

multiple-patterning lithography, and can be

used in seamless combination with EUV

systems to print different layers of the same

chip.

Our latest state-of-the-art immersion system

is the TWINSCAN NXT:2100i, launched in

the third quarter of 2022. Alongside intrinsic

improvements to lens metrology, reticle

conditioning and wafer table, as well as

overall cross-matching improvements, the

NXT:2100i features innovations such as the

Alignment Optimizer 12 Color package. The

system delivers 295-wafers-per-hour

productivity combined with unprecedented

overlay performance, providing the most

cost-efficient solution to customers for critical

immersion layers on the sub 3 nm nodes.

Dry systems

Not every layer on a chip has to be produced

by the most innovative immersion lithography

systems. While some more complicated

layers do require more advanced lithography

systems, others can often be printed using

‘older’ technology such as dry lithography

systems. Our dry systems product portfolio

offers our customers more cost-effective

solutions for all types of wavelengths.

Our TWINSCAN NXT:1470 dual-stage ArF

system continues to be adopted by the majority

of Memory and Logic customers and has been

inserted in high-volume manufacturing

processes. It is the first dry NXT system,

building on the common immersion platform,

with improvements in matched machine overlay

(<4.0 nm), productivity (>300 wafers per hour)

and footprint.

Following our new-generation KrF system,

the TWINSCAN XT:860N, we shipped the

first TWINSCAN NXT:870 248 nm step-and-

scan system to a customer. The NXT:870 is

a high-productivity, dual-stage KrF

lithography tool designed for volume 300 mm

wafer production at and above 110 nm

resolution. The system increases productivity

from the 260 wafers per hour capability of

the XT:860N to 330 wafers per hour through

the use of the NXT platform, a higher scan

speed and reduced system overhead time.

For more critical KrF layers, the 0.93 NA

TWINSCAN XT:1060K is our most advanced

dual-stage KrF lithography tool at 248 nm,

with the highest NA and productivity in the

industry, offering best-in-class resolution at

and below 80 nm.

The TWINSCAN XT:400L is our latest i-line

lithography system, which can print features

down to a resolution of 220 nm for 200 mm

and 300 mm wafer production.

With an 0.80 NA, the

TWINSCAN NXT:870

is our new generation

KrF system.

Before EUV, before immersion and even

before our TWINSCAN systems, there was

the PAS. In 1991, seven years after the

company was founded, we launched the

PAS 5500, which would prove to be our

breakthrough platform. This system

dramatically reduced manufacturing times

for our customers, and its modular design

enabled them to produce multiple

generations of advanced chips using the

same system.

Our refurbished products business, known

as Mature Products and Services (MPS),

refurbishes and upgrades our older

lithography systems to extend their lives

and offer associated services. MPS’s

customer base is wide and active in a

variety of markets, especially in the ‘More

than Moore’ space.

ASML systems have a very long operational

lifetime that often exceeds their role at the

initial customer. Many customers are

therefore able to generate value by selling off

systems they no longer require. To support

this sustainable product use and ensure

used systems deliver the quality that ASML

stands for, we are actively involved in the

used-system market through our

refurbishment and associated services.

Remarkably, 95% of the systems that we

have sold in the last 30 years are still in use.

We offer refurbished systems of the PAS

5500 and first-generation AT, XT and NXT

systems. Our refurbishment and associated

services are adept at extending the lifespan

of our customers’ installed base, drawing

value from their capital and contributing to

sustainable product use.

Read more in:

Environmental - Circular economy - Refurbish

mature products.

Our metrology and inspection systems

allow chipmakers to measure the patterns

that they actually print on the wafer to see

how well they match the intended pattern.

Our portfolio covers every phase of bringing

a chip to market, from R&D to mass

production, and our systems monitor each

step of the manufacturing process –

enabling chipmakers to assess the

performance of the entire process.

The systems offer the speed and accuracy

needed to create automated control loops

via our process control solutions. This

optimizes the lithography system settings

for each exposure to reduce edge

placement error (EPE), which is the

combination of product overlay and critical

dimension uniformity, enlarge the process

window and achieve the highest yield and

best performance in mass production.

Optical metrology

Our YieldStar optical metrology solutions

allow chipmakers to assess the quality of

patterns on the wafer in volume production,

through fast and accurate overlay

measurements. Overlay, or how well one

layer of a chip is aligned with the previous

one, is an important measure of lithography

performance and a key contributor to EPE.

As structures on microchips get smaller and

smaller, overlay and EPE become

increasingly important.

The YieldStar 385H, launched in 2020, offers in-

resist post-lithography (pre-etch) overlay and

focus metrology, with enhanced throughput

and accuracy. Compared with previous

systems, key enhancements include a faster

stage and faster wavelength changing. This

enables highly accurate overlay measurements

and tool matching using multiple wavelengths

without impacting throughput.

Our latest model, launched in 2021, the

YieldStar 1385H, provides the ability to

measure after-etch device patterns, enabling

extended yield control capability for our

customers. This system for fast, accurate in-

device overlay and metrology delivers

improved in-device accuracy and around

50% productivity improvement capability

over the previous YieldStar 1375 model, and

has the capability to measure multiple layers

at once, helping customers to improve yield

through post-etch process control.

E-beam metrology and inspection

Our HMI e-beam solutions allow customers to

locate and analyze individual chip defects amid

billions of printed features, extending the scope

for process control. While e-beam solutions

were historically too slow to monitor volume

production processes, we have made progress

in various methods of increasing the throughput

of e-beam systems.

We continue to extend technology leadership

in voltage contrast inspection and physical

defect inspection with the widely adopted

single-beam platform. The eScan 430 is our

latest single-beam inspection system,

delivering more than 35% throughput

improvement across various applications in

Logic, DRAM and 3D NAND.

Our high-resolution e-beam metrology system

eP5 offers world-class 1 nm resolution with

large field-of-view capabilities. It produces

critical dimension (CD) and EPE data in high

volume with a quality level that customers

need for monitoring and control. EPE is

becoming more critical for device patterning

and yield with shrinking design rules and the

adoption of EUV lithography. We also released

an EPE metrology application software

product on eP5. It is capable of local and

global EPE measurements on device, both

intralayer and interlayer.

In 2022, we released and shipped eP5 XLE,

which extends the high-resolution eP5 system

with high landing energy up to 30 keV and fast

back-scattered electron detection for

inspection and metrology of 3D devices in

Logic and Memory. It is capable of overlay

measurement on device patterns,

complementing our YieldStar product offering.

We have also released and shipped the first

next generation high resolution e-beam

metrology system eP6 to succeed eP5. The

projected eP6 performance is expected to be

more than 10 times the speed of existing

technologies.

Metrology and inspection systems (continued)

Building on the 2020 launch of our

breakthrough multibeam inspection tool HMI

eScan 1000, with a 3x3 image, we have now

introduced the next-generation HMI eScan

1100 to our product portfolio. With a 5x5

image, it demonstrates successful multibeam

operation, simultaneously scanning with 25

beams. The 5x5 system has higher sensitivity

for detecting voltage contrast defects and

physical defects, while substantially increasing

inspection throughput. In 2022, the first

eScan1100 multibeam system was installed at

a customer site to start customer evaluation.

System and process control

Our system and process control software

products enable automated control loops to

maintain optimal operation of lithography

processes. Using powerful algorithms, they

analyze metrology and inspection data and

calculate necessary corrections for each

individual exposure. These are then fed

back to the lithography system to minimize

EPE in subsequent wafer lots. In this way

they enable the creation of ever more

advanced microchips with maximum yield

and performance. Our system and process

control roadmap aims to take increasing

advantage of the huge flexibility of our

lithography systems. We are able to apply

more powerful algorithms with higher-order

corrections to support our customers, own

roadmaps for increasing EPE performance.

Computational lithography and

software solutions

Our computational lithography solutions are

used in the development of new chips to

optimize both the reticle patterns and the

setup of the lithography system to ensure

robust, manufacturable designs that deliver

high yields. Insight from computational

lithography solutions is also increasingly

being used to guide metrology and

inspection, increasing throughput and

enabling more precise process monitoring

and control in high-volume manufacturing.

These products are based on accurate

computer simulations of the lithography

system and process, representing a wide

variety of physical and chemical effects.

Increasingly, we are using machine-learning

techniques to further speed up

development, and are continually

developing our computational lithography

offering to increase the range and accuracy

of models and reduce the computational

time and cost.

To provide all our customers with the best

possible value proposition, we offer an

extensive installed base management

portfolio, including a wide range of service

and upgrade options.

Our installed base continues to grow, with

many systems finding second or even third

lives at new owners in new markets and

applications.

We develop and sell product options and

enhancements designed to improve

throughput, patterning performance and

overlay. Our field-upgrade packages enable

customers to optimize their cost of ownership

over a system’s lifetime by upgrading older

systems to improved models.

Customer support

We support our customers with a broad

range of applications, services and technical

support products to maintain and enhance

our systems’ performance. We have more

than 9,000 customer support employees,

who work to ensure the systems in our

customers’ fabs run at the highest levels of

predictability and availability. We offer 24/7

support, next-day parts delivery, an easy,

centralized customer portal and training for

customer engineers.

What were the stand-out achievements

of the last 12 months?

For us, innovation is all about making a

difference in the marketplace. Our goal is

always to give customers the products and

capabilities they need to deliver on the

potential of technology for making a positive

contribution to society. The hunger for

computational power is endless. Energy

transition, connectivity, healthcare and many

more areas are all being transformed by

digital technology – we do not directly create

the tech that is making these developments

possible, but we are important enablers.

So the most pleasing aspects of the last year

have included seeing some of the ideas we

have been working on in recent years

become reality. For example, we made the

first shipment of our latest DUV NXT

technology, the TWINSCAN NXT:2100i.

Furthermore, all our current EUV customers

have now submitted orders for EUV 0.55 NA

(High-NA). Customers will start their R&D in

2024-2025, aiming for high-volume

manufacturing in 2025-2026.

The Rayleigh criterion that drives

Moore’s Law

–CD is the critical dimension, a measure of how small

the smallest structures are that the lithography

system can print.

–Lambda is the wavelength of the light source used

and the smaller the wavelength, the smaller the

structures that can be printed. Our deep ultraviolet

(DUV) lithography systems, known as the industry

workhorse, dive deep into the UV light spectrum to

print the tiny features that form the basis of the

microchip. Over the years, ASML has made several

wavelength steps, and our DUV lithography systems

range from 365 nm (i-line), 248 nm (KrF) to 193 nm

(ArF). With the extreme ultraviolet (EUV) systems, we

provide highest-resolution lithography in high-

volume manufacturing as these systems make a

major step in wavelength. With EUV tin plasma, we

generate EUV light which has a wavelength of just

13.5 nm.

–NA is the numerical aperture, indicating the

entrance angle of the light – with larger NA

lenses/mirrors, smaller structures can be printed.

Besides larger lenses, ASML has increased the NA

of our ArF systems by maintaining a thin film of

water between the last lens element and the wafer,

using the breaking index of the water to increase

the NA (so-called immersion systems). After the

wavelength step to EUV, ASML is developing the

next-generation EUV systems, called EUV 0.55 NA

(High- NA), where we push the numerical aperture

from 0.33 to 0.55.

–k1 is a factor relating to optical and process

optimizations. Together with our computational

lithography and patterning control software

solutions, we provide the control loops for our

customers to optimize their mask designs and

illumination conditions.

We are 100% committed to advancing both

EUV and DUV technologies in order to

provide a balanced product portfolio. We

have seen something of a transition in our

R&D focus in recent years, with increased

emphasis and resources dedicated to DUV,

which will continue to be the industry

workhorse and the technology of choice for

many customers. We are now ramping up

our development of solutions that are driving

commonality, productivity and performance

to new standards, underpinning the future of

DUV.

Behind the scenes, we have been making

good progress with our scanner and process

control software solutions, as well as with our

computational engine and optical and e-

beam metrology and inspection solutions.

And there is a lot more to come in the years

ahead, as we continue to sharpen our focus

on holistic lithography. Lithography systems

are highly complex, so we aim to provide

customers with a holistic, integrated

approach that enables them to optimize the

lithography process. To take the new half-

dome mirror as an example, this provides the

customer with around 100 different controls,

in addition to the approximately 1,000 that

we already offered. This year we enhanced

our virtual computing platform that brings

data together from every part of the

lithography process, analyzes it and provides

a feedback loop to control the performance

of our tools and optimize what is a very

complex process.

Is Moore’s Law still alive and well?

Overall shrink will continue for years to come.

In his book ‘The Singularity is Near’, Ray

Kurzweil explains how the number of

transistors per device will continue to

increase for a decade or more due to system

innovation, of which lithography is one

aspect.

But first of all, let’s be clear that shrink is a

really complicated story. It is partly

determined by what we do with our

lithography, in line with Moore’s Law, and

through dimensional scaling this has been

the main driver of shrink over the last 15

years. This is still hugely significant but is

slowing down a little [as patterns become

ever smaller]. In addition to dimensional

scaling, shrink is being enabled by both

device and system scaling. Device scaling

involves innovation in the materials and

structures used to make transistors, while

system scaling results from greater on-chip

integration, such as system-on-chip solutions

that combine processors, memory and

auxiliary functionality into one chip.

Looking beyond scaling and Moore’s Law,

other metrics are also important in our

industry – for example, energy-efficient

performance (EEP), which was pioneered at

TSMC, one of our key customers. EEP

tracks energy efficiency, which is expected to

increase threefold every two years.

What are the main challenges for you

as CTO?

As CTO, I’m always asking myself how I can

best drive innovation at ASML and make

sure the pipeline continues to be filled. And

one of the most important factors in that is

people. Our growth and ability to hire large

numbers of new staff present challenges in

their own right. We employ more than

14,000 FTE in R&D and are adding 7-8% to

that number every year. So that’s 1,000 or

more new people over a 12-month period, all

of whom need to quickly learn about and buy

into our culture before they can become part

of our team.

Sustainability is another challenge that has

moved rapidly up the agenda in recent years.

The amount of passion and expertise that we

are now able to bring to a topic like re-use

and repair – not only internally within ASML

but also externally among our partners – is

very encouraging. As a group, we are

acknowledging responsibility for our

environmental footprint, which of course is

increasing in line with the industry’s growth.

We are constantly striving to improve EEP,

but the fact remains that more lithography

equipment at work in fabs will inevitably

require more energy in total. It is going to be

challenging to understand what it means to

create a truly sustainable semiconductor

industry.

What’s next for innovation at ASML?

I could talk about EUV with an NA higher than

0.7 (known as Hyper-NA) potentially becoming

a reality shortly after the end of this decade;

however, the most appropriate guide to what

comes next is actually: it all depends on cost.

We need to be more and more focused on cost

reduction – that means not reducing resources

but making sure that the solutions we bring to

market are simpler, more sustainable, more

serviceable, more manufacturable and more

scalable. It is not responsible to move to the

next product without understanding the cost

and complexity constraints we have to put on

those products from the very beginning. That is

exactly what we did with our new optical

metrology system, which will come to market in

2023. We re-examined this project within

intense cost parameters and have been able to

achieve a new technology that is many times

more cost-effective than before.

Similarly, we are continuing to work to contain

the cost of the current EUV 0.33 NA systems,

as well as High-NA and Hyper-NA, to make

sure that the appetite for shrink remains strong.

Ten years ago, when we developed High-NA,

we could not have imagined that NA beyond

0.55 even existed. So Hyper-NA is very, very

difficult to achieve. The great thing is that our

business and R&D capability are such that we

can handle all of these things simultaneously.

We can develop technology like Hyper-NA while

focusing on cost containment, simplicity,

sustainability, manufacturability and

serviceability all at the same time.




		GLOBAL WELL-BEING
		Molecular-scale diagnostics, global health impact
		The COVID-pandemic has underlined the urgent need for a new generation of healthcare diagnostic tools. Ongoing scaling and miniaturization could result in a microchip smaller than a fingernail that can grab a single molecule and analyze it, providing real-time access to biological information and enabling well-being on a global scale.
		Read more online



ASML ANNUAL REPORT 2022	SMALL PATTERNS. BIG IMPACT.	STRATEGIC REPORT	GOVERNANCE	FINANCIALS	21

The big picture

The world faces a range of macro

challenges, including the war in Ukraine,

post-COVID-19 supply chain constraints,

inflationary pressures and risk of a

global recession.

The big picture for our sector continues to be

dominated by the global shortage of

semiconductors. With its ability to transform

how we all live and work, digital technology

sits at the heart of the macroeconomic

landscape. Expanding application space and

relentless innovation are expected to

continue to fuel growth across

semiconductor markets. Industry sources

anticipate annual growth rates of 9% and

more than a doubling of semiconductor

revenue from 2020 to 2030.

However, while the medium- and long-term

outlook and trends remain unchanged, the

current macro environment creates some

near-term uncertainties. The war in Ukraine

has changed short-term economic pressures

around the world by driving a rapid and

significant increase in energy costs which is

likely to dampen consumer demand. Not

surprisingly, people will choose to pay their

utility bills rather than buy the latest

smartphone. In addition, we are seeing

inflation increases across all the world’s

major economies, and this will in the short

term also reduce demand for products that

use semiconductors.

We continue to be very positive about the

outlook for our sector in general, and for

ASML in particular. While the current macro

environment creates near-term uncertainties,

we expect longer-term demand and capacity

showing healthy growth. Expanding

application space, continued industry

innovation, more foundry competition and

technological sovereignty drive an increased

demand across semiconductor markets.

The issues that restricted the supply chain

during and after the pandemic surges of

2020 and 2021 are beginning to abate, and

we are scaling up for capacity increases.

With additional global demand for wafers

expected to be over 780,000 wafer starts

per month per year in 2030, we plan to

increase our annual capacity to 90 EUV 0.33

NA and 600 DUV systems (2025-2026),

while also ramping up EUV 0.55 NA (High-

NA) capacity to 20 systems per year

(2027-2028).

Trends affecting our marketplace

The following are some of the major

themes and trends driving our industry’s

development, both today and tomorrow.

Increasing market demand

The convergence of wireless communication,

telecom, media and cloud via connected

devices continues to drive demand for

advanced semiconductors across the globe.

Growing populations, urbanization, the

transition toward renewable energy using

wind and solar power, and ongoing

electrification to support smart mobility are

creating increasing demand for advanced

electronic devices.

Microchips are at the heart of all of these

devices, ranging from sensors and actuators

to smart, scalable and flexible computing

solutions. This drives the demand for both

new and mature chips that are specifically

designed for a wave of new applications in

areas ranging from smart homes, cities and

industries to predictive healthcare, smart

wearables and autonomous robotics.

Read more on page 25 >

Global geopolitics

The current trade environment presents

significant challenges for the global

semiconductor industry. Geopolitical

tensions and increased protectionism are

likely to continue. Recently steps have been

made towards an agreement between

governments that will further restrict the

export of semiconductor manufacturing

equipment to China. This agreement will be

translated into legislation in the course of

2023 and, to our understanding, will be

focused on advanced chip manufacturing

technology, including but not limited to

advanced lithography tools. The pandemic

has alerted governments around the world

that global supply chains can create

significant geographical dependencies on

services, raw materials and end products.

Semiconductors are playing an increasingly

important role in the growth and continuity of

large industrial complexes, and the strategic

importance of the semiconductor industry is

only likely to increase.

Governments have turned their attention to

securing sufficient semiconductor supplies to

support their local industries, ensuring higher

levels of technological sovereignty, and they

are planning significant investments in the

semiconductor industry. Industry forecasts

indicate that the top three semiconductor

manufacturers plan to invest over $300 billion

in global capacity in the coming years.

The industry continues to manage its overall

costs, though price rises could ultimately be

passed on to the end market, resulting in an

increase of prices of devices. Trade tensions

and protectionism also introduce significant

complexity throughout the supply chain and

the processes required. The industry, like so

many others in this trading environment,

needs to review its global supply chain.

Acting on climate change

Climate change is an urgent matter for

governments, companies and individuals

around the world. It is a global challenge that

requires a global response to limit global

warming to 1.5°C. Technologies to counter

climate change – from the energy transition

to electrification, supporting smart mobility

and agricultural innovation – all require

semiconductors. For example,

semiconductors are crucial in the generation,

storage, distribution and consumption of

electrical energy.

Internally, the semiconductor industry has an

important role to play, as the manufacturing

process alone consumes large volumes of

energy and water resources.

Driving Moore’s Law to enable shrink and, at

the same time, improve computing power

and storage capacity, also fuels the demand

for these vital resources. New architectures

and a new way of looking at the entire

ecosystem will be required to enhance

energy and water resource efficiency.

Read more on page 75 >


Trends affecting our marketplace (continued)

Technological developments Technology is evolving fast, and the next level of computing is approaching at speed. The era of mobile computing – where you bring the computer with you – is moving toward an immersive world of ‘ubiquitous computing’, with computing power available wherever you go. Unleashing the power of data better and faster with artificial intelligence The transition to ubiquitous computing is enabled by what has been termed the ‘artificial intelligence of things’ (AIoT). AIoT is a smart and connected network of devices that seamlessly communicate over powerful 5G networks, unleashing the power of data better and faster than ever. This combination of artificial intelligence (AI) technologies and the internet of things (loT) infrastructure will achieve more efficient loT operations, improve human-to-machine interactions and enhance data management and analytics. The potential of AloT will gradually open up as AI and loT increasingly intertwine, facilitated by 5G. The vast amount of data that people can access, and the insights this provides, will fuel semiconductor business growth and digital transformation.		There are around 40 billion connected devices currently in use, with more being added every second. This number is expected to increase to 350 billion devices by 2030. Connected IoT devices are expected to create up to 175 ZB (zettabytes) of data per year by 2025 based on external research. To put that in perspective, one zettabyte is equal to a trillion gigabytes. And to download 175 ZB of data with the average internet connection speed currently available would take one person 1.8 billion years – a very long day at the office (or anywhere else). So, this big data will also need to become fast data to allow for ubiquitous computing, as the world moves toward ‘edge’ computing, where processing is brought as close to the source of data as possible, rather than happening in the cloud. Semiconductor-enabled computing trends Moore’s Law is the guiding principle for the semiconductor industry, the motor driving the industry to transit from mobile computing to ubiquitous computing. This transition continues to expand, facilitating three major trends in computing, as shown in the overview on the right: applications, data and algorithms.


Trends affecting our marketplace (continued)


Semiconductor industry market	Smartphone	Personal computing	Consumer electronics	Automotive	Industrial electronics	Wired and wireless infrastructure	Servers, data centers and storage
In 2020, more than 953 billion chips were manufactured around the world, feeding a $471 billion industry. In 2022, the semiconductor industry increased the output to over 1.11 trillion chips, which fed a $618 billion market. Growth is set to continue, with market analysts predicting the industry could reach an over $700 billion by 2025. Semiconductor technology plays a crucial part in shaping the interconnected and intelligent network future, and end markets continue to grow. The overview shows an outlook on the current market size and market opportunity for the entire industry based on external research.

	Key driver
	Continued refresh of all semiconductor content including image sensors	High-end compute and Memory, fast conversion to SSD	Legacy products and packaged ICs, advanced ICs in add-ons	Strong IC content growth: GPU, sensors, V2X communication sensing	High-end compute for AI on big data and sensors	Devices for fast data processing, modem, base-station infrastructure refresh	High processor and Memory growth, hardware accelerations including GPU
	2020 market size ($bn)							Total
	117	100	50	40	51	38	76	471
	2022 market size ($bn)
	144	115	71	63	73	53	100	618
	2025 market opportunity ($bn)
	150	124	79	93	93	62	136	737
	2030 market opportunity ($bn)
	213	131	114	149	160	82	249	1,098
	Outlook CAGR 2020-2030 (%)
	6%	3%	9%	14%	12%	8%	13%	9%
	Source: ASML’s Investor Day presentation (November 2022). Please note rounding differences may exist.

Our customers – the world’s leading

microchip manufacturers – can be

grouped into Memory and Logic

chipmakers. We design our machines

based on their input, and we work

together to make sure our machines run

smoothly in their fabs.

Memory and Logic chips

Memory chips can store a large amount of

data in a very small area. They are used in an

increasing variety of electronic products like

servers, data centers, smartphones, high-

performance computing, automotive or

personal computers and other

communication devices. There are two main

classes of chips typically made in dedicated

Memory-chip factories: NAND chips that can

store data even when a device is powered

off, and DRAM memory chips that are used

to efficiently provide data to the processor.

Logic chips, which process information in

electronic devices, are produced by two

groups of manufacturers. The first group,

known as integrated device manufacturers

(IDMs), designs and manufactures Logic

chips. The second group comprises contract

manufacturers known as foundries. Foundry

manufacturers produce chips for ‘fabless’

companies that focus only on chip design

and distribution, but do not manufacture

microchips themselves.

Both Logic and Memory chips can vary

greatly in complexity and capability. For

example, the most advanced chips power

leading-edge technology in AI, big data and

automotive technology, while simpler, low-

cost chips integrate sensing capabilities into

everyday technology to create a vast loT.

Growth in the chip market

The historical market compound annual

growth rate (CAGR) over the last 10 years

was 6%, while industry sources project the

chip market (worldwide semiconductor

revenues) will grow at a CAGR of 9%1 in the

period 2020-2023.

1 Source: ASML’s Investor Day presentation (November

2022).

Lithography is where we come in. It is a

driving force in the creation of faster and

cheaper chips that are also more

powerful and energy efficient. Today’s

most advanced processors are based on

the Logic N5 node, and contain billions

of transistors. Shrinking transistors

further is becoming increasingly difficult,

but we are not as close to the

fundamental limits of physics as some

might think.

Next-generation chip designs will include

more advanced materials, new packaging

technologies and more complex 3D designs,

all of which will create the electronics of the

future.

The manufacturing of chips becomes

increasingly complex as semiconductor

feature sizes shrink, but the need to mass

produce at an acceptable cost remains. Our

holistic lithography product portfolio helps to

optimize production and enable affordable

shrink by integrating lithography systems

with computational modeling, as well as

metrology and inspection solutions that help

our customers to improve their yield.

Our computational models enable our

customers to optimize their mask design and

tape-out time (the time taken in sending the

final design to the manufacturer for

production). This works through mask-

correction software to prepare and modify

the design for optimized exposures, while the

metrology and inspection solutions help in

analyzing and controlling the manufacturing

process in real time.




	This process is repeated until the wafer is covered in patterns, completing one layer of the wafer’s chips. To make an entire microchip, this process is repeated on layer after layer, stacking the patterns to create an integrated circuit (IC). The simplest chips have around 40 layers, while the most complex can have more than 150 layers. The size of the features to be printed varies depending on the layer, which means that different types of lithography systems are used for different layers – our latest-generation EUV systems are used for the most critical layers with the smallest features, while our ArFi, ArF, KrF and i-line systems can be used for less critical layers with larger features.
The lithography process		Inside a fab	The making of a microchip involves a multiple-step sequence, including lithography to create a pattern in the photoresist and chemical processing steps such as deposition, photoresist coating, ion implantation and etching, to create electronic circuits on a silicon wafer. Microchips are made of layers about 50-150 nm thick that are built on the semiconductor substrate one layer at a time. The most advanced chips require EUV and DUV immersion lithography tools to make them. Simpler microchips, such as sensors for loT applications, can be produced using DUV dry machines.	After adding material for a new layer during deposition, the desired pattern is exposed onto it, which after development leaves lines and geometric shapes positioned precisely in the desired locations. Then the layer is etched, making these designs permanent on the wafer. The entire manufacturing process of microchips – from start to tested and packaged device, ready for shipment – can take between 18 and 26 weeks, depending on their complexity.
When you break it down, a lithography system is essentially a projection system. In our DUV systems, light is projected through a blueprint of the pattern that will be printed (known as 'mask' or 'reticle'); in our EUV systems, light is reflected via the reticle. With the pattern encoded in the light, the system’s optics shrink and focus the pattern onto a photosensitive silicon wafer. After the pattern is printed, the system moves the wafer slightly and makes another copy on the wafer.		A semiconductor fabrication plant, commonly known as a ‘fab’, is a factory where microchips are manufactured. The heart of a fab is the cleanroom. All fabrication steps take place here, so the environment is controlled to eliminate dust on a nanoscale. Under the cleanroom floor is the ‘sub fab’, which contains auxiliary equipment such as the drive laser. The utility fab – containing the pumping and abatement systems for vacuum and cooling – is usually found one floor below this.

Semiconductor application areas

Predictive healthcare

Predictive analysis of health data

from many sources combined with

machine learning and AI is helping to

improve healthcare services and

patient outcomes.

Read our story on page 21 >

Smart home

Smart home devices, such as

thermostats, lights and smart TVs,

learn a user’s habits to provide

automated support for everyday

tasks.

Wearables

Wearable devices (such as fitness

trackers smart watches, smart rings,

jewelry or glasses) are able

to connect to the internet and

continuously monitor, track and

transmit personal data.

Read our story on page 148 >

Autonomous robotics

A new generation of lightweight

robots connected to a greater

network and fitted with smart

sensors enables humans and

machines to work side by side,

with greater safety and efficiency.

Energy transition

Semiconductors play a key enabling

role in the global shift from fossil-

based energy production and

consumption to renewable energy

sources like wind and solar.

Read our story on page 39 >

Global connectivity

5G enables a new kind of network

that is designed to connect virtually

everyone and everything across the

world – including machines, objects

and devices.

Mixed reality

Combining augmented reality and

virtual reality technology (so that

physical and digital objects coexist

and interact in real time) will bring

together the real world and digital

elements to create the next-level

user experience.

Read our

story on

page 68 >

Smart cities

Smart cities that use technology and

digital networks to integrate

transportation and infrastructure,

connectivity, energy and lighting, and

other public services.

Smart industry

Smart industry devices use real-time

data analytics and machine-to-

machine sensors to optimize

processes to foresee bottlenecks

and prevent errors and injuries.

Self-driving cars

These vehicles are literally

supercomputers on wheels, with

advanced driver-assistance systems

(ADAS) enabled by electronics and

semiconductors.




		FOOD SECURITY
		Lower cost, higher yield
		Farmland in remote locations, particularly in emerging economies such as Kenya and Ethiopia, can be extremely vulnerable to climate change. As microchips become smaller and cheaper, access to mobile devices is increasing across the world. Farmers are now using smartphones to access vital weather information – aiming to ensure better crops and greater food security.
		Read more online



ASML ANNUAL REPORT 2022	SMALL PATTERNS. BIG IMPACT.	STRATEGIC REPORT	GOVERNANCE	FINANCIALS	29

Our purpose is to unlock the potential of people and society by

pushing technology to new limits – with a vision that our ground-

breaking technology solves some of humanity’s toughest

challenges. Our strategy and priorities are designed to deliver on

these points and create value for our stakeholders.

We provide chipmakers with everything they

need – hardware, software and services – to

mass produce patterns on silicon through

lithography. Our customers depend on our

products to bring cutting-edge technology to

life. To meet their needs, we invest in the

future. We invest in research and

development to create chipmaking machines

that can deliver the smallest features and

highest yields.

We invest in our factories and facilities

around the world so we can meet increasing

customer demand for our products and

services, driven by strong growth rates

across both advanced and mature

semiconductor markets, continued

innovation, more foundry competition and

technological sovereignty. The number of

machines we plan to deliver in the coming

years continues to grow.

We also invest in our workforce, the people

who give life to our values – challenge,

collaborate and care. They come from more

than 100 countries to work together and

advance ASML's mission. Our values push

us to invest in being a good neighbor and

global citizen. From supporting our

preservation to minimizing our environmental

impact, our initiatives lay the groundwork for

long-term sustainable growth.

To make our vision for the future a reality, we

need to collaborate with our customers and

suppliers, across departments, sectors and

continents, effectively executing

improvements and processes across ASML

and our ecosystem to bring our holistic

lithography solutions to the market. Our

investors enable the innovation that

advances our technology and creates value.

Together, we aim to lead the semiconductor

industry into a sustainable and profitable future.


	Our core strategy is to

1.		Grow our core holistic lithography business

2.		Secure unique supply chain capabilities to ensure business continuity

3.		Move toward adjacent business opportunities

	4.	Increase our focus on ESG sustainability



	With a current focus on five priorities

			Strengthen customer trust

			Holistic lithography

			DUV competitiveness

			EUV.33 NA for manufacturing

			EUV.55 NA insertion


	Grow our holistic lithography business two- to threefold by 2030

Fueled by strong customer demand, we

expect substantial growth opportunities for

our holistic lithography business in this

decade. We will continue to increase the

capacity of our company to meet this

demand, both for mature and advanced

lithography systems, preparing for cyclicality

while sharing risks and rewards fairly with all

stakeholders.

Based on different market scenarios, we

see an opportunity to achieve the following

in 2025 and 2030:

–In 2025: annual revenue between

approximately €30 billion and €40 billion

with a gross margin between

approximately 54% and 56%

–In 2030: annual revenue between

approximately €44 billion and €60 billion

with a gross margin between

approximately 56% and 60%

To realize this significant growth, we will

focus on protecting and gaining market

share by delivering on our technology

roadmap, addressing our growth and

execution challenges, and securing

competitiveness in DUV and metrology and

inspection.

The semiconductor industry innovates at an

incredible pace to deliver on Moore's Law,

producing microchips that are three times

more energy-efficient every two years. By

continuing to advance our lithography and

patterning control solutions for silicon

substrates, we will provide the continued

shrink and reduction in edge placement

error that our customers' semiconductor

roadmaps require over the next decade.

Our holistic lithography approach integrates

a set of products that enables chipmakers

to develop, optimize, and control the

semiconductor production process. In

addition to our lithography systems, we

provide customers with process control

solutions that include computational

lithography, optical and e-beam metrology,

high-resolution inspection, and scanner and

process control software solutions. Our

comprehensive product portfolio is aligned

to our customers’ roadmaps, delivering

cost-effective solutions in support of all

applications, from leading-edge to mature

nodes.

We aim to innovate responsibly by

improving the simplicity, sustainability,

serviceability, manufacturability and

scalability of our future lithography

solutions. By considering the cost and

complexity constraints of a new technology

from day one, we can efficiently allocate our

resources and cost-effectively deliver new

capabilities to our customers.

Secure unique supply chain

capabilities to ensure business

continuity

Increase our focus on ESG sustainability

Our five strategic priorities

Our ESG Sustainability strategy

We believe digital technologies are among the most

important tools available to help society make progress

and address environmental challenges. Enabled by

microchips, these technologies are fueling a digital

transformation that is helping to address global challenges,

such as tackling climate change by reducing energy

consumption and greenhouse gas emissions.

We recognize that development of technology comes with

new problems to solve, such as the energy use of devices

and data centers, increased waste and material use, and

social challenges. We believe our industry has a great

opportunity and a moral obligation to drive sustainable

growth.

We are committed to using our innovations to also enable

the semiconductor industry to reduce its footprint. We aim

to help our customers minimize materials and energy

required to produce advanced microchips. Within our own

operations, including our supply chain, we are also looking

closely at our social and environmental impact.

Through the continued execution of our strategic priorities, we aim to provide

cost-effective solutions for our customers, enable the extension of the

industry roadmap into the next decade, and support our long-term

commitment to our environmental, social and governance (ESG) ambitions.

Central to our strategic approach, we

collaborate with our stakeholders to

deliver on the ambitions of our ESG

Sustainability strategy:

Environmental

We want to continue to expand

computing power but with minimal waste,

energy use and emissions. That's why we

focus on energy efficiency, climate action

and circular economy.

Social

We want to ensure that responsible

growth benefits all our stakeholders – to

have an attractive workplace for all, a

responsible supply chain, to fuel

innovation in our ecosystem and to be a

valued partner in our communities.

Governance

We commit to act on our responsibilities

and fully anchor them in the way we do

business through our focus on integrated

governance, engaged stakeholders and

transparent reporting.

Our ESG Sustainability strategy is based

on a materiality assessment where we

determine the most significant impacts for

our company. Our aim is to create long-

term value for our stakeholders, while also

contributing to the United Nations’

Sustainable Development Goals (SDGs).

We will continue to focus on securing

business continuity in our core lithography

business and controlling future unique,

roadmap-enabling technologies. Our

supply chain is a critical enabler of our

ambition to grow our core business. In

order to deliver our growth aspirations, we

need to secure innovation, scale-up and

continuity, sound business conditions and

a constructive collaboration model with

our unique technology suppliers. We are

pro-actively assessing our supply base for

projected demand and control of future

roadmap-enabling capabilities.

Strengthen

customer trust

DUV

competitiveness

Enhance our innovation and

operational excellence capabilities

to deliver on our roadmap for new

product introductions and system

deliveries, on time and with the

highest quality, to address the

needs of our customers. Increase

our focus on sustainability through

parts commonality and re-use,

and drive improvements in

performance and energy efficiency

of our products to reduce costs

and waste.

Continue our innovation leadership,

enabling execution of customer

roadmaps by driving DUV to the

highest level of performance while

remaining cost-competitive. Expand

our installed base and support

customer needs.

EUV .33 NA for

manufacturing

Move toward adjacent business

opportunities

Secure high-volume manufacturing

performance and enhance the value

of EUV technology by extending the

product portfolio for future nodes.

Improve cost effectiveness for our

customers by improving system

performance.

Beyond, if core growth is secured, we can

move into adjacencies representing

additional growth opportunities. We aim to

do this by focusing on synergetic

opportunities at the forefront of holistic

transistor scaling to best serve our

customers, by leveraging product and

technology synergies, and by tapping into

different future semiconductor scaling

engines.

Read more on page 117 >



ASML ANNUAL REPORT 2022		OUR BUSINESS MODEL	STRATEGIC REPORT	GOVERNANCE	FINANCIALS	32
	What we need to create value
The depth and breadth of our resources and the relationships we build are key to our continued success.



	Digital technology is required to help people and society progress
			See page 34 >

1. Deposition

2. Photoresist coating

3. Lithography

4. Baking and developing

5. Etching

6. Ion implantation

7. Removing photoresist

The first step is typically

to deposit thin films of

semiconducting material

onto the silicon wafer.

The wafer is then coated

with a light-sensitive layer

called a ‘photoresist’.

Light is projected onto the wafer

through a reticle. Optics shrink

and focus the reticle pattern. This

pattern is then printed onto the

wafer when the resist layer is

exposed to light.

The wafer is then baked

and developed to make

the pattern permanent, with

a pattern of open spaces.

Materials such as gases are

used to etch away material

from the open spaces, leaving

a 3D version of the pattern.

The wafer may be bombarded

with positive or negative ions to

tune the semiconductor

properties.

After the layer is ionized, the

remainder of the photoresist

coating that was protecting

areas not to be etched is

removed.



ASML ANNUAL REPORT 2022		OUR BUSINESS MODEL CONTINUED	STRATEGIC REPORT	GOVERNANCE	FINANCIALS	33
	Creating value within the fab
We are a critical part of the chip manufacturing process, but our world-leading technology would not function without other key partners in the value chain.



Our world- leading systems			Lithography
Our world- leading systems



	Computational lithography		Metrology and inspection

	Computational lithography is used to predict and enhance the process window of our lithography systems by calculating the optimal settings, depending on the specific application. This takes place in the research and development phase, before a lithography system goes into high-volume manufacturing.		We have a suite of tools – optical and e-beam metrology, high- resolution inspection and scanner and process control software solutions – which control the process window and help ensure that the lithography system operates optimally in the fab environment. Lithography is the only way in which inline adjustments can optimize performance as part of the manufacturing process.



ASML ANNUAL REPORT 2022		OUR BUSINESS MODEL CONTINUED	STRATEGIC REPORT	GOVERNANCE	FINANCIALS	34
	Creating value with our holistic approach
Our holistic approach is based on the intelligent integration of computational lithography, lithography systems and metrology and inspection. This enables shrink by optimizing setup and control of the system’s process window during high-volume manufacturing – improving the availability of our lithography systems, reducing downtime and overall costs, and optimizing yield for our customers.

Shareholders

Customers

Suppliers

Employees

Society

Our large and sustained investments

in research and development help

us execute our business strategy

and enable us to maintain our

position as a leader in holistic

lithography. Our innovations

contribute to the long-term growth

of the semiconductor industry,

which contributes to our solid

financial performance and cash

return policy by means of share

buyback and paid dividends.

We invest in innovations that

enable our world-leading

lithographic systems to continue to

shrink microchips. With EUV 0.33

NA and the next-generation EUV

0.55 NA platform, we pursue the

continuation of Moore’s Law. This

allows our customers to develop

ever more powerful chips for new

applications and devices. At the

same time, we help our customers

reduce costs and their

environmental footprint.

We innovate together with our

strategic partnerships, sharing

knowledge and tapping into each

other’s technology expertise to drive

ever higher levels of complexity and

capability.

We conduct our business in a

sustainable and responsible

manner, where long-term

relationships, close collaboration

and transparency with our suppliers

are key to our success.

ASML is a growth business providing

employment opportunities around the

world. With our headquarters in

Veldhoven, Netherlands, we are a

major employer in the community.

We invest in people’s career

development and well-being, and

provide a diverse and inclusive

environment where people can

achieve their full potential. This results

in both high employee engagement

scores and low attrition.

Our continuous innovations enable

new technology to support the

growth and transformation of the

semiconductor industry to help

address society’s needs. As a

global technology leader and

employer, we play an active role in

the local communities we operate

in. Our collaborative ecosystem

nurtures innovation and benefits

society. For example, we share our

expertise with universities and

research institutes, support young

tech companies and promote

STEM education worldwide. We

also develop ground-breaking

technology to minimize our own

environmental footprint. We do this

by seeking to minimize waste and

maximize the value of the materials

we use, and executing our carbon

footprint strategy and product

energy-efficiency strategy.

€4.6bn

€21.2bn

€12.4bn

78%

€11.5m

87%

Share buyback

Total net sales

Total sourcing spend

Employee engagement score

Community investment

Re-use rate of parts returned

from field and factory

€5.80

345

5,000

6.0%

€14.7m

38.1 kt

Proposed annualized dividend

per share

Lithography systems sold

Number of suppliers (rounded)

Attrition rate

Contribution to EU

research projects

Emissions from manufacturing

and buildings (scope 1 + 2)

€16.08

24%

95%

11.9 Mt

Earnings per share

TechInsights Customer

Satisfaction ranking of the 10

Best Large Suppliers of Chip

Making Equipment

Gender diversity – % females

inflow

% of systems sold in the past

30 years still active in the field

Indirect emissions from total

value chain (scope 3)



ASML ANNUAL REPORT 2022		OUR BUSINESS MODEL CONTINUED	STRATEGIC REPORT	GOVERNANCE	FINANCIALS	35
	The value we create for our stakeholders
Our success depends on strong, sustainable relationships with all stakeholders in the value chain. We aim to create sustainable value for them, and to use their input to develop our strategy, our products and services.



We develop our materiality assessment based on GRI, which includes the principle of stakeholder engagement, where we identify key topics to discuss with the relevant stakeholder group.

Read more on page 70 >

We think about our stakeholders as belonging to five groups: shareholders, customers, employees, suppliers and society. These groups can affect or be affected by our business, and we embrace continuous open dialogue and knowledge sharing for the benefit of all parties.



	This group consists of current shareholders, potential active and passive investors, financial and ESG analysts. We aim to help them to understand our (long-term) investment opportunities. We communicate with them about our financial growth strategies and opportunities, financial performance and outlook and shareholder returns as well as our sustainability strategy.
Shareholders

		How we engage
		–Direct interaction with the Investor Relations department (e.g. calls, ESG performance surveys, email exchange, site visits – at ASML and/or at the investor) –AGM –Investor Day –Company quarterly results presentations and press releases –Various investor conferences and roadshows –Various sustainability questionnaires, assessments and survey feedback

		Main topics
		– Financial results – Cash return – Market outlook – Products and end market –Customer adoption – Geopolitics – Business summary – Company roadmap and product portfolio – ESG targets and results: human capital development, carbon footprint, waste, recycling, energy consumption, social responsibility in supply chain – Board diversity and remuneration



	We are a manufacturer of leading-edge chipmaking equipment. We enable our customers to create the patterns that define the electronic circuits on a chip. Our customers are the world’s leading microchip manufacturers, and our success is inextricably linked with theirs.
Customers

		How we engage
		–Customer feedback survey –Direct interaction via account teams and zone quality managers –Voice of the Customer sessions –Technology Review Meetings (between our CTO, product managers, other executives and our major customers) –Executive Review Meetings (between ASML executives and major customers) –Different technology symposia and special events
		Main topics
		–Products and technology –Customer roadmap –Innovation –Customer support, cost of ownership and quality –ESG: energy efficiency, integrating ESG sustainability in strategy and roadmaps, waste reduction and reuse of materials and safety awareness and behavior

		Our customers are the world's leading microchip manufacturers.



		We want to provide a unified direction and anchor ASML’s identity deep in the organization. To do this, we aim to help people embrace our values, familiarize themselves with our strategy and purpose and uphold our Code of Conduct principles. Employee engagement is important to the success of our company and employer brand enables us to attract talent. We are committed to good labor practice and respect human rights.
Employees

	How we engage
	–Employee engagement survey –Training and development programs, including employee evaluation/feedback –ASML's Speak Up service –Works Council – Employee networks, such as Next, Women/WAVES, Seniors, Parents, Veterans, Green ASML, Atypical, SHADES and Proud –Internal communication and awareness (e.g. intranet, Ethics program, department employee meeting, lunch with Board members) –Onboarding program for new employees –All-employee meeting and senior management meetings






	Main topics
	–Training and development –Code of Conduct/Ethics –Strategy –Diversity and inclusion –Labor conditions –Vitality –Human rights –Sustainability target and performance



		We rely heavily on our supplier network to achieve the innovations we strive for. Our goal is to ensure we get the products, materials and services we need to meet our short- and long-term needs. To this end, we invest in developing our supply landscape to help suppliers meet our requirements with regard to quality, logistics, technology, cost and sustainability. We are committed to a responsible and sustainable supply chain.
Suppliers

	How we engage		Main topics
	–ASML’s Supplier Day –Direct interactions via supplier account teams/ procurement account managers –Supplier audits –Site visits –Newsletter –RBA self-assessment questionnaire (SAQ) –ASML's Speak Up service		–Products and technology –Quality, logistics, technology, total cost and sustainability (QLTCS) –Supplier performance and risk management –IP/information security –Business continuity –RBA compliance (ethics, labor practice, health and safety, and environment) –Scarce (natural) resources, 3TG, hazardous substances, etc. –Circularity (re-use, recycling, refurb) –Scope 3 carbon footprint



		We are committed to conducting our business in an accountable and caring way, for our employees and the wider communities we operate in. As a global technology leader and employer, we play an active role in the local communities in which we operate. We also develop ground-breaking technology to minimize our own environmental footprint. We do this by seeking to minimize waste and maximize the value of material we use, as well as executing our carbon footprint strategy and product energy efficiency strategy.
Society



	How we engage		Main topics
	With industry unions and associations –Member conferences and technical forums –Member consultation on standards –Brainport Eindhoven With governments and authorities –Dialogue with tax authorities –Relevant EU roundtable discussions –Compliance reporting –Proactive dialogue with government, authorities and municipalities With communities, universities, media, NGOs and others –Website www.asml.com –Community engagement programs and events –Young high-tech community (HighTechXL, Make Next Platform, Eindhoven Startup Alliance) –Company visits –Press releases, interviews, engagement calls and meetings		–Employee development –Charity, sponsoring and donations –Collaboration in innovation –Strengthening innovation in the industry, in society and where we operate –Social and environmental responsibility –Promotion of science, technology, engineering and mathematics (STEM) education –Local developments




		ENERGY TRANSITION
		Tiny connections, huge implications
		The shift to renewables is helping deliver the clean, affordable energy the world needs to counter climate change. Semiconductors are absolutely central to this shift – harnessing, converting, transferring and storing energy as electricity, and ensuring that national power grids are both responsive and robust.
		Read more online



ASML ANNUAL REPORT 2022	SMALL PATTERNS. BIG IMPACT	STRATEGIC REPORT	GOVERNANCE	FINANCIALS	39

From a financial perspective, how did

ASML perform in 2022?

This was an outstanding year for ASML, with

a record €21.2 billion in net sales – an

increase of €2.6 billion over 2021.

Our gross profit increased, mainly due to the

volume increase in DUV, our NXE:3600D

value proposition and continued growth in

our installed base business. The overall gross

profit, as a percentage of total net sales,

decreased from 50.6% in 2021 to 49.7% in

2022, due to fast shipments, the current

strong inflationary effects relating to

increasing material, freight and labor and the

increased factory costs required to ramp up

production and keep up with customer

demand. In addition, there were costs

incurred due to the preparations for High-NA.

Our strong net income and continued

working capital improvement initiatives

resulted in net cash provided by operating

activities of €9.4 billion in 2022. This allowed

us to return cash to our shareholders

through dividends and our share buyback

programs.

In 2022 we repurchased shares for a total

consideration of €4.6 billion and paid

dividends totaling €2.6 billion.

What were the key drivers for these

increases?

Our Logic system customers again saw

strong demand for both advanced and

mature nodes in support of the ongoing

digital transformation, which includes secular

growth drivers such as 5G, AI, virtual reality,

gaming, simulation and visualization

applications, and the intelligent cloud and

edge that will be an integral part of the

growing digital infrastructure. The rise in

Memory system sales was driven by

continued strong end-market demand for

servers.

We are increasing our

output capability for EUV

as well as DUV.”

Roger Dassen

Executive Vice President and Chief Financial Officer

Growth in our service and field option sales

was primarily driven by the continued scaling

of customers' installed base, which resulted

in increased service sales to support our

systems used in their ongoing operations

during the systems life cycle.

What were the year’s main challenges?

As our CEO Peter Wennink explained in his

message, our ability to meet customer

demand was impacted by several issues in

2022, including the war in Ukraine and the

aftermath of COVID-19.

We are working hard to keep up with

customer demand, for example by driving

down our manufacturing cycle times across

our entire product portfolio and by

collaborating with our supply chain to

increase our output capability for EUV as well

as DUV. To address materials shortages, we

are significantly expanding capacity together

with our supply chain partners, although

these shortages have already led to the late

start of the assembly of a number of

systems. As our tools are in high demand,

our customers are frequently requesting fast

shipments. A fast shipment process skips

some of the testing in our factory. Final

testing and formal acceptance then takes

place at the customer site. This leads to a

delay of revenue recognition for those

shipments until formal customer acceptance,

but does provide our customers with earlier

access to wafer output capacity.

Additionally, I would like to highlight that

safety is at the heart of our business. While

we did not encounter any ASML work-

related fatalities, regrettably two contracted

workers had a fatal accident on ASML

premises in Wilton in 2022. We are doing

everything we can to minimize this risk and

are working proactively at all levels to deliver

on our mission to ensure injury-free and

healthy working conditions.

Are the current financial uncertainties

affecting capital investment plans?

Although the current macro environment is

creating uncertainties, demand for our

products continues to exceed supply, and

we remain committed to our capital

investment plans.

While we are aiming to meet demand in full,

we are preparing for cyclicality at the same

time. We are looking to invest timely and

sustainably in additional capacity while also

embedding flexibility so that we can not only

grow fast but also adjust rapidly in a down

cycle.

Further, we will continue to make the

investments required to ramp up our

capacity in anticipation of the medium- to

long-term growth of our industry. The

expanding application space for

semiconductors and secular trend is driving

structural demand. We need to raise

capacity and plan to further increase our EUV

and DUV shipments to support our

customers’ productivity roadmaps.

What progress have you made in the

project to transform the finance

organization?

We are experiencing growth at an

unprecedented rate, which creates an

increasing demand for the finance

organization to support the business. To set

up our company and people for future

success, we took a snapshot of the current

state of our finance organization and created

a vision for our future.

Our vision is to deliver a strong foundation

and best-in-class integrated solutions. To

embed the new vision and way of working,

our organization is currently executing

multiple projects to improve, automate and

continuously monitor its end-to-end

processes by using new digital tools and

robotics.



		We are experiencing growth at an unprecedented rate.”
		We are experiencing growth at an unprecedented rate.”
		Roger Dassen
		Executive Vice President and Chief Financial Officer

What is the outlook for ASML, from a

financial perspective?

There is clearly a lot of uncertainty in the

current semiconductor market due to a

number of global macro concerns such as

inflation, declining consumer confidence and

a real chance of a recession. As we have

shown in the past, in such an environment

we need to maintain flexibility in our supply

chain, in our workforce and in our

manufacturing capability. We aim to adjust

our capacity to meet future demand,

preparing for cyclicality while fairly sharing

risks and rewards with all our stakeholders.

This also means we need to invest timely and

sustainably in additional capacity to plan to

meet demand. Clearly these investments

could put pressure on the gross margin next

year, but they are inevitable if we want to

maintain the longer-term growth profile of the

company.


	€2.6bn
	Net sales increase

	49.7%
	Gross margin

	€4.6bn
	Repurchased shares

	€2.6bn
	Dividends paid

In the near term, fear of a recession could

impact the demand for semiconductors. We

are starting to see diverging demand

dynamics across our market segments, with

some customers running our systems at

lower utilization levels, and others adjusting

the desired timing of their demand to

respond to near-term uncertainties. The vast

majority of our customers, however, are still

requesting shipment of their lithography

systems as soon as possible. This is driven

by the strategic nature of these investments

in support of technology transitions, capacity

additions that require time for wafer output to

materialize, as well as governments' global

investments in pursuit of technology

sovereignty.

The current strong inflationary effects relating

to material, freight and labor costs impact

our suppliers and put pressure on our

margins. In general, customers understand

our request to share these extraordinary cost

increases, and as such we expect to receive

a reasonable level of inflation compensation

over the course of 2023.

The scarcity of highly skilled people in the

labor market is also leading to higher costs.

To maintain our fast pace of innovation and

ensure our long-term success as a company,

we need to attract and retain the best talent

– and this is requiring heavy investment in

our hiring activities as well as in the provision

of opportunities and an environment where

employees can develop their talent, feel

respected and thrive.

The uncertainties around geopolitics

continue. Press reports indicate that steps

have been taken by the US, Netherlands and

Japan to further restrict the export of

semiconductor manufacturing equipment to

China. This would cover advanced

lithography tools as well as other types of

equipment. The terms of this agreement

have not been publicly disclosed and remain

confidential for now. We expect that it will

take many months for the governments to

write and enact new rules. While these rules

are being finalized, ASML will continue to

engage with the authorities to discuss the

potential impact of any proposed regulation

in an effort to ensure the impact on the

global semiconductor supply chain is

properly assessed. Given the timelines and

current market situation, we do not expect

these measures to have a material effect on

our expectations for 2023.

While the current macro environment creates

near-term uncertainties, we expect longer-

term demand and capacity to generate

healthy growth, fueled by the expanding

application space and relentless innovation.

In conclusion, I believe ASML is well placed

to deliver more record performances in the

future – providing strong cash returns to

shareholders, collaborating with our partners

and suppliers, supporting our people and

enabling our customers to manufacture

technology that will continue to have a big

impact on the future of our planet.

ASML is well placed to deliver more

record performances in the future.”

Roger Dassen

Executive Vice President and Chief Financial Officer

The figures in the table below are based on US GAAP, as ASML measures its performance and externally reports quarterly to stakeholders in accordance with US GAAP.


Sales	Profitability		Liquidity
Total net sales	Gross profit	% of total net sales	Cash and cash equivalents (year-end)
€21.2bn	€10.7bn	50.5%	€7.3bn
2021: €18.6bn	2021: €9.8bn	52.7%	2021: €7.0bn
Net system sales	Income from operations		Short-term investments (year-end)
€15.4bn	€6.5bn	30.7%	€0.1bn
2021: €13.7bn	2021: €6.8bn	36.3%	2021: €0.6bn
Net service and field option sales	Net income		Net cash provided by operating activities
€5.7bn	€5.6bn	26.6%	€8.5bn
2021: €5.0bn	2021: €5.9bn	31.6%	2021: €10.8bn
Sales of lithography systems (in units)1	Earnings per share		Free cash flow2
345	€14.14		€7.2bn
2021: 309	2021: €14.36		2021: €9.9bn
Immersion systems recognized (in units)
81
2021: 81	1.Lithography systems do not include metrology and inspection systems.
EUV systems recognized (in units)	2. Free cash flow is a non-GAAP measure and is defined as net cash provided by operating activities (2022: €8,486.8 million and 2021: €10,845.8 million) minus purchase of property, plant and equipment (2022: €1,281.8 million and 2021: €900.7 million) and purchase of intangible assets (2022: €37.5 million and 2021: €39.6 million). We believe that free cash flow is an important liquidity metric for our investors, reflecting cash that is available for acquisitions, to repay debt and to return money to our shareholders by means of dividends and share buybacks. Purchase of property, plant and equipment and purchase of intangible assets are deducted from net cash provided by operating activities in calculating Free cash flow because these payments are necessary to support the maintenance and investments in our assets to maintain the current asset base.
40
2021: 42

A reconciliation of net income in accordance with US

GAAP and EU-IFRS is set forth below:


Year ended December 31 (€, in millions)	2021	2022
Net income in accordance with US GAAP	5,883.2	5,624.2
Capitalization of development expenditures and related amortization, net of tax	249.0	499.4
Income taxes on intercompany profit elimination, share-based payments and uncertain tax position	2.5	96.5
Partial STI accrual reversal under IFRS	—	175.7
Net income in accordance with EU-IFRS	6,134.6	6,395.8

The Consolidated Financial Statements included in this

Annual Report are based on EU-IFRS, therefore, the

results of operations analysis set out in the remainder of

this chapter are based on EU-IFRS.

Operating results of 2022 compared to 2021


Year ended December 31 (€, in millions)	2021	%1	2022	%1	% Change
Net system sales	13,652.8	73.4	15,430.3	72.9	13.0
Net service and field option sales	4,958.2	26.6	5,743.1	27.1	15.8
Total net sales	18,611.0	100.0	21,173.4	100.0	13.8

Cost of system sales	(6,874.5)	(36.9)	(7,843.3)	(37.0)	14.1
Cost of service and field option sales	(2,319.1)	(12.5)	(2,817.4)	(13.3)	21.5
Total cost of sales	(9,193.6)	(49.4)	(10,660.7)	(50.3)	16.0

Gross profit	9,417.4	50.6	10,512.7	49.7	11.6

Research and development costs	(1,861.6)	(10.0)	(2,282.1)	(10.8)	22.6
Selling, general and administrative costs	(725.6)	(3.9)	(909.6)	(4.3)	25.4
Other income	213.7	1.1	—	—	n/a
Operating income	7,043.9	37.8	7,321.0	34.6	3.9

Finance income	10.0	0.1	16.2	0.1	62.0
Finance costs	(54.6)	(0.3)	(60.8)	(0.3)	11.4
Income before income taxes	6,999.3	37.6	7,276.4	34.4	4.0

Income tax expense	(1,063.8)	(5.7)	(1,018.6)	(4.8)	(4.2)
Income after income taxes	5,935.5	31.9	6,257.8	29.6	5.4

Profit (loss) related to investments in associates	199.1	1.1	138.0	0.7	(30.7)
Net income	6,134.6	33.0	6,395.8	30.2	4.3

1.As a percentage of total net sales.

Total net sales and gross profit

We achieved another record year in 2022, with total net

sales increasing by €2,562.4 million, 13.8%, reflecting an

increase in net system sales of 13.0%, and an increase in

net service and field option sales of 15.8% compared to

2021.

Revenue growth from each of the Logic

and Memory markets and our installed base

(in millions)

We saw strong demand in both the Logic and Memory

markets. Memory systems sales benefited from

continued strong end-market demand for servers, while

for Logic system sales we saw strong demand in

advanced and mature nodes to support the digital

transformation (5G, AI, VR, intelligent cloud solutions and

simulation and visualization applications).

The global chip shortage in 2022 proved to be an

accelerator for the service and field option sales. Our

productivity enhancement packages enabled our

customers to increase wafer capacity effectively and

efficiently.

Increase on previous year

13.8%

Net sales

13.0%

Net system sales

15.8%

Net service and

field option sales

Increase in net sales driven by strong

demand across all technologies

(in millions)

The increase in total net sales was driven by a strong

increase in demand from our customers across all

technologies. Our EUV sales increased as a result of the

NXE:3600D system value proposition and DUV sales

volumes increased to keep up with customer demand

driven by the ongoing digital transformation and chip

shortage. We recognized revenue for 40 EUV systems (all

NXE:3600D) in 2022 compared with 42 EUV systems (16

NXE:3400 & 26 NXE:3600D) in 2021. Our system sales

across our DUV technologies increased from 267 units in

2021 to 305 units in 2022.

In addition to the growth in EUV and DUV system sales,

net service and field option sales were also a key driver

for our overall growth in net sales. The increase is mainly

driven by an increase in service sales as a result of the

continued scaling of our customers' installed base. EUV

continues to contribute to net service and field option

sales as our installed base continues to grow and our

customers continue to run more EUV systems in their

high-volume production.

Gross profit

(in millions)

Gross profit increased as a result of an increase in sales.

This is mainly due to the volume increase in DUV and the

value proposition of the NXE:3600D system. The gross

margin decreased from 50.6% in 2021 to 49.7% in 2022.

Fast shipments, the strong inflationary effect related to

increasing costs (material, labor freight) and ramp-up

costs (increased factory costs) combined with the High-

NA investment negatively impacted the gross margin.

Research and development costs

(in millions)

R&D investments of €3,253.5 million (2021: €2,547.0

million), are mainly comprised of R&D costs net of credits

(including net development costs not eligible for

capitalization) of €2,282.1 million (2021: €1,861.6 million)

and capitalization of development expenditures of €893.4

million (2021: €685.4 million). The increase in

investments is across each of our EUV, DUV and

Applications programs supporting our holistic lithography

solutions, with the most significant efforts going toward

our roadmap to continue enhancing EUV high-volume

manufacturing, as well as our development of EUV 0.55

NA (High-NA). In 2022, R&D activities mainly related to:

–Continued investments in EUV high-volume

manufacturing, finalizing the development of the

NXE:3600D, investments in the development as well as

shipment of the NXE:3800E and further improving

availability and productivity of our installed base

systems. In addition, our roadmap includes High-NA,

our EUV 0.55 NA systems, to support our customers

with future nodes for both Logic and DRAM.

–The introduction of our latest-generation immersion

system NXT:2100i for the most critical DUV layers and the

dry system NXT:870, which introduces break-through

productivity in the KrF market. Continued developments

for the next generation of scanners shipping in 2023

include NXT:1980Fi and XT:400M, increasing productivity

for the mid-critical and i-line layers respectively.

Furthermore, we are delivering productivity packages and

introducing new value-based service models to improve

‘good wafers per day’ at customers’ installed base.

–Continued investment in single-beam inspection, e-

beam metrology and optical metrology (YieldStar ADI

and IDM solutions). In addition, securing our multibeam

inspection roadmap and continuously expanding our

investment in the holistic software applications space.

€2.3 billion

R&D costs

22.6%

Increase in R&D costs

on previous year

Selling, general and administrative costs

SG&A costs increased by 25.4% from 2021 to 2022

largely due to an increase in the number of employees,

an increase in wages as well as investments in

digitalization and cybersecurity.

Income taxes

The effective tax rate decreased to 14.0% in 2022,

compared with 15.2% in 2021. The lower rate is mainly

driven by increase in deferred tax assets (with

corresponding deferred tax benefit) on intercompany

eliminations.

Net income

Net income in 2022 amounted to €6,395.8 million, or

30.2% of total net sales, representing €16.08 basic net

income per ordinary share, compared with net income in

2021 of €6,134.6 million, or 33.0% of total net sales,

representing €14.97 basic net income per ordinary share.

Cash flow analysis

We continue to invest heavily in our next-generation technologies in order to secure future growth opportunities which

require a significant cash investment in net working capital, capital expenditures and R&D.

We also continued our efforts to return cash to our shareholders through our share buyback program and growing

dividends. We were able to return a record amount of dividend to our shareholders.


Year ended December 31 (€, in millions)	2021	2022
Cash and cash equivalents, beginning of period	6,049.4	6,951.8

Net cash provided by (used in) operating activities	11,592.6	9,434.9
Net cash provided by (used in) investing activities	(757.4)	(1,922.0)
Net cash provided by (used in) financing activities	(9,953.1)	(7,193.3)
Effect of changes in exchange rates on cash	20.3	(3.1)
Net increase (decrease) in cash and cash equivalents	902.4	316.5

Cash and cash equivalents, end of period	6,951.8	7,268.3
Short-term investments, end of period	638.5	107.7
Cash and cash equivalents and short-term investments	7,590.3	7,376.0

Net cash provided by (used in) operating activities

The decrease in Net cash provided by operating activities of €2.2 billion compared with 2021, is mainly due to an

increase in inventory to prepare for the future ramp up in order to facilitate the growing demand from our customers,

offset with an increase in Net income of €0.3 billion.

Net cash provided by (used in) investing activities

Net cash used in investing activities increased by €1.2 billion compared to 2021, which is mainly due to our

continuous cash investment in capital expenditures, which increased by €0.6 billion, and the €0.2 billion loan issued

to a related party, as well as a decrease in the net purchase and maturity of short-term investments of €0.1 billion.

Additionally, in 2021 we had net proceeds from sale of subsidiaries of €0.3 billion, with no proceeds in 2022.

Net cash provided by (used in) financing activities

The decrease in net cash used in financing activities of €2.8 billion compared to 2021, is mainly due to a decrease in

shares purchased through our share buyback program (€3.9 billion), offset with an increase in our dividend (€1.2

billion). In 2022, we had net proceeds from issuances of notes of €0.5 billion and we repaid an amount of €0.5 billion

for a previous issued note that became due, with no note issuance or repayment in 2021.

As of December 31, 2022, management has determined that ASML has sufficient capital for the company’s present

requirements.

Trend information

Despite uncertainties in the market, we expect 2023 to

see continued growth with an expected net sales growth,

of more than 25%. The expected growth is driven by

increasing sales across all technologies, as well as

growth in our installed base business. The industry

momentum around innovation and expanding new

markets further strengthens our confidence in the 2023

outlook and our 2025 growth scenarios.

Customers adopted EUV, and with increasing customer

confidence in EUV, this is translating into more layers in

their next nodes, for Logic production as well as the

adoption in Memory. We expect to ship 60 EUV systems

in 2023 and an expected sales growth of around 40%.

In our DUV and Applications business, we expect growth

in both immersion and dry systems, as well as continued

demand for metrology and inspection systems. For DUV

we plan to ship 375 systems in 2023 of which around

25% will be immersion systems. For non-EUV systems,

we expect a sales growth of around 30%.

For the Installed Base Management business we expect

year over year revenue growth of around 5 percent. As

we are coming off a strong growth year in 2022, we

expect to see a bit lower demand in our upgrade

business as customers adjust utilization.

Total net sales for the first quarter of 2023 is guided

between €6.1 billion and €6.5 billion.

The trends discussed above are subject to risks and

uncertainties.

Read more in:

Forward-looking statements.

Outlook 2025 and 2030

This decade is all about distributed computing, bringing

the cloud closer to devices at the edge. Through

connectivity, computing power will be available to all of

us ‘on device’, enabling a connected world. These global

megatrends in the electronics industry, supported by a

highly profitable and fiercely innovative ecosystem, are

expected to continue to fuel growth across the

semiconductor market. This translates into increased

wafer demand at both advanced and mature nodes.

The continued push of countries around the globe for

technological sovereignty is expected to drive increased

capital intensity. This means that the industry is expected

to make significant investments in wafer capacity, with

increasing spend on lithography. The semiconductor end

markets, such as automotive, data centers, industrial and

consumer electronics, are expected to grow, and we

expect the total semiconductor market to grow around

9% year-on-year through 2030, fueling the strong growth

of our business based on an increased mix of EUV, while

the demand for DUV is expected to increase across all

wavelengths. To achieve this, we and our supply chain

partners are actively adding and improving capacity to

meet future customer demand.

At our November 2022 Investor Day, also known as

Capital Markets Day (CMD), we presented our upward

revised long-term growth opportunity for 2025 as well as

2030. We remodeled our previous sales scenarios in a

low and high market due to the rapid evolution of end-

market technology growth drivers technological

sovereignty and foundry competition projects since our

update in 2021.

Based on the different market scenarios, we believe we

have an opportunity to reach annual sales of between

approximately €30 billion and €40 billion in 2025.

Looking further ahead, for 2030 we believe we have an

opportunity to reach annual sales of between

approximately €44 billion and €60 billion.

The main additional demand drivers behind the upward

adjustments of our scenarios are the market-driven

growth in both advanced and mature markets,

technology (e.g. energy transition, die sizes) and

geopolitical and competition-driven growth.

Our sales potential is primarily based on assumed

organic growth. We continuously review our product

roadmap and have, from time to time, made focused

acquisitions or equity investments to enhance the

industrial synergy of our product offering. Based on such

reviews and the assessment of clear potential product

and value synergies, we may also evaluate and pursue

focused merger and acquisition activities in the future.

Within this growth ambition, we expect to continue to

return significant amounts of cash to our shareholders

through a combination of growing dividends and share

buybacks.

Lastly, we seek to continuously improve our performance

on ESG Sustainability. In 2022, we upgraded our ESG

Sustainability strategy and KPIs to accelerate progress in

close collaboration with our partners.

Read more in:

Our business and ESG strategy.



Our updated model for 2025 goes beyond our high-market scenario from CMD 2021


Market		System units				Total sales opportunity (in €bn)

High			CMD 2021 Units ASML	CMD 2022 Units ASML	CMD 2022 Units ASML		CMD 2021 Sales	CMD 2022 Sales	CMD 2022 Sales
			2025	2025	2030		2025	2025	2030
		EUV High-NA 0.55	5	5	30	Systems (Litho and M&I1)	23	32	47
		EUV Low-NA 0.33	70	80	80	Systems (Litho and M&I1)	23	32	47
		ArFi (immersion)	78	105	115	Installed Base Management2	7	8	13
		Dry	189	385	425	Installed Base Management2	7	8	13
		Total	342	575	650	Total	30	40	60


Low			CMD 2021 Units ASML	CMD 2022 Units ASML	CMD 2022 Units ASML		CMD 2021 Sales	CMD 2022 Sales	CMD 2022 Sales
			2025	2025	2030		2025	2025	2030
		EUV High-NA 0.55	5	5	15	Systems (Litho and M&I1)	18	23	33
		EUV Low-NA 0.33	48	65	65	Systems (Litho and M&I1)	18	23	33
		ArFi (immersion)	63	75	85	Installed Base Management2	6	7	11
		Dry	124	180	250	Installed Base Management2	6	7	11
		Total	240	325	415	Total	24	30	44

	1. M&I: Metrology and inspection. 2. Installed Base Management equals our net service and field option sales.




		SMART MOBILITY
		Individual choices, shared benefits
		Across the world, people are changing their views about personal transport. Instead of owning expensive and environmentally harmful vehicles, they’re seeking to get from A to B through car-sharing, ride-sharing, ride-hailing, micro-mobility and micro-transit. The mobile apps that underpin smart mobility are all enabled by semiconductor technology.
		Read more online



ASML ANNUAL REPORT 2022	SMALL PATTERNS. BIG IMPACT.	STRATEGIC REPORT	GOVERNANCE	FINANCIALS	50

Enterprise Risk Management

Our ERM framework enables a well-defined governance

structure and a robust ERM process. The Risk and

Business Assurance function drives the ERM process

and associated activities across ASML. We follow a

systematic approach to identify, manage and monitor

risks in pursuit of our business objectives by setting

standards and enabling management to maintain and

continuously improve our governance, risk management,

internal control and compliance. The framework also

helps to identify opportunities that allow us to achieve our

objectives and enable long-term sustainable growth.

The purpose of risk management is to

maximize the probability of achieving

business objectives responsibly.”

Geert Beullens

VP Risk and Business Assurance

ERM is a continuous process. Its related activities are

periodically repeated to identify and address risks in a

timely fashion, and ensure that its results are relevant for

decision-making purposes. Our Vice President of Risk

and Business Assurance reports to the CFO and Audit

Committee, and is responsible for leading the

development and maintenance of the ERM framework as

well as for the implementation of the ERM process. We

have adopted the ISO 31000:2018 standard as the basis

for our ERM activities. In addition, the Vice President of

Risk and Business Assurance is responsible for leading

the security and internal control function and for

developing and maintaining the compliance process.

Risk management governance structure



Supervisory Board			Audit Committee

Request to investigate specific risk topics	–Bi-annual risk review –Risk topics feedback			–Assertion on control effectiveness –Quarterly progress reporting
Board of Management

Corporate Risk Committee (CRC) Risk oversight		Disclosure Committee Internal Control Committee

–Risk appetite –Risk management policy –CRC sub committees (governance)	–Risk assessment results –Risk response progress –Incidents			–Control effectiveness
Risk owners



ASML ANNUAL REPORT 2022	RISK	STRATEGIC REPORT	GOVERNANCE	FINANCIALS	51
How we manage risk
We use an Enterprise Risk Management (ERM) framework to integrate risk management into our daily business activities and strategic planning.

Supervisory Board and Audit Committee

The Supervisory Board provides independent oversight

on management’s response to identifying and mitigating

critical risk areas based on regular risk reviews. The

Supervisory Board’s Audit Committee provides

independent oversight on the ERM process and timely

follow-up of priority actions based on quarterly progress

updates.

Board of Management

The Board of Management is responsible for managing

the internal and external risks related to our business

activities and for making sure we comply with applicable

laws and regulations.

Corporate Risk Committee

The Corporate Risk Committee is a central risk oversight

body that reviews, manages and controls risks in the

ASML risk universe, including security. It also approves

the risk appetite, risk-management policies and risk-

mitigation strategies. The Corporate Risk Committee is

chaired by the CFO and comprises senior management

representatives across ASML, including the CEO and

COO.

ASML risk management process provides direction for

adequate risk and control measures for key risks.”

Roel Verstegen

Head of Enterprise Risk Management

Disclosure Committee

The Disclosure Committee assists the Board of

Management in overseeing ASML’s disclosure activities

and compliance with applicable disclosure requirements

arising under Dutch and US law, applicable stock

exchange regulations and other regulatory requirements.

Internal Control Committee

The Internal Control Committee, which includes

members of the Disclosure Committee, advises the

Disclosure Committee and the CEO and CFO in their

assessment of our internal control over financial reporting

and disclosures, under section 404 of the Sarbanes –

Oxley Act. The Chair of the Internal Control Committee

updates the Audit Committee, the CEO and CFO on the

progress of this assessment. The Chair also includes this

update in the Internal Control Committee’s report to the

Audit Committee.

Risk owners

Risk owners monitor the development of risks in the

ASML risk universe and drive risk response across ASML

according to requirements that are defined by the

Corporate Risk Committee.

ASML risk universe

The ASML risk universe is a consolidated overview of the

risks that may have a material adverse impact on our

ability to achieve our business objectives. The risk

universe was updated in 2022 and consists of 35 risk

categories grouped into six risk types. The risk universe

allows us to have a consistent approach to risk

assessments across ASML.



ASML risk universe

Strategy and products

–Industry cycle risk –Political risk –Climate change risk	–Business model risk –Merger and acquisition risk	–Competition risk –Innovation risk –Product stewardship risk		–Product roadmap execution risk –Intellectual property rights risk

Finance and reporting	Partners	People		Operations

–Business planning risk –Foreign exchange rate risk –Liquidity risk –Interest rate risk –Capital availability risk –Counterparty credit risk –Shareholder activism risk –Disclosure/external reporting risk	–Customer dependency risk –Product/service quality risk –Supplier strategy and performance risk –Supply chain disruption risk	–Knowledge management risk –Organizational effectiveness risk –Human resource risk		–Product industrialization risk –Process effectiveness and efficiency risk –Environment, health and safety risk –Continuity of own operation risk –Security risk –Information technology risk –Manufacturing and install risk

Legal and compliance

–Contractual liability risk	–Violation of laws and regulations risk		–Violation of internal policies risk

We take into account a broad range of internal and

external information sources, such as macroeconomic

and industry trends, relevant guidelines and legislation,

and stakeholders’ needs and expectations in all areas.

The risk universe is reviewed, updated and approved

annually, or more frequently in case of significant internal

and/or relevant external developments.

Enterprise Risk Management process

Our ERM process provides a holistic approach

combining both top-down (company-level) and bottom-

up (organization- and process-level) perspectives. This

helps us to ensure that risk identification, evaluation and

management are performed at the right level. We

continuously seek to improve our ERM process.

The results of periodic risk assessments and the potential

impact of external trends and emerging risks are captured in

the ASML risk landscape. As we operate in a dynamic

environment, risk exposures are subject to change. The

ASML risk landscape is reviewed, updated and discussed

by the Corporate Risk Committee each quarter. Risk

assessments are carried out according to the risk

management plan and any additional engagement is

approved by the Corporate Risk Committee. We define

strategies to address relevant risks and take these into

account when we define our corporate priorities. Our risk

responses aim to mitigate the risks up to the level defined by

the risk appetite.

Risk appetite

Our risk appetite describes the level of risk we are willing

to accept to achieve our objectives – which depends on

the nature of the specific risk and is divided into five

levels: Averse, Prudent, Moderate, High and Extensive.

Our approach is geared toward mitigating the risks to the

level defined in our risk appetite.

Risk management process

Risk assessment

Risk response

Top-down risk assessment

Coordination and follow-up

Corporate Risk Committee/Risk owners/Emerging risks

Risk owners

Risk identification

Risk

landscape

Risk appetite

Risk analysis

Risk evaluation

Risk treatment

Bottom-up risk assessment

Execution

Country/Sector

Action owners

Risk type

Averse

Prudent

Moderate

High

Extensive

Strategy and products

Partners

People

Operations

Finance and reporting

Legal and compliance

Risk developments

The table below shows examples of external developments that affected the exposure of a series of risk categories in 2022 and includes examples of our responses. The list of risks and risk responses below is not exhaustive.


Strategy	Risk categories	Risk developments	Risk responses
Continue innovating at pace to maintain technology leadership	Innovation Product roadmap execution IP rights Supplier strategy and performance Human resource Knowledge management Security Competition	Intellectual Property (IP) technology leadership pressure	–Intellectual property portfolio management –Patents and relevant technical publications monitoring –Extensive investments in security program –Awareness and training programs –Cyber Defense Center
		–There is significant pressure on know-how and IP protection for ASML and its open innovation partners. ASML’s existence is based on people and knowledge. Unauthorized disclosure of information of ASML, its customers or suppliers may benefit competitors, negatively affect ASML’s ability to file patents or affect cooperation with customers and suppliers. –We experience cyberattacks and other security incidents on our information technology systems, and our suppliers, customers and other service providers also experience such cyberattacks.
Advanced lithography solutions	Product industrialization Manufacturing and install Continuity of own operations Supplier strategy and performance Supply chain disruption Human resource Product and service quality Process effectiveness and efficiency Violations of laws and regulations Business model Competition Political Industry cycle	Growth challenges	–Increase of manufacturing capabilities, utilization rate and cycle- time reduction –Fast shipments –Support suppliers to increase move rate and mitigate material shortages –Deployment of onboarding and well-being programs –Shorten time to knowledge (learning operating model)
		–There is an increasing demand across all market segments and our product portfolio, which is an opportunity for us that also brings challenges. We face challenges to increase production capacity in our end-to-end supply chain to meet this demand. This is amplified by supply chain constraints. –Hiring, onboarding and retaining the workforce in the current competitive market is increasingly challenging. Consistent pressure on our organization and people as a result of our growth may lead to well-being issues among our employees. –The high demand we are continuing to experience could change customers’ sourcing strategies to become less dependent on ASML.
		Geopolitical tensions	–Actively engage with governmental authorities about effectiveness, consequences and enforceability of regulations –Collaborate with peers in global advocacy –Scenario planning around potential geopolitical events –Apply for export licenses as required –Comply with applicable (existing and new) regulations –Optimization of supply chain footprint
		–Geopolitical tensions are rising and additional export control restrictions have been imposed during 2022. The risk of further restrictions on exports or investments is high, and as a consequence global trade is shifting from globalization to regionalization as China, US and many other countries strive for technological sovereignty. In particular, the tensions between China and the US may lead to a decoupled ecosystem and – in the longer term – overcapacity. Given the important role both countries play in the semiconductor supply chain, this can have a significant impact on our industry. Trade and export barriers have already impacted our ability to sell to and service systems for certain customers, and this is likely to continue to impact our business going forward. –Changes in relations between Taiwan and the People’s Republic of China could lead to additional trade restrictions and could impact our employees and the ability to utilize our manufacturing facilities and supply chain in Taiwan for our global customers, as well as our ability to service our customers in Taiwan.
		Weakening global economy	–Control costs and maintain flexibility –Scenario planning around macroeconomic trends
		–Macroeconomic downturn fears are increasing, fueled by high inflation rates that are amplified by the energy crisis. Economic uncertainty has led to reduced consumer and business spending, and could cause our customers to decrease, cancel or delay their orders. A recession might also bring opportunities in the tight labor market.
Drive a more sustainable world	Product stewardship EHS Climate change Human resource Violation of laws and regulations Continuity of own operations Supply chain disruption	Strengthening ESG regulations and increasing stakeholder expectations	–Stakeholder engagement and disclosures –Deployment of ESG strategy in our organization and value chain –Non-financial reporting in accordance with the Global Reporting Initiative (GRI) Universal Standards 2021 –Deployment of business continuity plans –Include extreme weather aspects in building upgrades and new designs –Comply with (existing and new) regulations
		–Companies across all industries are facing increasing scrutiny relating to their ESG policies. Our stakeholders are increasingly focused on our contribution to society and expect us to minimize the environmental and social impact of our products throughout all life-cycle stages. A global trend to transition to a lower carbon economy has resulted in the imposition of increased regulations and disclosure requirements. Failure to achieve our ESG objectives and meet the emerging ESG expectations of our stakeholders could negatively affect our brand and reputation.
		Climate change fueling extreme weather
		–Climate change contributes to increasing severity and frequency of extreme weather events (such as cyclones and flood, fire stress, drought, heat and precipitation stress, rising sea levels) that can impact continuity of our operations and/or our supply chain.

The risk factors below are classified under

these six risk types. Any of these risks and

events or circumstances described therein

may have a material adverse effect on our

business, financial condition, results of

operations and reputation. These risks are

not the only ones that we face. Some risks

may not yet be known to us, and certain

risks that we do not currently believe to be

material could become material in the

future.

Many of these risks may be intensified by

global events such as the COVID-19

pandemic (including the China Zero-COVID

policy), the Russia–Ukraine conflict,

inflation, global measures taken in

response to these events and any

worsening of the associated global

business and economic conditions.


1. Strategy and products

	Our future success depends on our ability to respond timely to commercial and technological developments in the semiconductor industry

	Risk category:	Business model, Innovation

	Our success in developing new technologies, products and services, and in enhancing our existing products and services, depends on a variety of factors. These include the success of our and our suppliers’ R&D programs and the timely and successful completion of product development and design relative to competitors, or more costly. Our business will suffer if the technologies we pursue to assist our customers in producing smaller and more energy-efficient chips are not as effective as those developed by competitors. Our business will also suffer if our customers do not adopt technologies that we develop, or adopt new technological architectures that are less focused on lithography products. The success of our EUV 0.55 NA (High-NA) technology, which we believe is critical for keeping pace with Moore’s Law, remains dependent on continuing technical advances by us and our suppliers. We invest considerable financial resources to develop and introduce new and enhanced technologies, products and service offerings. If we are unsuccessful in developing (or if our customers do not adopt) these technologies, products and service offerings such as EUV 0.55 NA and multibeam inspection, or if alternative technologies or processes are successfully introduced by others, our competitive position and business may suffer.		In addition, we make significant investments in developing new products and product enhancements, and we may be unable to recoup some or all of these investments. We may incur impairment charges on capitalized technology including prototypes or incur costs related to inventory obsolescence, as a result of technological changes. Such costs may increase as the complexity of technology increases. Due to the highly complex nature and costs of our systems, including newer technologies, our customers may purchase existing technology systems rather than new leading-edge systems, or may delay their investment in new technology systems to the extent that such investment is not economical or required, given their product cycles. Global economic conditions affect our customers’ investment decisions, leading to uncertainties on the timing around the introduction of and demand for new leading-edge systems. Some of our customers have experienced and may continue to experience delays in implementing their product roadmaps. This increases the risk of slowing down the overall transition period (or cadence) for the introduction of new nodes, and therefore new systems. We also depend on our suppliers to maintain their development roadmaps to enable us to introduce new technologies on a timely basis. If they are unable to keep pace, whether due to technological factors, lack of financial resources or otherwise, this could prevent us from meeting our development roadmaps.




	The success of new product introductions is uncertain and depends on our ability to successfully execute our R&D programs

	Risk category:		Product roadmap execution, Innovation

	As our lithography systems and applications have become increasingly complex, the costs and time periods to develop new products and technologies have increased. We expect such costs and time periods to continue to increase. In particular, developing new technology, such as EUV 0.55 NA (High-NA) and multibeam, requires significant R&D investments by us and our suppliers to meet our and our customers’ technology demands. Our suppliers may not be able or willing to invest the resources necessary to continue the (co-)development of the new technologies to the extent that such investments are necessary. This may result in ASML contributing funds to such R&D programs or limiting the R&D investments that we can undertake. Furthermore, if our R&D programs are not successful in developing the desired new technology on time or at all, we may be unsuccessful in introducing new products and unable to recoup our R&D investments. In light of the high levels of customer demand, we may prioritize our resources toward increasing production over R&D programs.



ASML ANNUAL REPORT 2022	RISK CONTINUED	STRATEGIC REPORT	GOVERNANCE	FINANCIALS	55
Risk factors
We face many risks that have the potential to impact our business. It is important to understand the nature of these. We assess our risks by using the ASML risk universe, which comprises six risk types (Strategy and products, Finance and reporting, Partners, People, Operations, Legal and compliance).

We face intense competition

The semiconductor industry can be cyclical and we may be adversely affected by any downturn

We derive most of our revenues from the sale of

a relatively small number of products

Risk category:

Competition

Risk category:

Industry cycle risk

Risk category:

Business model

The semiconductor equipment industry is highly

competitive. Our competitiveness depends upon our

ability to develop new and enhanced lithography

equipment, related applications and services that bring

value to our customers and are competitively priced and

introduced on a timely basis – as well as our ability to

protect and defend our intellectual property, trade secrets

or other proprietary information. We compete primarily

with Canon and Nikon in respect of DUV systems. Both

Canon and Nikon have substantial financial resources

and broad patent portfolios. Each continues to offer

products that compete directly with our DUV systems,

which may impact our sales or business. In addition,

adverse market conditions, long-term overcapacity or a

decrease in the value of the Japanese yen in relation to

the euro could further intensify price-based competition,

resulting in lower prices and lower sales and margins.

We also face competition from new competitors with

substantial financial resources, as well as from

competitors driven by the ambition of self-sufficiency in

the geopolitical context. Furthermore, we face

competition from alternative technological solutions or

semiconductor manufacturing processes, particularly if

we are unsuccessful in developing new EUV technology,

products and product enhancements in a timely and

cost-competitive manner.

We also compete with providers of applications that

support or enhance complex patterning solutions, such

as Applied Materials Inc. and KLA-Tencor Corporation.

These applications effectively compete with our

Applications offering, which is a significant part of our

business.

The semiconductor industry has historically been

cyclical. As a supplier to the global semiconductor

industry, we are subject to the industry’s business

cycles, and the timing, duration and volatility are

difficult to predict and can have a significant impact on

semiconductor manufacturers and therefore ASML.

Newer entrants to the industry, including Chinese

semiconductor manufacturers, could increase the risk

of cyclicality in the future. Certain key end-market

customers – Memory and Logic – exhibit different

levels of cyclicality and different business cycles. Sales

of our lithography systems, services and other holistic

lithography products depend in large part upon the

level of capital expenditures by semiconductor

manufacturers. These in turn are influenced by

industry cycles, the drive for technological sovereignty

and a range of competitive and market factors,

including semiconductor industry conditions and

prospects. The timing and magnitude of capital

expenditures of our customers also impact the

available production capacity of the industry to

produce chips, which can lead to imbalances in the

supply and demand of chips. Reductions or delays in

capital expenditures by our customers, or incorrect

assumptions by us about our customers’ capital

expenditures, could adversely impact our business. In

addition, industry trends that are currently positively

impacting our business, such as increasing capital

expenditures by our customers, may not continue.

Our ability to maintain profitability in an industry downturn

will depend substantially on whether we are able to lower

our costs to break-even level. If sales decrease significantly

as a result of an industry downturn and we are unable to

adjust our costs over the same period, and if down

payments need to be returned, our net income may

decline significantly or we may suffer losses.

As we have significantly increased our organization in

terms of employees, infrastructure, manufacturing capacity

and other areas, we may not be able to adjust our costs in

the event of an industry downturn.

In addition, we are facing a weakening of the global

economy. Economic uncertainty frequently leads to

reduced consumer and business spending, and could

cause our customers to decrease, cancel or delay their

orders. The tightening of credit markets, rising interest

rates and concerns regarding the availability of credit could

make it more difficult for our customers to raise capital,

whether debt or equity, to finance their purchases of

equipment, including the products we sell. Reduced

demand, combined with delays in our customers’ ability to

obtain financing (or the unavailability of such financing) may

adversely affect our product sales and revenues and

therefore may harm our business and operating results.

If we are unable to timely and appropriately adapt to

changes resulting from difficult macroeconomic conditions,

our business, financial condition or results of operations

may be materially and adversely affected.

We derive most of our revenues from the sale of a

relatively small number of lithography systems (345

units in 2022 and 309 units in 2021). As a result, the

timing of shipments, including any delays, and

recognition of system sales for a particular reporting

period from a small number of systems, with an

increase in sales prices, may have a material adverse

effect on our business, financial condition and results

of operations in that period.

In addition, we may not be able to increase installed

base revenues to the extent we planned, as, for

example, customers may perform more of these

services themselves or find other third-party suppliers

to provide them.

Failure to adequately protect intellectual property, trade secrets or other proprietary information could

harm our business

Defending against intellectual property claims brought by others

could harm our business

Risk category:

Intellectual property rights

Risk category:

Intellectual property rights

We rely on intellectual property (IP) rights such as

patents and copyrights to protect our proprietary

technology. However, we face the risk that such

protective measures could prove to be inadequate,

and we could suffer material harm because, among

other matters:

In addition, legal proceedings may be necessary to

enforce our IP rights and the validity and scope may be

challenged by others. Any such proceedings may

result in substantial costs and diversion of

management resources, and, if unfavorable decisions

are made, could result in significant costs or have a

significant impact on our business.

We have experienced and may in the future experience

misappropriation attacks by third parties or our

employees, including theft of intellectual property, trade

secrets, or other proprietary or confidential information.

For example, we have experienced unauthorized

misappropriation of data relating to proprietary

technology, as described under “Risk Factors –

Cybersecurity and other security incidents, or other

disruptions in our processes or information technology

systems, could materially adversely affect our business

operations”. As a result of such incidents, third parties

or others have or may, without authorization, obtain,

copy, use or disclose our intellectual property, trade

secrets or other proprietary information despite our

efforts to protect them.

In the course of our business, we have been in the

past and are subject to claims by third parties alleging

that our products or processes infringe upon their IP. If

successful, such claims could limit or prohibit us from

developing our technology, manufacturing and selling

our products.

In addition, our customers or suppliers may be subject

to claims of infringement from third parties, including

patent holder companies, alleging that our products

used by such customers in the manufacturing of

semiconductor products and/or the processes relating

to the use of our products infringe on one or more

patents issued to such third parties. If such claims are

successful, we could be required to indemnify our

customers for some or all of any losses incurred or

damages assessed against them as a result of such

infringement.

We also may incur substantial licensing or settlement

costs to settle claims or to potentially strengthen or

expand our intellectual property rights or limit our

exposure to intellectual property claims of third parties.

Patent litigation is complex and may extend for a

protracted period of time, giving rise to the potential for

both substantial costs and diverting the attention of

key management and technical personnel. Potential

adverse outcomes from patent litigation may include

payment of significant monetary damages, injunctive

relief prohibiting our manufacturing, exporting or selling

of products, reputational damage and/or settlement

involving significant costs to be paid by us.

–IP laws may not sufficiently support our proprietary rights

or may change adversely in the future;

–Our agreements (e.g. confidentiality, licensing) with our

customers, employees and technology development

partners and others to protect our IP may not be

sufficient or may be breached or terminated;

–Patent rights may not be granted or interpreted as we

expect;

–Patent rights will expire, which may result in key

technology becoming widely available that may harm our

competitive position;

–The steps we take to prevent misappropriation or

infringement of our proprietary rights may not be

successful;

–IP rights and trade secrets are difficult to enforce in

countries where the application and enforcement of the

laws governing such rights may not have reached the

same level compared with other jurisdictions where we

operate; and

–Third parties may be able to develop or obtain patents

for our or similar competing technology.

We are exposed to economic, geopolitical and other developments in

our international operations

We may be unable to make desirable acquisitions or to integrate successfully

any businesses we acquire

Risk category:

Political

Risk category:

Mergers & acquisitions

Global trade issues and changes in and uncertainties with

respect to multilateral and bilateral treaties and trade

policies, and international trade disputes, trade sanctions,

export controls, tariffs and similar regulations, impact our

ability to deliver our systems, technology and services

internationally. In particular, our ability to deliver

technology in certain countries such as China has been

and continues to be impacted by our ability to obtain

required licenses and approvals.

Our business involves the sale of systems and services to

customers in a number of countries, including China,

where our business has grown in recent years, and

includes technologies that may be the subject of

increased export regulations or policies.

The US government has enacted trade measures,

including national security regulations and restrictions on

conducting business with certain Chinese entities,

restricting our ability to provide certain products and

services to such entities without a license. The list of

Chinese entities impacted by trade restrictions, as well as

the export regulation requirements and the

implementation and enforcement of such regulations, has

increased with the addition of certain entities to the Entity

List, and more recently by the Additional Export Controls

on Semiconductor Manufacturing Items imposing license

requirements on US-origin parts and US persons

destined toward fabs in China working on advanced

technology nodes. The list of restricted customers is

subject to change.

These and further developments in multilateral and bilateral

treaties, national regulation, and trade, national security and

investment policies and practices have affected and may further

affect our business, and the businesses of our suppliers and

customers. Such developments have impacted and continue to

impact our ability to obtain necessary licenses (among others

from the Dutch government), including authorizations for use of

US technology and for employees producing and developing

such technology. Such developments, including the drive for

technological sovereignty, could also lead to long-term changes

in global trade, competition and technology supply chains, which

could adversely affect our business and growth prospects.

Certain of our manufacturing facilities as well as our supply chain

and customers are located in Taiwan. Customers in Taiwan

represented 38.2% of our 2022 total net sales and 39.4% of our

2021 total net sales. Taiwan has a unique international political

status. Changes in relations between Taiwan and the People’s

Republic of China, Taiwanese government policies and other

factors affecting Taiwan’s political, economic or social

environment could, for example, impact our ability to service our

customers in Taiwan, which could have a material adverse effect

on our business, financial condition and results of operations.

Furthermore, certain of our facilities as well as customers are

located in South Korea. Customers in South Korea represented

28.6% of our 2022 total net sales and 33.4% of our 2021 total

net sales. In addition, there are tensions with the Democratic

People’s Republic of Korea (North Korea) which have existed

since the division of the Korean Peninsula following World War II.

A worsening of relations between those countries or the outbreak

of war on the Korean Peninsula could have a material adverse

effect on our business, financial condition or results of operations.

From time to time, we may acquire, or seek to acquire,

businesses or technologies to complement, enhance

or expand our current business or products or that

might otherwise offer us growth opportunities. Any

such acquisitions could lead to failure to achieve our

financial or strategic objectives or our ability to perform

as we plan or disrupt our ongoing business and

adversely impact our results of operations.

Furthermore, our ability to complete such transactions

may be hindered by a number of factors, including

potential difficulties in obtaining government approvals.

Any acquisition that we make could pose risks related

to the integration of the new business or technology

with our business and organization. We cannot be

certain that we will be able to achieve the benefits we

expect from a particular acquisition investment. Such

transactions may also strain our managerial and

operational resources, as the challenge of managing

new operations may divert our management from day-

to-day operations. Furthermore, we may be unable to

retain key personnel from acquired businesses or we

may have difficulty integrating employees, business

systems and technology. The controls, processes and

procedures of acquired businesses may also not

adequately ensure compliance with laws and

regulations, and we may fail to identify compliance

issues or liabilities.

In connection with acquisitions, antitrust and national

security regulators have in the past and may in the

future impose conditions on us, including

requirements to divest assets or other conditions that

could make it difficult for us to integrate the

businesses that we acquire. Furthermore, we may

have difficulty in obtaining or be unable to obtain

antitrust and national-security clearances, which

could inhibit future desired acquisitions.

As a result of acquisitions, we have recorded a

significant amount of goodwill and intangible assets.

Accounting standards require periodic review of these

assets for indicators of impairment. If one or more

indicators of impairment are found to exist, then

valuation of the related asset could change and may

incur impairment charges.



We may not be able to achieve our Environmental, Social and Governance (ESG) objectives or adapt and respond timely to emerging ESG expectations and regulations

Risk category:	Climate change, Product stewardship

Companies across all industries are facing increasing scrutiny relating to their ESG policies. Investors, capital providers, shareholder advocacy groups, other market participants, customers and other stakeholders are increasingly focused on ESG practices and, in recent years, have placed increasing importance on the implications and social cost of their investments. In particular, within the semiconductor industry, there is a focus on contribution to society and minimizing environmental and social impacts of products throughout all life-cycle stages. Failure to achieve our ESG objectives, meet the emerging ESG expectations of our stakeholders and/or timely respond to enhanced regulations and disclosure obligations could negatively affect our brand and reputation, which may impede our ability to compete as effectively to recruit or retain employees, which may adversely affect our operations.		Climate change contributes to increasing severity and frequency of extreme weather events, rising sea levels and droughts that can impact continuity of our operations and/or our supply chain. Climate change concerns and the potential environmental impact of climate change have resulted in and may result in new laws and regulations that may affect us, our suppliers and our customers. Such laws or regulations could cause us to incur additional direct costs for compliance, as well as increased indirect costs resulting from our value chain. Furthermore, the ability to improve our product-related environmental performance (such as energy efficiency) may be affected by the complexity of our technology and products. In order to meet our ESG goals and requirements in this regard, we are dependent on our suppliers and their ability to reduce their ecological footprints. In addition, we are dependent on our customers and/or our customers may not be satisfied with our progress, which can impact demand.	A global trend to transition to a lower-carbon economy has resulted in the imposition of increased regulations that could lead to technology restrictions, modification of product designs, an increase in energy prices and energy or carbon taxes, restrictions on pollution, required remediation measures or other requirements that could impact our business and increase our costs. A variety of regulatory developments have been introduced that focus on restricting or managing the emission of carbon dioxide and other greenhouse gases. This could result in a need to redesign products and/or purchase at higher costs new equipment or materials with lower carbon footprints. We publish disclosures on ESG matters relating to our business and our partners in compliance with applicable regulations and guidance and other data which may not be required but which we nonetheless elect to disclose.	Such disclosure includes statements based on our expectations and assumptions, involving forecasts about costs and future circumstances, which may prove to be incorrect. In addition, our ESG Sustainability strategy may not have the intended results, and our estimates concerning the timing and cost of implementing and ability to meet stated goals are subject to risks and uncertainties, which could result in us not meeting our goals on expected timing or at all or within expected costs. In addition, ESG disclosure requirements are increasing and authorities have proposed disclosure requirements on ESG matters which differ from the requirements that we are currently subject to, so we face risks in compliance with such regulations, including the risk of complying with requirements in different jurisdictions, costs associated with such compliance and potential liability in the event that our ESG disclosures prove incorrect.


2. Finance and reporting

	We are exposed to financial risks, including liquidity risk, interest rate risk, credit risk, foreign exchange risk and inflation

	Risk category:	Liquidity, Interest rate, Counterparty credit, Foreign exchange

	We are a global company and are exposed to a variety of financial risks, including those related to liquidity, interest rate, credit, foreign exchange and inflation. Liquidity risk Negative developments in our business or global capital markets could affect our ability to meet our financial obligations or to raise or refinance debt in the capital or loan markets. In addition, we might be unable to repatriate cash from a country when needed for use elsewhere due to legal restrictions or required formalities. Interest rate risk Our Eurobonds bear interest at fixed rates. Our cash and investments as well as our revolving credit facility		bear interest at a floating rate. Failure to effectively hedge this risk could impact our financial condition and results of operation. In addition, we could experience an increase in borrowing costs due to a ratings downgrade (or the expectation of a downgrade), developments in capital and lending markets or developments in our businesses.	finance receivables at December 31, 2022, compared with €3,855.2 million, or 83.7%, at December 31, 2021. Accordingly, business failure or insolvency of one of our main customers could result in significant credit losses.	to the euro. We incur costs of sales predominantly in euros, with portions also denominated in US and Taiwanese dollars. A small portion of our operating results are driven by movements in currencies other than the euro, US dollar, Japanese yen, South Korean won, Taiwanese dollar or Chinese yuan. Inflation risk We are exposed to increases in costs due to inflation for costs of goods, transportation and wages, which may impact our profitability. We are currently experiencing higher-than-normal inflation, which impacts our costs and margins to the extent we are not able to pass on increased costs in our prices.
				Currency risk
				Our Financial Statements are expressed in euros. Accordingly, our results of operations are exposed to fluctuations in exchange rates between the euro and other currencies. Changes in currency exchange rates can result in losses in our Financial Statements. We are particularly exposed to fluctuations in the exchange rates between the US dollar and the euro, and to a lesser extent to the Japanese yen, the South Korean won, the Taiwanese dollar and the Chinese yuan, in relation
			Counterparty credit risk
			We are exposed to credit risk in particular with respect to financial counterparties with whom we hold our cash and investments as well as our customers. As a result of our limited number of customers, credit risk on our receivables is concentrated. Our three largest customers (based on total net sales) accounted for €5,252.8 million, or 78.6%, of accounts receivable and


3. Partners

	Our success is highly dependent on the performance of a limited number of critical suppliers of single-source key components

	Risk category:	Supply chain disruption, Supplier strategy and performance

	We rely on outside vendors for components and subassemblies used in our systems, including the design thereof. These components and subassemblies are obtained from a single supplier or a limited number of suppliers. As our business has grown, our dependence on single suppliers or a limited number of suppliers has grown, because the highly specialized nature of many of our components, particularly for EUV including 0.55 NA systems, means it is not economical to source from more than one supplier. Our sourcing strategy therefore (in many cases) prescribes ‘single sourcing, dual competence’. Our reliance on a limited group of suppliers involves several risks, including a potential inability to obtain an adequate supply of required components or subassemblies in time and at acceptable costs, and reduced control over pricing and quality. Delays in supply of these components and subassemblies, which could occur for a variety of reasons, such as disruptions experienced by our suppliers, including work stoppages, fire, energy shortages, pandemic outbreaks, flooding, cyberattacks, blockades, sabotage or other disasters, natural and otherwise, can lead to delays in delivery of our products which could impact our business. For example, certain of our suppliers experienced disruptions in their operations		as a result of chip and material shortages. A prolonged inability to obtain adequate deliveries of components or subassemblies, or any other circumstance that requires us to seek alternative sources of supply, could significantly hinder our ability to deliver our products in a timely manner, which could damage relationships with our customers and materially impact our business. The number of lithography systems we are able to produce may be limited by the production capacity of one of our key suppliers, Carl Zeiss SMT GmbH, which is our sole supplier of lenses, mirrors, illuminators, collectors and other critical optical components (which we refer to as optics). We have an exclusive arrangement with Carl Zeiss SMT GmbH, and if they are unable to maintain and increase production levels, we could be unable to fulfill orders, which could have a material impact on our business and damage relationships with our customers. If Carl Zeiss SMT GmbH were to terminate its supply relationship with us or be unable to maintain production of optics over a prolonged period, we would effectively cease to be able to conduct our business.	From time to time, we experience supply constraints which can impact our production, particularly during periods of high levels of demand such as those we have experienced in 2022 and continue to experience. In 2022, we were impacted by delays and shortages in our supply chain, resulting in a late start on the assembly of a number of systems. In addition, due to high demand, we reduced cycle time in our factory to ship more systems. We have achieved this through a fast shipment process that skips some of the testing in our factory. Final testing and formal acceptance then takes place at the customer site. This provides our customers with earlier access to wafer output capacity but also leads to a delay of revenue recognition for those shipments until formal customer acceptance. We and our suppliers are investing in additional capacity to meet the demand. However, increasing capacity takes time, and we may be unable to meet the full demand of our customers for a few years. Further, we face the risk that demand may not continue to increase, which could result in overcapacity and loss of investment in increasing capacity.	In addition, most of our key suppliers, including Carl Zeiss SMT GmbH, have a limited number of manufacturing facilities, the disruption of which may significantly and adversely affect our production capacity. Lead times in obtaining components have increased as our products have become more complex. A failure by us to adequately predict demand for our systems or any delays in the shipment of components can result in insufficient supply of components, which can lead to delays in delivery of our systems and can limit our ability to react quickly to changing market conditions. Conversely, a failure to predict demand could lead to excess and obsolete inventory. We are also dependent on suppliers to develop new models and products and to meet our development roadmaps. If our suppliers do not meet our requirements or timetable in product development, our business could suffer.

4. People

A high percentage of net sales is derived from

a few customers

Our business and future success depend on our ability to manage the growth of our organization

and attract and retain a sufficient number of adequately educated and skilled employees

Risk category:

Customer dependency

Risk category:

Human resources, Knowledge management, Organizational effectiveness

Historically, we have sold a substantial number of

lithography systems to a limited number of customers.

Customer concentration can increase because of

continuing consolidation in the semiconductor

manufacturing industry. In addition, although the

applications part of our holistic lithography solutions

constitutes an increasing portion of our revenue, a

significant portion of those customers are the same

customers as those for our systems. Consequently,

while the identity of our largest customers may vary

from year to year, sales may remain concentrated

among relatively few customers in any particular year.

The recognized total net sales to our largest customer

amounted to €7,046.9 million, or 33.3% of total net

sales in 2022, compared with €6,881.1 million, or

37.0% of total net sales in 2021. In 2022, 55.8% of

total net sales were made to two customers. The loss

of any significant customer or any significant reduction

or delay in orders by such a customer may have a

material adverse effect on our business, financial

condition and results of operations.

Our business and future success depends significantly

upon our ability to attract and retain employees,

including a large number of highly qualified

professionals. Competition for such personnel is

intense and has intensified in the last year. Despite our

ability to grow our employee base significantly,

attracting sufficient numbers of qualified employees to

meet our growing needs will remain a challenge. This

risk of not being able to attract, onboard and retain

qualified personnel increases as our business grows.

Our R&D programs require a large number of qualified

employees. If we are unable to attract sufficient

numbers of such employees, this could affect our

ability to conduct our R&D on a timely basis. Also, the

loss of key employees for unexpected reasons such as

resignation or long-term illness is a risk.

Moreover, as a result of the uniqueness and complexity

of our technology, qualified engineers capable of

working on our systems are scarce and generally not

available from other industries or companies. As a

result, we have to educate and train our employees to

work on our systems. Retention of those key

employees is a critical success factor for us.

Furthermore, the increasing complexity of our products

results in a longer learning curve for new and existing

employees and suppliers, leading to an inability to

decrease cycle times, and may result in significant

additional costs. Our suppliers face similar risks in

attracting and retaining qualified employees, including

those in connection with programs that will support our

R&D programs and technology developments. If our

suppliers are unable to attract and retain qualified

employees, this could impact our R&D programs or

deliveries of components to us.

In recent years, our organization has grown

significantly. We may be unable to effectively manage,

monitor and control our employees, facilities,

operations and other resources. Our rapid growth in

recent years, driven by strong customer demand, puts

pressure on our organization and employees, which

can negatively impact employee well-being. This may

in turn negatively impact the efficiency of our

operations, our ability to ensure compliance with laws

and regulations as well as our reputation as an

employer.

5. Operations

We may face challenges in managing the industrialization of our products and

bringing them to high-volume production

We are dependent on the continued operation of a limited

number of manufacturing facilities

Risk category:

Product industrialization

Risk category:

Continuity of own operation

Bringing our products to high-volume production at

a value-based price and in a cost-effective manner

depends on our ability to manage the

industrialization of our products and to manage

costs. Customer adoption of our products depends

on the performance of our products in the field. As

our products become more complex, we face an

increasing risk that products may not meet

development milestones or specifications and may

not perform according to specifications, including

quality standards. If our products do not perform

according to specifications and performance

criteria or if quality or performance issues arise, this

may result in additional costs, reduced demand for

our products and our customers being unable to

meet planned wafer capacity.

Transitioning our newly developed products to full-

scale production requires the expansion of our

infrastructure, including enhancing our

manufacturing capabilities, increasing the supply of

components and training qualified personnel. It may

also require our suppliers to expand their

infrastructure capabilities. If we or our suppliers are

unable to expand infrastructure as necessary, we

may be unable to introduce new technologies,

products or product enhancements or reach high-

volume production of newly developed products on

a timely basis or at all.

In addition, when we are successful in industrializing

new products, it can take years to reach profitable

margins, as was the case for EUV 0.33 NA.

New technologies might not have the same margins as

existing technologies, and we might not be able to

adjust value-based pricing and/or cost in an effective

manner. In addition, the introduction of new

technologies, products or product enhancements also

impacts ASML’s liquidity, as new products may have

higher cycle times, resulting in increased working capital

needs. This impact on liquidity increases as our

products become more complex and expensive.

The capability, capacity and costs associated with

providing the required customer support function to

cover the increasing number of shipments and service a

growing number of EUV systems that are operational in

the field could affect the timing of shipments. It could

also impact the efficient execution of maintenance,

servicing and upgrades, which is key to our systems

continuing to achieve the required productivity.

All of our manufacturing activities, including

subassembly, final assembly and system testing, take

place in cleanroom facilities in Veldhoven (the

Netherlands), Berlin (Germany), Wilton, San Diego (US),

Pyeongtaek (South Korea), and Linkou and Tainan

(Taiwan). These facilities may be subject to disruption

for a variety of reasons, including work stoppages, fire,

energy shortages, pandemic outbreaks, flooding,

cyberattacks, blockages, sabotage or other disasters,

natural and otherwise. We cannot ensure that

alternative production capacity would be available if a

major disruption were to occur. In 2022, we

experienced a fire in our Berlin operations which

required significant recovery efforts to secure our

operations.

As our organization grows, we are not able to fully

insure our risk exposure. In addition, not all disasters are

insurable. As we are unable to duly insure against

potential losses, we are subject to the financial impact of

uninsured losses, which can have an adverse impact on

our financial condition and results of operation.

We face challenges to meet demand

The nature of our operations exposes us to health,

safety and environment risks

Risk category:

Manufacturing and install, Human resources, Supplier strategy and performance

Risk category:

Environment, health and safety

We have in recent years and are continuing to

experience increasing demand across all our market

segments and product portfolio because our systems

play critical roles in meeting end-market demand. This

high level of demand brings challenges. We have been

and are continuing to increase production capacity in

our end-to-end supply chain to meet this demand, but

we face challenges in increasing capacity. For

example, in order to increase our capacity, we depend

on our suppliers increasing their capacity, and it takes

time to build the production space and equipment

required for expansion. We and our supply chain also

need to obtain permits to make expansion possible;

these may not be (timely) granted.

It is a challenge for ASML and our suppliers to hire and

retain more employees in the current competitive labor

market. Our processes and systems may not be able

to adequately support our growth. In addition, our end-

to-end supply chain is facing a shortage of materials

which is hampering our growth.

If we are not successful in increasing our capacity to

meet demand, this could impact our relationships with

customers and our competitive position. The increased

demand and resultant supply constraints that we are

continuing to experience lead to longer lead times for

customers which could result in customers changing

their sourcing strategy to become less dependent on

ASML, which impacts our market share in certain

product offerings.

Where we are able to increase our capacity, we are

subject to increased risk of a downturn, as it becomes

more difficult for us to reduce costs in the event of an

industry downturn.

Hazardous substances are used in the production and

operation of our products and systems, which subjects

us to a variety of governmental regulations relating to

environmental protection and employee and product

health and safety. This includes the transport, use,

storage, discharge, handling, emission, generation,

and disposal of toxic or other hazardous substances.

In addition, operating our systems (which use lasers

and other potentially hazardous systems) can be

dangerous and can result in injury. The failure to

comply with current or future regulations could result in

substantial fines being imposed on us, suspension of

production, alteration of our manufacturing and

assembly and test processes, damage to our

reputation and/or restrictions on our operations or sale

or other adverse consequences.

Additionally, our products have become increasingly

complex. This requires us to invest in continued risk

assessments and development of appropriate

preventative and protective measures for health and

safety for both our employees (in connection with the

production and installation of our systems and field

options and performance of our services) and our

customers’ employees (in connection with the

operation of our systems). Our health and safety

practices may not be effective in mitigating all health

and safety risks. Failure to comply with applicable

regulations or the failure of our implemented practices

for customer and employee health and safety could

subject us to significant liabilities.



Cybersecurity and other security incidents, or other disruptions in our processes or information technology systems, could materially adversely affect our business operations

Risk category:	Security, Information technology, Process effectiveness and efficiency

We rely on the accuracy, availability and security of our information technology (IT) systems. Despite the measures that we have implemented, including those related to cybersecurity, our systems could be breached or damaged by computer viruses and systems attacks, natural or man-made incidents, disasters or unauthorized physical or electronic access, and we have experienced some of these incidents. We are experiencing an increasing number of cyberattacks on our IT systems as well as the IT systems of our suppliers, customers and other service providers, whose systems we do not control. These attacks include malicious software (malware), attempts and acts to gain unauthorized access to data and other electronic and physical security breaches of our IT systems. They also include the IT systems of our suppliers, customers and other service providers that have led and could lead, for us, our customers, suppliers or other business partners – including R&D partners – to disruptions in critical systems, unauthorized release, misappropriation, corruption or loss of data or confidential information (including confidential information relating to our customers, employees and suppliers). Further, we depend on our employees and the employees of our suppliers to appropriately handle confidential and sensitive data and deploy our IT resources in a safe and secure manner that does not expose our network systems to security breaches or the loss of data.		Inadvertent disclosure or actions or malfeasance by our employees, those of our suppliers or other third parties have resulted and may in the future result in a loss or misappropriation of data or a breach or interruption of our IT systems, and could result in competitive harm and violate export controls and other laws and regulations which could result in fines and penalties, business disruption, reputational harm and additional regulatory scrutiny or export control measures. We have experienced unauthorized misappropriation of data relating to proprietary technology by a (now) former employee in China. We promptly initiated a comprehensive internal review. Based upon our initial findings we do not believe that the misappropriation is material to our business. However, as a result of the security incident, certain export control regulations may have been violated. ASML has therefore reported the incident to relevant authorities. We are implementing additional remedial measures in light of this incident. In addition, any system failure, accident or security breach could result in business disruption, theft of our intellectual property or trade secrets (including our proprietary technology), unauthorized access to, or disclosure of, customer, personnel, supplier or other confidential information, corruption of our data or of our systems, reputational damage or litigation and violation of applicable laws.	Furthermore, computer viruses or other malware may harm our systems and software and could be inadvertently transmitted to our customers’ systems and operations, which could result in loss of customers, litigation, regulatory investigation and proceedings that could expose us to civil or criminal liabilities and diversion of significant management attention and resources to remedy the damages that result. We may also be required to incur significant costs to protect against or repair the damage caused by these disruptions or security breaches, including, for example, rebuilding internal systems, implementing additional threat protection measures, providing modifications to our products and services, defending against litigation, responding to regulatory inquiries or actions, paying damages, or taking other remedial steps with respect to third parties. Further, remediation efforts may not be successful and could result in interruptions, delays or cessation of service, unfavorable publicity, damage to our reputation, customer allegations of breach-of- contract, possible litigation and loss of existing or potential customers that may impede our sales or other critical functions. Cybersecurity threats are constantly evolving. We remain potentially vulnerable to additional known or as yet unknown threats, as in some instances, we, our customers, partners and our suppliers may be unaware of an incident or its magnitude and effects.	We also face the risk that we could unintentionally expose our customers to cybersecurity attacks through the systems we deliver to them, including in the form of malware or other types of attacks, as described above, which could harm our customers. Furthermore, we have increased the level of remote working within our organization, which increases the risks of cybersecurity incidents. ASML’s visibility and importance for the semiconductor industry continues to increase. There is a risk that this may lead to actions that may adversely impact the security of ASML or the safety of its employees. In addition, processes and systems may not be able to adequately support the growth that we have experienced in recent years and continue to experience. From time to time, we implement updates to our IT systems and software, which can disrupt or shut down our IT systems. We may not be able to successfully launch and integrate these new systems as planned without disruption to our operations. For example, we are currently implementing a new ERP system and infrastructure. As a result of this system implementation or otherwise, we have and could continue to experience disruptions in our operations.
				Read more in: Governance - Responsible business - Information security.

6. Legal and compliance

We are subject to increasingly complex regulatory

and compliance obligations

Changes in taxation could affect our

future profitability

Risk category:

Violation of laws and regulations

Risk category:

Violation of laws and regulations

In recent years, our business has grown significantly in

terms of sales, operations, employees and our

business infrastructure. As a result, compliance with

laws and regulations, including with as well as our

internal policies and standards, such as without

limitation, the ASML Code of Conduct, has become

more complex. Furthermore, as we operate in different

countries in the world, we have become increasingly

subject to compliance with additional laws and

regulations in such jurisdictions, including but not

limited to export control, anti-corruption, anti-bribery,

antitrust and ESG regulations, which can be complex.

We may also be subject to investigations, audits and

reviews by authorities in such jurisdictions regarding

compliance with laws and regulations, including tax

laws.

In addition, the existing laws and regulations that we

are subject to, including regulations relating but not

limited to trade, national security, tax, export controls,

reporting, product compliance, anti-corruption laws,

antitrust, human rights, data protection, spatial

planning and environmental laws, are becoming more

complex and the trade and national security

environment has resulted in increasing restrictions.

Trade and security regulations limit our ability to sell

our products and services in certain jurisdictions and

we face the risk of further restrictions. We have

experienced delays in permits for shipments as well as

restrictions on shipping certain products or

components to certain customers.

Such changes in the regulations that apply to our

business can increase compliance costs and the risk

of non-compliance. Non-compliance could result in

fines and penalties, business disruption, reputational

harm and additional regulatory scrutiny measures.

Furthermore, additional regulations could impact or

limit our ability to sell our products and services in

certain jurisdictions.

We are subject to income taxes in the Netherlands

and the other countries in which we are active. Our

effective tax rate has fluctuated in the past and may

fluctuate in the future.

Changes in our business environment can affect our

effective tax rate. The same applies to changes in tax

legislation in the countries where we operate, together

with developments driven by global organizations such

as the OECD, as well as any change in approach to

tax by tax authorities. All these initiatives have already

resulted in and may result in further increased

compliance obligations for ASML. Additionally, this

may result in an increase in our effective tax rate in

future years.

Changes in tax legislation in jurisdictions where we

operate may adversely impact our tax position and

consequently our net income. Our worldwide effective

tax rate is heavily impacted by R&D incentives included

in tax laws and regulations in the countries where we

operate. Examples include the so-called innovation box

in the Netherlands and the foreign derived intangible

income deduction/R&D credits we obtain in the US. If

jurisdictions alter their tax policies/laws in this respect,

it may have an adverse effect on our worldwide

effective tax rate. In addition, jurisdictions levy

corporate income tax at different rates. The mix of our

sales over the various jurisdictions in which we operate

may vary from year to year, resulting in a different mix

of corporate income tax rates applicable to our profits,

which can also affect our worldwide effective tax rate

and impact our net income.

7. Other risk factors

COVID-19 or other pandemics may impact our

operations

Restrictions on shareholder rights may dilute

voting power

We may not declare cash dividends, conduct

share buyback programs or cancel shares at all

or in any particular amounts in any given year

We may be impacted by the Russia–Ukraine

conflict

The COVID-19 pandemic and the measures

implemented to address this pandemic globally may

continue to impact our business, our suppliers and our

customers. Pandemics can have significant impact on

the global economy, which can potentially affect our end

markets.

The COVID-19 pandemic has increased the level of

remote working within our organization, which impacts

productivity and may delay our roadmap, increase the

risks of cybersecurity incidents and/or impact our control

environment. In addition, as we are dependent on our

suppliers, disruptions to their operations as a result of the

COVID-19 pandemic impact us and our ability to

produce, deliver and service tools. Market demand for

semiconductors and therefore our products and services

can also be impacted by the COVID-19 pandemic and

measures taken to address it. Further, an important part

of our business involves installing and servicing tools at

customer premises around the globe, and this could be

impacted by travel restrictions and vaccination

requirements.

There is uncertainty as to how the COVID-19 pandemic

could develop and the impact on global GDP, end

markets and our manufacturing capability and supply

chain. The impact of the pandemic on ASML will depend

on future developments, including the continued severity

of the pandemic, and the actions of the Dutch and other

foreign governments to contain outbreaks or address

their impact, which are outside of our control.

Our Articles of Association provide that we are subject

to the provisions of Dutch law applicable to large

corporations, called ‘structuurregime’. These

provisions have the effect of concentrating control

over certain corporate decisions and transactions in

the hands of our Supervisory Board. As a result,

holders of ordinary shares may have more difficulty in

protecting their interests in the face of actions by

members of our Supervisory Board than if we were

not subject to the ‘structuurregime’.

Our authorized share capital also includes a class of

cumulative preference shares, and we have granted

Stichting Preferente Aandelen ASML, a Dutch

foundation, an option to acquire, at the nominal value

of €0.09 per share, such cumulative preference

shares. Exercise of the Preference Share Option

would effectively dilute the voting power of our

outstanding ordinary shares by one-half, which may

discourage or significantly impede a third party from

acquiring a majority of our voting shares.

We aim to pay a quarterly dividend that is growing (on

an annualized basis) over time, and we conduct share

buybacks from time to time. The dividend proposal,

amount of share buybacks and cancellation of shares

in any given year will be subject to the availability of

distributable profits, retained earnings and cash, and

may be affected by, among other factors, the Board

of Management’s views on our potential future

liquidity requirements, including for investments in

production capacity and working capital

requirements, the funding of our R&D programs and

for acquisition opportunities that may arise from time

to time, and by future changes in applicable income

tax and corporate laws. The Board of Management

may decide to propose not to pay a dividend or to

pay a lower dividend and may suspend, adjust the

amount of or discontinue share buyback programs, or

we may otherwise fail to complete buyback

programs.

Although we do not currently have operations in

Russia or Ukraine, the impact of the military action in

Ukraine creates uncertainty in the macroeconomic

environment. This military action, including sanctions

and other measures taken in response, have and

could further adversely affect the global economy, the

financial markets and supply chain, which therefore

may impact customer demand, delivery of products

and services to clients, as well as our ability and the

ability of our supply chain to obtain parts,

components and gas supply. In addition, the conflict

amplifies the surge in energy prices, commodity

prices, transportation costs, inflation and

cyberattacks.




		VIRTUAL AND AUGMENTED REALITY
		Virtual reality, unreal opportunities
		There’s more to virtual reality (VR) and augmented reality (AR) than gaming. At ASML, these technologies are helping us design, build and maintain some of the world’s most complex machines. Through VR and AR, our teams are able to manipulate designs and learn how to maintain systems – in some cases, many years before the machines themselves physically exist.
		Read more online



ASML ANNUAL REPORT 2022	SMALL PATTERNS. BIG IMPACT.	STRATEGIC REPORT	GOVERNANCE	FINANCIALS	68



Our vision	Our contribution to a digital, sustainable future

		We want to contribute to expanding computing power but with minimal waste, energy use and emissions. That's why we focus on energy efficiency, climate action and circular economy.


Our vision at ASML is to enable ground- breaking technology that solves some of humanity’s toughest challenges.

		We want to ensure that responsible growth benefits all our stakeholders – to have an attractive workplace for all and a responsible supply chain, to fuel innovation in our ecosystem and to be a valued partner in our communities.

		We commit to act on our responsibilities and fully anchor them in the way we do business through our focus on integrated governance, engaged stakeholders and transparent reporting.

How we report on our ESG progress

SDGs we align with

ESG Sustainability chapters

Environmental

–Energy efficiency and climate action

Read more on page 146 >

We aim to create long-term value for our

stakeholders and to shape a sustainable

future. To achieve these aims, we must

focus our strategy on the ESG

sustainability topics that matter most.

Our material topics represent our most significant

impacts on the economy, environment and people,

including their human rights. We update our materiality

annually based on ongoing engagement with

stakeholders, developments within ASML and the

context in which we operate.

The process for determining material topics consists of

four steps which are based on the guidance provided by

the Global Reporting Initiative (GRI). Our 2022 materiality

assessment process is based on the standard ‘GRI 3:

Material Topics 2021’.

Step 1: Understand

the context

Step 2: Identify

impacts

Step 3: Assess the

significance of the impacts

Step 4: Prioritize the most

significant impacts

List of topics, positive and negative,

actual and potential, short

and long-term impacts

Positive and negative against their

scale, scope and remediability

Most material topics influence

strategy and long-term targets

Shareholders

Customers

Employees

Suppliers

Society



Key changes in the sustainability topics list from 2021 to 2022 (Step 2: Identify impacts)

	2022 topics	2021 topics
Environmental	–Circular economy	–Waste management –Circular economy: Re-use –Circular economy: Recycling
Environmental	–Energy management and carbon footprint: Supply chain –Energy management and carbon footprint: Operations	–Energy management operations
	–Energy management and carbon footprint: Product use and downstream	–Energy management products
Environmental	–Biodiversity	(none)
Social	–Innovation ecosystem	–IP protection –Innovations management –Innovation partnership
Social	–Talent attraction, employee engagement and retention	–Talent attraction and retention –Employee engagement
Social	–Responsible supply chain and product stewardship	–Responsible supply chain –Product stewardship
Social	–Diversity and inclusion –Occupation health and safety –Responsible supply chain and product stewardship	–Human rights

Step 1:

Understand the context

Key to our materiality assessment process is

understanding the stakeholders that are affected or could

be affected by us. We have five stakeholder groups:

shareholders, customers, employees, suppliers (including

contractors) and society. We continuously engage with

these stakeholders to understand their concerns and

how we may impact their interests. Through stakeholder

engagement we also identify improvement actions and

receive feedback on our performance and progress.

We also monitor the sustainability context of our activities

and business relationships by reviewing relevant sources

of information. These sources include international

standards and (upcoming) legislation, industry and peers,

media and ESG rating agencies.

Step 2:

Identify actual and potential impacts

We identified an initial list of topics and impacts based on

insights from stakeholder engagement and relevant

sources of information. The list of topics includes positive

and negative, actual and potential, and short- and long-

term impacts. Actual impacts are those that have already

occurred, and potential impacts are those that could

occur but have not occurred yet. The assessment aims

to cover all impacts likely to be relevant across our value

chain and business relationships and considers the

relevant GRI Topic Standards.

While our 2022 list of topics includes topics from the

2021 materiality assessment, it also includes a number of

changes, with some topics merging to bundle strongly

connected impacts. The table on the previous page

shows key movements across our material issues.

Step 3:

Assess the significance of the impacts

We assessed the significance of actual negative impacts

by their severity (scale, scope and irremediable character)

and the significance of actual positive impacts by their

scale and scope. For potential impacts we also assessed

likelihood. Negative and positive impacts were assessed

separately, as these cannot always be compared, and

negative impacts cannot be offset by positive impacts.

Based on ASML subject matter experts’ assessment, the

topics were ranked, initially based on scale, scope, and

remediability, and in case of an equal ranking also on

likelihood. The ranking of topics was also subject to

review by internal representatives of stakeholder groups,

to ensure the concerns and interests of all stakeholders

were sufficiently considered.

Step 4:

Prioritize the most significant impacts

The most significant impacts are prioritized for strategy

and reporting. The outcomes of the materiality

assessment are used to shape our strategy and long-

term targets, with the aim of long-term value creation for

all our stakeholders. The Board of Management sets this

strategy.

The table below shows the material topics, the impacts

included in the definition of each topic, whether these

impacts are positive or negative, actual or potential and

where in the value chain they occur.

Compared with 2021, the criteria for prioritizing topics in

the GRI standards have changed, which affects

comparability between the 2021 and 2022 material

topics. The following changes occurred in 2022:

–'Community engagement' emerged as a new material

topic, covering (potential) negative impacts on the

availability of housing, talent and infrastructure in the

region and positive impacts from job creation and

community programs.

–'Human capital development' is no longer a material

topic, although the assessment shows that ASML has

a positive impact by providing training and career

development opportunities for employees.

–'Customer intimacy' is no longer a material topic now

that impact is the sole criterion for materiality in the

updated GRI standards.


Material topics 20221
Topic name	Topic definition (impacts covered)	Positive or negative impact	Actual or potential impact	Impact area value chain
Energy management and carbon footprint – Product use and downstream	a) Energy-efficiency products (EUV, DUV) b) Energy consumption (EUV, DUV) c) Scope 3 downstream emissions	Negative	Actual	Downstream customers and society
Energy management and carbon footprint – Supply chain	a) Energy management supply chain b) Scope 3 upstream emissions	Negative	Actual	Upstream suppliers and partners
Energy management and carbon footprint – Operations	a) Energy use within and management of own buildings and factories b) Reduction of energy consumption c) Use of renewable energy for our operations d) Resulting scope 1 and 2 GHG emissions	Negative	Actual	Own operations
Circular economy	a) Waste generated through operations (e.g. waste from parts, packaging, construction, hazardous waste and other waste directed to disposal) b) Use of non-renewable materials and resources	Negative	Actual	Entire value chain
Circular economy	c) Use of renewable materials and resources d) Measure to reduce and manage waste from operations (e.g. recycling, re-use and waste diverted from disposal) e) Measure to reduce the use of materials and move to circulation of products and material	Positive	Actual	Entire value chain
Diversity and inclusion	a) Workforce gender diversity b) Diversity of governance bodies c) Workforce inclusiveness d) Pay equality, i.e. the ratio of basic salary and remuneration of women to men e) Diversity (age, gender, cultural background, etc.) of new hires, promotions and turnover	Positive	Actual	Own operations
Talent attraction, employee engagement and retention	a) New employee hires and employee turnover b) Working conditions, including working time, rest periods, holidays, dismissal practices, maternity protection, support for collective bargaining to determine wages, etc. c) Remuneration practices, including how these relate to legal and industry minimums, whether they enable employees to meet their basic needs, how overtime is compensated, etc. d) Other benefits, including life insurance, healthcare, disability and invalidity coverage, parental leave, retirement provision, etc.	Positive	Actual	Own operations
Occupational health and safety	a) Work-related injuries, ill health and well-being b) Work-related hazards and risks, including the identification, assessment and measures taken to manage these risks c) Safety culture, including worker participation, consultation, communication and training on occupational health and safety	Negative	Potential	Own operations
Responsible supply chain and product stewardship	a) Social impacts (e.g. health and safety, working conditions, child labor, etc.) in the supply chain and actions taken b) Environmental impacts (e.g. pollution, water use, etc.) in the supply chain and actions taken c) Supplier ESG standards and screening d) Supplier ESG performance e) Impact on environmental and social aspects in the supply chain from product design and engineering	Negative	Potential	Upstream suppliers and partners


Topic name	Topic definition (impacts covered)	Positive or negative impact	Actual or potential impact	Impact area value chain
Innovation ecosystem	a) Innovation partnerships b) Innovation pipeline c) In-kind support startups and scaleups d) EU public-private R&D innovation projects e) Knowledge management	Positive	Actual	Entire value chain
Community engagement	a) Local community impacts, including housing, talent pipeline (region), mobility and infrastructure, social cohesion, neighbor (local) impact	Negative	Actual	Own operations
Community engagement	b) Local community impacts, including economic growth, local tax contribution and job creation c) Philanthropy, including local community engagement and development programs	Positive	Actual	Own operations

1.Although Biodiversity was added as a topic in the 2022 materiality assessment, our impact on this topic was assessed and in comparison to other topics it was not considered material.

Contributing to the UN’s Sustainable

Development Goals

Adopted by all member states in 2013, the UN’s 2030

agenda for sustainable development provides a shared

blueprint for peace and prosperity, for people and planet,

now and in the future.

We have developed the work streams of our ESG

program to support the 2030 ambition as defined by the

UN’s Sustainable Development Goals (SDGs), focusing

on six particular SDGs where we can have the greatest

impact. Our ambitions, commitment and programs for

these SDGs are explained more fully at the start of each

ESG chapter of this report. In brief, they are as follows:

In our Environmental pillar, we focus on SDG 13

(Energy efficiency and climate action) by addressing our

energy efficiency in our operations, and on SDG 12

(Responsible consumption and production) via our

circular economy work streams.

In our Social pillar, we focus on SDG 4 (Quality education)

by developing our people and promoting lifelong learning

opportunities for the communities where we operate. SDG 8

(Decent work and economic growth) is covered by our

commitment to provide an attractive workplace that

promotes sustained, inclusive growth, full and productive

employment and decent work for all throughout our supply

chain. Our support for SDG 9 (Industry, innovation and

infrastructure) is demonstrated by our work to build a

resilient ecosystem that fosters innovation while promoting

inclusive and sustainable industrialization. We support SDG

11 (Sustainable cities and communities) by working with our

community outreach partners to make cities and other

human settlements inclusive, safe, resilient and sustainable.

SDG 12 (Responsible consumption and production) is

addressed by our work with suppliers and in our supply

chain.

In our Governance pillar, we focus on SDG 8 (Decent

work and economic growth) by ensuring that we

eradicate all types of forced labor, protect labor rights

and promote a safe and secure working environment for

everyone. In addition to being covered under our

Environmental and Social pillars (see above), SDG 12

(Responsible consumption and production) is also

supported under our Governance pillar by our work to

achieve environmentally sound management of

chemicals and all wastes throughout their life cycles, in

accordance with agreed international frameworks.

We believe that increasing

digitalization opens the way

to a society that is more

environmentally and

socially sustainable.



	What we do
	We develop lithography technology that enables manufacturers to make more energy-efficient microchips. Reducing our environmental footprint and managing our waste – both from our operations and in the use of our products and services – is key to our ESG practices.
	Our aims
	As the world continues to increase its dependence on technology to solve some of its most pressing challenges, our role is to help make this happen by expanding the availability of the necessary computing power. Our ambition is to achieve carbon neutrality with net zero emissions in our operations (scope 1 and 2) by 2025. We aim to achieve net zero emissions in our supply chain (scope 3) by 2030, and net zero emissions from the use of our products by our customers (scope 3) by 2040. In addition, our goal is to have zero waste from operations to landfill or incineration by 2030. We focus on energy efficiency – not only in our business but also by addressing the amount of energy that semiconductors require in operation. We are also working hard to manage our own waste streams and improve the circularity of our value chain. Our actions are closely aligned to two SDGs in particular – SDG 13 (Energy efficiency and climate action) and SDG 12 (Circular economy).



Energy efficiency and climate action		Read more on page 75 >

	SDG 13 Take urgent action to combat climate change and its impacts by regulating emissions and promoting developments in renewable energy	–Energy management and carbon footprint: Operations (Scope 1 and 2) –Energy management and carbon footprint: Supply chain, business travel and commuting (Scope 3) –Energy management and carbon footprint: Product use at our customers (Scope 3)



Circular economy		Read more on page 84 >

	SDG 12	–Reduce waste in our operations –Re-use parts and materials –Refurbish mature products –Water management
	Ensure sustainable consumption and production patterns



	38.1 kt		1.11 kt
	Scope 1 and 2 CO2e emissions (2025 target: net zero)		Scope 3 CO2e emissions intensity (per €m gross profit) (2025 target: 1.02)

	0.56 kt		11.9 Mt
	Net scope 3 CO2e emissions intensity (per €m revenue)		Scope 3 CO2e emissions (2040 target: net zero)

	8.27 kWh
	NXE energy use per exposed wafer pass (NXE:3600D, measured in 2021) (2025 target: 5.1 kWh)


	IN THIS SECTION
	77	Our overall performance in 2022
	78	Energy management and carbon footprint: Operations (scope 1 and 2)
	80	Energy management and carbon footprint: Supply chain, business travel and commuting and product use at our customers (scope 3)

Our approach

Climate change is a global challenge that requires urgent

action by everyone, including us. While the benefits our

industry brings to society are considerable, these come

at a cost, through the consumption of considerable

energy and resources. We have identified energy

management and carbon footprint as material topics for

our business across three distinct areas – in our own

operations, throughout our supply chain and in the use of

our products and downstream.

In recognition of the importance of following a science-

based pathway to limit global warming to 1.5°C, we are

signatories to the Science Based Targets initiative (near

term SBTi). Our aim at ASML is to achieve net zero

emissions along our value chain by 2040.

We have set out the following milestones and focus

areas to help us achieve this:

1.Energy management and carbon footprint –

Operations (scope 1 and 2): net zero emissions by

2025

2.Energy management and carbon footprint – Supply

chain (scope 3): reduce net scope 3 upstream

emissions to zero by 2030 and net zero scope 3

emissions from business travel and commuting by

2025

3.Energy management and carbon footprint – Product

use at our customers (scope 3): net zero scope 3

emissions from product use by 2040

In this section, we will elaborate on our approach and

explain how we aim to achieve our targets in the context

of our focus areas.

Alongside our efforts to lower our own carbon footprint,

we are committed to using our innovations and digital

technologies to enable the industry to reduce its

environmental footprint. For example, our EUV systems

allow customers to fabricate advanced chips more

efficiently, using fewer process steps and fewer

resources.



	Energy efficiency and climate action

	SDG target		How we measure our performance
	SDG target 13.1
	Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries		–Scope 1 and 2 CO2e emissions –Scope 3 CO2e emissions intensity (per €m gross profit) –Net scope 3 CO2e emissions intensity (per €m revenue) –Scope 3 CO2e emissions –NXE energy use per exposed wafer pass

The following diagram illustrates our journey to net zero emissions in our value chain:



	Our journey to net zero emissions in our value chain
	Our goal is to achieve the following milestones in our journey toward net zero emissions in our value chain by 2040, for each of our impact areas: –2025: Net zero scope 1+2 emissions –2025: Net zero scope 3 emissions from business travel and commuting –2030: Collaborating with our suppliers, reduce net scope 3 upstream emissions to zero –2040: Collaborating with our customers and peers, reduce net scope 3 emissions from product use to zero Our approach to achieving net zero emissions is based on four pillars: 1.Analyzing energy use and greenhouse gas (GHG) emissions to learn about improvement options 2.Innovating in energy efficiency, and redesigning our assets, products and processes to minimize environmental impact

Our environmental management system

To measure our journey, we have an Environmental

Management System (EMS) in place to help us monitor

our energy use and emissions, improve performance and

enhance efficiency. The EMS is integrated into our

Environmental, Health and Safety (EHS) management

system. All our facilities operate on the basis of this

system – and the HMI locations in Tainan (Taiwan) and

San Jose (US) have now been successfully integrated.

Our system is ISO 14001 certified and structured in

accordance with ISO 45001 requirements.

3.Aiming to lead on the shift toward 100% credible,

renewable energy

4.Compensating residual emissions to achieve our

targets if no reasonable other improvement actions

are available

We recognize that we cannot do any of this alone,

which is why we collaborate closely with our

employees, suppliers, customers, peers and society.

We identify and assess the impact of climate-related

risks and opportunities using the assessment

guidelines of the Task Force on Climate-related

Financial Disclosures (TCFD).

Read more in:

Our TCFD Recommendations: climate-related disclosure,

available on www.asml.com.

This certification gives our stakeholders confidence in our

commitment to achieving our environmental goals.

Our participation in the annual assessment by the

Carbon Disclosure Project (CDP), a non-profit global

disclosure program, also helps steer our environmental

initiatives. Our score in the most recent CDP Climate

Change 2022 questionnaire is B, which is above the

global average of C.

Our overall performance in 2022


			Progress tracking
Topic	Target 2025	Performance indicator	2020	2021	2022	Status


Climate action	Net zero	Scope 1 – Direct emissions from fossil fuels in our operations (kton)	15.4	19.3	17.3	•
Climate action	Net zero	Scope 2 – Indirect emissions from energy consumption (kton) [market-based]2	0.0	20.1	20.8	•
	Net zero (2040)	Scope 3 – Indirect emissions from total value chain (kton)	8,800.0	11,400.0	11,900.0	•
		Total footprint (in kton)1	8,815.4	11,439.4	11,938.1

	n/a	Scope 3 CO2e emissions intensity (per €m revenue)	0.63	0.61	0.56	n/a
	1.02	Scope 3 CO2e emissions intensity (per €m gross profit)	1.29	1.16	1.11	•
	n/a	Reduction in GHG emissions from projects (kton)	n/a	n/a	2.6	n/a


Energy efficiency	5.1	Products – NXE energy use per wafer (in kWh)	9.64 (NXE:3400C)	8.27 (NXE:3600D)	8.27 (NXE:3600D)	•
Energy efficiency	n/a	Products – NXT energy use per wafer (in kWh)	0.45 (NXT:2050i)	0.48 (NXT:1980Ei)	0.46 NXT:2100i	n/a
	n/a	Energy consumption (in TJ)	1,412	1,689	1,633	n/a
	100 TJ	Energy savings worldwide through projects (in TJ)3	113.9	12.7	19.0	•
	100%	Renewable electricity (of total electricity purchased)	100%	92%	91%	•
	(10)%	Energy consumption (NXE) (reduction in % of baseline 2018 1.4 MW)	(6)% (NXE:3400C)	(6)% (NXE:3600D)	(6)% (NXE:3600D)	•
	n/a	Throughput (in wph) (NXE)	136 (NXE:3400C)	160 (NXE:3600D)	160 (NXE:3600D)	n/a
	(60)%	Energy use per exposed wafer pass (NXE) (reduction in % of baseline 2018)	(26)% (NXE:3400C)	(37)% (NXE:3600D)	(37)% (NXE:3600D)	•

1.The guidance from the Greenhouse Gas Protocol – the organization that provides widely used international standards for emissions reporting – is used for the calculation of the emission scope. Market-based conversion factors are used to calculate the scope 1 and scope 2 CO2e emissions in kt.

2.We report the market-based emissions after purchase of EACs. ASML currently does not offset any of the remaining emissions, resulting in no differences between our gross and net emissions.

3.In 2021 we started a new masterplan period for 2021-2025, with a target to achieve 100 TJ energy savings by the end of 2025.The figure from 2020 is related to the masterplan 2016-2020. The savings reported are cumulated compared with the base year; therefore, they are not comparable.

Our approach

Scope 1 emissions

Our main direct CO2 emissions come from fossil fuels –

mainly natural gas in our operations. The vast majority of

natural gas consumption is used for heating our buildings

and the humidification of our cleanrooms.

Scope 2 emissions

Purchased electricity accounts for 80% of the energy we

use at ASML. Most of our electricity consumption relates

to the manufacturing of chipmaking equipment – from

assembly to testing lithography and other systems – and

maintaining consistent climate conditions, such as

constant temperature, humidity and air quality.

We aim to achieve our targets for scope 1 and 2 by:

1.Reducing energy consumption

2.Using renewable energy

3.Compensating CO2 emissions

Our targets

Our target is to achieve net zero scope 1 and 2

emissions by 2025. This target is consistent with

reductions required to keep global warming to 1.5°C and

is approved by the SBTi – under the ‘near-term’

category.

Our performance in 2022

Scope 1 emissions

Our gross scope 1 emissions decreased from 19.3 kt in

2021 to 17.3 kt in 2022, despite our sales growing by

13.8%.

Scope 2 emissions

In 2022, our indirect emissions from energy consumption

were 20.8 kt (20.1 kt in 2021). We report market-based

emissions after purchase of energy attribute certificates

(EACs). ASML currently does not offset any of the

remaining emissions, resulting in no differences between

our gross and net emissions.

Our electricity consumption has increased compared

with 2021, along with our scope 2 emissions. The share

of renewable electricity decreased slightly to 91% from

92% in 2021 due to higher electricity consumption in

Taiwan (where we are currently not yet buying renewable

electricity).

One of the most important challenges for us in achieving

our net zero emissions target is the procurement of

credible renewable energy in Taiwan and South Korea.

Our actions in 2022

1. Reducing energy consumption and use of natural gas

We aim to reduce our energy consumption through

direct annual savings of 100 TJ (or 3 kt CO2e) by

executing more than 80 projects in the energy-saving

masterplan which covers each of our five large industrial

sites. The main components of this masterplan are

reducing the use of natural gas and electricity, adding

renewable production of energy on our sites, purchasing

credible renewable electricity and optimizing the use of

BREEAM (Building Research Establishment

Environmental Assessment Method) certified offices.

Out of over 80 projects, the six key projects and the

expected annual energy savings are shown below.



The table below includes six key projects that support the masterplan and will help to realize savings between 2021 and 2025:

Key projects	Location	Total estimated energy saving – annual (TJ)	Estimated natural gas reduction (TJ)	Estimated electricity reduction (TJ)
Energy grid	Veldhoven	50	40	10
Implement adiabatic humidification and elimination of steam generation	Veldhoven	12	12	0
Renewable energy generation (solar panels)	Veldhoven	3	0	3
Onsite renewable electricity generation (solar panels)	San Diego	8	0	8
Replacement of chillers	Wilton	3	0	3
HVAC energy consumption and improving (set points)	Taiwan	3	0	3
Total		79	52	27

Energy savings are achieved mainly by using more

energy-efficient technical installations and improving our

overall production processes. Our efforts have focused

on recovery of exhaust heat and reduction of the energy

consumption of our cleanrooms, where maintaining the

right conditions is energy intensive.

One of our goals is to reduce the use of natural gas.

Based on our plans and calculations, we expect that the

use of natural gas in Veldhoven will be reduced from

around 4.4 million m3 to around 1.3 million m3 in the next

three years, driven by the energy grid in combination with

other energy-saving measures.

We have a multi-year project to implement an energy grid

to re-use waste heat from our factories in offices on our

site in Veldhoven, the Netherlands. The energy grid is a

two-pipe loop that makes waste heat available for

heating in winter and energy-efficient cooling in summer.

As we grow as a company, we strive to optimize our

real-estate portfolio. As 95% of our scope 1 and 2

emissions are related to our buildings, optimizing the use

of every square meter in our portfolio contributes to

reducing our environmental footprint – each square

meter saved is one we do not need to heat, cool,

ventilate or light up.

When building new offices and manufacturing sites, we

seize the opportunity to make them as environmentally

sound as possible. Several of our existing buildings have

been assessed for sustainability performance using

BREEAM guidelines. We achieved a score of ‘Excellent’

for our newly built logistics center. We expect to have the

results of the assessment for the other buildings in early

2023. With an eye on future growth, our new campus in

Veldhoven is also being designed with a strong focus on

sustainability. For 2025, we strive to implement the most

suitable green building certifications in new constructions

– such as BREEAM, LEED (Leadership in Energy and

Environmental Design) and G-SEED (Green Standard for

Energy and Environmental Design) – in the countries

where we operate.

In 2022, the key projects executed in the Netherlands,

Wilton and Taiwan resulted in ~19 TJ savings:

–2.9 TJ per year through further operationalization of the

4,846 m2 solar panels installed on our campus in

Veldhoven

–11 TJ savings in 2022 in the Netherlands through the

completion of our largest project. This will result in

annual savings of around 11 TJ in the years ahead

–3 TJ savings in Wilton by replacing chillers with new

high-efficiency variable-speed chillers which reduce

energy consumption

–3 TJ savings in Hsinchu, Taiwan, by optimizing the use

of air-conditioning systems through time-outs.

2. Using renewable energy

Our ambition is to increase the share of direct green

energy purchases (so-called bundled renewable

electricity) from renewable electricity produced close to

our premises.

In the Netherlands, we are now in the second year of a

10-year purchase agreement for green electricity for our

installations which will enable us to achieve our goal of

using 100% renewable electricity in the country. We also

achieved 100% renewable energy in the US in 2022. For

much of Asia, while our goal is to use renewable energy

whenever possible, we faced challenges in Taiwan and

South Korea procuring credible renewable energy.

3. Compensating for CO2 emissions

We aim to use renewable energy as much as possible.

Where this is not feasible, we would purchase voluntary

emission reduction certificates (VER).

Action plans for 2022-2025

We will continue our work to procure renewable energy

in Taiwan and South Korea and will make use of

offsetting as a fallback option to reach our net zero

target. We are on track and see no reason to adjust our

current targets. In the coming years, we plan to expand

the use of solar panels on our sites in EMEA, the US and

Asia.

Our approach

We recognize that environmental impact goes beyond

our operations. In general, most of the environmental

impact in our value chain (scope 3) comes from the

greenhouse gas (GHG) emissions of our suppliers

(upstream) and the use of our products at our customers

(downstream).

Our targets

Our overall scope 3 target is to reduce the intensity level

(in line with our SBTi commitment) to 1,016 tons CO2e

per € million gross profit, by 2025. This represents a

35.3% intensity reduction by 2025 compared with 2019.

The intensity is measured by the total scope 3 emissions

(in tonnes CO2e) normalized to the total gross profit (in €,

millions).

We are working toward reducing our upstream emissions

toward net zero by 2030. An element of this target is

business travel and commuting, for which we have set a

net zero target by 2025.

Our performance in 2022

Our scope 3 intensity for 2022 was 1,110 tonnes CO2e

per € million gross profit (similar to 2021). Our results

indicate that the indirect scope 3 emissions from

upstream and downstream value chains account for 11.9

Mt or 99.7% of the total emissions footprint (scope 1, 2

and 3). Of this 11.9 Mt, 7.4 Mt are indirect emissions

‘downstream’ in the value chain (use of sold products at

our customers’ sites) and 4.5 Mt are ‘upstream’

emissions (mainly related to the goods and services we

buy).

Our actions in 2022

Improving our scope 3 emission data quality

We calculate our scope 3 emissions using guidance from

the Greenhouse Gas Protocol – the organization that

provides widely used international standards for

emissions reporting. We continuously seek to improve

the data quality of our scope 3 calculations. In past

years, we have reported scope 3 emission data with a

one-year lag, but in 2022 we made efforts to collect the

emissions data in a more timely manner. For 2022, we

are now able to report nine months of actual data and

three months of estimated data. In the 2023 reporting

year, we will adjust the 2022 figure reported with full-year

actual 2022 data.

The next step in improving our data quality is to include

actual supplier emissions data in our calculation for

scope 3. This will enable us to obtain more reliable scope

3 emission data, because for supplier data we currently

use the spend-based methodology for calculating

emissions. In 2022, we made progress by requesting

CO2e emission data directly from our suppliers through

our Supplier Sustainability Program. That data was not

used in the emission calculations for 2022. Recognizing

that we depend on our suppliers, we also encourage our

value chain partners to work with us to jointly reduce our

carbon footprint.

Improving access and mobility

We have also been looking at mobility. For example, with

more than 50% of employees at our Veldhoven campus

living less than 30 minutes away by bike, our Access &

Mobility (A&M) program is focused on developing

sustainable commuting options, and we are working with

employees to encourage, incentivize and support

changing commuting habits. We offer a mix of options,

including cycling incentives, free public transport, car-

pooling and shuttle buses, all supported by various online

apps.

Action plans for 2022-2025

We remain on track to achieve our overall scope 3 target.

Our Supplier Sustainability Program is a key enabler in

our efforts to further reduce scope 3 emissions.

Our approach

As the demand for enhanced chip functionality grows,

the complexity and energy consumption of the overall

microchip patterning process, including from our

lithography systems, is also increasing.

The EUV light source is the key focus area of our current

engineering efforts to reduce energy consumption

because it requires the larger portion of an EUV system’s

total energy consumption. Our roadmap includes

optimizing the sequence of the CO2 laser to produce the

plasma for creating EUV light, for example by turning the

CO2 laser off when the system is in idle mode and

reducing the firing intensity of the laser between

exposures. Our longer-term goal is to eventually stop the

CO2 laser firing between exposures altogether. Following

a feasibility study from our research team and our

suppliers, we know that keeping the laser beam stable

will require corrective hardware that will be part of the

baseline configuration of the next generation (NXE:3800).

Working with our suppliers, we have also identified ways

to use cooling water of a higher temperature to remove

the heat in the EUV source and electronics cabinets. To

do this, we need to make sure that modules such as the

drive laser can operate at a higher cooling water

temperature – this project is currently in development, in

collaboration with our suppliers.

By enabling EUV optics to deal with higher intensities,

higher productivity can be achieved for the same energy

input, thereby increasing efficiency. That is why we are

developing materials and coatings that can deal with

higher EUV intensities, and improving the heat

management of optical components. This includes the

wafer itself, which heats up through the exposure to EUV

light during the production process.

We recognize that tackling all these challenges requires

ongoing innovation and collaboration within our

innovation ecosystem of customers, suppliers and

knowledge institutions.

Our targets

We have set a target to reduce the overall energy

consumption of our future-generation EUV systems by

10% compared with the 2018 baseline model

(NXE:3400B) by 2025, while increasing productivity. We

have also set a target of reducing the energy

consumption per exposed wafer by 60%, compared with

the 2018 baseline (NXE:3400B).

Our actions in 2022

We have been working on making the reduction of

energy consumption an integral part of our product

generation process (PGP). When designing new

systems, reducing the use of energy is becoming an ever

more important aspect, together with cost, performance

and availability.

In 2022, we continued working on energy-efficiency

improvements for future products, which require long

lead times and take multiple years to achieve. Progress

on these projects is monitored on a quarterly basis. We

believe we are on track to achieve our targets of 10%

EUV system energy consumption reduction by 2025 and

60% reduction in energy use per exposed wafer with

NXE:4000.

In 2022, we proved the capability of the NXE:3600D

system to reach productivity targeting 175 wph (as

compared with the current specification of 160 wph). In

2023, this will be introduced to the market as the

NXE:3600 PEP-D package.

We have begun to better assess the energy efficiency of

our other product families – in DUV, metrology and

inspection, computational lithography and scanner and

process control software solutions.

Regarding our scope 3 product use initiative of net zero

emissions in 2040, we are one of the founding members

of and active contributor to the Semiconductor Climate

Consortium, founded in November 2022 and focused on

speeding up industry value chain efforts to reduce

greenhouse gas emissions.

The table below provides an overview of the system achievements in terms of output and energy-efficiency

improvements to achieve this output.



Platform1	DUV immersion
System type	NXT:1980Di	NXT:2000i	NXT:2050i	NXT:1980Ei	NXT:1960Bi + PEP-B	NXT:2100i
Year of energy measurement	2015	2017	2020	2021	2021	2022
Energy consumption (in MW)	0.14 MW	0.14 MW	0.13 MW	0.14 MW	0.13 MW	0.14 MW
Throughput (wph)	275	275	295	295	250	295
Energy use per exposed wafer pass (in kWh)	0.51 kWh	0.51 kWh	0.45 kWh	0.48 kWh	0.51 kWh	0.46 kWh



Platform1	DUV Dry					YieldStar
System type	XT:860M	XT:1460	NXT:1470	XT:860N	NXT:870	YS350E	YS375F	YS-380
Year of energy measurement	2017	2020	2020	2022	2022	2017	2019	2020
Energy consumption (in MW)	0.07 MW	0.06 MW	0.11 MW	0.06 MW	0.12 MW	0.01 MW	0.01 MW	0.01 MW
Throughput (wph)	240	209	277	260	330	n/a	n/a	n/a
Energy use per exposed wafer pass (in kWh)1	0.28 kWh	0.27 kWh	0.38 kWh	0.24 kWh	0.36 kWh	n/a	n/a	n/a



Platform1	EUV 20 mJ/cm2 dose	EUV 30 mJ/cm2 dose
System type	NXE:3350B	NXE:3400B	NXE:3400C	NXE:3600D
Year of energy measurement	2015	2018	2020	2021
Energy consumption (in MW)	1.15 MW	1.40 MW	1.31 MW	1.32 MW
Throughput (wph)	59	107	136	160
Energy use per exposed wafer pass (in kWh)	19.49 kWh	13.08 kWh	9.64 kWh	8.27 kWh
1.Dose energy in mJ refers to the energy required per expose per cm2.

Action plans for 2022-2025

In 2023, we will continue to work on the energy efficiency of our systems and other product families. We are still on

track to achieve our overall scope 3 target. However, taking into account the change in product mix (an increase in

the number of EUV systems sold) and the fact that our output in terms of product units manufactured is expected to

increase, the overall emissions in the entire value chain are expected to rise. At the moment, we see no reason for

adjusting our 2025 targets regarding the energy consumption of our systems.



	Advanced patterning with EUV helps to limit growth in energy and water use and GHG emissions

More advanced microchips mean smaller features, which

need shorter wavelengths in lithography to manufacture

them. With a single exposure of DUV light at 193 nm, for

example, the smallest feature of the image of a microchip

pattern reaches its physical limit around 40 nm. However,

by using two or more exposures of the same pattern – so-

called multiple patterning – it is possible to image details at

20 nm with two exposures, or at 10 nm with four

exposures and additional process steps.

Over the past decades, multiple patterning with DUV

has become mainstream in semiconductor

manufacturing, at the cost of having to go through the

same process steps multiple times, which increases

production cycle time and environmental impact.

Compared to DUV, EUV at 13.5 nm enables a more

efficient chip-manufacturing process. Because of the

higher resolution of an EUV system, several exposures

and process steps can be replaced by a single exposure

and fewer process steps to pattern a certain layer of a

chip. According to a study conducted by imec, EUV

enables the number of non-lithography processing steps

for some critical layers to be reduced by up to three to

five times – and this significantly reduces production

cycle time. The fab also benefits from reduced energy

and water usage, resulting from the lower number of

deposition, etching and cleaning steps.

The increasing productivity of our EUV systems allows

more advanced and more energy-efficient microchips to

be created faster. Energy consumption of the total

patterning process per wafer will thus be lower using

EUV lithography, compared with using the complex

multi- patterning strategies required for DUV-only

patterning.

Our next-generation EUV system, EUV 0.55 NA (High-

NA), will enable further shrink and partly eliminate double-

exposure schemes, again replacing multiple 0.33 NA

exposures with a single 0.55 NA exposure. With EUV

0.55 NA, the number of non-lithography processing

steps can therefore again be kept within limits. This will

effectively further limit the total energy consumption of

the patterning process per wafer.

Source: M. Garcia Bardon et al., DTCO including Sustainability: Power-

Performance-Area-Cost-Environmental score (PPACE) Analysis for

Logic Technologies, IEDM2020.



	Creating EUV light

The greatest portion of an EUV system’s energy is used

to operate the laser-produced plasma source to create

EUV light. Molten tin droplets of around 25 microns in

diameter are ejected from a generator. As they move,

the droplets are hit first by a lower-intensity laser pulse.

Then a more powerful laser pulse vaporizes the

flattened droplet and ionizes the vaporized tin atoms to

create a plasma that emits EUV light. This conversion

process from laser to EUV light using tin droplets takes

place 50,000 times per second, and is the most

energy-intensive step. By increasing conversion

efficiency, we can decrease an EUV system’s energy

consumption at constant wafer output. Making this

happen, while ensuring that this will not negatively affect

other functionalities of the EUV system, is a key

challenge for our R&D teams.



	315 kg		75%
	Waste generated per €m revenue (2025 target: 209 kg)		Recycling rate (excluding construction) (2025 target: 90%)

	95%		€0.8bn
	% of systems sold in the past 30 years still active in the field (2025 target: >95%)		Savings from re-used parts

	87%		€232m
	Re-use rate of parts returned from field and factory (2025 target 95%)		Value of scrapped parts and packaging

	6,675 t
	Total waste from operations (excluding construction)



	IN THIS SECTION
	86	Our overall performance in 2022
	87	Reduce waste in our operations
	90	Re-use parts and materials
	93	Refurbish mature products
	94	Water management

Our approach

At ASML, we believe the circular economy is vital to

ensure the future success and competitiveness of the

semiconductor industry. Our commitment to a circular

economy is intended to ensure that any materials we use

can retain and generate as much value as possible for us

and for our partners in the ecosystem. Our strategy is to

eliminate waste to avoid negative impacts on the planet

and also to generate business value. We do this by

aiming to:

–Reduce waste in our operations

–Re-use parts and materials

–Refurbish mature products

While continuously innovating with our products, we

work to ensure the increasingly sustainable use of

materials across our processes and value chain. Our

overarching goal is twofold: firstly, we aim to close the

learning loop on our parts performance, and secondly,

we aim to eliminate waste – whether that’s the waste of

energy or the materials we need in our operations at

every level. This approach is part of the fabric of our

company, and fully in line with our values and culture.

Our impact on the use of materials and resources (in

weight) was identified as a new material topic in our

materiality assessment conducted in 2022 – a process to

formally manage this is currently under development.



€781 million
Savings from re-used parts



	Circular economy

	SDG target		How we measure our performance

	SDG target 12.2
	By 2030, achieve the sustainable management and efficient use of natural resources		–Recycling rate –Supplier spend covered with commitment to sustainability (LOI)

	SDG target 12.5
	By 2030, substantially reduce waste generation through prevention, reduction, recycling and re- use		–Reduction in waste –Increase in re-use of parts –Decrease in scrapped parts and packaging –Lifetime extension of systems still active in the field

To execute our Circular strategy and achieve our targets,

we have defined a set of principles that guide us in our

increasing efforts to reduce waste in our operations, re-

use parts and materials from our installed base and

recycle mature products through refurbishments:

–We learn to improve our understanding and data

around resources and waste flows.

–We rethink designs and processes to avoid

environmental impact.

–We extend the lifetime and productivity of systems to

maximize resource value.

–We re-use resources within our own value chain, to

minimize our waste streams.

–We recycle materials to give resources a new life, if we

can no longer re-use those resources ourselves.

The following diagram illustrates our circular economy

approach.

Our circular economy approach

Our overall performance in 2022


			Progress tracking
Topic	Target 2025	Performance indicator	2020	2021	2022	Status

Circular economy	>95%	% of systems sold in the past 30 years still active in the field	n/a	94%	95%	•
Circular economy	95%	Re-use rate of parts returned from field and factory	n/a	85%	87%	•
	No target	Savings from re-used parts (€, in millions)1,2	551	686	781	n/a
	No target	Value of scrapped parts and packaging (€, in millions)2	n/a	269	232	n/a
	209 kg/€m	Total waste from operations (excl. construction) normalized to revenue	360	305	315	•
	90%	Recycling rate (excl. construction)	85%	77%	75%	n
	No target	Total waste from operations (excl. construction)3	5,026	5,679	6,675	n/a

1.This reporting indicator follows the principle of prior-year indicator ‘Value of parts re-used (in € millions): however, there has been a modification in the methodology and scope:

–For the re-used parts, the value component has been modified from 100% standard cost price to 100% standard cost price less standard reconditioning costs.

Due to the expansion in scope for this indicator, the comparative figures have been recalculated to reflect fair presentation.

2. A limited portion of data is not readily available, therefore the figures in the table are best estimates that contain some uncertainty.

3. Construction waste is excluded from the calculation of this indicator, because this waste is not resulting from the daily operations at ASML. The amount of construction waste tends to fluctuate over the years and can therefore make the trend of the indicator unclear.

For more on our performance indicators (PIs) and related results, please read:

Non-financial statements – Non-financial indicators – Circular economy.

Our approach

Managing waste from our operations is a complex issue

and relies on the availability of detailed and accurate

insights into waste streams to and from ASML. We

manage our waste through proper classification,

separation and safe disposal. Disposal is carried out by

waste vendors, in compliance with local legislation.

All our waste vendors are certified by local authorities for

waste disposal, and in our contracts we state they need

to comply with local legislation. We aim to further improve

the way in which we monitor these vendors' compliance

with local legislation. Waste data is managed through our

myEHS system, whereby information from our waste

vendors in our locations is entered into the system along

with the relevant supporting documentation (invoices).

The data entered is checked internally and by an

independent party against the supporting documentation.

Our targets

We have set two ambitious targets to reduce waste in

our operations:

–By 2025 we aim to have halved waste generation

(209 kg waste generated per €m revenue as compared

with a 2019 benchmark of 417 kg waste generated per

€m revenue).

–By 2030 we aim to send zero waste from operations to

landfill or incineration.

Our performance in 2022

In 2022, we generated 6,913 tonnes of waste from our

operations overall (including construction waste), with

75% of this being recycled (77% in 2021). After a

significant decrease in the recycling rate in 2021, the

recycling rate decreased two percentage points in 2022.

This slight decrease is largely due to the impact of

improved data on our waste streams.

Compared with 2021, the total amount of waste

increased by nearly 18% (from 5,878 tonnes in 2021 to

6,913 tonnes in 2022). This is mainly due to more people

working onsite worldwide, following the lifting of

COVID-19 measures and our production increase.

Total amount of waste (excluding construction) was

6,675, up 18% from 5,679 in 2021. Over the years

2019-2021, our waste intensity showed a downward

trend. In 2022, our waste intensity was 315 kg per €m

revenue, slightly up from 305 kg per €m revenue in 2021

but still below the waste intensity pre-COVID-19 waste

intensity (417 kg per €m revenue in 2019, 360 kg per €m

revenue in 2020). However, to achieve our target of 209

kg per €m revenue, we need to scale up our efforts to

reduce our waste streams in absolute terms and improve

our recycling rate.

Our waste from operations to landfill or incineration was

25% of the total waste from operations (compared with

2021: 23%). We need to redouble our efforts in order to

reach our ambitious target of zero waste from operations

to landfill or incineration.

The reduction of our waste is explained below in more

detail, via the different waste streams.

Understanding our waste flows

Within our operations, the main waste streams are:

–Non-hazardous waste, such as packaging material,

product-related waste from parts resulting from

upgrades or defects, and general waste. This category

also includes construction waste, resulting from

building activities.

–Hazardous waste, such as the chemicals we use in our

manufacturing processes.

Distribution of waste streams

(total: 6,913 tonnes)



		Non-hazardous waste recycling	71%
		Non-hazardous waste disposed	24%
		Hazardous waste recycling	4%
		Hazardous waste disposed	1%



95%
of our total waste in 2022 was non-hazardous waste

Our non-hazardous waste performance in 2022

Non-hazardous waste accounted for 95% (2021: 93%

(5,483 tonnes)) of our total waste in 2022, of which the

vast majority was recycled (75%).

Distribution of non-hazardous waste

(total: 6,533 tonnes)


		Wood	31%
		General waste	24%
		Paper and cardboard	13%
		Electronics	6%
		Metals	7%
		Other non-hazardous waste	5%
		Plastic	5%
		Organic waste	5%
		Construction waste	4%

Our hazardous waste performance in 2022

The production and operation of our products and

systems requires the use of hazardous substances.

Hazardous waste can include lamps, batteries,

hazardous liquids, empty packaging from hazardous

materials, and cleaning wipes and filters. Liquids,

including acetone and sulfuric acid, comprise the majority

of our hazardous waste streams.

The use of hazardous substances means that we are

subject to a variety of governmental regulations relating

to environmental protection as well as employee and

product health and safety. These include the transport,

use, storage, discharge, handling, emission, generation

and disposal of hazardous substances.

In 2022, hazardous waste accounted for 5% (380

tonnes) of our total waste generated, compared with 7%

(395 tonnes) in 2021. Of this, 81% was recycled.

Distribution of hazardous waste

(total: 380 tonnes)


		Hazardous liquids	91%
		Other hazardous waste (e.g. packaging, filters, lamps, etc.)	6%
		Cleaning wipes	2%
		Batteries	1%

Our actions in 2022

Non-hazardous waste

We worked to reduce non-hazardous waste through

several ongoing programs, such as:

–Cross-sector re-use program, which added €400

million of re-usable parts value in our circular flows in

2022. We plan to add a further €450 million in 2023.

–Circular IT life cycle: After four years of use, we give all

functioning computers and laptops used in our

organization a second life. In the case of defective

computers, we recycle clean, separated streams of

recycled plastic, iron, steel, copper, aluminum, glass

and precious metals.

–Flexible cleanrooms: These are cleanrooms that can be

moved between locations and assembled quickly,

while providing the same standards and performance

as our current fixed cleanrooms. More than 95% of the

materials used in the flexible cleanroom setup are re-

usable, with a lifespan of more than 30 years.

–Construction waste: As we expand our operations, we

try to make sure that waste from ASML’s construction

activities are recycled wherever possible. Construction

waste accounted for 3% (238 tonnes) of our total

waste generated in 2022 (compared with 3% in 2021),

of which 67% was recycled. In our real-estate portfolio

management, we apply BREEAM standards that

emphasize sustainability through the circular use of

materials.

–In Wilton, local teams in cooperation with suppliers and

waste vendors initiated a recycling program whereby

personal protective equipment (for example gloves, hair

nets, face masks, etc.) are now recycled instead of

being disposed of.

Improving data on our hazardous and

non-hazardous waste streams

In 2022, we made adjustments to our waste stream

figures in Taiwan, as formal reporting was not in line with

our own definition of waste streams. This has led to a

decrease in our 2022 overall recycling rate (75%, from

77% in 2021).

We improved the accuracy of our waste reporting by

increasing actual measurements of the amounts of waste

in our main production site in Veldhoven. We are also

investigating ways to improve data quality in our sites in

the US and Asia.

In the context of improving data, in 2023 we aim to

include ASML waste generated by third-party

warehouses as a first step toward including downstream

waste – we are already preparing the required processes

to enable the relevant data collection for this. On our

campuses we aim to ensure maximum waste separation

onsite (in order for waste vendors to more easily recycle)

and we are working on getting agreements included in

contracts with waste vendors to maximize recycling.

Action plans for 2022-2025

Despite our many waste reduction and/or increasing

recycling rate initiatives, we are still not on track to

achieve our waste recycling goals. This is mainly due to

data improvement processes and more reporting

locations compared with 2020. In order to achieve our

goals, we are currently investigating the impact of our

waste on the environment, cooperating with suppliers

and waste vendors, and ensuring that new contracts

with waste vendors include sustainability requirements.

We currently see no reason to adjust our targets.

Our approach

We are committed to re-using system parts, packaging

and tools in our value chain to reduce and prevent waste

while also reducing costs. We believe that re-use is a

learning opportunity: by re-using, we learn more about

the performance of parts and how existing processes

affect them. By implementing those learnings in design

and processes, we can then improve parts and system

performance for all of us in the value chain. It is important

that we continue to work closely on this with our

customers and suppliers.

Our targets

Our overall target is to increase our rate of re-use of

defective parts in ASML factories and in the field to 95%

by 2025.

To achieve our ambition, we focus on:

–Design for re-use by focusing on more robust and

repairable designs at an early stage of development

–Return of transportation packaging and materials for

shipments to our customers, for re-use

–Repair at local repair centers to improve parts repair

yields by reducing cycle time of root-cause analysis

and repairs

–Remanufacture modules and parts that return from the

field to as-new quality, also to use in new build

systems

–Harvesting of end-of-life parts through disassembly to

re-use subcomponents

Our performance in 2022

In 2022, our re-use rate of defective parts was 87%

(85% in 2021). Our savings from re-used parts amounted

to €781 million and the value of scrapped parts and

packaging was €232 million.

Our actions in 2022

Design for re-use

In 2022, we continued to further integrate re-use into our

existing design methodologies and tools, such as in our

Product Generation Process (PGP). This key element of

preventing waste will help us meet our long-term goals.

Re-use requirements are now part of the core product

design strategy and specifications. For example, through

the modular design of our products and their

components, we make sure that future upgrades, worn

parts and components can be replaced as a single unit.

By ensuring commonality in the parts design process, a

part can be used in multiple contexts in a product and

even in future product generations.

Managing reverse flows for re-use

In 2022, we set up a dedicated reverse logistics team to

drive waste reduction in our ‘reverse flows’ – materials

coming back to us or to our suppliers both from the field

and from the factory. The goal of this team is to help

support our drive to re-use, reduce reverse logistics and

repair lead times, and increase the overall re-use rate.

We are continuing to work to resolve bottlenecks in the

execution of re-use and to clarify direction, guidelines

and re-use rules across the business.

Return for re-use of transportation materials

When modules and systems are shipped, either from our

suppliers to our factories or from our factories to our

customers, many transportation materials are used –

such as packaging, locking and plug materials – to

ensure that the products arrive safely. Instead of being

thrown away, these are re-used. Before these parts are

returned for re-use, they undergo an identification

process and quality check, followed by the logistical and

financial processes required to bring them back in the

supply chain (either to the original module suppliers or to

ASML). Our goal is to standardize these processes and

create a network-related solution to enable high flexibility

and reduce transport, which also reduces our CO2e

footprint.

We are improving the re-use of packaging, locking and

transport materials from the field and factory, and aim to

return and re-use 80% or more in the next installation or

relocation.

Local repair centers

We are extending the number of local repair centers for

refurbishing, repairing or cleaning service parts,

packaging and tools, and we are setting up global repair

centers for factory materials. The value handled by our

local repair centers increased fourfold in 2022, and we

expect it will increase three times again in 2023. Our goal

for 2025 is that 10% of our parts sent to the field should

be repaired locally.

Currently we have local repair centers in South Korea

and China, and we are rolling out plans for all our

customer regions to eventually have one or more in

place. A global repair center has been opened in Linkou

and additional global repair centers will be established at

each of our factory hubs in Wilton and San Diego (US)

and Veldhoven (the Netherlands).

Our repair centers partner with local material suppliers

and specialized repair partners, creating a local

ecosystem. By enabling repair and re-use activities and

taking ownership of repairs in the field close to our

customers, we are able to reduce logistics time, the

costs of stocking parts and our environmental impact (by

reducing scrap and waste and greenhouse gas

emissions). Our customers benefit from reduced service

costs and improved material availability.

A single quality standard for both new and

re-used parts

When a part is re-used, our customers expect it to be as

good as, or better than, the original new part. We have a

single qualification standard and requirement in place

that ensures that the same specifications, performance

requirements, warranties, and so on, are applicable to

both new and re-used parts. We expect our suppliers to

be fully engaged in meeting this standard as well.

87%

Re-use rate of defective

parts in 2022

Our achievements on re-use in 2022

We have streamlined our scrap approval process. Firstly,

every e-scrap request is accompanied by a proposal

from the re-use team outlining which parts are still re-

usable, to be assessed by the initiator before the request

is approved. Secondly, an automated validation step

makes sure the right follow- up actions are in place,

which reduces the lead time in the scrap process. We

have already implemented this process in Veldhoven and

are creating a roll-out plan for other locations.

Re-use is recognized as a key contributor in our ability to

ramp up our capacity to cope with strong customer

demand. By retrieving parts from inventory or through

repair or harvesting, we have been able to execute a

large amount of extra module build starts in our work

centers, which in turn helps accelerate our efforts to

embed re-use across our company.

For example, in 2022, we successfully demonstrated that

our external interface module (EIM), built by our supplier

Lamers (part of Aalberts Advanced Mechatronics) in the

Netherlands, can be remanufactured, requalified and

used again in a newly built system with as good as new

or better than new quality. EIMs are used for regulating

the flow or pressure of the gas supply into our

TWINSCAN XT and NXT systems. In this case, re-use

saves around 200 kg of waste and between €40k and

€50k per EIM.

We have also created and implemented a process for re-

use of tin catch buckets, modules that are used in the

light source of our EUV systems. We retrieve them,

disassemble them and drain the tin for re-use. After that,

the cleaned module is as-new, ready for re-use in our

EUV systems.

Another pioneering re-use example is the EUV reticle

masking module (REMA) that blanks off not-used parts of

the reticle. Older versions of these modules that return

from our customers are harvested for parts that are used

to build new REMA modules. This has helped to lower

the pressure on our supply chain, secure supplier output

for these modules and reduce waste and carbon

footprint. Learnings from this project are captured and

embedded in our development way of working.

We have also started re-using electronic cabinets that we

retrieved as leftovers from system upgrades in the field

which would normally have been scrapped. A refurbished

electronic cabinet has as-new quality and can therefore

be integrated into new systems for our customers.

The Wilton EHS overseas CRE Re-use program is

another example of how re-use can deliver key benefits.

When an employee or department has a piece of

equipment or furniture that is in good condition and can

be re-used onsite, a picture of the item is placed on the

CRE Re-use Wilton SharePoint page. If an ASML

employee sees something they can use, they reach out

to CRE EHS and our technicians will deliver the item. So

instead of scrapping work benches, cabinets or

machines, we are re-using these items onsite.

We further embedded our re-use commitment by

enhancing our Supplier Sustainability Program.

Read more in:

Social - Our supply chain.

Re-use challenges and roadmap

In 2022, we continued to make good progress on re-use

and remain committed to further reducing our waste

streams. Building a re-use mindset and embedding it into

normal ways of working is critical to achieving re-use and

preventing scrap. For example, by replacing scrap bins in

our factories with what we now call ‘re-use collection

corners’, we encourage employees to think of used parts

as having potential rather than being seen as waste.

However, to fully embed our re-use vision, we recognize

that there are several challenges to overcome and

processes to be defined. These include:

–Configuration control: To re-use as-new parts in a

system requires traceability of those parts. This means

we need to be able to trace a part’s history, where it

comes from, and know how many times it was used

and repaired.

–Organization: Across our operations, there are a variety

of separate processes related to return and re-use. We

need to align these to an overall end-to-end re-use

process flow.

–Repair engineering and processes: Part of our new

focus is creating awareness regarding design for re-

use, and defining processes around how to include re-

use in redesigns and engineering changes.

As a next step, we have started building a dedicated

global re-use center in Veldhoven (Netherlands) that will

facilitate various repairs and harvesting activities. We

anticipate a bigger re-use inflow from a bigger installed

base. This is part of our strategy to move from re-use

activities as part of build work centers – which can be

very distracting and confusing for teams that are building

modules – to making dedicated re-use centers, which

will help us to create even more re-use output.

Action plans for 2022-2025

This year we determined our targets for 2025 in more

detail. With the action plans above, we see no reason to

adjust our 2025 target. Going forwards, we aim to also

include packaging data to our 'Savings from re-used

parts' indicator.


4x
the value handled by our local repair centers in 2022

Our approach

Our approach is to have more than 95% of systems sold

in the past 30 years, still active in the field.

A well-maintained ASML lithography system can last for

decades and can be used by more than one fab. Many

ASML lithography systems start out in cutting-edge fabs.

Once that fab needs to upgrade, the lithography systems

are given a new lease of life in a fab where the

manufacturer requires comparatively less sophisticated

chips, such as accelerometers or radio-frequency chips.

Our refurbishment strategy focuses on buying back

systems that are not operational in the field, harvesting

parts from decommissioned systems and managing the

continued availability of spare parts, which is key to the

extended lifetime service we offer for our systems. We

provide our customers with a guaranteed service

roadmap until at least 2030. This means that all support

and the necessary services and spare parts they need to

maintain their systems are expected to be available

through at least 2030 and beyond.

For the TWINSCAN AT systems that are still in operation,

we focus on measures to proactively manage their end

of life. We do this by guaranteeing the availability of spare

parts as long as possible on a best-effort basis.

Our performance in 2022

Our Mature Products and Services (MPS) business

focuses on the refurbishment of the following product

families: PAS 5500 (with around 1,800 systems at

customer sites worldwide), TWINSCAN XT systems and,

as of 2021, NXT:1950-1980 systems. By the end of

2022, we had refurbished and resold well over 540

lithography systems. Some 95% of systems sold in the

past 30 years are still active in the field, and we have a

target to achieve more than 95% by 2025. We are on

track to meet this target.

Our actions in 2022

We are making significant investments to ensure

continued supply of more than 2,000 service parts for

our PAS platform, either through redesigns, a parts

harvesting strategy or finding an alternative with the

same form, fit and function. In instances where this does

not work, we are generally able to secure components

through Last Time Buy – a supplier’s ‘last call’ for a part

or component before production switches to its

successor. Over time, when a part is no longer available,

we redesign parts.

We track the spare parts we have in our portfolio, see

how they are being used, and identify when we expect to

run out of these parts. For PAS systems, we use this

information to update our priorities for redesigning parts.

For TWINSCAN AT systems, we aim to continue

supplying parts by harvesting them from systems that

are decommissioned by our customers.


	95% of all systems sold in the past 30 years still active in the field

To secure the availability of spare parts into the next

decade, we need to replace many unavailable parts that

were designed with technology from the 1980s and

1990s with parts based on state-of-the-art technology.

This involves a complete overhaul of these parts. For the

coming years, we have identified and plan to execute

more than 100 redesign projects for nearly 300 parts.

This is especially relevant for electronic parts, for which

the evolution of technology has been faster than in any

other field.

Action plans for 2022-2025

No additional actions, as we are on track to meet our

target of 95%.

Water management

Semiconductor manufacturing processes use a great

deal of water. Due to climate change, droughts have

become more extreme and more unpredictable, which

may lead to water becoming a scarce resource in

specific locations. Although water is an essential

resource in our customers’ semiconductor

manufacturing processes, water use in our own

operations is limited. ASML’s products use water mainly

in three ways. First, water is used to remove heat loads,

to keep the system on a constant temperature. These

internal cooling circuits are all designed as ‘closed-

loop’ (recycling) systems. Second, these heat loads are

ultimately removed by cooling towers, using evaporation

of (lower-quality) water. Third, DUV systems use ultrapure

water in the immersion hood – this water is currently only

partially recycled.

Water consumption at ASML is only a fraction of the

water consumption of most companies in the

semiconductor industry. Nevertheless, we promote the

responsible use of water throughout our company. Our

water consumption in 2022 increased to 1,161,850

cubic meters, up from 1,041,000 cubic meters in 2021.

This increase can primarily be attributed to more cooling

water being used in Veldhoven due to higher power

consumption, driven by an increase in the number of

systems produced and warmer weather in 2022. In

addition, more people were working in the office and

factory compared with 2021. In San Diego, the HVAC

cooling tower water cleanliness set point was modified,

resulting in an increased automated flushing of the

system.

While disruptions in access to water may represent a

significant risk for some of our customers, water-related

risk for ASML is limited. We have seven manufacturing

sites located in Veldhoven (Netherlands), San Diego (US),

Wilton (US), Linkou (Taiwan) and Tainan (Taiwan).

Read more in:

Our TCFD Recommendations – Climate-related disclosure,

available on www.asml.com.



			What we do

			As a multinational technology company, we impact many people’s lives, both directly and indirectly. We want to have a positive role in society – for our employees, our supply chain, everyone involved in our innovation ecosystem and the communities around us.

			Our aims

			We work closely with our stakeholders, collaborating to achieve the ambitions of our four focus areas. Our goal is to ensure that responsible growth benefits everyone. To maintain our fast pace of innovation and ensure our long-term success as a company, we need to attract and retain the best talent and provide the best possible employee experience. We aim to be a valued and trusted partner, improving the quality of life for all and supporting people in disadvantaged communities. Through our focus areas, we support five different SDGs in a range of ways.


Attractive workplace for all		Read more on page 96 >

	SDG 4 and 8	–Inspiring a unified culture –Best employee experience –Enabling strong leadership –Ensuring employee safety
	Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all/Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all

Our supply chain		Read more on page 108 >

	SDG 8 and 12	–Supplier performance and risk management –Responsible supply chain
	Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all/Ensure sustainable consumption and production patterns

Innovation ecosystem		Read more on page 117 >

	SDG 9	–Partnerships for research and development –Supporting startups and scaleups
	Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation

Valued partner in our communities		Read more on page 123 >

	SDG 4 and 11	–Education –Arts & culture –Local outreach
	Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all/Make cities and human settlements inclusive, safe, resilient and sustainable	–Education –Arts & culture –Local outreach



6.0%			37,643
Attrition rate (2025 target: <7%)			Total employees (FTE)1 EMEA 21,267 Asia 8,871 US 7,505

78%		(-4%)	24%
Employee engagement score against benchmark (2025 target -2% vs. top 25% performing companies)			Gender diversity (% females’ inflow) (2024 target: 23%)

143
Nationalities

IN THIS SECTION
97	Our overall performance in 2022
98	Inspiring a unified culture
100	Best employee experience
105	Enabling strong leadership
106	Ensuring employee safety

Our approach

Our engaged, diverse and highly skilled employees are

critical to the performance of our organization and our

long-term success as a company. We work hard to

attract the world’s top talent and focus on helping them

reach their full potential.

ASML’s people vision sets out our ambition for the

future, supporting our values and what we stand for: We

empower each other to thrive, fueling our growth,

happiness and business success.

Everyone throughout the organization has an important

role in this vision, but we need an environment and tools

that support collaboration, knowledge sharing and

autonomy in more diverse and interdependent teams.

We must also continue to deliver on our commitments to

our stakeholders and manage our day-to-day challenges

to attract, onboard, develop and retain talent.

To deliver on our long-term people vision, we focus on

three key areas:

–Inspiring a unified culture;

–Providing the best possible employee experience; and

–Enabling our leadership to bring out the best in our people.

Across the business, we drive various programs that

provide our people with more autonomy in steering their

development and career aspirations in a safe

environment, while enabling our leaders to support the

growth of the company.

Our approach to foster an attractive workplace for all is

set out in the following pages.

1.This FTE number excludes Berliner Glas (ASML Berlin GmbH).



	Attractive workplace for all

	SDG target				How we measure our performance

	SDG target 4.3
	By 2030, ensure equal access for all women and men to affordable and quality technical, vocational and tertiary education, including university				–Employee training and development indicators

	SDG target 8.1
	Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7% gross domestic product growth per annum in the least developed countries				–Financial performance

	SDG target 8.2
	Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high value-added and labor- intensive sectors				–Employee engagement score

	SDG target 8.5
	By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value				–Workforce data including diversity and inclusion –Fair remuneration pay ratio

	SDG target 8.6
	By 2020, substantially reduce the proportion of youth not in employment, education or training				–Employee attrition rate –New hires

	SDG target 8.8
	Protect labor rights and promote safe and secure working environments for all workers, including migrant workers, in particular women migrants, and those in precarious employment				–Employee safety indicators

Our overall performance in 2022


			Progress tracking
Topic	Target 2025	Performance indicator	2020	2021	2022	Status

Attractive workplace for all	Be on par with benchmark target: 2% below benchmark of top 25% performing companies	Employee engagement score	80%	78%	78%	•
		Employee engagement score	80%	78%	78%	•
	No target	Employee growth (new hires and rate)	1,932 (8%)	4,373 (15%)	7,130 (21%)	n/a
	<7%	Attrition rate	3.8	5.4	6.0	•
	20% (in 2024)	Gender diversity – % females inflow job grade 13+	n/a	12%	35%	•
	12% (in 2024)	Gender diversity – % females job grade 13+	n/a	8%	10%	•
	NL top 10 Taiwan top 20 S Korea top 20 US top 75 China top 100	Attractiveness to talent (employer brand score)1	NL 10 Taiwan 22 S Korea 24 US3 177 China 168	NL 6 Taiwan 6 S Korea2 14 US3 177 China 148	NL 4 Taiwan 6 S Korea n/a US 159 China 188	n
	0.16 (2022)	Recordable incident rate	0.18	0.17	0.18	n
	Target is relative to the score of the top 25% of performing companies by +/-3%) (2024)	Inclusion index	73%	83%	85%	•
	23% (in 2024)	Inflow % female	23%	21%	24%	•
	No target	Total employees	Total 26,481 Male 83% Female 17% Asia 6,057 EMEA 14,714 US 5,710	Total 30,842 Male 82% Female 18% Asia 7,430 EMEA 17,230 US 6,182	Total 37,643 Male 80% Female 19% Unknown 1% Asia 8,871 EMEA 21,267 US 7,505	n/a
	No target	Number of nationalities	120	122	143	n/a

As ASML has continued to grow strongly, we have

managed a large increase in our workforce in recent

years, benefiting from a more diverse employee base.

However, this rapid growth brings its own challenges, as

the organization becomes more complex, and the

expectations of our customers and stakeholders grow.

For more Attractive workplace for all related performance indicators

(PIs), see:

Non-financial statements – Non-financial indicators – Attractive

workplace for all.

1.Employer brand ranking from Universum: engineering students.

2.As of 2021, overall ranking for South Korea is no longer conducted by Universum. The result reported for 2021 is based on a customized ranking report.

3.The methodology for the US was changed, which results in a restatement for 2020/2021, so the comparative figures have been revised based on the overall brand ranking. This results in an increased score of 177 versus the previously published rankings of 99 in 2020 and 133 in 2021.

Our approach

We are anchoring ASML’s identity deep in the

organization, to help people embrace our values and to

provide a unified direction that enables people to

familiarize themselves with our company strategy and

purpose.

Our company values – challenge, collaborate and care –

ensure we are all working from a commonly understood

base that applies equally across the organization. They

help us make choices that keep us true to ourselves, and

allow teams to discuss natural areas of friction when they

occur. They also ensure we balance the traits that have

brought ASML this far (persistence, a ‘can do’ attitude

and a belief that anything is possible) with the right

degree of care).

Building on these core values, our six people principles

guide and inspire us in our decision-making to bring the

best out of our employees. These principles are: clarity

and accountability, continuous learning, inclusion, an

enabling environment, personal growth and trust.

We recognize that our success is driven by our unique

and diverse teams. As an equal opportunity employer,

we are cultivating a diverse and inclusive workforce to

drive innovation and accelerate creativity within our

business. We strive to maintain an environment where all

feel valued and respected and can fully contribute. That

has helped us to build a culturally diverse organization,

with our employees representing 143 different

nationalities. Even with this wide range of diverse talent

on our team, we still have opportunities to be more

inclusive. Our goal is for our workforce to be

representative of the available qualified talent pool.

Our Global Diversity & Inclusion Council, founded in

2021, consists of senior leaders who act on behalf of

ASML to provide thought leadership. The Council,

chaired by a member of the Board of Management,

proposes the Diversity & Inclusion strategy to the Board

of Management, sets, promotes and monitors diversity

and inclusion initiatives and leads company-wide

accountability for our goals. We also have a global

diversity and inclusion team, including a Chief Diversity

Officer, who is responsible for driving initiatives that are

related to diversity and inclusion across ASML.

Our diversity and inclusion roadmap is integrated in our

people strategy and focuses on three key areas within

ASML: leadership, culture and talent. These pillars

strengthen our connection with ASML’s wider

community. Through activities centered around talent,

culture and leadership, we engage with our communities

in a sustainable, mutually beneficial way that

demonstrates our care and commitment to diversity and

inclusion.

We know it’s important to nurture the connection

between employees’ expectations and perspectives with

the global D&I strategy. ASML employee networks –

such as Atypical for neurodivergent employees and

Proud for the LGBTQIA+ community – play an important

role in this, and we encourage participation from

everyone.



Our Diversity and Inclusion Strategy
Our roadmap focuses on three key areas:

Talent		Leadership
Attract and retain employees by ensuring that they are valued, supported with feedback and can grow their careers		Enabling our leaders to demonstrate commitment, accountability and role-model behavior to advance inclusion within their teams

	Culture
	Cultivate and promote an inclusive culture that equips employees to challenge norms and increase collaboration



24%
of our new hires were women in 2022

85%
2022 inclusion score

Our targets

We must hold ourselves accountable in our efforts to

grow an inclusive workplace which drives innovation and

creativity. Therefore, we have set a number of targets

which will allow us to measure the effectiveness of our

approach. These targets are:

–Reach 23% women new hires by 2024

–Reach 12% women at leadership levels by 2024

–Reach 20% inflow of women to leadership levels by 2024

–Score on par +/- 3 percentage points with the top 25%

of top-performing global companies on our inclusion

employee survey score in 2024. Our goal is to meet or

increase this level of inclusion on an ongoing basis.

More information about the diversity of our Supervisory Board and

Board of Management can be found in:

Corporate Governance - Other Board-related matters - Diversity.

Our performance in 2022

In 2022, we made progress in gender diversity at all

levels, including individual contributors and senior

leaders. Female employees now make up 19% of our

workforce worldwide, an improvement of one percentage

point compared with last year. We aim to continue this

upward trend as we move toward 2024.

To do this, we are focusing on the growth of our existing

team members and expanding the diversity of our talent

pool. In 2022, 24% of new hires were female.

The current representation of women at leadership level

is 10% while our ambition is to reach 12% by 2024. To

make this tangible, we have set a goal to increase the

hiring and promotion of female leaders, from 12% in

2021 to 20% in 2024. In 2022, the % inflow of female

leaders was 35%.

This talented pool of female employees will be 'role

models', paving a path for more to follow. We believe

that promoting more diversity in our workforce will help

us to attract and retain smart, talented people, enabling

us to drive technological innovations that meet our

customers’ needs.

Overall, the global STEM (science, technology,

engineering and math) talent pool is thinly populated, and

it is even more challenging to recruit female talent. Our

R&D workforce is 16% female. Nearly 90% of our job

positions are STEM-related, whereas peers in the high-

tech industry have more non-STEM-related job positions.

ASML is highly motivated to see more women pursuing

careers in engineering and science now and in the future.

The highly specialized nature of our industry means

achieving this balance is a long-term process.

We@ASML, our internal employee survey, measures

inclusion levels each year. In 2022, our inclusion score

was 85%, 1 percentage point above the benchmark of

top-performing global companies. Our goal is to meet or

increase this level of inclusion among our employees on

an ongoing basis.

Our actions in 2022

To promote diversity and inclusion in our workforce, we

are building and implementing programs that lead to

measurable and actionable results. During 2022, we:

–Facilitated over 20 D&I internal training sessions for

approximately 1,000 employees, managers and

leaders globally, both virtually and in person.

–Worked toward broadening our talent pipeline to be more

diverse and inclusive in all areas of demographics, and

having an employee base that is representative of the

available qualified workforce. To help achieve this goal, we

participated in national engineering conferences in the US

such as the National Society of Black Engineers (NSBE),

Society of Hispanic Professional Engineers (SHPE), Out in

Science Technology Engineering, and Mathematics

(oSTEM), and Society of Women Engineers (SWE).

–Collaborated with universities and organizations

dedicated to building diversity and creating

opportunities for professional development and

engagement. New global partners include Out & Equal

Workplace Advocates and Disability:IN.

–Actively engaged with multiple educational programs to

grow the talent pipeline, deploying multiple initiatives to

promote STEM education among the future female

talent pool.

–Executed global D&I engagement activities, such as

International Women’s Day, LGBTQIA+ Pride Month

and Global Diversity Month.

–Held nine D&I events with keynote speakers which were

held alongside observances such as Black History Month,

Pride Month, Juneteenth, Hispanic Heritage Month and

Global Diversity Awareness Month, each with an average

live attendance of 460 employees.

–Supported employee networks giving back locally in their

community through mentoring programs such as

American Corporate Partners, partnering with local Pride

organizations, fundraising events, and donating goods.

Action plans for 2022-2025

In 2022, we had a strong performance with a 24%

female inflow. Due to this result and recognizing that we

want to continue this ambitious inflow, we have defined a

2025 target of 24% (which is at the same level as our

2022 performance, but higher than the original 2024

target of 23%).

Our approach

We want to offer our people the best possible employee

experience at all our sites, enabling them to develop their

talent, feel respected and work to the best of their

abilities – this allows us to attract and retain the best

talent.

Employee experience is the sum of all experiences an

employee gains through the interactions with the

company at each stage of the employee life cycle, from

attracting and onboarding talent to attrition. To this end,

we focus on employer branding and employee

engagement.

Likewise, employee engagement depends on a wide

variety of factors and activities, such as talent attraction

and retention, onboarding experience, learning and

development, diversity & inclusion, labor practices such

as fair remuneration and labor conditions, and

leadership.

The overall impact of these programs on the total

employee experience is measured by our We@ASML

employee engagement survey.

Employer branding

With the demand for top-tier talent increasing year-on-

year, employer branding is a vital strategy to ensure

ASML gets its share of this talent. Our strong growth

means we need to hire large numbers of employees.

Highly skilled people with a technical background are

scarce in the labor market and competition is growing.

We recognize that top-tier talent select their employer of

choice, not the other way around. In light of this general

trend for employees to choose their future employer, it is

important that a potential employer has a strong value

proposition.

Within the recruitment funnel, we continuously seek to

raise awareness, consideration and conversion to jobs.

We aim to improve and professionalize how we attempt

to achieve this by understanding our target audiences

and their preferences in an employer. We use this

information to improve our candidate experience and

drive communications, programs and campaigns which

enable our talent acquisition teams to hire top talent with

speed.

Onboarding and developing our people

Once our people are on board, it’s vital to strengthen and

continuously invest in them to anticipate evolving

business requirements and developments in the labor

market. We empower our employees to take

responsibility for their own personal development, pursue

their career ambitions and to thrive, offering tailor-made

training and development programs.

Supporting careers at ASML

We are always looking for ways to improve how we can

help employees identify opportunities for professional

development within ASML. We offer a wide range of

career paths and have various tools in place to support

our employees’ career navigation.

Employee engagement

Employee engagement is critical to the performance of our

organization and our long-term success as a company.

We measure the overall impact of our activities on the total

employee experience using our we@ASML employee

engagement survey. This annual survey is a crucial tool for

collecting and measuring employee feedback. It provides

insights that enable us to improve the employee experience

and refine our policies and processes.

To measure the degree to which our values are

embedded in the organization, the survey also includes

questions about our culture and values that go beyond

the ‘what’ to the ‘how’.

We want to offer our people the best possible employee

experience at all our sites, enabling them to develop

their talent, feel respected and work to the best of

their abilities.

We support our employees

in maintaining a healthy,

productive and balanced life.

Working practices and remuneration

We want to provide fair labor conditions and social

protection for all our employees, regardless of their

location and whether they are on fixed or temporary

contracts. We support the principles of the International

Labor Organization (ILO) and we respect the rights of all

employees to form and join trade unions of their own

choosing, to bargain collectively and to engage in

peaceful assembly.

We have no indication that we operate in countries where

the freedom of association and collective bargaining for

ASML employees is restricted. We strive to comply with

the relevant legislations in every country where we

operate. In those countries where we have employee

representation, we engage in regular dialogue with the

different organizations representing our employees. In

these conversations, topics are put forward and

discussed by both the company and the employee

representatives. The working conditions and terms of

employment of employees not directly covered by

collective bargaining agreements are influenced or

determined based on other collective bargaining

agreements, labor market developments and usage and

habits in the specific country.

When it comes to remuneration, our approach is to be

fair and balanced. In our Remuneration Policy, we are

committed to gender equality and we strive for global

consistency while respecting what is common practice in

local markets. We continuously review how our

remuneration compares with the market benchmark for

technology professionals in each region where we

operate and, where necessary, make changes to our

remuneration policies and levels.

Remote working

Following the pandemic, we recognize that patterns of

work have changed, and we want to continue to have a

positive impact on the well-being, productivity and work

– life balance of our people. We aim to provide ASML

employees and their managers with clear guidance and

help them to make the right choices between working

remotely and working in the office. Remote working is

neither mandatory nor an entitlement. As a global

guideline, employees may work remotely up to two

working days per week if the job allows. There may be

exceptions for certain jobs or departments.

Fundamentally, ASML is convinced that employees

themselves can best manage their own work. At the

same time, managers are responsible for efficiently

organizing the way the team and the company is

working. This means that employees and managers have

joint responsibility for the choices to be made under our

Remote Working Policy.

Well-being

Care is central to who we are at ASML. In terms of well-

being, this means ensuring we support our employees in

maintaining a healthy, productive and balanced life. After all,

we only thrive as an organization when everyone can give

their best. In a time of unprecedented demand, it is even

more important to take care of each other and ensure the

well-being of all our colleagues. This means building and

maintaining an environment where we can work together

with positive energy. Our well-being framework brings

together all our well-being activities but also allows us to

drive our initiatives region by region to meet local needs.

Within ASML, we look at well-being from a holistic

perspective and we strive to integrate well-being into

everyone’s day-to-day work. We have identified four well-

being dimensions – mental, physical, social and financial

well-being – and have defined and created our programs,

tools and resources accordingly. We also have specific

resources and initiatives in place for teams and managers to

get the right conversations going.

Our offerings include general support for employees,

training and masterclasses, well-being events, and

physical and mental health checks. In Veldhoven we

have a dedicated health & well-being center that provides

several health & well-being employee services including

an in-house physiotherapist, psychologist, career center,

indoor gym, yoga room and a running track. We currently

have more than 165 well-being ambassadors globally,

and the network is still expanding, helping us to spread

well-being across our global organization.

Our targets

Employer brand

We measure our employer brand for the main locations

where we operate – the Netherlands, the US, China,

Taiwan and South Korea. We measure how ASML is

perceived by external audiences – and potential

employees in particular – by monitoring our position in an

independent external employer-branding ranking.

We have defined targets for our ranking in the different

local labor markets by 2025 – the Netherlands top 10,

the US top 75, China top 100, Taiwan top 20 and South

Korea top 20.

Employee engagement

We want to compare ourselves and grow toward the top

performer category. Our target for 2025 is to be within a

2% range of the top 25% performing companies

benchmark for our employee engagement survey.

Retention

While attrition can open up a knowledge gap in the

company, we also view it as an opportunity to bring in

new talent and enhance existing talent. We strive for a

healthy attrition rate (the percentage of employees

leaving our company), aiming for an annual rate of 3-8%

for 2022 and for an attrition rate below 7% in the future.

Our performance in 2022

We hired 7,130 new payroll employees in 2022, compared

with 4,373 in 2021, growing our workforce to 37,643 full-

time employees (FTEs) at the year end (with a new hires rate

of 21%, up from 15% last year). In addition, we employ

1,443 FTEs in our ASML Berlin entity, which is not fully

integrated yet in our reporting, which increases our total

workforce to 39,086 FTE. Our workforce has more than

doubled since the end of 2015.

Employer brand

During 2022, we were ranked #4 in the Netherlands, #6

in Taiwan, #159 in the US, #188 in China with ranking

unavailable in South Korea.

We continue to create greater understanding of what we do

and what we stand for as an employer. In 2022, we saw

significant improvement in the Netherlands, our

headquarters, by moving up two points into the top five of

most attractive employers for students and top 10 for

professionals. In Taiwan, we also increased awareness and

consideration among students and professionals, especially

within our engineering/IT target group. In the Netherlands

and Taiwan, we significantly increased awareness among

women in this group. In China, we are still struggling to

position ourselves, as this remains an extremely competitive

and fragmented market for top-tier talent. We are currently

known in 81% of the country among our target group for

students, but are not yet considered an employer of choice.

Similar to China, the US is a fragmented market in which it is

extremely difficult to reach everyone. We therefore focus our

employer-branding efforts on targeting specific states where

we operate and specific target groups. In order to have a

consistent method to measure our employer brand, we use

the Universum research data in those markets.

Unfortunately, Universum stopped providing their services in

South Korea from 2021. Therefore, we are not able to obtain

comparable data. However, according to a local survey,

ASML was recognized as the top ideal employer among the

semiconductor equipment companies operating in South

Korea. We are also certificated as the 'Best Employer' by the

South Korean government.

Employee engagement

In our 2022 we@ASML employee engagement survey,

we again saw good results and a high participation rate

of 84% (in line with previous years) and received valuable

feedback for improvement. The engagement survey

score was 78% in 2022, in line with 2021 – 4 percentage

points above our external global benchmark of 74%,

which decreased by 2% from 2021.

Against the benchmark of the top 25% performing

companies, our 2022 engagement score was four

percentage points lower. Our target for 2025 is to be

within a 2% range of the top performing companies

benchmark, and therefore we have more work to do in

enhancing our engagement score. Overall, we conclude

that ASML has a highly engaged population. People are

proud to work for ASML and would recommend ASML

to others.

We improved in nine out of the 15 categories in the

survey versus last year and only saw a slight decrease

from the 2021 score in two categories related to intention

to stay and quality. These two categories scored above

the global benchmark in 2022.

7,130

New payroll employees in 2022 (4,373 in 2021)

21%

Rate of new hires in 2022 (15% in 2021)

We have seen improvement on all key action topics

compared to 2021: clarity of expectations, enabling

processes, cross-team collaboration and well-being.

Even though we have made good progress, there is still

work to do, as these topics are still behind the external

benchmark with the exception of well-being, which is 6%

above the external norm.

We introduced ESG as a new theme in the 2022 survey

in order to set a baseline for our step-up in internal ESG

engagement. 74% of our employees are proud of our

efforts to have a positive impact on the world, but only

39% indicated that they have the opportunity to

contribute to ESG, which is significantly below the

external benchmark. We therefore plan to improve

awareness and opportunities for employees to contribute

to ESG Sustainability efforts.

Our workforce trend1

1.The 2020 to 2022 FTEs in the chart above do not include the FTEs acquired through the acquisition of Berliner Glas (ASML Berlin GmbH).

Retention

With an overall attrition rate in 2022 of 6.0%, up from

5.4% in 2021, we are well within our target range and

below the industry average in every country in which we

operate. We attribute the increase to the effects of the

global shortage of employees across many industries,

and a booming semiconductor industry that is providing

plenty of job opportunities. Nevertheless, we believe that

our efforts to create a unique employee experience, our

employee engagement programs and our onboarding of

new employees are paying off.

Onboarding and developing our people

With our fast-growing global workforce, a positive

onboarding experience is vital to building a sense of

connection, and helping employees fit in quickly. We

measure the quality of this onboarding experience

through pulse surveys and, on average, 87% of new

hires indicated that they had a positive experience in

2022, with good support from their managers.

Our actions in 2022

Attracting and retaining the best talent

In 2022, travel restrictions were lifted and we were again

able to engage in a personal way with students and

professionals in our countries, both in person and

virtually. There was an increasing focus on living the

brand from the inside out, by asking our employees to

share their stories on why they join and stay, and

supporting these ambassadors in sharing their stories

with their networks. This credible way of messaging

helps us to target talent within earned media and drive

awareness and referrals – a high-quality source of hires.

We continue to research the expectations of our key

target audiences in order to match them with who we are

as an employer. A big challenge is understanding how

expectations have changed since the pandemic,

especially in areas such as hybrid working and work – life

balance. We recognize that potential employees have a

choice, and in the highly competitive global labor market

we are challenged to differentiate ourselves even more in

the coming years, while retaining the unique culture and

values that have helped us get to where we are today.

87% of new hires indicated that they had a positive

onboarding experience in 2022, with good support from

their managers.

We launched the ASML Academy to ensure our people

have the right knowledge and expertise to maintain our

technological leadership and the pace of innovation our

industry demands. The Academy unites all learning and

knowledge management within ASML, enabling our

people to easily access the knowledge, skills and

expertise they need to perform well in their roles. The

launch of our new Learning eXperience Platform (LXP)

further enables our people to drive their own

development and learn from each other, and intuitively

connects them to best-in-class learning content from

ASML and external learning content providers.

Overall, we aim to provide the best possible employee

experience by ensuring that learning and knowledge

management takes place on the job, guided by the

70-20-10 approach for learning: 70% on-the-job

learning, 20% coaching and 10% training courses.

Supporting careers at ASML

We have reviewed our whole performance management

approach and philosophy to align it better with our

culture and values. We worked hard on reshaping our

performance management processes and to embedding

them in the new tooling, and this went live in January

2022. Our new ‘develop and perform’ methodology

allows for both formal and ‘natural’ moments of

connection, feedback and recognition to support

ongoing development and performance.

Fair pay for our employees

At ASML, we are committed to meeting adequate living-

wage requirements, meaning that employees earn

salaries that meet their and their families’ basic needs to

maintain an adequate standard of life in the

circumstances of each country where we operate, but

we also provide some discretionary income. Our

company has a predominantly highly educated workforce

with relatively high levels of remuneration. On average,

our salaries are significantly above local living wage.

In 2022, as part of a two-year cycle, we conducted an

analysis of how our lowest base salary compared with

the local minimum wage and local ‘living wage’ in the

countries and regions where we operate. We did not

detect any gaps.

Each year, we analyze paid salaries for gender disparity.

In 2022, as in previous years, we found no major

differences in these salaries.

Action plans for 2022-2025

From the results of the we@ASML engagement score,

priority areas have been agreed and will be worked on in

the coming year by the departments responsible, which

will define actions that address the specific situation and

needs of the department. At the moment, we see no

reason to adjust our 2025 targets.



	Future ASML CLA

	In the Netherlands, we continue to aim for dispensation from the Metalektro Collective Labor Agreement (CLA) in order to develop our own CLA. Our unique position in the global market, our size and growth as well as our very unique group of employees and the large range of competencies and activities we bring together to deliver our products have created a need for our own approach to labor conditions. The purpose of a future ASML CLA is to offer a set of labor conditions that match the diversity and needs of all our employees.

Our approach

To remain a market leader, we must provide unified

direction based on authentic leadership that gives our

people a clear picture of where ASML is heading. This

offers great opportunities for all of us to contribute to

ASML’s success and make an impact, while also

presenting a challenge for our leaders. As our company

grows, so does the need for clarity around roles and

expectations. Leaders need to play a part here in

providing role clarity for employees, as well as being clear

about their own roles and responsibilities. We continue to

strive to formulate and capture this more clearly so our

people can understand what is expected of them.

Launched in 2020, our Leadership Framework outlines

and clarifies a leader’s role in business leadership, role-

modeling the values within the company, and what it

means to be a people manager and coach for

employees. Leadership is all about people.

As our company grows, so does the need for clarity

around roles and expectations.

Our actions in 2022

In 2022, we continued deploying behavioral competencies

training, coaching programs and a practical guide to inspire

and enable personal development. We have leadership

programs that fast-track the careers of our most promising

managers, for example our Potential Acceleration Program.

These programs ensure our managers are aware of what’s

expected of them, and help them to develop the skills and

competencies they need to become better leaders.

The impacts of these programs are most visible in

employees’ responses to our 2022 we@ASML survey,

where all four dimensions of our leadership framework

were evaluated: 81% of our employees see their

manager as a role model, 80% as a coach, 77% as a

business leader and 82% as a people leader.

Our approach

Safety is an integral part of our daily work. More than just

a priority, it is central to everything we do. We work to

ensure we provide injury-free and healthy working

conditions for everyone on our premises by eliminating

hazards and reducing safety risks.

That includes employees, contractors, suppliers,

customers and visitors. We count on each other – every

one of us working at and for ASML – to share this

commitment, because only by working together to

common standards can we keep each other safe.

Naturally, we follow all government guidelines and safety

measures, and where appropriate we go further.

We believe that all work-related injuries and occupational

illnesses are preventable. As such, we are working

toward a long-term ambition of zero injuries and work-

related illnesses.

While it is impossible to completely eradicate risk, we are

working proactively at all levels to identify potential issues or

concerns in the workplace and develop measures toward

reducing them. We do everything we can to minimize risk,

and it is our responsibility to provide our people with the right

protection, procedures and processes to keep them safe.

Our ongoing ambition is zero recordable incidents, and

this drives our continuous improvement in processes,

working conditions and employee behavior. To achieve

this, we focus on an Environment, Health and Safety

(EHS) management system, safety culture and training.

We are committed to a well-established EHS

management system. We work to the highest possible

professional standards, with continuous improvement as

a key principle. Our EHS management system is based

on the ISO 45001 standard and complies with its

requirements. The EHS reporting system is assessed

against the ISO standard as part of its yearly internal

audit, although it is not certified or audited by an external

party. We have implemented our EHS management

system worldwide at our sites and customer services

locations. It covers everyone whose workplace is

controlled by ASML, including all our employees and

other workers not employed by ASML.

Our Corporate EHS Committee, chaired by our Chief

Operations Officer, oversees and approves ASML’s EHS

strategy. Our line managers are responsible for day-to-

day EHS management and performance. Our EHS

Competence Center (EHS Experts) brings together best

practices, defines the EHS standards for ASML and

supports our managers to implement these standards in

the workplace.

Our commitment to employee and product safety is

captured in our Sustainability Policy, which applies to ASML

colleagues worldwide. Our ASML EHS Guide is also an

invaluable resource, providing practical, useful and essential

information for our employees, contractors and any other

parties working for us. The guide, which was redesigned in

2022 to create awareness and ownership, explains our aims

and objectives, and clearly describes how employees can

contribute to a safe and healthy workplace with minimum

impact on the environment.

Incident and risk management are key elements of our

EHS management system. An incident report is required

to be completed by any ASML employee who is involved

in or observes an unsafe situation or incident.

We record and investigate all incidents and high-risk

unsafe situations to determine the root cause and take

actions to prevent them from recurring.

EHS Experts conduct regular hazard and risk evaluations,

with a focus on preventing employees’ potential exposure to

hazards such as chemicals, radiation, mechanical handling

and ergonomic risks. These provide us with further insights

into the main hazard and risk areas at ASML. We are then

able to take appropriate action to mitigate these risks. We

also ensure continuous improvement through internal EHS

audits. These are complemented by regular ‘Safety Gemba

Walks’, where managers visit the employees’ workplace,

helping to increase safety performance and strengthen our

safety culture.

To improve our EHS performance, we encourage our

employees to speak up whenever they encounter safety

risks. Every employee is empowered to stop working if

they feel unsafe. Together with their manager and EHS

expert, a safe way of working will subsequently be

identified, so the work can resume.

At ASML, it is standard practice to inform our employees

and anyone else accessing our premises and customer

sites independently – including contractors and suppliers

– about our safety rules and to raise awareness around

these. Training ensures that our people are prepared and

informed about these safety requirements.

All new employees joining ASML are required to complete

our EHS Fundamentals (EHS basics) e-learning module –

with this training refreshed for all employees on an annual

basis. The engineers in our cleanrooms receive more

extensive training upon joining ASML and annually thereafter

through our EHS Cleanroom Fundamentals module, which

explains how to recognize hazards and prevent injuries.

We have company doctors or external health services

available on all our sites.

Our targets

Our goal is to prevent occupational health and safety

incidents. To benchmark our performance against industry

standards, we use a targeted recordable incident rate of

0.16, which represents world-class performance.

Our performance in 2022

Strengthening our safety culture

Following our first safety culture measurement in 2019, using

the Bradley maturity model, we repeated this measurement

in 2022. We launched a Safety Perception Survey early in

2022 to 25,000 employees in Operations, Development and

Engineering and our business line organizations. The

feedback was analyzed within the different sectors and rolled

up to company level, and revealed a significant growth on

the maturity curve compared with the 2019 starting point.

The implementation of life-saving rules company wide, safety

leadership programs for managers and safety awareness

campaigns throughout the company in the past three years

has paid off.

Our safety record

We register EHS-related incidents in line with the US

Occupational Health and Safety Act. Our recordable incident

rate increased from 0.17 in 2021 to 0.22 in 2022. Our

recordable incident rate (for our own employees) is 0.18 in

2022, higher than our 2022 desired benchmark of 0.16. The

increased rate is due to an increased number of small

injuries at our campus and in our offices compared with

2021 as more people returned to the office. The recordable

incident rate is the number of cases that required more than

first aid in a year per 100 FTE. As in previous years, we did

not encounter any ASML work-related fatalities. We reported

two injuries in which the employees were away from work for

>180 days. Regrettably, two contracted workers (in two

separate occurrences) had fatal accidents on ASML

premises in Wilton. Although they were not working under

supervision of ASML, we thoroughly investigated these

accidents together with the contracted agencies and the

local authorities to understand the root cause and take

corrective action. These incidents were formally reported to

the local authorities by the contracted companies, in line with

OSHA guidelines.

Our actions in 2022

The rapid growth of ASML presents us with significant

challenges – with a large number of new employees

every month, we have to make sure people are informed,

instructed and also supported while doing their work.

Safety extends beyond procedures, rules and the right

equipment to include human mindset, behavior, attitude

and habits. Following the five safety rules, we deployed

various department-specific awareness programs. For

example, we extended the hein® safety campaign to all

sectors to secure a common safety language and

dialogue. This was supported by workshops and training

sessions that saw many interesting discussions and

insights into our safety behaviors.

In 2022, we started separating those incidents related to

injuries from those related to ill health. We analyzed the

most common root cause for illnesses experienced by

our employees and identified that this is related to

ergonomics. Based on this finding, we developed a new

industrial ergonomics training for our employees, and this

will be rolled out in 2023 to our operations teams,

supported by ergonomic workplace assessments and

improvements where needed. We hope to see a

reduction in illness related to ergonomics in future years.

To address the high number of near-miss reports in prior

years as a result of incorrect use of lifting equipment, a

new ‘lift’ training module was introduced in 2022 for all

engineers performing lifting activities.

Action plans for 2022-2025

In response to the increased recordable incident rate in

2022 from 2021, we are deploying a global safety

awareness campaign in 2023 for all employees.

We have agreed on a new ambition to move to the next

level on the Bradley safety culture measurement maturity

curve by 2025. Improvement plans at corporate and

sector levels have been identified and will be

implemented, supported by solid management

commitment. We will continue to engage with our

partners, main suppliers and customers to align our

safety principles and processes.



€12.4bn		5,000
Total sourcing spend 39% Netherlands 41% EMEA (excl. NL) 13% North America 7% Asia		Total suppliers 1,600 Netherlands 750 EMEA (excl. NL) 1,300 North America 1,350 Asia

59%
% supplier spend covered by commitment to sustainability (LOI) (2025 target: 80%)


IN THIS SECTION
110	Our overall performance in 2022
111	Supplier performance and risk management
112	Responsible supply chain

Our approach

At ASML, we rely heavily on our supplier network to achieve

the innovations we strive for. Our suppliers are a critical

extension of our value chain. With around 5,000 suppliers in

our total supplier base, we distinguish between product-

related and non-product-related suppliers.

Product-related suppliers provide materials, equipment,

parts and tools used directly to produce our systems.

This category comprises approximately 800 suppliers

and represents the highest percentage (69%) of our

procurement volume. We define around 250 of these

suppliers as ‘critical suppliers’, accounting for roughly

92% of the product-related spend. Critical suppliers

supply a unique part and/or are single sourced, those

that have switching time to an alternative supplier of over

12 weeks or suppliers who supply parts with long

production times.

Non-product-related suppliers are goods and services

suppliers, providing the products and services that

support our operations, from temporary labor to logistics,

and from cafeteria services to IT services. With around

4,200 suppliers, this group represents 84% of our total

supplier base.



	Our supply chain

	SDG target			How we measure our performance

	SDG target 8.8
	Protect labor rights and promote safe and secure working environments for all workers, including migrant workers, in particular women migrants, and those in precarious employment			–Compliance with RBA Code of Conduct –RBA self-assessment questionnaire completion –Suppliers with high risk on sustainability elements evaluated and follow-up agreed

	SDG target 12.2
	By 2030, achieve the sustainable management and efficient use of natural resources			–Supplier spend covered with commitment to sustainability (LOI)

We invest considerable resources in developing and

introducing new systems and system enhancements,

such as EUV lithography and e-beam metrology and

inspection. As these are complex technologies involving

thousands of specialized parts, we focus on high value-

added system integration.

ASML’s supply chain strategy is centered on long-term

relationships and close cooperation with our suppliers

and partners. Our goal is to ensure we have the

products, materials and services we need to meet our

short- and long-term needs, to support our operations

from the earliest moment of development to the end-of-

life stages of our systems. To make sure that this runs

smoothly, we involve our suppliers at the earliest possible

stage in the Product Generation Process (PGP). This also

enables us to increase product performance and ensure

manufacturability and serviceability.

Operating in a niche market characterized by producing

high-value products in small quantities, fast development

cycles and business volatility requires several key

performance requirements for the supply base.

Continuously improving our suppliers’ capabilities and

performance is at the heart of our sourcing and supply

chain strategy.

ASML’s supply chain strategy is centered on long-term

relationships and close cooperation with our suppliers

and partners.



	We require our suppliers to:
	1.Secure materials from their suppliers to enable the output ramp-up for customers 2.Enable our product roadmap through the development and maintenance of best-in-class competencies and capabilities to secure the most advanced technology and fast time-to-market 3.Drive cost reductions, quality and capability improvements through efficient and dedicated operations 4.Build a sufficiently broad customer base and scale to share and spread the risks of volatile market cycles and to increase flexibility and cost competitiveness 5.Make active contributions to our sustainability strategy

To drive a sustainable and resilient supply chain, we

place high importance on supplier performance

management, supply chain risk management and playing

a full part in a responsible supply chain.

We have adopted the Responsible Business Alliance

(RBA) Code of Conduct, which sets out ethical, social

and environmental standards. We expect our key

suppliers and their suppliers to acknowledge and comply

with its requirements.

Our Supplier Sustainability Program focuses on seven

building blocks – the Supplier Code of Conduct (RBA),

RBA self-assessment, responsible minerals sourcing,

reducing our carbon footprint, increasing re-use

capabilities and reducing waste, information security, and

business continuity.

We set out our approaches in these areas ('Supplier

performance and risk management' and 'Responsible

supply chain') over the following pages.

Our overall performance in 2022


			Progress tracking
Topic	Target 2025	Performance Indicator	2020	2021	2022	Status

Our supply chain	80%	% supplier spend covered by commitment to sustainability (LOI)	n/a	n/a	59%	•
	90%	RBA self-assessment completed (in %)	88%	89%	93%	•
	100%	Suppliers with high risk on sustainability elements evaluated and follow-up agreed (in %)	—%	100%	100%	•

For more supply chain performance indicators (PIs) see:

Non-financial statements – Non-financial indicators – Our supply chain.

Our approach

Supplier performance management

To help us manage ASML’s growth and our future

ambitions, we continue to improve our key business

processes. Tight risk control and continuous supply

chain improvement are key to ensuring quality, long-term

business continuity and sustainability.

We invest in developing and monitoring our supply

landscape to help suppliers meet our requirements with

regard to quality, logistics, technology, cost and

sustainability (QLTCS). Our supplier profiling

methodology helps us to measure supplier performance,

supplier capability and risk profile in all of these fields.

We have a framework in place to communicate process

requirements and compliance expectations to our

suppliers. This framework outlines our approach to

supplier management and development toward the

desired ASML supplier landscape. It also provides an

enhanced knowledge base to improve our dialog with

suppliers around their performance and development

potential. We conduct regular operational and

performance review meetings to ensure suppliers

continue to improve their performance and processes.

When supplier performance drops below the thresholds

we set and persistently fails to recover upon request and

within a reasonable time frame, ASML’s policy is to take

action to secure reliable future supplies.

A structural audit program enables us to assess supply

chain risks and identify areas of improvement to mitigate

or reduce those risks.

Supply chain risk management

Due to the highly specialized nature of many of our parts

and modules, as well as the low volume, it is not always

economical to source from more than one supplier. In

many instances, our sourcing strategy therefore

prescribes ‘single sourcing, dual competence’, which

requires us to proactively manage supplier performance

and risk.

In our risk management framework, we assess six risk

domains – calamity, ownership, finance, intellectual

property ownership, information security and

compliance. Since suppliers operating in the same

industry or market are typically exposed to similar risks,

we evaluate suppliers’ risk and performance within the

context of their supply market category. We will adjust

our category strategies where required to meet ASML’s

short- and long-term business needs. In cases where

risk exceeds the agreed threshold, mitigation measures

are taken. For example, we have long-term supplier

agreements (LTSAs) and/or continuous supply

agreements in place, or ensure the availability of

intellectual property in escrow.

Read more in:

Risk - How we manage risk.

Our performance and actions in 2022

We conduct continuous performance and risk

management of our supply base to assuring and

improving performance, and preventing reputational

damage. Two key programs to this process: a suppliers'

business continuity program aimed at securing continuity

of supply and suppliers’ information security; and an

information security and cyber resilience program

intended to protect our intellectual property and maintain

our leading technology position.

Business continuity program

In 2022, we continued to focus on improving business

recovery capabilities, carrying out a review of business

continuity plans for reassurance that suppliers can re-

establish deliveries within the shortest possible time

frame in case a disruptive event occurs. We require

suppliers to have business recovery capabilities in line

with the ISO 22301 standard. Supplier recovery plans are

requested, evaluated and, where needed, improved to

prevent potential business disruptions. For example,

suppliers might be required to store their inventory in

separate locations, implement fire prevention controls or

increase buffer stock. In 2022, we included 235

business-critical product-related suppliers in the

business continuity program, and extended the scope

with 29 non-product-related suppliers.

Information security and cyber resilience program

We continued to expand our information security and

cyber resilience program in 2022, leading to a current

scope of 314 suppliers compared with 202 in 2021.

Additionally, a cyber-risk monitoring tool to monitor the

internet presence of suppliers has been implemented,

with 256 suppliers in scope.

Suppliers with access to top-secret information or with

privileged access to our IT systems were asked to raise

their cyber resilience through the ISO 27001 standard.

To support our suppliers and other ecosystem partners

in this effort, we established a Security Circle of Trust

together with Cyber Weerbaarheid (resilience) Brainport

in the Netherlands.

We conduct continuous

performance and risk

management of our supply

base to assure and improve

performance, and prevent

reputational damage.

Our approach

We actively pursue sustainable development of our

supply chain to ensure that our Tier 1 suppliers and

contractors conduct their business in a caring and

accountable manner, and that they act as responsible

business partners. As we seek to ensure a responsible

supply chain, we deploy several programs that focus on

Responsible Business Alliance (RBA) commitments and

standards, due diligence, and our Supplier Sustainability

Program.

We are a member of the Responsible Business Alliance

(RBA) and have adopted the RBA Code of Conduct.

of Conduct.

Due diligence

With almost 5,000 Tier 1 (direct) suppliers in our supplier

base, it is important for us to identify and prioritize

suppliers at risk. We apply a risk-based approach to

determine which suppliers are in scope for our more

detailed due diligence process, which consists of three

layers:

–Determine inherent risk level by screening our full

supplier base on ethics, labor, health and safety and

environment risk using the RBA Risk Platform.

–Apply supplier risk profiling to business-critical

suppliers. For these suppliers we conduct risk

assessment of QLTCS capability elements.

–Apply an RBA self-assessment questionnaire (SAQ) to

major suppliers, in which we consider the type of

supplier, leverage and geographical location of the

supplier. We focus on our product-related suppliers

covering 80% of our annual spend, business-critical

suppliers including non-product-related suppliers, and

suppliers deemed high risk from our annual RBA risk

screening.

We expect suppliers in scope for these detailed

procedures to complete the RBA SAQ each year to

validate their compliance with the RBA Code of Conduct

and to determine any potential gaps in relation to its

standards. We review all RBA SAQ results, evaluate high-

risk findings (if any) and determine the severity of the

finding. It is our policy to discuss all high-risk findings

with the supplier to evaluate the risk and determine if an

improvement plan is needed.

Supplier Sustainability Program

Our Supplier Sustainability Program addresses labor,

human rights, safety, ethics and environmental risks in

our Tier 1 supply chain by focusing on seven building

blocks – Supplier Code of Conduct (RBA), RBA self-

assessment, responsible minerals sourcing, reducing

carbon footprint, increasing re-use capabilities and

reducing waste, information security, and business

continuity.

An important element in our Supplier Sustainability

Program is the ‘Letter of Intent’. By signing this Letter of

Intent, suppliers agree to comply with a number of

measures: to continue adhering to the latest version of

the RBA Code of Conduct; to measure and share their

CO2e emission data with ecosystem partners; to set

ambitious targets to reduce CO2e emissions; and to

collaborate with ASML and ecosystem partners to

remanufacture used system parts, tools, packaging and

other materials to maximize the re-use of materials.

Conflict minerals

Like many companies in the electronics industry, our

products contain minerals and metals necessary to the

functionality or production of our products. Such

minerals and metals include tantalum, tungsten, tin and

gold, which are 3TG minerals, or so-called ‘conflict

minerals’. We do not use a significant amount of these

3TG minerals in the manufacturing of our products.

However, certain 3TG minerals are needed to develop

our products and for them to function. Gold, for example,

is used in coating critical electronic connectors, and tin is

used for welding electronic components and creating

EUV light.

We have adopted a series of compliance measures

based on the legal requirements and guidelines of the

five-step framework set out by the OECD Due Diligence

Guidance for Responsible Supply Chains of Minerals

from Conflict-Affected and High-Risk Areas (OECD

Guidance). As part of our responsible sourcing program,

we implement a reasonable country of origin inquiry

focusing on five areas: 1. a robust management system,

2. risk identification, 3. risk mitigation, 4. industry

collaboration with the Responsible Minerals Initiative

(RMI) organization and 5. public reporting.

Despite our best efforts, we are unable to determine the

precise origin of all of the 3TG minerals included in our

products. This is due to several reasons including 3TG

supply chain complexity, the number of tiers of suppliers

involved in tracing the source and the limited number of

certified conflict-free smelters for all conflict minerals.

Obtaining correct data from our supply chain is a

challenge, but we continue to encourage our suppliers to

trace the origins of the 3TG minerals within their supply

chain in accordance with applicable conflict minerals

rules and regulations. We also request our suppliers to

report smelters who are not listed or identified on the

RBA smelters list to the RBA for audit.

For more information, please see our

Conflict Minerals report available on www.asml.com.

Our targets

We have set three targets to support our drive to

increase the sustainability of our supply chain:

–To have 80% of our top 60 suppliers covered with a

commitment to sustainability (via letter of intent – LOI or

providing us with their CO2e emissions data (scope 1,

scope 2 and scope 3)) by 2025

–For 90% of all suppliers in scope of the RBA self-

assessment to have completed it by 2025

–For 100% of our suppliers identified by the RBA self-

assessment as having high-risk sustainability elements

to be evaluated and follow-up action agreed by 2025

We monitor targets and commitments on a monthly

basis, tracking the progress against target and following

up with the Sourcing lead and Supplier as needed.


Our performance in 2022
Total supplier base
€12.4bn
Total spend
			% of total spend
	800	Product-related suppliers	69%
	4,200	Non-product-related suppliers	31%


	2025 LOI target is 80%


		In 2022, 59% of the total spend was covered with the LOI commitment to sustainability
We apply due diligence screening to the total supplier base using the RBA Risk Assessment Platform.

By year end 2022, 59% of the 60 suppliers in scope had

signed the Letter of Intent, acknowledging their joint

responsibility and commitment to reducing the collective

environmental footprint – in particular the CO2e emissions

contributing to our scope 3 reduction and waste

contributing to our re-use ambitions. By the end of the

year, more than 35 suppliers had provided data on CO2e

emissions. By 2025, we aim for 80% of the top 60

suppliers to have signed the Letter of Intent.

We have asked a total of 59 suppliers to complete the

detailed RBA SAQ. In general, the RBA SAQ results

show a relatively low risk level in our supply base, as

most of our suppliers operate in countries which we

believe generally have a strong rule of law. By end 2022,

93% of the suppliers in scope had completed the RBA

SAQ (89% in 2021). The completed RBA SAQs indicated

that no supplier had overall high risk on all sustainability

elements.



	ASML suppliers



	5,000
	Suppliers
	€12.4bn
	Total spend



Supplier base geographic split by percent spend

	1,600 suppliers			750 suppliers			1300 suppliers		1350 suppliers

		39%			41%		13%		7%
Netherlands			EMEA (excl. Netherlands)			North America		Asia



Supplier Risk Profiles, created for business-critical, strategically important suppliers
€8.6bn

	216 suppliers represent 92% of this spend

		€3.8bn

			29 suppliers represent 23% of this spend
Product-related spend		Non-product-related spend	29 suppliers represent 23% of this spend

* Major suppliers are those that account for 80% of PR spend and any business-critical NPR suppliers




The Responsible Business Alliance (RBA) self-assessment questionnaire completed by major suppliers*
€8.6bn

	44 suppliers represent 71% of this spend
		€3.8bn

			15 suppliers represent 26% of this spend
Product-related spend		Non-product-related spend	15 suppliers represent 26% of this spend

However, this process did indicate high risk on Health and Safety, Environment or Ethics standards for several suppliers. Further assessment of identified high risks revealed that the risks were related to a missing 'third-party' management

system in place. After follow-up through discussions we assessed the risk as low/medium. ASML does not require suppliers to have a formal environmental/labor management system in place. All suppliers which were followed up on

could show that they have a policy/procedure in place to ensure compliance to ethics, labor, safety and environmental requirements. More details can be found in the table below for 2020-2022.


		Number of high risks identified from RBA SAQ
Standard	RBA commitment	2020	2021	2022	Main findings 2022
Labor	To uphold the human rights of all workers (direct and indirect), and to treat them with dignity and respect as understood by the international community, including the ILO's eight fundamental conventions	1	0	0
Health and safety	To minimize the incidence of work-related injury and illness and to ensure a safe and healthy working environment. Communication and education is essential to identifying and solving health and safety issues in the workplace	0	0	1	Finding related to a non-product-related supplier where the requirements do not entirely match the type of organization.
Environment	Environmental responsibility is integral to producing world-class products and services. Adverse effects on the community, environment and natural resources are to be minimized while safeguarding the health and safety of the public	0	0	3	Findings related to 1) a non-product-related company where the requirements do not entirely match the type of organization; 2) a supplier in the process of implementing a company-wide environmental program and supplier management and 3) a company with policies in place, however, no environmental program and supplier contractual requirements in place.
Ethics	To meet social responsibilities and to achieve success in the industry, the highest standards of ethics should be upheld, including but not limited to business integrity, anti-bribery and corruption, antitrust and competition, protecting privacy	1	0	1	Finding related to no separate conflict minerals policy and supplier program in place, but instead this supplier has a supplier code of conduct in place.
Members and participants are committed to establishing a management system to ensure:
–Compliance with applicable laws, regulations and customer requirements –Conformance with the Code standards –Identification and mitigation of operational risks –Facilitation of continuous improvement

Our actions in 2022

Reduction of CO2e emissions and waste

In 2022, we made significant progress in our Supplier

Sustainability Program, with the aim of joining forces with

suppliers to achieve our goal of net zero emissions by

2030. We launched this program to our top 60 suppliers,

and our goal is to gradually increase the scope over time.

We recognize that our suppliers are in different phases of

maturity with regard to CO2e emissions and waste

reduction ambitions, varying from advanced target

setting and performances to not having yet started to

measure their environmental footprint.

We also started collecting CO2e emissions data from

suppliers – more than 35 key suppliers now share their

environmental performance and commitment with us,

and we are discussing the emission reduction

opportunities together. We are also sourcing an IT tool

that suppliers can use to share their CO2e emission data

with us.

In 2022, we also resumed our onsite supplier audits for

QLTCS and business continuity. We also initiated two

pilot RBA audits during the year, and we will move to a

model where we structurally audit suppliers on RBA

compliance.

Engaging with suppliers

We held a number of engagement sessions with key

suppliers during the year, including a Supplier Ramp-up

Day in March and a Supplier Day in September, which

gave suppliers the opportunity to ask questions and

share mutual challenges with us. We identified action

points from these feedback sessions where possible.

Our suppliers have access to our Sourcing lead or our

Strategic Account (SAT) teams, whose job is to manage

the relationship with our suppliers. Sourcing and Supply

Chain also held workshops for suppliers specifically to

cover collaboration on CO2e emissions data, with experts

invited to introduce the program and talk through scope

1, 2 and 3 emissions. The workshops started with 15

suppliers and expanded to 80 over the year, with one

being held face-to-face at Brainport to give suppliers an

update from an ASML perspective, next steps and the

chance to brainstorm ideas. We ask suppliers to let us

know their challenges when collecting CO2e emissions

data, and we discuss possible solutions.

Suppliers have indicated that these workshops are highly

beneficial and contribute to best-practice sharing and

being able to tackle joint problems together. Topics

raised in workshops are followed up in future workshops.

To meet the continuing high demand from our

customers, we need to work closely together. Our

customers’ trust is key, while material shortages threaten

our output. Greater transparency and collaboration are

crucial to success. We face dynamic market

circumstances and these present challenges in their own

right. During the Supplier Days, ASML leaders and

suppliers spoke openly about how to overcome

challenges by improving partnerships, increasing

transparency, shortening feedback loops and embracing

re-use. In response to suppliers indicating difficulties in

understanding the demand flexibility, our team provided

more insights into why ASML is adjusting the Start Plan

when needing to ramp. Further discussions have

centered on how listening to the voice of the customer is

an essential part of understanding the market dynamics,

as well as transparency on the ASML investments in

robust growth, sustainability and improvements

regarding industrialization. ASML leaders and suppliers

agreed on the importance of highlighting and learning

from areas of collaborative success.

Our experience during 2022 has again underlined the

importance to the Supplier Sustainability Program of

achieving alignment with suppliers and of early

engagement with the supplier on RBA and conflict

minerals in order to remove time pressures. The biggest

challenge relates to collecting data – environmental data

is a new area for some suppliers, so they need to put

processes in place and develop teams to handle those

processes. Every two months we host a workshop to

facilitate and help suppliers with their issues and the

challenges they face. We have also found that overall

company targets are not always aligned across suppliers,

as some work toward 2030 while others are working to

2040.

Action plans for 2022-2025

We are on track to achieve our targets and we intend to

expand the number of suppliers with a commitment to

sustainability to include our top 100 suppliers.

We will continue to host supplier workshops every two

months in 2023.



€3.3bn		63%
R&D investments (based on US GAAP) (2025 target: >4bn)		R&D spend as % growth from 2019 base year (2025 target: >100%)

€14.7m		€1.0m
Contribution to EU research projects		Value startups and scaleups in-kind support


IN THIS SECTION
118	Our overall performance in 2022
119	Partnerships for research and development
121	Supporting startups and scaleups

Our approach

We see ourselves as architects and integrators, working

with partners in an innovation ecosystem. Our focus is on

innovating through partnerships, and in our innovation

ecosystem, long-term collaboration is based on trust. By

sharing our expertise with the ecosystem, we build a

strong knowledge network capable of creating

technological solutions that society can tap into. We

share both risk and reward, and this collaborative

approach allows us to accelerate innovation.

We focus on collaboration with research centers, fueling

the innovation pipeline through partnerships with

academia and research institutes, and collaboration with

R&D partners through EU public–private partnerships.

We also believe that we can create greater impact in the

ecosystem by nurturing future young tech through

support for startups and scaleups.

Over the following pages, we explain how our approach

to partnerships can accelerate innovation.



	Innovation ecosystem

	SDG target				How we measure our performance

	SDG target 9.1
	Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all				–Supporting startups to Star level –Supporting scaleup projects –Collaboration in EU projects

	SDG target 9.4
	By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes, with all countries taking action in accordance with their respective capabilities				–Collaboration with research partners –Energy efficiency of our products measured per wafer pass

	SDG target 9.5
	Enhance scientific research, upgrade technological capabilities of industrial sectors in all countries, in particular developing countries. For developing countries, this includes, by 2030, encouraging innovation and increasing the number of research and development workers per one million people, as well as public and private research and development spending				–Investments in R&D

Our overall performance in 2022


			Progress tracking
Topic	Target 2025	Performance indicator	2020	2021	2022	Status

Innovation ecosystem	>4bn euro	R&D Investments (based on US GAAP)	€2.2bn	€2.5bn	€3.3bn	•
Innovation ecosystem	>100%	R&D spend as % growth from 2019 base year	10%	25%	63%	•
	No target	Value startups and scaleups in-kind support	€0.6m	€1.0m	€1.0m	n/a
	No target	Startups and scaleups in-kind support hours	1,550hrs	2,100hrs	4,180hrs	n/a
	>20%	Startups reached Star level from total startups (in %)	16%	15%	12%	n
	14	Number of scale-up companies supported (in numbers)	7	7	10	•
	No target	Contribution to EU research projects	€28.5m	€30.3m	€14.7m	n/a

Our approach

Public–private partnership

We cooperate with private partners in research and

innovation projects subsidized by the European Union

and its member states. We run collaborative subsidy

projects aimed at advancing integrated circuit (IC)

technology for the next node connected to the industry

roadmap following Moore’s Law. The Horizon Europe

program, a public–private partnership, facilitates

collaboration and strengthens the impact of research and

innovation in developing, supporting and implementing

EU policies while tackling global challenges.

By collaborating in European projects, ASML and its

partners play a role in giving the continent a degree of

sovereignty by driving and accelerating fundamental

research and ground-breaking innovation in EMEA. This

collaboration also generates significant business value,

fuels job creation and creates knowledge. The increasing

number of patent requests per year, both for ASML and

the other members in the various consortia,

demonstrates the success of these collaborations.

Partnerships with academia and research institutes

We co-develop expertise within a wide network of

technology partners, such as universities and research

institutions. Our partners include imec in Belgium, the

technical universities in Twente, Delft and Eindhoven in

the Netherlands and the Advanced Research Center for

Nanolithography (ARCNL), also in the Netherlands.

ARCNL conducts fundamental research and focusing on

the physics and chemistry that are important in current

and future key technologies within nanolithography and

its application within the semiconductor industry.

Our targets for research and development

Our R&D partnerships are underpinned by a number of

targets:

–Reach >€4bn R&D investments by 2025

–Grow R&D spend over 100% from 2019 base year

Our performance in 2022

Our R&D investments in 2022 amounted to €3.3 billion

based on US GAAP, which represents 63% growth from

the 2019 investment level.

Our own contribution in R&D across public–private

partnerships in 2022 was €14.7 million, and the total

value of our investment for the full three-year duration of

our projects is €88.9 million, with a total project size of

€438.9 million. Across all of our projects, we work with

universities, research and technology institutes and other

high-tech companies across EMEA – varying from 20 to

80 partners from 12 different European countries – to

help enable the industry to move toward next-generation

technology.

Our actions in 2022

Public–private partnerships

In 2022, we continued coordinating efforts in four EU

projects – TAPES3, PIN3S, IT2 and ID2PPAC – all with a

duration of three years. We have enabled timely reporting

to the connected public partners, and have organized

online consortium meetings to exchange ideas and

knowledge. The TAPES3 project was successfully closed

in April 2022, when an online project review meeting

involving independent experts from the industry hired by

the European Commission evaluated the results of the

project.

In 2022, we submitted a project proposal – 14ACMOS –

in the first call of the newly established Key Digital

Technologies Joint Undertaking. The aim of this three-

year project is to explore and realize solutions for the

manufacture of 14 angstrom (1.4 nm) CMOS chip

technology. A consortium has been formed that covers

four key areas needed in IC technology development for

manufacture – lithography, metrology, mask

infrastructure and process technology.

The 14ACMOS project brings together the R&D

capabilities of 25 leading expert partners to tackle these

challenges. It is valued at more than €95 million in R&D

costs and unlocks at least €27 million in public funding

for the ecosystem. In terms of geography, the project

connects people from Romania, the United Kingdom,

Belgium, Sweden, France, Germany, Israel and the

Netherlands.

€3.3 billion

R&D investments in 2022 (based on US GAAP)

€14.7 million

Contribution in R&D across public–private

partnerships in 2022

Partnerships with academia and research institutes

Over the last couple of years, using 0.33 NA EUV

systems, imec and ASML have entered into an extensive

technical collaboration to prepare for the introduction of

EUV 0.55 NA (High-NA) lithography (see phase 1 in

Figure 1). This collaboration identified the critical device

layers on a customer’s roadmap that required the most

work to enable the introduction of High-NA. We carried

out studies to understand and mitigate foreseen High-NA

scanner-related challenges, among other detailed studies

on depth of focus and field stitching. In parallel studies,

the ecosystem challenges – such as choices of resist

and their stochastic effects, reticle absorber materials

and the necessary massive metrology – were addressed.

As an indication of the impact of this collaboration, more

than 30% of the oral paper presentations submitted by

ASML to the upcoming SPIE Advanced Lithography and

Patterning conference (SPIE ALP 2023) are derived from

the collaboration between imec and ASML. Preparation

for phase 2 began in 2022 with the creation of the

infrastructure for the joint High-NA Lab and the

installation of the necessary peripheral equipment, such

as resist and development track, film thickness and wafer

metrology equipment.

In 2022, we joined forces with the NXTGEN Hightech

program that is intended to support the future growth of

the Netherlands by working on the next generation of

high-tech equipment. The ASML contribution in this

Growth Fund program focuses on mechatronics,

systems engineering and potentially other fields.

Our collaboration with ARCNL is becoming even

stronger. In the past we have established a unique

collaboration model in which scientists from ARCNL can

explore the research questions they would like to focus

on and at the same time create value for ASML. In the

areas of EUV source, metrology and materials, our joint

interest is well established and yielding results. Among

many other examples, these results include: new insights

into optimal drive laser wavelengths for EUV plasma

generation, interferometric metrology techniques for

improved wafer analysis and detailed understanding of

tribology for wear-resistant coatings on wafer tables.

Action plans for 2022-2025

No additional actions, as we are on track to meet our

targets.

Figure 1: ASML’s IPCEI proposal concerns the third step in the three-phase approach toward introduction of EUV 0.55 NA (High-NA) lithography.

Phases 1 & 2 are already planned by ASML and imec.

Our approach

To nurture innovation by new generations of

technological talents, we also provide valuable expertise

to support entrepreneurs and startups. We make use of

our experts’ in-depth competencies and knowledge to

develop and support startups and scaleups. By fostering

entrepreneurship, we aim to help these young

enterprises excel and grow. What we share is based on

what we are good at, such as building complex

manufacturing systems. This is where we can play a role

and make a difference.

Sharing our expertise strengthens our regional high-tech

ecosystem, particularly around our headquarters in

Veldhoven, the Netherlands. This region has a

competitive edge globally, and we need to make sure we

maintain this position. Building a strong regional

foundation offers benefits not just to ASML and

associated partners, but also to other companies and

organizations. In addition, it helps attract a broad base of

talent to the region.

Through HighTechXL and DeepTechXL, we build, finance

and accelerate impactful startups by combining high-

tech entrepreneurial talent and relevant technologies.

With the Make Next Platform, we aim to support young,

innovative high-tech scaleups. And through

DeepTechXL, we help to finance these deep-tech

ventures, particularly in the early stages where risks are

still at their highest.

Make Next Platform

To support young innovative high-tech scaleups, ASML

founded the Make Next Platform (MNP) in 2016 together

with Huisman, Vanderlande and the non-profit Stichting

Technology Rating (STR). Thales NL joined as a co-

founder in 2019. MNP puts the partners’ network,

competencies, expertise and experience to work in

answering questions that these scaleups encounter in

their development and helps them grow into sustainable

companies.

MNP aims to help emerging high-tech ventures that have

moved beyond the startup phase and are ready to

expand. These scaleup companies face challenges such

as systems engineering, supply chain management,

business/corporate development, targeting beachhead

markets, managerial issues, funding issues and public

affairs. Through the exchange of best practices, business

experience and coaching from senior corporate experts,

the MNP partners aim to support scaleup companies in

their development to become global players by giving

them access to their internal and external networks.

Our targets

Our target for 2025 is for >20% of the total startups to reach

Star level and to support 14 new scaleup projects by 2025.

Our performance in 2022

In 2022, ASML committed to providing more than €15

million support to high-tech startups and scaleups, with

4,180 hours of in-kind support provided and over €14

million cash committed. This commitment includes our

contribution to the DeepTechXL startup investment fund

for early-phase funding. 12% of startups reached Star

level.

To date, the MNP has screened more than 250

companies and engaged with the management teams of

more than 60 of them. So far, 10 scaleups have been

adopted, including three in 2022. Meanwhile, one has

reached Alumnus status and is now finding their own

way, based on their own strengths: SMART Photonics

(2021).

Our actions in 2022

ASML as a venture builder

In 2022, we became a strategic investor and co-initiator

in DeepTechXL Fund I, a new Dutch deep-tech fund of

€85 million. Together with the other investing industry

partners (Philips, Brabantse Ontwikkelings Maatschappij

(BOM), research institute TNO, PME Pension Fund,

Invest-NL and some family offices), the fund provides

deep-tech startups and scaleups with access to

knowledge, network, technology, licenses and business

development support, and it intends to finance these

tech ventures particularly in their early stage of growth,

where investments risks are still at the highest. The fund

aims to introduce launching customers, find partners in

the supply chain and to assist in entering new markets

and scaling up manufacturing. DeepTechXL originates

from and will work closely with HighTechXL.

ASML is also one of the main shareholders of HighTechXL,

together with other tech-minded partners in the region such

as Philips, TNO, BOM and High Tech Campus Eindhoven.

Through HighTechXL, we build and accelerate impactful

startups by combining high-tech entrepreneurial talent and

relevant technologies from reputable tech partners such as

ESA, CERN, Fraunhofer, imec and TNO, with the goal of

solving major global societal challenges. Selected ASML

talents join these startups for 30% of their time for a period

of three months. They define their learning goals and typically

benefit from both enriched skills and mindsets after this

entrepreneurial experience.

To date, over 20 new deep-tech ventures have

completed the program and some are already receiving

global attention. Moreover, several new ventures are

currently still in the accelerator program, making good

progress, and new cohorts are already planned.

Action plans for 2022-2025

We are on track to support 14 new scaleup projects by

2025 and to meet our R&D investment targets. However,

the target of 20% of startups to achieve Star level by

2025 may take longer than originally expected. This

target was first set when HighTechXL was still a

traditional startup accelerator, but since it was

transformed into a venture building program, we have

seen that it generally takes longer for these newly

established startups to mature. Additionally, the focus is

now on deep-tech, which typically requires a longer time

to develop. A discussion on defining a more applicable

target reflecting the new situation is ongoing.



	inPhocal makes first sale after two years as HighTechXL Venture Building Program alumnus

In 2020, a group of enthusiastic founders set course on

a journey to start inPhocal, a deep-tech company

based on an optical technology that originated from the

CERN institute, where it was originally developed for

long-distance alignment of equipment in their Large

Hadron Collider (LHC) experiment.

Within the nine-months HighTechXL venture building

program, inPhocal was given the chance to pick

technologies from several top-class institutes and

companies, such as ASML, the European Space

Agency, Philips and TNO, and to develop themselves

into a mature company. As part of this program,

inPhocal discovered the potential of their unique

technology for laser processing, which provides a laser

beam with a long focus depth – this means the focus

does not have to be adjusted when marking curved

objects or cutting through thick materials, which results

in unprecedented improvements in speed and

efficiency. Market research proved that their technology

could indeed solve current problems and their

technology quickly gained the interest of several large

companies, such as Heineken, Coca-Cola, Pepsico,

AbInBev and Logitech.



	We are on track to support 14 new scaleup projects by 2025.

In the meantime, inPhocal developed a functional

product prototype in 2021, together with lab partner

Exspectrum. They optimized their technology further in

cooperation with development partner Lion Lasers,

which led to a first fully certified system mid 2022. By

that time, they also received a €2 million investment, led

by the new DeepTechXL fund in which ASML is

participating as well. InPhocal is using their funding to

scale production in 2023 and have already made their

first sale of a system that will be installed in the

Netherlands in early 2023.

Over the years, inPhocal has made optimal use of the

support provided by ASML to HighTechXL with four

ASML talents joining at various stages during the

program. As part of their own personal development,

these talents are allowed to join the startup for a period

of three months and make contributions to topics

ranging from technology, finance, market research and

strategy. After completing the program, the ASML

talents went back to work on their ASML duties,

however with all of them strong relationships have been

built and the talents remain available for InPhocal to ask

for advice and guidance on an ad hoc basis. InPhocal

will continue its mission to become the new standard in

laser processing while at the same time strengthening

the high-tech ecosystem of the Eindhoven region.


€11.5m	13,645
Community investment	Time investment in volunteers – hrs community involvement


4,736	411
Time investment in volunteers – hrs technology promotion	Total number of projects supported


	IN THIS SECTION
	124	Our overall performance in 2022
	125	Education
	127	Arts & culture
	129	Local outreach
	131	ASML Foundation

Our approach

ASML’s success and growth has a significant impact on

the communities where we operate, in particular at our

large sites (Brainport Eindhoven region, Wilton, Silicon

Valley, San Diego and Hsinchu), where ASML and its

network of suppliers and partners generate a wealth of

jobs and social activity.

We aim to be a valued and trusted partner in our

communities, improving the quality of life for all, with a

special focus on disadvantaged communities. Our

community engagement program, which falls under the

responsibility of our CEO, is built on three pillars where

ASML has competence and can create impact:

1.Education

2.Arts & culture

3.Local outreach

Our corporate citizenship activities stretch beyond

community support to in-kind contribution to startups

and scaleups, aiming to nurture innovation by future

young tech.

scaleups.

Through our global volunteering program, we encourage

employees to become more involved in their local

communities. Every person is able to use one day a year

as a paid volunteering day with an event, charity or

activity that is in line with our volunteering policy.

Employees can also volunteer with ASML Foundation

projects.

In this chapter, we outline our approach to community

outreach and our actions to improve education, arts &

culture and local outreach.



	Valued partner in our communities

	SDG target				How we measure our performance

	SDG target 4.4
	By 2030, substantially increase the number of youth and adults who have relevant skills, including technical and vocational skills, for employment, decent jobs and entrepreneurship				–Community engagement and technology promotion

	SDG target 4.5
	By 2030, eliminate gender disparities in education and ensure equal access to all levels of education and vocational training for the vulnerable, including persons with disabilities, indigenous peoples and children in vulnerable situations				–ASML Foundation projects

	SDG target 11.2
	By 2030, provide access to safe, affordable, accessible and sustainable transport systems for all, improving road safety, notably by expanding public transport, with special attention to the needs of those in vulnerable situations, women, children, persons with disabilities and older persons				–Community engagement

	SDG target 11.4
	Strengthen efforts to protect and safeguard the world’s cultural and natural heritage

Our overall performance in 2022


			Progress tracking
Topic	Target 2025	Performance indicator	2020	2021	2022	Status

Valued partner in our communities	No target	ASML Foundation projects supported	22	22	21	n/a
Valued partner in our communities	No target	ASML Foundation's value of donations	€1.0m	€2.0m	€2.4m	n/a
	No target	Projects supported	n/a	133	390	n/a
	No target	Value of donations	€3.1m	€8.1m	€7.9m	n/a
	No target	Total cost of volunteering	€271k	€283k	€1,200k	n/a
	No target	Time investment of volunteers (in hours) – Community involvement	1,333	2,393	13,645	n/a
	No target	Time investment of volunteers (in hours) – Tech promotion	2,936	1,886	4,736	n/a

We are welcomed as a source of high-tech economic

activity that benefits people and planet, and we scored

7.8 out of 10 in the October 2022 Brainport Eindhoven

survey. However, our many stakeholders in the

community also point out that our growing presence

means that more engagement is expected and required

to ensure that everyone in the community can benefit,

and our presence delivers true positive social impact.

The total amount of cash commitments and in-kind

support that ASML spent on charities, community

engagement, organizations and our own ASML

Foundation in 2022 was approximately €11.5 million.

Five of our locations (Veldhoven, Wilton, Silicon Valley,

San Diego and Hsinchu) benefit from implemented and

dedicated community engagement programs. These

locations represent 83% of our operations (in

headcount). We also operate smaller community

engagement initiatives in other locations, and these will

be gradually scaled up to more formal dedicated

programs in the coming years.

Our approach

Education, as the ‘big equalizer’ and opportunity creator,

needs to prepare people of all ages for an increasingly

digital future. Our intensive STEM (science, technology,

engineering and mathematics) education programs aim

to boost interest in technology among young people and

increase the local and regional talent pool. We also raise

awareness of career prospects in a sector offering many

development opportunities. STEM competencies are

important in helping children to reach their potential,

particularly in disadvantaged communities. At the same

time, we work with senior citizens’ organizations to help

the elderly bridge the digital divide.

We organize and sponsor many initiatives that aim to

share our enthusiasm for and expertise in technology to

inspire all generations. We also partner with multiple

organizations and educational events that promote

careers in technology. Our employees act as role models

and guides for all these initiatives.

The education team works closely with schools and

education programs in the communities where we have

operations. It provides hands-on support and

coordinates a network of ASML volunteers (known as

ASML ambassadors) who visit schools and events, and

support children and schools in their curricula, some as

part-time (‘hybrid’) teachers, some as tutors of

disadvantaged children, and some as technology and

STEM promoters.

The ASML Foundation aims to unlock the potential of

young people in need by enabling inclusive and equitable

participation in society through quality education. The

ASML Foundation is an independent foundation with

strong ties to ASML. It operates at arm’s length and has

its own board and budget. It aims to increase the self-

sufficiency of underrepresented and underserved youth

around the world, and more specifically in the

communities where ASML operates, through educational

initiatives that develop their talent and help unlock their

potential. Read more in: ASML Foundation.

Our performance in 2022

In 2022, we supported a total of 221 education projects

across the regions where we operate (Netherlands, US

and Asia). The total value of these projects amounted to

€0.9 million.

'Our actions' outlines a few highlights – for more information, please

visit

www.asml.com – community engagement.


	We’re doing our part to ensure everyone, at every age, is prepared for an increasingly digital future and that all young people have access to technical education to reach their potential.

Our actions in 2022

Ongoing projects

–ASML Junior Academy (the Netherlands): In September,

the ASML Junior Academy kicked off with 58 primary

schools in a partnership with Mad Science, a renowned

name in the field of STEM education and promotion. It

offers all participating classes (children aged 4–12)

technology lessons six times a year, with the aim of

creating more awareness of STEM topics. One of the six

lessons focuses on the role of the microchip in our daily

lives and will be given by an ASML employee. The

partnership also includes a project to familiarize teacher-

training students with more STEM topics. The aim is to

have all 271 primary schools in the Brainport Eindhoven

region supported with STEM lessons by 2025.

–Wikimedia (global): We donated €64,000 to the Wikimedia

Foundation, the organization behind Wikipedia, to ensure

its continuity and support its drive to remain a resource for

free and open knowledge for everyone. This annual

donation will increase over time as our employee base

grows, in accordance with Wikimedia’s guidelines.

–Dutch Technology Festival (the Netherlands):

Technology is at the core of who we are and what we

do at ASML. At the annual Dutch Technology Festival

we share this passion and knowledge to inspire the

next generation of scientists and engineers. In 2022,

we highlighted the best our region has to offer, all in

one place, to inspire more than 22,000 young thinkers

and doers.

Standalone initiatives

–Science & Engineering Night (US): In July 2022, the

San Diego Children’s Discovery Museum was

transformed after hours to host hands-on activities at

Science & Engineering Night. As main sponsor, we

hosted a booth at this educational event with seven

ASML employees featuring an exhibit that taught kids

how to bring a robot to life using coding and

programming, giving them the opportunity to learn

more about science and engineering.

–BOYO Foundation (Taiwan): The Enlighten Your

Potential project aims to prevent underserved students

from dropping out of school by sponsoring the salaries

of educators and the lecture materials for the BOYO

Foundation. As well as providing funding, the ASML

Foundation worked with the ASML Community

Engagement team on setting up teacher-training

workshops. By the end of 2022, over 35 teachers from

four remote schools had joined our workshops. We

also sent multiple volunteers as speakers to schools in

order to encourage underserved students to continue

learning and exploring their potential.

Our approach

While culture is the invisible bond that ties the people of a

community together, the arts are how culture becomes

visible. To strengthen that bond, we support initiatives

and organizations that are vital for the community’s

culture and help open them up for newcomers and the

underprivileged. We focus on cultural icons in our

communities – organizations and initiatives that have an

impact beyond the local community.

Our performance in 2022

In 2022, we supported a total of 29 arts & culture

projects across the regions where we operate

(Netherlands, US and Asia). The total value of these

projects amounted to €1.9 million.

'Our actions' outlines a few highlights – for more information, please

visit

www.asml.com – community engagement.

Our actions in 2022

Ongoing projects

–Van Gogh Museum and Van Gogh Brabant

(Netherlands and global): We have long-term

partnerships with the Van Gogh Museum and Van

Gogh Brabant to help ensure the artist’s work and

cultural heritage, rooted in the Dutch region of Brabant,

can be enjoyed for many generations to come.

Through this partnership we support several programs,

including:

–Preserve the paintings: In collaboration with the

Cultural Heritage Agency of the Netherlands, the

University of Amsterdam and the conservators of the

Van Gogh Museum, a team of ASML engineers is

investigating how external factors, such as light, affect

the paint that Van Gogh used. By using this knowledge

to optimize display conditions and minimize further

degradation of the collection, we help to preserve his

masterpieces for future generations. In 2022, we made

steady progress in developing the condition

assessment tool – and we are looking forward to

demonstrating our work during the celebrations for the

50th anniversary of the Van Gogh Museum in 2023.

–Vincent’s Lightlab: Museum Vincentre, which focuses

on Vincent’s Brabant years, has plans for a significant

expansion that includes ‘Vincent’s Lightlab’, developed

together with ASML. The reopening is planned for May

2023. The ambition is to welcome 40,000 visitors every

year to the new Museum Vincentre and to share the

story of Vincent Van Gogh and his search for color and

light in Brabant.

–Educational programs: Together with the Van Gogh

Museum, we have developed educational materials for

students in primary and secondary schools, connecting

science and art. The artist’s curiosity was key to his

craftsmanship, and together with the museum, we

encourage students to follow in his footsteps.

–In 2022, we participated in the Vakkanjers program,

which sets real-world competitions – working with a

different industry partner each year – and challenges to

teenage boys and girls, designed to help them discover

and develop their skills. Through this program, schools

and companies collaborate to help develop the

craftspeople of the future. This year, the Van Gogh

Museum in cooperation with ASML challenged

students to think of innovative ways of preserving Van

Gogh’s artworks for the future, as well as to give new

dimensions to Vincent’s story and the way people

experience his paintings by using technical

components and creative solutions. In total, 254

schools and more than 12,000 students took part in

these challenges.

–In Taiwan, ASML and the Van Gogh Museum launched

Masterminds & Masterpieces, an international STEM

program that reached students across the country.

Working closely with two non-profit organizations,

colleagues co-developed a hybrid initiative, leveraging

their expertise in developing offline and online

resources. In September, a bookmobile – developed in

partnership with the CommonWealth Magazine

Foundation – started traveling to schools in remote

areas of Taiwan, supporting wider efforts to improve

students’ literacy. ASML Taiwan recruited over 70

volunteers to participate in this education program. The

roll-out of the school tour and the online learning

program will continue across Taiwan until the end of

2022, with over 20,000 primary school students in

Taiwan estimated to join in Q4 2022.

–GLOW Light Art Festival (the Netherlands): Light is key

to our work, which is why we partner with the annual

GLOW Light Art Festival in Eindhoven, the Netherlands.

In November 2022, around 700,000 people visited the

festival.

–ASML on Stage (the Netherlands): ASML on Stage is

an annual event featuring a multicultural mix of musical

styles, all performed by acts featuring ASML colleagues

and friends. With 17 ASML acts and 1,400 tickets sold

in 2022, the event once again showcased the multiple

talents of our employees, combining their love of music

with their passion for science and technology.

–Spotlight (the Netherlands): Together with

Muziekgebouw Eindhoven, we host the Spotlight

program, where anyone who normally does not have

the chance can take the main stage and experience

being a performing artist. During 2022, 437 people

participated and enjoyed their moment in the spotlight.

Standalone initiatives

–Van Gogh PaintFest (global): This year, a partnership

between the Foundation for Hospital Art (FFHA) and

the Van Gogh Museum in Amsterdam opened the door

for hospitals all over the world to brighten their walls

with the wonder of Van Gogh. The Van Gogh Museum

collaborated with FFHA to license six of Van Gogh’s

greatest original works as inspiration for the designs.

ASML was given first access to the PaintFest Kit

designs before they were made available for public

purchase. Throughout March 2022, leading up to Van

Gogh’s birthday, five ASML sites around the globe

(Wilton, San Jose, San Diego, Veldhoven and Hsinchu)

invited colleagues to paint the murals. 750 colleagues

joined in on the fun. All finished murals were donated to

local healthcare facilities upon completion for

permanent installation to cheer and uplift patients and

their families as well as hospital staff.

Our approach

Because our operations are concentrated in a limited

number of locations, our presence and impact in these

communities is important to us and to our local

stakeholders. Our continuous interactions with community

members as well as local government give us the

opportunity to focus our efforts and improve our impact.

While our stakeholders welcome ASML’s presence in the

community as a sustainable engine of progress and

economic development, they also observe that ASML’s

growth brings several challenges for their community.

Their main concerns are connected with the growing and

increasingly international workforce at ASML and its

supplier network. At our main locations this has recently

been associated with increasing home prices and

competition for scarce engineering talent, while traffic

congestion has been a longer-term concern.

It is important to us that everyone in our communities

around the world can benefit from ASML’s presence

and develop their potential.

In the Brainport Eindhoven region, community leaders

also observe increasing tensions between established

residents and international newcomers, who all claim

their fair share of public and non-public services. On top

of these main concerns that take place in the public

domain, local government leaders ask for successful

businesses to become more inclusive employers and

offer development and career opportunities for the

disadvantaged local residents who currently benefit less

from the prosperity brought by the high-tech industry.

In these high-impact areas, we aim for smart and

sustainable interventions. To battle congestion, we

actively encourage employees to choose healthy and

sustainable modes of transportation, such as cycling and

public transport, through our successful Access &

Mobility program that has been running for several years.

We support education and development by promoting

STEM, with ASML employees working as ‘hybrid

teachers’ and tutoring disadvantaged students, helping

to increase the number of youngsters with a professional

qualification. For our neighbors and local stakeholders,

we invest in local amenities and services, while we

enable our employees to take part in community service

and to share their knowledge and expertise. Across all

our partnerships and programs, we pay special attention

to encouraging integration, promoting diversity and

empowering the underprivileged.

We work with key players and fund high-impact

programs and projects that also make a quantified

contribution to our ESG strategy, and are supported by

approved, robust governance structures.

Our performance in 2022

In 2022, we supported a total of 140 local outreach

projects across the regions where we operate

(Netherlands, US and Asia). The total value of these

projects amounted to €5.1 million.

'Our actions' outlines a few highlights – for more information, please

visit

www.asml.com – community engagement.

Our actions in 2022

Ongoing projects

–Gift Matching (US & the Netherlands): Dedicated to

supporting the causes that our people care about, we

have launched our Gift Matching program in the US

and the Netherlands. We match donations made to

non-profit organizations via the Global Matching Gift

program, up to €1,000 per employee per year. This

means that when an employee donates €100 to a

qualified organization, we match their generosity and

donate another €100 to the same organization. The

program was initially launched in the US and has

already succeeded in matching almost $150,000 of

employee donations. We are looking forward to

launching the program in Asia in 2023.

–PSV football club (the Netherlands): In a unique

sponsorship innovation, ASML and five other partners

teamed up to sponsor professional local soccer club

PSV. Through this partnership, we are committed to

promoting the Brainport Eindhoven region as an

attractive environment to live and work. We support

several programs, including:

–ASML Community Lounge at Philips Stadium: This

aims to make soccer accessible to everyone, to help

newcomers find their place in our region and to

enable people lacking the means to enjoy an evening

of top-class sport. We welcomed volunteers and

clients from groups such as Food Bank, senior

citizens’ union, Severinus, The Salvation Army and

other aid agencies to the venue, totaling more than

4,200 guests in 2022.

–As part of our partnership with PSV, we are able to

use their pitch for a day. We took full advantage

during 2022, inviting the Eindhoven children of the

Weekend School. We also welcomed 500 primary

school students to present their innovative ideas

while participating in the PSV Brainport School

Challenge, as well as 400 Ukrainian children and their

supervisors, who enjoyed some respite from their

troubles.

–Brainport Eindhoven and PSV’s online vitality

platform is still up and running, offering health and

well-being inspiration and motivation for everyone in

the Brainport Eindhoven region, creating a vital and

healthy region for all.

–PSV Analytics: This collaboration project between

PSV Sport performance and ASML BAS Big Data

was initiated to help the Dutch premier top soccer

club unlock, use and optimize the large amounts of

data it has collected, and translate it into dynamic

images analyzing the game plan. This work inspires

our technologists as we collaborate and support the

club to compete with its much bigger (and richer)

rivals.

–Open Huis (the Netherlands): Following a two-year

pause, we were thrilled to once again underline our role

as a good neighbor and welcome 2,400 Brainport

Eindhoven residents to the Veldhoven campus. These

well-known Neighbor Days returned for the seventh

time with a new name, ‘Open Huis’, and took place on

not just one but four days in September. All residents

of the Brainport region were able to register online, with

places filled very quickly. The visitors were guided by

more than 300 ASML ambassadors and enjoyed an

action-packed program. We hosted various on-

campus tours, shared our plans for new ASML

buildings in the local area, gave insightful presentations

on how our machines work, arranged Van Gogh

workshops, led Mad Science experiments, hosted a

photo corner with cleanroom suits and much more.

Our neighbors particularly noted the campus’s full-

sized running track, 24-hour market, magnificent view

over our neighborhood from the nineteenth floor and

extremely neat cleanrooms.

–ASML Eindhoven Marathon (the Netherlands): The

annual ASML Marathon Eindhoven took place in

October 2022. A record 1,700+ ASML colleagues (up

from 900 last year) took part in the various races,

including the full marathon, half marathon, relay and

quarter marathon. Anyone, of any age, experience or

ability was welcome to take part, and we encouraged

all of our runners to wear a special ASML shirt with

pride. Runners and spectators were out in force to

celebrate the city and the spirit of this challenge, with

more than 25,000 runners competing.

Standalone initiatives

–Blood banks (US): The San Diego Blood Bank and

blood banks across the US are experiencing a major

decline in donor turnout, leading to a disruption in

blood supply. In 2022, our San Diego office hosted six

blood drives to help the community. 148 San Diego

employees and 47 members of the community

donated 180 units, which will help save the lives of 544

people.

–Support for Ukraine (the Netherlands): Russia’s

invasion of Ukraine has forced millions of people to

leave their homes and seek refuge in the EU and

neighboring countries. ASML helped the municipality of

Eindhoven and social organization Springplank040 to

accommodate more than 100 refugees in a specially

created shelter. Working with our partners from the

Brainport Partner Fund, we helped fit out the shelter

and provided toys and supplies to soften the

experience for the children. Together with our partner

PSV, we also organized an afternoon of fun and games

in the Philips Stadium for 400 Ukrainian children.

–Wilton Land Conservation Trust (US): Over 30 ASML

Wilton employees joined forces with Wilton Land

Conservation Trust to clear invasive plant species from

Schenck’s Island Park in Wilton. The invasive plants

were replaced with native blueberry bushes, which will

provide food for native animals and local hikers alike.

–Rise Against Hunger (USA): ASML Wilton partnered

with Rise Against Hunger, an international hunger relief

non-profit organization that coordinates the packaging

and distribution of food and other aid to people

worldwide. Over 140,000 meals were packaged and

shipped to our neighbors in need.

Our approach

The ASML Foundation is our charity of choice, with a

primary focus on impactful, inclusive education and

training programs for young people in need. Its mission is

to improve lives through inclusive and quality education

and training – with the goal of enabling equitable

participation in society. The Foundation aims to make a

sustainable impact on SDG 4 (Quality Education), and

contribute to SDG 5 (Gender Equality), SDG 10 (Reduce

Inequalities) and SDG 17 (Partnerships for the goals).

We believe that all people deserve to receive a quality

education, allowing them to be self-sufficient, no matter

what their background is. We aim to help people who

participate in the programs we support to improve their

chances of a better life. In terms of diversity, our project

selection seeks to improve the inclusion of underserved

groups, such as people of color, people who are

neurodivergent and people from a less-privileged

background, thereby tackling the disadvantages our

target groups may face, such as limited access to

education, special education needs or a lack of

vocational training.

As the ASML Foundation aims to make a difference in

ASML’s communities, it mainly supports projects and

initiatives in EMEA, the US and Asia that address specific

needs in the ASML regions. For example, in the Brainport

Eindhoven region in the Netherlands, tackling illiteracy

continues to be a key focus area for the ASML

Foundation, alongside support for organizations that

provide help to neurodivergent young people, with

special attention on autism and high giftedness. In the

US, projects focus mainly on preventing school dropouts

in less-privileged areas, and on promoting science,

technology, engineering and mathematics (STEM) for

girls as well as for specific minority groups. Projects in

Asia differ per country. In developing areas in Asia, for

example, there is a focus on education for girls to reduce

inequality and also to prevent child marriages. In China,

the focus is on STEM for girls in rural areas.

Where possible, the ASML Foundation strongly promotes

collaboration between organizations with similar focus,

but with complementary programs. This has resulted in a

number of initiatives that clearly added value to the

organizations, resulting in improved support for a number

of our target groups.

ASML employees support the ASML Foundation

financially when they purchase goods from the ASML

employee store, and the Foundation also receives regular

private donations from a number of colleagues.

Our performance in 2022

In 2022, the Foundation donated around €2.4 million

(€2.0 million in 2021), supporting 21 projects in nine

countries. With the Foundation's financial support, the

Foundation contributed to improving the lives of around

1.2 million young people. Our employees contributed a

total of 13,645 volunteering hours to community

involvement and 4,736 hours to tech promotion. We saw

an increase from prior years due to the relaxation of

COVID-19 measures.

Action plans for 2022-2025

Next steps in society and community engagement

Our reputation and license to operate are for a large part

dependent on the local and regional communities where

we operate – we need their support to be able to

execute our strategy. Our continuing strong growth and

increasing visibility mean that these communities expect

considerably more from us. That is why we aim to

increase our investments, by a factor of 10, in society

and community engagement activities across the globe

in the coming years. Those activities will have a strong

focus on social cohesion, talent and education, digital

inclusion and employee engagement. This has also led to

the creation of an ESG Community Partnership Program

Team. This new team will provide integrated governance

on all company-wide community outreach activities and

overseeing our increasing investments.

As part of our step up we will determine our actions for

this topic, setting tangible targets and implementing a

process to monitor the effectiveness of our approach.

Working closely with local stakeholders as well as

employees, our goal is to increase our positive impact in

all of these areas and strengthen ASML’s position as a

robust, reliable and valued partner in the communities

around us.



			What we do
			We champion good integrated corporate governance to build a relationship of trust, respect and mutual benefit with our stakeholders – shareholders, customers, suppliers, employees and society. In this ESG Governance section, we describe how we organize the management of ESG issues within our business, and the other ways in which we ensure we are a responsible business.

			Our aims
			As the innovator that makes vital systems for the chip industry, we have a responsibility to lead by example. We are committed to conducting our business in compliance with applicable laws and regulations in all the countries we operate in. We strive to work to the highest standards of integrity and continuous improvement of our governance, based on feedback we actively procure from our internal and external stakeholders. We want to conduct our business with honesty and embrace an open dialogue and knowledge sharing throughout our ecosystem.



Managing ESG sustainability, Responsible business and Our approach to tax		Read more on page 133, 134, and 146 >

	SDG 8	–Managing ESG sustainability –Business ethics and Code of Conduct –Legal and compliance –Anti-bribery and anti-corruption –Competition law compliance policy –Privacy protection –Respecting human rights –Information security –Our approach to tax
	Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.


	SDG 12	–Product safety
	Ensure sustainable consumption and production patterns

We manage ESG sustainability as an integrated part of

our corporate strategy. The purpose of the ESG

sustainability governance is to monitor and guide our

organization to realize our ambition to be a top performer

by 2025. This incorporates a number of levels to drive

accountability and execution, including the Supervisory

Board, Board of Management, ESG Sustainability team,

topic-specific action owners and experts from the

business lines and sectors.

Our Board of Management sets the ESG Sustainability

aspects of our integrated strategy and oversees its

execution. The Board of Management meets regularly to

give guidance on relevant issues, including climate-

related risks and opportunities.

The Supervisory Board supervises, monitors and advises

the Board of Management on the ESG Sustainability

aspects which are relevant to the company (see Rules of

Procedure). This includes addressing the principal risks

and opportunities related to the strategy.

Our ESG Sustainability team supports the Board of

Management in relation to ESG Sustainability aspects.

This could include recommendations regarding focus

areas, targets, external commitments and disclosures.

Furthermore, the ESG Sustainability team is responsible

for monitoring risks and opportunities (including climate

change-related matters), global trends, stakeholder

expectations and (peers), best practices that could

impact our short-, medium- and long-term ESG

sustainability objectives.

the ESG Sustainability strategic themes are driven by one

or more cross-functional table meetings. Responsibility

for executing the strategy lies with the business lines and

sectors. Progress is monitored quarterly by the Board of

Management.

In addition, we identify and assess the impact of ESG

Sustainability-related risks and opportunities, including

risks from climate change, through our Enterprise Risk

Management (ERM) process.

Read more in:

Risk.

Our performance in sustainability areas is part of the

Long Term Incentive Plans of our Board of Management

and senior management.

Read more in:

Remuneration Report.



	414		10%
	Speak Up messages		Gender diversity % female in senior (13+) job grades (2024 target: 12%)



	IN THIS SECTION
	135	Business ethics and Code of Conduct
	138	Legal & Compliance
	138	Anti-bribery and anti-corruption
	138	Competition Law Compliance Policy
	139	Export Controls
	139	Privacy protection
	140	Respecting human rights
	141	Information security
	144	Product safety

We are a global leader in the semiconductor industry.

As the innovator that makes vital systems for the chip

industry, we have a responsibility to lead by example.

Our purpose is clear – 'to unlock the potential of people

and society by pushing technology to new limits' – and

we want our values to reflect in everything we do to

pursue our purpose.

Besides the material focus areas in our strategy, we need

to make sure that we conduct our business in a

responsible manner. Anywhere we operate, we believe

that conducting our business with honesty and acting

with the highest standards of integrity is essential to our

value creation for our stakeholder groups and the long-

term success of our company.

We have corporate policies and procedures in place

detailing our principles and compliance, guiding us in

making the right decisions and living up to our values.

In the next sections, more information can be found on

topics such as our business ethics and Code of

Conduct, compliance, our responsibility to respect

human rights, protection of information and tax.



	Responsible business

	SDG target			How we measure our performance

	SDG target 8.7
	Take immediate and effective measures to eradicate forced labor, end modern slavery and human trafficking and secure the prohibition and elimination of the worst forms of child labor, including recruitment and use of child soldiers, and by 2025 end child labor in all its forms			–Number of speak-up messages

	SDG target 8.8
	Protect labor rights and promote safe and secure working environments for all workers, including migrant workers, in particular women migrants, and those in precarious employment

	SDG target 12.4
	By 2020, achieve the environmentally sound management of chemicals and all wastes throughout their life cycle, in accordance with agreed international frameworks, and significantly reduce their release to air, water and soil in order to minimize their adverse impacts on human health			–RoHs/REACH compliance of parts used

Business ethics and Code of Conduct

We are committed to conducting our business in

compliance with applicable laws and regulations in all the

countries we operate in. We promote and uphold ethical

behavior, fostering a culture where speaking up is

encouraged and appreciated.

We seek to continuously improve and professionalize our

Ethics and related Compliance organization to the

highest standards. In 2022, we continued to grow our

network of Ethics Liaisons and provided them with

tailored training sessions, updated our Anti-Bribery &

Anti-Corruption and Anti-Fraud policies, and refreshed

our Gifts & Entertainment Policy. These policies are

reflecting the precautionary principle as a guiding

principle. We continued our training programs and

focused on raising awareness across our entire

organization. Our next Global Ethics Survey will take

place in 2023, as part of the we@ASML pulse survey.

Our values – challenge, collaborate and care – guide us

in our everyday dealings with employees, customers,

suppliers, shareholders and the society we serve. These

values are reflected in our Code of Conduct (hereafter:

Code). The Code sets clear expectations and guiding

principles for the way we conduct our business and

serves to foster a culture of integrity, ethics and respect.

Together with a set of practical guidelines, it puts integrity

at the center of what we do.

At ASML, we rely heavily on the skills, commitment and

behavior of our employees for our continued success,

and for our positive contribution to society. That is why

we expect all employees to fully live up to the company’s

values and to act with integrity and respect at all times.

We ask all our employees and our business partners to

abide by our Code.

For over a decade, we have been a member of the

Responsible Business Alliance (RBA), the world’s largest

industry coalition dedicated to corporate social

responsibility in the global electronics industry. As a

member of the RBA, we have adopted the RBA Code of

Conduct, which is a standard intended to ensure that

working conditions in the electronics industry, or

industries in which electronics is a key component, and

its supply chains are safe, that workers are treated with

respect and dignity, and that business operations are

environmentally responsible and conducted ethically.

Our Code is in line with the RBA Code of Conduct. To

reinforce our commitment to the supplier network, we

expect our key suppliers (representing around 80% of

our total spend) and their suppliers to acknowledge and

comply with the RBA Code of Conduct and to develop

their own strategies, policies and processes to follow it.

This requirement is included in our long-term product-

related suppliers’ contracts. We also encourage our

suppliers to develop their own sustainability strategies,

policies and processes, and we actively encourage our

suppliers’ adherence to this code.



	Our ethics governance consists of several levels, which include: 1.Our Ethics Board, chaired by our CEO, reports to the Audit Committee and Board of Management. The Ethics Board is responsible for policymaking and the supervision of ASML’s compliance with legal and ethical requirements. The Ethics Board meets regularly to give guidance on relevant issues and approve the relevant policies. 2.Our Ethics Committee investigates significant notifications about potential breaches of ASML’s Code of Conduct worldwide. 3.Our Ethics Office is responsible for overseeing and implementing our Ethics program. All reports of a possible breach of ASML’s Code of Conduct are screened by one of the Ethics Officers and all significant reports are discussed with the Ethics Committee. 4.Our Ethics organization includes employees who, in addition to their regular roles at ASML, act as Ethics Liaisons in all the countries we operate in. They serve as trusted representatives, and act as the first local point of contact for employees with questions and concerns related to ethics.

Our values – challenge,

collaborate and care –

guide us in our everyday

dealings with employees,

customers, suppliers,

shareholders and the

society we serve.

Our Code of Conduct principles



		Our commitment
	We respect people	ASML is committed to maintaining a safe and healthy working environment, respecting human rights in line with international laws and regulations and industry standards such as the RBA Code of Conduct. Diversity of cultures, education and talent makes us a stronger, more creative and innovative company. By working together and using these values to guide us, we create an environment based on mutual respect – one that leads to better results than any of us can achieve alone.
	We operate with integrity	A strong culture of integrity and compliance underpins ASML’s business success. We define ‘integrity’ as acting with honesty, sincerity, care and reliability. Compliance not only means complying with laws and regulations, but also with our high ethical standards. Our reputation for integrity is a valuable asset. It is essential for us to demonstrate personal and business integrity at all times.
	We commit to safety and social responsibility	Technology reaches all parts of society. By helping to make chips more affordable and more powerful, ASML has an important role to play – not only by reputation and results but also in relation to the environment too. This is why ASML is committed to conducting business responsibly, enabling sustainable growth while fulfilling legal and moral obligations. We aim to achieve our business objectives in a caring and responsible manner as outlined in the key principles.
	We protect our assets	ASML’s most valuable assets are its people and knowledge, both of which are highly valued and protected. Our ‘assets’ include intellectual property, trade secrets or other proprietary information which refers to intangible assets such as technical know-how, products data, business data and personal data, as well as physical assets such as products, tooling, funds and computers for conducting ASML business. Our company expects anyone entrusted with ASML assets to keep them safe from loss, damage, misuse or theft.
	We encourage you to communicate and Speak Up	To fulfill our commitment to upholding the high standards of integrity described in this Code, communication is key. We strive for a working environment that encourages open dialogue among employees, as well as between employees and third parties, where employees feel comfortable and respected, and that they can trust each other to do the right thing. If you observe or suspect a violation, we encourage you to speak up.

Our Code is available for all our stakeholders on our website

www.asml.com, our intranet and in our Employee app.

Promoting ethical behavior

Our dedicated Ethics program, and related Compliance

program, provides the necessary support, advice,

training and communication to enable employees and

others to understand and follow our Code. It does this by

building awareness through various communication

channels to promote a culture of high integrity. It also

helps create an open and honest culture that fosters

compliance with the law and ASML policies across the

organization.

In 2022, we continued to extend our ethics training

curriculum.

Our Code of Conduct serves to foster a culture of

integrity, ethics and respect.

In addition to generic modules, which are available to all

employees, the curriculum will include modules with a

specific audience depending on potential exposure. The

curriculum aims to support management and employees

in decision-making and promoting our Code and other

compliance-related topics, and to raise awareness

around the importance of ethical behavior and our Speak

Up & Non-Retaliation Policy. It also provides information

and guidance on dealing with topics such as personal

relationships at work, conflicts of interest, navigating

cultural differences and ethical aspects around ancillary

activities or other positions outside of ASML. In our

training program we particularly focus on all new

employees; within the first three months of starting at

ASML they receive an invitation to complete the first

module of the curriculum.

We promote an open

culture of trust and honest

communication.

Encouraging people to Speak Up

In 2022, following an update to our Speak Up & Non-

Retaliation Policy which addressed the requirements of

the EU Whistleblowing Directive, we continued to focus

on putting the concept of non-retaliation at the core of

what we do. We strongly believe that employees should

feel safe to express their concerns with the company

without apprehension due to the fear of retaliation. These

policies and procedures reassure employees that they

can report a breach without fear of repercussions. ASML

has zero tolerance for retaliation.

In 2022, we also focused on updating our internal ethics

investigation procedure, which outlines the investigation

phases of an ethics complaint, from first report to

remedial action and final closure.

For more information on speaking up, non-retaliation, our

ethics investigation procedure, anonymity and privacy,

please see our Speak Up & Non-Retaliation Policy

publicly available on www.asml.com.

We encourage everyone, including external business

partners, such as suppliers, contractors and other

workers, to express any concerns they might have

regarding possible violations of our Code, our company’s

policies, the law or our values. We promote an open

culture of trust and honest communication where

violations of the Code are not tolerated. We have several

different channels within the Speak Up program to report

such concerns, including an online reporting tool (hosted

by an independent, external service company), phone

numbers for each country in which we operate, a

dedicated email address and via our Ethics Liaisons. For

employees or external stakeholders who prefer to remain

anonymous, the Speak Up service is available to report

breaches anonymously. The role of the Ethics Office is to

assess each Speak Up report and take proper action to

address the report so that any suitable remedial actions

can be taken by the appropriate body.

We review and assess all Speak Up messages and follow

up on all of them by providing feedback to the reporting

party if possible. If necessary, we engage with the

reporting party and/or counterparty to understand the

nature of the Speak Up message, and to conduct more

detailed analysis and/or investigation. When required, we

implement remedial actions to prevent recurrence.

We registered 414 ethics-related reports in 2022 (396 in

2021).

Among these Speak Up reports, sixteen complaints were

considered to be admissible as investigations by the

Ethics Committee. These follow a formal ethics complaint

investigation procedure. At the time of publication of this

annual report, the investigation procedure of ten ethics

complaints was completed. Of this total, two complaints

were deemed unsubstantiated – no violation of the Code

– and two partially substantiated. The corrective actions

on the six substantiated complaints vary from warning

letters and suspension to instant dismissal. The

remaining six ethics complaints remain in the formal

investigation process.

Legal & Compliance

Our Legal & Compliance function oversees adherence to

a wide variety of regulatory compliance-related areas and

advises management about the regulatory framework,

including changes in legislation and regulations. The

function aims to ensure that we conduct business in

compliance with all relevant national and international

laws and regulations, as well as professional standards,

accepted business practices and our own internal

standards. Examples of regulatory compliance areas

include securities and insider trading, competition law

(antitrust), export control and anti-bribery and anti-

corruption. When needed, our Legal & Compliance

Department takes charge of any regulatory

investigations.

Anti-bribery and anti-corruption

ASML does not tolerate bribery or corruption or any form

of improper influence on colleagues or others. We are

committed to the highest standards of personal and

business integrity. In September 2022, our Anti-Fraud

and Anti-Bribery & Anti-Corruption policies were both

updated. The Anti-Bribery & Anti-Corruption Policy

details our commitment to strong ethics and integrity and

the measures we take to prevent bribery and corruption

at ASML. ASML does not allow employees to accept or

provide facilitation payments or to make political

contributions on behalf of the company. The policy also

requires compliance with applicable anti-bribery and anti-

corruption laws as well as the ASML Code of Conduct.

For more information or to download the policy, please visit:

www.asml.com.

Our Gifts & Entertainment Policy details the behavior

expected of all ASML employees with regard to giving

and accepting gifts or entertainment (including business

meals) and supports our commitment to doing business

in a professional, ethical and transparent manner. The

policy is also a key element in our compliance and anti-

bribery & anti-corruption program. We require our

employees to always comply with this policy, use

common sense and, if needed, seek guidance or support

as outlined in this policy and explanatory material (such

as FAQs and flowchart). An important element of the

policy is the request for prior approval for certain

categories of third-party gifts or entertainment. This

enables us to capture registration of both given and

accepted gifts and entertainment in these categories,

which supports us in complying with the policy, as well

as with laws and regulations. Giving and accepting gifts

and entertainment should never influence, or appear to

influence, the integrity of our business decisions and

transactions, or the loyalty of the parties involved.

In 2022, we updated our training curriculum regarding

fraud, anti-bribery and anti-corruption topics, by

launching an all-employee mandatory e-learning course

which is part of the ethics training curriculum and by

providing additional classroom training to specific

stakeholder groups. We are further strengthening our

global third-party due diligence program.

There were no regulatory fines or actions toward ASML

in the area of bribery and corruption in the reporting year

2022.

Competition Law Compliance Policy

We consider compliance with competition law an

essential part of our business. Competition law (also

known as ‘antitrust law’) protects effective competition in

order to ensure the optimal functioning of the market.

Competition law impacts many areas of ASML’s day-to-

day business, and affects our dealings and interactions

with customers, suppliers, co-developers and other

business partners.

We are committed to the principles of fair competition

and fairness in dealing with our business partners,

including suppliers, co-developers, customers and other

industry peers. As such, ASML does not condone any

form of conduct that is considered illegal under

applicable competition laws or is contrary to our Code of

Conduct, and we will not engage in business or

cooperate with business partners who resort to

anticompetitive behavior or suggest entering into illegal

conduct.

To this end, we have general and specific control

measures in place to prevent, detect and disclose

potential competition law issues, including the following:

Competition law compliance risk assessment:

We regularly perform risk assessments of relevant

competition law focus areas. This assessment identifies

and takes into account risks that may be present from a

competition law perspective, the controls that have been

put into place, the remaining risks and which measures

will be taken in order to mitigate any remaining risks.

Policy review:

Our Competition Law Compliance Policy demonstrates

our ongoing commitment to ensuring compliance with

applicable competition laws and our Code of Conduct.

Any act of an employee or business partner contrary to

this policy will be considered a significant breach of

ASML’s Code of Conduct. Consequently, this may lead

to appropriate disciplinary measures, including dismissal.

We published a public version of the policy in 2020.

ASML reviews this policy periodically, and released an

updated version of the internal policy in 2021.

Training and awareness:

Our competition law training program consists of a

combination of different methods, including computer-

based and in-person training sessions. It also promotes

awareness of relevant topics and issues relating to

competition law by periodic communications through, for

example, presentations and articles on our intranet or by

email communications.

Contacts with business partners:

We expect our business partners (such as customers,

suppliers, consultants, contractors and intermediaries) to

demonstrate high standards of ethical behavior that are

consistent with our own. We will not engage in business

or cooperate with business partners that resort to

anticompetitive behavior or suggest entering into illegal

conduct. We firmly condemn any anticompetitive

behavior by our business partners.

Reporting and resolving an issue, violation or complaint:

We will support our employees and business partners

who refuse to enter into anticompetitive conduct or who

report potential violations of our policy, as clearly stated

in our Speak Up & Non-Retaliation Policy. We do not

tolerate any form of retaliation or other forms of adverse

consequences against employees who practice strict

adherence to competition law rules or against those who

Speak Up, even if we lose business as a result. We didn’t

incur any fines for breaches of competition law in 2022.

For more information, download our ASML’s public Competition Law

Compliance Policy:

www.asml.com.

Export Controls

We are committed to compliance with all applicable

export controls laws globally. We have implemented

policies and procedures designed to promote

compliance and prevent unauthorized transactions.

Employees are required to follow our policies and

procedures. Further, we have IT controls and other

measures in place designed to facilitate protection

against inadvertent violations of export control

requirements.

We regularly assess the effectiveness of such policies,

procedures, and controls, and update them as

necessary. For example, we have recently updated our

policies and procedures in connection with the Additional

Export Controls on Semiconductor Manufacturing Items

imposed by the U.S. government in October 2022.

We expect our business partners – customers, suppliers,

consultants, contractors and intermediaries – to

demonstrate high standards of ethical behavior that are

consistent with our own.

Privacy protection

We are committed to respecting and protecting the

privacy rights of employees, customers, suppliers and

everyone we do business with. Personal data is

managed in a professional, lawful and ethical way, in line

with our Code of Conduct and in compliance with

applicable laws and regulations.

We have technical and organizational measures in place

intended to prevent accidental or unlawful destruction,

loss, alteration, unauthorized disclosure of, or access to,

personal data. Our Privacy Policy sets the minimum

requirements from the perspective of ASML as a global

organization. The policy is binding for all ASML

employees and applies to the processing of personal

data of our staff, job applicants and business partners

such as customers, suppliers, visitors and other

individuals.

A dedicated privacy and personal data protection

program ensures we adhere to high standards of

personal data protection. Among other elements, the

program covers:

–Governance: At the senior management level, the

Corporate Risk Committee is responsible for oversight

of the topic of privacy, while the Privacy Office

manages the privacy framework and provides

assistance and guidance. Each employee is

responsible for reading and understanding the content

and implications of the Privacy Policy.

–Systems and procedures: The Privacy Controls

framework consists of 130 privacy activities including

privacy impact assessments and data protection

impact assessments. The Privacy Controls framework

is included in our ERM process.

–Disciplinary actions: We investigate all incidents,

concerns and reports of potential breaches that are

registered in our Privacy portal, as outlined in our

personal data breach procedure. We take appropriate

control measures and disciplinary actions to prevent

reoccurrence.

–Audit: Privacy is included in our internal audit program.

Our privacy notices for both business partners and

recruitment are derived from our Privacy Policy. They

explain why personal data is collected and how ASML

uses it.

In 2021, we updated our Global Privacy Notices for

workers, job applicants, business partners and visitors.

The new privacy notices reflect the latest processing of

personal data within ASML, and meet the requirements

of the applicable privacy laws and regulations, for

example GDPR (EU) and CCPA (US).

Respecting human rights

ASML is a keen proponent of intentional integrity,

particularly given its responsibility to society. This means

not just ticking a box when it comes to critical issues

such as upholding human rights. We conduct business

on the basis of fairness, good faith and integrity, and we

expect the same from all those we work with. To this

end, we also believe that we have the responsibility not

only to respect human rights but to advocate for them

throughout our organization to help make a positive

impact on society. The work we are doing around our

ESG framework, the steps we are taking with respect to

diversity and inclusion, our well-being program and our

continuous efforts to address integrity as part of our

culture are all attribute to advocating for human rights

within ASML. We are committed to respecting universal

human rights and honoring the value of ethics as

expressed in our Code of Conduct. We support the

principles laid down in UN Guiding Principles on

Business and Human Rights. In 2017, we initiated our

Human Rights Policy, which is publicly available on

www.asml.com, which reflects the earlier mentioned

precautionary principle and takes a holistic view on

embedding and protecting human rights within our

organization.

The provisions of this policy are derived from key

international human rights standards including the ILO

Declaration on Fundamental Principles and Rights at

Work and the UN Declaration of Human Rights, the UN

Global Compact and the principles laid down in the

OECD Guidelines for Multinational Enterprises. In 2023,

we will review our existing policy to ensure we are not

only complying with the minimum requirements but

adjust them where necessary and consider whether we

can introduce additional measures to meet our goals of

being leaders in this field. In addition, we will review the

effectiveness of the procedures that have been

implemented in order to identify, manage and prevent

adverse human rights impacts that are material to

ASML's business.

Our Human Rights Policy complements our ASML Code

of Conduct and the RBA Code of Conduct, to which we

adhere. It expresses our commitment to human rights

and responsible labor practice in our operations and our

supply chain. The Human Rights Policy applies to ASML

and its subsidiaries anywhere in the world. The overall

responsibility for identifying and managing human rights

issues in our direct operations falls under the remit of our

Executive Vice President HR. Responsibility for human

rights in our supply chain falls under the remit of our

Executive Vice President Sourcing and Supply Chain.

Defining salient human rights issues

Salient human rights issues are those human rights that

are at risk of the most severe negative impact through a

company’s activities or business relationships. Our

commitments to address and engage actively in our

salient human rights issues are highlighted in our Code of

Conduct, Human Rights Policy and RBA Code of

Conduct for suppliers. We identify and manage human

rights issues in various ways, for example through

stakeholder engagement and by assessing human rights

in our own operations, as well as suppliers’ due diligence

and sustainability risk management.

Read more in:

Social - Our supply chain.

We received no grievances about breaches of human

rights in 2022.

Our operations

Following the risk assessment which we conducted to

identify the inherent risks related to human rights within

our own operations, we have decided to review the

current policy and update it during 2023. The results of

our previous analysis showed that the risk of human

rights vulnerabilities inherent in our own operations are

working hours and overtime, health and safety, and

workplace harassment. The vulnerable rights-holder

groups identified within ASML are contractors, ethnic

minorities and migrant workers. We continue to monitor

these issues through regular internal EHS audits.

Working hours and overtime

The standard weekly working hours in the locations

where we operate are on average 40 hours. Our

company standards are based on the International Labor

Standards of the International Labor Organization (the

Forty-Hour Week Convention) and the RBA norms. A

working week must not exceed the maximum set by

local law and should not be more than 60 hours,

including overtime, except in an emergency or unusual

situation. We pay constant attention to protecting our

employees from working overtime during peak periods.

As overtime remains an important attention point for

management, we are continuing to monitor the use of

overtime and to take appropriate measures to manage

the situation.

Health and safety

Our obligation is to provide safe and healthy working

conditions for all our employees and others working on

our premises. In all our products and processes, we

work hard to make ASML a safe place to work. We put

significant effort into creating awareness and maintaining

a proactive safety culture within ASML.

We believe that we have the

responsibility not only to

respect human rights but to

advocate for them

throughout our

organization to help make a

positive impact on society.

Workplace harassment

We are a global company with operations in more than

60 locations in 16 countries and regions. We have a

culturally diverse workforce, employing 143 nationalities.

This leads to a higher inherent human rights risk around

the issue of workplace harassment.

of Conduct.

Through our Ethics program, we raise awareness around

the importance of ethical behavior and our Speak Up &

Non-Retaliation Policy. It also provides information and

guidance on dealing with topics such as personal

relationships at work, conflict of interest, dealing with

cultural differences, and ethical aspects around ancillary

activities or other positions outside of ASML.

Our supply chain

We assess risks related to human rights in our supply

chain through a risk-based approach. In our due

diligence process, we use the RBA Risk Assessment

Platform to identify inherent risks in labor (including

human rights), ethics, health and safety and

environmental standards across our full supply base.

In the event that a medium or high risk relating to labor is

identified, we engage with the supplier and conduct a

more detailed analysis. For strategic suppliers covering

around 80% of our product-related spend, we expect

them to complete the annual RBA SAQ. This SAQ covers

more than 400 risk elements related to labor (including

human rights), ethics, environmental and safety factors,

control elements and management systems, including

their performance. It helps us to determine a supplier’s

risk profile on sustainability. When we identify compliance

gaps, we engage with the supplier to determine

corrective action plan(s).

The salient issues we have identified relate to working

conditions (forced and bonded labor), health and safety,

and trade union rights. However, as they work in the

high-tech industry, the majority of our suppliers operate

in countries with a strong rule of law and are law abiding.

We view this inherent risk as low.

Read more in:

Social - Our supply chain.

Information security

With ASML’s unique position and the growing

geopolitical tensions in the semiconductor industry, we

see increasing security risk trends, ranging from

ransomware and phishing attacks to attempts to acquire

intellectual property or disrupt business continuity.

In 2022, ASML registered around 2,800 cybersecurity

incidents, excluding phishing. We don’t believe that any

of these incidents has had a material impact on our

business. See “Risk Factors – Cybersecurity and other

security incidents, or other disruptions in our processes

or information technology systems, could materially

adversely affect our business operations”. We have

increased the number of FTEs from 10 around a decade

ago to around 300 FTEs dedicated to security matters in

2022.

Security – like safety and quality – is a prerequisite for

trust in the ASML brand. Our customers and partners

must be able to rely on the security, safety and quality of

our products and services. ASML’s competitive edge is

based on the knowledge and intellectual property that

has been developed through decades within our

ecosystem. That knowledge sits in various repositories

within the company as well as in the minds of our

employees and the many people we work with within our

collaborative eco-system of hundreds of suppliers,

customers and knowledge institutions. On the one hand

it makes the protection of knowledge a challenge,

because our eco-system is to a large extent based on

exchange of ideas and insights among many individuals.

On the other hand it also means that it is very difficult to

replicate what we do. Without (operating) software,

knowledge about electronics and the behavior of the

different components, the specific knowledge of

individuals within ASML and our partners about

integration of different elements of our technology, and

without the very diverse and extensive partnerships

within our eco-system, it is extremely difficult to

effectively build machines as complex as ours.

As we innovate together with our ecosystem partners,

our partners need access to some of our systems.

Because the chain is only as strong as the weakest link,

we need to make sure that this access is enabled in a

secure way. ASML’s Security Circle of Trust is intended

to certify and assist our ecosystem partners to increase

the maturity of their information security, while also

resulting in developments for ASML itself to learn of

effective techniques and technologies in return.

Information security resilience framework

Our vision on security is that it needs to be embedded in

the DNA of our people, processes and technologies. In

our effort to ensure this, we have created a dedicated

security function in order to manage security risks. The

Chief Information Security Officer (CISO) coordinates the

response on information security risks as second line of

responsibility and is supported by security teams in the

sectors as first line of responsibility. Our mission is to

enable ASML to have control over the protection of

information and assets of the company, as well as

confidential information of its customers and suppliers,

by applying risk-based and efficient measures for people,

processes and technology that support our business

goals. To realize this vision and mission, we pursue and

deploy our security strategy as we seek to achieve the

highest level of maturity in our security capabilities, and

rolling these out to our assets in a risk-based manner.

We developed our information security framework by

applying the ISO 27001 Information Security Standard

across its 14 domains and by driving security maturity –

from policy setting, asset management and access

control to incident management and more. For each of

these domains, we have tailored controls in place, which

are assessed routinely intended to ensure compliance

and effectiveness. In addition, our incident-reporting tool

seeks to make sure that all IT and information security

issues can be reported, correlated and investigated.

People and knowledge are key to the business success

of ASML. Unauthorized disclosure of our information, or

information of our customers or suppliers in our

innovation ecosystem, could benefit competitors,

negatively affect our ability to file patents or negatively

affect cooperation with customers, suppliers and

regulators. At the same time, our operations are

dependent on reliable information processing, and

unauthorized changes to the information content of these

assets can damage our ability to carry out our business.

Therefore, it is critical to guarantee confidentiality and

integrity of information. To make sure that our employees

understand the security policy and know how to act, we

provide mandatory security training and through the year

host multiple security awareness events, during which we

provide additional information and share learnings.

In our supply chain network, we use a single model for

risk assessment of our partners, which they also use in

order to screen their suppliers. We are also in close

contact with peers, partners and best-in-class security

solution providers, and our security solutions are tested

regularly through penetration testing (ethical hacking) to

identify exploitable issues so that effective security

controls can be implemented.

Given the continuous trend of increasing cyber and

security risk and the increasing geopolitical attention

towards ASML, we are continuously reviewing the

adequacy of our risk control framework and continue to

implement additional controls. However, given the

pervasiveness, sophistication and rapid rise of

cybersecurity and other security risks, the geopolitical

attention towards the semiconductor industry and the

inherent limitations that follow from our collaborative

innovation approach, this may not always be sufficient to

prevent an incident, and reduce this risk entirely. Hence a

relentless drive is required and in place to adopt the

latest best practices.

Read more in:

Risk - How we manage risk.



	Creating Security Circles of Trust
	At ASML, we develop our technology in close collaboration with partners inside and outside our company in an innovation ecosystem based on trust. Innovating and collaborating in a connected ecosystem requires secure information sharing beyond corporate boundaries, as the vulnerability to cyberattacks is extended to the perimeter of the total ecosystem. Therefore, in 2021 ASML started the Security Circles of Trust initiative to protect our innovation ecosystem in the Brainport Eindhoven region and the Netherlands. The ‘circle of trust’ is a network of peers and suppliers who jointly embrace the same information security standards and raise their performance against these standards. The network also drives the exchange of knowledge and best practices between ASML, suppliers and ecosystem partners.		We share best practices to help our innovation partners develop and reinforce security maturity. The goals are to protect intellectual property and guard the industry and the region against cybercrime such as ransomware, to share relevant threat intelligence, to collaborate on security topics and to become more secure together. Annually we hold master classes with our top 10 key suppliers and more than 50 of our neighbor companies to increase information security awareness and knowledge in the region, and to share practical tips, tricks and strategies, for example about combating ransomware. In 2022, we have expanded the Circle of Trust to also include semiconductor companies in the US, Europe and Taiwan, with further roll-out scheduled for 2023 to other geographies.

Intellectual property protection

Our company is based on people and knowledge. Our

specific knowledge gives us a leading edge and a head

start over competitors. To stay in business, it is key to

protect our own knowledge as well as information

entrusted to ASML by our customers and business

partners. Patents are a way to protect ASML’s research

and development investments from use by our third

parties, including exploitation by our competitors,

customers, suppliers and co-developers. We innovate

and develop our technology with our ecosystem partners

consisting of many different firms and institutions, each of

which requires a dedicated way of dealing with

intellectual property matters.

ASML’s general intellectual property (IP) strategy has

three objectives:

–Build and maintain a solid intellectual property portfolio

by protecting ASML’s inventions.

–Prevent situations where ASML infringes the intellectual

property rights of third parties.

–Prevent the disclosure of confidential information,

including know-how and trade secrets, to the outside

world, in accordance with ASML’s Knowledge

Protection Program.

Our Corporate Intellectual Property department is tasked

with strengthening our global IP position including our

patent portfolio, as well as protecting our patents. The

department’s mission is to maximize ASML’s intellectual

property value, to execute and support ASML’s overall

objectives and to preserve ASML’s freedom of operation.

To protect our technology leadership and our R&D in

leading-edge technology, the department is involved in

the product generation process and assesses new

products to determine whether they would potentially

infringe any relevant third-party intellectual property rights

of third parties.

Our significant investment in complex research and

development justifies a strong intellectual property

portfolio. We have developed an IP rights management

mechanism to safeguard our IP rights and to respect the

IP of other parties. This includes, among others, a

dedicated knowledge protection program, restricted

access to Engineering Top Secrets, an information

security program, mandatory information classification,

and a training and awareness program.

We have adopted controls, policies and procedures to

safeguard the protection of our trade secrets, proprietary

customer data, and other information, and in order for us

to comply with export controls, economic sanctions and

similar regulations. These controls and procedures may

not always be effective, and we have experienced

unauthorized accessibility of data which enabled

misappropriation of information by a former employee,

which may constitute a violation of such regulations (see

the risk factor “Cybersecurity and other security

incidents, or other disruptions in our processes or

information technology systems, could materially

adversely affect our business operations”). We have

implemented remedial measures to prevent similar

unauthorized access and we are reviewing our security

controls, policies and procedures to determine whether

any further changes are appropriate.

IP portfolio trend

Product safety

We want to innovate, but always with safety at the top of

mind. It is our duty to provide a safe work environment at

all times. We do this by focusing on safety at every stage

of a product life cycle: research, development,

production, transport, installation, maintenance,

upgrades and decommissioning. And we make sure we

cover all our stakeholder groups, including employees,

customers, suppliers, contractors and visitors.

How we manage product safety

As we have grown, so has our product complexity and

the number of geographical locations where we operate.

It is therefore becoming more complex to assess which

safety legislation and regulations apply to our products

and tools. At the same time, it is also more complex to

determine the rules and procedures we need to follow to

demonstrate this compliance. Some of our technology is

so innovative and new that it is not always immediately

clear which regulatory regime applies. ASML is extending

the expertise by hiring country safety regulatory experts.

We have clear systems and processes in place to

support our approach to product safety. Our Global

Product Safety and Regulatory organization is part of

Quality and Excellence, which coordinates the overall

product safety approach within ASML. To support ASML

products, each product line has safety engineers who

are responsible for the product and make a first-level

system risk assessment. To support safe design, we

have defined and implemented 12 key risk areas, with

risk experts supporting individual projects.


Product safety competences
With regard to all of our competences, the role of our D&E safety competence leads is to provide thorough knowledge about our ways of working and to design rules for specific safety hazards in all of our competences. Electrical: Making an electrical design safe and protecting people from electrical shock. This involves making conductors carrying hazardous voltage inaccessible, ensuring that accessible conductors do not carry hazardous voltages and that inaccessible conductors are sufficiently insulated from accessible ones through compliance with corresponding regulations and standards. Pressure: Interpreting and explaining local legislations and standards, and also advising on testing and documentation, and maintaining the manufacturing record book which is needed for a high-pressure permit in certain countries. Human factor engineering (including ergonomics): Incorporating a human-centered design approach helping projects maintain access for maintenance and servicing by laying down rules for issues such as accessibility, posture, forces and the lifting of parts. Mechanical: Keeping track of safety factors, as well as seismic requirements for our machines. Lifting: Many special requirements (such as the certification and training of crane operators) are applicable in countries where we use lifting tools. Our team can advise when certification is needed. For example, in South Korea certification is required for weights of 500 kg or more.		Working at height: This is a new area of expertise which was required during the design of our EXE:5000, our first EUV 0.55NA (High-NA) system to guarantee good access to the various areas. Radiation: Main focus on lasers with intensities that go beyond standard. In addition, we consider the impacts of standard and special lamps and LEDs that we are using. Dangerous goods: Prevent shipments being stopped due to requirements for transport and the importation of certain hazardous substances such as chemicals, magnets and batteries. Safety in procedures: Support of creating written safety procedures for highly complex operations. Thermal: The use of tin at high temperatures requires special precautions to protect people. Dangerous gases: The use of gases requires safety systems and procedures to protect machines and people. For example, nitrogen is an asphyxiation hazard, and the use of hydrogen in EUV has additional applicable legislations and standards. Materials and substances: Monitoring worldwide legislation to check the legal status of all materials used on our products, and ensuring that we don’t use or introduce hazardous materials in our products.

Product safety in design

We seek to ensure all the products and tools we develop

comply with the world’s most stringent product safety

regulations, and with legislation applicable to the

countries where we do business. We focus on safety by

design in hardware, followed by safety by procedure –

prevention is key.

Safe products start with a well-thought-out design and with

product safety requirements implemented right at the start of

initial design. The first step to a human-safe design is to

eliminate risk or protect people by product design. Since

human factors play an important role in the safe operation of

a product, we try to guard against these becoming a risk

factor as much as possible. This helps prevent workplace

activities from turning into potential accidents. If there are no

safety precautions available to address potential hazards, we

develop our own.

When we start designing our systems, our engineers

conduct an initial Safety Risk Assessment (SRA). Our

product designers are trained to identify any safety

issues in the early stages of the design process. The

SRA is evaluated throughout the entire product

development process. We evaluate product safety at

each subsequent stage of the product life cycle and

track any reported product-related incidents – including

supply chain incidents – through our incident-reporting

system. We are proud to report that in 2022 there were

no recordable incidents caused by our equipment.

Progress on EUV 0.55 NA (High-NA) safety aspects

EUV 0.55 NA (High-NA) is the latest ASML product on

our EUV roadmap and is recognized as the next

generation of EUV machines. The development of this

system presented new challenges for product safety due

to its size, weight of modules and accessibility. To

support the design, we placed extra focus on

ergonomics and working at height.

For example, our ergonomic experts use 3D simulations

to enable people to practice various actions.

In addition, the new system features built-in service

platforms and platforms which led to the new ‘working at

height’ safety competence.

Due to the complexity of the system, the EU Safety

Directives and semiconductor industry guidelines (SEMI

S2) review was split, with a first design review followed

by a second inspection of the hardware. During 2022,

we began the SEMI S2 third-party safety design review.

Embedding product safety in the organization

In 2021, we established a Safety and Regulatory Office,

tasked with tracking new legislation and standards and

ensuring that our products are compliant with product

safety rules and regulations. The Regulatory Board is

responsible for decision-making on ASML product safety

compliance as well as the strategy to eliminate non-

compliance. It also monitors compliance status and

drives risk mitigation. The Regulatory Board discusses

possible non-compliance cases at its monthly meetings

and takes decisions based on the mitigation plan

presented.

Ensuring safety compliance

The products and tools we develop comply with the

SEMI S2 to ensure product safety is taken into account

at all times. These guidelines are incorporated in the

Safety System Performance Specification (Safety SPS).

We are SEMI S2-compliant for every product type

shipped. In 2022, a report confirming this compliance

was available for every product type we shipped. We

also have a CE ('conformité européenne') declaration of

conformity for all ASML products and tools.

Increasing product safety in our supply chain

Ensuring product safety does not end at our facilities –

we also focus on product safety in the supply chain. A

significant proportion of our innovation and development

takes place at our suppliers’ sites. Safety is a key priority

for ASML, and we want to be sure that all the products

that we ship comply with the most stringent legislation,

including the designs that are made and supplied by our

suppliers in the value chain. Our goal is to ensure that

our suppliers have the capability to deliver a safe and

compliant product, so that we can avoid safety accidents

or incidents, safety-related non-compliance issues or

delayed shipments.

We have defined an end-to-end process in close

cooperation with our suppliers, ensuring that deliveries

meet our safety requirements.

Dangerous goods management

Following the successful completion of our Dangerous

Goods program, dangerous goods management is

structurally embedded across our organization. Policies,

processes, guidelines and IT infrastructures are in place

to enable dedicated specialists to manage dangerous

goods as part of our competence groups. Hazardous

properties are identified at an early stage in the design

process in order to enable us to take measures to ensure

the safe handling, transport and storage of our products

on time and with greater efficiency. As these activities are

overseen by the safety and compliance organization, we

are able to safeguard the active control of regulations

and legislation impacting ASML products.

Materials and substance compliance

We are committed to complying with legislation and

regulations in the markets where we operate. We follow

the most stringent or leading regulations, currently but

not limited to RoHS (Restriction of Hazardous

Substances), REACH (Registration, Evaluation,

Authorization and restriction of Chemicals) and Batteries

Directive in the EU, K-REACH (Act on the Registration

and Evaluation of Chemicals) in South Korea or TSCA

(Toxic Substances Control Act) in the US.

We have implemented multiple initiatives to overcome

compliance challenges due to factors including: the

increasing number of changes in the regulatory

landscape; the number of unique parts used in our

products (>50,000); an extensive global supply chain; the

number of regulated substances we use (>100) we use.

Activities during the course of 2022 include:

–A multi-disciplinary program embedding processes

throughout our organization – improving our IT

solutions, enabling automated supply chain

communication and delivering flexible reporting

capabilities.

–A global safety focus to strengthen our

communications with new local safety expert teams

and establish a regulatory intelligence team.

–A proactive approach toward upcoming regulations

such as PFAS, TSCA and the Battery directive by

taking part in the Semiconductor PFAS Consortium,

working with our business partners and the supply

chain, and establishing a working relationship with a

well-respected firm of consultants.



	We consider the taxes that we pay to be a contribution to the communities in which we operate and an integral part of our responsibility for social value creation. Openness and transparency on how we operate and our approach to tax is important to us, which is supported by our business and ESG strategy.

	€1.7bn		14.0%
	Income tax paid 2022 (€1.2bn in 2021)		Effective tax rate 2022 (15.2% in 2021)



	Read more in:
	‘Approach to tax report’ on www.asml.com

Income tax paid in our five most significant

countries of operation


1. Netherlands	757m
2. United States	474m
3. Taiwan	209m
4. South Korea	167m
5. China	42m

Last year we already took a significant step in our efforts to

be more transparent on our tax affairs among others by

sharing our tax principles and disclosing information about

the five main countries in terms of business and tax footprint.

This year we have taken it a step further and made

several improvements. We signed up to the VNO-NCW

Tax Governance Code. This Tax Governance Code

should lead to more transparency on the tax position of

Dutch listed companies. In line with this Code, we have

included country-by-country tax information in our tax

report for all countries where ASML is established. We

also have included an explanation of the activities in our

five main countries as well as a brief explanation of the

type and geographic scope of activities of our entities.

We will keep improving our transparency for tax matters.

ASML’s move to sign up to the VNO-NCW Tax

Governance Code reflects this and answers to the call for

companies to respond to shifting expectations from

policymakers, NGOs and the general public.

Our leading principle is that our tax position is a reflection

of our business operations, being the sale of lithography

systems and related products and services, supported

by our manufacturing and R&D activities. Since the start

of the company, ASML has had a straightforward

operating model, with our campus in Veldhoven, the

Netherlands, at the heart of our global operations.

The following principles guide us in how we report and

pay tax in the countries we operate in.

The Board of Management is accountable for ASML’s

tax strategy, tax principles and the overall tax risk

management, which are subsequently reviewed by the

Audit Committee. The ASML Tax & Customs department

is responsible for the execution of the ASML tax strategy

set by the Board of Management.

ASML’s tax strategy is based on our tax principles and is

closely aligned to our business strategy and our

sustainability goals. The tax strategy is approved by the

Board of Management. The tax strategy, tax principles

and the overall tax risk management apply to all group

entities.

Our tax strategy is

closely aligned to our

business strategy and

our sustainability goals.”

Gaby Bes

Head of Tax & Customs


	Our tax principles
	Compliance
	–We act in accordance with the letter, intent and spirit of tax laws and regulations. –We make tax disclosures in accordance with reporting requirements, US GAAP and IFRS. –ASML’s profit allocation methods are based on internationally accepted standards as published by the OECD. We apply these consistently across our business, contingent on the relevant rules and regulations in the local jurisdictions we operate in.

	Support tax systems
	–We report taxable income in a jurisdiction commensurate with the added value of the business activities in that jurisdiction. –We do not use so-called tax havens (as defined by the European Commission’s ‘blacklist’) for tax avoidance.

	Relationships with authorities
	–We pursue an open and constructive dialogue with the tax authorities, and other relevant authorities, in the jurisdictions we operate in, based on mutual respect, transparency and trust, disclosing all relevant facts and circumstances. We do not use tax structures intended for tax avoidance, nor will we engage in the artificial transfer of profits to low- tax jurisdictions.


	Our tax strategy

	1	Stakeholder management

	Externally, with tax authorities and regulators, but also investor communication. Internally, in supporting our business in managing risks, being in control and at the same time remaining efficient in its administrative procedures and way of working. We work in an integrated way with other experts within ASML.
	2	The future of taxation

	This includes developments in ESG (including Tax Transparency) and Tax technology, whereby we closely monitor the developments in the outside world and continuously translate these into potential requirements or implications for ASML.
	3	Compliance & Control

	This includes the development, implementation and continuous monitoring of processes and controls for appropriate tax risk management and reporting purposes. Furthermore, this includes ensuring timely and accurate fulfillment of tax compliance obligations in line with applicable tax laws and regulations (incl. timely payment of taxes due).
	4	Tax & Customs organization

	In a fast-changing world, it is important to have a diverse team which can handle change and are more than just good tax and customs experts. Communication, digital and project management skills are becoming increasingly important. We strive to work together and develop each other in line with the ASML values (challenge, collaborate, and care).
	5	Projects

	Our business and the regulatory environment in which we operate change constantly. We work on projects that deal with these changes to ensure the solutions implemented are compliant and efficient. Likewise, we continuously strive for simplification and review of existing business models to ensure we remain tax and customs compliant.




		WEARABLE TECHNOLOGY
		Ground- breaking tech, life-changing outcomes
		Semiconductors are essential to a new range of wearable devices with the potential to transform medical care, particularly for our elderly populations. From smartwatches to fall detection services, nano-sensors can monitor patients’ health and alert caregivers – while in conjunction with artificial intelligence, they can even predict conditions such as heart disease and cancer.
		Read more online



ASML ANNUAL REPORT 2022	SMALL PATTERNS. BIG IMPACT.	STRATEGIC REPORT	GOVERNANCE	FINANCIALS	148

Overview

Corporate

Governance Statement

on page 150

Supervisory

Board Report

on page 167

Remuneration

Report

on page 185

These pages provide an

overview of and a brief

introduction to the Corporate

Governance section of our

Annual Report.

In our Corporate Governance Statement we

report on ASML's corporate governance

structure and the way ASML applies the

principles and best practices of the Dutch

Corporate Governance Code.

–Governance structure

–Board of management

–Supervisory Board

–Board-related matters

–AGM and share capital

–Financial reporting and audit

–Compliance with governance

requirements

This report outlines the activities of the

Supervisory Board and its committees, as

well as the key focus areas for 2022,

including stakeholder engagement, issues

relating to people and our supply chain, and

the growing importance of ESG.

Here we explain the progress made during

the year regarding our commitment to fair

and balanced remuneration, including our

work to increase the level of transparency

around how we reward management in

order to attract the right talent.

–Message from the Chair

–Supervisory Board

–Board focus in 2022

–Meetings and attendance

–Composition, training and evaluation

–Supervisory Board Committees

–Audit committee

–Technology committee

–Selection and Nomination Committee

–Message from the Chair

–Remuneration committee

–Board of Management remuneration

–Supervisory Board remuneration

Our strategy

on page 30

Message from the Chair

of our Supervisory Board

on page 167

Message from the Chair of

the Remuneration Committee

on page 185

Our business model

on page 32

Our stakeholders

on page 36

We endorse the importance of good

corporate governance, of which

independence, accountability and

transparency are the most significant

elements. These are also the elements on

which a relationship of trust between us

and our stakeholders can be built.

ASML Holding N.V. is a public limited liability company

operating under Dutch law. ASML’s shares are listed on

Euronext Amsterdam and NASDAQ.

We have a two-tier board structure, consisting of a

Board of Management responsible for managing the

company, and an independent Supervisory Board which

supervises and advises the Board of Management. For

the fulfillment of their duties, the two Boards are

accountable to the General Meeting, the corporate body

representing our shareholders.

Our governance structure is based on ASML’s Articles of

Association, Dutch corporate and securities laws and the

Dutch Corporate Governance Code. Because we are

listed on NASDAQ, we are also required to comply with

applicable provisions of the Sarbanes-Oxley Act, the

NASDAQ Listing Rules and the rules and regulations

promulgated by the US Securities and Exchange

Commission.

We are subject to the relevant provisions of Dutch law

applicable to large corporations (structuurregime). These

provisions have the effect of concentrating control over

certain corporate decisions and transactions in the hands

of the Supervisory Board. Procedures for the

appointment and dismissal of Board of Management and

Supervisory Board members are based on the

structuurregime.

This section of the Annual Report addresses our

corporate governance structure and the way ASML

applies the principles and best practices of the Dutch

Corporate Governance Code. It also provides information

required by the Decree adopting further rules related to

the content of the management report and the Decree

implementing Article 10 of the Takeover Directive.

We signed up to the VNO-NCW Tax Governance Code

and report on the application of its principles in the

section Our Approach to Tax and in our more

comprehensive Approach to Tax Report on our website.

In accordance with the Dutch Corporate Governance

Code (https://www.mccg.nl/english), other parts of this

Annual Report address our strategy and culture aimed at

long-term value creation, our values and Code of

Conduct, as well as the main features of our internal

control and risk management systems.

In February 2022, the Dutch Corporate Governance

Code Monitoring Committee started a consultation

process that has led to a revision of the Dutch Corporate

Governance Code. The amended Dutch Corporate

Governance Code was published on December 20,

2022, and for reporting purposes, applies to the financial

years starting on or after January 1, 2023. As part of the

continued effort of our Supervisory Board and Board of

Management to ensure that our practices and

procedures comply with Dutch corporate governance

requirements, we are currently assessing the implications

of the amended Code for our corporate governance

structure.

Read more in:

Our company,

Our business and ESG strategy,

Our business model and

Risk - How we manage risk.

ASML corporate governance structure

Shareholders

Supervisory Board

Board of Management

Business

sectors

Business

functions

Corporate

functions

Employee

support

Our Board of Management is responsible

for managing ASML. Its responsibilities

include establishing a position on the

relevance of long-term value creation for

ASML and its business, defining and

deploying ASML’s strategy, establishing

and maintaining effective risk management

and control systems, managing the

realization of ASML’s operational and

financial objectives and the corporate

social responsibility aspects relevant to

ASML. In fulfilling its management tasks

and responsibilities, the Board of

Management is guided by the interests of

ASML and its business and takes into

consideration the interests of our

stakeholders.

The current Board of Management comprises five

members. On October 19, 2022, the Supervisory Board

announced its intention to expand the Board of

Management to six members effective per the 2023

AGM, adding the Chief Strategic Sourcing &

Procurement function as a Board of Management

position, given the increased strategic importance of this

function for ASML’s strategy.

The Board of Management has a dual leadership

structure, under the chairmanship of the President and

Chief Executive Officer, and the vice chairmanship of the

President and Chief Technology Officer. The Board of

Management divides tasks among its members, charging

individual members with specific managerial tasks.

However, the Board of Management remains collectively

responsible for the management of ASML.

The Board of Management is supervised and advised by

the Supervisory Board. The Board of Management

provides the Supervisory Board with all the information,

in writing or otherwise, necessary for the Supervisory

Board to properly carry out its duties. In addition to the

information provided in the regular meetings, the Board

of Management provides the Supervisory Board with

regular updates on developments relating to our

business, financials, operations and industry

developments in general. Certain important decisions of

the Board of Management require the approval of the

Supervisory Board. For details, see the Supervisory

Board section of this Corporate Governance chapter.

Further information regarding the general responsibilities

of the Board of Management, its relationships with the

Supervisory Board and various stakeholders, the

decision-making process within the Board of

Management and the logistics surrounding the meetings

can be found in the Board of Management’s Rules of

Procedure. These are published in the Governance

section of our website.

Appointments

Members of the Board of Management are appointed by the

Supervisory Board on the recommendation of the Selection

and Nomination Committee and upon notification to the

General Meeting. Members of the Board of Management

are appointed for a term of four years. Reappointment for

consecutive four-year terms is possible. For persons

aged 65 years or above, a maximum appointment term

of two years applies, with the possibility of reappointment

for consecutive two-year terms.

In line with Dutch law, all members of the Board of

Management are engaged by means of a management

services agreement for the duration of their appointment.

The management services agreements between ASML

and the Board of Management members contain specific

provisions regarding severance payments. If ASML

terminates the agreement for reasons which are not

exclusively or mainly found in acts or omissions of the

Board of Management member, a severance payment

not exceeding one year’s base salary will be paid.

Furthermore, current agreements stipulate that a

member of the Board of Management, when giving

notice of termination pursuant to a change of control, will

be entitled to a severance amount. Given that such a

resignation is specifically linked to a change of control,

ASML does not consider this provision a deviation from

the Dutch Corporate Governance Code.

The Supervisory Board may suspend and dismiss

members of the Board of Management, but this can only

take place after consulting the General Meeting.

More information about changes related to the Board of Management

during 2022 can be found in the

Supervisory Board Report included in this Annual Report.

Martin A. van den Brink

(1957, Dutch)

Christophe D. Fouquet

(1973, French)

President, Chief Technology

Officer and Vice Chair of Board

of Management

Term expires 2024

Executive Vice President

and Chief Business Officer

Term expires 2026

Christophe Fouquet was appointed Executive

Vice President EUV and member of the Board

of Management in 2018. In 2022, Christophe

was appointed Executive Vice President and

Chief Business Officer. Since joining ASML in

2008, he has held several positions, including

Senior Director Marketing, Vice President

Product Management, and Executive Vice

President Applications, a position he held

from 2013 until 2018. Prior to joining ASML,

he worked for semiconductor equipment

peers KLA-Tencor and Applied Materials.

Christophe holds a master’s degree in

Physics from the Institut Polytechnique de

Grenoble.

Martin van den Brink has been President and

CTO of ASML since 2013. He joined ASML at

its founding in 1984, and for the next 11 years

held various positions in engineering. In 1995,

he became Vice President Technology, and in

1999 was appointed Executive Vice President

Product & Technology and member of the

Board of Management. Martin holds a degree

in Electrical Engineering from HTS Arnhem

(HAN University), as well as a degree in

Physics (1984) from the University of Twente.

In 2012, the University of Amsterdam

awarded him an honorary doctorate in

Physics.

Roger J.M. Dassen

(1965, Dutch)

Executive Vice President

and Chief Financial Officer

Term expires 2026

Peter T.F.M. Wennink

(1957, Dutch)

Peter was a member of the Advisory Board

of the Investment Committee of Stichting

Pensioenfonds ABP until December 31,

2021. He serves as Vice Chairman on the

Board of the FME-CWM. Peter is also a

member of the Board of Captains of Industry

Eindhoven Region and is Chair of the

Eindhovensche Fabrikantenkring and of the

Supervisory Board of the Eindhoven

University of Technology. Furthermore, Peter

is council member of Topconsortium voor

‘Kennis en Innovatie’ TKI HTS&M, member of

the Advisory Committee of the Dutch

National Growth Fund and a member of the

Circle of Influence of Startup Delta.

Roger Dassen joined ASML in June 2018 and

was appointed Executive Vice President and

CFO and member of the Board of

Management at the AGM the same year. He

previously served as Global Vice Chair and

member of the Executive Board of Deloitte

Touche Tohmatsu Limited, having been CEO

of Deloitte Holding B.V. Roger holds a

master’s in Economics and Business

Administration, a post-master’s in Auditing

and a PhD in Business Administration, all from

the University of Maastricht. He is Professor of

Auditing at Vrije Universiteit Amsterdam, and

sits on the Supervisory Board of the Dutch

National Bank. He is also the Chair of the

Supervisory Board of Maastricht University

Medical Center+ and serves on the Board of

the Stichting Brainport.

Frédéric J.M. Schneider-

Maunoury (1961, French)

President, Chief Executive Officer

and Chair of Board of Management

Term expires 2024

Executive Vice President

and Chief Operations Officer

Term expires 2026

Peter Wennink became President and CEO in

2013, having served as Executive VP, CFO

and member of the Board of Management

since 1999. Peter was previously a partner at

Deloitte Accountants, focusing on the

semiconductor industry. He has an extensive

background in finance and is a member of the

Dutch Institute of Registered Accountants.

Frédéric Schneider-Maunoury has been

Executive Vice President and Chief

Operations Officer since he joined ASML in

2009. He was appointed to the Board of

Management in 2010. Prior to joining ASML,

Frédéric was Vice President Thermal Products

Manufacturing at power generation and rail

transport equipment group Alstom, having

previously served as General Manager of the

worldwide Hydro Business of Alstom. Before

joining Alstom, Frédéric held various positions

at the French Ministry of Trade and Industry.

He is a graduate of École polytechnique

(1985) and École Nationale Supérieure des

Mines (1988) in Paris.

Our Supervisory Board supervises the

Board of Management and the general

course of affairs of ASML and its

subsidiaries. The Supervisory Board also

supports the Board of Management with

advice. In fulfilling its role and

responsibilities, the Supervisory Board

takes into consideration the interests of

ASML and its business, as well as the

relevant interests of its stakeholders.

In our two-tier structure, the Supervisory Board is a

separate and independent body from the Board of

Management and from ASML. No member of the

Supervisory Board personally maintains a business

relationship with ASML, other than as a member of the

Supervisory Board.

The Supervisory Board currently consists of nine

members, with the minimum being three.

In performing its tasks, the Supervisory Board focuses

on, inter alia, ASML’s corporate strategy aimed at long-

term value creation and the execution thereof, the

staffing of and succession planning for the Board of

Management, the management of risks inherent to

ASML’s business activities, the financial reporting

process, compliance with applicable legislation and

regulations, ASML’s culture and the activities of the

Board of Management in that regard, the relationship

with shareholders and other stakeholders and corporate

social responsibility issues important for ASML.

Important management decisions, such as setting the

operational and financial objectives, the strategy

designed to achieve these objectives, major investments,

budget and the issue, repurchase and cancellation of

shares, require the Supervisory Board’s approval.

The Supervisory Board is governed by its Rules of

Procedure. Items covered in these rules include the

responsibilities of the Supervisory Board and its

committees, the composition of the Supervisory Board

and its committees, logistics surrounding the meetings,

the meeting attendance of members of the Supervisory

Board, the rotation schedule for these members and the

committee charters. The Supervisory Board’s Rules of

Procedure and the committee charters are regularly

reviewed and, if needed, amended. The Audit Committee

charter is reviewed annually to confirm that the charter

still complies with applicable rules and regulations,

especially those relating to the Sarbanes-Oxley Act.

Read more information on the meetings and activities of the

Supervisory Board in 2022 in:

Supervisory Board Report - Meetings and attendance.

Appointments

The members of the Supervisory Board are appointed by

the General Meeting based on binding nominations

proposed by the Supervisory Board. When nominating

persons for (re)appointment, the Supervisory Board

checks whether the candidates fit the Supervisory

Board’s profile. The profile is available in the Governance

section of our website. The General Meeting may reject

binding nominations of the Supervisory Board by way of

a resolution adopted with an absolute majority of the

votes cast, representing at least one-third of ASML’s

outstanding share capital. If the votes cast in favor of

such a resolution do not represent at least one-third of

the total outstanding capital, a new shareholders’

meeting can be convened, at which the nomination can

be overruled by an absolute majority.

The Supervisory Board generally informs the General

Meeting and the Works Council about upcoming

retirements by rotation at the AGM in the year preceding

the actual retirement(s) by rotation. This ensures they

have sufficient opportunity to recommend candidates for

the upcoming vacancies. The Supervisory Board has the

right to reject the proposed recommendations.

Furthermore, the Works Council has an enhanced right

to make recommendations for one-third of the members

of the Supervisory Board. This enhanced

recommendation right implies that the Supervisory Board

may only reject the Works Council’s recommendations in

limited circumstances: (i) if the relevant person is

unsuitable or (ii) if the Supervisory Board would not be

duly composed if the recommended person were

appointed as Supervisory Board member.

Members of the Supervisory Board serve for a maximum

term of four years or a shorter period as per the

Supervisory Board’s rotation schedule. Supervisory

Board members are eligible for reappointment for

another maximum term of four years. After that,

members may be reappointed again for a maximum

period of two years. This appointment may be extended

for a final term of no more than two years. The rotation

schedule is available in the Governance section of our

website.

If the General Meeting loses confidence in the

Supervisory Board, it may, by an absolute majority of the

votes representing at least one-third of the total

outstanding capital, withdraw its confidence in the

Supervisory Board. This resolution shall result in the

immediate dismissal of the entire Supervisory Board. In

such case, the Enterprise Chamber of the Amsterdam

Court of Appeal shall appoint one or more members to

the Supervisory Board at the request of the Board of

Management.

Further information about changes to the Supervisory Board's

composition in 2022 and 2023 can be found in the

Supervisory Board Report.

Supervisory Board committees

The Supervisory Board, while retaining overall

responsibility, has assigned some of its tasks and

responsibilities to four committees: the Audit Committee,

the Remuneration Committee, the Selection and

Nomination Committee and the Technology Committee.

Further information on the Supervisory Board committees can be found

in the

Supervisory Board Report and in the charters of the committees

as posted on our website.

Antoinette (Annet) P. Aris

(1958, Dutch)

Member of the Supervisory

Board since 2015

(Third term expires in 2024)

Vice Chair of the Supervisory

Board since 2021, Member

of Remuneration Committee,

Technology Committee

and Selection and Nomination

Committee

Annet Aris has been a member of the

Supervisory Board since 2015. She is Senior

Affiliate Professor of Strategy at INSEAD

business school, France, a position she has

held since 2003. From 1994 to 2003, she was

a partner at McKinsey & Company in

Germany and until December 2022 she was a

Supervisory Board member at the

Cooperatieve Rabobank UA. She also sits on

the supervisory boards of Jungheinrich AG

and Randstad Holding NV.

Alexander F.M. Everke

(1963, German)

Member of the Supervisory Board

since 2022

(First term expires in 2026)

Gerard J. Kleisterlee

(1946, Dutch)

Gerard Kleisterlee joined the Supervisory

Board in 2015, and has been its Chair since

2016. He was President and CEO of the

Board of Management of Royal Philips NV

from 2001 until 2011, having worked at the

company since 1974. He also served as a

Supervisory Board member of the Dutch

Central Bank from 2006 until 2012, as Non-

Executive Director at Daimler AG from 2009

until 2014 and as Non-Executive Director at

Dell from 2010 until 2013. From 2011 to

2022, Gerard was the Chairman of the Board

of Vodafone Group Plc. From 2010 until May

2020, he was a Non-Executive Director of

Royal Dutch Shell Plc. Currently, Gerard is an

independent Board member at IBEX Limited.

Member of the

Remuneration Committee

D. Mark Durcan

(1961, American)

Mark Durcan was appointed as a member

of the Supervisory Board in 2020. From

2012 to 2017, he was CEO of Micron

Technology, Inc., having joined the

company in 1984 and held various

management positions before being

appointed as CEO. Furthermore, Mark was

director at Freescale Semiconductor, MWI

Veterinary Supply and Veoneer, Inc. Mark

is a Non-Executive Director at Advanced

Micro Devices, Inc., a member of the

Board of AmerisourceBergen Corporation,

member of the Board of Trustees for Rice

University (Texas), Director at St Luke’s

Health System (Idaho) and Director at

Natural Intelligence Systems CA private AI,

Startup Company.

Member of the Supervisory

Board since 2015

(Second term expires in 2023)

Alexander Everke joined the Supervisory

Board in 2022. He is the CEO of ams-OSRAM

AG, a position he has held since March 2016,

after having joined ams AG in October 2015.

Prior to that, Mr. Everke held a range of

positions in the semiconductor industry

including management positions at Siemens

and Infineon and various leadership positions

at NXP Semiconductors.

Member of the Supervisory

Board since 2020

(First term expires in 2024)

Chair of the Supervisory Board,

Chair of the Selection and

Nomination Committee and member

of the Technology Committee

Chair of the Technology Committee,

member of the Selection and

Nomination Committee

Rolf-Dieter Schwalb

(1952, German)

Birgit M. Conix

(1965, Belgian)

Terri L. Kelly

(1961, American)

Terri Kelly has been a member of the

Supervisory Board since 2018. Previously,

she was President and Chief Executive

Officer at W.L. Gore & Associates from 2005

until 2018, having worked at Gore since 1983

in various management roles. She also

served on Gore’s Board of Directors through

July 2018. Terri is a Trustee of the Alfred I.

Dupont Charitable Trust, which provides

oversight of the Nemours Foundation. She is

the Chair of the Board of the University of

Delaware and she is a member of the Board

of Directors of United Rentals, Inc.

Member of the Supervisory

Board since 2015

(Second term expires in 2023)

Member of the Supervisory

Board since 2021

(First term expires in 2025)

Member of the Supervisory

Board since 2018

(Second term expires in 2026)

Chair of the Audit Committee

and member of the Remuneration

Committee

Member of the Audit Committee

Chair of the Remuneration Committee,

member of the Selection and

Nomination Committee

Birgit Conix became a member of the

Supervisory Board in 2021. Birgit has been

CFO and a member of the Management

Board of Sonova Holding AG since June

2021. From 2018 until January 1, 2021, Birgit

was a member of the Executive Board and

CFO of TUI AG. Prior to that, she was the

CFO of the Belgian media, cable and

telecommunications company Telenet Group

N.V. Prior to that, she held various

management positions in finance at Johnson

& Johnson, Heineken, Tenneco and Reed

Elsevier.

Rolf-Dieter Schwalb has been a member of

the Supervisory Board since 2015. He was

CFO and member of the Board of

Management of Royal DSM N.V. from 2006

to 2014. Prior to that, he was CFO and

member of the Executive Board of Beiersdorf

AG. He also held a variety of management

positions in Finance, IT and Internal Audit at

Beiersdorf AG and Procter & Gamble Co.

An L. Steegen

(1971, Belgian)

Member of the Supervisory

Board since 2022

(First term expires in 2026)

D. Warren A. East

(1961, British)

Member of the Technology

Committee

Member of the Supervisory

Board since 2020

(First term expires in 2024)

An Steegen joined the Supervisory Board in

2022. She is co-CEO and member of the

Board of Directors of Barco N.V., a position

she has held since October 2021. Prior to

that, An was R&D director at IBM

Semiconductor and Executive Vice President

at the research institute imec in Belgium.

Furthermore, An was CTO and Executive

Vice President Electronic and Electro-Optical

Materials at Umicore.

Member of the Audit Committee

Warren East became a member of the

Supervisory Board in 2020. Warren was CEO

of Rolls-Royce Group Plc from 2015 until

December 2022. He spent his early career at

Texas Instruments Ltd from 1985 to 1994.

He then joined ARM Holdings, Plc, where he

held various management positions and was

appointed CEO from 2001 to 2013.

The section below addresses a number of

topics that apply to both the Board of

Management and the Supervisory Board.

Remuneration and share ownership

The remuneration of the Board of Management is

determined by the Supervisory Board, on

recommendation of the Remuneration Committee, in

accordance with the Remuneration Policy for the Board

of Management as adopted by the General Meeting. The

current Remuneration Policy for the Board of

Management was adopted by the General Meeting in

2022.

The remuneration of the Supervisory Board is based on

the Remuneration Policy for the Supervisory Board. The

current Remuneration Policy for the Supervisory Board

was adopted by the General Meeting in 2021. The

remuneration of the Supervisory Board is not dependent

on our (financial) results. The members of the Supervisory

Board do not receive ASML shares, or rights to acquire

ASML shares, as part of their remuneration.

Board of Management and Supervisory Board members

who acquire or have acquired ASML shares or rights to

acquire ASML shares must intend to keep these for long-

term investment only. In concluding transactions in ASML

shares, members of the Board of Management and the

Supervisory Board must comply with our Insider Trading

Rules. Any transactions in ASML shares performed by

members of the Board of Management and the

Supervisory Board are reported to the Dutch AFM. No

member of the Supervisory Board currently has any

ASML shares or rights to acquire ASML shares.

We will not and have not granted any personal loans,

guarantees or the like to members of the Board of

Management and the Supervisory Board.

Our Articles of Association provide for the indemnification

of the members of the Board of Management and the

Supervisory Board against claims that are a direct result

of their tasks, provided that such claims are not

attributable to willful misconduct or intentional

recklessness of the respective member. We have also

implemented the indemnification of the members of the

Board of Management and the Supervisory Board by

means of separate indemnification agreements for each

member.

Detailed information on the Board of Management’s and the

Supervisory Board’s remuneration can be found in the:

Remuneration Report.

Diversity

On August 6, 2021, the US Securities and Exchange

Commission approved the NASDAQ Stock Market’s

proposal to amend its listing standards to encourage

greater board diversity and to require board diversity

disclosures for NASDAQ-listed companies. Pursuant to

the amended listing standards, ASML, as a foreign

private issuer, is required to have at least two diverse

Supervisory Board members or explain the reasons for

not meeting this objective. Furthermore, a Board diversity

matrix is required to be included in the Annual Report on

Form 20-F, containing certain demographic and other

information regarding members of the Supervisory

Board. ASML currently complies with the diversity

requirement, as we currently have four female and five

male members on our Supervisory Board. The Board

diversity matrix is set out on this page.


Board Diversity Matrix (status per December 31, 2022)

		Female	Male	Non-Binary	Did not Disclose
	Part I: Gender Identity
	Directors	4 (2021: 3)	5 (2021: 5)	0 (2021: 0)	0 (2021: 0)

	Part II: Demographic Background
	Underrepresented Individual in Home Country Jurisdiction	0 (2021: 0)	0 (2021: 0)	0 (2021: 0)	0 (2021: 0)

	LGBTQI+	0 (2021: 0)	0 (2021: 0)	0 (2021: 0)	0 (2021: 0)

	Did Not Disclose Demographic Background	0 (2021: 0)	0 (2021: 0)	0 (2021: 0)	0 (2021: 0)


Country of Principal Executive Offices	The Netherlands
Foreign Private Issuer	Yes
Disclosure Prohibited under Home Country Law	No
Total Number of Supervisory Board members	9 (2021: 8)



	We recognize the importance of diversity and inclusion.”
	Christophe Fouquet
	Executive Vice President, Chief Business Officer and member of the Board of Management

On January 1, 2022, the gender diversity bill came into

force, introducing a quota for the supervisory boards of

Dutch listed companies following which the composition

of the supervisory board should comprise at least one-

third men and one-third women. New appointments will

be declared null and void in the event of non-compliance

with this requirement. Also, the bill introduced a

requirement to set ambitious gender balance targets for

boards of management and senior management of large

listed and non-listed Dutch NVs and BVs and a plan

which outlines the actions needed in order to meet the

gender diversity targets. Based on the gender diversity

bill, companies will have to report on the gender balance

targets, the plan and their progress made in achieving

the gender balance targets to the Dutch Social and

Economic Council within 10 months after the end of the

financial year and in the management report.

Currently, the Supervisory Board meets the gender quota

of the Dutch gender diversity bill, as both men and

women are represented on the Supervisory Board by at

least three out of nine members.

Currently, no seats are taken by women on the Board of

Management. During 2022, the Supervisory Board set a

gender balance target for the Board of Management to in

2026 have at least one female and a at least one male

Board of Management member. Taking into account the

intended appointment of Wayne Allan as member of the

Board of Management per the 2023 AGM, this would

lead to a female representation of at least 17% based on

the size of the Board of Management per the 2023 AGM,

being six members. When setting the gender balance

target for the Board of Management, the Supervisory

Board has considered the technology environment ASML

operates in, with a thinly populated global STEM

(science, technology, engineering and math) talent pool,

making it challenging to recruit female talent. Our R&D

workforce is 16% female. The Supervisory Board has

also considered the female representation of the ASML

group overall, which was 19% (December 31, 2022) and

the female representation in senior leadership (JG 13+),

which was 10% (December 31, 2022). Furthermore,

during 2022 a target was set to reach a representation of

women at senior management level of 12% by 2024, the

current level being 10%. To make this gender target for

senior management tangible, we also set a goal to

increase the hiring and promotion of female leaders (JG

13+), from 12% in 2021 to 20% in 2024. The Supervisory

Board also included performance metrics aimed at

improving the representation of females in senior

leadership in the Board of Management's long term

incentive. During 2022, the Supervisory Board updated

the Board of Management Diversity Policy, which can be

found on our website.

The Supervisory Board fully supports ASML’s Diversity &

Inclusion strategy as set out in this Annual Report. We

recognize that human capital is ASML’s most valuable

asset and that our success is driven by our unique and

diverse teams. Diversity promotes the inclusion of

different perspectives and ideas, mitigates against

groupthink and ensures ASML can benefit from all

available talent. This also applies to the Board of

Management and our senior management, where a

diverse composition contributes to robust decision-

making and proper functioning. Diversity complements

ASML’s company values – challenge, collaborate and

care.

We are building and implementing company-wide

programs to further promote diversity and inclusion at all

levels of our workforce. This includes specific programs

aimed at attracting, retaining and developing diverse

leaders with the purpose of increasing our talent pool of

diverse talent for senior leadership and Board of

Management positions.

Our Global Diversity & Inclusion Council, founded in

2021, consists of senior leaders who act on behalf of

ASML to provide thought leadership. The Council,

chaired by a member of the Board of Management,

proposes the Diversity & Inclusion strategy to the Board

of Management, sets, promotes and monitors diversity

and inclusion initiatives, and leads company-wide

accountability for our goals. We also have a global

diversity and inclusion team, including a Chief Diversity

Officer, who is responsible for driving initiatives that are

related to diversity and inclusion across ASML.

Our diversity and inclusion roadmap focuses on three key

areas within ASML: leadership, culture and talent.



		12%
		Target 2024 representation of women at leadership level

To promote diversity and inclusion in our workforce,

including our Board of Management and senior

management, we are building and implementing

programs that lead to measurable and actionable results.

These programs include:

– Organizing internal training sessions for employees,

managers and leaders globally

–Participating in national engineering conferences to

broaden our talent pipeline to be more diverse and

inclusive in all areas of demographics

–Collaborating with universities and organizations

dedicated to building diversity and creating

opportunities for professional development and

engagement

–Executing global D&I engagement activities, such as

International Women’s Day, LGBTQIA+ Pride Month

and Global Diversity Month

–Organizing D&I events with keynote speakers

–Supporting employee networks give back locally in

their community through mentoring programs

For the Board of Management specifically, the

Supervisory Board will select candidates for appointment

to the Board of Management with due observance of

ASML's objective to foster a diverse and inclusive

working environment. Accordingly, ASML aims to fill

vacancies by considering candidates that bring the

required expertise and contribute to ASML's diversity.

The Supervisory Board, when assessing the composition

of the Board of Management and identifying suitable

candidates for succession, will consider candidates on

merit against objective criteria and the specific profile for

the job, while having due regard for the relevant aspects

of diversity. This applies in particular to continuously

striving for a more balanced gender representation.

In ASML's internal development efforts for potential

Board of Management members, we strive for

participation of a diverse group of employees, specifically

senior leadership.

Any search firm engaged by the Supervisory Board or its

Selection and Nomination Committee will be specifically

directed to include diverse candidates in general and

multiple female candidates in particular.

In 2022, we made progress in gender diversity at all

levels, including individual contributors and senior

leaders. Female employees now make up 19% of our

workforce worldwide, an improvement of one percentage

point compared with last year. We aim to continue this

upward trend as we move toward 2024.

To do this, we are focusing on the growth of our existing

team members and expanding the diversity of our talent

pool. We had set goals to increase the percentage of

females among our new hires from 20% in 2021 to 23%

by 2024. In 2022, 24% of new hires were females.

The current representation of women at leadership level

is 10% while our ambition is to reach 12% by 2024. To

make this tangible, we had set a goal to increase the

hiring and promotion of female leaders, from 12% in

2021 to 20% in 2024. In 2022, the % inflow of female

leaders was 35%.

Due to the strong performance of our female inflow of

new hires and recognizing that we want to continue this

ambitious inflow, we have defined a 2025 target of 24%

(which is at the same level as our 2022 performance, but

higher than the original 2024 target of 23%).

This talented pool of female employees will be 'role

models', paving a path for more to follow. We believe

that promoting more diversity in our workforce will help

us to attract and retain smart, talented people, enabling

us to drive technological innovations that meet our

customers’ needs.

Ensuring balanced gender representation has proven to

be challenging in a technology environment such as the

one ASML operates in. Overall, the global STEM

(science, technology, engineering and math) talent pool is

thinly populated and it is even more challenging to recruit

female talent. Our R&D workforce is 16% female. Nearly

90% of our job positions are STEM-related, whereas

peers in the high-tech industry have more non-STEM-

related job positions. ASML is highly motivated to see

more women pursuing careers in engineering and

science now and in the future. The highly specialized

nature of our industry means achieving this balance is a

long-term process. We are actively engaged with multiple

educational programs to grow the pipeline, deploy

multiple initiatives to promote STEM education among

the future female talent pool and continue to foster an

environment where our current workforce can thrive.

Read more information on our diversity and inclusion strategy,

initiatives, women in leadership and performance data in:

Social - Attractive workplace for all - Best employee experience

and Non-financial statements - Non-financial indicators -

Attractive workplace for all.

Conflicts of interest and related party transactions

Conflict of interest procedures are incorporated in both

the Board of Management’s and the Supervisory Board’s

Rules of Procedure. These procedures reflect Dutch law

and the principles and best practice provisions of the

Code with respect to conflicts of interest.

There have been no transactions in 2022, nor are there

currently any transactions, between ASML or any of

ASML’s subsidiaries, or any significant shareholder and

any member of the Board of Management, officer,

Supervisory Board member or any relative or spouse

thereof, other than ordinary course compensation

arrangements. Furthermore, ASML has not granted any

personal loans, guarantees or the like to members of the

Board of Management or Supervisory Board.

Outside positions

Pursuant to Dutch legislation, a member of the Board of

Management may not be a Supervisory Board member

in more than two other large companies or large

foundations, as defined in Dutch law. A member of the

Board of Management may never be the Chairperson of

a Supervisory Board of a large company. Board of

Management members require prior approval from the

Supervisory Board before accepting a position of another

large company or foundation. Members of the Board of

Management are also required to notify the Supervisory

Board of other important functions held or to be held by

them. The remuneration received by members of the

Board of Management from outside positions, if any,

shall be reimbursed to ASML, unless otherwise agreed

with the Supervisory Board in accordance with the Rules

of Procedure of the Board of Management.

Dutch law stipulates that a Supervisory Board member

may not hold more than five Supervisory Board positions

in large companies or large foundations as defined in

Dutch law, with chairmanships counting twice.

During the financial year 2022, all members of the Board

of Management and the Supervisory Board complied

with the requirements described above.



	We highly value the interaction with our shareholders.”
	Gerard Kleisterlee
	Chair of the Supervisory Board

General Meeting

A General Meeting (AGM) is held at least once a year and

generally takes place in Veldhoven, the Netherlands. In

2022, shareholders had the option to attend the 2022

AGM in person in Veldhoven or virtually. The agenda for

the AGM typically includes the following topics:



	–Discussion of the management report and the adoption of the financial statements over the past financial year; –Discussion of the dividend policy and approval of any proposed dividends; –Advisory vote on the Remuneration Report over the past financial year; –The discharge from liability of the members of the Board of Management and the Supervisory Board for the performance of their responsibilities in the previous financial year; –The limited authorization for the Board of Management to issue (rights to) shares in ASML’s capital, and to exclude preemptive rights for such issuances, as well as to repurchase shares and to cancel shares; and –Any other topics proposed by the Board of Management, the Supervisory Board or shareholders in accordance with Dutch law and the Articles of Association.

Proposals placed on the agenda by the Supervisory

Board, the Board of Management or shareholders,

provided that they have submitted the proposals in

accordance with the applicable legal provisions, are

discussed and resolved upon. Shareholders representing

at least 1.0% of ASML’s outstanding share capital or

representing a share value of at least €50 million are

entitled to place items on the agenda of a General

Meeting at least 60 days before the date of the meeting.

Extraordinary general meetings may be held when

considered necessary by the Supervisory Board or Board

of Management. In addition, an extraordinary general

meeting must be held if one or more ordinary or

cumulative preference shareholders, who jointly

represent at least 10% of the issued share capital, make

a written request to that effect to the Supervisory Board

and the Board of Management. The request must specify

in detail the business to be dealt with.

Shareholders’ meetings are convened by public

announcement via the website of ASML no later than

42 days prior to the meeting, as stipulated by Dutch law.

The record date is set at the 28th day prior to the day of

the AGM. Persons who are registered as shareholders

on the record date are entitled to attend the meeting and

to exercise other shareholder rights.

The Board of Management and Supervisory Board

provide shareholders with information relevant to the

topics on the agenda by means of an explanation of the

agenda as well as by documents necessary or helpful for

this purpose. The agenda indicates which agenda items

are voting items, and which items are for discussion only.

All documents related to the General Meeting, including

the agenda with explanations, are posted on our

website.

ASML shareholders may appoint a proxy who can vote

on their behalf at the AGM. In addition, we use an

internet proxy voting system, facilitating shareholder

participation without having to attend in person. We also

provide the option for shareholders to issue voting

proxies or voting instructions to an independent civil law

notary prior to the AGM. We do not solicit from or

nominate proxies for our shareholders.

Hybrid AGM

In view of the ongoing COVID-19 pandemic, we

organized a hybrid AGM in 2022, accommodating

attendance in person as well as virtual attendance of the

AGM by enabling shareholders to follow the proceedings

of the meeting via video webcast and to vote

electronically during the meeting. The opportunity to

participate in the AGM in person or virtually was offered

in addition to the opportunity to vote in advance via

written or electronic proxy. As we highly value interaction

with our shareholders, we invited shareholders who

attended the AGM in person to ask questions about the

agenda items during the AGM and we provided holders

of shares traded on Euronext Amsterdam who attended

the AGM virtually the opportunity to ask live questions in

writing through the virtual meeting platform. All questions

were answered during the AGM.

Resolutions are adopted by the General Meeting by an

absolute majority of the votes cast (except where a

different proportion of votes are required by the Articles

of Association or Dutch law), and there are generally no

quorum requirements applicable to such meetings.

Voting results from the AGM are made available on our

website within 15 days of the meeting. The draft report of

the AGM is made available on our website or on request

no later than three months after the meeting.

Shareholders have the opportunity to provide comments

in the subsequent three months, after which the report is

adopted by the Chairman and the Secretary of the

meeting. The adopted report is also available on our

website and on request.

Powers

In addition to the items submitted annually at the AGM,

the General Meeting also has other powers, with due

observance of the statutory provisions. These include

resolving:

–To amend the articles of association;

–To issue shares if and insofar as the Board of

Management has not been designated by the General

Meeting for this purpose; and

–To adopt the Remuneration Policies for the members

of the Board of Management and the Supervisory

Board.

(Proposed) amendments of the Articles of Association

require the approval of the Supervisory Board. A quorum

requirement applies for the General Meeting at which an

amendment of the Articles of Association is proposed:

more than half of the issued share capital is required to

be represented; the proposal requires a voting majority of

at least three-fourths of the votes cast. If the quorum

requirement is not met, a subsequent General Meeting

shall be convened, to be held within four weeks of the

first meeting. At this second meeting, the resolution can

be adopted with at least three-fourths of the votes cast,

irrespective of the share capital represented. If a

resolution to amend the Articles of Association is

proposed by the Board of Management, the resolution

will be adopted with an absolute majority of votes cast

irrespective of the represented share capital at the

General Meeting.

During the 2022 AGM, the Board of Management, with

the approval of the Supervisory Board, proposed to the

General Meeting to amend the Articles of Association.

The amendments mainly related to reflecting various

changes in applicable laws and regulations, simplifying

the Articles of Association and applying amendments of

a technical nature. The proposal was adopted by the

General Meeting and the new Articles of Association

became effective as per May 12, 2022. For more detailed

information on the amendments to the Articles of

Association, please see the 2022 AGM page on our

website.

A brief summary of the most significant provisions of our

Articles of Association is included as Exhibit 99.1 to our

Form 6-K furnished to the SEC on February 8, 2013 (the

‘Articles of Association’), which is incorporated by

reference herein.



ASML’s authorized share capital amounts to €126.0 million and is divided into:

	Type of shares	Number of shares	Nominal value	Votes per share
	Cumulative preference shares	700,000,000	€0.09 per share	1
	Ordinary shares	700,000,000	€0.09 per share	1

The issued and fully paid up ordinary shares with a nominal value of €0.09 each were as follows:

	Year ended December 31	2020	2021	2022
	Issued ordinary shares with nominal value of €0.09	416,514,034	402,601,613	394,589,411
	Issued ordinary treasury shares with nominal value of €0.09	2,983,454	3,873,663	8,548,631
	Total issued ordinary shares with nominal value of €0.09	419,497,488	406,475,276	403,138,042

87,875,651 ordinary shares were held by 280 registered

holders with a registered address in the US. Since certain

of our ordinary shares were held by brokers and

nominees, the number of record holders in the US may

not be representative of the number of beneficial holders,

or of where the beneficial holders are resident.

Each ordinary share consists of 900 fractional shares.

Fractional shares entitle the holder thereof to a fractional

dividend, but do not give entitlement to voting rights.

Only those persons who hold shares directly in the share

5504 DR Veldhoven, de Run 6501, the Netherlands, or in

the New York share register, held by JP Morgan Chase

Bank, N.A., P.O. Box 64506, St. Paul, MN 55164-0506,

United States, can hold fractional shares. Shareholders

who hold ordinary shares through the deposit system

under the Dutch Securities Bank Giro Transactions Act

maintained by the Dutch central securities depository

Euroclear Nederland or through the Depository Trust

Company cannot hold fractional shares.

No cumulative preference shares have been issued.

Following the amended Articles of Association that were

adopted by the General Meeting during the 2022 AGM,

the capital structure changed. Due to these changes, we

no longer have the ordinary share class B. With the

removal of the ordinary share class B, each share carries

one vote.

Special voting rights, limitation voting rights and transfers

of shares

There are no special voting rights on the issued shares in

our share capital.

In 2012, we issued shares to three key customers – Intel,

TSMC and Samsung – as part of the customer co-

investment program (CCIP) to accelerate ASML’s

development of EUV. Under this program, the

participating customers funded certain development

programs and invested in ASML’s ordinary shares.

Currently, only one participating customer still holds

(directly or indirectly) ordinary shares issued in the CCIP.

Certain voting restrictions apply in respect of ordinary

shares issued in connection with the CCIP. These voting

restrictions in respect of these ordinary shares are set out

in the underlying agreement between ASML and the

relevant customer. The shares issued in the CCIP were

held by foundations which issued depository receipts to

participants in the CCIP. A total of 96,566,077 depository

receipts for ordinary shares were issued at the launch of

the CCIP. This number has since decreased with the sell-

down by the relevant customers following expiry of the

lock-up.

There are currently no limitations, either under Dutch law

or in ASML’s Articles of Association, on the transfer of

ordinary shares in the share capital of ASML. Pursuant to

ASML’s Articles of Association, the Supervisory Board’s

approval shall be required for every transfer of cumulative

preference shares.

Issue and repurchase of (rights to) shares

Our Board of Management has the power to issue

ordinary shares and cumulative preference shares insofar

as it has been authorized to do so by the General

Meeting. The Board of Management requires approval of

the Supervisory Board for such an issue. The

authorization by the General Meeting can only be granted

for a certain period not exceeding five years and may be

extended for no longer than five years on each occasion.

If the General Meeting has not authorized the Board of

Management to issue shares, the General Meeting will be

authorized to issue shares on the Board of

Management’s proposal, provided that the Supervisory

Board has approved such a proposal.

Holders of ASML’s ordinary shares have a preemptive

right, in proportion to the aggregate nominal amount of

the ordinary shares held by them. This preemptive right

may be restricted or excluded. Holders of ordinary

shares do not have preemptive right with respect to any

ordinary shares issued for consideration other than cash

or ordinary shares issued to employees. If authorized for

this purpose by the General Meeting, the Board of

Management has the power, subject to approval of the

Supervisory Board, to restrict or exclude the preemptive

rights of holders of ordinary shares.

2022 authorization to issue shares

At our 2022 AGM, the Board of Management was

authorized from April 29, 2022 through October 29,

2023, subject to the approval of the Supervisory Board,

to issue shares and/or rights thereto representing up to a

maximum of 5% of our issued share capital at April 29,

2022, plus an additional 5% of our issued share capital

at April 29, 2022, that may be issued in connection with

mergers, acquisitions and/or (strategic) alliances. Our

shareholders also authorized the Board of Management

through October 29, 2023, subject to approval of the

Supervisory Board, to restrict or exclude preemptive

rights with respect to holders of ordinary shares up to a

maximum of 5% of our issued share capital in connection

with the general authorization to issue shares and/or

rights to shares, plus an additional 5% in connection with

the authorization to issue shares and/or rights to shares

in connection with mergers, acquisitions and/or

(strategic) alliances.

We may repurchase our issued ordinary shares at any

time, subject to compliance with the requirements of

Dutch law and our Articles of Association. Any such

repurchases are subject to the approval of the

Supervisory Board and the authorization by the General

Meeting, which authorization may not be for more than

18 months.

2022 authorization to repurchase shares

At the 2022 AGM, the Board of Management was

authorized, subject to Supervisory Board approval, to

repurchase through October 29, 2023, up to a maximum

of 10% of our issued share capital at April 29, 2022, at a

price between the nominal value of the ordinary shares

purchased and 110% of the market price of these

securities on Euronext Amsterdam or NASDAQ.

Read more details on our share buyback program in:

Consolidated Financial Statements - Notes to the Consolidated

Financial Statements - Note 22 Shareholders’ equity.

ASML Preference Shares Foundation

The ASML Preference Shares Foundation (Stichting

Preferente Aandelen ASML), a foundation organized

under Dutch law, has been granted an option right to

acquire preference shares in the share capital of ASML.

The Foundation may exercise the Preference Share

Option in situations where, in the opinion of the

Foundation’s Board of Directors, ASML’s interests,

ASML’s business or the interests of ASML’s

stakeholders are at stake. This may be the case if:

–A public bid for ASML’s shares is announced or made,

or there is a justified expectation that such a bid will be

made without any agreement having been reached

with ASML in relation to such a bid; or

–In the opinion of the Foundation’s Board of Directors,

the (attempted) exercise of the voting rights by one

shareholder or more shareholders, acting in concert, is

materially in conflict with ASML’s interests, ASML’s

business or ASML’s stakeholders.

Objectives of the Foundation

The Foundation’s objectives are to look after the interests

of ASML and the enterprises maintained by and/or

affiliated in a group with ASML, in such a way that the

interests of ASML, of those enterprises and of all parties

concerned are safeguarded in the best possible way,

and that influences in conflict with these interests, which

might affect the independence or the identity of ASML

and those companies, are deterred to the best of the

Foundation’s ability, and everything related to the above

or possibly conducive thereto. The Foundation aims to

realize its objects by acquiring and holding cumulative

preference shares in the capital of ASML and by

exercising the rights attached to these shares,

particularly the voting rights.

The Preference Share Option

The Preference Share Option gives the Foundation the

right to acquire such number of cumulative preference

shares as the Foundation will require, provided that the

aggregate nominal value of such number of cumulative

preference shares shall not exceed the aggregate

nominal value of the ordinary shares issued at the time of

exercise of the Preference Share Option. The

subscription price will be equal to their nominal value.

Only one-fourth of the subscription price would be

payable at the time of initial issuance of the cumulative

preference shares, with the other three-fourths of the

nominal value only being payable when ASML calls up

this amount. Exercise of the preference Share Option

could effectively dilute the voting-power of the

outstanding ordinary shares by one-half.

Cancellation of cumulative preference shares

Cancellation and repayment of the issued cumulative

preference shares by ASML requires authorization by the

General Meeting, on a proposal to this effect made by

the Board of Management and approved by the

Supervisory Board. If the Preference Share Option is

exercised and as a result cumulative preference shares

are issued, ASML will initiate the repurchase or

cancellation of all cumulative preference shares held by

the Foundation on the Foundation’s request. In that

case, ASML is obliged to effect the repurchase and

respective cancellation as soon as possible. A

cancellation will result in a repayment of the amount paid

and exemption from the obligation to pay up on the

cumulative preference shares. A repurchase of the

cumulative preference shares can only take place when

such shares are fully paid up.

If the Foundation does not request ASML to repurchase

or cancel all cumulative preference shares held by the

Foundation within 20 months of issuance of these

shares, we will be required to convene a General Meeting

for the purpose of deciding on a repurchase or

cancellation of these shares.

Board of Directors

The Foundation is independent of ASML. The Board of

Directors of the Foundation is composed of four

independent members from the Netherlands’ business

and academic communities. The Foundation’s Board of

Directors is composed per December 31, 2022, of the

following members: Mr. A.P.M. van der Poel, Mr. S.

Perrick, Mr. S.S. Vollebregt and Mr. J. Streppel.

Other than the arrangements made with the Foundation

as described above, ASML has not established any other

anti-takeover devices.

Major shareholders

The Dutch Act on the supervision of financial markets and US securities laws contain requirements regarding the

disclosure of capital interests and voting rights in listed companies. The following table sets forth the total number of

ordinary shares owned by each shareholder that reported to the Dutch AFM or the US SEC a beneficial ownership of

ordinary shares that is at least 3.0% (5.0%, in the case of the SEC) of our ordinary shares issued and outstanding.

Also included in the table below is the total number of ordinary shares owned by our members of the Board of

Management as of December 31, 2022. The information set out below with respect to shareholders is based on

public filings with the SEC and AFM as of February 8, 2023.


	Shares	% of Class6
Capital Research and Management Company1	40,615,837	10.29%
BlackRock Inc.2	32,539,755	8.25%
T. Rowe Price Group, Inc.3	13,527,385	3.43%
Members of ASML’s current Board of Management (5 persons)4,5	89,892	0.02%

1.As reported to the AFM on February 7, 2022, Capital Research & Management Company (CRMC) reports 365,542,532 voting rights

corresponding to 40,615,837 ordinary shares (based on 9 votes per share), but do not report ownership rights related to those shares.

2.Based solely on the Schedule 13-G/A filed by BlackRock Inc. with the SEC on March 11, 2022; BlackRock reports voting power with respect to

29,277,159 of these shares. A public filing with the AFM on December 6, 2022 shows an aggregate indirect capital interest of 5.80% and voting

rights of 7.23%, based on the total number of issued shares and voting rights at that time.

3.A public filing with the AFM on November 8, 2022 shows T. Rowe Price Group, Inc. indirectly holding 13,527,385 shares (comprising common

shares and new york shares) and 13,098,195 votes, representing a capital interest of 3.33% and a voting interest of 3.22%, based on the total

number of issued shares and voting rights at that time.

4.Does not include unvested shares granted to members of the Board of Management. For further information, see Leadership and governance –

Remuneration Report.

5.No shares are owned by members of the Supervisory Board.

6.As a percentage of the total number of ordinary shares issued and outstanding, 394,589,411 as of December 31, 2022, which excludes

8,548,631 ordinary shares which have been issued but are held in treasury by ASML. The share ownership percentages reported to the AFM are

expressed as a percentage of the total number of ordinary shares issued (including treasury stock), and accordingly, percentages reflected in

this table may differ from percentages reported to the AFM or the SEC.



		ASML publishes, among others, the following annual reports regarding the financial year 2022:	Both reports have the same qualitative base and describe the same risk factors that are specific to the semiconductor industry, ASML and ASML’s shares. We also provide sensitivity analyses by providing:
		–The statutory Annual Report, prepared in accordance with the requirements of Dutch law. The financial statements included therein are prepared in accordance with Part 9 of Book 2 of the Dutch Civil Code and EU-IFRS; and –The Annual Report on Form 20-F, prepared in accordance with the requirements of the Exchange Act. The financial statements included therein are prepared in conformity with US GAAP.
			–A narrative explanation of ASML’s financial statements; –The context within which financial information should be analyzed; and –Information about the quality, and variability, of our earnings and cash flow.

ASML annually prepares two sets of annual reports

including financial statements as set out on this page.

With respect to the process of creating the Annual

Report, we have extensive guidelines for the content and

layout of our report. These guidelines are primarily based

on the applicable laws and regulations referred to above.

With respect to the preparation process of these and the

other financial reports, we apply internal procedures to

safeguard the completeness and accuracy of such

information as part of its disclosure controls and

procedures. The Disclosure Committee assists the Board

of Management in overseeing ASML’s disclosure

activities and ensures compliance with applicable

disclosure requirements arising under Dutch and US law,

and other regulatory requirements. These internal

procedures are frequently discussed by the Audit

Committee and the Supervisory Board.

For ASML’s internal risk management and control systems read more

in:

Risk - How we manage risk - Enterprise Risk Management.

The Supervisory Board has reviewed and approved, and

all Supervisory Board members signed, ASML’s 2022

financial statements as prepared by the Board of

Management. KPMG has duly examined our financial

statements, and the Auditor’s Report is included in the

Consolidated Financial Statements.

External Audit

In accordance with Dutch law, our external auditor is

appointed by the General Meeting, based on a

nomination for appointment by the Supervisory Board.

The Supervisory Board bases its nomination on the

advice from the Audit Committee and the Board of

Management, who annually provide a report to the

Supervisory Board on the performance of and

relationship with the external auditor, as well as its

independence. ASML’s current external auditor, KPMG,

was first appointed by the General Meeting in 2015 for

the reporting year 2016, and has been reappointed on a

yearly basis since then. At the 2022 AGM, KPMG was

appointed as the external auditor for the reporting years

2023 and 2024.

On April 29, 2022, ASML announced the Supervisory

Board’s decision to nominate PricewaterhouseCoopers

Accountants NV (PwC) as its external auditor for the

reporting year 2025. The formal appointment of PwC will

be submitted for voting at ASML’s 2023 AGM.

The Audit Committee reviews and approves the external

auditor’s audit plan for the audits planned during the

financial year. The audit plan also includes, among

others, the activities of the external auditor with respect

to their limited procedures on the quarterly results other

than the annual accounts. Proposed services may be

pre-approved at the beginning of the year by the Audit

Committee (annual pre-approval) or may be pre-

approved during the year by the Audit Committee in case

of a particular engagement (specific pre-approval). The

annual pre-approval is based on a detailed, itemized list

of services to be provided, which is designed to ensure

there is no management discretion in determining

whether a service has been approved, and to ensure the

Audit Committee is informed of each service it is pre-

approving.

Dutch rules require strict separation of audit and advisory

services for Dutch public-interest entities and US

regulations restrict services that can be provided by an

auditor of a US listed company. Dutch law prohibits the

acceptance by the external auditor of other services

when an audit is performed. The Audit Committee

monitors compliance with Dutch and US rules on

services provided by the external auditor.

The remuneration of the external auditor is approved by

the Audit Committee on behalf of the Supervisory Board,

and after consulting the Board of Management. As the

Audit Committee has the most relevant insight and

experience in this area, the Supervisory Board has

delegated these responsibilities to the Audit Committee.

Read more information on principal accountant fees and services in:

Consolidated Financial Statements - Notes to the Consolidated

Financial Statements - Note 29 Principal accountant fees and

services.

In principle, the external auditor attends all the Audit

Committee meetings. The external auditor’s findings are

discussed at these meetings. The Audit Committee

reports to the Supervisory Board on the topics discussed

with the external auditor, including the external auditor’s

reports with regard to the audit of the annual reports as

well as the content of the annual reports. Furthermore,

the external auditor may attend the Supervisory Board

meeting in which the annual external audit report is

discussed. The external auditor may also attend

Supervisory Board meetings at which the quarterly

financial results are discussed.

The Audit Committee is informed by the external auditor

without delay if the external auditor discovers

irregularities in the content of the audit of the financial

reports.

The external auditor is present at our AGM to respond to

questions, if any, from the shareholders about the

auditor’s report on the Consolidated Financial

Statements.

Internal Audit

The role of our Internal Audit function is to assess our

systems of internal controls by performing independent

procedures such as risk-based operational audits, IT

audits and compliance audits. The Internal Audit

department reports directly to the Audit Committee and

the Board of Management. The yearly Internal Audit plan

is discussed with and approved by the Audit Committee,

the Board of Management and the Supervisory Board.

The follow-up on the Internal Audit findings and progress

made compared with the plan are discussed on a

quarterly basis with the Audit Committee. The external

auditor and Internal Audit department have meetings on

a regular basis.

Corporate information

ASML Holding N.V. is a holding company that operates

through its subsidiaries. We have operating subsidiaries

in the Netherlands, the United States, Italy, France,

Germany, the United Kingdom, Ireland, Belgium, South

Korea, Taiwan, Singapore, China, Hong Kong, Japan,

Malaysia and Israel.

Financial Statements - Note 27 Subsidiaries and associates.

US listing requirements

As ASML’s New York Shares are listed on NASDAQ

Stock Market LLC, NASDAQ corporate governance

standards in principle apply to us. However, NASDAQ

rules provide that foreign private issuers may follow home

country practice in lieu of the NASDAQ corporate

governance standards subject to certain exceptions. Our

corporate governance practices are primarily based on

Dutch requirements. The table on this page sets forth the

practices followed by ASML in lieu of NASDAQ rules the

exception as described above.


Practices followed by ASML in lieu of NASDAQ rules
Quorum	ASML does not follow NASDAQ’s quorum requirements applicable to meetings of ordinary shareholders. In accordance with Dutch law and generally accepted Dutch business practice, ASML’s Articles of Association provide that there are no quorum requirements generally applicable to general meetings of shareholders.
Solicitation of proxies	ASML does not follow NASDAQ’s requirements regarding the solicitation of proxies and the provision of proxy statements for general meetings of shareholders. ASML does furnish proxy statements and solicit proxies for the General Meeting. Dutch corporate law sets a mandatory (participation and voting) record date for Dutch listed companies at the 28th day prior to the date of the General Meeting. Shareholders registered at such a record date are entitled to attend and exercise their rights as shareholders at the General Meeting, regardless of sale of shares after the record date.
Distribution of Annual Report	ASML does not follow NASDAQ’s requirement regarding distribution to shareholders of copies of an annual report containing audited Financial Statements prior to our AGM. The distribution of our annual reports to shareholders is not required under Dutch corporate law or Dutch securities laws, or by Euronext Amsterdam. Furthermore, it is generally accepted business practice for Dutch companies not to distribute annual reports. In part, this is because the Dutch system of bearer shares has made it impractical to keep a current list of holders of the bearer shares in order to distribute the annual reports. Instead, we make our Annual Report available at our corporate head office in the Netherlands (and at the offices of our Dutch listing agent as stated in the convening notice for the meeting) no later than 42 days prior to convocation of the AGM. In addition, we post a copy of our Annual Reports on our website prior to the AGM.
Equity compensation arrangements	ASML does not follow NASDAQ’s requirement to obtain shareholder approval of stock option or purchase plans or other equity compensation arrangements available to officers, directors or employees. It is not required under Dutch law or generally accepted practice for Dutch companies to obtain shareholder approval of equity compensation arrangements available to officers, directors or employees. The General Meeting adopts the Remuneration Policy for the Board of Management, approves equity compensation arrangements for the Board of Management and approves the remuneration for the Supervisory Board. The Remuneration Committee evaluates the achievements of individual members of the Board of Management with respect to the short- and long-term quantitative performance and he full Supervisory Board evaluates the quantitative performance criteria. Equity compensation arrangements for employees are adopted by the Board of Management within limits approved by the General Meeting.

Compliance with the Corporate

Governance Code

We closely follow the developments in the area of

corporate governance and the applicability of the relevant

corporate governance rules for ASML. Any substantial

changes to ASML’s corporate governance structure or

application of the Corporate Governance Code will be

submitted to the General Meeting for discussion.

We are of the opinion that ASML fully complies with the

applicable principles and best-practice provisions of the

Dutch Corporate Governance Code as in effect for the

financial year 2022.

The Board of Management and the Supervisory Board,

Veldhoven, February 15, 2023



	The Supervisory Board supervises and advises the Board of Management in performing its management tasks and setting the direction for ASML, focusing on long- term and sustainable value creation. The members of the Supervisory Board are fully independent.

The Supervisory Board is

confident that the full order

book – supported by the

skills and passion of our

outstanding teams – lays a

firm foundation for the

months and years ahead.”

Gerard Kleisterlee

Chair of the Supervisory Board

Dear Stakeholder,

Despite geopolitical turmoil, high inflation and massive

supply chain issues, 2022 has been another record year

for our company. Driven by continuing strong demand for

microchips, we currently enjoy the fullest order book in

our history – and we are in a very good position to

achieve further growth in the years to come.

As a supervisory Board we are of course very pleased

with these achievements that only could be realized

thanks to our highly engaged workforce that always went

the extra mile required. We are satisfied, but not

complacent. The high market demand, especially for

DUV, took us by surprise and our systems and supply

chain issues did not allow us to meet all our customer

requirements.

In order to maintain our success we are working hard to

prepare for the future. Below, I outline some of the key

areas that we focused on during 2022.

Reviewing our capacity plans

The last 12 months again saw unprecedented demand

for semiconductors, both in mature as well as leading

edge technology, resulting in the fullest order book in our

history. This against a backdrop of a declining global

economic growth, driven by geopolitical tensions –

including the war in Ukraine as well as legacy issues

associated with COVID-19 - with resulting high inflation

and the desire for (regional) technological sovereignty.

In this highly volatile and uncertain environment the

Supervisory Board dedicated several of its sessions to

discuss different long term market development

scenarios and agree with management the plans for

structural capacity expansion both at ASML and in our

supply chain with the required flexibility to cope with

market volatility.

The Supervisory Board also discussed in detail with

management the actions required to meet the short term

demand of our customers. Although we could not supply

all that we were asked to deliver, we ensured that our

teams did everything possible to help our customers

continue to meet the demands of their customers. For

example, our fast shipments initiative reduced throughput

time and increased output by having some final testing

and formal acceptance carried out on customer sites

instead of at our own facilities.

Organizing for continued growth

Reviewing our priorities for continued growth, we

confirmed that our current core business presents by far

the biggest opportunity. This requires a further

strengthening of our partnerships with certain key

suppliers, where we are making good progress. In

addition, we see interesting opportunities in adjacent

holistic lithography markets that we will further explore.

We strive to foster a unified culture at ASML based on

our values of challenge, collaborate and care. Making the

impossible possible and always trying to reach the

cutting edge of what is technically doable are core

characteristics of our company. However, ASML’s rapid

growth presents significant challenges for our way of

working, our people and our managerial capacity and

capabilities.

We have grown from a small-to-medium-sized company,

operating in one location and relying on a handful of

people to oversee the entire organization, to a global

multinational business. Such expansion requires a

different approach and new structures, so organizational

and people development have been top priorities for the

Supervisory Board. Projects have been agreed to renew

and strengthen both our Customer Management as well

as our Supply Chain Management.

In addition, as a Supervisory Board, we maintained a

strong focus on Management development and

succession planning. We are working hard together with

the Board of Management to identify and develop the

talent we need to ensure that we have qualified

successors both in middle- and senior-management to

deliver continued growth and meet market demands for

cutting edge lithography solutions.

Emphasizing the importance of ESG

Environment, Social and Governance (ESG) matters are

increasingly important to us and all our stakeholders.

With us and all our stakeholders, from customers and

our investors to our people and local communities, there

is a growing awareness of the role that all businesses

must play in society.

The Supervisory Board has spent considerable time

evaluating and discussing the company’s ESG strategy

and is fully supportive of the decisions that management

has made.

Energy efficiency, climate action, a circular economy,

water management and product safety are key

commitments from an environmental perspective. At the

same time, our management is working hard to ensure

that ASML is an attractive workplace for all and a valued

partner in our communities, while supporting the

innovation ecosystem and the supply chain. Overarching

our Environmental and Social initiatives is a firm

commitment to the highest standards of Governance.

Engaging with our stakeholders

The Supervisory Board continued to visit customers and

suppliers during the year in order to learn more about the

challenges they face and build engagement at the

highest level. We visited Intel, one of our major

customers, where we engaged with their senior team to

further improve our customer focus, and Zeiss, the

supply partner for all our optics, to explore how we could

make the supply chain more robust and resilient.

Our visits to internal functions including the 5L

Warehouse project and the High NA factory gave us a

good insights into the expertise we have at ASML and

delivered valuable learnings on further improvement

required. l We also visited one of our key technology

partners, the Advanced Research Center for

Nanolithography (ARCNL), where we were impressed by

their depth of technical capability.

In addition a delegation of the Supervisory Board

regularly meets with the Works Council in order to better

understand the needs and concerns of our people.

Although our thoughts are usually closely aligned with

those of the Works Council, we ensure that we engage

directly with them to provide a clear communications

channel to the feelings of people across our organization.

Also Members of the Supervisory Board regularly meet

with institutional investors. For instance, the Chair of our

Remuneration Committee frequently engages with major

investors to ensure that the Remuneration Policy is

closely aligned with their expectations.

Looking ahead

The Supervisory Board is confident that the full order

book – supported by the skills and passion of our

outstanding teams – lays a firm foundation for the

months and years ahead. While geopolitical matters,

likely mild recession and the aftermath of COVID-19 will

continue to hamper efforts to ensure the supply chain

runs smoothly, ASML is well placed to achieve another

excellent performance in 2023.

At the 2023 AGM, Rolf-Dieter Schwalb and I will step

down after having served on ASML's Supervisory Board

for eight years. On behalf of the Supervisory Board I

would like to express gratitude to Rolf-Dieter for his

important contribution to the Supervisory Board,

especially as Chairman of the Audit Committee and

previously also as Chairman of the Remuneration

Committee.

During our 8 years on the Board, we were part of a

fantastic journey that saw ASML grow with the

breakthrough of EUV from a 6 billion revenue company in

2014 to a 21 billion Company in 2022, driven by absolute

customer focus, technological prowess and an

unbelievably strong “can do” mentality. The journey will

continue under our successors. For us it was a pleasure

and a privilege to serve.

To close, on behalf of the whole Supervisory Board I

would once again like to thank every member of our

39,086-strong team for their hard work and sheer

enthusiasm throughout 2022.You made it happen!

Gerard Kleisterlee

Chair of the Supervisory Board




	7	44%
	Supervisory Board meetings (2021: 6)	Female members (2021: 38%)


	95%	4.0
	Attendance rate (2021: 98%)	Years average tenure (2021: 3.9)

The Supervisory Board supervises and advises the Board

of Management in performing its management tasks and

setting the direction for ASML. The Supervisory Board

focuses on long-term and sustainable value creation,

with the goal of ensuring that the Board of Management

pursues a strategy that secures ASML’s leading position

as a supplier of holistic lithography solutions to the

semiconductor industry. The Supervisory Board

maintains an appropriate system of checks and

balances, provides oversight, evaluates performance and

gives advice where required or requested. Through good

governance, we help to ensure that ASML acts in the

best interests of the company and its stakeholders. In

this Supervisory Board Report, we report on our activities

in 2022.

We are pleased to see that 2022 was another record

year for ASML in terms of turnover, cash flow and

profitability. It was a challenging year as well, since

demand for our products continued to outweigh our

output possibilities. The company has therefore been

working very hard to ramp up capacity. We recognize

that the strong growth of ASML leads to challenges in

the area of people and organizational development.

Furthermore, the geopolitical situation is a sincere factor

of risk and uncertainty. However, with a record order

book and a clear strategy for growth, we believe that

ASML is well positioned to continue to provide its

customers with leading, cost-effective patterning

solutions that drive the advancement of microchips.

Supervisory Board focus in 2022

Throughout 2022, the Supervisory Board agenda was

centered around the strategy and its execution, financial

and operational performance, business developments,

risk management, and people and organization. Based

on the strategic priorities for ASML as agreed in the

annual strategy review, several topics were extensively

discussed by means of deep dives, allowing a focused

and in-depth review.

Strategy and long-term value creation

During 2022, the Supervisory Board devoted a

considerable amount of time to discussing strategic

topics. We carried out our recurring annual review of

ASML’s corporate strategy, the long-term financial plan

and the long-term plans of EUV, DUV and Applications.

The Supervisory Board fully supports ASML’s strategy,

which continues to be centered around the five pillars:

strengthen customer trust, holistic lithography and

applications, DUV competitiveness, EUV 0.33 NA for

manufacturing and EUV 0.55 NA (High-NA) insertion.

With the strong demand for ASML’s products in

combination with the company’s focus on the execution

of its strategic priorities, the Supervisory Board has

confidence in ASML’s long-term growth opportunities

and the continued delivery of value to its stakeholders.

As part of the annual strategy review, we held dedicated

workshops focused on ASML’s value strategy and data

strategy. An in-depth review was performed of the short-,

medium- and long-term market developments in the

semiconductor industry and the related capacity ramp-

up required to meet our customers’ demands. Another

session was focused on long-term organic and in-

organic growth opportunities. These sessions enable an

engaged and focused discussion between the

Supervisory Board and Board of Management on key

strategic matters, and we highly value this way of

contributing to the strategic decision-making process.


	Deep dive
	Market developments and ASML capacity



	The Supervisory Board discussed with the Board of Management the short-, medium- and long-term market developments in the semiconductor industry and the related capacity ramp-up required to meet our customers’ demands. Key areas of Supervisory Board attention were the various demand drivers and their impact on overall demand, potential demand volatilities and the consequences of increasing demand in terms of capacity (ASML infrastructure and FTEs, supply chain). The challenges and risks related to the capacity ramp-up were also a key focus area for the Supervisory Board.



ASML ANNUAL REPORT 2022	SUPERVISORY BOARD REPORT CONTINUED	STRATEGIC REPORT	GOVERNANCE	FINANCIALS	169
Supervisory Board focus in 2022

Alongside the annual

strategy review, the

Supervisory Board

addressed strategic topics

throughout the year via

deep dives, which enabled

focused, in-depth

review.”

Gerard Kleisterlee

Chair of the Supervisory Board

Financial and operational performance

We reviewed the annual and interim financial statements,

including non-financial information, the quarterly results

and accompanying press releases, as well as the

outcomes of the year-end US GAAP and EU-IFRS audits.

As part of the financial updates, the Supervisory Board,

assisted by the Audit Committee, reviewed ASML’s

financing and capital return policies. The Supervisory

Board approved the Board of Management’s proposals

for the final and interim dividends paid in 2022.

Furthermore, the Supervisory Board monitored the

execution of the 2021-2023 share buyback program,

which was completed on October 18, 2022. The

Supervisory Board also discussed and approved the

2022-2025 share buyback program, which was

announced on November 10, 2022.

A special Audit Committee meeting was held, in which

also the majority of the full Supervisory Board was also

present, to discuss the messaging around the 2022

Capital Markets Day. During this meeting, our updated

market outlook and financial model were extensively

reviewed and discussed.

As a Supervisory Board, we are pleased with the financial

performance of the Company and we are confident that

ASML is well positioned to continue to deliver long-term

growth and stakeholder value in a sustainable manner.

Business developments

In 2022, we witnessed continued increase of wafer

demand at both advanced and mature nodes driven by

global megatrends in the electronics industry as well as

countries pushing for technological sovereignty in a

complex geopolitical context. This surging demand came

with challenges both in our own operations and in our

supply chain. The Supervisory Board closely monitored

the developments in this regard and saw management

address these challenges with the highest priority.

As a technology leader in the semiconductor industry,

technological progress is one of ASML’s top priorities.

The Supervisory Board closely followed the execution of

the product and technology roadmap and is pleased to

see the ever-wider adoption of ASML’s EUV 0.33 NA

scanner platform in high-volume manufacturing, and

growing commitment to the next-generation EUV 0.55

NA (High-NA) platform, where great progress has been

made by the teams working on this program.


	Deep dive

	Growth



	Growth is a central theme that touches on many aspects of ASML. For this reason, growth has also been top of mind for the Supervisory Board during 2022. We discussed with the Board of Management the challenges resulting from our growth in various areas, including how to grow our customer trust and performance, our people and organization, our output capability, and our innovation, and also how to grow sustainably. On all of these themes we held open dialogues in which the Supervisory Board challenged and advised the Board of Management, not only on how to deal with the current growth ASML is going through, but on how to organize for the future expected growth towards 2030.

People and organization

Given the significant growth of ASML in recent years, the

topics of people and organization continued to be key

areas of focus for the Supervisory Board in 2022, as we

believe that these are of critical importance for the future

success of ASML. On several occasions, we were

provided with updates on Human Resources and

Organization. Topics covered included the ASML

progress made on the ASML leadership program, the

results of the annual employee engagement survey and

the Diversity & Inclusion strategy and progress made.

Specific attention was also paid to ASML's culture and

values the focus of the Supervisory Board was how to

maintain the culture that has made ASML successful

while growing so fast in number of employees. Also,

internal and external perspectives on ASML's culture

were discussed. We also extensively discussed the

organizational setup of ASML in the context of current

and future growth. As a result of this discussion, the

Supervisory Board decided to position the role of the

Executive Vice President and Chief Strategic Sourcing &

Procurement Officer in the Board of Management, as

announced by press release on October 19, 2022.

Furthermore, the Supervisory Board, assisted by the

Selection and Nomination Committee, extensively

discussed and provided advice in respect of ASML’s

talent management and people development programs

as well as succession planning for the Board of

Management and senior management. The Supervisory

Board is pleased to see the effort being put into the

onboarding of new employees, enabling them to develop

and contribute as quickly as possible.

Furthermore, as a Supervisory Board, we find it important

that business processes are fit for growth. We therefore

oversaw various transformation programs such as the

Business Performance Improvement (BPI) initiative,

focused on improving our cross-sectoral, non-product-

related business processes. As part of the BPI initiative,

we also monitored the progress on the ONE Program,

ASML’s program dedicated to securing configuration

integrity over the life cycle of our customer offerings while

enhancing the business processes and maintaining

flexibility, with the support of its upgraded backbone

information system. We paid special attention to the sub-

roadmaps of the program where there had been less

progress than planned, looking at the challenges and

mitigating actions. We will continue to closely follow the

developments.


	Deep dive:
	ESG Sustainability strategy



	As a Supervisory Board we consider ESG Sustainability an increasingly important topic. While the Supervisory Board keeps the overall oversight of ESG Sustainability, various ESG Sustainability aspects are discussed at committee level, e.g. reporting in the Audit Committee, diversity in the Selection and Nomination Committee, ESG Sustainability as part of the Board of Management's incentive scheme in the Remuneration Committee and product and technology aspects in the Technology Committee. In 2022, we discussed ASML’s updated ESG Sustainability strategy and execution with the Board of Management. In deep dive sessions specific attention was paid to EUV energy efficiency, which is a key area of focus also given ASML's CO2 reduction ambitions, and the Diversity & Inclusion strategy and the implementation thereof. To underline the importance of ESG Sustainability, the Supervisory Board decided to include in the Board of Management's incentive scheme metrics directly linked to ESG Sustainability strategy, with an increased weighting.

Risk management

As risk management is a key element of the Supervisory

Board’s responsibilities, we received periodic risk

management updates during the year. We focused on

the risk landscape and the developments in that area,

the risk appetite and the measures put in place by the

Board of Management to mitigate the critical risks. We

paid particular attention to the challenges created by the

strong increase in demand for ASML’s products across

the entire product portfolio, which impacts multiple risks

in ASML’s risk landscape. We also focused on the risk

related to rapid growth of the organization. During the

year, specific risk areas were reviewed in deep dive

sessions. These included the physical and IT security

risk, the risk related to the ability to deliver according to

plan and political risks in light of the global trade

situation.

Read more in:

Risk - How we manage risk.

Relationship with stakeholders

The Supervisory Board regularly discussed ASML’s

relationship with its shareholders, and Supervisory Board

members engaged with shareholders throughout the

year on topics such as ASML’s strategy and

performance, governance and ESG. The Remuneration

Committee engaged with a variety of ASML shareholders

and other stakeholders regarding Board of Management

remuneration. More information can be found in the

Remuneration Report.

A Supervisory Board delegation held two formal

meetings with the Works Council in 2022. We exchanged

views on ASML’s strategy and priorities, ASML’s

performance and challenges, in particular related to the

growth and increased complexity of ASML’s business. In

this context, the effectiveness of new processes

supporting growth and institutionalizing of ASML was

addressed. Other topics of discussion were ESG, the

develop and perform program at ASML, leadership

development and the status and future plans related to

working from home / return to work onsite. The

composition of the Supervisory Board and the Board of

Management was discussed, in particular the changes

per the 2022 and 2023 AGMs. The Works Council and

Supervisory Board also extensively discussed the 2022

Remuneration Policy for the Board of Management; more

information on the interactions with the Works Council on

the topic of executive remuneration can be found in the

Remuneration Report.

In November 2022, the Supervisory Board paid a visit to

one of our key customers, Intel. The Supervisory Board

met with Intel’s management and visited the Intel facility

in Hillsboro, Oregon, US. Topics of discussion included

market outlook, Intel’s technology roadmap and how

ASML can support it, and the relationship between the

two companies. For the Supervisory Board, such visits

are highly valuable because it increases our

understanding of our customers and the challenges they

face.

Additional topics

Other topics considered during Supervisory Board

meetings in 2022 included:

–Compliance with rules and regulations: We monitored

compliance with rules and regulations including the

Dutch Corporate Governance Code and were kept

informed on key legal matters, including developments

in the area of export control regulations.

–Supervisory Board composition, profile and

functioning: We extensively discussed our own

composition, profile and functioning, the composition

and functioning of Board committees and the

composition and functioning of the Board of

Management. More information can be found in the

report of the Selection and Nomination Committee.

–Board of Management composition and performance:

We also monitored the performance of the Board of

Management and decided on the Board of

Management’s remuneration targets and target

achievements. More information can be found in the

reports of the Selection & Nomination Committee and

the Remuneration Committee.

An overview of topics discussed during the year can be

found in the list on the right.

Overview of the year

–2021 Annual Results and Annual Report

–2021 external audit report

–Final dividend 2021

–Remuneration Board of Management and Supervisory

Board

–Risk Management including deep dive: ability to deliver

according to plan

–ESG strategy, including deep dives on EUV energy

efficiency and Diversity & Inclusion

–Expansions beyond current scope and M&A strategy

–Outcome of Supervisory Board evaluation

–Composition of Supervisory Board

–Composition of Board of Management

–Remuneration Policy for the Board of Management

–Amendment to the Rules of Procedure Board of

Management and Supervisory Board

–Amendment of the Articles of Association

–External auditor rotation

–Legal matters report

–AGM agenda

–Strategy deep dive: Future operating model

–Strategy deep dive: Tool allocation policy

–Strategy deep dive: Scenarios to ramp the end-to-end

supply chain including industrial footprint

–Market outlook and demand drivers

–Update on business sectors: EUV, DUV, Applications

–AGM update

–2022 statutory interim report

–Cash return including dividend policy and interim

dividend

–Visit to ASML new logistics warehouse (5L)

–HR&O update

–Risk management: Update risk landscape & deep dive:

Security

–Strategy deep dive: 2023-2027 litho demand and

consequences for ASML capacity

–Business Performance Improvement initiative including

update on Our New Enterprise program

–Revision to insider trading rules

–Annual strategy review

–Long-term financial plan and Annual Plan 2023

–Update of business plans of the business sectors and

functions

–Cash return including interim dividend and share

buyback program

–Strategy deep dive: Expansion beyond current scope

–Strategy deep dive: Value strategy

–Strategy deep dive: Data

–Transformation projects related to sourcing & supply

chain, Customer and operating model

–Capital Markets Day messaging

–Composition of Supervisory Board

–Composition of Board of Management

–HR&O, including deep dives on Diversity & Inclusion

and Culture

–Customer deep dive: Intel

–Intel visit

Meetings and attendance

The Supervisory Board meets at least four times per year

in accordance with its annual schedule and whenever the

Chairman, one or more of its members, or the Board of

Management requests a meeting.

In 2022, the Supervisory Board held seven meetings. Of

these meetings, three were held virtually and four were

held in person. Three in-person meetings were held at

ASML's headquarters, one was held offsite in the

Netherlands and one was held in the USA. In addition to

these meetings, there were several informal meetings

and interactions among Supervisory Board and/or Board

of Management members.

Supervisory Board meetings and Supervisory Board

committee meetings are held over several days, ensuring

there is time for review and discussion. At each meeting,

the Supervisory Board members discuss among

themselves the goals and outcome of the meeting, as

well as topics such as the functioning and composition of

the Supervisory Board and the Board of Management.

Also discussed during each meeting are the reports from

the different committees of the Supervisory Board.

The Supervisory Board meetings and the meetings of the

four Supervisory Board committees were well attended,

as is shown in the table on the far right.

In addition to the Supervisory Board members, the

members of the Board of Management are invited to the

Supervisory Board meetings. All Board of Management

members were present at the Supervisory Board

meetings in 2022. Members of senior management are

regularly invited to provide updates on topics within their

area of expertise. This gives the Supervisory Board the

opportunity to get acquainted with a variety of ASML

managers, which the Supervisory Board considers very

useful in connection with its talent management and

succession-planning activities.


	Meetings of the Supervisory Board

	While most Supervisory Board and Committee meetings of 2022 were held in person, the Supervisory Board also met virtually on some occasions. Using the experience gained from virtual meetings during the COVID-19 pandemic, the Supervisory Board continued to apply a number of solutions developed to benefit the discussion in the meetings, such as organizing break-out sessions in smaller groups to optimize interaction. We also used video for meeting preparation and provided written meeting documents, in order to allow as much time as possible for discussion. The Supervisory Board members provided positive feedback about applying these solutions in the annual evaluation.



Supervisory Board meeting attendance overview


		95%
		Attendance rate
	Name		Supervisory Board	Audit Committee	Remuneration Committee	Selection and Nomination Committee	Technology Committee
	Gerard Kleisterlee (Chair)		7/7	7/7	n/a	6/6	5/5
	Annet Aris		6/7	n/a	4/4	6/6	5/5
	Birgit Conix		6/7	6/7	n/a	n/a	n/a
	Mark Durcan		7/7	n/a	n/a	6/6	5/5
	Warren East		6/7	5/7	n/a	n/a	n/a
	Alexander Everke1		4/4	n/a	3/3	n/a	n/a
	Terri Kelly		7/7	n/a	4/4	6/6	n/a
	Rolf-Dieter Schwalb		7/7	7/7	4/4	n/a	n/a
	An Steegen2		4/4	n/a	n/a	n/a	1/2
	Hans Stork3		3/3	n/a	1/1	n/a	3/3

1.Appointed at the AGM on April 29, 2022; also appointed as member of the Remuneration Committee. 2.Appointed at the AGM on April 29, 2022; also appointed as member of the Technology Committee. 3.Stepped down per the AGM on April 29, 2022.

Composition, training and evaluation

Composition

The Supervisory Board determines the number of

members required to perform its functions, the minimum

being three members. The Supervisory Board currently

consists of nine members. The Supervisory Board

attaches great importance to its composition,

independence and diversity and strives to meet all the

associated guidelines and requirements. To ensure an

appropriate and balanced composition, the Supervisory

Board spends considerable time on an ongoing basis

discussing its profile, composition and rotation schedule.

Independence

In order to properly perform its tasks, the Supervisory

Board considers it to be very important that its members

are able to act critically and independently of one

another, the Board of Management and other

stakeholders. The independence of the Supervisory

Board and its individual members is assessed on an

annual basis. All current members of the Supervisory

Board are fully independent, as defined by the Dutch

Corporate Governance Code, and have completed the

annual questionnaire addressing the relevant

independence requirements.

Diversity

The current composition of ASML’s Supervisory Board is

diverse in terms of gender, nationality, knowledge,

experience and background and has a suitable level of

experience in the financial, economic, technological,

social and legal aspects of international business. For

more information about diversity, see Corporate

governance – Other Board-related Matters.

Supervisory Board skills matrix

Gerard

Kleisterlee

(Chair)

Annet

Aris

Birgit

Conix

Mark

Durcan

Warren

East

Alexander

Everke

Terri

Kelly

Rolf-

Dieter

Schwalb

Steegen

General skills

Executive board member of (listed)

international company

Finance/governance

Remuneration

Human resources/employee

relations

IT/digital/cyber

ESG

ASML-specific skills

Semiconductor ecosystem

Deep understanding of

semiconductor technology

High-tech manufacturing/integrated

supply chain management

Business in Asia

For further information and background on the members of the Supervisory Board, including details on nationality, gender and age,

please see the

Supervisory Board members’ information in Corporate Governance - Supervisory Board.

Changes in composition in 2022

When his term of appointment expired, Hans Stork did

not stand for re-election and stepped down from the

Supervisory Board at the 2022 AGM, after having served

eight years on the Supervisory Board. The Supervisory

Board decided, with due observance of the Supervisory

Board profile and rotation schedule, to nominate two

candidates, Mr. Alexander Everke and Ms. An Steegen,

for appointment at the 2022 AGM. The nomination for

the appointment of An Steegen was based on the

enhanced recommendation right of the Works Council of

ASML Netherlands B.V. The General Meeting resolved to

appoint Alexander Everke and An Steegen for a term of

four years effective from the date of the 2022 AGM. As a

result, the Supervisory Board consists of nine members

following the 2022 AGM.

Changes in composition in 2023

At the 2022 AGM, the Supervisory Board gave notice

that the appointment terms of Gerard Kleisterlee and

Rolf-Dieter Schwalb would expire per the 2023 AGM.

Gerard Kleisterlee and Rolf-Dieter Schwalb have

informed the Supervisory Board that they will not stand

for re-election and will retire at the 2023 AGM, upon

completion of their current term. The Supervisory Board

extends its thanks to Gerard Kleisterlee and Rolf-Dieter

Schwalb for their valuable contribution over the past

eight years, during which the Supervisory Board has

greatly benefited from their knowledge and experience.

On November 23, 2022, the Supervisory Board

announced that it intends to nominate Nils Andersen and

Jack de Kreij as members of the Supervisory Board

effective from the 2023 AGM, with the intention to elect

Nils Andersen as Chair of the Supervisory Board and

Jack De Kreij as Chair of the Audit Committee following

their appointment. Furthermore, Nils Andersen is

intended to be elected as the Chair of the Selection and

Nomination Committee. Jack de Kreij is intended to be

elected as a member of the Remuneration Committee

upon appointment. Both candidate Supervisory Board

members have been present at the Supervisory Board

meetings as observers as of Q4 2022 in order to ensure

a smooth onboarding.

The agenda and explanatory notes for the 2023 AGM will

contain further information about the intended

nominations for appointment of these two Supervisory

Board members.

Induction and training

We have a comprehensive induction program in place for

newly appointed Supervisory Board members, designed

to ensure that new members gain a good understanding

of our business and strategy, as well as the key risks we

face. The induction program includes meetings with

other Supervisory Board and Board of Management

members, a technology tutorial and detailed

presentations by our business lines, sectors and

corporate departments. A site visit and factory tour is

also part of the induction program. On joining the

Supervisory Board, Alexander Everke and An Steegen

completed an induction program, which was partly virtual

and partly in person. Nils Andersen and Jack de Kreij will

also complete their induction program prior to their

appointment.

To ensure permanent education, the Supervisory Board

is provided with regular deep dives on a variety of topics,

both in the plenary meetings and in the meetings of the

Supervisory Board’s committees. During 2022, strategy

and risk deep dives were held on a variety of topics: see

the Our Activities 2022 section in this Supervisory Board

Report. Furthermore, external speakers or advisers

attended various committee meetings to provide outside-

in views on topics such as technology developments and

technology outlook. The Supervisory Board also

performed site visits. We visited the 5L logistics center at

ASML’s headquarters, where we saw the process of the

new logistics center first hand and were impressed by

the achievements made. Visits were also paid to ASML's

office in Hillsboro, Oregon, US, where the Supervisory

Board met with local management and employees, as

well as to Intel, one of our key customers. The

Technology Committee visited the Advanced Research

Center for Nanolithography (ARCNL) to see how ARCNL

works and cooperates with ASML as well as see the

ARCNL facilities in Amsterdam at first hand.

Evaluation

The Supervisory Board greatly values the structural and

ongoing evaluation process as a means of ensuring

continuous improvement in our way of working. Each

year, the Supervisory Board, assisted by the Selection

and Nomination Committee, evaluates the composition,

competence and functioning of the Supervisory Board

and its committees, the relationship between the

Supervisory Board and the Board of Management, its

committees, its individual members, the chairs of both

the Supervisory Board and the committees, as well as

the composition and functioning of the Board of

Management and its individual members, and the

education and training needs for the Supervisory Board

and Board of Management members.

In principle, the evaluation of the Supervisory Board is

performed once every three years by an external adviser;

in the other two years, the evaluation of the Supervisory

Board is performed by means of a self-assessment using

a written questionnaire, followed by one-to-one meetings

between the Chairman and individual Supervisory Board

members.

The 2022 evaluation of the Supervisory Board and its

committees was performed through a web-based

survey, which was prepared by the Selection and

Nomination Committee. The Chairman of the Supervisory

Board also met with the individual Supervisory Board

members. The evaluation was centered around the

following themes: composition, stakeholder oversight,

oversight of strategy, risk management and succession

planning, management and focus of meetings and

priorities for improvement. A specific focus was the

follow-up of prior-year recommendations. An upward

review by the Board of Management was also part of the

annual assessment.

The results of the Supervisory Board evaluation were

discussed in early 2023. The conclusion was that the

Supervisory Board and its committees continue to

function well. Suggestions to further improve the

functioning of the Supervisory Board will be implemented

in 2023. These suggestions include further developing

the open and constructive dialogue with the Board of

Management on strategic topics and emerging risks,

and increasing the focus on key priorities identified by the

Supervisory Board. Other recommendations relate to

continuous enhancement of the oversight on

stakeholders, in particular customers and suppliers, and

to increase the understanding of the ecosystem beyond

our direct stakeholders. Obtaining outside-in

perspectives, where relevant, was another

recommendation resulting from the evaluation.

Opportunities for improving the focus and concision of

meeting materials were also identified, for instance by

including executive summaries highlighting the key

discussion items. The Supervisory Board furthermore

decided performing an in-depth analysis of its profile in

2023 and investigating the establishment of an ESG

Sustainability Committee in view of corporate governance

developments.

The Board of Management also conducted a self-

evaluation in 2022, focusing on the role, responsibilities

and functioning of the Board of Management collectively,

and on the functioning of the individual Board of

Management members. This self-evaluation was

performed in a number of offsite Board of Management

meetings dedicated to this topic. Important aspects

addressed by the Board of Management include the

Board of Management’s strategic focus, stakeholder

involvement, people & organization, Board dynamics and

(future) Board organization. Also in 2023, special Board

of Management sessions will be held to continue the

discussion and follow up on the observations made. The

overall conclusion of the self-evaluation was that ASML

has a well-functioning Board of Management. The self-

evaluation was also discussed with the Supervisory

Board and its Selection and Nomination Committee.

The Supervisory Board has four standing

committees, with members appointed by the

Supervisory Board from among its members. The

full Supervisory Board remains responsible for all

decisions, even if prepared and taken by one of the

Supervisory Board’s Committees.

The four committees of the Supervisory Board support

the decision-making by the full Board. In the plenary

Supervisory Board meetings, the chairpersons of the

committees report on the items discussed in their

committee meetings. In addition, the meeting documents

and minutes of the committee meetings are available to

all Supervisory Board members, enabling the full

Supervisory Board to make the appropriate decisions.

Further information about the Audit Committee, the

Technology Committee and the Selection and

Nomination Committee can be found in this Supervisory

Board Report. Further information about the

Remuneration Committee can be found in the

Remuneration Report.

Supervisory Board

Audit

Committee

Remuneration

Committee

Technology Committee

Selection and

Nomination Committee

Assisting in overseeing the

integrity and quality of our

financial reporting and the

effectiveness of risk

management and controls

Overseeing the development

and implementation of

the Remuneration Policies, in

cooperation with the Audit

and Technology Committee

Providing advice

with respect to our

technology plans required to

execute the business

strategy

Assisting with the

preparation of the selection

criteria and appointment

procedures for the

Supervisory Board and

Board of Management

Members

Read more on page 180 >



Audit Committee

The Audit Committee assists the Supervisory Board in overseeing the integrity and quality of our financial reporting and the effectiveness of the internal risk management and internal control systems.		Recurring agenda topics (quarterly)	Attendance
		–Financial update and financing –Review of the quarterly financial results and press release –Accounting update –Internal control update –Observations of External Auditor –Risk and Internal Audit update –Disclosure Committee report –Legal matters report –Ethics and compliance	In addition to the Audit Committee members, the Chairman of the Supervisory Board attends the Audit Committee meetings whenever possible. The external auditor and the internal auditor have a standing invitation for Audit Committee meetings and attended all Audit Committee meetings in 2022. The CEO, CFO, EVP Finance, Corporate Chief Accountant, the Head of Risk and Business Assurance are invited to the meetings.

Members:	Main responsibilities:
–Rolf-Dieter Schwalb (Chair) –Birgit Conix –Warren East	–Overseeing the integrity and quality of ASML’s financial statements and related non-financial disclosure and submitting proposals to ensure such integrity; –Overseeing the accounting and financial reporting processes and the audits of the financial statements; –Overseeing the effectiveness of our internal risk management and control systems, including compliance with the relevant legislation and regulations, and the effect of codes of conduct; –Overseeing the integrity and effectiveness of our system of disclosure controls and procedures and our system of internal controls over financial reporting; –Overseeing the External Auditor’s qualifications, independence, performance and determining its compensation; and –Overseeing the functioning of Internal Audit.

The members of the Audit Committee are all independent members of the Supervisory Board. The Supervisory Board has determined that both Mr. Schwalb and Ms. Conix qualify as Audit Committee financial experts pursuant to section 407 of the Sarbanes-Oxley Act and Dutch statutory rules, taking into consideration their extensive financial backgrounds and experience.


		The overview below provides a number of topics discussed during Audit Committee meetings in 2022, in addition to the recurring agenda topics.

		Q1	Q3
		–2021 Annual Report and financial statements US GAAP and EU-IFRS –Accounting deep dive: Balance sheet review –2021 External audit report –Annual reporting process –Cash return: Final dividend 2021 –Fraud-risk assessment –Results of the external auditor evaluation 2021 –Results of the Audit Committee self-evaluation –Annual plans of Risk and Internal Audit –External auditor rotation	–Statutory Interim report 2022 –Financing, capital allocation and dividend policy –Quarterly interim dividend proposal and share buyback program –Compliance deep dive: Finance –Finance and IT transformation program
		Q2	Q4
		–Approval of external audit plan 2022 –Expense reporting for Board of Management and Supervisory Board 2021 –Security, including IT security –External auditor rotation	–Cash return including Q4 2022 interim dividend proposal and share buyback program –Capital Markets Day messaging –2022 Annual Report process –Long-term financial plan –Annual Plan 2023 –Accounting deep dive: ESG reporting requirements including CSRD –Annual tax update –External audit update –Review of Rules of Procedure for the Audit Committee
In Q4 2022, the Audit Committee performed an accounting deep dive into ESG reporting requirements.

The Audit Committee is provided with all relevant

information to be able to adequately and efficiently

supervise the preparation and disclosure of financial

information. This includes information on the status and

development of the semiconductor market to support

judgment regarding the outlook and budget for the next

six to 12 months, the application of EU-IFRS and US

GAAP, the choice of accounting policies and the work of

the internal and external auditor.

Audit Committee meetings in 2022

The Audit Committee meets at least four times a year

and always before the publication of the quarterly, half-

year and annual financial results. In 2022, the Audit

Committee held seven meetings.

Financials

In 2022, the Audit Committee focused, among other

things, on financial reporting, most particularly the review

of ASML’s Annual and Interim Reports, including the

annual and interim financial statements and non-financial

information. The Audit Committee also closely monitored

the progress and discussed the outcomes of the year-

end US GAAP and EU-IFRS audits. The quarterly results

and the accompanying press releases were reviewed

before publication.

On a quarterly basis, the Audit Committee was provided

with accounting updates by the Corporate Chief

Accountant, highlighting the main accounting matters

relevant for the quarter. A recurring item of focus of the

Audit Committee in this regard is revenue recognition, as

this is a complex accounting matter also identified as a

critical audit matter by the external auditor. Other

important elements of the Audit Committee’s quarterly

procedures included the discussion of the observations

of the external auditor in relation to the accounting

matters, as well as the report by the Disclosure

Committee on the accuracy and completeness of the

quarterly disclosures. Throughout the year, specific

accounting topics were addressed in depth, for instance

emerging ESG reporting requirements. An annual in-

depth balance sheet review was also performed.

The operational and financial short- and long-term

performance of ASML was discussed extensively,

looking at various performance scenarios and their

impact on ASML’s results and cash generation. ASML’s

financing and cash return policies were reviewed in

detail, in particular the change in dividend policy enabling

quarterly dividend payments, the execution of the

2021-2023 share buyback program and the new share

buyback program for 2022-2025 as announced on

November 10, 2022.

The Audit Committee reviewed and provided the

Supervisory Board with advice regarding the long-term

financial plan, the financing of ASML and ASML’s cash

return policy. Topics specifically discussed included the

proposed final dividend payment in respect of the 2021

financial year and the interim dividends for the financial

year 2022, which were approved by the Supervisory

Board following recommendation by the Audit

Committee. The Audit Committee also extensively

discussed the revised dividend policy that provides for

dividend payments on a quarterly basis. The revised

dividend policy was announced in July 2022.

Risk management and internal control

Throughout 2022, the Audit Committee closely

monitored risk management and the risk management

process, including the timely follow-up of high-priority

actions based on quarterly progress updates. The Audit

Committee oversaw the annual internal control process,

with a focus on scoping, materiality levels, updates to the

internal control framework, the tests of design and

effectiveness and management’s assessment of ASML’s

internal control over financial reporting and disclosures.

The observations made by the internal auditor and the

external auditor on the design and effectiveness of

internal controls were also discussed with the Audit

Committee.

Emerging risks and risk deep dives

In 2022, we performed an in-depth review of emerging

risks as a result of ASML’s growth and ramp-up to meet

customer demand, given its potential impact on several

risk categories in the risk landscape. We looked in detail

into the risks impacted and the mitigating actions

identified by management. We paid special attention to

the process effectiveness and efficiency risk, with a focus

on support processes, not only in view of the challenges

related to the significant growth, but also considering the

different business models for ASML’s products, the IT

and process landscape.

Furthermore, a deep dive review of the key risks and

developments related to physical and IT security was

performed paying specific attention to the progress of

risk mitigation actions and the further development of

ASML's security capabilities.

Ethics and compliance

We recognize that acting with the highest standards of

integrity is vitally important to value creation for our

stakeholders and the long-term success of ASML. The

Audit Committee received quarterly reports on the Ethics

program, including the trends and risks in the area of

ethics and the Ethics training strategy. During 2022, we

also discussed ASML’s Compliance Program, including

an in-depth review of finance compliance. Furthermore,

an annual update on fraud and fraud risk management

was provided.

Internal audit

The Audit Committee reviewed the annual internal audit

plan, including the scope of the audit at the start of 2022.

During the year, the Audit Committee was kept updated

on the progress of the internal audit activities on a

quarterly basis and reviewed the results of audits

performed as well as the status of the follow-up on

action plans. The Audit Committee also discussed the

internal management letter and monitored the follow-up

by the Board of Management on the recommendations

made in the internal management letter.

External audit

The Audit Committee reviewed the 2022 external audit

plan, including scoping, materiality level and fees. It

monitored the progress of the external audit activities,

including review of the observations made in the

quarterly procedures and the audits performed at year

end. The Audit Committee oversaw the follow-up by the

Board of Management on the control deficiencies

reported by the external auditor in their periodic internal

control update. The Audit Committee confirms that the

communication over the 2022 financial year contained no

significant items that need to be mentioned in this report.

The Audit Committee evaluated the performance of the

external auditor at the end of 2022, including a review of

their independence. During the 2022 AGM, KPMG was

appointed as the external auditor for the reporting years

2023 and 2024.

Due to the fact that the current lead audit partner, for

independence reasons, can only stay in this role until and

including the reporting year 2024, the current external

auditor will rotate off after the 2024 reporting year. The

Audit Committee considered it important to start the

preparations and selection process in a timely manner,

given the limited number of audit firms available. In

addition, the Audit Committee considered it essential to

have sufficient time for onboarding the new external audit

firm and for transferring any non-audit services currently

performed by the newly appointed external audit firm. In

September 2021, the Audit Committee started the

selection process in connection with the mandatory

external audit firm rotation. A Selection Committee was

established, consisting of the members of the Audit

Committee, the CFO, the EVP Finance and the

Corporate Chief Accountant. The Selection Committee

invited the other three ‘Big Four’ audit firms (other than

ASML’s current external auditor) as well as one second-

tier audit firm, to participate in the selection process. The

three ‘Big Four’ audit firms decided to participate in the

selection process. Following a series of interviews, as

well as two presentation rounds, in which the

participating firms were offered the opportunity to

present themselves and their audit proposals, the

Selection Committee evaluated the firms based on

certain pre-defined selection criteria. These included the

planned involvement of experts, the fit with the audit

partner and the audit team, the level of innovation in audit

approach, experience in the high-tech industry, quality

and reference rating, the international network of the

audit firm, the onboarding strategy, the competitiveness

of the audit fee and the proposal documentation and

presentations provided by the invited audit firms.

The Selection Committee concluded that Deloitte

Accountants BV (Deloitte) was the preferred audit firm,

with PricewaterhouseCoopers Accountants NV (PwC) as

runner-up. Unfortunately, the Supervisory Board needed

to withdraw the nomination of Deloitte after being

informed by Deloitte that they would not be able to

complete in a timely manner and therefore resolve a

conflicting advisory role involving a company in which

ASML holds an equity stake. The Supervisory Board

immediately re-initiated the selection process and

announced in April 2022 that PwC had been identified as

the preferred audit firm to become ASML’s external

auditor for the reporting year 2025. We intend to submit

the proposal to appoint PwC for the reporting year 2025

for voting at ASML's 2023 AGM.

Other topics

Other topics discussed by the Audit Committee in 2022,

included ASML’s tax planning, the Finance and IT

transformation program, ESG reporting requirements and

the quarterly overviews of legal matters.

The Audit Committee also performed an annual review

and update of its Rules of Procedure.

Following most Audit Committee meetings, the internal

and external auditor each meet with the Audit Committee

without management present to discuss their views on

the matters warranting the attention of the Audit

Committee. This may include their relationship with the

Audit Committee, the relationship with the Board of

Management and any other matters deemed necessary

to be discussed. The Audit Committee also held regular

one-to-one meetings with the CFO.



Selection and Nomination Committee

The Selection and Nomination Committee assists the Supervisory Board in relation to its responsibilities over the composition and functioning of the Supervisory Board and the Board of Management and the monitoring of corporate governance developments.		Recurring agenda topics	Attendance
		–Role, composition and functioning of the Board of Management –Role, composition and functioning of the Supervisory Board –Corporate governance	In addition to the Selection and Nomination Committee members, the two presidents and the EVP HRO are regularly invited to attend (parts of) its meetings. An external adviser is also invited to attend the Selection and Nomination Committee meetings when deemed necessary.

Members:	Main responsibilities:
–Gerard Kleisterlee (Chair) –Annet Aris –Mark Durcan –Terri Kelly	–Preparing the selection criteria and appointment procedures for members of the Supervisory Board and Board of Management, and the supervision of the Board of Management’s policy in relation to the selection and appointment criteria for senior management; –Periodically evaluating the scope and composition of the Board of Management and the Supervisory Board, and proposing the profile of the Supervisory Board; –Periodically evaluating the functioning of the Board of Management and the Supervisory Board, and their individual members; –Preparing the Supervisory Board’s decisions for appointing and reappointing members of the Board of Management and proposing (re)appointments of members of the Supervisory Board; and –Monitoring and discussing developments in corporate governance.



		The overview below provides details on the topics discussed during Selection and Nomination Committee meetings in 2022.

Each member is an independent, non-executive member of our Supervisory Board, in accordance with the NASDAQ Listing Rules.		H1	H2
		–Composition of Board of Management, including diversity aspects & requirements and succession pipeline –Reappointment of Board of Management members –Profile and composition of Supervisory Board and composition of its committees –Nominations for appointment of Supervisory Board members –Induction program for new Supervisory Board members –Amendment of Rules of Procedure Board of Management and Supervisory Board –Amendment of Articles of Association –Outcome of evaluation of Supervisory Board and committees –Performance of the Board of Management and individual members	–Composition of Board of Management, including diversity aspects & requirements, and succession pipeline –Intended appointment of Wayne Allan as member of the Board of Management per the 2023 AGM –Profile and composition of Supervisory Board –Nomination for appointment of Nils Andersen and Jack de Kreij as Supervisory Board members per the 2023 AGM –Evaluation of the Supervisory Board and committees including follow-up on the recommendations of the Supervisory Board evaluation and approach to the 2022 evaluation
In 2022, the Selection and Nomination Committee nominated Nils Andersen and Jack de Kreij for appointment as Supervisory Board members per the 2023 AGM.

Composition, role and responsibilities of the Board of

Management

In 2022, the Selection and Nomination Committee

devoted significant time to discussing the (future)

composition, role and responsibilities of the Board of

Management. For example, we reviewed the talent

bench and discussed career development of top talent to

prepare for future Board of Management roles. The

Committee also assessed the functioning of the Board of

Management and its individual members. For this

purpose, discussions took place with each individual

Board of Management member, the outcome of which

was discussed with the Committee.

During the 2022 AGM, Peter Wennink, Martin van den

Brink, Roger Dassen, Christophe Fouquet and Frédéric

Schneider-Maunoury were reappointed as members of

the Board of Management. Peter Wennink and Martin

van Den Brink were reappointed for a term of two years.

Roger Dassen, Christophe Fouquet and Frédéric

Schneider-Maunoury were appointed for four-year terms.

On October 19, we announced the intention to appoint

Wayne Allan, EVP and Chief Strategic Sourcing &

Procurement Officer, as member of the Board of

Management effective per the 2023 AGM. With this

appointment, the Board of Management will be

expanded to six members. The rationale behind this

intended appointment is the increased strategic

importance of the Strategic Sourcing & Procurement

Officer function for ASML’s strategy.

The Selection and Nomination Committee and the

Supervisory Board are continuously discussing the

succession planning with respect to the Board of

Management.

Composition, role and responsibilities of the Supervisory

Board

The Selection and Nomination Committee spent a

significant amount of time discussing the Supervisory

Board’s composition, profile and rotation schedule,

particularly the appointment and reappointment of

Supervisory Board members to fill vacancies both in the

short and longer term. This discussion resulted among

other things in a decision to increase the number of

Supervisory Board members to nine effective from the

2022 AGM. The rationale behind this extension is that the

Supervisory Board considered it desirable to add an

additional member with a background and experience in

semiconductor technology and the semiconductor

industry. This was seen as particularly important given

the growth of ASML in size and complexity as well as in

view of the Supervisory Board’s rotation schedule. For

the actual changes in composition of the Supervisory

Board, reference is made to the section on Supervisory

Board composition in this Annual Report.

The Selection and Nomination Committee also discussed

changes to the composition of the Supervisory Board

effective per the 2023 AGM. The Selection and

Nomination Committee advised the Supervisory Board

on the nomination for appointment of successors to

Gerard Kleisterlee and Rolf-Dieter Schwalb, who will

retire during the 2023 AGM after having served eight

years on our Supervisory Board.

Composition.

Changes to Supervisory Board Committees in 2022

The Selection and Nomination Committee also discussed

the composition of the Supervisory Board committees in

light of the retirement of Hans Stork and the appointment

of An Steegen and Alexander Everke. Several changes in

the composition of the Supervisory Board Committees

took effect per the 2022 AGM. Alexander Everke became

a member of the Remuneration Committee upon the

retirement of Hans Stork. In the Technology Committee,

Hans Stork was succeeded by An Steegen.

Composition.

At the end of 2022 and early 2023, the Selection and

Nomination Committee discussed the functioning of the

individual members of the Supervisory Board as well as

the process and outcome of the Supervisory Board’s

self-evaluation.

Evaluation.

Corporate governance

As part of its responsibility to monitor corporate

governance developments, the Selection and Nomination

Committee discussed, among other things, the

amendments of the Articles of Association and the Rules

of Procedure for the Board of Management and the

Supervisory Board. In addition, the Selection and

Nomination Committee discussed developments with

regard to the Dutch gender diversity bill that came into

effect on January 1, 2022, and its impact on ASML.

The Committee also discussed the amendment of the

Dutch Corporate Governance Code as well as matters of

interest to investors and shareholder organizations.



Technology Committee

The Technology Committee advises the Supervisory Board with respect to the technology plans required to execute our business strategy.		Recurring agenda topics (quarterly)	Attendance
		–Product roadmap –Progress Technology Leadership Index	In addition to the Technology Committee members, the Committee’s external and internal advisers regularly attended committee meetings. The advisers do not have voting rights.

Members:	Main responsibilities:	Technology Committee meetings in 2022
–Mark Durcan (Chair) –Annet Aris –Gerard Kleisterlee –An Steegen	–Advising on technology trends, the study of potential alternative strategies, the technology strategy, product roadmaps, required technical resources and operational performance in R&D; –Making recommendations to the Supervisory Board on technology-related projects with respect to ASML’s competitive position; and –Discussing the technology targets set to measure short- and long-term performance as well as the achievements related to these, and advising the Remuneration Committee on this topic.	In general, the Technology Committee meets at least twice a year and more frequently when deemed necessary. In 2022, the Technology Committee held five meetings.


The Technology Committee is supported by external experts as well as experts from within ASML who act as advisers on the subjects reviewed and discussed. External experts may include representatives of customers, suppliers and partners to increase the Committee’s understanding of the technology and research required to develop our leading-edge systems.		The overview below provides details on the topics discussed during Technology Committee meetings in 2022.

		Q1	Q3
		–Business line review: Applications –Technology target setting for 2022	–Business line review: EUV (including High-NA) –Next EUV
		Q2	Q4
		–Review of the Development & Engineering department –Visit to Advanced Research Center for Nanolithography in Amsterdam, the Netherlands	–Roadmap in Logic and Memory –Business line review: DUV

In Q2 2022, the Technology Committee visited the Advanced Research Center for Nanolithography in Amsterdam, the Netherlands.

Review of technology programs

As in previous years, the Technology Committee’s

primary focus in 2022 was on the review of the execution

and implementation of technology programs and

roadmaps in EUV 0.55 NA (High-NA), EUV 0.33 NA, DUV

and Applications. In this respect, the key challenges and

opportunities, from a business perspective as well as

from a technology standpoint, were reviewed and

discussed in depth. During each meeting the Technology

Committee also discussed the progress made on the

technology targets included in the Technology

Leadership Index, a performance measure for the short-

term and long-term variable remuneration of the Board of

Management. At the beginning of the year, in a meeting

especially planned for this purpose, the Technology

Committee discussed the final achievements on the

technology targets. In the same meeting, new technology

targets were set for the new performance period. The

Technology Committee subsequently provided advice to

the Remuneration Committee and the Supervisory

Board.

The meeting in Q1 was dedicated to the achievements

within the Applications business line. The Technology

Committee was presented with a recap of the

achievements in 2021 and was informed about the

roadmap toward 2027, the market developments,

competitive landscape and the opportunities in that

respect. In addition, updates were provided on

computational lithography, optical metrology, e-beam

metrology and control and data products.

In Q2, the main focus of the meeting was on the

Development & Engineering department of ASML,

including its Research department. In addition, a

presentation was provided on system engineering within

ASML and how this contributes to the product and

technology roadmap. The meeting took place at the

Advanced Research Center for Nanolithography (ARCNL)

in Amsterdam. In addition to a presentation on how

ARCNL works and cooperates with ASML, the

Technology Committee was provided with a tour of

through the ARCNL facilities in Amsterdam.

The primary focus of the meeting in Q3 was the

achievements and challenges in EUV 0.33 NA and

EUV 0.55 NA (High-NA), including an extensive

discussion about the biggest risks and opportunities for

EUV 0.33 NA. Special attention was paid to the overall

roadmap, market developments and EUV field

performance as well as the status of new product

development. The Technology Committee was informed

about the interest and engagement of customers in High-

NA, the customer insertion roadmap and node

requirements and how supply chain challenges are

managed. In addition, the Technology Committee was

presented with input regarding the possibilities and the

landscape beyond EUV 0.55 NA (High-NA).

In Q4, the Technology Committee invited imec to provide

its view on the long-term device roadmap for both Logic

and Memory, and this was followed by a detailed

discussion of the impact of the device roadmap on the

lithography roadmap. In addition, the Technology

Committee discussed the developments and

achievements in DUV. In addition to the product

roadmaps and the technology programs, the Technology

Committee was informed about the product strategy and

the service strategy. Furthermore, the Committee paid

attention to the Mature Products & Services business line

and the related challenges and opportunities.

The Technology Committee’s in-depth technology

discussions and the subsequent reporting of the main

points of these discussions to the full Supervisory Board

increases the Supervisory Board’s understanding of our

technology requirements. It also enables the Supervisory

Board to adequately supervise the strategic choices we

face, including our investment in R&D.

The financial statements of ASML for the financial year

2022, as prepared by the Board of Management, have

been audited by KPMG Accountants N.V. All members of

the Board of Management and the Supervisory Board

have signed these financial statements.

We recommend to shareholders that they adopt the

2022 financial statements. We also recommend that our

shareholders adopt the Board of Management’s

proposal to make a final dividend payment of €1.69 per

ordinary share. Together with the interim dividends paid

in respect of the 2022 financial year, which add up to

€4.11 per ordinary share, this leads to a total dividend of

€5.80 per ordinary share for the year 2022.

Finally, we would like to extend a word of thanks to the

Board of Management and all ASML employees for their

continued commitment and hard work during this

challenging year.

The Supervisory Board,

Gerard Kleisterlee, Chair

Annet Aris, Vice Chair

Birgit Conix

Mark Durcan

Warren East

Alexander Everke

Terri Kelly

Rolf-Dieter Schwalb

An Steegen

Veldhoven, February 15, 2023



	A fair and balanced remuneration is our main priority, and this year we have looked to increase the level of transparency around how we reward management in order to attract the right talent.

Overall, starting from high

standards, ASML’s

leadership set ambitious

targets and was able to

resolve and respond to

many challenges.”

Terri Kelly

Chair of the Remuneration Committee

Dear Stakeholder,

On behalf of the Remuneration Committee, I am pleased to

present the 2022 Remuneration Report, which provides a

summary of the remuneration policies for the Board of

Management and the Supervisory Board. The following

pages explain how these policies were applied in 2022.

From a personal perspective, my first full year as Chair

has been challenging but highly enjoyable. Throughout, I

have really appreciated the support I have received from

both internal and external stakeholders. The Committee

worked hard to engage with as many stakeholders as

possible during the year. We built a sound understanding

of the major issues around remuneration, particularly

those around disclosure and incentives, and this enabled

us to prepare a fair and balanced Remuneration Policy.

Broad support

These are early days during which we are closely

monitoring the impact of the new policy to ensure that it

has the desired effects. Our initial engagements with

shareholders and shareholder representatives revealed

that they were generally supportive. In particular, they

were appreciative of the increased disclosure and of the

ways in which the Supervisory Board proposed to

address sensitivities around the higher pay levels.

However, some shareholders expressed concerns

regarding our ability to attract and retain the right talent,

given senior executive pay packages at ASML versus

those at companies with which we compete in the global

race for talent. Furthermore, some shareholders have

raised questions around the level of ambition of the

performance metrics in the long-term incentive (LTI),

notably Relative Total Shareholder Return and employee

engagement. We amended the threshold level for the

employee engagement target following this feedback.

In addition, while the Works Council acknowledged the

recruitment challenges we face and was positive about

the Remuneration Policy for the Board of Management in

many respects, it did have reservations regarding some

matters including the short-term incentive (STI) – for

example, the Works Council was concerned that internal

factors such as process efficiency and employee well-

being were not explicitly considered in the STI and that

there were no explicit criteria regarding internal and

societal fairness. Throughout 2022, the Remuneration

Committee and the Works Council continued to engage

constructively about these topics.



ASML ANNUAL REPORT 2022	REMUNERATION REPORT		STRATEGIC REPORT	GOVERNANCE	FINANCIALS	185
Remuneration Report		Message from the Chair of the Remuneration Committee

An eventful year, a strong team

The last 12 months have seen ASML continue to go from

strength to strength, supported by a wonderful team of

people who have again come together in uncertain times

and done what is best for our company and for our

customers.

A key factor that motivates our people across ASML is

the opportunity to engage in meaningful work and make

an impact. In an increasingly digital world, the work

carried out at ASML is ultimately enabling innovative

businesses to transform the way in which we all live by

bringing new opportunities in areas from healthcare to

agriculture, interconnectivity to climate change.

Nevertheless, fair and balanced remuneration must

always be the top priority for our Remuneration

Committee, and throughout the year we have continued

to engage with stakeholders, not only ahead of the

presentation of the new ASML Remuneration Policy at

the 2022 AGM, but in the many months since.

During my time as Chair, I am committed to ensuring that

engagement and collaboration continue to be the

hallmarks of the ASML Remuneration Committee.

Changes to the Remuneration Committee

At the 2022 AGM, Hans Stork stepped down from the

Remuneration Committee and the Supervisory Board,

and I would like to thank him for his contribution over the

past years.

We are delighted that Alexander Everke became a

member of the Remuneration Committee after the 2022

AGM. It is important that the composition of the

Remuneration Committee maintains a proper balance

that drives a deep and broad understanding of ASML’s

business environment. Alexander brings with him

valuable and extensive skills from a business and

operational perspective. We have already benefited from

his experience and input and look forward to continuing

to work closely with him in the future.

Decisions made in 2022: Our new Remuneration

Policy

In the first quarter of 2022, we finalized our review of

the Remuneration Policy for the Board of Management.

The Remuneration Committee and Supervisory Board

concluded that it was appropriate to amend the

Remuneration Policy for the Board of Management, as

the last major revision took place in 2017 with only minor

revisions having been made to compensation levels –

primarily associated with the Short Term Incentive and

Long Term Incentive plans. Since 2017, ASML has

grown significantly and the context in which we operate

has changed. The revised Remuneration Policy for the

Board of Management was submitted to the 2022 AGM

and was adopted with 93.18% support.

During our review, we took the opportunity to explore

current market practice, stakeholder views and societal

trends and expectations, as well as developments in

corporate governance. We also asked our Board of

Management members to share their views on the

proposed amendments.

The main changes are outlined in the 2022 Remuneration

Policy changes in the section Board of Management

remuneration.

Transparency around remuneration

The Remuneration Report for the financial year 2021 was

submitted to the 2022 AGM for an advisory vote.

84.59% of the votes were cast in favor. As part of our

efforts to further improve transparency, we have added

the ex-ante disclosure of the STI metrics for 2023 and

the ex-ante disclosure of the LTI metrics and target levels

for the 2023-2025 performance period. We have also

continued to disclose the actual achievement levels. An

exception is made in the case of sensitive information

where disclosure is not in the interests of ASML or our

shareholders.

Outlook

The development of an appropriate Remuneration Policy

is an evolutionary process, and during 2022 the

Remuneration Committee continued to evaluate both the

Remuneration Policy itself and the changing landscape in

which ASML operates. Our focus remains on ensuring

that we have the right incentive measures in place and

that we use the right metrics. Only then will we be able to

drive the right behaviors and the correct outcomes.

This process will continue over the coming year. We have

a degree of flexibility in the Remuneration Policy for the

Board of Management to align the metrics with what is

important to drive strategy, as well as an improved ability

to make that vital connection between remuneration and

strategy. We have made good strides toward being more

transparent and are committed to making further

changes to enhance transparency where practicable.

We will also continue to engage with all our stakeholders

as well as with external advisers in 2023, ensuring that

our decisions take account of best practice, stakeholder

views and the wider societal perspectives on executive

remuneration. In addition, we will continue to engage

with the members of the Board of Management to gather

their views on remuneration.

Finally, I would like to thank my fellow Remuneration

Committee members for their support during the last

year. Together, we have put in place a Remuneration

Policy for the Board of Management that I believe will

serve us well for the period to come. In the year ahead,

we will work hard to continue this ongoing process.

Terri Kelly

Chair of the Remuneration Committee


	Our remuneration principles for 2022 performance support long-term success and sustainable value

	Competitiveness		The remuneration structure and levels intend to be competitive in the relevant labor market, while at the same time taking into account societal trends and perceptions.
	Alignment		The remuneration policy is aligned with the short-term and long-term incentive policies for ASML senior management and other ASML employees and takes into account internal relativities.
	Long-term orientation		The policy and incentives focus on sustainable and long-term value creation.
	Compliance		ASML adopts the highest standards of good corporate governance.
	Simplicity and transparency		The policy and its execution are as simple as possible and easily understandable to all stakeholders.

Linking remuneration to purpose and strategy

Purpose

Strategy

Incentive

measures

Pay for

performance

Unlocking the

potential of

people and

society by

pushing

technology to

new limits.

Strengthen

customer trust

Financial measures

Remuneration

outcomes

Holistic lithography

and applications

Customer Orientation

DUV

competitiveness

Technology leadership

EUV

industrialization

High-NA

Leadership in

ESG sustainability


How we performed in 2022

Financial (based on US GAAP)			Non-financial

€21.2bn	€10.7bn	€6.5bn	8.1
Total sales	Gross profit	Operating income	Technology Leadership Index score
(2021: €18.6bn)	(2021 €9.8bn)	(2021 €6.8bn)	(2021: 8.0)

€8.5bn	€14.14	48.2%	10.8%
Net cash provided by operating activities	Earning per share	ROAIC (Non-GAAP measure)1	Dow Jones Sustainability Index
(2021 €10.8bn)	(2021 €14.36)	(2021: 34.2%)	(2021: 12.1%)

1.The ROAIC (Non-GAAP measure) is based on a three-year average by dividing the Income after income taxes by the Average Invested Capital.

Average Invested Capital is calculated by taking the average of Total Assets minus Cash, Short Term Investments, Current liabilities and

Long-term contract liabilities at the start and end of each quarter over three years. We believe that ROAIC is a meaningful measure because it

quantifies our effectiveness in generating returns relative to the capital invested in our business over the past three years.



	Relative TSR - ASML vs PHLX



We aim to align the total remuneration for our Board of Management to our business strategy through a combination of fixed pay and short- and long- term incentives, underpinned by stretching performance targets.

	€17.0m
	Total remuneration

	99.1%
	Achieved of STI target

	182.2%
	Achieved of LTI target

	34:1
	CEO vs. average per FTE (based on US GAAP)


	Board of Management

	Peter T.F.M. Wennink
	Total remuneration 2022 (€’000s)
	€4,280

	Martin A. van den Brink
	Total remuneration 2022 (€’000s)
	€4,279

	Frédéric J.M. Schneider-Maunoury
	Total remuneration 2022 (€’000s)
	€2,844

	Roger J.M. Dassen
	Total remuneration 2022 (€’000s)
	€2,834

	Christophe D. Fouquet
	Total remuneration 2022 (€’000s)
	€2,798

Remuneration summary

Base salary and benefit

STI

LTI


	Stakeholder engagement in 2022

	During 2022, we consulted with our large shareholders and other stakeholders. The Remuneration Committee also consulted the views of the Board of Management.

	Shareholders
	Number of organizations met	10
	Number of meetings	10
	Percentage of issued share capital owned	22%

	Shareholders representatives and proxy advisers
	Number of organizations met	3
	Number of meetings	3

	Works Council
	Number of organizations met	1
	Number of meetings	>5



Remuneration Committee


The Remuneration Committee advises the Supervisory Board and prepares the Supervisory Board’s resolutions with respect to the remuneration of the Board of Management and the Supervisory Board.		Recurring agenda topics (quarterly)	Attendance
		–Remuneration of the Board of Management –Remuneration of the Supervisory Board –Update on performance on targets for short- and long- term incentives	In addition to the Remuneration Committee members, the Remuneration Committee generally invites the CEO, the EVP HRO, the Head of Compensation and Benefits and in some instances also the CFO to attend (parts of) its meetings. The Remuneration Committee’s external adviser is also invited to attend the Remuneration Committee meetings when deemed necessary.

Members:	Main responsibilities:
–Terri Kelly (Chair) –Annet Aris –Alexander Everke –Rolf-Dieter Schwalb	–Overseeing the development and implementation of the Remuneration Policy for the Board of Management and preparing the Supervisory Board Remuneration Policy; –Reviewing and proposing to the Supervisory Board corporate goals and objectives relevant to the variable part of the Board of Management’s remuneration; –Carrying out scenario analyses of the possible financial outcomes on the variable remuneration of meeting these goals, as well as exceeding these goals, before proposing these corporate goals and objectives to the Supervisory Board for approval; and –Evaluating the performance of the members of the Board of Management in view of those goals and objectives, and – based on this evaluation – recommending to the Supervisory Board appropriate compensation levels for the members of the Board of Management.


Each member is an independent, non-executive member of our Supervisory Board in accordance with the NASDAQ Listing Rules. Ms. Kelly is neither a former member of our Board of Management, nor a member of the management board of another company. Currently, no member of the Remuneration Committee is a member of the management board of another Dutch listed company.

		The below overview provides details on the topics discussed during Remuneration Committee meetings in 2022.

		Q1	Q3
		–Short Term Incentive Plan: Performance 2021, pay-out 2021 and targets 2022 –Long Term Incentive Plan: share vesting performance period 2019-2021, and conditional grant and targets performance period 2022-2024 –Remuneration Report 2021 –Self-evaluation of Remuneration Committee –Board of Management Remuneration Policy review including stakeholder outreach –Compliance with share ownership requirements	–Progress STI and LTI targets and metrics –Customer Orientation metric –Latest trends in policies and reporting –Report on interaction with the Works Council –Board of Management remuneration 2023, including selection of STI and LTI metrics
			Q4
			–Progress STI and LTI targets –Board of Management remuneration 2023, including selection of STI and LTI metrics –Benchmark on Supervisory Board remuneration –Update on corporate governance developments: remuneration –Engagement of external auditor for agreed-upon procedures on remuneration –Draft Remuneration Report 2022 –Compliance Board of Management members with share ownership guideline –Share planning AGM period 2023-2024

		Q2
		–No meetings
The Committee will continue to monitor the Board of Management’s performance and make recommendations around compensation levels.

Remuneration of the Board of Management

In Q1 2022, the Remuneration Committee finalized its

fundamental review of the Remuneration Policy for the

Board of Management. During this process, the

Remuneration Committee was supported by an external

remuneration adviser. Before proposing to amend the

Remuneration Policy for the Board of Management to the

General Meeting, the Remuneration Committee

consulted extensively with shareholders, shareholder

representatives and other stakeholders, including the

Works Council of ASML Netherlands B.V. For more

information about the stakeholder feedback, reference is

made to the 2022 AGM page on our website.

On April 29, 2022, the Supervisory Board, upon

recommendation of the Remuneration Committee,

proposed to the General Meeting to amend the

Remuneration Policy for the Board of Management. The

amended policy was adopted at the 2022 AGM. A summary

of the main changes compared with the previous

Remuneration Policy is included in this Remuneration

Report.

The Remuneration Committee made recommendations

to the Supervisory Board concerning the total

remuneration package of the Board of Management and

the variable remuneration consisting of an STI in cash

and an LTI in shares. The Remuneration Committee

proposed 2022 targets for the Board of Management’s

variable remuneration to the Supervisory Board. During

the year, the Remuneration Committee closely monitored

the Board of Management’s performance. It provided

recommendations to the Supervisory Board regarding

the achievement of the 2022 targets and related

compensation levels for the Board of Management

members.

In proposing and evaluating the Board of Management’s

performance in relation to the corporate goals and

objectives for the variable remuneration of the Board of

Management members, the Remuneration Committee

closely cooperates with the Audit Committee and the

Technology Committee.

At the end of 2022 we performed a light review of Board

of Management remuneration levels. Since the 2022 STI

and LTI at-target levels were below the maximum at-

targets levels allowed by the 2022 Remuneration Policy,

the RC wanted to determine if an increase of these at-

target levels for 2023 was desirable. The outcome of this

review is that the Supervisory Board decided to increase

the at-target levels for the STI from 95% to 105% for the

Presidents and from 90% to 95% for the non-Presidents.

For the LTI the increase will be from 160% to 170%.

The Remuneration Committee has taken note of the

views of the individual members of the Board of

Management with regard to the amount and structure of

their remuneration.

The shareholding positions of the Board of Management

members were reviewed by the Remuneration

Committee in order to assess compliance with the share

ownership guideline as included in the Remuneration

Policy for the Board of Management.

The Remuneration Committee also prepared the

Remuneration Report, which details the remuneration of

members of the Supervisory Board and the Board of

Management.

Increased transparency around remuneration

In our engagements with stakeholders during 2022, we

received valuable feedback on the Remuneration Report,

in particular on further improving transparency around

remuneration. We have taken this feedback into

consideration, and as a result, we have implemented

several changes in the 2022 Remuneration Report.

For example, we now include ex-ante disclosures of the

selected STI metrics and of the selected LTI metrics and

target levels (where this is not contrary to the strategic

and/or commercial interests of ASML).

The Remuneration Committee engaged the external

auditor to perform certain agreed-upon procedures

regarding the reported performance by the Board of

Management on the Short Term Incentive Plan 2022 and

Long Term Incentive Plan for performance period

2020-2022.

Remuneration of the Supervisory Board

The current Remuneration Policy for the Supervisory

Board was adopted by the General Meeting at the 2021

AGM. In 2022, the Remuneration Committee discussed

the latest trends in policies and reporting and performed

the recurring bi-annual benchmark of Supervisory Board

remuneration. Based on the outcome of this review, we

intend to submit a proposal for implementing some

adjustments to the Remuneration Policy for the

Supervisory Board at the 2023 AGM. The proposal will

be set out in the convocation notice for the 2023 AGM,

which will be published in March 2023.

The Remuneration Committee also reviewed the

Remuneration Report, which details the remuneration of

the members of the Supervisory Board.

In this section of the Remuneration Report,

we provide an overview of the Remuneration

Policy for the Board of Management, which

was adopted by the General Meeting on April

29, 2022, and has applied as of January 1,

2022 onwards. It also contains information

about the execution of the Remuneration

Policy for the Board of Management as well

as details of the Board of Management

members’ actual remuneration for the

financial year 2022. The Remuneration Policy

for the Board of Management can be found

in the Governance section of our website.

Remuneration Policy

Remuneration as a strategic instrument

The 2022 Remuneration Policy for the Board of

Management supports the strategy, long-term interests

and sustainability of ASML in a highly dynamic

environment, while aiming to fulfill all stakeholders’

requirements and keeping an acceptable risk profile.

More than ever, the challenges for ASML are to drive

technology, to serve our customers and to satisfy our

stakeholders. These drivers are embedded in the identity,

mission and values of ASML and its affiliated enterprises

and are the backbone of the 2022 Remuneration Policy

for the Board of Management. The Supervisory Board

ensures that the 2022 Remuneration Policy for the Board

of Management and its implementation are linked to

ASML’s objectives. A direct way in which this is achieved

is by determining performance measures and setting

targets with respect to variable compensation that are

linked to our short-term and long-term ambitions.

More indirectly, we want to ensure that our 2022

Remuneration Policy for the Board of Management

enables ASML to attract, motivate and retain qualified

industry professionals for the Board of Management in

order to define and achieve our strategic goals. This is

reflected by our drive to determine a remuneration

structure and remuneration levels that intends to be

competitive in the relevant labor market, while at the

same time being aware of societal trends and

perception. Therefore, the 2022 Remuneration Policy for

the Board of Management acknowledges the internal

and external context as well as our business needs and

long-term strategy.

The 2022 Remuneration Policy for the Board of

Management is designed to encourage behavior that is

focused on long-term value creation and the long-term

interests and sustainability of ASML, while adopting the

highest standards of good corporate governance. The

2022 Remuneration Policy for the Board of Management

is aimed at motivating the Board of Management

members to achieve outstanding results, using a

combination of non-financial and financial performance

measures as well as an appropriate ratio between base

salary and variable compensation. Technology

leadership, customer value creation and employee

engagement are the key drivers of sustainable returns to

our shareholders.

Remuneration principles

The remuneration philosophy that ASML applies for all its

employees includes the principle that ASML wants to be

competitive in its relevant labor markets and pay what is

fair in such markets, while maintaining internal

consistency in reflecting differences in size and

complexity of individual responsibilities. The Supervisory

Board applies the same principle for the Board of

Management of ASML and in doing so takes the pay and

employment conditions for the ASML employees into

account when formulating the Remuneration Policy for

the Board of Management. The level of stakeholder

support, including the support of society, for the

Remuneration Policy for the Board of Management that

ASML applies is important to us and is also taken into

account when formulating the various elements of the

policy. While revising the Remuneration Policy for the

Board of Management, the Supervisory Board

considered the external environment in which the

Company operates, the relevant statutory provisions and

provisions of the Dutch Corporate Governance Code and

competitive market practice as well as the guidance

issued by organizations representing institutional

shareholders. The Supervisory Board’s Remuneration

Committee engaged extensively with various

stakeholders to obtain their perspectives. These

stakeholders included ASML’s shareholders, shareholder

interest organizations, proxy advisers and the Works

Council of ASML Netherlands B.V. We received a high

level of support for the revised Remuneration Policy at

the 2022 AGM, with 93.18% of votes in favor. The Works

Council was asked to provide advice on the proposed

amended Remuneration Policy. The Works Council took

the position that it did not fully support the proposed

amendment and had some serious concerns. The Works

Council and a delegation of the Supervisory Board

continued the dialogue on this topic throughout the

course of 2022. A detailed overview of the stakeholder

feedback is published on ASML’s website (asml.com/

agm2022). In line with the Dutch Corporate Governance

Code, the members of the Board of Management have

been asked to share their views on the proposed

amendments of their own remuneration. Furthermore,

advice has been obtained from an external remuneration

expert.

The 2022 Remuneration Policy for the Board of

Management is built on the following principles:

–Competitiveness: The remuneration structure and

levels intend to be competitive in the relevant labor

market, while at the same time taking into account

societal trends and perceptions;

–Alignment: The policy is aligned with the Short-term

Incentive and/or Long-term Incentive Policy for ASML

senior management and other ASML employees and

takes into account internal relativities;

–Long-term orientation: The policy and incentives focus

on sustainable and long-term value creation;

–Compliance: ASML adopts the highest standards of

good corporate governance; and

–Simplicity and transparency: The policy and its

execution are as simple as possible and easily

understandable to all stakeholders.

Reference group and market positioning

Similar to the remuneration philosophy for all ASML

employees, we aim to offer the members of the Board of

Management a remuneration package that is competitive

compared with a relevant labor market. To define this

market, we created a reference group consisting of

companies that are comparable to ASML in terms of size

and complexity, industry or business profile, data

transparency and geographical area. The reference

group may include Dutch and international companies

where members of the Board of Management might be

recruited to and from.

For as long as ASML is positioned around the median of

the group of companies with respect to size (measured

by enterprise value, revenue and number of employees)

and thus complexity, the median market level may serve

as a reference in determining the level of remuneration for

the Board of Management.

As ASML is a Dutch-headquartered company, the

Supervisory Board also takes into account the external

environment in which the Company operates in the

Netherlands, and furthermore considers competitive

market practices as well as guidance issued by

organizations representing institutional shareholders in

the Netherlands, and has decided for the 2022

remuneration policy not to follow the (high) international

market level for long-term incentives (LTI) and to cap the

maximum target LTI award at 200% of base salary. This

means that the reference to a median market level

described above will be used for the cash compensation

only (i.e. the base salary and the short-term incentive

(STI), as the LTI will be capped).

As ASML has a dual presidency and considers the two

presidents of equal weight and importance to the

Company, the Supervisory Board has decided to

continue the Company’s longstanding practice that the

relevant benchmark reference level for the two presidents

is the average of the CEO level and that of the other

members of the Board of Management in the labor

market data, instead of benchmarking against CEO data

only. For the other members of the Board of

Management, the Supervisory Board has applied the

average of all non-CEO members of the Board of

Management in the benchmark as relevant reference,

instead of differentiating between members of the Board

of Management.

In principle, a benchmark of the Board of Management

remuneration is conducted every two years. In the year

without a market assessment, the Supervisory Board

considers the appropriateness of any change of base

salary, taking into account the market environment as

well as the salary adjustments for other ASML

employees. To ensure an appropriate composition of the

relevant labor market, the Supervisory Board reviews the

composition of the reference group at the time a

benchmark is conducted. The composition of the

reference group may be adjusted as a result of takeover

transactions, mergers or other corporate activities.

Substantial changes applied to the composition of the

reference group will be proposed to shareholders.


The current reference group consists of the following companies:
Current reference group composition
	European companies with focus on long-term technology/ industrial engineering/R&D	Semiconductor manufacturing companies	Semiconductor equipment companies
	ABB	Broadcom	Applied Materials
	Airbus	Intel	Lam Research
	Dassault Systèmes	Qualcomm
	Infineon Technologies
	Linde
	Medtronic
	Novartis
	NXP Semiconductors
	Philips
	Roche
	SAP
	Schneider Electric
	Shell
	Siemens
	Siemens Healthineers

Total direct compensation

The remuneration levels are determined using the Total

Cash Compensation (TCC). TCC consists of base salary

and variable remuneration in the form of an STI. A

capped LTI is added to the TCC, which together

constitutes the total direct compensation.

Base salary

The 2022 Remuneration Policy for the Board of

Management prescribes a benchmark that will only be

conducted for the TCC level. The base salary of Board of

Management members is derived from this TCC level.

The actual base salary and annual increases will be

reported in the Remuneration Report. The base salary for

the Board of Management for the reporting year 2022 is

disclosed in the table ‘Total remuneration Board of

Management.

Variable compensation

The variable compensation consists of the STI and the

LTI. The performance metrics are set by the Supervisory

Board and consist of financial and non-financial metrics

in such a way that an optimal balance is achieved

between the various Company objectives, both in the

short term and the long term. By doing so, we ensure

that the variable compensation contributes to the

strategy, long-term interests and sustainability of the

Company. The Supervisory Board may adjust the

performance metrics and their relative weighting of the

variable income based on the rules and principles as

outlined in the 2022 Remuneration Policy for the Board

of Management of ASML Holding N.V., if required by

changed strategic priorities in any given year. The

Supervisory Board assesses the extent to which

performance metrics are met at the end of a

performance period.

The 2022 Remuneration Policy for the Board of

Management contains maximum levels for the STI and

the LTI for on-target performance. These maximum levels

can be implemented if ASML’s relative positioning in the

reference group is at least equal to the median (in terms

of size). For 2022, the target STI levels were lower,

namely 95% for the presidents and 90% for the other

members of the Board of Management, aligned with a

positioning in the reference group slightly below the

median (in terms of size) at the time of designing the

Remuneration Policy, and applying a gradual transition

into the new policy levels. For the same reason, the

target LTI level for 2022 was 160% of base salary for all

members of the Board of Management.

The Supervisory Board has the discretionary power to

adjust the incentive pay-out upward or downward if it

feels that the outcome is unreasonable due to

exceptional circumstances during the performance

period.

Scenario analyses of the possible outcomes of the

variable remuneration components and their effect on the

remuneration of the Board of Management have been

conducted.

The following table represents the variable pay as

percentage of base salary for the Board of Management

in the case of on-target performance.


Maximum variable compensation (on-target)	Market reference	Variable pay as % of base salary (maximum)	2022 Variable pay as % of base salary (on-target)
Short-term incentive	Determined based on ASML’s relative position in the reference group capped at 50th percentile	Presidents: 120% Other members: 100%	Presidents: 95% Other members: 90%
Long-term incentive	Maximum on-target LTI is capped at 200% of base salary	200.0%	160.0%
Total		Presidents: 320% Other members: 300%	Presidents: 255% Other members: 250%

Summary of 2022 Remuneration Policy Board of Management

The elements of the 2022 Remuneration Policy for the Board of Management and their link to the strategy of ASML

are summarized below.

Summary of 2022 Remuneration Policy



Base salary	+	STI Cash bonus	+	LTI Share-based incentive	+	Pension and other benefits	=	Total remuneration



	Fixed remuneration (base salary)

	Link to strategy/rationale			2022 policy

	Attract, motivate and retain qualified industry professionals for the Board of Management in order to define and achieve strategic goals.			Benchmark
				–Consisting of 20 most relevant technology and R&D oriented companies, including ASML’s talent competitors and business peers and (indirect) customers –Composition of companies in the reference group takes into account ASML’s geographic location – it’s weighted toward European companies (75% weighting), with some US companies (25% weighting)


	STI (cash bonus)

	Link to strategy/rationale			2022 policy

	Ensure a balanced focus on both the (financial) performance of ASML in the short term, and the sustained company future in terms of technological advancement and customer satisfaction, fueling long-term success.			–Maximum target STI: 120% of base salary for the presidents and 100% for the other BoM members –2022 target STI: 95% of base salary for the presidents and 90% for the other BoM members

				The weight of the individual STI performance metrics is as follows:
				–60% Financial –20% Technology Leadership Index –20% Customer Orientation


	LTI (share-based incentive)

	Link to strategy/rationale			2022 policy

	Contribute to the strategy, long-term interests and sustainability of ASML using performance measures which balance the direct interest of ASML’s investors, the long-term financial success of ASML, the long-term continuation of technological advancement and the environmental and social dimensions of sustainability.			Maximum target LTI: capped at 200% of base salary 2022 target LTI: 160% of base salary

				The weight of the individual LTI performance metrics is as follows:

				–30% Relative TSR –20-30% ESG measures; 2022 weight: 20% –20-30% Technology Leadership Index; 2022 weight: 20% –20-30% Strategic value drivers; 2022 weight: 30%


	Other elements of fixed remuneration (pension and other benefits)

	Link to strategy/rationale			2022 policy

	Contribute to the competitiveness of the overall remuneration package and create alignment with market practice.			–Pension arrangement based on the ‘excedent’ (supplementary) arrangement for ASML employees in the Netherlands – a defined contribution plan –Expense reimbursements, such as company car costs, travel expenses, representation allowances, housing costs (gross amount before taxes), social security costs and health and disability insurance costs


	Share ownership guidelines

	Link to strategy/rationale			2022 policy

	Requirement for a minimum share ownership by members of the Board of Management. Ensure alignment between the interests of the Board of Management members and ASML’s long-term value creation.			–Presidents three times annual base salary, other Board members two times annual base salary –5-year period to comply for new members –Supervisory Board has discretion to allow a temporary deviation in extraordinary circumstances –Any shortfall will be remediated through the next vesting of shares

2022 Remuneration Policy changes


Remuneration benchmarking

Reference group	2021 policy	2022 policy
	–Consisting of similar-sized European companies from various industry sectors	–Consisting of 20 most relevant technology and R&D orientated companies, including ASML’s competitors and business peers and (indirect) customers –Composition of companies in reference group takes into account ASML’s geographic location – it’s weighted toward European companies (75% weighting), with some US companies (25% weighting)


Incentive levels

	2021 policy	2022 policy
STI	–Target: 80% base salary (presidents and other BoM members)	–Phased increase from 80% of base salary to 120% of base salary for presidents and 100% for the other BoM members

LTI	–Target: 120% base salary (presidents and other BoM members)	–Phased increase from 120% of base salary to 200% of base salary for presidents and other BoM members


Performance measures

	2021 policy	2022 policy
STI	The weight of the individual performance metrics:	The weight of the individual performance metrics:
STI	–60% Financial –20% Technology Leadership Index –20% Market Position	–60% Financial –20% Technology Leadership Index –20% Customer Orientation

LTI	–Threshold pay-out at -20% versus the PHLX index –(Threshold pay-out as 50% of target)	–Proposed performance incentive zone adjusted into percentile-based relative TSR ranking approach instead of fixed range –Reduced vesting level pay-out with 25th percentile performance at 25% of target
	The weight of the individual performance metrics:	The weight of the individual performance metrics:
	–40% ROAIC –30% Relative TSR –20% Technology Leadership Index –10% Sustainability	–30% Strategic value drivers –30% Relative TSR –20% Technology Leadership Index –20% ESG

Remuneration of Board of Management in 2022

The remuneration of the Board of Management for the

financial year 2022 is an implementation of and complies

with the 2022 Remuneration Policy for the Board of

Management, as further explained below. As such, the

remuneration of the Board of Management in 2022

contributed to the objectives of the 2022 Remuneration

Policy for the Board of Management and, as a result, to

ASML’s strategy aimed at long-term value creation.

Scenario analyses of the possible outcomes of the

variable remuneration components and their effect on the

remuneration of the Board of Management have been

conducted.

Base Salary

The base salaries of the members of the Board of

Management were set at the beginning of 2022. The

Supervisory Board decided not to apply a base salary

increase for 2022 compared with 2021 levels, as the

base salary was considered competitive compared with

the reference group. For 2022 base salary levels,

reference is made to the section Total remuneration

Board of Management.

Short-term incentive 2022

The financial and non-financial target levels for the STI

were set at the beginning of the 2022 financial year in

accordance with the 2022 Remuneration Policy for the

Board of Management and taking into account the

annual plan (forecast) for 2022. The rationale for

amending the Remuneration Policy of the Board of

Management including replacement of certain STI

metrics is included in the 2022 Remuneration Policy for

the Board of Management of ASML Holding N.V.

For the STI, the Supervisory Board selected the financial

performance metric below, taking into consideration

ASML’s business challenges and circumstances in 2022:

–EBIT Margin %, measuring Income from operations as

percentage of Total net sales

In addition, the following non-financial performance

metrics applied for the STI in 2022:

–Customer Orientation: This metric consisted of four

equally weighed sub-targets measuring ASML’s

positioning in the market and its performance in terms

of customer experience, customer satisfaction and

quality. The sub-targets were: the Applications market

share of YieldStar and HMI Single Beam, as these are

segments of the Applications market where ASML

faces intense competition; DUV output in terms of

systems, in light of the 2022 supply-demand situation;

EUV availability of the NXE:3600D tool, which is a key

metric reflecting the quality of the performance of our

tools at the customer site and as such is considered an

appropriate metric to measure customer satisfaction;

and overall customer satisfaction, which was measured

using an external benchmark: the VLSI Survey.

–Technology Leadership Index: A set of internal targets

related to ASML’s product and technology roadmaps.

The index measures the technological progress made

by ASML over the relevant performance period,

supporting our efforts to drive innovation and thereby

helping our customers achieve their goals and realize

new technology and applications. The Technology

Leadership Index for 2022 consisted of a list of 18 key

projects in Applications, DUV and EUV. Among others,

these projects related to improvements in inspection

and metrology systems, manufacturing capacity

expressed in wafers per day, component commonality

to decrease costs and the power of the (EUV) light

source. Exact details of the key projects included in the

Technology Leadership Index are not disclosed, given

that this would be detrimental to the Company and its

stakeholders from a competitive and strategic point of

view. To calculate the Technology Leadership Index

performance, each project is scored between 1 and

10; the overall Technology Leadership Index score is

the average of the 18 individual scores. Both the STI

and LTI make use of the Technology Leadership Index

as a qualitative performance measure. The objectives

are the same for both, but the applicable measures,

targets and performance periods are different and

aligned with specific short- and long-term strategic

priorities.

After the end of the performance period, the Supervisory

Board assessed the performance achieved against the

targets, in cooperation with the relevant subcommittees:

the Technology Committee, Audit Committee and

Remuneration Committee. The target and actual

achievement levels for the STI performance criteria are

set out in the table below, excluding information which

qualifies as commercially or strategically sensitive. The

Supervisory Board considers disclosure of this

information not to be in the interest of ASML and its

stakeholders. In view of transparency, we report

performance for these metrics as percentage of target.


	Performance targets1				Actual outcome	Pay-out2
	Weight	Threshold	Target	Stretch		% target
EBIT Margin (%) (Non-GAAP measure)	60%	33%	35%	37%	34.5%	88.1%

Customer Orientation	20%					105.0%
Consisting of the following equally weighted sub-targets:
Applications market share	5%	*				120.0%
DUV output (systems)	5%	*				—%
EUV availability	5%	*				150.0%
VLSI customer survey	5%	Top 5	Top 3	Top 2	Top 2	150.0%

Technology Leadership Index	20%	4	6	10	8	126.3%

Total	100%					99.1%

1.Certain performance targets (*) are not disclosed due to strategic or commercial sensitivity.

2.The pay-out % is based on the pay-out levels as included in the Summary of 2022 Remuneration Policy Board of Management.

The 2022 EBIT Margin % (Non-GAAP measure) of 30.7% is calculated as Income from operations of €6,501 million

divided by Total net sales of €21,173 million.

The Supervisory Board applied an adjustment for fast shipments on the STI financial performance metric EBIT Margin

% result. The rationale behind this decision is that fast shipments are a change in the business model made on

request of our customers; the Board of Management decided to honor these customer requests, as this was

considered the best decision in the interest of ASML and its stakeholders, especially also in light of the global chip

shortage; however, fast shipments lead to a delay in revenue recognition and as such have a negative impact on the

EBIT Margin %. Considering the foregoing, the Supervisory Board decided to normalize the EBIT Margin % result for

these fast shipments. The adjustment for the delay in revenue recognition due to fast shipments results in an EBIT

margin % of 34.5% and a total STI pay-out as % of target of 99.1% compared with 46.3% without adjustment.

The composition of customer performance changed, since DUV is now measured based on output in systems.

Performance in the other sub targets was comparable to last year.

The actual outcome for Technology Leadership Index of 8.1 is in line with last year performance.

The total STI outcome for current Board of Management results in a cash pay-out of €3.8 million, representing a

payout as % of target of 99.1%.

Short-Term Incentive 2023

For 2023, the Supervisory Board has decided to apply the following STI performance measures:


	Weight
EBIT Margin (%) (Non-GAAP measure)	60%

Customer Orientation	20%
Consisting of the following equally weighted sub-targets:
Applications market share	5%
DUV output (systems)	5%
EUV availability	5%
TechInsights (f.k.a. VLSI) customer survey	5%

Technology Leadership Index	20%

Total	100%

In setting the target levels for the performance metric EBIT Margin % for 2023, the Supervisory Board has taken the

assumption that the timing of revenue recognition of fast shipments will be the same as it was in 2022, in line with the

2022 normalization applied for fast shipments. In case of any change in accounting treatment, which would no longer

result in a delay in revenue recognition, the Supervisory Board intends to increase the EBIT Margin % target levels

accordingly.

Board of Management Remuneration in 2022 – Long-term incentive

Conditionally granted Long-term incentive 2022–2024 Plan in 2022

At the beginning of 2022, 19,105 performance shares were conditionally granted to the current members of the

Board of Management for the 2022-2024 LTI performance plan. These conditional grants are based on the maximum

achievable opportunity.

At the beginning of 2022, the Supervisory Board, in line with the recommendation of the Remuneration Committee,

selected the performance metrics to be used to measure ASML’s performance related to strategic value drivers and

ESG Sustainability. The Supervisory Board also set the target levels related to all performance metrics for the

2022–2024 LTI Plan, as listed below. This was done taking into account the long-term product roadmap, ESG goals

and the long-term financial plan, thereby ensuring alignment between the various targets and ASML’s long-term

strategic priorities and encouraging behavior focused on long-term value creation. The rationale for amending the

Remuneration Policy of the Board of Management including replacement of certain LTI metrics is included in the

2022 Remuneration Policy for the Board of Management of ASML Holding N.V.

For the 2022-2024 LTI Plan, the following performance metrics apply, in accordance with the 2022 Remuneration

Policy for the Board of Management:

–Total shareholder return vs. Index (TSR): Measuring ASML’s relative change in share price, plus dividends paid over

the relevant performance period. The TSR is calculated as the difference between (i) the average (closing) share

price during the last quarter of the performance period and (ii) the average (closing) share price during the quarter

preceding the performance period; in the calculation, dividends are reinvested at the ex-dividend date. The TSR of

ASML (calculated with the ASML New York share) is compared with the PHLX Semiconductor Sector Index. This

NASDAQ index is designed to track the performance of a set of companies engaged in the design, distribution,

manufacture and sale of semiconductors. There are two versions of this index, a price return index and a total

return index, the latter of which has been chosen (NASDAQ: X.SOX), as this index reinvests cash dividends,

equivalent to the TSR definition described above.

–Strategic value driver: Normalized three-year average cash conversion rate is a measure to ensure a focus on

balance sheet and cash generation, in addition to the focus on margin that is already part of the 2022 STI (by

including EBIT Margin). The Normalized Cash Conversion Rate percentage is calculated over a three-year average

by dividing Normalized Free Cash Flow (non-GAAP measure) by Net Income. Free Cash Flow is a non-GAAP

measure and is defined as net cash provided by operating activities minus purchase of property, plant and

equipment and purchase of intangible assets. Normalized Free Cash Flow (non-GAAP measure) is Free Cash Flow

(non-GAAP measure) excluding early payments received in a certain financial year from customers without a

contractual payment obligation in that financial year.

–Technology Leadership Index: A qualitative measure which is also applied for the STI. As a metric for the LTI, the

Technology Leadership Index is more forward looking than its STI equivalent. It consists of targets to be achieved

three years ahead, two years ahead and in the coming year. Each year, new targets are defined for the period three

years ahead. The targets for two years ahead are based on the prior-year targets (that were three years ahead at

that time) and a correction factor on the score (up or down) depending on whether targets appeared to be easier or

more difficult to achieve. The same approach is utilized for subsequent years. The total score for the Technology

Leadership Index over the three-year performance period is the average of the scores over the three years,

including the relevant correction factors applied on each year’s score.

–ESG: A qualitative measure consisting of three equally weighted sub-targets: (1) EUV energy use per wafer pass,

(2) employee engagement and (3) the percentage of female employees in a job grade 13+.


Performance metric	Performance targets
Performance metric	Weight	Threshold	Target	Maximum
Relative TSR	30%	Lower quartile	Median	Upper quartile

Normalized three-years average Cash Conversion Rate %1	30%	80.0%	90.0%	95.0%

ESG Measures	20%
Consisting of:
EUV energy use per wafer pass		7.0 kWh	6.5 kWh	6.0 kWh
Employee engagement		X2 – 4% point	X2 – 3% point	X2
% female representation in JG13+		10%	12%	14%

Technology Leadership Index	20%	4	6	10

Total	100%

1.The Normalized three-year average Cash Conversion Rate % (CCR) is calculated by dividing Normalized Free Cash Flow (Non-GAAP measure)

by Net Income (three-year average). Free Cash Flow (Non-GAAP measure) is normalized by excluding early payments received in a certain

financial year from customers without a contractual payment obligation in that financial year.

2.X = top 25% companies.

Vesting under the Long-Term Incentive 2020–2022 Plan

Following the end of the three-year performance period 2020-2022, the Supervisory Board assessed the

performance achieved against the LTI targets, in cooperation with the Technology Committee, Audit Committee and

Remuneration Committee. The performance metrics that applied to the LTI 2020-2022 Plan were Relative Total

Shareholder Return vs. Index, Return on Average Invested Capital (ROAIC), Technology Leadership Index and

Sustainability, in accordance with the 2020 Remuneration Policy for the Board of Management. The target and actual

achievement levels for the LTI performance criteria based on the Remuneration Policy for the Board of Management

are set out in the table below.


	Performance targets					Actual performance	Pay-out %2
Performance metric	Weight	Threshold	Target	Exceed	Stretch
Relative TSR	30%	(20%)	0%	n/a	20%	41.4%	200%
ROAIC1	40%	29.5%	31.0%	32.5%	34.0%	48.2%	200%
Technology Leadership Index	20%	4	6	8	10	8.3	158.3%
Sustainability	10%	≤13.5%	≤11%	n/a	≤6%	10.8%	104.9%

Total	100%						182.2%	3

1.The ROAIC (Non-GAAP measure) is based on a three-year average by dividing the Income after income taxes by the Average Invested Capital.

Average Invested Capital is calculated by taking the average of Total Assets minus Cash, Short Term Investments, Current liabilities and

Long-term contract liabilities at the start and end of each quarter over three years. We believe that ROAIC is a meaningful measure because it

quantifies our effectiveness in generating returns relative to the capital invested in our business over the past three years.

2.The Pay-out % is based on the pay-out levels as included in the 2020 Remuneration Policy Board of Management.

3.Total Actual Performance score of 182.2% is based on weighting of individual performance metrics multiplied by the pay-out %.

The total LTI outcome results in a share vesting of 182.2% of target.

LTI Plan 2023-2025

At the beginning of 2023, 28,604 performance shares were conditionally granted to the current members of the

Board of Management for the 2023-2025 LTI performance plan. These conditional grants are based on the maximum

achievable opportunity for 2023.

For the 2023-2025 performance period, the Supervisory Board has decided to apply the following LTI performance

measures and target setting:


	Performance targets
Performance metric	Weight	Threshold	Target	Maximum
Relative TSR	30%	As per remuneration policy

Normalized three-year average Cash Conversion Rate %1	30%	85%	90%	95%

ESG measures	20%
Consisting of:
Net zero emission (Scope 1+2) with minimum compensation		<37kT compensation	<30kT compensation	<20kT compensation
Employee engagement		X2 – 4% point	X2 – 2% point	X2
Total and JG9+ female Inflow		22%	24%	26%

Technology Leadership Index	20%	4	6	10

Total	100%

1.The Normalized three-year average Cash Conversion Rate % (CCR) is calculated by dividing Normalized Free Cash Flow (Non-GAAP measure)

by Net Income (three-year average). Free Cash Flow (Non-GAAP measure) is normalized by excluding early payments received in a certain

financial year from customers without a contractual payment obligation in that financial year.

2.X = top 25% companies.

Other remuneration

In 2022, members of the Board of Management participated in the pension arrangement for the Board of

Management, which is based on the ‘excedent’ (supplementary) arrangement for our employees in the Netherlands,

a defined contribution opportunity as defined in Dutch fiscal regulations. It consists of a gross pension element (for

the salary below approximately €115k) and a net pension element (for a salary above €115k). Some members opted

out of the net pension due to different tax treatment of this outside the Netherlands. Details of the incurred

accounting expenses relating to the application of the pension arrangement in 2022 can be found in the table Total

Remuneration Board of Management.

Expenses reimbursed by ASML in 2022 included company car costs, representation allowances, social security costs

and health and disability insurance costs.

Share ownership guidelines

The table below shows the share ownership guidelines, number of outstanding vested shares and share ownership

ratio of each Board of Management member as per December 31, 2022. All members of the Board of Management

complied with the minimum ownership guidelines per year end 2022.


Board of Management	Ownership guidelines	2022 base salary in € thousands	Number of outstanding vested shares	Ownership ratio1
P.T.F.M. Wennink	3x base	1,020	38,047	18.79
M.A. van den Brink	3x base	1,020	11,923	5.89
F.J.M. Schneider- Maunoury	2x base	694	17,903	13.00
R.J.M. Dassen	2x base	694	15,549	11.29
C.D. Fouquet	2x base	694	6,470	4.70

1.The Ownership ratio is calculated by multiplying the number of outstanding vested shares with the share price of €503.80 (based on the closing

share price of December 30, 2022) and dividing this by the base salary.

Total remuneration Board of Management

The remuneration of the members of the Board of Management based on incurred accounting expenses in 2022, 2021 and 2020 was as follows (amounts are in € thousands):


Board of Management	Financial Year	Base salary	Pension	Other benefits	Total fixed	% Fixed	STI	LTI	Total variable	% Variable	Total Remuneration	Relative proportion fixed vs. variable
P.T.F.M. Wennink	2022	1,020	206	58	1,284	30.0%	961	2,035	2,996	70.0%	4,280	0.43
	2021	1,020	206	57	1,283	26.6%	1,098	2,439	3,537	73.4%	4,820	0.36
	2020	1,020	216	57	1,293	28.3%	1,135	2,136	3,271	71.7%	4,564	0.40
M.A. van den Brink	2022	1,020	206	57	1,283	30.0%	961	2,035	2,996	70.0%	4,279	0.43
	2021	1,020	206	56	1,282	26.6%	1,098	2,439	3,537	73.4%	4,819	0.36
	2020	1,020	216	57	1,293	28.3%	1,135	2,136	3,271	71.7%	4,564	0.40
F.J.M. Schneider-Maunoury	2022	694	141	36	871	30.6%	619	1,354	1,973	69.4%	2,844	0.44
	2021	694	115	36	845	26.8%	747	1,566	2,313	73.2%	3,158	0.37
	2020	694	122	36	852	29.1%	773	1,302	2,075	70.9%	2,927	0.41
R.J.M. Dassen	2022	694	116	51	861	30.4%	619	1,354	1,973	69.6%	2,834	0.44
	2021	694	115	51	860	22.6%	747	2,193	2,940	77.4%	3,800	0.29
	2020	694	100	51	845	22.2%	773	2,186	2,959	77.8%	3,804	0.29
C.D. Fouquet	2022	694	78	53	825	29.5%	619	1,354	1,973	70.5%	2,798	0.42
	2021	694	78	52	824	26.3%	747	1,566	2,313	73.7%	3,137	0.36
	2020	694	83	51	828	27.8%	773	1,374	2,147	72.2%	2,975	0.39
Total Board of Management	2022	4,122	747	255	5,124	30.1%	3,779	8,132	11,911	69.9%	17,035	0.43
	2021	4,122	720	252	5,094	25.8%	4,437	10,203	14,640	74.2%	19,734	0.35
	2020	4,122	737	252	5,111	27.1%	4,589	9,134	13,723	72.9%	18,834	0.37

The remuneration reported as part of the LTI (share awards) is based on costs incurred under accounting values EU-IFRS. The costs of share awards are charged to the Consolidated Statement of Profit or Loss over the three-year vesting

period based on the number of awards expected to vest for non-market-based elements. For the first two years, we apply the maximum achievable number of share awards, and in the final performance year of the awards we update this

estimate for the non-market performance conditions to the best estimated number of awards which are anticipated to vest. Any difference between the amount based on the best estimate of achievable number of shares awards and the

amount based on the actual number of share awards that vest, is taken into account in the Consolidated Statement of Profit or Loss in the financial year in which the share awards vest. Market-based elements are accounted at target.

Total remuneration Former Board of Management

F.J. van Hout is no longer part of the Board of Management as he retired from ASML in 2021.


Former Board of Management	Financial Year	Base salary	Pension	Other benefits	Total fixed	% Fixed	STI	LTI	Total variable	% Variable	Total Remuneration	Relative proportion fixed vs. variable
F.J. van Hout1	2021	231	47	16	294	11.4%	243	2,036	2,279	88.6%	2,573	0.13
	2020	694	122	47	863	29.4%	773	1,302	2,075	70.6%	2,938	0.42

1.The 2021 total remuneration of F.J. van Hout excluded an estimated tax levy payable to the Dutch tax authorities by the Company on termination benefits pursuant to article 32bb of the Dutch Wage Tax Act.

Share-based payments

Performance-based share-based remuneration for current members of the Board of Management is disclosed in the table below. Fractional shares are rounded down to full shares for reporting purposes.


				Market-based element		Non-market-based elements
Board of Management	Grant date	Status	Full control	Number of shares at target	Fair value at grant date	Number of shares at target	Fair value at grant date	Total number of shares at target	Total number of shares at maximum (200%)	Vesting date	Number of vested shares on publication date	Year-end closing share price in year of vesting	End of lock-up date
P.T.F.M. Wennink	4/29/22	Conditional	No	709	596.0	1,655	533.5	2,364	4,727	1/1/25	n/a	n/a	1/1/27
	1/22/21	Conditional	No	1,053	635.6	2,455	454.9	3,508	7,016	1/1/24	n/a	n/a	1/1/26
	1/24/20	Unconditional	No	1,387	286.9	3,235	263.7	4,622	9,245	1/1/23	8,420	503.8	1/1/25
	7/19/19	Unconditional	No	2,217	245.4	5,173	194.4	7,390	14,780	1/1/22	13,326	706.7	1/1/24
	1/19/18	Unconditional	No	1,958	215.1	4,570	162.8	6,528	13,056	1/19/21	9,566	439.9	1/19/23
M.A. van den Brink	4/29/22	Conditional	No	709	596.0	1,655	533.5	2,364	4,727	1/1/25	n/a	n/a	1/1/27
	1/22/21	Conditional	No	1,053	635.6	2,455	454.9	3,508	7,016	1/1/24	n/a	n/a	1/1/26
	1/24/20	Unconditional	No	1,387	286.9	3,235	263.7	4,622	9,245	1/1/23	8,420	503.8	1/1/25
	7/19/19	Unconditional	No	2,217	245.4	5,173	194.4	7,390	14,780	1/1/22	13,326	706.7	1/1/24
	1/19/18	Unconditional	No	1,958	215.1	4,570	162.8	6,528	13,056	1/19/21	9,566	439.9	1/19/23
F.J.M. Schneider-Maunoury	4/29/22	Conditional	No	483	596.0	1,126	533.5	1,609	3,217	1/1/25	n/a	n/a	1/1/27
F.J.M. Schneider-Maunoury	1/22/21	Conditional	No	717	635.6	1,670	454.9	2,387	4,774	1/1/24	n/a	n/a	1/1/26
	1/24/20	Unconditional	No	858	286.9	2,001	263.7	2,859	5,718	1/1/23	5,208	503.8	1/1/25
	7/19/19	Unconditional	No	1,371	245.4	3,198	194.4	4,569	9,137	1/1/22	8,239	706.7	1/1/24
	1/19/18	Unconditional	No	1,125	215.1	2,626	162.8	3,751	7,502	1/19/21	5,496	439.9	1/19/23
R.J.M. Dassen	4/29/22	Conditional	No	483	596.0	1,126	533.5	1,609	3,217	1/1/25	n/a	n/a	1/1/27
	1/22/21	Conditional	No	717	635.6	1,670	454.9	2,387	4,774	1/1/24	n/a	n/a	1/1/26
	1/24/20	Unconditional	No	858	286.9	2,001	263.7	2,859	5,718	1/1/23	5,208	503.8	1/1/25
	7/19/19	Unconditional	No	1,371	245.4	3,198	194.4	4,569	9,137	1/1/22	8,239	706.7	1/1/24
	1/25/19	Unconditional	No	3,000	169.0	7,000	148.3	10,000	20,000	1/1/22	18,032	706.7	1/1/24
	7/20/18	Unconditional	No	657	274.6	1,531	185.0	2,188	4,376	1/19/21	3,207	439.9	1/19/23
C.D. Fouquet	4/29/22	Conditional	No	483	596.0	1,126	533.5	1,609	3,217	1/1/25	n/a	n/a	1/1/27
	1/22/21	Conditional	No	717	635.6	1,670	454.9	2,387	4,774	1/1/24	n/a	n/a	1/1/26
	1/24/20	Unconditional	No	858	286.9	2,001	263.7	2,859	5,718	1/1/23	5,208	503.8	1/1/25
	7/19/19	Unconditional	No	1,371	245.4	3,198	194.4	4,569	9,137	1/1/22	8,239	706.7	1/1/24
	7/20/18	Unconditional	No	844	274.6	1,969	185.0	2,813	5,626	1/19/21	4,122	439.9	1/19/23

Performance-based share-based remuneration for former members of the Board of Management is disclosed in below table. Fractional shares are rounded down to full shares for reporting purposes.


				Market-based element		Non-market-based elements
Former Board of Management	Grant date	Status	Full control	Number of shares at target	Fair value at grant date	Number of shares at target	Fair value at grant date	Total number of shares at target	Total number of shares at maximum (200%)	Vesting date	Number of vested shares on publication date	Year-end closing share price in year of vesting	End of lock-up date
F.J. van Hout	1/22/21	Conditional	No	239	635.6	557	454.9	796	1,592	1/1/24	n/a	n/a	1/1/26
	1/24/20	Unconditional	No	858	286.9	2,001	263.7	2,859	5,718	1/1/23	5,208	503.8	1/1/25
	7/19/19	Unconditional	No	1,371	245.4	3,198	194.4	4,569	9,137	1/1/22	8,239	706.7	1/1/24
	1/19/18	Unconditional	No	1,125	215.1	2,626	162.8	3,751	7,501	1/19/21	5,496	439.9	1/19/23

Reasons, criteria and principal conditions for granting shares

For the reasons and criteria for granting the performance shares to each member of the Board of Management, reference is made to the Summary of 2022 Remuneration Policy Board of Management and to the section Board of

Management Remuneration in 2022 – Long-term incentive as included in this Remuneration Report.

The principal conditions applicable to the 2022 performance shares are described below. These apply to each member of the Board of Management.


Instrument:		Performance shares
Grant		Conditional grant on an annual basis based on maximum achievable opportunity. The number of performance shares to be conditionally awarded is calculated using the volume-weighted average share price during the last quarter of the year preceding the conditional award.
Grant date		Date on which the performance shares are conditionally granted.
Performance period		Period of three-years over which the achievement of the pre-defined performance targets is measured.
Vesting		The shares will become unconditional after the end of the performance period, depending on the level of achievement of the predetermined performance targets.
Lock-up period		The minimum holding period is two years after the vesting date.
		Upon termination of contract, the transfer restrictions will remain in place during the holding period except in case of decease.
		In case a tax payment is due by the members of the Board of Management over the retrieved variable income, performance shares may be partially sold at vesting (‘sell to cover’) in accordance with the law and internal regulations.

Relationship between accounted remuneration and company’s performance

The following table provides an overview of the relationship between accounted remuneration and the company’s performance for the past five years:


For the year ended December 31 (€, in thousands)	20181	Change (in %)1	2019	Change (in %)	2020	Change (in %)	2021	Change (in %)	2022	Change (in %)
Net sales	10,944,016	22%	11,820,001	8%	13,978,452	18%	18,610,994	33%	21,173,448	14%
Net income based on US GAAP	2,591,614	25%	2,592,252	—%	3,553,670	37%	5,883,177	66%	5,624,209	(4)%
Net income based on EU-IFRS	2,525,515	16%	2,581,107	2%	3,696,813	43%	6,134,595	66%	6,395,775	4%
ASML share price (closing price on Euronext Amsterdam in €)	137.2	(6)%	263.7	92%	397.6	51%	706.7	78%	503.8	(29)%
Average number of payroll employees in FTEs	18,204	20%	22,192	22%	24,727	11%	28,223	14%	33,071	17%

Remuneration P.T.F.M. Wennink (CEO)	3,433	(1)%	4,361	27%	4,564	5%	4,820	6%	4,280	(11)%
Remuneration M.A. van den Brink	3,431	(1)%	4,360	27%	4,564	5%	4,819	6%	4,279	(11)%
Remuneration R.J.M. Dassen	897	—	2,956	230%	3,804	29%	3,800	—%	2,834	(25)%
Remuneration C.D. Fouquet	1,125	—	2,203	96%	2,975	35%	3,137	5%	2,798	(11)%
Remuneration F.J.M. Schneider-Maunoury	2,169	(4)%	2,724	26%	2,927	7%	3,158	8%	2,844	(10)%

Average remuneration per FTE2 based on US GAAP	115	(2)%	114	(1)%	120	5%	122	2%	125	2%
Average remuneration per FTE2 based on EU-IFRS	115	(2)%	114	(1)%	120	5%	122	2%	118	(3)%
Internal pay ratio (CEO versus employee remuneration based on US GAAP)2	30	—%	38	27%	38	—%	40	5%	34	(15)%
Internal pay ratio (CEO versus employee remuneration based on EU-IFRS)2	30	—%	38	27%	38	—%	40	5%	36	(10)%
Ratio of the percentage increase in annual total compensation for CEO to the percentage increase in average annual remuneration for all employees3 based on US GAAP									(5.5)	n/a
Ratio of the percentage increase in annual total compensation for CEO to the percentage increase in average annual remuneration for all employees3 based on EU-IFRS									3.7	n/a

1.The remuneration of the R.J.M. Dassen and C.D. Fouquet was lower in 2018 as they were appointed as members of the Board of Management during 2018.

2.The calculation approach of the internal pay ratio is disclosed in the section Relationship between CEO and average remuneration (pay ratio).

3.The ratio of the percentage increase in annual total compensation for CEO to percentage increase in average annual remuneration for all employees is calculated by dividing the % annual increase in the remuneration of the CEO by the % annual increase in the average remuneration per FTE. This

ratio is only applicable as of 2022 to comply with the GRI Standards 2021.

Explanation of changes in company’s performance versus

remuneration

The foregoing table aims to provide insight into the

Company’s performance over the past five years and the

development of the remuneration. The metrics net sales,

net income and share price are used to measure

Company performance, as they are key metrics serving

as a good proxy for ASML’s general performance, as

well as in view of comparability with other companies.

The Company has grown significantly over recent years,

not only reflected in the number of employees but also in

terms of net sales. Since 2018, net sales have increased

by 93%. The performance of the Company in that same

period has increased significantly as well, reflected for

example in Net Income (117% growth since 2018 based

on US GAAP and 153% growth since 2018 based on

EU-IFRS) and ASML share price (267% growth). As the

table shows, the Company performance over the last five

years has improved more significantly compared to the

development of remuneration in that same period. The

growth of the Company has led to revisions of the

Remuneration Policy for the Board of Management in

2019, 2021 and 2022, resulting in higher base salaries as

well as higher levels of STI (at target) and LTI (at target).

Total remuneration for the Board of Management in 2022

was lower compared to 2021, due to the impact of

supply chain issues and inflation on the STI score, and

due to a lower number of granted shares at issuance

date for the 2020-2022 LTI plan. Actual remuneration

may fluctuate year over year depending on actual STI

pay-out in any year, as well as the vesting of

performance shares (LTI) in any year and the share price

at that moment.

Relationship between CEO and average remuneration

(pay ratio)

The internal pay ratio consists of the CEO’s total

remuneration (including all remuneration components)

during 2022 of €4,280 thousand, compared to the

average remuneration of all employees. The average

remuneration of all employees was calculated using the

average number of payroll employees in FTE (wages and

salaries + social security expenses + pension and

retirement expenses + share-based payments)/average

number of payroll employees = €4,128 million / 33,071 =

€125 thousand. This ratio has not been prepared to

comply with the Pay Ratio Disclosure requirements under

SEC regulations. The ratio is based on the highest paid

individual according to accounting values consisting of

fixed and variable remuneration elements compared to

the average remuneration of all employees that are in

service with the company, which excludes all other

Board Members. This calculation approach brings the

ratios more in line with the requirements from the

Corporate Governance Code.

The internal pay ratio (CEO versus employee

remuneration) based on US GAAP decreased towards

34:1 in 2022 (2021 40:1) and based on EU-IFRS

decreased towards 36:1 in 2022 (2021 40:1). Decrease

is driven by lower remuneration for the Board of

Management in 2022, due to the impact of supply chain

issues and inflation on the STI score, and due to a lower

number of granted shares at issuance date for the

2020-2022 LTI plan. In 2022, the remuneration of the

employees was adjusted for CLA and merit increases in

2022. Furthermore, in addition to normalizing the STI

score for fast shipments, the 2022 STI score for

employees was also adjusted for the impact of supply

chain issues and inflation in 2022, which is reflected in

the 2022 US GAAP figures. ASML intends to grant

competitive remuneration to employees at all position

levels within the Company. At each level remuneration

should reflect the responsibilities of the role. The build-up

of remuneration from level to level should therefore be

gradual and in line with increasing responsibilities, also

following market practice. At the highest level the steps

become gradually bigger as responsibilities ultimately rise

from a divisional level to an overall company level. The

Supervisory Board considers the current build-up and

the overall pay ratio of 34:1 to be equitable, considering

the current performance of the company.

In this section of the Remuneration Report, we provide

an overview of the 2021 Remuneration Policy for the

Supervisory Board as adopted by the General Meeting

on April 29, 2021, and as in force from April 1, 2021

onwards. It provides information about the

implementation of the 2021 Remuneration Policy for the

Supervisory Board in 2022 and contains the details of the

Supervisory Board members’ actual remuneration in

2022. The 2021 Remuneration Policy for the Supervisory

Board can be found in the Governance section of our

website.

Remuneration Policy

Remuneration objectives and principles

The 2021 Remuneration Policy for the Supervisory Board

is designed to enable ASML to attract and retain qualified

Supervisory Board members, who together compose a

diverse and balanced Supervisory Board with the

appropriate level of skills, competencies and experience

required to properly supervise (the execution of) ASML’s

strategy, which is focused on the creation of long-term

value for all stakeholders.

The 2021 Remuneration Policy for the Supervisory Board

is built on the following principles:

–Transparent – The Remuneration Policy and its

execution are clear and practical

–Alignment – The Remuneration Policy is benchmarked

to market practice

–Compliant – ASML adopts the highest standards of

good corporate governance

–Simple – The Remuneration Policy and its execution

are as simple as possible and easily understandable to

all stakeholders

–Fair – The remuneration should reflect the time spent

and the responsibilities of the role of the members of

the Supervisory Board

–Independent – The remuneration of a Supervisory

Board member may not be dependent on the results of

the company

Reference group and market positioning

The remuneration of the Supervisory Board should be

competitive compared with a relevant reference market.

This market is defined using a reference group of

companies with a two-tier board structure included in the

AEX Index of Euronext Amsterdam. To determine the

positioning in this group, enterprise value, revenue and

number of employees are taken into account.

Summary of Remuneration Policy Supervisory Board

This table provides an overview and description of the elements of the 2021 Remuneration Policy for the Supervisory Board.


Fixed remuneration

	Description	Value

	Basic membership fee	Chair of Supervisory Board	€130,000
		Vice Chair of Supervisory Board	€94,000
		Member of Supervisory Board	€75,000
		Chair Audit Committee	€25,500
		Member Audit Committee	€18,000
		Chair of other Committees	€20,000
		Member of other Committees	€14,500


Extra allowance for intercontinental meetings

	Description	Value

	Extra, fixed allowance paid in connection with additional time commitment for intercontinental travel	€ 5,000 for each meeting that involves intercontinental travel


Expenses

	Description	Value

	Expenses incurred in relation to meeting attendance are reimbursed. In addition, a fixed net cost allowance is paid, covering certain pre- defined out-of-pocket expenses	Depending on level of expenses
		Chair of Supervisory Board	€1,980
		Member of Supervisory Board	€1,380


	Loans and guarantees

	Description			Value
	No (personal) loans or guarantees or the like will be granted			Not applicable


	Shares and share ownership

	Description			Value

	No (rights to) shares are granted by way of remuneration. Any holding of ASML shares is for the purpose of long-term investment. Any trading activity is subject to ASML’s Insider Trading Rules			Not applicable


	Other arrangements

	Description			Value

	(Re)appointment based on Dutch law and ASML’s Articles of Association. No claw-back, severance or change in control arrangements are in place			Not applicable

Remuneration of the Supervisory Board in 2022

Overview of the remuneration of the Supervisory Board members based on incurred accounting expenses over the last five years (amounts are in € thousands):


	Membership fees 2022	Committee fees 2022	Allowances 2022	Proportion fixed vs. variable 2022	Total remuneration 2022	Total remuneration 2021	Total remuneration 2020	Total remuneration 2019	Total remuneration 2018
G.J. Kleisterlee	130	53	7	100:0	190	178	157	154	138
A.P. Aris	94	44	6	100:0	144	127	95	98	80
B.M. Conix	75	18	6	100:0	99	63	n/a	n/a	n/a
D.M. Durcan	75	35	16	100:0	126	112	57	n/a	n/a
D.W.A. East	75	18	6	100:0	99	93	59	n/a	n/a
T.L. Kelly	75	35	16	100:0	126	107	88	101	60
R.D. Schwalb	75	40	1	100:0	116	113	104	101	88
A.F.M. Everke	50	10	6	100:0	66	n/a	n/a	n/a	n/a
A.L. Steegen	50	10	6	100:0	66	n/a	n/a	n/a	n/a
Total	699	263	70	100:0	1,032	793	560	454	366

1. Allowances consist of fixed-expense allowances and allowances for intercontinental meetings.

No variable pay has been granted to the current and former members of the Supervisory Board during the last five years. The remuneration of the Supervisory Board is not directly linked to the performance of ASML, in line with the

remuneration principles set out in the 2021 Remuneration Policy for the Supervisory Board.

Remuneration of former Supervisory Board members

Overview of the remuneration awarded to the former Supervisory Board members in 2022, 2021 and 2020 (amounts are in € thousands):


	Membership fees 2022	Committee fees 2022	Allowances 2022	Proportion fixed vs. variable 2022	Total remuneration 2022	Total remuneration 2021	Total remuneration 2020
J.M.C. Stork	25	10	5	100:0	40	113	100
D.A. Grose	n/a	n/a	n/a	n/a	n/a	36	117
C.M.S. Smits Nusteling	n/a	n/a	n/a	n/a	n/a	31	95
W.H. Ziebart	n/a	n/a	n/a	n/a	n/a	n/a	30
Total	25	10	5		40	180	342

1. Allowances consist of fixed-expense allowances and allowances for intercontinental meetings.

Other information

Total remuneration

The total annual remuneration for the members of the

Board of Management and the Supervisory Board,

including former members, during 2022 amounts to

€18.1 million (2021: €23.3 million).

Other arrangements

No remuneration has been granted and allocated by

subsidiaries or other companies whose financials are

consolidated by ASML, since all members of the Board

of Management and the Supervisory Board are paid

directly by ASML Holding N.V.

No (personal) loans have been granted to the members

of the Board of Management or the Supervisory Board

and no guarantees or the like have been granted in favor

of any of the members of the Board of Management and

the Supervisory Board.

No severance payments were granted to members of the

Board of Management and the Supervisory Board in 2022

and no variable remuneration has been clawed back.

Deviations

In 2022, no deviations took place from the decision-

making process for the implementation of the 2021

Remuneration Policy for the Supervisory Board and the

2022 Remuneration Policy for the Board of Management

and no temporary deviations took place from the 2022

Remuneration Policy for the Board of Management and

the 2021 Remuneration Policy for the Supervisory Board.

Shareholder voting

At the 2022 AGM, the 2022 Remuneration Policy for the

Board of Management was adopted with 93.18% of the

votes cast in favor of the proposal.

The Remuneration Report for the financial year 2021 was

submitted to the 2022 AGM for an advisory vote.

84.59% of the votes were cast in favor. In the Message

from the Remuneration Committee Chair at the beginning

of this Remuneration Report, we discuss how we have

taken into account the feedback received on Board of

Management remuneration.

This Remuneration Report will be submitted to the 2023

AGM for an advisory vote in line with Dutch law.

Directors’ Responsibility Statement

The Board of Management hereby declares that, to the

best of its knowledge, the Financial Statements prepared

in accordance with EU-IFRS and Part 9 of Book 2 of the

Dutch Civil Code provide a true and fair view of the

assets, liabilities, financial position and profit or loss of

ASML Holding N.V. and the undertakings included in the

consolidation taken as a whole and that the Annual

Report includes a fair review concerning the position, as

per the statement of financial position date, the

development and performance of ASML Holding N.V.

and the undertakings included in the consolidation taken

as a whole, together with the principal risks and

uncertainties that they face.

In accordance with the Dutch Corporate Governance

Code, the Board of Management hereby states that to

the best of its knowledge and belief, that based on the

current state of affairs, it is justified that the financial

reporting is prepared on a going concern basis, and the

Annual Report discloses all material risks and

uncertainties that are relevant regarding the expectation

as to the continuity of ASML for the 12-month period

after the date of issue of this Annual Report.

In control statement

As the Board of Management of ASML Holding N.V., we

hereby state that we are responsible for the design,

implementation and operation of ASML’s internal risk

management and control systems. The purpose of these

systems is to adequately and effectively manage the

significant risks to which ASML is exposed. Such

systems can never provide absolute assurance regarding

achievement of corporate objectives, nor can they

provide an absolute assurance that material errors,

losses, fraud and the violation of laws or regulations will

not occur.

We acknowledge the importance of internal control and

risk management systems. Additionally, ASML is required

to properly establish and maintain internal controls over

financial reporting, per section 404 of the Sarbanes-

Oxley Act of 2002. Under the supervision and with the

participation of ASML’s CEO and CFO, ASML’s

management conducts an annual evaluation of the

effectiveness of ASML’s internal control over financial

reporting based upon the framework in "Internal Control -

Integrated Framework" (2013) issued by the Committee

of Sponsoring Organizations of the Treadway

Commission. Outcomes of the annual assessment,

periodical updates, as well as significant changes and

improvements, are regularly reported to and discussed

with ASML’s Audit Committee and external auditors. The

Audit Committee reports about these subjects to the

Supervisory Board on a regular basis. In addition, once a

year, the Board of Management discusses the

effectiveness of this internal control framework with the

Audit Committee and the full Supervisory Board.

The establishment of our internal control and risk

management systems is based on the identification of

external and internal risk factors that could influence our

operational and financial objectives and contains a

system of monitoring, reporting and operational reviews.

All material risk management activities have been

discussed with the Audit Committee and the Supervisory

Board.

For more information on our risk management activities and our internal

control and risk management systems, we refer to

Risk - How we manage risk.

For a summary of our risk factors, we refer to

Risk - Risk factors.

Summary

Based on the outcome of the above-mentioned

measures and to the best of its knowledge and belief, the

Board of Management states that:

1.The above-mentioned measures provide reasonable

assurance that the Financial Statements do not

contain any material errors.

2.The Annual Report provides sufficient insights into any

important deficiencies in the internal risk management

and control systems as far as such important

deficiencies occur.

The Board of Management,

Peter T.F.M. Wennink, President, Chief Executive Officer

and Chairman of the Board of Management

Martin A. van den Brink, President, Chief Technology

Officer and Vice Chairman of the Board of Management

Roger J.M. Dassen, Executive Vice President and Chief

Financial Officer

Christophe D. Fouquet, Executive Vice President and

Chief Business Officer

Frédéric J.M. Schneider-Maunoury, Executive Vice

President and Chief Operations Officer

Veldhoven, February 15, 2023



		Financials & Non-financials

		IN THIS SECTION

			Consolidated Financial Statements
		214	Consolidated Statement of Profit or Loss
		215	Consolidated Statement of Comprehensive Income
		216	Consolidated Statement of Financial Position
		217	Consolidated Statement of Changes in Equity
		219	Consolidated Statement of Cash Flows
		220	Notes to the Consolidated Financial Statements
		271	Company financial statements
		279	Other information

			Non-financial statements
		288	Assurance Report of the Independent Auditor
		290	About the non-financial information
		296	EU Taxonomy
		298	Non-financial indicators



ASML ANNUAL REPORT 2022	STRATEGIC REPORT	GOVERNANCE	FINANCIALS	212



		Consolidated Financial Statements

		IN THIS SECTION

		214	Consolidated Statement of Profit or Loss
		215	Consolidated Statement of Comprehensive Income
		216	Consolidated Statement of Financial Position
		217	Consolidated Statement of Changes in Equity
		219	Consolidated Statement of Cash Flows
		220	Notes to the Consolidated Financial Statements



ASML ANNUAL REPORT 2022	STRATEGIC REPORT	GOVERNANCE	FINANCIALS	213


Year ended December 31 (€, in millions, except per share data)	Notes	2020	2021	2022
Net system sales	2	10,316.6	13,652.8	15,430.3
Net service and field option sales		3,661.9	4,958.2	5,743.1
Total net sales	2, 3	13,978.5	18,611.0	21,173.4

Cost of system sales		(5,597.9)	(6,874.5)	(7,843.3)
Cost of service and field option sales		(2,012.0)	(2,319.1)	(2,817.4)
Total cost of sales		(7,609.9)	(9,193.6)	(10,660.7)

Gross profit		6,368.6	9,417.4	10,512.7

Research and development costs		(1,579.9)	(1,861.6)	(2,282.1)
Selling, general and administrative costs		(544.9)	(725.6)	(909.6)
Other income	10	—	213.7	—
Operating income		4,243.8	7,043.9	7,321.0

Finance income		8.4	10.0	16.2
Finance costs	16	(43.3)	(54.6)	(60.8)
Income before income taxes		4,208.9	6,999.3	7,276.4

Income tax expense	21	(600.7)	(1,063.8)	(1,018.6)
Income after income taxes		3,608.2	5,935.5	6,257.8

Profit from investments in associates	9	88.6	199.1	138.0
Net income		3,696.8	6,134.6	6,395.8

Basic net income per ordinary share	23	8.84	14.97	16.08
Diluted net income per ordinary share	23	8.82	14.95	16.07
Number of ordinary shares used in computing per share amounts
Basic	23	418.3	409.8	397.7
Diluted	23	419.1	410.4	398.0


Year ended December 31 (€, in millions)	Notes	2020	2021	2022
Net income		3,696.8	6,134.6	6,395.8

Other comprehensive income:
Proportionate share of other comprehensive income from associates		(1.3)	22.0	37.7

Foreign currency translation, net of taxes:
Gain (loss) on foreign currency translation	22	(75.1)	95.4	68.9

Financial instruments, net of taxes:
Gain (loss) on derivative financial instruments	22, 25	(21.0)	16.6	57.6
Transfers to net income	22, 25	(2.3)	22.2	(66.5)
Other comprehensive income, net of taxes1		(99.7)	156.2	97.7

Total comprehensive income, net of taxes		3,597.1	6,290.8	6,493.5
Attributable to equity holders		3,597.1	6,290.8	6,493.5

1.All items in accumulated other comprehensive income as of December 31, 2022, comprised of our accumulated proportionate share of other comprehensive income from associates of €32.8 million gain (2021: €4.9 million loss; 2020 €26.9 million loss), the hedging reserve balance of €7.6 million

gains (2021: €16.5 million gains; 2020: €22.3 million losses) and the currency translation adjustment balance of €218.0 million gains (2021: €150.7 million gains; 2020: €57.4 million gains), will be reclassified subsequently to profit or loss when specific conditions are met.


As of December 31 (€, in millions)	Notes	2021	2022
Assets
Finance receivables, net	6	383.0	—
Deferred tax assets	21	1,337.6	2,188.9
Loan receivable	26	124.4	364.4
Other assets	8	839.7	739.8
Derivative financial instruments	25	47.3	—
Investments in associates	9	892.5	923.6
Goodwill	11	4,577.1	4,577.1
Intangible assets, net	12	2,852.9	3,345.7
Property, plant and equipment, net	13	2,982.7	3,944.2
Right-of-use assets	14	164.8	192.7
Total non-current assets		14,202.0	16,276.4

Cash and cash equivalents	4	6,951.8	7,268.3
Short-term investments	4	638.5	107.7
Accounts receivable, net	5	3,028.0	5,323.8
Finance receivables, net	6	1,185.6	1,356.7
Contract assets	2	164.6	131.9
Current tax assets	21	42.0	33.4
Inventories, net	7	5,179.2	7,199.7
Other assets	8	687.2	1,110.8
Derivative financial instruments	25	52.2	17.3
Total current assets		17,929.1	22,549.6

Total assets		32,131.1	38,826.0


As of December 31 (€, in millions)	Notes	2021	2022
Equity and liabilities

Shareholders’ equity	22	11,843.8	11,286.0

Long-term debt	16	4,075.0	3,514.2
Deferred and other income tax liabilities	21	438.3	538.4
Contract liabilities	2	3,225.7	5,269.9
Accrued and other liabilities	15	251.1	275.9
Derivative financial instruments	25	—	179.0
Total non-current liabilities		7,990.1	9,777.4

Accounts payable		2,115.5	2,563.5
Accrued and other liabilities	15	1,432.7	1,574.3
Derivative financial instruments	25	2.8	82.3
Current tax liabilities	21	301.9	315.3
Current portion of long-term debt	16	509.1	746.2
Contract liabilities	2	7,935.2	12,481.0
Total current liabilities		12,297.2	17,762.6






Total equity and liabilities		32,131.1	38,826.0

(Before appropriation of net income)


		Issued and Outstanding Shares		Share Premium	Treasury Shares at Cost	Retained Earnings	Other Reserves1	Net Income	Total
(€, in millions)	Notes	Number	Share Capital	Share Premium	Treasury Shares at Cost	Retained Earnings	Other Reserves1	Net Income	Total
Balance at January 1, 2020		419.8	38.2	4,242.1	(1,019.6)	6,514.9	1,520.2	2,581.1	13,876.9
Prior year net income		—	—	—	—	2,581.1	—	(2,581.1)	—
Components of comprehensive income:
Net income		—	—	—	—	—	—	3,696.8	3,696.8
Proportionate share of other comprehensive income from associates		—	—	—	—	—	(1.3)	—	(1.3)
Gain (loss) on foreign currency translation		—	—	—	—	—	(75.1)	—	(75.1)
Gain (loss) on financial instruments	25	—	—	—	—	—	(23.3)	—	(23.3)
Total comprehensive income		—	—	—	—	—	(99.7)	3,696.8	3,597.1

Purchase of treasury shares		(3.9)	—	—	(1,207.5)	—	—	—	(1,207.5)
Cancellation of treasury shares		—	(0.7)	—	1,262.3	(1,261.6)	—	—	—
Share-based payments2	20	—	—	62.9	—	—	—	—	62.9
Issuance of shares		0.6	0.1	(45.8)	101.6	(18.0)	—	—	37.9
Dividend paid		—	—	—	—	(1,066.4)	—	—	(1,066.4)
Development expenditures		—	—	—	—	(192.5)	192.5	—	—
Balance at December 31, 2020		416.5	37.6	4,259.2	(863.2)	6,557.5	1,613.0	3,696.8	15,300.9
Prior year net income		—	—	—	—	3,696.8	—	(3,696.8)	—

Components of comprehensive income:
Net income		—	—	—	—	—	—	6,134.6	6,134.6
Proportionate share of other comprehensive income from associates		—	—	—	—	—	22.0	—	22.0
Gain (loss) on foreign currency translation		—	—	—	—	—	95.4	—	95.4
Gain (loss) on financial instruments	25	—	—	—	—	—	38.8	—	38.8
Total comprehensive income		—	—	—	—	—	156.2	6,134.6	6,290.8


		Issued and Outstanding Shares		Share Premium	Treasury Shares at Cost	Retained Earnings	Other Reserves1	Net Income	Total
(€, in millions)	Notes	Number	Share Capital	Share Premium	Treasury Shares at Cost	Retained Earnings	Other Reserves1	Net Income	Total
Purchase of treasury shares		(14.4)	—	—	(8,560.3)	—	—	—	(8,560.3)
Cancellation of treasury shares		—	(1.2)	—	6,926.6	(6,925.4)	—	—	—
Share-based payments2	20	—	—	131.7	—	—	—	—	131.7
Issuance of shares		0.5	0.1	(21.5)	74.1	(3.7)	—	—	49.0
Dividend paid		—	—	—	—	(1,368.3)	—	—	(1,368.3)
Development expenditures		—	—	—	—	(293.9)	293.9	—	—
Balance at December 31, 2021		402.6	36.5	4,369.4	(2,422.8)	1,663.0	2,063.1	6,134.6	11,843.8
Prior year net income		—	—	—	—	6,134.6	—	(6,134.6)	—

Components of comprehensive income:
Net income		—	—	—	—	—	—	6,395.8	6,395.8
Proportionate share of other comprehensive income from associates		—	—	—	—	—	37.7	—	37.7
Gain (loss) on foreign currency translation		—	—	—	—	—	68.9	—	68.9
Gain (loss) on financial instruments	25	—	—	—	—	—	(8.9)	—	(8.9)
Total comprehensive income		—	—	—	—	—	97.7	6,395.8	6,493.5

Purchase of treasury shares		(8.5)	—	—	(4,639.7)	—	—	—	(4,639.7)
Cancellation of treasury shares		—	(0.3)	—	2,333.7	(2,333.4)	—	—	—
Share-based payments2	20	—	—	66.4	—	—	—	—	66.4
Issuance of shares		0.5	0.1	(4.2)	87.5	(1.6)	—	—	81.8
Dividend paid		—	—	—	—	(2,559.8)	—	—	(2,559.8)
Development expenditures		—	—	—	—	(600.9)	600.9	—	—
Balance at December 31, 2022		394.6	36.3	4,431.6	(4,641.3)	2,301.9	2,761.7	6,395.8	11,286.0

1.Other reserves consist of our proportionate share of other comprehensive income from associates, the hedging reserve, the currency translation reserve and the reserve for capitalized development expenditures. See Note 22 Shareholders’ equity.

2.Share-based payments include income taxes recognized directly in shareholders' equity of €2.5 million loss (2021: €14.2 million gain, 2020: €9.0 million gain).


Year ended December 31 (€, in millions)	Notes	2020	2021	2022
Cash Flows from Operating Activities
Net income		3,696.8	6,134.6	6,395.8
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization1	12, 13, 14	918.4	862.6	875.9
Impairment and loss (gain) on disposal	12, 13	5.5	(15.9)	39.3
Share-based compensation expense	20, 28	62.9	131.7	66.4
Gain on sale of subsidiaries	10	—	(213.7)	—
Inventory reserves	7	192.4	180.7	278.5
Deferred tax expense (benefit)	21	(175.8)	(487.9)	(774.7)
Investments in associates2	9	11.0	(49.8)	15.3
Changes in assets and liabilities:
Accounts receivable, net	5	507.5	(1,754.9)	(2,338.0)
Finance receivables, net	6	(1,125.4)	542.3	212.2
Inventories	7	(706.7)	(483.2)	(2,080.9)
Other assets	8	(67.9)	(127.0)	(611.4)
Accrued and other liabilities	15	106.4	410.3	278.7
Accounts payable		334.3	717.4	405.3
Current tax assets and liabilities	21	129.2	215.6	39.8
Contract assets and liabilities	2	1,418.0	5,529.8	6,632.7
Net cash provided by operating activities		5,306.6	11,592.6	9,434.9

Cash Flows from Investing Activities
Purchase of property, plant and equipment3	13	(962.0)	(900.7)	(1,281.8)
Purchase of intangible assets	12	(658.9)	(725.0)	(930.6)
Purchase of short-term investments	4	(1,475.5)	(1,162.7)	(334.3)
Maturity of short-term investments	4	1,359.1	1,826.4	864.7
Loans issued and other investments	8	(12.2)	(124.4)	(240.0)
Proceeds from sale of subsidiaries (net of cash disposed of)	10	—	329.0	—
Acquisition of subsidiaries (net of cash acquired)	10	(222.8)	—	—
Net cash used in investing activities		(1,972.3)	(757.4)	(1,922.0)


Year ended December 31 (€, in millions)	Notes	2020	2021	2022
Cash Flows from Financing Activities
Dividend paid	22	(1,066.4)	(1,368.3)	(2,559.8)
Purchase of treasury shares	22	(1,207.5)	(8,560.3)	(4,639.7)
Net proceeds from issuance of shares	20	37.9	49.0	81.8
Net proceeds from issuance of notes, net of issuance costs	16	1,486.3	—	495.6
Repayment of debt and lease obligations	14, 16	(62.2)	(73.5)	(571.2)
Net cash used in financing activities		(811.9)	(9,953.1)	(7,193.3)

Net cash flows		2,522.4	882.1	319.6
Effect of changes in exchange rates on cash		(5.3)	20.3	(3.1)
Net increase (decrease) in cash and cash equivalents		2,517.1	902.4	316.5
Cash and cash equivalents at beginning of the year	4	3,532.3	6,049.4	6,951.8
Cash and cash equivalents at end of the year	4	6,049.4	6,951.8	7,268.3

Supplemental Disclosures of Cash Flow Information:
Unpaid portion of property, plant and equipment, excluded in investing activities, included in Accounts payable		(46.9)	29.3	50.3
Interest received		32.1	36.6	42.4
Interest paid		(64.1)	(83.0)	(82.2)
Income taxes paid, net of refunds		(650.2)	(1,235.0)	(1,734.6)

1.Depreciation and amortization include depreciation of property, plant and equipment, amortization of intangible assets, depreciation of right-of-

use assets, amortization of underwriting commissions and discount related to the bonds and credit facility.

2.Investments in associates relates to our 24.9% equity interest in Carl Zeiss SMT Holding GmbH & Co. KG and includes our share of the net

result, dividends received and other equity movements, as well as the capitalization of R&D and supply chain support funding as disclosed in

Note 26 Related parties. The dividend received is a cash inflow of €178.7 million (2021: €168.0 million, 2020: €128.1 million).

3.Purchase of property, plant and equipment includes a cash outflow of €33.8 million (2021: €69.2 million, 2020: €203.7 million) to related parties,

which was initially recognized as part of Other assets.

1. General information / summary of general accounting policies

ASML is a leading supplier to the semiconductor industry. The company provides chipmakers with hardware,

software and services to mass produce the patterns of integrated circuits (microchips). Together with its partners,

ASML drives the advancement of more affordable, more powerful and more energy-efficient microchips. ASML

enables groundbreaking technology to solve some of humanity’s toughest challenges, such as in healthcare, energy

use and conservation, mobility and agriculture. Headquartered in Europe’s top tech hub, the Brainport Eindhoven

region in the Netherlands, we are a global team of over 39,000 FTEs with 143 different nationalities across 3

continents. ASML’s principal operations are in EMEA, North America and Asia.

The registered office of ASML Holding N.V. is located at De Run 6501, Veldhoven, the Netherlands. The statutory

seat is in Veldhoven. The company is registered with the Dutch Commercial Register under number 17085815.

Our shares are listed for trading in the form of registered shares on Euronext Amsterdam and on NASDAQ. The

principal trading market of our ordinary shares is Euronext Amsterdam.

Our Financial Statements were authorized for issuance by the Board of Management on February 15, 2023 and will

be filed at the Trade Register of the Chamber of Commerce in Eindhoven within eight days after adoption by the

2023 AGM.

Basis of preparation

The accompanying Consolidated Financial Statements are stated in millions of euros unless indicated otherwise.

These Consolidated Financial Statements, prepared for statutory purposes, have been prepared in accordance with

EU-IFRS and also comply with Article 362.9 of Book 2 of the Dutch Civil Code. For internal and external reporting

purposes, we apply US GAAP. US GAAP is our primary accounting standard for setting financial and operational

performance targets.

The Consolidated Financial Statements have been prepared on historical cost convention unless stated otherwise.

The principal accounting policies adopted are set out below.

Use of estimates

The preparation of our Consolidated Financial Statements in conformity with EU-IFRS requires management to make

estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent

assets and liabilities on the dates of the Consolidated Statement of Financial Position, and the reported amounts of

net sales and costs for the reported periods. The inputs into our estimates and assumptions consider economic

implications including supply chain constraints, inflation, the Russia-Ukraine conflict, COVID-19 and uncertainty in the

macroeconomic environment. We believe that the critical accounting estimates and assumptions are appropriate.

ASML will continue to monitor the impacts of economic implications and incorporate them into accounting estimates.

Actual results could differ from those estimates.

We evaluate our estimates continuously and we base our estimates on historical experience and on various other

assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these

estimates if the assumptions prove incorrect. To the extent there are material differences between actual results and

these estimates, our future results could be materially and adversely affected.

We believe that the accounting policies described below require us to make significant judgments and estimates in

the preparation of our Consolidated Financial Statements. Our most critical accounting estimates include:

–Revenue recognition (see Note 2 Revenue from contracts with customer)

–Recoverability of deferred taxes for capitalized R&D expenditures (see Note 21 Income taxes)

–Capitalization of Development Expenditures

Principles of consolidation

The Consolidated Financial Statements include the Financial Statements of ASML Holding N.V. and all of its

subsidiaries. Subsidiaries are all entities over which ASML controls the financial and operating activities, generally

accompanying a shareholding of more than 50.0% of the outstanding voting rights. Subsidiaries are fully consolidated

from the date on which control is obtained by ASML. All intercompany transactions, balances and unrealized results

on transactions with subsidiaries are eliminated.

Foreign currency translation

The financial information for subsidiaries with a functional currency outside the euro-zone is measured using a mix of

local currencies or the euro as the functional currency. The Financial Statements of those foreign subsidiaries with a

functional currency different than the euro are translated into euros in the preparation of ASML’s Consolidated

Financial Statements. Assets and liabilities are translated into euros at the exchange rate on the respective balance

sheet dates and income and costs are translated into euros based on the average exchange rate for the

corresponding period. The resulting translation adjustments are recorded directly in shareholders’ equity.

New EU-IFRS accounting standards and interpretations adopted

During 2022, there were no new EU-IFRS accounting standards and interpretations that were adopted which have a

material impact on our Consolidated Financial Statements.

New EU-IFRS accounting standards and interpretations issued but not adopted

For the year ended December 31, 2022, there are no new accounting standards and interpretations issued which

have not yet been adopted and are expected to have a material impact on our Consolidated Financial Statements.

2. Revenue from contracts with customers

Accounting Policy

We measure revenue based on the consideration specified in the contracts with our customers, adjusted for any

significant financing components, and excluding any taxes collected on behalf of third parties. We recognize revenue

when we satisfy a performance obligation by transferring control over a good or service to our customer. We bill our

customers for, and recognize as revenue, charges for shipping and handling costs.

Depending on the contract, we obtain a right to payment for our systems through a combination of either a

reservation of a production slot or upon delivery of our systems, with the remaining portion upon final acceptance of

our systems. Right to payment for our service and field options occurs upon shipment or completion of the service

unless described otherwise. The payment is typically due 15-45 days after the aforementioned events. Our contracts

typically include cancellation penalties that provide economic protection from the risk of customer cancellation. The

costs related to our sales are recognized as cost of sales.

We generate revenue from the sale of integrated patterning solutions for the semiconductor industry, which mainly

consist of systems, system-related options and upgrades, other holistic lithography solutions and customer services.

The main portion of our net sales is derived from volume purchase agreements with our customers that have multiple

performance obligations, which mainly include the sales of our systems, system-related options, installation, training

and extended and enhanced warranties. In our volume purchase agreements we offer customers discounts in the

normal course of sales negotiations. As part of these volume purchases agreements, we may also offer free goods or

services and credits that can be used towards future purchases. Occasionally, systems, with the related extended

and enhanced warranties, installation and training services, are ordered individually. Our sales agreements do not

include a right of return for any reason other than not meeting the agreed upon specifications.

We account for individual goods and services as separate and distinct performance obligations, including the free or

discounted goods or services, if a product or service is separately identifiable from other items and if a customer can

benefit from it on its own or with other resources that are readily available to the customer.

The consideration paid for our performance obligations is typically fixed. However, most of our volume purchase

agreements with customers contain some component of variable consideration, typically dependent on the final

volume of systems ordered by the customer or the system performance. Variable consideration is estimated at

contract inception for each performance obligation based on communication with the customer to understand their

requirements and roadmap. This is subsequently updated each quarter, using either the expected value method or

most likely amount method, whichever is determined to best predict the consideration to be collected from the

customer. Variable consideration is only included in the transaction price if it is considered probable that a significant

revenue reversal will not occur.

In certain scenarios when entering into a volume purchase agreement, free goods or services are provided directly or

through a voucher that can be used on future contracts. Consideration from the contract will be allocated to these

performance obligations and revenue recognized when control transfers based on the nature of the goods or services

provided.

Most of our contracts require our customers to pay a down payment on systems to be shipped. We do not record a

significant financing component for down payments as the timing difference between when the consideration is paid

and when the system is transferred to the customer arises from reasons other than financing.

The total consideration of the contract is allocated between all distinct performance obligations in the contract based

on their standalone selling prices. The standalone selling prices are determined based on other standalone sales that

are directly observable, when possible. However, for the majority of our performance obligations these are not

available. If no directly observable evidence is available, the standalone selling price is determined using the adjusted

market assessment approach, which requires judgment and is based on multiple factors including, but not limited to,

historical pricing practices and discounting trends for products and services.

Options to buy goods or services in addition to the purchase commitment are assessed to determine if they provide a

material right to the customer that they would not have received if they had not entered into this contract. Each

option to buy additional goods or services provided at a discount from the standalone selling price is considered a

material right. The discount offered from the standalone selling price will be allocated from the consideration of the

other goods and services in the contract if it is determined the customer will exercise the option to buy, adjusted for

the likelihood. Revenue will be recognized in line with the nature of the related goods or services. If it is subsequently

determined the customer will not exercise the option to buy, or the option expires, revenue will be recognized.

Occasionally we enter into bill-and-hold transactions where we invoice a customer for a system that is ready for

delivery but not shipped to the customer until a later date, based on customer’s request. Transfer of control is

determined to have occurred only when there is a substantive reason for the arrangement, the system is separately

identified as belonging to the customer, the good has been accepted by the customer and is ready for delivery, and

we do not have the ability to direct the use of the system.

We generate revenue from lessor agreements, which we classify as a finance lease when the lease meets any of the

following criteria at lease commencement:

–The lease transfers ownership of the underlying asset to the lessee by the end of the lease term;

–The lease grants the lessee an option to purchase the underlying asset, that the lessee is reasonably certain to

exercise;

–The lease term is for the major part of the remaining economic life of the underlying asset. However, if the

commencement date falls at or near the end of the economic life of the underlying asset, this criterion shall not be

used for purposes of classifying the lease;

–The present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not

already reflected in the lease payments equals or exceeds substantially all of the fair value of the underlying asset;

–The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at

the end of the lease term.

For finance leases where substantially all the risks and rewards incidental to ownership of an asset are transferred to

the lessee, revenue is recognized at commencement of the lease. If material, the difference between the gross

finance receivable and the present value of the minimum lease payments is initially recognized as unearned interest

and presented as a deduction to the gross finance receivable. Interest income is recognized in the Consolidated

Statement of Profit or Loss over the term of the lease contract using the effective interest method.

Leases that are not a finance lease are operating lease arrangements. If we have offered the customer an operating

lease arrangement, the system is included in Property, plant and equipment upon commencement of the lease.

Revenue from operating lease arrangements is recognized in the Consolidated Statement of Profit or Loss on a

straight-line basis over the term of the lease contract.


Goods or services	Nature, timing of satisfying the performance obligations, and significant payment terms
New systems (established technologies)		New systems sales include i-line, KrF, ArF, ArFi and EUV-related systems, along with the related factory options ordered with the base system, as well as metrology and inspection systems.
		Prior to shipment, the majority of our systems undergo a Factory Acceptance Test (FAT) in our cleanroom facilities, effectively replicating the operating conditions that will be present on the customer’s site, in order to verify whether the system meets its standard specifications and any additional technical and performance criteria agreed with the customer.
		A system undergoing FAT, is shipped only after all contractual specifications are met or discrepancies from agreed upon specifications are waived and customer sign-off is received for delivery. Each system’s performance is re-tested through a Site Acceptance Test (SAT) after installation at the customer site. We have never failed to successfully complete installation of a system at a customer’s premises; therefore, acceptance at FAT is considered to be proven for established technologies with a history of successful customer acceptances at SAT (equal or better than FAT).
		Transfer of control of a system undergoing a FAT, and recognition of revenue related to this system, will occur upon delivery of the system.
		A system not undergoing a FAT or for which some of the testing in our factory is skipped (fast shipments), transfer of control of such a system and revenue recognition will occur upon customer acceptance of the system at SAT after installation is complete.
		New system sales do not meet the requirements for over time revenue recognition because our customers do not simultaneously receive and consume the benefits provided by our performance, or control the asset throughout any stage of our production process, as well as the systems are considered to have alternative use.


Goods or services	Nature, timing of satisfying the performance obligations, and significant payment terms
Used systems		We have no repurchase commitments in our general sales terms and conditions, however we occasionally repurchase systems that we previously manufactured and sold, in order to refurbish and resell the system to a different customer. This repurchase decision is mainly driven by market demand expressed by other customers.
Used systems		Transfer of control of a used system, and recognition of revenue, follow the same logic as for our “New systems (established technologies)”.
Field upgrades and options (system enhancements)		Field upgrades and options mainly relate to goods and services that are delivered for systems already installed in the customer factories. Certain upgrades require significant installation efforts, enhancing an asset the customer controls, therefore resulting in transfer of control over the period of installation, measured using the cost incurred method which is estimated using labor hours, as this best depicts the satisfaction of our obligation in transferring control. For the options and other upgrades for which the customer receives and consumes the benefit at the moment of delivery, the transfer of control and recognition of revenue will occur upon delivery.
Field upgrades and options (system enhancements)		As long as we are not able to make a reliable estimate of the total efforts needed to complete the upgrade, we only recognize revenue to cover costs incurred. Margin will be realized at the earlier of us being able to make a reliable estimate or completion of the upgrade.
New product introduction		We sell new products and services, which are evolutions of our existing technologies. If installation is determined not to be a separate performance or if there is not a sufficient established history of acceptance on FAT, the product is determined to be a “new product introduction”.
New product introduction		New product introductions are typically newly developed options to be used within our systems. Transfer of control and revenue recognition for new product introductions occurs after successful installation and customer acceptance at SAT. Once there is an established history of successful installation and customer acceptance, revenue will be recognized consistent with other systems and goods after transfer of control.
Installation		Installation is provided within the selling price of a system. Installation is considered to be distinct as it does not significantly modify the system being purchased and the customer or a third party could be capable of performing the installation themselves, if desired. Transfer of control takes place over the period of installation from delivery through SAT, measured on a straight-line basis, as our performance is satisfied evenly over this period of time. Installation is not considered to be distinct when recognition of revenue related to a system occurs upon customer acceptance of the system at SAT after installation is complete.
Warranties		We provide standard warranty coverage on our systems for 12 months, providing labor and non-consumable parts necessary to repair our systems during these warranty periods. These standard warranties cannot be purchased and do not provide a service in addition to the general assurance the system will perform as promised. As a result, no revenue is allocated to these standard warranties.
Warranties		Both the extended and enhanced warranties on our systems are accounted for as a separate performance obligation, with transfer of control taking place over the warranty period, measured on a straight-line basis, as this is a stand-ready obligation.


Goods or services	Nature, timing of satisfying the performance obligations, and significant payment terms
Time-based licenses and related service		Time-based licenses relate to software licenses and the related service which are sold for a period of time. The licenses and the related service are not considered to be individually distinct as the support services are integral to the customer’s ability to continue to use the software license in the rapidly changing technological environment. The transfer of control takes place over the license term, measured on a straight-line basis, as our performance is satisfied evenly over this period of time. Payments are generally made in installments throughout the license term.
Application projects		Application projects are node transition and consulting projects which at times may be provided as free service within a volume purchase agreement. Measuring satisfaction of this performance obligation is performed through an input method based on the labor hours expended relative to the estimated total labor hours as this best depicts the transfer of control of these kind of services.
Service contracts		Service contracts are entered into with our customers to support our systems used in their ongoing operations during the systems life cycle, typically in the form of full-service agreements, limited manpower agreements, other labor agreements, parts availability or parts usage agreements. These services are for a specified period of time and typically have a fixed price. Control transfers over this period of time, measured on a straight-line basis, as these are stand-ready obligations. For service contracts where the price is not fixed, the transaction price has a variable component that is based on the performance of the system.
Billable parts and labor		Billable labor represents maintenance services to our systems installed in the customer’s factories while in operation, through purchase orders from our customer. Control over these services is transferred to the customer upon receipt of customer sign-off.
		Billable parts represent spare parts including optical components relating to our systems installed in the customer’s factories while in operation, through purchase orders from our customer.
		Billable parts can be:
		–Sold as direct spare parts, for which control transfers point in time upon delivery; or
		–Sold as part of maintenance services, where control transfers point in time upon receipt of customer sign-off.
Field projects (relocations)		Field projects represent mainly relocation services. Measuring satisfaction of this performance obligation is performed through an input method based on the labor hours expended relative to the estimated total labor hours as this best depicts the transfer of control of our service.
OnPulse Maintenance		OnPulse maintenance services are provided over a specified period of time on our light source systems. Payment is determined by the amount of pulses counted from each light source system, which is variable. Invoicing is monthly based on the pulses counted. Revenue is recognized in line with invoicing using the practical expedient in EU-IFRS 15.B16.

Disaggregation of revenue

Our revenue from contracts with customers, on a disaggregated basis, aligns with our reportable segment

disclosures with the addition of disaggregation of net system sales per technology and per end-use.

Net system sales per technology were as follows:


Year ended December 31	Net system sales in units	Net system sales in € millions
2022
EUV	40	7,045.3
ArFi	81	5,236.5
ArF dry	28	623.7
KrF	151	1,653.7
I-line	45	211.5
Metrology & Inspection	216	659.6
Total	561	15,430.3

2021
EUV	42	6,284.0
ArFi	81	4,959.6
ArF dry	22	431.9
KrF	131	1,321.3
I-line	33	142.3
Metrology & Inspection	196	513.7
Total	505	13,652.8

2020
EUV	31	4,463.8
ArFi	68	3,917.0
ArF dry	22	427.0
KrF	103	1,012.3
I-line	34	146.4
Metrology & Inspection	137	350.1
Total	395	10,316.6

Net system sales per end-use were as follows:


Year ended December 31	Net system sales in units	Net system sales in € millions
2022
Logic	357	9,977.6
Memory	204	5,452.7
Total	561	15,430.3

2021
Logic	327	9,588.5
Memory	178	4,064.3
Total	505	13,652.8

2020
Logic	260	7,393.0
Memory	135	2,923.6
Total	395	10,316.6

Contract assets and liabilities

The contract assets relate to our right to a consideration in exchange for goods or services delivered, when that right

is conditional on something other than the passage of time. The contract assets are transferred to the receivables

when the receivables become unconditional. The contract liabilities primarily relate to remaining performance

obligations for which consideration has been received for systems not yet recognized in revenue, as well as deferred

revenue from system shipments, based on the allocation of the consideration to the related performance obligations

in the contract.

The majority of our customer contracts result in both asset and liability positions. At the end of each reporting period,

these positions are netted on a contract basis and presented as either an asset or a liability in the Consolidated

Statement of Financial Position. Consequently, a contract balance can change between periods from a net contract

asset balance to a net contract liability balance in the balance sheet.

Significant changes in the contract assets and the contract liabilities balances during the periods are as follows.


Year ended December 31 (€, in millions)	2021		2022
	Contract Assets	Contract Liabilities	Contract Assets	Contract Liabilities
Balance at beginning of the year	119.2	5,594.1	164.6	11,160.9
Transferred from contract assets to accounts receivables	(268.2)	—	(393.4)	—
Revenue recognized during the year ending in contract assets	199.7	—	116.5	—
Revenue recognized that was included in contract liabilities	—	(3,767.0)	—	(6,326.6)
Changes as a result of cumulative catch-up adjustments arising from changes in estimates	—	39.7	—	(118.0)
Remaining performance obligations for which considerations have been received, or for which we have an unconditional right to consideration	—	9,180.2	—	12,790.4
Transfer between contract assets and liabilities	113.9	113.9	244.2	244.2
Total	164.6	11,160.9	131.9	17,750.9

The increase in the net contract liabilities to €17.6 billion as of December 31, 2022 compared to €11.0 billion as of

December 31, 2021 is mainly driven by the recognition of down payments for systems which will be shipped in the

future, and consideration received for fast shipment systems that have been delivered, but for which revenue has not

yet been recognized. Cumulative catch-up adjustments recognized in our current year revenue are due to updated

estimates for system volume, discounts and credits included in our volume purchase agreements.

Remaining performance obligations

Our customers generally commit to purchase systems, service, or field options through separate sales orders and

service contracts. Typically the terms and conditions of these sales orders come from volume purchase agreements

with our customers which can cover up to 5 years. The revenues for each committed performance obligation are

estimated based on the terms and conditions agreed through the volume purchase agreements.

When revenues will be recognized is mainly dependent on when systems are delivered or installed, as well as when

service projects and field upgrades are performed and completed. All of which is estimated based on contract terms

and communication with our customers, including the customer facility readiness to take delivery of our goods or

services. The volume purchase agreements may be subject to modifications, impacting the amount and timing of

revenue recognition for the anticipated revenues.

As of December 31, 2022 the remaining performance obligations amount to €45.4 billion (December 31, 2021: €28.9

billion). We estimate that 56% (December 31, 2021: 61%) of these anticipated revenues will be recognized during the

next 12 months. The remaining anticipated revenues mainly include orders related to EUV systems and our next-

generation EUV platform, High-NA, which are expected to be recognized in revenue in 2024 or later.

3. Segment disclosure

ASML has one reportable segment, since we are an integrated holistic lithography solution provider, for the

development, production, marketing, sales, upgrading and servicing of advanced semiconductor equipment systems,

consisting of lithography, metrology and inspection systems. The Chief Operating Decision Maker regularly sets and

monitors goals and boundaries on a consolidated basis to make decisions about resource allocation and assess

performance.

Management reporting includes net system sales figures of new and used systems, sales per technology and sales

per end-use. For the sales per technology and end-use, see Note 2 Revenue from contracts with customers.

Net system sales for new and used systems were as follows:


Year ended December 31 (€, in millions)	2020	2021	2022
New systems	10,160.8	13,446.1	15,152.3
Used systems	155.8	206.7	278.0
Net system sales	10,316.6	13,652.8	15,430.3

For geographical reporting, total net sales are attributed to the geographic location in which the customers’ facilities

are located. Total non-current assets are attributed to the geographic location in which these assets are located and

exclude deferred tax assets, financial instruments and compensation plan assets. Totals by geographic region were

as follows:


Year ended December 31 (€, in millions)	Total net sales	Non-current assets
2022
Japan	1,008.6	7.9
South Korea	6,045.6	94.4
Singapore	475.5	5.5
Taiwan	8,095.5	223.0
China	2,916.0	41.8
Rest of Asia	7.2	0.2
Netherlands	9.2	8,024.1
EMEA	624.5	1,051.1
United States	1,991.3	4,200.8
Total	21,173.4	13,648.8


Year ended December 31 (€, in millions)	Total net sales	Non-current assets

2021
Japan	459.3	8.3
South Korea	6,223.0	89.7
Singapore	126.2	8.6
Taiwan	7,327.9	187.2
China	2,740.8	30.3
Rest of Asia	1.8	0.5
Netherlands	14.2	7,030.4
EMEA	134.6	935.6
United States	1,583.2	3,934.0
Total	18,611.0	12,224.6

2020
Japan	542.8	12.6
South Korea	4,151.6	59.5
Singapore	84.9	3.5
Taiwan	4,731.3	188.4
China	2,324.4	26.8
Rest of Asia	1.6	0.8
Netherlands	1.6	6,521.0
EMEA	483.3	982.8
United States	1,657.0	3,899.1
Total	13,978.5	11,694.5

In 2022, 2 customers exceed more than 10% of total net sales, totaling €11.8 billion, or 55.8%, of total net sales. In

2021 2 customers exceeded more than 10% of total net sales and in 2020, 3 customers exceeded more than 10%

of total net sales, in 2021 totaling €12.5 billion, or 67.2% (2020: €9.9 billion, or 71.2%). Our three largest customers

(based on total net sales) accounted for €5.3 billion, or 78.6%, of accounts receivable and finance receivables at

December 31, 2022, compared with €3.9 billion, or 83.7%, at December 31, 2021 and €2.8, or 80.1%, at

December 31, 2020.

The increase in total net sales of €2.6 billion, or 13.8%, to €21.2 billion in 2022 from €18.6 billion in 2021 is driven by the

global chip shortage, the acceleration of the digital infrastructure and the push for ‘technological sovereignty’. This resulted in

higher sales volumes for DUV systems, whereas the increase in EUV sales is mainly attributable to the NXE:3600D value

proposition. It has also led to growth in our service and field options business, which has benefited from a growing installed

base. The Logic sector continued to be strong in 2022 and was the largest consumer of our most advanced EUV systems.

Memory demand continued growing in 2022, resulting from strong data center demand. Taiwan and Japan saw the largest

geographic sales growth in support of expanding capacity to meet worldwide demand.

The increase in non-current assets in the Netherlands during 2022 is primarily related to capitalization of development

expenditures in R&D and construction of ASML's logistics facility, the High-NA factory and office space at our

headquarters in Veldhoven, in order to support our continued growth.

Segment performance is also evaluated by our Chief Operating Decision Maker based on US GAAP for total assets.

The table below presents the measurements and the reconciliation to total assets in the Consolidated Statement of

Financial Position:


Year ended December 31 (€, in millions)	2021	2022
Total assets based on US GAAP	30,231.0	36,300.4

Development expenditures (Note A)	1,907.9	2,512.4
Income taxes	(7.8)	13.2
Total assets based on EU-IFRS	32,131.1	38,826.0

The above differences between US GAAP and EU-IFRS mainly relate to the following:

Note A – Development Expenditures

Under EU-IFRS, we apply IAS 38, "Intangible Assets". In accordance with IAS 38, we capitalize certain development

expenditures that are amortized over the expected useful life of the related product generally ranging between one

and five years.

Under US GAAP, we apply ASC 730, "Research and Development". In accordance with ASC 730, we charge costs

relating to research and development to operating expense as incurred.

4. Cash and cash equivalents and short-term investments

Accounting Policy

Cash and cash equivalents consist primarily of highly liquid investments, such as bank deposits, deposits with

governments and government-related bodies, money market funds and bank accounts readily convertible to known

amounts of cash with insignificant interest rate risk and original maturities to the entity holding the investments 3

months or less at the date of acquisition.

Investments with original maturities at the date of acquisition greater than 3 months and 1 year or less are presented

as short-term investments. Fair value changes in these investments, which are not temporary, are recognized in the

Consolidated Statement of Profit or Loss. Short-term investments have insignificant interest rate risk.

Cash and cash equivalents and short-term investments consist of the following:


Year ended December 31 (€, in millions)	2021	2022
Deposits with financial institutions, governments and government related bodies	2,131.7	2,548.1
Investments in money market funds	2,928.3	3,196.7
Bank accounts	1,891.8	1,523.5
Cash and cash equivalents	6,951.8	7,268.3

Deposits with financial institutions, governments and government related bodies	638.5	107.7
Short-term investments	638.5	107.7

Cash and cash equivalents and short-term investments are mainly impacted by strong net cash provided by

operating activities, driven by net income and down payments, mainly offset by purchase of property, plant and

equipment, purchase of treasury shares and dividend paid.

The deposits with financial institutions, governments and government-related bodies and investments in money

market funds have an investment grade credit rating as rated by credit rating institutions such as S&P, Moody’s or

Fitch. Our cash and cash equivalents are predominantly denominated in euros and to some extent in US dollars,

Taiwanese dollars, South Korean won and Chinese yuan.

The carrying amount of these assets approximates their fair value.

As of December 31, 2022, no restrictions on usage of cash and cash equivalents exist (2021: no restrictions).

5. Accounts receivable, net

Accounting Policy

Accounts receivable are measured at fair value and are subsequently measured at amortized cost, less allowance for

credit losses. The carrying amount of the accounts receivable approximates the fair value. We perform ongoing credit

evaluations on our customers’ financial condition. We periodically review whether an allowance for credit losses is

needed by considering factors such as historical payment experience, credit quality, aging of the accounts receivable

balances, expected lifetime losses, and current economic conditions that may affect a customer’s ability to pay.

When entering into arrangements to sell our receivable, we derecognize the receivable only when meeting the

derecognition criteria. The criteria require isolation from the seller, granting the buyer the right to pledge or exchange

the receivables, and legal transfer of substantially all risks and rewards over the receivable.

Accounts receivable consist of the following:


Year ended December 31 (€, in millions)	2021	2022
Accounts receivable, gross	3,032.5	5,327.9
Allowance for credit losses	(4.5)	(4.1)
Accounts receivable, net	3,028.0	5,323.8

The increase in accounts receivable as of December 31, 2022, compared to December 31, 2021, is mainly due to an

increase in our sales, the timing of cash receipts and systems purchased at the end of the free-use or evaluation

period, and an increase in down payment receivables related to future system deliveries.

In 2022, no receivables were sold through factoring arrangements (2021: €2.3 billion).

Accounts receivable are impaired and provided for on an individual basis. As of December 31, 2022, accounts

receivable of €1,376.9 million (2021: €448.8 million) were past due but not impaired. The average days outstanding

increased to 92 days in 2022 from 59 days in 2021. The increased average number of days outstanding is a result of

the timing of cash receipts from our customers, an increase in down payment receivables, and amounts invoiced for

fast shipment systems, which have not yet been recognized as revenue. These balances are still considered to be

recoverable because they relate to customers for whom there is no recent history of default and there has not been a

significant change in credit quality. The table below shows the aging analysis of the accounts receivable that are up

to three months past due and over three months past due. Accounts receivable are past due when the payment term

has expired.


As of December 31 (€, in millions)	2021	2022
Up to three months past due	401.0	838.2
Over three months past due	52.3	542.8
Total past due	453.3	1,381.0

In 2022 and 2021, we did not record any expected credit losses for accounts receivable on system sales.

6. Finance receivables, net

Accounting Policy

Finance receivables consist of receivables in relation to finance leases. We perform ongoing credit evaluations of our

customers’ financial condition. We periodically review whether an allowance for credit losses is needed by

considering factors such as historical payment experience, credit quality, the aging of the finance receivables

balances, expected lifetime losses, and current economic conditions that may affect a customer’s ability to pay.

The following table lists the components of the finance receivables as of December 31, 2022 and 2021:


Year ended December 31 (€, in millions)	2021	2022
Finance receivables, gross	1,570.0	1,356.7
Unearned interest	(1.4)	—
Finance receivables, net	1,568.6	1,356.7
Current portion of finance receivables, gross	1,187.0	1,356.7
Current portion of unearned interest	(1.4)	—
Non-current portion of finance receivables, net	383.0	—

The decrease in finance receivables as of December 31, 2022, compared to December 31, 2021, is the result of the

expiration of free-use and evaluation periods of systems shipped, partly offset by new finance leases by providing

additional systems with a free-use or evaluation period. These finance leases support the capacity ramp-up of high-

end systems which are part of the early-insertion life cycle of the technology or system type. It is expected these

systems will be purchased at the end of the free-use or evaluation period.

Gross profit recognized at the commencement date of the lease for our finance leases amounts to €429.1 million

during 2022 (2021: €514.2 million; 2020: €830.2 million).

As of December 31, 2021 and 2022, the minimum lease payments and present value of minimum lease payments is:


	Minimum lease payments		Present value of minimum lease payments
Year ended December 31 (€, in millions)	2021	2022	2021	2022
Not later than one year	1,187.0	1,356.7	1,185.6	1,356.7
Later than one year and not later than five years	383.0	—	383.0	—
Total	1,570.0	1,356.7	1,568.6	1,356.7
Less: unearned interest	(1.4)	—	n/a	n/a
Present value of minimum lease payments receivable	1,568.6	1,356.7	1,568.6	1,356.7

In 2022 and 2021 we did not record any expected credit losses from finance receivables. As of December 31, 2022,

the finance receivables were neither past due nor impaired.

7. Inventories, net

Accounting Policy

Inventory costs are computed on a first-in, first-out basis. Our inventory values are comprised of purchased materials,

freight expenses, customs, duties, production labor and overhead. The valuation of inventory includes determining

which fixed production overhead costs should be capitalized into inventory based on the normal capacity of our

manufacturing and assembly facilities. During periods when production is below our established normal capacity

level, a portion of our fixed overhead costs are not included in the cost of inventory; instead, it is recognized as cost

of sales as incurred.

Inventory is valued at the lower of cost or net realizable value, based on assumptions about future demand and

market conditions. Valuation of inventory also requires us to establish provisions for inventory that is defective,

obsolete or in excess. We use our demand forecast to develop manufacturing plans and utilize this information to

compare against raw materials, work in progress and finished product levels to determine the amount of defective,

obsolete or excess inventory.

Inventories consist of the following:


Year ended December 31 (€, in millions)	2021	2022
Raw materials	2,668.3	3,198.9
Work-in-process	1,749.9	2,163.9
Finished products	1,179.0	2,303.8
Inventories, gross	5,597.2	7,666.6
Allowance for obsolescence	(418.0)	(466.9)
Inventories, net	5,179.2	7,199.7

The increase in inventory in 2022, compared to 2021, is driven by the increased demand from customers reflected

through an increased number of fast shipments during 2022. Systems that are fast shipped to our customers are not

recognized into revenue until formal customer acceptance at SAT and thus remain part of ASML Finished products.

Additionally, inventory increased in 2022 due to higher costs of our latest technologies and growing install base.

A summary of movements in the inventory reserves is as follows:


Year ended December 31 (€, in millions)	2021	2022
Balance at beginning of year	(473.2)	(418.0)
Addition for the year	(180.7)	(278.5)
Effect of changes in exchange rates	(6.1)	(1.1)
Utilization of the provision	242.0	230.7
Balance at end of year	(418.0)	(466.9)

The additions for 2022, 2021 and 2020 are recorded in Cost of sales. The additions for the year mainly relate to

inventory items which became obsolete due to technological developments and design changes.

The cost of inventories recognized in cost of sales in 2022 amounted to €7,999.0 million (2021: €6,800.7 million;

2020: €5,403.3 million).

8. Other assets

Other current and non-current assets consist of the following:


Year ended December 31 (€, in millions)	2021	2022
Advance payments to Carl Zeiss SMT GmbH1	288.5	479.9
Prepaid expenses	113.2	163.3
VAT receivable	136.7	201.2
Other assets	148.8	266.4
Other current assets	687.2	1,110.8

Advance payments to Carl Zeiss SMT GmbH1	694.3	620.4
Prepaid expenses	41.0	32.4
Compensation plan assets	81.4	71.1
Non-current accounts receivable	8.0	—
Other assets	15.0	15.9
Other non-current assets	839.7	739.8

1.For further details on advance payments to Carl Zeiss SMT GmbH see Note 26. Related parties.

Prepaid expenses mainly include prepayments for maintenance and the contract balance related to the joint

development program with imec of €16.3 million as of December 31, 2022 (2021: €30.3 million). At the end of 2018

we started the new joint development program with imec under which we mainly deliver systems and services upfront

and receive R&D services throughout the contract period up until 2024.

The carrying amount of the non-current and current Other assets approximates the fair value.

9. Investments in associates

Accounting Policy

Equity investments over which we are able to exercise significant influence but do not control, are accounted for

using the equity method and presented on our Consolidated Statement of Financial Position within Investments in

associates. The difference between the cost of our investment and our proportionate share in the carrying value of

the investee’s underlying net assets as of the acquisition date is the basis difference. The basis difference is allocated

to the identifiable assets and liabilities based on their fair value as of the acquisition date (i.e. the date on which we

obtain significant influence), with the excess costs of the investment over our proportional fair value of the identifiable

assets and liabilities being equity method goodwill.

We amortize the basis difference related to the other intangible assets over the estimated remaining useful lives of

these assets that gave rise to this difference. The remaining weighted-average life of the finite-lived intangible assets

acquired is 14.1 years and is amortized using a straight-line method. In-process R&D is initially capitalized at fair value

as an intangible asset not yet ready for use and is assessed for impairment thereafter. When the R&D project is

complete, it is reclassified as an amortizable purchased intangible asset and is amortized over its estimated useful life.

If the project is abandoned, we will record the full basis difference charge for the value of the related intangible asset

in our Consolidated Statement of Profit or Loss in the period of abandonment. Equity method goodwill is not

amortized or tested for impairment; instead the equity method investment is tested for impairment whenever events

or changes in circumstances indicate that the carrying value of the investment may not be recoverable.

Under the equity method, after initial recognition at cost, our Investments in associates are adjusted for our

proportionate share in the profit or loss and other comprehensive income of the investee, recognized on a one-

quarter time lag to allow for the timely preparation of financial information and presented within Profit from

investments in associates. Our proportionate share in the profit or loss of the investee is adjusted for any differences

in accounting principles and policies, basis difference adjustments and intra-entity profits. Receipt of dividends

reduces our Investments in associates, which is presented as an operating cash flow based on the nature of the

distributions.

Investments in associates consists of a 24.9% equity interest acquired on June 29, 2017 in Carl Zeiss SMT Holding

GmbH & Co. KG, a limited partnership that owns Carl Zeiss SMT GmbH, our single supplier of optical columns.

For the year ended December 31, 2022, we recorded a profit related to investments of €138.0 million (2021: €199.1

million) in the Consolidated Statement of Profit or Loss. This profit includes the following components:

–Profit of €169.1 million (2021: €246.5 million) related to our share of Carl Zeiss SMT Holding GmbH & Co. KG’s net

income after accounting policy alignment

–Cost due to basis difference amortization related to intangible assets of €26.7 million (2021: €26.7 million)

–Cost due to intercompany profit elimination of €4.4 million (2021: €20.7 million)

In 2022, we received a dividend of €178.7 million (2021: €168.0 million) from Carl Zeiss SMT Holding GmbH

& Co. KG.

Carl Zeiss SMT Holding GmbH & Co. KG is a privately held company; therefore, quoted market prices for its stock

are not available.

The summarized financial information of Carl Zeiss SMT Holding GmbH & Co. KG excluding basis difference

adjustments, before accounting policy alignment, and using the one-quarter time lag is as follows:


Year ended December 31 (€, in millions)	2021	2022
Summarized Statement of Financial Position:
Total non-current assets	898.1	1,294.1
Total current assets	1,751.6	2,135.6
Total non-current liabilities	513.6	616.1
Total current liabilities	1,914.7	2,268.3

Summarized Statement of Profit or Loss and Comprehensive Income:
Total net sales	2,267.8	2,714.8
Net income	727.3	791.1
Other comprehensive income	75.3	162.4
Total comprehensive income	802.6	953.5

The reconciliation of our proportionate share of Carl Zeiss SMT Holding GmbH & Co. KG’s net income and the profit

related to investments in associates as reported in our Consolidated Statement of Profit or Loss is as follows:


Year ended December 31 (€, in millions)	2021	2022
Net income	727.3	791.1

ASML's share of net income	181.1	197.0
Accounting policy alignment	65.4	(27.9)
Basis difference adjustments	(26.7)	(26.7)
Intercompany profit elimination	(20.7)	(4.4)
ASML profit related to investments in associates	199.1	138.0

10. Business combinations and divestitures

Accounting Policy

Acquisitions of subsidiaries are included on the basis of the acquisition method. The cost of acquisition is measured

based on the consideration transferred at fair value, the fair value of identifiable assets distributed and the fair value of

liabilities incurred or assumed at the acquisition date (i.e. the date which we obtain control). Goodwill is capitalized as

the excess of the costs of an acquired subsidiary, net of the amounts assigned to identifiable assets acquired and

liabilities incurred or assumed. Acquisition-related costs are expensed when incurred in the period they arise or the

service is received.

Business combinations

On October 30, 2020, we concluded the acquisition of Berliner Glas (ASML Berlin GmbH), a provider of optical key

components. We obtained control through acquiring 100% of the issued share capital for a total consideration of

€257.1 million.

The total consideration was allocated to goodwill of €87.9 million, assets acquired of €312.1 million and liabilities

assumed of €142.9 million. The contingent consideration was paid in cash in 2021. The majority of the goodwill

arising on the acquisition of Berliner Glas (ASML Berlin GmbH) is attributable to the fact that the acquisition will help

us achieve our strategic objective to secure the ramp-up and roll-out of future lithography systems. All goodwill has

been allocated to the ASML reporting unit. None of the goodwill recognized is expected to be deductible for income

tax purposes.

Divestitures

During 2021, we sold the non-semiconductor businesses of the acquired Berliner Glas (ASML Berlin GmbH) group.

The proceeds from these disposals totaled €339.4 million, which primarily related to the sale of the Medical

Applications and Swiss Optic business on November 30, 2021. The remaining proceeds are from the sale of the

Berliner Glas Technical Glas business on April 30, 2021.

A pre-tax gain of €213.7 million was recognized on these transactions which was recorded in the line item Other

income (loss) in our Consolidated Statement of Profit or Loss in 2021.

11. Goodwill

Accounting Policy

Goodwill represents the excess of the costs of an acquisition over the fair value of the amounts assigned to assets

acquired and liabilities incurred or assumed of the acquired subsidiary at the date of acquisition. Goodwill on

acquisition of subsidiaries is allocated to CGUs for the purpose of impairment testing. The allocation is made to those

CGUs that are expected to benefit from the business combination in which the goodwill arose. Goodwill is stated at

cost less accumulated impairment losses.

Goodwill is tested for impairment annually or whenever events or changes in circumstances indicate that the carrying

amount of the goodwill may not be recoverable. If the recoverable amount of the CGU is less than the carrying

amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to

the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

An impairment loss recognized for goodwill is not reversed in a subsequent period.

Goodwill mainly results from the acquisitions of Cymer and HMI. The balance as of December 31, 2022, is €4,577.1

million (2021: €4,577.1 million).

We have identified two CGUs, CGU ASML and CGU Cymer Light Sources. As of December 31, 2022 the goodwill

allocated to CGU ASML amounts to €4,119.2 million (2021: €4,119.2 million) and CGU Cymer Light Sources

amounts to €457.9 million (2021: €457.9 million).

The recoverable amounts of the CGUs are based on value in use calculations consistently with prior reporting

periods. The value in use calculations were performed by discounting the pre-tax future cash flows generated from

the continuing use of the CGUs. Cash flows beyond the forecasted period of five years have been extrapolated using

a 2% growth rate. These estimates are consistent with the plans and estimated costs we use to manage our

underlying business.

The pre-tax WACC used to determine the expected discounted future cash flows is 13.4% for CGU ASML and

12.5% for CGU Cymer Light Sources.

Based on our assessment during the annual goodwill impairment test, we believe it is more likely than not that the

recoverable amounts of the CGUs exceed their carrying amounts, and therefore goodwill was not impaired as of

December 31, 2022. The accumulated impairment as of December 31, 2022 is nil (2021: nil).

12. Intangible assets, net

Accounting Policy

Intangible assets include internally-generated intangible assets, brands, intellectual property, developed technology,

customer relationships, and other intangible assets not yet available for use. These finite-lived intangible assets are

stated at cost, less accumulated amortization and accumulated impairment losses. Amortization is calculated using

the straight-line method based on the estimated useful lives of the assets.

Finite-lived intangible assets are assessed for impairment, annually or whenever there is an indication that the balance

sheet carrying amount may not be recoverable using cash flow projections for the useful life.

The following table shows the respective useful lives for intangible assets:


Category	Estimated useful life
Brands	20 years
Development expenditures	1 – 5 years
Intellectual property	3–10 years
Developed technology	6–15 years
Customer relationships	8–18 years
Other	2–10 years

Internally-generated intangible assets - development expenditures

Expenditures on research activities are recognized as costs in the period in which they are incurred. EU-IFRS requires

capitalization of development expenditures provided if, and only if, certain criteria can be demonstrated.

An internally-generated intangible asset arising from our development is recognized only if we can demonstrate all of

the following conditions:

–The technical feasibility of completing the intangible asset so that it will be available for use or sale

–The intention to complete the intangible asset and use or sell it

–The ability to use or sell the intangible asset

–The probability that the asset created will generate future economic benefits

–The availability of adequate technical, financial and other resources to complete the development and to use or sell

the intangible asset

–The ability to measure reliably the expenditure attributable to the intangible asset during its development

For certain development programs, it was not possible to separate development activities from research activities

(approximately €234.0 million and €166.6 million for 2022 and 2021, respectively). Consequently, we are not able to

reliably determine the amount of development expenditures incurred and therefore no amounts were capitalized for

these programs.

As of December 31, 2022, intangible assets consist mainly of development expenditures, brands, intellectual property, developed technology and customer relationships obtained from the acquisitions of HMI (2016) and Cymer (2013):


€, in millions	Development expenditures	Brands	Intellectual property	Developed technology	Customer relationships	Other	Total
Cost
Balance at January 1, 2021	3,268.4	38.9	144.8	1,230.1	228.6	145.9	5,056.7
Additions	685.4	—	—	—	—	45.6	731.0
Divestment	—	—	—	(9.9)	—	(0.8)	(10.7)
Disposals	(0.7)	—	—	—	—	(0.5)	(1.2)
Effect of changes in exchange rates	2.6	—	—	—	—	(0.2)	2.4
Balance at December 31, 2021	3,955.7	38.9	144.8	1,220.2	228.6	190.0	5,778.2
Additions	893.4	—	1.5	—	—	32.5	927.4
Disposals		—	—	—	—	(1.6)	(1.6)
Effect of changes in exchange rates	1.8	—	0.8	—	—	1.6	4.2
Balance at December 31, 2022	4,850.9	38.9	147.1	1,220.2	228.6	222.5	6,708.2

Accumulated amortization
Balance at January 1, 2021	1,663.6	11.1	78.8	510.7	95.9	42.9	2,403.0
Amortization	391.6	1.9	8.4	84.2	12.7	25.8	524.6
Divestment	—	—	—	(0.9)	—	(0.4)	(1.3)
Disposals	—	—	—	—	—	(0.4)	(0.4)
Effect of changes in exchange rates	(0.3)	—	—	—	—	(0.3)	(0.6)
Balance at December 31, 2021	2,054.9	13.0	87.2	594.0	108.6	67.6	2,925.3
Amortization	292.3	1.9	8.6	83.4	12.7	28.5	427.4
Impairment charges	—	—	—	—	—	9.2	9.2
Disposals	—	—	—	—	—	(1.4)	(1.4)
Effect of changes in exchange rates	0.4	—	—	—	—	1.6	2.0
Balance at December 31, 2022	2,347.6	14.9	95.8	677.4	121.3	105.5	3,362.5

Carrying amount
December 31, 2021	1,900.8	25.9	57.6	626.2	120.0	122.4	2,852.9
December 31, 2022	2,503.3	24.0	51.3	542.8	107.3	117.0	3,345.7

Development expenditures in 2022 were primarily focused on programs supporting our Holistic Lithography solutions

in EUV, DUV and Applications. In 2022, these activities mainly related to the development of High-NA, our next

generation 0.55NA system, NXE:3800E, NXT:2050i and further development of YieldStar and process window

control solutions.

Of our Intangible assets at December 31, 2022, €2,620.3 million have been generated internally (December 31, 2021:

€2,023.2 million). These intangibles are included in Development Expenditures and Other.

The Consolidated Statement of Profit or Loss include the following amortization charges:


Year ended December 31 (€, in millions)	2020	2021	2022
Cost of Sales	529.5	499.4	398.2
R&D Costs	12.0	14.5	18.2
SG&A	9.7	10.7	11.0
Total Amortization	551.2	524.6	427.4

As of December 31, 2022, the other intangible assets not yet available for use, included in the development

expenditures amount to €1,837.7 million (2021: €1,121.5 million) and are allocated to CGU ASML for €1,831.2 million

and to CGU Cymer Light Sources for €6.5 million. This increase is mainly due to continued High NA investments in

2022.

As of December 31, 2022, the intangible assets not yet available for use, as included in Other, amount to €34.0

million (2021: €23.6 million) and are allocated to CGU ASML.

During 2022 we recorded €9.2 million impairment charges (2021: €0.0 million; 2020: €0.0 million).

As of December 31, 2022, the estimated amortization expenses for intangible assets for the next five years and

thereafter is as follows:


€, in millions	Amount
2023	490.5
2024	663.3
2025	605.6
2026	548.4
2027	542.3
Thereafter	495.6
Total	3,345.7

13. Property, plant and equipment, net

Accounting Policy

Property, plant and equipment is stated at cost, less accumulated depreciation and accumulated impairment losses.

Costs of assets manufactured by ASML include direct manufacturing costs, production overhead and interest costs

incurred for qualifying assets during the construction period. Property, plant and equipment are depreciated on a

straight-line basis in the Consolidated Statement of Profit or Loss over their estimated useful lives, except for land

which is not depreciated.

Evaluation systems leased to our customers under an operating lease are capitalized as Property, plant and

equipment at cost and depreciated over the respective lease term. Leased assets that are returned to ASML upon

expiration of the lease term are either taken back into Property, plant and equipment as they will be used internally by

D&E or transferred back to Inventory to be reworked and sold.

The carrying values of prototypes, tooling and equipment that are intended to be sold, but first internally utilized for

more than one year for R&D purposes, are reclassified from Inventories to Property, plant and equipment and

depreciated while being internally used. When no longer required for R&D activities, the assets’ carrying value is

reclassified back to Inventories and reworked to make them ready for sale to our customers. These transfers are

reported as Net non-cash movements to/from Inventories in our Property, plant and equipment movement schedule.

Property, plant and equipment is assessed for impairment whenever there is an indication that the carrying amount

may not be recoverable using cash flow projections for the useful life.

The following table shows the respective useful lives for Property, plant and equipment:


Category	Estimated useful life
Buildings and constructions	5–45 years
Machinery and equipment	1–7 years
Leasehold improvements	1–10 years
Furniture, fixtures and other	3–5 years

Property, plant and equipment consists of the following:


€, in millions	Land and buildings	Machinery and equipment	Leasehold improvements	Furniture, fixtures and other	Total
Cost
Balance at January 1, 2021	2,432.2	1,828.9	340.3	420.6	5,022.0
Additions	372.7	389.6	33.2	65.3	860.8
Divestment	(17.9)	(13.4)	—	(4.7)	(36.0)
Disposals	(0.5)	(199.1)	(7.5)	(70.3)	(277.4)
Net non-cash movements to/from Inventories	—	11.9	—	—	11.9
Effect of changes in exchange rates	17.2	10.8	2.6	3.2	33.8
Balance at December 31, 2021	2,803.7	2,028.7	368.6	414.1	5,615.1
Additions	510.9	665.4	34.4	87.6	1,298.3
Disposals	(1.3)	(42.2)	(1.0)	(3.0)	(47.5)
Net non-cash movements to/from Inventories	—	129.2	—	—	129.2
Effect of changes in exchange rates	0.7	(3.5)	(1.2)	(1.7)	(5.7)
Balance at December 31, 2022	3,314.0	2,777.6	400.8	497.0	6,989.4

Accumulated depreciation and impairment
Balance at January 1, 2021	842.6	1,126.2	297.3	285.6	2,551.7
Depreciation	95.6	167.1	15.9	43.0	321.6
Impairment charges	3.1	8.2	0.2	—	11.5
Divestment	(0.6)	(4.4)	—	(2.5)	(7.5)
Disposals	(0.4)	(181.2)	(3.9)	(69.7)	(255.2)
Net non-cash movements to/from Inventories	—	(7.9)	—	—	(7.9)
Effect of changes in exchange rates	7.4	7.6	1.5	1.7	18.2
Balance at December 31, 2021	947.7	1,115.6	311.0	258.1	2,632.4


€, in millions	Land and buildings	Machinery and equipment	Leasehold improvements	Furniture, fixtures and other	Total
Depreciation	134.8	232.6	21.9	55.9	445.2
Impairment charges	10.9	6.4	0.5	—	17.8
Divestment	—	—	—	—	—
Disposals	(2.3)	(29.5)	(0.9)	(2.4)	(35.1)
Net non-cash movements to/from Inventories	—	(10.9)	—	—	(10.9)
Effect of changes in exchange rates	(0.5)	(1.9)	(0.6)	(1.2)	(4.2)
Balance at December 31, 2022	1,090.6	1,312.3	331.9	310.4	3,045.2

Carrying amount
December 31, 2021	1,856.0	913.1	57.6	156.0	2,982.7
December 31, 2022	2,223.4	1,465.3	68.9	186.6	3,944.2

As of December 31, 2022, the carrying amount includes assets under construction of €869.8 million (2021: €695.9

million) consisting of primarily buildings, as well as Machinery and equipment.

As of December 31, 2022, the carrying amount of land amounts to €178.7 million (2021: €137.5 million).

The additions in 2022 in Land and buildings, as well as Furniture, fixtures and other mainly relates to the construction

of the EUV 0.55 NA (High-NA) factory and office space at our headquarters in Veldhoven, in order to support our

continued growth.

The additions in 2022 in Machinery and equipment mainly relate to the upgrade and expansion of production tooling

to support the growth of our business, as well as investments in prototypes of new technologies.

The additions in 2022 in Leasehold Improvements mainly relate to installation of cleanrooms and office space for

leased properties in both the United States and Taiwan. During 2022, we entered into 23 leases that will require

further Leasehold Improvement investments amounting €33.3 million.

The Consolidated Statement of Profit or Loss includes the following depreciation charges:


Year ended December 31 (€, in millions)	2020	2021	2022
Cost of Sales	205.9	188.6	248.2
R&D Costs	119.9	101.4	163.7
SG&A	25.9	31.6	33.3
Total Depreciation	351.7	321.6	445.2

14. Right-of-use assets and lease liabilities

Accounting Policy

We determine whether an arrangement contains a lease at inception. Leases are included in Right-of-use assets,

Accrued & other current liabilities, Accrued & other non-current liabilities, current portion of Long-term debt, and

Long-term debt in our Consolidated Statement of Financial Position.

Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our

obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at

commencement date based on the present value of lease payments over the lease term. As our leases do not

provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement

date in determining the present value of lease payments. The Right-of-use assets include any lease payments made

at or before the commencement date and are reduced by lease incentives. Our Right-of-use asset and lease liability

valuation may include options to extend or terminate the lease when it is reasonably certain that we will exercise that

option. Lease expenses for operating leases are recognized on a straight-line basis over the lease term.

We have lease agreements with lease and non-lease components. The lease components are accounted for

separately from non-lease components. The allocation of the consideration between lease and non-lease

components is based on the relative standalone prices of lease components included in the lease contracts.

Right-of-use assets consist of the following leases:


Year ended December 31 (€, in millions)	2021	2022
Properties	149.7	148.9
Cars	6.7	5.1
Equipment	—	—
Warehouses	7.5	38.0
Other	0.9	0.7
Right-of-use assets	164.8	192.7

The additions to Right-of-use assets throughout 2022 was €88.9 million (2021: €73.4 million).

ASML owns the majority of real estate we utilize for manufacturing, supply chain management and general

administration at our headquarters in Veldhoven, the Netherlands. At our other locations worldwide, most of the

properties we occupy are leased.

Lease liabilities are split between current and non-current. The non-current portion mainly consists of properties and

warehouses. For the year ended December 31, 2022, Lease Liabilities increased by €32.2 million, mainly due to new

leases of warehouses that commenced during 2022.


Year ended December 31 (€, in millions)	2021	2022
Current	46.6	47.6
Non-current	120.3	151.5
Lease liabilities	166.9	199.1

The Consolidated Statement of Profit or Loss include the following depreciation charges relating to these leases:


Year ended December 31 (€, in millions)	2020	2021	2022
Properties	51.7	52.2	52.3
Cars	5.5	4.8	2.7
Equipment	7.0	—	—
Warehouses	6.6	3.0	4.0
Other	5.9	2.4	1.4
Depreciation charge right-of-use assets	76.7	62.4	60.4

The total cash flows relating to the lease liabilities are as follows:


Year ended December 31 (€, in millions)	2020	2021	2022
Total Cash Flows	61.7	68.9	57.9

The weighted average remaining lease term and weighted average discount rate related to the leases are as follows:


Year ended December 31 (€, in millions)	2020	2021	2022
Weighted average remaining lease term (months)	147	62	67
Weighted average discount rate (%)	1.3%	1.9%	2.2%

15. Accrued and other liabilities

Accrued and other liabilities consist of the following:


Year ended December 31 (€, in millions)	2021	2022
Costs to be paid1	352.0	511.6
Personnel-related items	864.7	851.4
Lease liabilities 2	161.7	196.7
Provisions	91.2	90.6
Standard warranty reserve	145.3	143.6
Other	68.9	56.3
Accrued and other liabilities	1,683.8	1,850.2
Less: non-current portion of accrued and other liabilities	251.0	275.9
Current portion of accrued and other liabilities	1,432.7	1,574.3

1.Costs to be paid includes an amount payable to related parties. For further details see Note 26 Related parties and variable interest entities.

2.For further details on lease liabilities see Note 14 Right-of-use assets and lease liabilities.

Costs to be paid as of December 31, 2022, include VAT payables and accrued costs for unbilled services provided

by suppliers including contracted labor, outsourced services and consultancy. Cost to be paid represent ASML’s

estimate of contractual liability as of the reporting date, to be settled in a future period, based upon the underlying

terms and conditions.

Personnel-related items mainly consist of accrued annual short-term incentive bonus plans, accrued vacation days,

accrued pension premiums, accrued wage tax and accrued vacation allowance. The increase in the accrued

personnel-related items compared to prior year is mainly of an increase in the number of our employees to support

the continued growth of our business.

The standard warranty reserve is based on historical product performance and total expected costs to fulfill our

warranty obligation. Annually, we assess and update the standard warranty reserve based on the latest actual

historical warranty costs and expected future warranty costs. Total changes in standard warranty reserve for the

years 2022 and 2021, are as follows:


Year ended December 31 (€, in millions)	2021	2022
Balance at beginning of year	119.1	145.3
Additions for the year	188.6	191.5
Utilization of the reserve	(162.8)	(193.5)
Effect of exchange rates	0.4	0.3
Balance at end of year	145.3	143.6

16. Long-term debt, finance income and finance costs

Accounting Policy

Long-term debt represents debt issued privately without registration with a government authority and is payable to

others under the terms of a signed agreement. Long-term debt is initially recognized at fair value and subsequently

measured at amortized cost. Debt is qualified as long-term debt as long as the group has an unconditional right to

defer settlement of the liability for at least 12 months after the reporting period.

Interest accruals and payments relating to Long-term debt are accounted for as part of Accrued and other liabilities.

Interest and other costs should be accrued and recorded with the passage of time over the agreed term, regardless

of when the interest receipt or payment has taken place.

Long-term debt consists of the following:


Year ended December 31 (€, in millions)	2021	2022
€500 million 0.625% senior notes issued July 2016 and principal due July 7th 2022 interest annually payable on July 7th, carrying amount	500.5	—
€750 million 3.375% senior notes issued September 2013 and principal due September 19th 2023 interest annually payable on September 19th, carrying amount	780.6	744.6
€1,000 million 1.375% senior notes issued July 2016 and principal due July 7th 2026 interest annually payable on July 7th, carrying amount	1,003.2	893.9
€750 million 1.625% senior notes issued November 2016 and principal due May 28th 2027 interest annually payable on May 28th, carrying amount	769.3	666.8
€750 million 0.250% senior notes issued February 2020 and principal due February 25th 2030 interest annually payable on February 25th, carrying amount	741.7	742.7
€750 million 0.625% senior notes issued May 2020 and principal due May 7th 2029 interest annually payable on May 7th, carrying amount	747.1	747.5
€500 million 2.250% senior notes issued May 2022 and principal due May 17th 2032 interest annually payable on May 17th, carrying amount	—	440.3
Debt acquired from Berliner Glas (ASML Berlin GmbH)	36.4	22.3
Other	5.3	2.3
Long-term debt	4,584.1	4,260.4
Less: current portion of long-term debt	509.1	746.2
Non-current portion of long-term debt	4,075.0	3,514.2

All senior notes are redeemable at the option of ASML, in whole or in part, at any time by paying a make whole

premium, and unless previously redeemed, will be redeemed at 100% of their principal amount on the due date.

Our obligations to make principal repayments under our senior notes and other borrowing arrangements excluding

interest expense as of December 31, 2022:


€, in millions	Amount
2023	753.8
2024	2.0
2025	2.0
2026	1,002.0
2027	752.0
Thereafter	2,012.9
Total debt maturities	4,524.7

For the year 2023, the obligations mainly relate to principal repayment of the senior notes due on September 19,

2023. The years thereafter mainly relate to repayments of principals under the long-term senior notes.

Eurobonds

The following table summarizes the carrying amount of our outstanding Eurobonds, including the fair value of interest

rate swaps used to hedge the change in the fair value of the Eurobonds:


Year ended December 31 (€, in millions)	2021	2022
Amortized cost amount	4,478.5	4,479.0
Fair value interest rate swaps1	63.9	(243.2)
Carrying amount	4,542.4	4,235.8

1.The fair value of the interest rate swaps excludes accrued interest.

We use interest rate swaps to minimize the net interest exposure for the group by aligning the interest terms of the

available cash and the interest bearing debt. The fair value changes of these interest rate swaps are recorded on the

Consolidated Statement of Financial Position under derivative financial instruments and the carrying amount of the

Eurobonds is adjusted for these fair value changes. We did not enter into additional interest rate swaps in connection

with the Eurobonds issued in 2020.

The following table summarizes the estimated fair value of our Eurobonds:


Year ended December 31 (€, in millions)	2021	2022
Principal amount	4,500.0	4,500.0
Carrying amount	4,542.4	4,235.8
Fair value1	4,673.9	4,072.8

1.Source: Bloomberg Finance LP.

The fair value of our Eurobonds is estimated based on quoted market prices as of December 31, 2022. The fair value

deviates from the principal amount, due to changes in market interest rates and credit spreads since the issue of our

Eurobonds which carry a fixed coupon interest rate.

The following table summarizes changes in liabilities arising from financing activities, including both changes arising

from cash flows and non-cash changes:


€, in millions	Long term debt	Lease liability	Total
Balance at January 1, 2021	4,665.4	12.8	4,678.2
Cash flows	(7.5)	(4.6)	(12.1)
Non-cash changes:
Fair value adjustments	(76.5)	—	(76.5)
Other	(2.5)	(3.0)	(5.5)
Balance at December 31, 2021	4,578.9	5.2	4,584.1

Cash flows	(14.1)	(2.9)	(17.0)
Non-cash changes:
Fair value adjustments	(307.0)	—	(307.0)
Other	0.3		0.3
Balance at December 31, 2022	4,258.1	2.3	4,260.4

Debt acquired from Berliner Glas (ASML Berlin GmbH)

The loan of Berliner Glas (ASML Berlin GmbH) is a mortgage loan of €22.3 million with an annual interest rate of 0.5%

repayable in 2034. Debt decreased compared to 2021, due to repayments made in 2022.

Lines of credit

We maintain an available committed credit facility, with a group of banks, of €700.0 million as of December 31, 2022

and as of December 31, 2021. No amounts were outstanding under the committed credit facility at the end of 2022

and 2021. This facility of €700.0 million was renegotiated on July 3, 2019, with an original maturity date of July 3,

2024. The facility included two 1-year extension options. The second one-year extension was exercised in June

2021. This extends the maturity from July 2025 to July 2026. Outstanding amounts under this credit facility will bear

an interest of Euribor plus a margin. The margin depends on our credit rating and ESG score.

We have a non-committed guarantee facility of €85.0 million under which guarantees in the ordinary course of

business, such as customs or rental guarantees, can be provided to third parties. As of December 31, 2022, an

amount of €23.4 million has been provided as guarantee. In addition, ASML has a non-committed credit facility for

our Chinese subsidiary of €130.0 million. The non-committed credit facility covers bank guarantees, standby letters of

credit, as well as advances up to €75.0 million. No amounts were outstanding under this facility. Outstanding

amounts under the non-committed facility will bear interest based on market conditions at the moment of draw

down.

Finance costs

Finance costs are €60.8 million (2021: €54.6 million; 2020: €43.3 million). The expenses mainly relate to interest

expense on our Eurobonds, interest rate swaps and hedges, amortized financing costs, and to negative interest on

Cash and cash equivalents.

17. Commitments and contingencies

Commitments

We have various contractual obligations, some of which are required to be recorded as liabilities in our Consolidated

Statement of Financial Position, including long- and short-term debt and lease commitments. Other contractual

obligations, namely unconditional purchase obligations, are generally not required to be recognized as liabilities but

are required to be disclosed.

Our contractual obligations as of December 31, 2022 can be summarized as follows:


Payments due by period (€, in millions)	Total	1 year	2 year	3 year	4 year	5 year	>5 years
Long-Term Debt Obligations, including interest1	4,837.1	823.5	46.3	46.4	1,046.3	782.4	2,092.2
Lease Obligations2	199.1	49.9	37.4	28.8	24.7	21.1	37.2
Purchase Obligations	11,815.1	9,703.9	1,152.5	729.9	165.5	51.1	12.2
Total Contractual Obligations	16,851.3	10,577.3	1,236.2	805.1	1,236.5	854.6	2,141.6

1.Long-term debt obligations mainly relate to principal amounts and interest payments of our Eurobonds. For the amounts excluding interest

expenses and for further details see Note 16 Long-term debt, finance income and finance costs.

2.For further details see Note 14 Right-of-use assets and lease liabilities.

We have purchase obligations towards suppliers in the ordinary course of business which mainly relate to goods and

services for our operations. The general terms and conditions of the agreements relating to the major part of our

purchase obligations as of December 31, 2022, contain clauses that enable us to delay or cancel delivery of ordered

goods and services up to the dates specified in the purchase agreements, in line with the timing of future sales. The

terms and conditions that we normally agree with our suppliers give us additional flexibility to adapt our purchase

obligations to our requirements in light of the cyclicality and technological developments inherent in the industry in

which we operate.

Contingencies

ASML is subject to proceedings, litigation and other actual or potential claims, including those related to a potential

violation of laws and regulations. ASML’s customers may be subject to claims of infringement from third parties

alleging that the ASML equipment used by those customers in the manufacture of semiconductor products, and/or

the methods relating to use of the ASML equipment, infringes one or more patents issued to those third parties. If

these claims were successful, ASML could be required to indemnify such customers for some or all of the losses

incurred or damages assessed against them as a result of that infringement. Further, ASML has been subject to

misappropriation of data relating to proprietary technology by a (now) former employee in China. Although we do not

believe that the misappropriation is material to our business, certain export control regulations may have been

violated. ASML has reported the incident to relevant authorities.

In connection with any proceedings and claims, our management evaluates, based on the relevant facts and legal

principles, the likelihood of an unfavorable (or favorable) outcome, and whether the amount of the loss (or gain) can

be reasonably estimated. Judgment is required in these evaluations, including judgments regarding the validity of

asserted claims and the likely outcome of legal and administrative proceedings. The outcome of these proceedings,

however, is subject to a number of factors beyond our control, most notably the uncertainty associated with

predicting decisions by courts and administrative agencies. In addition, estimates of the potential costs (or gains)

associated with legal and administrative proceedings frequently cannot be subjected to any sensitivity analysis, as

damage estimates or settlement offers by claimants may bear little or no relation to the eventual outcome. Finally, in

any particular proceeding, we may agree to settle or to terminate a claim or proceeding in which we believe that it

would ultimately prevail where we believe that doing so, when taken together with other relevant commercial

considerations, is more effective than engaging in an expensive and protracted litigation, the outcome of which is

uncertain.

As of December 31, 2022, management has determined that ASML does not have any material contingencies which

are considered probable or reasonably probable for each year presented in our Consolidated Statement of Financial

Position.

18. Personnel expenses and employee information

Personnel expenses for all payroll employees were as follows:


Year ended December 31 (€, in millions)	2020	2021	2022
Wages and salaries	2,519.6	2,842.7	3,283.1
Social security expenses	208.1	249.8	300.7
Pension and retirement expenses	182.6	229.2	255.9
Share-based payments	53.9	117.5	68.9
Personnel expenses	2,964.2	3,439.2	3,908.6

The continued increase in personnel expenses is mainly due to an increase in payroll employees to support the

continued growth of our business. The personnel expenses in 2020 do not include any expenses from Berliner Glas

(ASML Berlin GmbH), since ASML consolidated Berliner Glas (ASML Berlin GmbH) using a one-quarter lag.

The average number of payroll employees in FTEs was:


Average number of payroll employees in FTEs	2020	2021	2022
Netherlands	12,812	14,222	16,722
Worldwide (including Netherlands)	24,727	28,223	33,071

The total number of payroll and temporary employees as of December 31 in FTEs per sector was:


Year ended December 31 (in FTE)	2020	2021	2022
Customer Support	6,429	7,485	8,901
Manufacturing and Supply Chain Management	7,680	8,237	9,953
Strategic Supply Management	346	707	1,541
General & Administrative	2,061	2,761	3,768
Sales and Mature Products and Services	744	766	742
Research & Development	10,813	12,060	14,181
Total	28,073	32,016	39,086
Less: Temporary employees	1,459	2,155	2,974
Payroll employees	26,614	29,861	36,112

Short-term incentive bonus plans

We have annual performance-related short-term incentive (STI) bonus plans for our employees. Under these plans,

the employee bonus payout depends on the employee’s job grade, the type of bonus plan and the company/

individual performance. The employee bonus payout (excluding the Board of Management) ranges between 0% and

126% of their annual base gross salary. The 2022 STI bonus is accrued for as part of Accrued and other liabilities in

the Consolidated Statement of Financial Position and will be paid in the first quarter of 2023.

The STI bonus expenses for the (former) Board of Management and other employees were as follows:


Year ended December 31 (€, in millions)	2020	2021	2022
Board of Management	5.4	4.4	3.8
Former Board of Management	—	0.2	—
Other employees	402.5	423.5	410.2
Total STI bonus expenses	407.9	428.1	414.0

19. Employee benefits

Accounting Policy

Contributions to defined contribution retirement benefit plans are recognized as an expense when employees have

rendered service entitling them to the contributions. Payments made to state-managed retirement benefit schemes

are dealt with as payments to defined contribution plans where our obligations under the plans are equivalent to

those arising in a defined contribution retirement benefit plan.

We maintain one multi-employer union defined benefit pension plan and various other defined contribution pension

plans covering a substantial part of our employees. ASML accounts for its multi-employer defined benefit plan as if it

were a defined contribution plan for the following reasons:

–ASML is affiliated to an industry-wide pension fund and uses the pension scheme in common with other

participating companies

–Under the regulations of the pension plan, the only obligation these participating companies have towards the

pension fund is to pay the annual premium liability. Participating companies are under no obligation whatsoever to

pay off any deficits the pension plan may incur. Nor have they any claim to any potential surpluses

Our pension and retirement expenses for all employees for the years ended December 31, 2022, 2021 and 2020,

were:


Year ended December 31 (€, in millions)	2020	2021	2022
Pension plan based on multi-employer union plan	126.8	161.7	181.2
Pension plans based on defined contribution and other plans	55.8	67.5	74.7
Pension and retirement expenses	182.6	229.2	255.9

The accrued pension premiums were €53.2 million as at December 31, 2022 and €10.8 million as at December 31,

2021.

Multi-employer union plan

In accordance with the collective bargaining agreements effective for the industry in which we operate, which has no

expiration date, there are 18,631 number of eligible payroll employees in the Netherlands (51.6% of our total payroll

FTEs) that participate in a multi-employer union plan. Our net periodic pension cost for this multi-employer union plan

for any period is the amount of the required employer contribution for that period.

This multi-employer union plan is managed by PME (Stichting Pensioenfonds van de Metalektro) and this plan covers

approximately 1,565 companies and approximately 173,743 contributing members. Every participating company

contributes a premium that is based on the same contribution rate. This contribution rate can fluctuate yearly based

on the coverage ratio of the multi-employer union plan. For 2022, the contribution percentage was 28.0% (2021:

27.6%, 2020: 22.7%). For 2022, our contribution to this multi-employer union plan (including the premiums paid by

employees), was 15.7% (2021: 13.6%, 2020: 14.0%) of the total contribution to the plan. For 2023, we expect to

contribute around €300.0 million to this plan (including the premiums paid by employees). The pension rights of each

employee are based upon the employee’s average salary during employment.

The PME multi-employer union plan monitors its risks on a global basis and is subject to regulation by Dutch

governmental authorities. By Dutch law (the Dutch Pension Act), a multi-employer union plan must be monitored

against specific criteria, including the coverage ratio of the plan’s assets to its obligations. The coverage ratio is

calculated by dividing the funds capital by the total sum of pension liabilities and is based on actual market interest

rates. The legally required minimal coverage ratio is 104.3% (2021: 104.3%). During 2022, the coverage ratio of PME

improved to 110.4% as per December 31, 2022 (December 31, 2021: 107.9%).

Defined contribution and other pension plans

We also participate in several other defined contribution pension plans (inside and outside the Netherlands), with our

expenses for these plans equaling the employer contributions made in the relevant period.

Deferred compensation plans

For more senior US employees we have a non-qualified deferred compensation plan that allows to defer a portion of

their salary, bonus, and commissions. The plan allows us to credit additional amounts to the participants’ account

balances. The participants divide their funds among the investments available in the plan. Participants elect to receive

their funds in future periods after the earlier of their employment termination or their withdrawal election, at least 3

years after deferral. Expenses were close to nil relating to this plan in 2022, 2021 and 2020. As of December 31,

2022, our liability under deferred compensation plans was €70.5 million (2021: €82.4 million). The related

compensation plan assets are €71.1 million (2021: €81.4 million).

20. Share-based compensation

ASML has the following plans in place for its employees:

–Long-term incentive bonus plans

–Option plans

–Employee purchase plan

Long-term incentive bonus plans

Our LTI plans are covered by an overarching Employee Umbrella Share Plan, which is effective as of January 1, 2014,

and covers all employees. The main purpose of the grants of Equity Incentives under this Employee Umbrella Share

Plan is to continue to attract, reward and retain qualified and experienced industry professionals in an international

labor market. All grants under the Employee Umbrella Share Plan typically have a 2.5 to 3 year vesting period and are

subject to performance and/or service criteria.

As part of our long-term incentive (LTI) bonus, employees can be granted either a service or performance share-

based payment plan. For service-type plans, shares are granted at grant date and after having been in service for a

set period, the participant is awarded these shares at the vesting date. For performance plans, the same conditions

apply as a service-type plan. Additionally, the shares are conditionally granted and awarded based on the company

specific performance criteria, which can be split between market and non-market-based elements. These shares vest

after completion of the service period and the performance reached at vesting date.

The General Meeting approved the adoption of the most recent remuneration policy for the Board of Management

and the number of shares to be issued. The most recent remuneration policy includes the target and maximum levels

of the LTI plans, the performance measures and pay-out zone percentages. The policies for employees are approved

by the Board of Management. The General Meeting also approved the restrictions and limits to the Board of

Management for issuance/granting of ordinary shares, limits for restricting or excluding the preemption rights

accruing to shareholder and the restrictions and limits to the Board of Management for repurchasing ordinary shares

on behalf of the company.

The table below shows the performance criteria and the corresponding weight of the LTI performance plans granted

in 2022.


LTI performance plan criteria	Market/Non-Market element	Weight
Relative TSR	Market	30%
Cash Conversion Rate % (3-year average)	Non-Market	30%
Technology Leadership Index	Non-Market	20%
ESG Measures	Non-Market	20%
Total		100%

Accounting Policy

The fair value of the market-based element is measured at the grant date incorporating the expected vesting and

expected value at vesting, using a tailored Monte Carlo simulation model. The fair value of the service plans and the

non-market-based elements of the performance plans is the share price at grant date less the present value of

expected dividends during the vesting period, as participants are not entitled to dividends payable and voting rights

during the vesting period. The likelihood of the conditions being met for service and non-market performance plans is

assessed as part of the company’s best estimate of the number of equity instruments that will ultimately vest.

Participants are entitled to a conditional grant of company shares upon awarding. Performance plans are subject to

cliff vesting and are accounted for on a straight-line basis. Service only plans are subject to graded vesting. Each

installment of the plan is therefore accounted as a separate grant with a separate fair value. This means that each

installment will be separately measured and attributed to expense over the related vesting period. Expenses for the

market-based element are recognized during vesting at a fixed vesting level (as the vesting expectation is

incorporated in the fair value) provided that all other performance conditions are met. Expenses for the non-market-

based elements and service plans are recognized during vesting at expected vesting levels, which are updated during

vesting period as necessary, with a final update/adjustment at vesting date. All share-based remuneration expenses

are recognized as personnel expense, with a corresponding entry in equity, during the vesting period of the award.

Share-based remuneration expenses are included in the same income statement line or lines in the functional

grouped consolidated statement of operations as the compensation paid to the employees receiving the stock-based

awards.

The most important assumptions for the calculation of the fair value of shares for the LTI performance plans, which

include a market-based performance criteria, are set out in the following table:


Year ended December 31	2020	2021	2022
Share price in € at grant date	270.7	462.9	548.0
Expected volatility ASML	28.9%	38.5%	41.8%
Expected volatility PHLX index	24.7%	35.3%	n/a
Average volatility of the peer group (market practice)	n/a	n/a	47.8%
Vesting period	2.9 years	2.9 years	2.7 years
Dividend yield	0.9%	0.6%	1.0%
Risk free interest rate (Eurozone)	(0.6)%	(0.8)%	0.5%
Risk free interest rate (US)	1.5%	0.2%	2.8%

Expenses for LTI plans, including the Board of Management, were as follows:


Year ended December 31 (€, in millions)	2020	2021	2022
Total incurred expenses	53.9	117.5	68.9
Deferred tax asset movement (recognized as share-based payments in Equity)	9.0	14.2	(2.5)
Recognized income tax benefit (excluding excess income tax benefits)	6.6	8.2	10.2
Total expected expenses in future periods	85.9	125.4	113.0
Weighted average period in which these expected expenses are to be recognized	1.6 years	1.7 years	1.4 years

Details with respect to shares granted and vested during the year are set out in the following table:


	EUR-denominated			USD-denominated
Year ended December 31	2020	2021	2022	2020	2021	2022
Total fair value at vesting date of shares vested during the year (in millions)	124.9	156.9	120.6	133.9	164.0	149.6
Weighted average fair value of shares granted	297.05	547.79	578.65	302.75	498.64	553.61

A summary of the status of conditionally outstanding shares as of December 31 2022, and changes during the year

ended December 31, 2022, is presented below:


	EUR-denominated		USD-denominated
	Number of shares	Weighted average fair value at grant date	Number of shares	Weighted average fair value at grant date
Conditional shares outstanding at January 1, 2022	452,205	303.32	297,001	416.07
Granted	88,432	578.65	230,568	553.61
Vested	(239,685)	247.17	(273,861)	418.03
Forfeited	(8,187)	239.82	(15,314)	487.93
Conditional shares outstanding at December 31, 2022	292,765	434.10	238,394	542.22

Option plans

Since 2017, we no longer grant any options, but there are still outstanding options which may be exercised by

employees.

Accounting Policy

The grant-date fair value of stock options was estimated using a Black-Scholes option valuation model. This Black-

Scholes model required the use of assumptions, including expected share price volatility, the estimated life of each

award and the estimated dividend yield. The risk-free interest rate used in the model is determined, based on an

index populated with euro denominated European government agency bonds with high credit ratings and with a life

equal to the expected life of the equity settled share-based payments. Our option plans typically vest over a 3-year

service period with any unexercised stock options expiring 10 years after the grant date. Options granted have fixed

exercise prices equal to the closing price of our shares listed at Euronext Amsterdam on grant date. The purchase of

shares against the exercise price is settled with the employees involved through deductions on their salary and the

issuance of shares upon exercising the stock options are deducted from our treasury shares.

Details with respect to stock options exercised and outstanding are set out in the following table:


	EUR-denominated			USD-denominated
Year ended December 31	2020	2021	2022	2020	2021	2022
Weighted average share price at the exercise date of stock options	302.20	583.33	494.14	355.44	658.16	565.39
Aggregate intrinsic value of stock options exercised (in millions)	4.8	5.7	4.4	3.7	4.1	1.6
Weighted average remaining contractual term of currently exercisable options (in years)	3.55	2.81	2.08	3.66	2.93	2.09
Aggregate intrinsic value of exercisable stock options (in millions)	22.4	36.7	20.3	16.9	24.9	14.6
Aggregate intrinsic value of outstanding stock options (in millions)	22.4	36.7	20.3	16.9	24.9	14.6

The number and weighted average exercise prices of stock options as of December 31, 2022, and changes during

the year then ended are presented below:


	EUR-denominated		USD-denominated
	Number of options	Weighted average exercise price per ordinary share (EUR)	Number of options	Weighted average exercise price per ordinary share (USD)
Outstanding, January 1, 2022	57,923	73.87	35,251	90.36
Granted 1	—	—	—	—
Exercised	(10,016)	55.49	(3,113)	64.73
Forfeited	—	—	—	—
Expired	(300)	40.03	—	—
Outstanding, December 31, 2022	47,607	77.95	32,138	92.84
Exercisable, December 31, 2022	47,607	77.95	32,138	92.84

1.As of 2017 we no longer grant options to our employees.

Details with respect to stock options exercised in the relevant year and outstanding stock options as of December

31, 2022, are set out in the following table:


EUR-denominated			USD-denominated
Range of exercise prices (€)	Number of outstanding options	Weighted average remaining contractual life of outstanding (years)	Range of exercise prices (USD)	Number of outstanding options	Weighted average remaining contractual life of outstanding (years)
50 - 60	5,268	0.96	50 - 60	—	0.00
60 - 70	10,773	0.96	60 - 70	278	0.06
70 - 80	10,109	2.35	70 - 80	828	0.30
80 - 90	10,791	2.83	80 - 90	8,855	1.90
90 - 100	10,666	2.73	90 - 100	15,308	2.05
100 - 110	—	0.00	100 - 110	6,869	2.74
Total	47,607	2.08	Total	32,138	2.09

Employee Purchase Plan

Additionally, we also offer an Employee Purchase Plan to our payroll employees, except the Board of Management

who is excluded from participation in this plan. Through this plan, payroll employees are given the opportunity to buy

our shares through their monthly paycheck. The maximum amount for which employees can participate in the plan

amounts to 10.0% of their annual gross base salary. When employees retain the shares for a minimum of 12 months,

we will pay out a 20.0% gross cash bonus on the initial participation amount.

Accounting Policy

Employee purchase plans are accounted on an accrual basis. The shares for employee purchase plans are issued on

a quarterly basis and the share purchase price is based on the closing share price of our listed shares on grant date,

which is the date after our quarterly filings. The purchased shares by employees are issued from our treasury shares.

In 2022, ASML received €81.8 million (2021: €49.0 million and 2020: €37.9 million) from issuance of shares for this

plan.

21. Income taxes

Accounting Policy

Income taxes represent the sum of the current tax position and deferred tax.

The current tax position is based on taxable base for the year. Taxable base differs from results as reported in the

Consolidated Statement of Profit or Loss because it excludes items of income or charges that are taxable or

deductible in prior or later years, for example timing differences between taxable base and financial results, and it

further excludes items that are never taxable or deductible, for example permanent differences between taxable base

and financial results. Our tax position is calculated using tax rates that have been enacted or substantively enacted at

the Consolidated Statement of Financial Position date.

Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the Consolidated

Financial Statements and the corresponding tax base used in the computation of taxable profit. Deferred tax liabilities

are recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is

probable that taxable profits will be available against which deductible temporary differences can be utilized. Such

assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition

(other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable

profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each Consolidated Statement of Financial Position date

and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part

of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the

liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively

enacted by the Consolidated Statement of Financial Position date. The measurement of deferred tax liabilities and

assets reflects the tax consequences that would follow from the manner in which we expect, at the reporting date, to

recover or settle the carrying amount of our assets and liabilities.

Deferred tax assets and liabilities are offset on the Consolidated Statement of Financial Position when there is a

legally enforceable right to set off tax assets against tax liabilities and when they relate to income taxes levied by the

same taxation authority and we intend to settle our tax assets and liabilities on a net basis.

The Consolidated Statement of Profit or Loss effect of interest and penalties relating to liabilities for tax positions

subject to uncertainty over income tax treatment are included in income tax expense.

Current and deferred tax are recognized as an expense or income in the Consolidated Statement of Profit or Loss,

except when they relate to items credited or debited directly to OCI or directly to equity, in which case the tax is also

recognized directly in equity, or where they arise from the initial accounting for a business combination. In the case of

a business combination, the tax effect is taken into account in calculating goodwill or in determining the excess of our

interest in the net fair value of the acquired entity’s identifiable assets and liabilities incurred or assumed over the cost

of the business combination.

The calculation of our tax liabilities involves uncertainties in the application of complex tax laws. Our estimate for the

potential outcome of any uncertain tax position is highly judgmental. However, we believe that we have adequately

provided for tax positions subject to uncertainty over income tax treatment. Settlement of these uncertainties in a

manner inconsistent with our expectations could have a material impact on our results of operations, financial

condition and cash flows. We recognize a liability for tax positions subject to uncertainty over income tax treatment

when it is probable that an outflow of economic resources will occur. Measurement of the liability for tax positions

subject to uncertainty over income tax treatment is based on either the most likely amount method or the expected

value method based on ASML's best estimate of the underlying risk.

Income taxes are affecting our Consolidated Statements of Operations, Consolidated Statements of Comprehensive

Income and Consolidated Balance Sheets. The disclosure of the Income taxes is therefore split into:

–Income tax expense

–Liability for uncertain tax positions

–Deferred taxes

Income tax expense

The components of income tax expense are as follows


Year ended December 31 (€, in millions)	2020	2021	2022
Current tax	(786.8)	(1,482.4)	(1,757.6)
Deferred tax	186.1	418.6	739.0
Income tax expense	(600.7)	(1,063.8)	(1,018.6)

Current and deferred tax expense can be further broken down into:


Year ended December 31 (€, in millions)	2020	2021	2022
Current year tax expense	(747.5)	(1,461.1)	(1,701.8)
Prior year tax expense	(39.3)	(21.3)	(55.8)
Current tax expense	(786.8)	(1,482.4)	(1,757.6)


Year ended December 31 (€, in millions)	2020	2021	2022
Changes to recognition of tax losses and tax credits	56.9	(37.2)	(41.2)
Prior year tax expense	27.0	1.5	79.2
Tax rate changes	(8.4)	(1.0)	(1.1)
Origination and reversal of temporary differences, tax losses and tax credits	110.6	455.3	702.1
Deferred tax expense	186.1	418.6	739.0

The Dutch statutory tax rate was 25.8% in 2022 and 25.0% for 2021 and 2020. Tax amounts in other jurisdictions

are calculated at the rates prevailing in the relevant jurisdictions.

The effective tax rate decreased to 14.0% in 2022, compared with 15.2% in 2021. The lower rate is mainly driven by

an increase in deferred tax assets (with corresponding deferred tax benefit) on intercompany eliminations.

The reconciliation of the income tax expense from the Dutch statutory rate to the effective income tax rate is as

follows:


Year ended December 31 (€, in millions)	2020	%1	2021	%1	2022	%1
Income before income taxes	4,208.9	100.0%	6,999.3	100.0%	7,276.4	100.0%
Income tax expense based on ASML’s domestic rate	(1,052.2)	25.0%	(1,749.8)	25.0%	(1,877.3)	25.8%
Effects of tax rates in foreign jurisdictions	1.0	—%	(4.6)	0.1%	28.4	(0.4)%
Adjustments in respect of tax exempt income	0.2	—%	—	—%	—	—%
Adjustments in respect of tax incentives	530.0	(12.6)%	753.9	(10.8)%	792.1	(10.9)%
Adjustments in respect of prior years’ current taxes	(39.3)	0.9%	(21.3)	0.3%	(55.8)	0.8%
Adjustments in respect of prior years’ deferred taxes	27.0	(0.6)%	1.5	—%	79.2	(1.1)%
Movements in the liability for uncertain tax positions	(38.6)	0.9%	(22.8)	0.3%	(16.1)	0.2%
Tax effects in respect of acquisition/restructuring related items	—	—%	35.9	(0.5)%	—	—%
Change in unrecognized deferred tax assets	(56.9)	1.4%	(37.2)	0.6%	(41.2)	0.6%
Investments in associates	(20.9)	0.5%	(46.7)	0.7%	(38.3)	0.6%
Effect of change in tax rates	(8.4)	0.2%	(1.0)	—%	(1.1)	—%
Other (credits) and non-taxable items	57.4	(1.4)%	28.3	(0.4)%	111.6	(1.5)%
Income tax expense	(600.7)	14.3%	(1,063.8)	15.2%	(1,018.6)	14.0%

1.As a percentage of income before income taxes.

The individual line items in the table above are explained in more detail below.

Income tax expense based on ASML’s domestic rate

The income tax expense based on ASML’s domestic rate is based on the Dutch statutory income tax rate. It reflects

the income tax expense that would have been applicable assuming that all of our income is taxable against the Dutch

statutory tax rate and there are no differences between taxable base and financial results and no tax incentives are

applied.

Effects of tax rates in foreign jurisdictions

A portion of our results is realized in countries other than the Netherlands where different tax rates are applicable. The

effect can differ from year to year depending on the profit before tax in respective foreign jurisdictions.

Adjustments in respect of tax-exempt income

In past years in certain jurisdictions part of the income generated was tax exempted. In conjunction with changed

facts and circumstances this effect is significantly reduced as of 2020.

Adjustments in respect of tax incentives

Adjustments in respect of tax incentives mainly relate to a reduced tax rate as a result of application of the Dutch

Innovation Box, which is a facility under Dutch corporate tax law pursuant to which qualified income associated with

R&D is subject to an effective tax rate of 9.0% as of 2021. The effective innovation box tax rate was 7.0% in 2020.

The innovation box benefit is determined according to Dutch laws and published tax policy, whereby the application

has been confirmed in an agreement between ASML and the Dutch tax authorities that is applicable for the years

through 2023 assuming facts and circumstances do not change.

Furthermore, this category includes the benefit of the Foreign Derived Intangible Income (FDII) deduction which is

applicable at the level of our US group companies. The FDII deduction is a facility under US corporate tax law which

reduces the effective tax rate on income derived from tangible and intangible products and services in foreign

markets.

The higher amount in 2021 and 2022 compared to 2020 is mainly caused by an increase in innovation box benefit

resulting from an increased level in income before tax at the level of our Dutch group companies.

The increase in relative weight of this item in the effective tax rate reconciliation for 2022 as compared to 2021 is

mainly caused by increase in the general Dutch CIT rate to 25.8% as of 2022 (2021: 25%).

Adjustments in respect of prior years’ current taxes

The adjustments in respect of prior years’ current taxes relate to differences between the initially estimated income

taxes and final corporate income tax returns filed or arrangements agreed upon with tax authorities. To the main

extent these are caused by modifications in temporary differences on contract liabilities and are offset by similar

movements in prior year deferred tax balances.

Adjustments in respect of prior years’ deferred taxes

The movements in the adjustments in respect of prior years’ deferred taxes mainly relate to differences between the

initially estimated income taxes and final corporate income tax returns filed. This is mainly caused by modifications in

temporary differences on contract liabilities.

Movements in the liability for uncertain tax positions

In 2022, similar to prior years, the effective tax rate was impacted by movements in the liability for uncertain tax

positions. The movement for 2022 is mainly driven by continued dialogues with Dutch and foreign tax authorities in

the area of transfer pricing, as well as by uncertainties in FDII deduction and R&D credits claimed at the level of our

US group companies. Additionally, some prior year positions have been released as a result of the lapse of statute.

Tax effects in respect to acquisition/restructuring-related items

The 2021 effect relates to divestment of part of the Berliner Glas (ASML Berlin GmbH) entities, whereby the

commercial transaction result is, to a large extent, exempt for income tax purposes. No such transaction has taken

place in 2020 or 2022.

Change in unrecognized deferred tax assets

Changes in unrecognized deferred tax assets mainly relate to newly recognized R&D and withholding tax credits for

the respective year at the level of our group companies in the Netherlands and the US for which it is considered not

probable that these can be realized in future years.

Investments in associates

This line includes the income tax expense relating to our investment in Carl Zeiss SMT Holding GmbH & Co. KG. The

increased effect in 2021 and 2022 compared to 2020 is mainly caused by an increase in the profit from the equity

method investment as well as – for 2021 – tax accounting consequences following from adjustment in the outside

basis difference for the equity investment.

Effect of change in tax rates

The 2022 tax rate change impact relates to reduction in the corporate income tax rate in South Korea, slightly

impacting the valuation of deferred tax positions at the level of our South Korean group entities. The impact on the

effective tax rate for the years 2020 and in 2021 is mainly caused by changes in the general Dutch corporate income

tax rate as well as the innovation box rate enacted in respective years.

Other credits and non-tax deductible items

Other credits and non-tax deductible items reflect the impact on our statutory rates of permanent non-tax deductible

items such as non-deductible withholding taxes, non-deductible shared-based payment expenses and non-

deductible meals and entertainment expenses, as well as the impact of various tax credits (e.g. US R&D credits) on

our income tax expense. Additionally, it includes the tax impact on intercompany eliminations.

US Tax Reform

The year-end tax positions also reflect the regulations of 2017 US Tax Reform, thereby taking into account the

guidance issued by the US government. Hereby the most recent guidance for the final FDII regulations has been

applied as of 2021 onwards, not retrospectively as permitted by aforementioned regulations. With regard to GILTI

and BEAT, the decision has been taken to treat these as a period permanent item.

On August 9, 2022, the U.S. enacted the CHIPS and Science Act which, among other things, implemented a 25%

investment tax credit on semiconductor and semiconductor equipment manufacturing assets. Pending the release of

expected regulations, it is currently uncertain whether the Company will claim the investment tax credit to which we

may be entitled as of 2023.

Additionally, on August 16, 2022, the US enacted the Inflation Reduction Act of 2022, which, among other things,

implements a 15% minimum tax on book income of certain large corporations, a 1% excise tax on share buybacks,

several clean energy provisions, and additional funding for the IRS. Based on our current analysis of the law, we do

not believe the IRA will have a material impact on our consolidated financial statements for years 2022 and onwards.

Global minimum tax

To address concerns about uneven profit distribution and tax contributions of large multinationals corporations,

various agreements have been reached at global level, including an agreement by over 135 jurisdictions to introduce

a global minimum tax rate of 15%. We continuously monitor the developments with regard to Global Minimum Tax. At

December 31, 2022, only jurisdiction in which we operate that already has made some legislative changes related to

top-up tax is South Korea, with effective date of January 1, 2024. The same is expected however for other countries

where we operate, like the EU and the UK. At this moment we are not able to assess quantitative impact of these

(potential) new rules in full detail yet, but in general the impact is expected to be limited.

Liability for uncertain tax positions and deferred taxes

The liability for uncertain tax positions (including accrued interest and penalties) and total deferred tax position

recorded on the Consolidated Statement of Financial Position is as follows:


Year ended December 31 (€, in millions)	2020	2021	2022
Liability for uncertain tax positions	(203.4)	(210.1)	(225.8)
Deferred tax assets	807.4	1,337.6	2,188.9
Deferred tax liabilities	(198.5)	(228.2)	(312.6)
Deferred and other tax assets (liabilities)	405.5	899.3	1,650.5

Liability for uncertain tax positions

We have operations in multiple jurisdictions, where we are subject to the application of complex tax laws. Application

of these complex tax laws may lead to uncertainties on tax positions. We aim to resolve these uncertainties in

discussions with the tax authorities. We record uncertain tax positions in line with the requirements of IAS 12 / IFRIC

23, which requires us to estimate the potential outcome of any tax position. Our estimate for the potential outcome of

any uncertain tax position is highly judgmental. We believe that we have adequately provided for uncertain tax

positions. However, settlement of these uncertain tax positions in a manner inconsistent with our expectations could

have a material impact on our Consolidated Financial Statements.

Consistent with the requirements of IAS 12 / IFRIC 23, as of December 31, 2022, the liability for uncertain tax

positions (excluding interest and penalties) amounts to €163.0 million (2021: €143.0 million) which is classified as

Deferred and other income tax liabilities. If recognized, these uncertain tax positions would affect our effective tax rate

for approximately €142.1 million benefit (2021: €195.1 million benefit).

Interest and penalties related to the liability for uncertain tax positions amount to €62.8 million (2021: €67.1 million)

and are included in the total liability position as specified below. P&L impact of accrued interest and penalties in 2022

amount to a benefit of €4.3 million (2021: 4.4 million benefit; 2020: 14.2 million benefit).

A reconciliation of the beginning and ending balance of the liability for uncertain tax positions (excluding interest and

penalties) is as follows:


Year ended December 31 (€, in millions)	2020	2021	2022
Balance, January	(153.5)	(138.5)	(143.0)
Gross presentation for different tax jurisdictions	(27.3)	—	—
Gross increases – tax positions in prior period	(66.3)	(15.7)	(12.1)
Gross decreases – tax positions in prior period	0.5	10.7	0.6
Gross increases – tax positions in current period	(19.3)	(18.0)	(24.9)
Acquisitions through business combinations	—	—	—
Settlements	106.6	2.5	6.8
Lapse of statute of limitations	14.6	28.6	13.2
Effect of changes in exchange rates	6.2	(12.6)	(3.6)
Total liability for uncertain tax positions	(138.5)	(143.0)	(163.0)
Balance of accrued interest and penalties	(64.9)	(67.1)	(62.8)
Total liabilities for uncertain tax positions including interest and penalties	(203.4)	(210.1)	(225.8)

We conclude our liability for uncertain tax positions to be appropriate. Based on the information currently available,

we estimate that the liability for uncertain tax positions will decrease by €11.5 million (excluding interest and penalties)

within the next 12 months, mainly as a result of expiration of statute of limitations.

For 2020 gross increases of tax positions in prior period and settlements were in essence mainly relating to

finalization of a tax audit at the level of our South Korean group companies. Settlements in 2022 mainly relate to final

settlement of 2018 and 2019 corporate income tax returns of our Dutch fiscal unity.

We file income tax returns in all countries where we operate, with the Netherlands, US, Taiwan, South Korea and

China being the major jurisdictions. The years for which tax returns are still open for examination for respective

jurisdictions are as follows:


Country	Years
Netherlands	2019-2022
US	2017-2022
Taiwan	2017-2022
South Korea	2019-2022
China	2012-2022

We are routinely subject to examinations and audits from tax and other authorities in the various jurisdictions in which

we operate. We believe that adequate amounts of taxes and related interest and penalties have been provided for,

and any adjustments as a result of examinations are not expected to have a material adverse effect.

Deferred taxes

The composition of total deferred tax assets and liabilities reconciled to the classification in the Consolidated Statement of Financial Position is:


Deferred taxes (€, in millions)	January 1, 2022	Other	Consolidated Statement of Profit or Loss	Equity	Effect of changes in exchange rates	December 31, 2022
Deferred tax assets:
Unrealized profits resulting from intercompany transactions	362.5	—	369.4	—	(1.1)	730.8
Capitalized R&D expenditures	277.8	—	116.8	—	21.9	416.5
R&D & other tax credit carry forwards	162.7	23.7	20.6	—	6.4	213.4
Inventories	31.5	—	12.5	—	1.2	45.2
Contract liabilities	423.2	—	400.8	—	(3.2)	820.8
Accrued and other liabilities	98.1	—	(31.4)	—	3.4	70.1
Standard warranty reserve	11.3	—	(4.1)	—	0.9	8.1
Operating loss carry forwards	7.4	—	(2.8)	—	(0.1)	4.5
Property, plant and equipment	18.6	—	1.7	—	(1.3)	19.0
Lease liabilities	23.2	—	3.1	—	1.1	27.4
Other intangible assets	143.5	—	(18.7)	—	—	124.8
Share-based payments	28.5	—	(10.5)	(2.4)	0.6	16.2
Other temporary differences	27.5	—	3.7	(6.5)	(1.2)	23.5
Total deferred tax assets, gross	1,615.8	23.7	861.1	(8.9)	28.6	2,520.3
Unrecognized deferred tax assets1	(167.6)	—	(41.2)	—	(6.6)	(215.4)
Total deferred tax assets, net	1,448.2	23.7	819.9	(8.9)	22.0	2,304.9
Deferred tax liabilities:
Capitalized R&D expenditures	(193.4)	—	(67.4)	—	—	(260.8)
Other intangible assets	(79.9)	—	19.8	—	(5.3)	(65.4)
Goodwill	(20.9)	—	(7.9)	—	—	(28.8)
Right-of-use assets	(23.2)	—	(3.1)	—	(1.1)	(27.4)
Property, plant and equipment	(10.9)	—	1.5	—	(0.4)	(9.8)
Contract liabilities	(7.9)	—	(8.4)	—	—	(16.3)
Long-term debt	(1.5)	—	—	—	—	(1.5)
Other temporary differences	(1.1)	—	(15.4)	(2.1)		(18.6)
Total deferred tax liabilities	(338.8)	—	(80.9)	(2.1)	(6.8)	(428.6)
Net deferred tax assets (liabilities)	1,109.4	23.7	739.0	(11.0)	15.2	1,876.3
Classified as:
Deferred tax assets – non-current	1,337.6					2,188.9
Deferred tax liabilities – non-current	(228.2)					(312.6)
Net deferred tax assets (liabilities)	1,109.4					1,876.3

1.Unrecognized deferred tax assets disclosed above relate to R&D and other tax credit carry forwards and operating loss carry forwards that may not be realized.


Deferred taxes (€, in millions)	January 1, 2021	Other	Consolidated Statement of Profit or Loss	Equity	Effect of changes in exchange rates	December 31, 2021
Deferred tax assets:
Unrealized profits resulting from intercompany transactions	251.1	—	104.5	—	6.9	362.5
Capitalized R&D expenditures	152.9	—	100.7	—	24.2	277.8
R&D & other tax credit carry forwards	117.2	21.4	16.4	—	7.7	162.7
Inventories	37.2	—	(7.2)	—	1.5	31.5
Contract liabilities	125.2	—	288.0	—	10.0	423.2
Accrued and other liabilities	87.8	—	5.7	—	4.6	98.1
Standard warranty reserve	16.4	—	(6.3)	—	1.2	11.3
Operating loss carry forwards	27.1	—	(19.9)	—	0.2	7.4
Property, plant and equipment	26.9	—	(10.8)	—	2.5	18.6
Lease liabilities	6.5	—	16.2	—	0.5	23.2
Other intangible assets	143.5	—	—	—	—	143.5
Share-based payments	19.6	—	(5.9)	14.2	0.6	28.5
Other temporary differences	23.2	—	7.3	(1.0)	(2.0)	27.5
Total deferred tax assets, gross	1,034.6	21.4	488.7	13.2	57.9	1,615.8
Unrecognized deferred tax assets1	(122.5)	—	(37.2)	—	(7.9)	(167.6)
Total deferred tax assets, net	912.1	21.4	451.5	13.2	50.0	1,448.2
Deferred tax liabilities:
Capitalized R&D expenditures	(154.3)	—	(39.1)	—	—	(193.4)
Other intangible assets	(93.9)	2.9	17.1	—	(6.0)	(79.9)
Goodwill	(15.6)	—	(5.3)	—	—	(20.9)
Right-of-use assets	(6.5)	—	(16.2)	—	(0.5)	(23.2)
Property, plant and equipment	(5.4)	—	(4.3)	—	(1.2)	(10.9)
Contract liabilities	(18.2)	—	10.3	—	—	(7.9)
Long-term debt	(1.6)	—	0.1	—	—	(1.5)
Other temporary differences	(7.7)	2.5	4.5	—	(0.4)	(1.1)
Total deferred tax liabilities	(303.2)	5.4	(32.9)	—	(8.1)	(338.8)
Net deferred tax assets (liabilities)	608.9	26.8	418.6	13.2	41.9	1,109.4
Classified as:
Deferred tax assets – non-current	807.4					1,337.6
Deferred tax liabilities – non-current	(198.5)					(228.2)
Net deferred tax assets (liabilities)	608.9					1,109.4

1.Unrecognized deferred tax assets disclosed above relate to R&D and other tax credit carry forwards and operating loss carry forwards that may not be realized.

Operating loss carry forwards and Tax credit carry forwards

The deferred tax assets from operating loss carry forwards and R&D & other tax credit carry forwards recognized as

per December 31, 2022, are almost fully reserved. R&D & other tax credit carry forwards for the amount of €178.9

million have no expiration date. The remaining R&D & other tax credit carry forwards of €34.4 million have an

expiration date between 2023 and 2036. The operating loss carry forwards of €12.2 million have an expiration date

between 2023 and 2029.

Unrecognized Deferred Tax Liability Related to Investments in Foreign Subsidiaries

ASML periodically reviews the capital structure of each group entity and may distribute retained earnings, repay

capital or inject fresh capital in case the projected cashflows, freely available funds of the respective entity and the

capital adequacy requirements in the respective country allow/require for this. The tax implications of such

distributions are dependent on local tax and accounting regulations applying at the moment of actual distribution. At

balance sheet date, no deferred tax liability has been recognized in respect of undistributed profit reserves of the

foreign subsidiaries. This as we are able to control the timing of reversal of the temporary differences and we consider

it not probable that the temporary difference will reverse in the foreseeable future. As per December 31, 2022, the

aggregate amount of unrecognized temporary differences approximately amounts to €451.3 million (2021:

€283.4 million).

22. Shareholders’ equity

Share capital

ASML’s authorized share capital amounts to €126.0 million and is divided into:


Type of shares	Number of shares	Nominal value	Votes per share
Cumulative preference shares	700,000,000	€0.09 per share	1
Ordinary shares	700,000,000	€0.09 per share	1

The issued and fully paid up ordinary shares with a nominal value of €0.09 each were as follows:


Year ended December 31	2020	2021	2022
Issued ordinary shares with nominal value of €0.09	416,514,034	402,601,613	394,589,411
Issued ordinary treasury shares with nominal value of €0.09	2,983,454	3,873,663	8,548,631
Total issued ordinary shares with nominal value of €0.09	419,497,488	406,475,276	403,138,042

87,875,651 ordinary shares were held by 280 registered holders with a registered address in the US. Since certain of

our ordinary shares were held by brokers and nominees, the number of record holders in the US may not be

representative of the number of beneficial holders, or of where the beneficial holders are resident.

Each ordinary share consists of 900 fractional shares. Fractional shares entitle the holder thereof to a fractional

dividend, but do not give entitlement to voting rights. Only those persons who hold shares directly in the share

New York share register, held by JP Morgan Chase Bank, N.A., P.O. Box 64506, St. Paul, MN 55164-0506, United

States, can hold fractional shares. Shareholders who hold ordinary shares through the deposit system under the

Dutch Securities Bank Giro Transactions Act maintained by the Dutch central securities depository Euroclear

Nederland or through the Depository Trust Company cannot hold fractional shares.

No cumulative preference shares have been issued. Following the amended Articles of Association that were adopted

by the General Meeting during the 2022 AGM, the capital structure changed. Due to these changes, we no longer

have the ordinary share class B. With the removal of the ordinary share class B, each share carries one vote.

There are no special voting rights on the issued shares in our share capital.

In 2012, we issued shares to three key customers – Intel, TSMC and Samsung – as part of the customer co-investment

program (CCIP) to accelerate ASML’s development of EUV. Under this program, the participating customers funded certain

development programs and invested in ASML’s ordinary shares. Currently, only one participating customer still holds

(directly or indirectly) ordinary shares issued in the CCIP. Certain voting restrictions apply in respect of ordinary shares issued

in connection with the CCIP. These voting restrictions in respect of these ordinary shares are set out in the underlying

agreement between ASML and the relevant customer. The shares issued in the CCIP were held by foundations which

issued depository receipts to participants in the CCIP. A total of 96,566,077 depository receipts for ordinary shares were

issued at the launch of the CCIP. This number has since decreased with the sell-down by the relevant customers following

expiry of the lock-up.

There are currently no limitations, either under Dutch law or in ASML’s Articles of Association, on the transfer of

ordinary shares in the share capital of ASML. Pursuant to ASML’s Articles of Association, the Supervisory Board’s

approval shall be required for every transfer of cumulative preference shares.

Issue and repurchase of (rights to) shares

Our Board of Management has the power to issue ordinary shares and cumulative preference shares insofar as it has

been authorized to do so by the General Meeting. The Board of Management requires approval of the Supervisory

Board for such an issue. The authorization by the General Meeting can only be granted for a certain period not

exceeding five years and may be extended for no longer than five years on each occasion. If the General Meeting has

not authorized the Board of Management to issue shares, the General Meeting will be authorized to issue shares on

the Board of Management’s proposal, provided that the Supervisory Board has approved such a proposal.

Holders of ASML’s ordinary shares have a preemptive right, in proportion to the aggregate nominal amount of the ordinary

shares held by them. This preemptive right may be restricted or excluded. Holders of ordinary shares do not have

preemptive right with respect to any ordinary shares issued for consideration other than cash or ordinary shares issued to

employees. If authorized for this purpose by the General Meeting, the Board of Management has the power, subject to

approval of the Supervisory Board, to restrict or exclude the preemptive rights of holders of ordinary shares.

At our 2022 AGM, the Board of Management was authorized from April 29, 2022 through October 29, 2023, subject

to the approval of the Supervisory Board, to issue shares and/or rights thereto representing up to a maximum of 5%

of our issued share capital at April 29, 2022, plus an additional 5% of our issued share capital at April 29, 2022, that

may be issued in connection with mergers, acquisitions and/or (strategic) alliances. Our shareholders also authorized

the Board of Management through October 29, 2023, subject to approval of the Supervisory Board, to restrict or

exclude preemptive rights with respect to holders of ordinary shares up to a maximum of 5% of our issued share

capital in connection with the general authorization to issue shares and/or rights to shares, plus an additional 5% in

connection with the authorization to issue shares and/or rights to shares in connection with mergers, acquisitions

and/or (strategic) alliances.

We may repurchase our issued ordinary shares at any time, subject to compliance with the requirements of Dutch

law and our Articles of Association. Any such repurchases are subject to the approval of the Supervisory Board and

the authorization by the General Meeting, which authorization may not be for more than 18 months.

At the 2022 AGM, the Board of Management was authorized, subject to Supervisory Board approval, to repurchase

through October 29, 2023, up to a maximum of 10% of our issued share capital at April 29, 2022, at a price between

the nominal value of the ordinary shares purchased and 110% of the market price of these securities on Euronext

Amsterdam or NASDAQ.

ASML Preference Shares Foundation

The ASML Preference Shares Foundation (Stichting Preferente Aandelen ASML), a foundation organized under Dutch

law, has been granted an option right to acquire preference shares in the share capital of ASML. The Foundation may

exercise the Preference Share Option in situations where, in the opinion of the Foundation’s Board of Directors,

ASML’s interests, ASML’s business or the interests of ASML’s stakeholders are at stake. This may be the case if:

–A public bid for ASML’s shares is announced or made, or there is a justified expectation that such a bid will be

made without any agreement having been reached with ASML in relation to such a bid; or

–In the opinion of the Foundation’s Board of Directors, the (attempted) exercise of the voting rights by one

shareholder or more shareholders, acting in concert, is materially in conflict with ASML’s interests, ASML’s

business or ASML’s stakeholders.

The Foundation’s objectives are to look after the interests of ASML and the enterprises maintained by and/or affiliated

in a group with ASML, in such a way that the interests of ASML, of those enterprises and of all parties concerned are

safeguarded in the best possible way, and that influences in conflict with these interests, which might affect the

independence or the identity of ASML and those companies, are deterred to the best of the Foundation’s ability, and

everything related to the above or possibly conducive thereto. The Foundation aims to realize its objects by acquiring

and holding cumulative preference shares in the capital of ASML and by exercising the rights attached to these

shares, particularly the voting rights.

The Preference Share Option gives the Foundation the right to acquire such number of cumulative preference shares

as the Foundation will require, provided that the aggregate nominal value of such number of cumulative preference

shares shall not exceed the aggregate nominal value of the ordinary shares issued at the time of exercise of the

Preference Share Option. The subscription price will be equal to their nominal value. Only one-fourth of the

subscription price would be payable at the time of initial issuance of the cumulative preference shares, with the other

three-fourths of the nominal value only being payable when ASML calls up this amount. Exercise of the preference

Share Option could effectively dilute the voting-power of the outstanding ordinary shares by one-half.

Cancellation and repayment of the issued cumulative preference shares by ASML requires authorization by the

General Meeting, on a proposal to this effect made by the Board of Management and approved by the Supervisory

Board. If the Preference Share Option is exercised and as a result cumulative preference shares are issued, ASML will

initiate the repurchase or cancellation of all cumulative preference shares held by the Foundation on the Foundation’s

request. In that case, ASML is obliged to effect the repurchase and respective cancellation as soon as possible. A

cancellation will result in a repayment of the amount paid and exemption from the obligation to pay up on the

cumulative preference shares. A repurchase of the cumulative preference shares can only take place when such

shares are fully paid up.

If the Foundation does not request ASML to repurchase or cancel all cumulative preference shares held by the

Foundation within 20 months of issuance of these shares, we will be required to convene a General Meeting for the

purpose of deciding on a repurchase or cancellation of these shares.

The Foundation is independent of ASML. The Board of Directors of the Foundation is composed of four independent

members from the Netherlands’ business and academic communities. The Foundation’s Board of Directors is

composed per December 31, 2022, of the following members: Mr. A.P.M. van der Poel, Mr. S. Perrick, Mr. S.S.

Vollebregt and Mr. J. Streppel.

Other than the arrangements made with the Foundation as described above, ASML has not established any other

anti-takeover devices.

Other reserves

ASML is a company incorporated under Dutch Law. In accordance with the Dutch Civil Code, other reserves consist

of legal reserves that have to be established in certain circumstances. The legal reserves consist of the hedging

reserve, the currency translation reserve, the reserve for capitalized development expenditures and the other

comprehensive income from associate. Legal reserves are not available for distribution to our shareholders. If any

legal reserve has a negative balance, distributions to our shareholders are restricted to the extent of the negative

balance.

Changes in other reserves during 2022 and 2021 were as follows:


(€, in millions)	Hedging reserve	Currency translation reserve	Reserve for capitalized development expenditures	Share of OCI from associate	Total
Balance at January 1, 2021	(22.3)	57.4	1,604.8	(26.9)	1,613.0
Components of statement of comprehensive income:
Share of OCI from associate	—	—	—	22.0	22.0
Foreign currency translation	—	95.4	—	—	95.4
Financial instruments, net of taxes:
Gain (Loss) on derivative financial instruments	16.6	—	—	—	16.6
Transfers to net income	22.2	—	—	—	22.2
Development expenditures	—	—	293.9	—	293.9
Currency translation on development expenditures	—	(2.1)	2.1	—	—
Balance at December 31, 2021	16.5	150.7	1,900.8	(4.9)	2,063.1

Components of statement of comprehensive income:
Share of OCI from associate	—	—	—	37.7	37.7
Foreign currency translation	—	68.9	—	—	68.9
Financial instruments, net of taxes:
Gain (loss) on derivative financial instruments	57.6	—	—	—	57.6
Transfers to net income	(66.5)	—	—	—	(66.5)
Development expenditures	—	—	600.9	—	600.9
Currency translation on development expenditures	—	(1.6)	1.6	—	—
Balance at December 31, 2022	7.6	218.0	2,503.3	32.8	2,761.7

Exchange rate differences relating to the translation from our foreign subsidiaries into euro are recognized in the

currency translation reserve. Gains and losses on hedging instruments that are designated as hedges of net

investments in foreign operations are included in the currency translation reserve.

Hedging reserve represents hedging gains and losses on the effective portion of cash flow hedges.

Appropriation and determination of net income

Dividends may be payable out of net income or retained earnings shown in the Company Financial Statements as

adopted by our General Meeting, after payment first of (accumulated) dividends on any outstanding cumulative

preference shares. At its discretion, however, subject to statutory provisions, the Board of Management may, with the

prior approval of the Supervisory Board, distribute one or more interim dividends on the ordinary shares before the

Financial Statements for any financial year have been adopted by the General Meeting. The Board of Management,

with the approval of the Supervisory Board, may decide that all or part of our net income should be retained and not

be made available for distribution to shareholders, except for dividends on the cumulative preference shares. Those

net incomes that are not retained may be distributed to shareholders pursuant to a shareholders’ resolution, provided

that the distribution does not reduce equity below the amount of reserves required by Dutch law. Existing reserves

that are distributable in accordance with Dutch law may be made available to the General Meeting for distribution

upon a proposal by the Board of Management, subject to prior approval of the Supervisory Board. As regards cash

payments, the rights to dividends and distributions shall lapse if such dividends or distributions are not claimed within

five years following the day after the date on which they were made available.

ASML aims to distribute a dividend that will be growing over time, paid quarterly. On an annual basis, the Board of

Management, upon prior approval from the Supervisory Board, submits a proposal to the AGM with respect to the

amount of dividend to be declared with respect to the prior year, taking into account any interim dividend

distributions. The dividend proposal in any given year will be subject to availability of distributable profits, retained

earnings and cash, and may be affected by, among other things, our view of potential future liquidity requirements

including for investments in production capacity, working capital requirements, the funding of our R&D programs and

acquisition opportunities that may arise from time to time.

ASML intends to declare a total dividend in respect of 2022 of €5.80 per ordinary share. Recognizing the interim

dividend of €1.37 per ordinary share paid in August 2022, November 2022 and February 2023, this leads to a final

dividend proposal to the General Meeting of €1.69 per ordinary share. The total 2022 dividend is a 5.5% increase

compared to the 2021 total dividend of €5.50 per ordinary share.

Dividends on ordinary shares are payable out of net income or retained earnings as shown in our Financial

Statements as adopted by our AGM, after payment first of (accumulated) dividends out of net income on any issued

cumulative preference shares.

The amount of net income that is not distributed as dividend will be appropriated to our retained earnings.

Purchase of equity securities

In addition to dividend payments, we intend to return cash to our shareholders on a regular basis through share

buybacks or capital repayment, subject to our actual and anticipated level of liquidity requirements and other relevant

factors.

On November 10, 2022, we announced a new share buyback program to be executed by 31 December 2025. As

part of this program, ASML intends to repurchase shares up to an amount of €12 billion, of which we expect a total

of up to 2 million shares will be used to cover employee share plans. ASML intends to cancel the remainder of the

shares repurchased. The new program has replaced the previous €9 billion share buyback program 2021-2023

which was completed on October 18, 2022.

In 2022, we repurchased 8,538,787 shares (2021: 14,358,838 shares) for a total consideration of 4,639.7 million

(2021: 8,560.3 million) of which 355,324 shares for a consideration of €200.0 million were purchased under the new

program. In 2022, we canceled 3,337,825 shares (2021: 13,023,016 shares canceled), of which 3,337,825 shares

that were repurchased under the 2021-2023 program.

The share buyback program may be suspended, modified or discontinued at any time.

The following table provides a summary of shares repurchased by ASML in 2022:


Period	Total number of shares purchased	Average price paid per Share (€)	Total number of shares purchased under programs	Maximum value of shares that may yet be purchased (€ millions)
January 3 - 31, 2022	1,107,187	630.21	1,107,187	3,741.9
February 1 - 28, 2022	1,150,011	572.80	2,257,198	3,083.2
March 1 - 31, 2022	1,241,647	575.99	3,498,845	2,368.0
April 1 - 30, 2022	808,095	573.12	4,306,940	1,904.9
May 1 - 31, 2022	675,117	522.70	4,982,057	1,552.0
June 1 - 30, 2022	717,092	488.27	5,699,149	1,201.9
July 1 - 31, 2022	666,112	467.26	6,365,261	890.6
August 1 - 31, 2022	673,412	541.36	7,038,673	526.1
September 1 - 30, 2022	907,391	466.94	7,946,064	102.4
October 1 - 31, 2022	237,399	431.23	8,183,463	—
November 1 - 30, 2022	152,323	568.91	8,335,786	11,913.3
December 1 - 23, 2022	203,001	558.33	8,538,787	11,800.0
Total	8,538,787	543.37

23. Net income per ordinary share

Basic net income per ordinary share is calculated by dividing net income by the weighted average number of ordinary

shares outstanding for that period.

The dilutive effect is calculated using the treasury stock method by dividing net income by the weighted average

number of ordinary shares outstanding for that period plus shares applicable to options and conditional shares

(dilutive potential ordinary shares). The calculation of diluted net income per ordinary share does not assume exercise

of options when exercise would be anti-dilutive. Excluded from the diluted weighted average number of shares

outstanding calculation are cumulative preference shares contingently issuable to the preference share foundation,

since they represent a different class of stock than the ordinary shares.

The basic and diluted net income per ordinary share has been calculated as follows:


Year ended December 31 (€, in millions, except per share data)	2020	2021	2022
Net income	3,696.8	6,134.6	6,395.8

Weighted average number of shares outstanding	418.3	409.8	397.7
Basic net income per ordinary share	8.84	14.97	16.08

Weighted average number of shares outstanding	418.3	409.8	397.7
Plus shares applicable to options and conditional shares	0.8	0.6	0.3
Diluted weighted average number of shares	419.1	410.4	398.0
Diluted net income per ordinary share	8.82	14.95	16.07

24. Vulnerability due to certain concentrations

We rely on outside vendors for components and subassemblies used in our systems including the design thereof,

each of which is obtained from a single supplier or a limited number of suppliers. Our reliance on a limited group of

suppliers involves several risks, including a potential inability to obtain an adequate supply of required components,

reduced control over pricing and the risk of untimely delivery of these components and subassemblies.

25. Financial risk management

We are exposed to certain financial risks such as foreign currency risk, interest rate risk, credit risk, liquidity risk and

capital risk. Our overall risk management program focuses on the unpredictability of financial markets and seeks to

minimize potentially adverse effects on our financial performance. Our risk management program focuses

appropriately on the current environment of uncertainty in the financial markets.

A key element within our risk management program is our long held prudent financing policy, which is based on three

foundational elements:

–Liquidity: Maintain sufficient liquidity to ensure continued business growth and to provide buffer for cash flow

volatility

–Capital structure: Maintain a capital structure that targets a solid investment grade credit rating

–Cash return: Provide a sustainable dividend per share that will grow over time, paid quarterly, while returning

excess cash to shareholders through share buybacks or capital repayment

We use derivative financial instruments to hedge certain risk exposures. None of these transactions are entered into

for trading or speculative purposes. We use market information to determine the fair value of our derivative financial

instruments.

Foreign currency risk management

Our Consolidated Financial Statements are expressed in euros. Accordingly, our results of operations are exposed to

fluctuations in exchange rates between the euro and other currencies. Changes in currency exchange rates can

result in losses in our Consolidated Financial Statements. We are particularly exposed to fluctuations in the exchange

rates between the US dollar and the euro, and to a lesser extent to the Japanese yen, the South Korean won, the

Taiwanese dollar and Chinese yuan, in relation to the euro. We incur costs of sales predominantly in euros with

portions also denominated in US and Taiwanese dollars. A small portion of our operating results are driven by

movements in currencies other than the euro, US dollar, Japanese yen, South Korean won, Taiwanese dollar or

Chinese yuan.

Foreign currency sensitivity

The following table details our sensitivity to a 10.0% strengthening of foreign currencies against the euro. The

sensitivity analysis includes foreign currency denominated monetary items outstanding and adjusts their translation at

the period end for a 10.0% strengthening in foreign currency rates. A positive amount indicates an increase in net

income or equity.


Year ended December 31 (€, in millions)	2021		2022
	Impact on net income	Impact on equity	Impact on net income	Impact on equity
US dollar	(6.9)	51.5	(7.2)	65.3
Japanese yen	(2.2)	(32.9)	(0.1)	(16.6)
Taiwanese dollar	(3.7)	—	(12.8)	—
Other currencies	6.2	—	(1.3)	—
Total	(6.6)	18.6	(21.4)	48.7

It is our policy to limit the effects of currency exchange rate fluctuations on our Consolidated Statement of Profit or

Loss. The impact on net income reflects our net exposure to currencies other than the euro at year-end 2022. The

negative effect on net income as presented in the table above for 2022 is mainly attributable to timing differences

between the arising and hedging of exposures.

The effects of the fair value movements of cash flow hedges entered into for US dollar and Japanese yen transactions

are recognized in equity. The effect on 2022 compared to 2021 for both US dollar and Japanese yen is mainly the

result of the change in outstanding cash flow hedges.

For a 10.0% weakening of the foreign currencies against the euro, there would be approximately an equal but

opposite effect on net income and equity.

Foreign currency risk policy

It is our policy to hedge material transaction exposures, such as forecasted sales and purchase transactions. We

hedge these exposures through the use of forward foreign exchange contracts.

Foreign exchange contracts

The notional principal amounts of the outstanding forward foreign exchange contracts are mainly denominated in US

dollar, Japanese yen, Taiwanese dollar, South Korean won and Chinese yuan at December 31, 2022 are respectively

USD 1.0 billion, JPY 43.9 billion, TWD 18.5 billion, KRW 99.0 billion and CNY 1.0 billion (2021: USD 0.6 billion, JPY

44.5 billion, TWD 2.5 billion, KRW 11.9 billion and CNY 0.6 billion).

The hedged highly probable forecasted transactions denominated in foreign currency are expected to occur at

various dates during the coming 12 months. Gains and losses recognized in OCI on forward foreign exchange

contracts included in a hedge relationship will be recognized in the Consolidated Statement of Profit or Loss in the

period during which the hedged forecasted transactions affect the Consolidated Statement of Profit or Loss.

In 2022, we recognized a transfer to net income of €66.5 million gain (2021: €22.2 million loss; 2020: €2.3 million

gain) in the Consolidated Statement of Profit or Loss resulting from effective cash flow hedges for forecasted sales

and purchase transactions that occurred in the year. Furthermore, we recognized a net amount of €3.6 million gain in

the Consolidated Statement of Profit or Loss resulting from derivative financial instruments measured at fair value

through profit or loss (2021: €7.9 million loss; 2020: €28.2 million gain), which is mainly offset by the revaluation of the

hedged monetary items.

OCI balance unrealized gains and losses on financial instruments from foreign exchange contracts

Outstanding accumulated OCI balances unrealized gains and losses on financial instruments consist of:

–Outstanding anticipated gains and losses of foreign currency denominated forecasted purchase transactions. As of

December 31, 2022, outstanding accumulated OCI includes €5.5 million representing the total anticipated gain to

be released to cost of sales (2021: gain €20.8 million and 2020: loss €26.1 million), (net of taxes: 2022: gain €4.7

million 2021: gain €17.7 million; 2020: loss €22.7 million), which will offset the euro equivalent of foreign currency

denominated forecasted purchase transactions. All amounts are expected to be released over the next 12 months.

–Outstanding anticipated loss to be realized to sales. As of December 31, 2022, outstanding accumulated OCI

includes gain €3.4 million (2021: loss €1.2 million; 2020: gain €0.4 million), (net of taxes: 2022: gain €2.9 million

2021: loss €1.0 million; 2020: gain €0.4 million), representing the total anticipated gain to be released to sales.

The effectiveness of all contracts for which we apply hedge accounting is monitored on a quarterly basis throughout

the life of the hedges. During 2022, 2021 and 2020, no ineffective hedge relationships were recognized.

Interest rate risk management

We have interest-bearing assets and liabilities that expose us to fluctuations in market interest rates, managed

through interest rate swaps.

Interest rate sensitivity

The sensitivity analysis below has been determined based on the exposure to interest rates for both derivative

financial and non-derivative financial instruments at the Consolidated Statement of Financial Position date with the

stipulated change taking place at the beginning of the financial year and held constant throughout the reporting

period. The table below shows the effect of a 1.0% increase in interest rates on our net income and equity. A positive

amount indicates an increase in net income and equity.


Year ended December 31 (€, in millions)	2021		2022
	Impact on net income	Impact on equity	Impact on net income	Impact on equity
Effect of a 1.0% increase in interest rates	45.9	—	43.8	—

The positive effect on net income mainly relates to our total amount of cash and cash equivalents and short-term

investments being higher than our total floating debt position, which is excluding the Eurobonds issued in 2020.

For a 1.0% decrease in interest rates there would be approximately an equal but opposite effect on net income and

equity.

Hedging policy interest rates

We use interest rate swaps to minimize the net interest exposure for the group by aligning the interest terms of the

available cash and the interest bearing debt. There may be residual interest rate risk to the extent the asset and

liability positions do not fully offset.

Interest rate swaps

The notional principal amount of the outstanding interest rate swap contracts as of December 31, 2022 was €3.0

billion (2021: €3.0 billion). During 2022, these outstanding hedges were highly effective in hedging the fair value

exposure to interest rate movements. The changes in fair value of the Eurobonds were included in the Consolidated

Statement of Profit or Loss in the same period as the changes in the fair value of the interest rate swaps. We did not

enter into interest rate swaps in connection with the Eurobonds issued in 2020.

Credit risk management

Financial instruments that potentially subject us to significant concentration of credit risk consist principally of Cash

and cash equivalents, Short-term investments, Derivative financial instruments used for hedging activities, Accounts

receivable and Finance receivables and prepayments to suppliers.

Cash and cash equivalents, Short-term investments and Derivative financial instruments contain an element of risk of

the counterparties being unable to meet their obligations. Our risk management program focuses appropriately on

the current environment of uncertainty in the financial markets. We invest our Cash and cash equivalents and Short-

term investments in short-term deposits with financial institutions that have investment grade credit ratings and in

government and or government-related bodies that have investment grade credit ratings and in money market and

other investment funds that invest in high-rated debt securities. To mitigate the risk that our counterparties in hedging

transactions are unable to meet their obligations, we enter into transactions with a limited number of major financial

institutions that have investment grade credit ratings and closely monitor their creditworthiness. All credit ratings are

rated by credit rating institutions like for instance S&P, Moody’s or Fitch. Concentration risk is mitigated by limiting the

exposure to each of the individual counterparties.

Our customers consist of integrated circuit manufacturers located throughout the world. We perform ongoing credit

evaluations of our customers’ financial condition. We mitigate credit risk through additional measures, including the

use of down payments, letters of credit, and contractual ownership retention provisions. Retention of ownership

enables us to recover the systems in the event a customer defaults on payment.

Liquidity risk management

Our principal sources of liquidity consist of Cash and cash equivalents, Short-term investments and available credit

facilities with the objective to maintain sufficient liquidity to ensure continued business growth and to provide buffer

for cash flow volatility. In addition, we may from time to time raise additional funding in debt and equity markets. We

seek to ensure that our principal sources of liquidity will be sufficient to satisfy our liquidity requirements at all times.

Our liquidity needs are affected by many factors, some of which are based on the normal ongoing operations of the

business, and others that relate to the uncertainties of the global economy and the semiconductor industry. Although

our cash requirements fluctuate based on the timing and extent of these factors, we believe that cash generated from

operations, together with our other sources of liquidity are sufficient to satisfy our current requirements, including our

expected capital expenditures and debt servicing.

We intend to return cash to our shareholders on a regular basis in the form of dividend payments and, subject to our

actual and anticipated liquidity requirements and other relevant factors, share buybacks or capital repayment.

Our liquidity analysis of derivative financial instruments is as follows:


	Total	< 1 year	1-3 years	3-5 years	After 5 years
Cash outflows
Currency contracts	1,994.6	1,994.6	—	—	—
Interest rate swaps	454.8	106.9	183.4	99.9	64.6
Cash inflows
Currency contracts	1,975.7	1,975.7	—	—	—
Interest rate swaps	229.7	61.6	69.9	53.8	44.4

For interest rate swaps included in above table the amounts disclosed have been determined by reference to the

projected interest rates as illustrated by the yield curves as at December 31, 2022. For more information on our

contractual obligations, including the liquidity analysis in relation to our borrowings, see Note 17 Commitments and

contingencies. Additionally, other financial liabilities (including trade payables) are expected to be settled within one

year.

Capital risk management

Our objectives when managing our capital structure are to safeguard our ability to satisfy our capital providers by

maintaining a capital structure that ensures liquidity and supports a solid investment grade credit rating. The capital

structure includes both debt and the components of equity, in accordance with both US GAAP and EU-IFRS. The

capital structure is mainly altered by, among other things, adjusting the amount of dividends paid to shareholders, the

amount of share buybacks or capital repayment, and any changes in the level of debt. Our capital structure is formally

reviewed with the Supervisory Board each year in connection with our updated long-term financial plan and relevant

scenarios. The outcome of this year’s review confirmed to maintain our existing financing policy in relation to our

capital structure.

Our current credit rating from Moody’s is A2 (Stable), which is consistent with the rating on December 31, 2021. Our

current credit rating from Fitch is A (Stable), this rating was upgraded in April 2022 from A-.

Financial instruments

Accounting Policy

Financial assets

There are three principal classification categories for financial assets: (1) measured at amortized cost, (2) fair value

through other comprehensive income and (3) fair value through profit or loss. The classification of financial asset is

generally based on the business model in which a financial asset is managed and its contractual cash flow

characteristics. Hybrid financial instruments (derivatives embedded contracts where the host is a financial asset) are

assessed as a whole for classification.

Financial assets at amortized cost

Financial assets at amortized cost are non-derivative financial assets with fixed or determinable payments that are not

quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the

Consolidated Statement of Financial Position date. These are classified as non-current assets. Our Financial assets at

amortized comprise of accounts receivable, finance receivables, other assets, cash and cash equivalents (excluding

investments in money market funds, which are classified as financial assets at fair value through profit and loss) and

other non-current and current assets in the Consolidated Statement of Financial Position.

Financial assets at amortized cost are initially measured at fair value and subsequently at amortized cost using the

effective interest rate method.

We assess at each Consolidated Statement of Financial Position date whether there is objective evidence that a

financial asset or a group of financial assets is impaired.

Impairment of financial assets

Financial assets, other than those at fair value through profit or loss, are assessed using an 'expected credit

loss' (ECL) model each Consolidated Statement of Financial Position date. In accordance with the model we allocate

a probability of loss to each financial asset, based on data that is determined to be predictive of the risk of loss and

applying experienced credit judgment. These probabilities of default are defined using quantitative factors that are

indicative of the risk of default and are aligned to information from Bloomberg L.P.

Impairment on cash and cash equivalents, short term investments and finance receivables have been measured on

the 12-month expected loss basis and reflects the short maturities of the exposures. We consider our cash and cash

equivalents, short term investments and finance receivables to have a low credit risk based on the external credit

ratings of the counterparties. Impairment on trade receivables have been measured on the lifetime expected loss

basis.

Financial liabilities and equity instruments issued by ASML

Financial liabilities and equity instruments issued by ASML are classified according to the substance of the

contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Financial liabilities are either classified as financial liabilities at fair value through profit or loss or other financial

liabilities. An equity instrument is any contract that evidences a residual interest in the assets of ASML after deducting

all of its liabilities. Equity instruments issued by ASML are recorded at fair value, net of direct issue costs.

Financial liabilities at fair value through profit or loss are stated at fair value with any resultant gain or loss recognized

in the Consolidated Statement of Profit or Loss.

Other financial liabilities (including loans, borrowings and trade and other payables) are subsequently measured at

amortized cost using the effective interest rate method.

The classification of these financial instruments is:


Year ended December 31, 2022 (€, in millions)	Financial assets at fair value through profit or loss	Financial assets at amortized cost	Total
Assets as per statement of financial position date
Derivative financial instruments	17.3	—	17.3
Contract assets	—	131.9	131.9
Accounts receivable	—	5,323.8	5,323.8
Finance receivables	—	1,356.7	1,356.7
Other non-current and current assets	—	1,850.6	1,850.6
Short-term investments	107.7	—	107.7
Cash and cash equivalents	3,196.7	4,071.6	7,268.3
Loan receivable	—	364.4	364.4
Total	3,321.7	13,099.0	16,420.7


Year ended December 31, 2022 (€, in millions)	Financial liabilities at fair value through profit or loss	Other financial liabilities	Total
Liabilities as per statement of financial position date
Long-term debt1	—	4,260.4	4,260.4
Derivative financial instruments	261.2	—	261.2
Accrued and other liabilities	—	1,850.2	1,850.2
Accounts payable	—	2,563.5	2,563.5
Total	261.2	8,674.1	8,935.3

1.Long-term debt includes our Eurobonds. Because the Eurobonds serve as hedged item in a fair value hedge relationship, the carrying amount is

adjusted for fair value changes as a result of changes in market interest rates. See Note 16 Long-term debt, finance income and finance costs.


Year ended December 31, 2021 (€, in millions)	Financial assets at fair value through profit or loss	Financial assets at amortized cost	Total
Assets as per statement of financial position date
Derivative financial instruments	99.5	—	99.5
Contract assets	—	164.6	164.6
Accounts receivable	—	3,028.0	3,028.0
Finance receivables	—	1,568.6	1,568.6
Other non-current and current assets	—	1,526.9	1,526.9
Short-term investments	638.5	—	638.5
Cash and cash equivalents	2,928.3	4,023.5	6,951.8
Loan receivable	—	124.4	124.4
Total	3,666.3	10,436.0	14,102.3


Year ended December 31, 2021 (€, in millions)	Financial liabilities at fair value through profit or loss	Other financial liabilities	Total
Liabilities as per statement of financial position date
Long-term debt1	—	4,584.1	4,584.1
Derivative financial instruments	2.8	—	2.8
Accrued and other liabilities	—	1,683.8	1,683.8
Accounts payable	—	2,115.5	2,115.5
Total	2.8	8,383.4	8,386.2

1.Long-term debt includes our Eurobonds. Because the Eurobonds serve as hedged item in a fair value hedge relationship, the carrying amount is

adjusted for fair value changes as a result of changes in market interest rates. See Note 16 Long-term debt, finance income and finance costs.

The carrying amounts of the accounts receivable, finance receivables and other assets approximate their fair value.

The amounts reflected above represent our maximum exposure to credit risk for financial assets.

Accounting Policy – Derivative financial instruments and hedging activities

We measure all derivative financial instruments based on fair values derived from level 2 input criteria. We adopt

hedge accounting for hedges that are highly effective in offsetting the identified hedged risks taking into account

required effectiveness criteria.

Derivatives are initially recognized at fair value on the date a derivative contract is entered into and subsequently

remeasured. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as

a hedging instrument, and if so, the nature of the item being hedged. We designate derivatives as one of the

following:

–A hedge of an exposure relating to changes in the fair value of a recognized asset or liability, that is attributable to a

particular risk (fair value hedge).

–A hedge of an exposure relating to the variability in the cash flows of a recognized asset or liability, or of a

forecasted transaction, that is attributable to a particular risk (cash flow hedge).

–A hedge of the foreign currency exposure relating to a net investment in a foreign operation (net investment

hedge).

We assess at the inception of the transaction the relationship between hedging instruments and hedged items, as

well as our risk management objectives and strategy for undertaking various hedging transactions. We also assess,

both at hedge inception and on an ongoing basis, whether derivatives that are used in hedging transactions are

highly effective in offsetting changes in fair values or cash flows of hedged items. The cash flows resulting from the

derivative financial instruments are classified in the Consolidated Statements of Cash Flows according to the nature

of the hedged item.

Fair value hedge

Changes in the fair value of a derivative financial instrument, that is designated and qualified as a fair value hedge,

along with the gain or loss on the hedged asset or liability that is attributable to the hedged risk, are recorded in the

Consolidated Statement of Profit or Loss. We designate foreign currency hedging instruments as a hedge of the fair

value of a recognized asset or liability in non-functional currencies.

Hedge accounting is discontinued when we revoke the hedging relationship, the hedging instrument expires or is

sold, terminated or exercised, or no longer qualifies for hedge accounting. The adjustment to the carrying amount of

the hedged item arising from the hedged risk is amortized to the Consolidated Statement of Profit or Loss from that

date.

Interest rate swaps that are being used to hedge the fair value of fixed loan coupons payable are designated as fair

value hedges. The change in fair value is intended to offset the change in the fair value of the underlying fixed loan

coupons, which is recorded accordingly. The gain or loss relating to the ineffective portion of interest rate swaps

hedging fixed loan coupons payable is recognized in the Consolidated Statement of Profit or Loss as finance costs or

finance income.

Cash flow hedge

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of

the derivative is recognized in OCI and accumulated in the hedging reserve. The effective portion of changes in the

fair value of the derivative that is recognized in OCI is limited to the cumulative change in fair value of the hedged item,

determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value

of the derivative is recognized immediately in profit or loss.

When the hedged forecast transaction subsequently results in the recognition of a non-financial item such as

inventory, the amount accumulated in the hedging reserve and the cost of hedging reserve is included directly in the

initial cost of the non-financial item when it is recognized.

For all other hedged forecast transactions, the amount accumulated in the hedging reserve and the cost of hedging

reserve is reclassified to profit and loss in the same period or periods during which the hedged expected future cash

flows affect profit and loss.

Fair values of the derivatives

The following table summarizes the notional amounts and estimated fair values of our derivative financial instruments:


Year ended December 31 (€, in millions)	2021		2022
	Notional amount	Fair Value	Notional amount	Fair Value
Forward foreign exchange contracts	27.5	12.8	158.5	(18.8)
Interest rate swaps	3,000.0	83.9	3,000.0	(225.1)

The following table summarizes our derivative financial instruments per category:


Year ended December 31 (€, in millions)	2021		2022
	Assets	Liabilities	Assets	Liabilities
Interest rate swaps — fair value hedges	83.9	—	1.7	226.8
Forward foreign exchange contracts — cash flow hedges	15.0	2.2	3.0	18.1
Forward foreign exchange contracts — no hedge accounting	0.6	0.6	12.6	16.3
Total	99.5	2.8	17.3	261.2
Less non-current portion:
Interest rate swaps — fair value hedges	47.3	—	—	179.0
Total non-current portion	47.3	—	—	179.0
Total current portion	52.2	2.8	17.3	82.2

The fair value part of a hedging derivative financial instrument that has a remaining term of 12 months or less after

Statement of Financial Position date is classified as current asset or liability. When the fair value part of a hedging

derivative has a term of more than 12 months after Statement of Financial Position date, it is classified as non-current

asset or liability.

Fair value measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction

between market participants at the measurement date. The fair value measurement hierarchy prioritizes the inputs to

valuation techniques used to measure fair value as follows:

–Level 1: Valuations based on inputs such as quoted prices for identical assets or liabilities in active markets that the

entity has the ability to access.

–Level 2: Valuations based on inputs other than level 1 inputs such as quoted prices for similar assets or liabilities,

quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by

observable data for substantially the full term of the assets or liabilities.

–Level 3: Valuations based on inputs that are supported by little or no market activity and that are significant to the

fair value of the assets or liabilities.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or

liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). A financial instrument’s fair value

classification is based on the lowest level of any input that is significant in the fair value measurement hierarchy.

Financial assets and financial liabilities measured at fair value on a recurring basis

Investments in money market funds (included in our Cash and cash equivalents) have fair value measurements which

are all based on quoted prices for identical assets or liabilities.

Our Short-term investments consist of deposits with original maturities to the entity holding the investments longer

than three months and one year or less at the date of acquisition with financial institutions that have investment grade

credit ratings. The fair value of the deposits is determined with reference to quoted market prices in an active market

for similar assets or discounted cash flow analysis.

The principal market in which we execute our derivative contracts is the institutional market in an over-the-counter

environment with a high level of price transparency. The market participants usually are large commercial banks. The

valuation inputs for our derivative contracts are based on quoted prices and quoting pricing intervals from public data

sources; they do not involve management judgment.

The valuation technique used to determine the fair value of forward foreign exchange contracts (used for hedging

purposes) approximates the net present value technique which is the estimated amount that a bank would receive or

pay to terminate the forward foreign exchange contracts at the reporting date, taking into account current interest

rates and current exchange rates.

The valuation technique used to determine the fair value of interest rate swaps (used for hedging purposes) is the net

present value technique, which is the estimated amount that a bank would receive or pay to terminate the swap

agreements at the reporting date, taking into account current interest rates.

Four of our outstanding Eurobonds, with a combined principal amount of €3 billion, serve as hedged items in fair

value hedge relationships in which we hedge the variability of changes in the fair value of our Eurobonds due to

changes in market interest rates with interest rate swaps. No hedging is applied for our Eurobonds issued in 2020.

The fair value changes of the interest rate swaps are recorded on the Consolidated Statement of Financial Position

under derivative financial instruments and the carrying amounts of the Eurobonds are adjusted for the effective

portion of these fair value changes only. For the actual aggregate carrying amount and the fair value of our

Eurobonds, see Note 16 Long-term debt, finance income and finance costs.

The following tables present our financial assets and financial liabilities that are measured at fair value on a recurring

basis:


Year ended December 31, 2022 (€, in millions)	Level 1	Level 2	Level 3	Total
Assets measured at fair value
Derivative financial instruments1	—	17.3	—	17.3
Money market funds2	3,196.7	—	—	3,196.7
Short-term investments3	—	107.7	—	107.7
Total	3,196.7	125.0	—	3,321.7
Liabilities measured at fair value
Derivative financial instruments1	—	261.2	—	261.2
Assets and Liabilities for which fair values are disclosed
Loan receivable	—	—	307.9	307.9
Long-term debt4	4,072.8	—	—	4,072.8


Year ended December 31, 2021 (€, in millions)	Level 1	Level 2	Level 3	Total
Assets measured at fair value
Derivative financial instruments1	—	99.5	—	99.5
Money market funds2	2,928.3	—	—	2,928.3
Short-term investments3	—	638.5	—	638.5
Total	2,928.3	738.0	—	3,666.3
Liabilities measured at fair value
Derivative financial instruments1	—	2.8	—	2.8
Assets and Liabilities for which fair values are disclosed
Loan receivable	—	—	124.4	124.4
Long-term debt4	4,673.9	—	—	4,673.9

1.Derivative financial instruments consist of forward foreign exchange contracts and interest rate swaps.

2.Money market funds are part of our cash and cash equivalents.

3.Short-term investments consist of deposits with original maturities to the entity holding the investments longer than three months, but one year

or less at the date of acquisition. These deposits are valued at amortized costs which is close to their fair value. Their fair value is determined

with reference to quoted market prices in an active market for similar assets or discounted cash flow analysis.

4.Long-term debt mainly relates to Eurobonds.

There were no transfers between levels during the years ended December 31, 2022 and December 31, 2021.

Financial assets and financial liabilities that are not measured at fair value

The carrying amount of Cash and cash equivalents, Accounts payable, and other current financial assets and

liabilities approximate their fair value because of the short-term nature of these instruments. The fair value of the loan

to Carl Zeiss SMT GmbH is determined using a discounted cash flow model, which considers the present value of

expected cash receipts, discounted using a risk-adjusted discount rate.

Money market and investment funds measurement

The money market and investment funds qualify as available for sale securities. The fair value is close to the carrying

value due to short-term nature and since related to investment with investment grade credit ratings. Allowances for

credit losses and total unrealized gains and losses are close to nil. These money market funds can be called on a

daily basis. Investments and redemptions in money market funds are managed on a daily basis based triggered

through actual cash balances. Realized gain and losses on these money market funds are not significant given low

interest rates and high credit ratings. Costs of securities were close to nil. ASML does not have trading securities as

of December 31, 2022.

Deposits measurement

The deposits as part of the Cash and cash equivalents and Short-term investments qualify as securities held to

maturity. The amortized cost value is close to the fair value and carrying value due to short-term nature and since

related to investment with investment grade credit ratings. Allowance for credit losses and total unrealized gains and

losses are close to nil. Maturities are one year or less. No held to maturity securities were sold before expiration date.

Assets and liabilities measured at fair value on a non-recurring basis

In 2021 and 2022, we had no significant fair value measurements on a non-recurring basis from regular business

activities. We did not recognize any impairment charges for goodwill and other intangible assets during 2021 and

2022. For fair value measurements in relation to the acquisition of Berliner Glas (ASML Berlin GmbH) in 2020 and the

subsequent divestment of the non-semiconductor businesses in 2021, we refer to Note 10 Business combinations

and divestitures.

26. Related parties

Carl Zeiss SMT GmbH is our single supplier, and we are their single customer, of optical columns for lithography

systems. Carl Zeiss SMT GmbH is capable of developing and producing these items only in limited numbers and only

through the use of manufacturing and testing facilities in Oberkochen and Wetzlar, Germany. Our relationship with

Carl Zeiss SMT GmbH is structured as a strategic alliance that is run under the principle of ‘two companies, one

business’ and is focused on continuous innovation and improvement of operational excellence in the lithography

business.

We have a 24.9% interest in Carl Zeiss SMT Holding GmbH & Co. KG (ultimate parent is Carl Zeiss AG), which owns

100% of the shares in Carl Zeiss SMT GmbH. Based on the 24.9% investment, Carl Zeiss SMT Holding GmbH & Co.

KG and its subsidiaries are considered related parties.

We had several framework agreements in place with Carl Zeiss SMT GmbH since 1997.

2021 Framework Agreement

We entered into a new framework agreement in September 2021 with Carl Zeiss SMT GmbH, with effect as of the

beginning of 2021. This agreement, which we refer to as the 2021 framework agreement, replaced our key existing

framework agreements and aligned our business interests in order to focus on supporting our end customers. The

key components to the framework agreement are:

–A behavior and interaction model that fosters mutual respect and understanding

–A governance model that enables both companies to become more effective and aligned in their decision-making

and the execution of the strategy in the business via mutual approval on (i) certain investment decisions affecting

the lithography business, and (ii) the requirements of all products supplied by Carl Zeiss SMT GmbH

–New variable pricing model for purchases of products and services determined by the relevant annual financial

performance of both ASML and Carl Zeiss SMT GmbH in the lithography business

–Cash support via additional prepayments on product deliveries to ensure Carl Zeiss SMT GmbH a minimum

adjusted free cash flow floor in an annual period, if certain criteria are met

–A commitment from ASML to finance the capital expenditures of Carl Zeiss SMT GmbH up to €1 billion if Carl Zeiss

SMT GmbH's investments required to execute on the lithography business roadmap exceed certain thresholds,

measured annually

The financing takes place through loan agreements, with the key terms being:

–Ten years term loans with linear annual repayment after a three years grace period

–Interest rate subject to a floor of 0.01% and a cap of 1%

–Voluntary prepayment option without penalty

–The loan is secured by a parental guarantee from Zeiss AG

The two companies agreed in the 2021 framework agreement to perpetually continue their strategic alliance in order

to meet end customer demand, even in case of termination of the new framework agreement.

Transition from previous agreements

In 2016, we agreed with Carl Zeiss SMT GmbH to support their R&D costs, capital expenditures and supply chain

investments, in respect of EUV 0.55 NA (High-NA). With our new framework agreement, these payments will no

longer be made starting in 2021. We paid €969.1 million prior to the effective amendment date of the new framework

agreement, of which €305.5 million relating to R&D costs, which was not to be repaid, and €663.6 million relating to

capital expenditures and supply chain investments. The method of repayment for the capital expenditure and supply

chain investment support has been converted to be repaid annually to ASML between 2021 and 2032. This amount

is presented within Other Assets as Advanced payments to Carl Zeiss SMT GmbH. The new framework agreement

does not change the risk associated with these assets.

The cash outflows from ASML in the new variable pricing model for purchases of products and services was

determined to currently have 2 elements. The first is cash outflows for purchasing products and services reflected in

our inventory valuation and cost of sales. The second consists of R&D funding for High-NA to Carl Zeiss SMT GmbH,

for which these costs are presented within Research and development costs. For 2022, this amount was determined

to be €76.6 million (€61.2 million in 2021). Under the previous High-NA agreement, we incurred R&D costs of

€96.1 million in 2020.

An initial loan of €124.4 million has been provided on September 29, 2021 valued at amortized cost and presented

within the Consolidated Balance Sheet as Loan receivable. Under the previous High-NA agreement, we provided

support for capital expenditures and supply chain investments in 2020 of €221.4 million.

In addition to the High-NA support, we make non-interest bearing advance payments to support Carl Zeiss SMT

GmbH’s work-in-process. These payments are made to secure optical column deliveries and these advance

payments are settled through future lens or optical column deliveries, and are also presented in Other Assets. The

new framework agreement does not change our right to settle the previously paid amounts and does not change the

risk associated with these assets. We will continue to support Carl Zeiss SMT GmbH’s work-in-process under the

new framework agreement through prepayments on product deliveries.

The below table shows the outstanding balances with Carl Zeiss SMT Holding GmbH & Co. KG and its subsidiaries in

our Consolidated Statement of Financial Position:


Year ended December 31 (€, in millions)	2021	2022
Advance payments included in Other assets	982.8	1,100.3
Advance payments included in Property, plant & equipment	82.1	70.0
Loan receivable	124.4	364.4
Investment agreement for 24.9% equity	892.5	923.6
Accounts payable	482.7	269.2
Cost to be paid included in Accrued and other liabilities	—	111.2

The total purchases from Carl Zeiss SMT Holding GmbH & Co. KG and its subsidiaries are as follows:


Year ended December 31 (€, in millions)	2020	2021	2022
Total purchases	1,623.9	2,070.3	2,693.6

Other related party considerations

There have been no transactions between ASML or any of its subsidiaries, any other significant shareholder, any

director or officer, or any relative or spouse thereof, other than arrangements in the ordinary course business. During

our most recent fiscal year, there has been no, and at present there is no, outstanding indebtedness to ASML owed

by or owing to any director or officer of ASML or any associate thereof. Furthermore, ASML has not granted any

personal loans, guarantees, or the like to members of the Board of Management or Supervisory Board.

For further information in relation to key management personnel, comprising of our Board of Management members,

see Note 28 Board of Management and Supervisory Board Remuneration.

27. Subsidiaries and Associates

Details of our subsidiaries and associates at December 31, 2022 are as follows:


Legal Entity	Country of Incorporation
Subsidiaries of ASML Holding N.V. 1:
ASML Belgium BV	Belgium (Essen)
Hermes Microvision Co., Ltd. (Beijing)	China (Beijing)
ASML (Shanghai) Electrical Equipment Co. Ltd.	China (Shanghai)
ASML (Shanghai) Lithography Facilities Science and Technology Co. Ltd.	China (Shanghai)
Cymer Semiconductor Equipment (Shanghai) Co. Ltd.	China (Shanghai)
Hermes Microvision (Shanghai) Co., Ltd	China (Shanghai)
Brion Technologies (Shenzhen) Co. Ltd.	China (Shenzhen)
ASML France S.a.r.l.	France (Bernin)
ASML Verwaltungs GmbH	Germany (Berlin)
ASML Berlin GmbH (formerly Berliner Glas GmbH)	Germany (Berlin)
ASML Germany GmbH	Germany (Dresden)
ASML Participations Germany GmbH	Germany (Dresden)
ASML Hong Kong Logistic Services Ltd.	Hong Kong SAR
ASML Hong Kong Ltd.	Hong Kong SAR
ASML Ireland Ltd.	Ireland (Dublin)
ASML Israel (2001) Ltd.	Israel (Kiryat Gat)
ASML Italy S.r.l.	Italy (Avezzano)
ASML Japan Co. Ltd.	Japan (Tokyo)
Cymer Japan, Inc.	Japan (Tokyo)
ASML Equipment Malaysia Sdn. Bhd.	Malaysia (Georgetown, Pulau Pinang)
Cymer B.V.	Netherlands (Veldhoven)
ASML Netherlands B.V.	Netherlands (Veldhoven)
ASML Trading B.V.	Netherlands (Veldhoven)
Hermes Microvision Incorporated B.V.	Netherlands (Veldhoven)
ASML Singapore Pte. Ltd.	Singapore
Cymer Singapore Pte Ltd.	Singapore
ASML Korea Co. Ltd.	South Korea (Gyeonggi-Do)


Legal Entity	Country of Incorporation
ASML Repair Center Korea Ltd.	South Korea (Gyeonggi-Do)
Cymer Korea, Inc.	South Korea (Gyeonggi-Do)
ASML Taiwan Ltd.	Taiwan (Hsinchu City)
ASML Technology Taiwan Ltd.	Taiwan (Hsinchu City)
Cymer Southeast Asia Ltd.	Taiwan (Hsinchu City)
ASML (UK) Ltd.	UK (Edinburgh (Scotland))
Cymer, LLC.	US (Carson City, Nevada)
Hermes Microvision, Inc	US (Los Angeles, California)
ASML US, LLC	US (Wilmington, Delaware)
ASML US, LP	US (Wilmington, Delaware)
Associates and other entities in which ASML Holding N.V. has an interest:
Carl Zeiss SMT Holding GmbH & Co. KG (24.9% direct interest)	Germany (Oberkochen)
Carl Zeiss SMT GmbH (24.9% indirect interest)	Germany (Oberkochen)
DeeptechXL Fund I Coöperatief U.A. (18.05%)	Netherlands
HighTechXL Holding B.V. (17.65%)	Netherlands
HighTech XL Group B.V. (17.39%)	Netherlands
SecOp B.V. (0.58%)	Netherlands

1.All of our subsidiaries are (directly or indirectly) wholly-owned.

28. Board of Management and Supervisory Board Remuneration

The remuneration of the members of the Board of Management based on incurred accounting expenses in 2022, 2021 and 2020 was as follows (amounts are in € thousands):


Board of Management	Financial Year	Base salary	Pension	Other benefits	Total fixed	% Fixed	STI	LTI	Total variable	% Variable	Total Remuneration	Relative proportion fixed vs. variable
P.T.F.M. Wennink	2022	1,020	206	58	1,284	30.0%	961	2,035	2,996	70.0%	4,280	0.43
	2021	1,020	206	57	1,283	26.6%	1,098	2,439	3,537	73.4%	4,820	0.36
	2020	1,020	216	57	1,293	28.3%	1,135	2,136	3,271	71.7%	4,564	0.40
M.A. van den Brink	2022	1,020	206	57	1,283	30.0%	961	2,035	2,996	70.0%	4,279	0.43
	2021	1,020	206	56	1,282	26.6%	1,098	2,439	3,537	73.4%	4,819	0.36
	2020	1,020	216	57	1,293	28.3%	1,135	2,136	3,271	71.7%	4,564	0.40
F.J.M. Schneider-Maunoury	2022	694	141	36	871	30.6%	619	1,354	1,973	69.4%	2,844	0.44
	2021	694	115	36	845	26.8%	747	1,566	2,313	73.2%	3,158	0.37
	2020	694	122	36	852	29.1%	773	1,302	2,075	70.9%	2,927	0.41
R.J.M. Dassen	2022	694	116	51	861	30.4%	619	1,354	1,973	69.6%	2,834	0.44
	2021	694	115	51	860	22.6%	747	2,193	2,940	77.4%	3,800	0.29
	2020	694	100	51	845	22.2%	773	2,186	2,959	77.8%	3,804	0.29
C.D. Fouquet	2022	694	78	53	825	29.5%	619	1,354	1,973	70.5%	2,798	0.42
	2021	694	78	52	824	26.3%	747	1,566	2,313	73.7%	3,137	0.36
	2020	694	83	51	828	27.8%	773	1,374	2,147	72.2%	2,975	0.39
Total Board of Management	2022	4,122	747	255	5,124	30.1%	3,779	8,132	11,911	69.9%	17,035	0.43
	2021	4,122	720	252	5,094	25.8%	4,437	10,203	14,640	74.2%	19,734	0.35
	2020	4,122	737	252	5,111	27.1%	4,589	9,134	13,723	72.9%	18,834	0.37

F.J. van Hout is no longer part of the Board of Management as he retired from ASML in 2021.


Former Board of Management	Financial Year	Base salary	Pension	Other benefits	Total fixed	% Fixed	STI	LTI	Total variable	% Variable	Total Remuneration	Relative proportion fixed vs. variable
F.J. van Hout1	2021	231	47	16	294	11.4%	243	2,036	2,279	88.6%	2,573	0.13
	2020	694	122	47	863	29.4%	773	1,302	2,075	70.6%	2,938	0.42

Share-based payments

Performance-based share-based remuneration for current members of the Board of Management is disclosed in the table below. Fractional shares are rounded down to full shares for reporting purposes.


				Market based element		Non-Market based element
Board of Management	Grant date	Status	Full control	Number of shares at target	Fair value at grant date	Number of shares at target	Fair value at grant date	Total number of shares at target	Total number of shares at maximum (200%)	Vesting date	Number of vested shares on publication date	Year-end closing share price in year of vesting	End of lock-up date
P.T.F.M. Wennink	4/29/22	Conditional	No	709	596.0	1,655	533.5	2,364	4,727	1/1/25	n/a	n/a	1/1/27
	1/22/21	Conditional	No	1,053	635.6	2,455	454.9	3,508	7,016	1/1/24	n/a	n/a	1/1/26
	1/24/20	Unconditional	No	1,387	286.9	3,235	263.7	4,622	9,245	1/1/23	8,420	503.8	1/1/25
	7/19/19	Unconditional	No	2,217	245.4	5,173	194.4	7,390	14,780	1/1/22	13,326	706.7	1/1/24
	1/19/18	Unconditional	No	1,958	215.1	4,570	162.8	6,528	13,056	1/19/21	9,566	439.9	1/19/23
M.A. van den Brink	4/29/22	Conditional	No	709	596.0	1,655	533.5	2,364	4,727	1/1/25	n/a	n/a	1/1/27
	1/22/21	Conditional	No	1,053	635.6	2,455	454.9	3,508	7,016	1/1/24	n/a	n/a	1/1/26
	1/24/20	Unconditional	No	1,387	286.9	3,235	263.7	4,622	9,245	1/1/23	8,420	503.8	1/1/25
	7/19/19	Unconditional	No	2,217	245.4	5,173	194.4	7,390	14,780	1/1/22	13,326	706.7	1/1/24
	1/19/18	Unconditional	No	1,958	215.1	4,570	162.8	6,528	13,056	1/19/21	9,566	439.9	1/19/23
F.J.M. Schneider-Maunoury	4/29/22	Conditional	No	483	596.0	1,126	533.5	1,609	3,217	1/1/25	n/a	n/a	1/1/27
	1/22/21	Conditional	No	717	635.6	1,670	454.9	2,387	4,774	1/1/24	n/a	n/a	1/1/26
	1/24/20	Unconditional	No	858	286.9	2,001	263.7	2,859	5,718	1/1/23	5,208	503.8	1/1/25
	7/19/19	Unconditional	No	1,371	245.4	3,198	194.4	4,569	9,137	1/1/22	8,239	706.7	1/1/24
	1/19/18	Unconditional	No	1,125	215.1	2,626	162.8	3,751	7,502	1/19/21	5,496	439.9	1/19/23
R.J.M. Dassen	4/29/22	Conditional	No	483	596.0	1,126	533.5	1,609	3,217	1/1/25	n/a	n/a	1/1/27
	1/22/21	Conditional	No	717	635.6	1,670	454.9	2,387	4,774	1/1/24	n/a	n/a	1/1/26
	1/24/20	Unconditional	No	858	286.9	2,001	263.7	2,859	5,718	1/1/23	5,208	503.8	1/1/25
	7/19/19	Unconditional	No	1,371	245.4	3,198	194.4	4,569	9,137	1/1/22	8,239	706.7	1/1/24
	1/25/19	Unconditional	No	3,000	169.0	7,000	148.3	10,000	20,000	1/1/22	18,032	706.7	1/1/24
	7/20/18	Unconditional	No	657	274.6	1,531	185.0	2,188	4,376	1/19/21	3,207	439.9	1/19/23
C.D. Fouquet	4/29/22	Conditional	No	483	596.0	1,126	533.5	1,609	3,217	1/1/25	n/a	n/a	1/1/27
	1/22/21	Conditional	No	717	635.6	1,670	454.9	2,387	4,774	1/1/24	n/a	n/a	1/1/26
	1/24/20	Unconditional	No	858	286.9	2,001	263.7	2,859	5,718	1/1/23	5,208	503.8	1/1/25
	7/19/19	Unconditional	No	1,371	245.4	3,198	194.4	4,569	9,137	1/1/22	8,239	706.7	1/1/24
	7/20/18	Unconditional	No	844	274.6	1,969	185.0	2,813	5,626	1/19/21	4,122	439.9	1/19/23

Performance-based share-based remuneration for former members of the Board of Management is disclosed in below table. Fractional shares are rounded down to full shares for reporting purposes.


				Market-based element		Non-market-based elements
Former Board of Management	Grant date	Status	Full control	Number of shares at target	Fair value at grant date	Number of shares at target	Fair value at grant date	Total number of shares at target	Total number of shares at maximum (200%)	Vesting date	Number of vested shares on publication date	Year-end closing share price in year of vesting	End of lock-up date
F.J. van Hout	1/22/21	Conditional	No	239	635.6	557	454.9	796	1,592	1/1/24	n/a	n/a	1/1/26
	1/24/20	Unconditional	No	858	286.9	2,001	263.7	2,859	5,718	1/1/23	5,208	503.8	1/1/25
	7/19/19	Unconditional	No	1,371	245.4	3,198	194.4	4,569	9,137	1/1/22	8,239	706.7	1/1/24
	1/19/18	Unconditional	No	1,125	215.1	2,626	162.8	3,751	7,501	1/19/21	5,496	439.9	1/19/23

No (personal) loans have been granted to the members of the Board of Management or the Supervisory Board and no guarantees or the like have been granted in favor of any of the members of the Board of Management and the

Supervisory Board.

No severance payments were granted to members of the Board of Management and the Supervisory Board in 2022 and no variable remuneration has been clawed back.

Remuneration of the Supervisory Board in 2022

Overview of the remuneration of the Supervisory Board members based on incurred accounting expenses over the last five years (amounts are in € thousands):


	Membership fees 2022	Committee fees 2022	Allowances 2022	Proportion fixed vs. variable 2022	Total remuneration 2022	Total remuneration 2021	Total remuneration 2020	Total remuneration 2019	Total remuneration 2018
G.J. Kleisterlee	130	53	7	100:0	190	178	157	154	138
A.P. Aris	94	44	6	100:0	144	127	95	98	80
B.M. Conix	75	18	6	100:0	99	63	n/a	n/a	n/a
D.M. Durcan	75	35	16	100:0	126	112	57	n/a	n/a
D.W.A. East	75	18	6	100:0	99	93	59	n/a	n/a
T.L. Kelly	75	35	16	100:0	126	107	88	101	60
R.D. Schwalb	75	40	1	100:0	116	113	104	101	88
A.F.M. Everke	50	10	6	100:0	66	n/a	n/a	n/a	n/a
A.L. Steegen	50	10	6	100:0	66	n/a	n/a	n/a	n/a
Total	699	263	70	100:0	1,032	793	560	454	366

1. Allowances consist of fixed-expense allowances and allowances for intercontinental meetings.

remuneration principles set out in the 2021 Remuneration Policy for the Supervisory Board.

Overview of the remuneration awarded to the former Supervisory Board members in 2022, 2021 and 2020 (amounts

are in € thousands):


	Membership fees 2022	Committee fees 2022	Allowances 2022	Proportion fixed vs. variable 2022	Total remuneration 2022	Total remuneration 2021	Total remuneration 2020
J.M.C. Stork	25	10	5	100:0	40	113	100
D.A. Grose	n/a	n/a	n/a	n/a	n/a	36	117
C.M.S. Smits Nusteling	n/a	n/a	n/a	n/a	n/a	31	95
W.H. Ziebart	n/a	n/a	n/a	n/a	n/a	n/a	30
Total	25	10	5		40	180	342

1. Allowances consist of fixed-expense allowances and allowances for intercontinental meetings.

29. Principal accountant fees and services

KPMG has served as our independent auditor for the years ended December 31, 2022 and 2021. The following table

sets out the aggregate fees for professional audit services and other services rendered by KPMG and their member

firms and affiliates in 2022 and 2021:


Year ended December 31	2021			2022
(€, in thousands)	KPMG Accountants N.V.	KPMG Network	Total	KPMG Accountants N.V.	KPMG Network	Total
Audit fees	2,449	1,047	3,496	3,203	1,064	4,267
Audit-related fees	90	—	90	150	—	150
Tax fees	—	—	—	—	—	—
All other fees	27	—	27	47	9	56
Principal accountant fees	2,566	1,047	3,613	3,400	1,073	4,473

Audit fees and audit-related fees

Our independent registered public accounting firm is KPMG Accountants N.V. (KPMG), Amstelveen, The

Netherlands, Auditor Firm ID: 1012. Audit fees relate to the audit of the Financial Statements as set out in this Annual

Report, certain quarterly procedures, services related to offering memoranda, as well as our statutory and regulatory

filings of our subsidiaries. These fees relate to the audit of the respective Financial Statements, regardless of whether

the work was performed during the financial year. Other audit-related fees are related to assurance services on non-

financial information.

All other fees relate to certain agreed-upon procedures that are requested by the Supervisory Board or external

parties.

All audit fees, audit-related fees and permitted services that the independent auditor provides are subject to pre-

approval by the Audit Committee. The Audit Committee pre-approved 100% of the external audit plan and audit fees

for the years 2022 and 2021.

The Audit Committee monitors compliance with the Dutch, EU regulation and SEC rules on non-audit services

provided by an independent auditor, which outlines strict separation of audit and advisory services for Dutch public

interest entities.

30. Subsequent events

Subsequent events were evaluated up to February 15, 2023, which is the date the Consolidated Financial

Statements included in this Annual Report were approved.

On January 25, 2023 a total dividend for the year 2022 of €5.80 per ordinary share was announced.

An interim dividend of €1.37 per ordinary share will be made payable on February 15, 2023.

Recognizing this interim dividend and the 2 interim dividends of €1.37 per ordinary share paid in 2022, this leads to a

final dividend proposal to the General Meeting of €1.69 per ordinary share.

Veldhoven, the Netherlands

February 15, 2023

Prepared by

The Board of Management:

Peter T.F.M. Wennink

Martin A. van den Brink

Roger J.M. Dassen

Christophe D. Fouquet

Frédéric J.M. Schneider-Maunoury



		Company Financial Statements

		IN THIS SECTION

		272	Company Balance Sheet
		273	Company Statement of Profit and Loss
		274	Notes to the Company Financial Statements



ASML ANNUAL REPORT 2022	STRATEGIC REPORT	GOVERNANCE	FINANCIALS	271

(Before appropriation of net income)


Year ended December 31 (€, in millions)	Notes	2021	2022
Fixed assets
Financial Fixed Assets	6	15,059.5	14,329.0
Derivative financial instruments	11	47.3	—
Other fixed assets		0.3	0.2
Total fixed assets		15,107.1	14,329.2

Current assets
Cash and cash equivalents		5,111.3	4,712.3
Short-term investments	5	625.0	74.9
Amounts due from subsidiaries	12	1,006.5	2,122.5
Current tax assets		13.7	—
Other current assets		—	1.3
Derivative financial instruments	11	39.3	39.1
Total current assets		6,795.8	6,950.1









Total assets		21,902.9	21,279.3


Year ended December 31 (€, in millions)	Notes	2021	2022
Shareholders' equity
Issued and outstanding shares		36.5	36.3
Share premium		4,369.4	4,431.6
Treasury shares at cost		(2,422.8)	(4,641.3)
Retained earnings		1,663.0	2,301.9
Legal reserves		2,063.1	2,761.7
Net income		6,134.6	6,395.8
Total shareholders' equity	10	11,843.8	11,286.0

Non-current liabilities
Long-term debt	7	4,042.1	3,491.2
Deferred and other tax liabilities	4	339.8	420.2
Derivative financial instruments	11	—	179.0
Total non-current liabilities		4,381.9	4,090.4

Current liabilities
Amounts due to subsidiaries	12	5,145.8	4,876.1
Accrued and other liabilities		27.9	33.9
Derivative financial instruments	11	3.0	59.5
Current tax liabilities		—	188.8
Current portion of long-term debt	7	500.5	744.6
Total current liabilities		5,677.2	5,902.9

Total equity and liabilities		21,902.9	21,279.3


Year ended December 31 (€, in millions)	Notes	2021	2022
Other income		0.4	—
Research and development costs	9	—	—
Selling, general and administrative costs	9	(22.3)	(16.6)
Operating income		(21.9)	(16.6)

Finance income	3	9.1	44.5
Finance costs	3	(75.6)	(126.0)
Income before income taxes		(88.4)	(98.1)

Income tax benefit (expense)	4	(63.5)	3.4
Gain (loss) after taxes		(151.9)	(94.7)

Net income of subsidiaries	6	6,286.5	6,490.5
Net income		6,134.6	6,395.8

1. General Information

ASML Holding N.V. acts as a holding company within the group. The description of the activities and structure of the

group, as included in the Notes to the Consolidated Financial Statements, also apply to the Company Financial

Statements.

The Company Financial Statements have been prepared in accordance with Title 9, Book 2 of the Dutch Civil Code.

For setting the principles for the recognition and measurement of assets and liabilities and determination of results for

its Company Financial Statements, the Company makes use of the option provided in section 2:362(8) of the Dutch

Civil Code. This means that the principles for the recognition and measurement of assets and liabilities and

determination of the result (hereinafter referred to as principles for recognition and measurement) of the Company

Financial Statements are the same as those applied for the consolidated EU-IFRS financial statements. These

principles also include the classification and presentation of financial instruments, being equity instruments or financial

liabilities. In case no other principles are mentioned, refer to the accounting principles as described in the

consolidated financial statements. The Company Financial Statements should be read in conjunction with the

consolidated financial statements.

ASML Holding N.V. forms a tax unity together with certain of its Dutch subsidiaries, for purposes of Dutch tax laws

and are as such jointly and severally liable for the tax debts of the unity: The fiscal unity comprises of ASML Holding

N.V., ASML Netherlands B.V., ASML Trading B.V. and Hermes Microvision Incorporated B.V.

2. Summary of significant accounting policies

The accounting policies used in the preparation of the Company Financial Statements are the same as those used in

the preparation of the Consolidated Financial Statements (in accordance with article 362 sub 8 Part 9 of Book 2 of

the Dutch Civil Code). See the Notes to the Consolidated Financial Statements. In addition to those accounting

policies, accounting policies apply to the Company Financial Statements as included in the Notes to the Company

Financial Statements below.

The accompanying Company Financial Statements are stated in millions of euros unless otherwise indicated.

Investments in subsidiaries

Investments in subsidiaries are all entities in which the Company has directly or indirectly control. The Company

controls an entity when it is exposed, or has rights, to variable returns from its involvement with the subsidiary and

has the ability to affect those returns through its power over the subsidiary. Subsidiaries are recognized from the date

on which control is obtained by the Company and derecognized from the date that control by the Company over the

subsidiaries ceases. Investments in subsidiaries are accounted for in the Company Financial Statements according to

the equity method, with the principles for the recognition and measurement of assets and liabilities and determination

of results as set out in the Notes to the Consolidated Financial Statements.

Amounts due from subsidiaries and amounts due to subsidiaries

Amounts due from subsidiaries are recognized at fair value and subsequently measured at amortized cost, less

allowance for credit losses. The carrying amount of the accounts receivable approximates the fair value. Amounts

due to subsidiaries is initially recognized at fair value and subsequently measured at amortized cost.

Net income of subsidiaries

Net income of subsidiaries consists of the share of the Company in the result of these investments in subsidiaries.

Results on transactions involving the transfer of assets and liabilities between the Company and its investments in

subsidiaries and mutually between subsidiaries themselves, are eliminated to the extent that they can be considered

as not realized.

3. Finance income and costs

Finance income of €44.5 million (2021: €9.1 million) mainly consists of net finance income on our intercompany

current accounts with our subsidiaries.

Finance costs of €126.0 million (2021: €75.6 million) mainly consists of net finance costs on our Eurobonds and

related interest rate swaps and hedges, amortized financing costs, negative interest on Cash and cash equivalents

and currency results. For information regarding finance costs, see Consolidated Financial Statements - Notes to the

Consolidated Financial Statements - Note 16 Long-term debt, finance income and finance costs.

4. Income taxes

The reconciliation of the income tax expense from the Dutch statutory rate to the effective income tax rate is as

follows:


Year ended December 31 (€, in millions)	2021	%1	2022	%1
Income (loss) before income taxes, including net income of subsidiaries	6,198.1	100.0%	6,392.4	100.0%
Income tax provision based on ASML’s domestic rate	(1,549.5)	25.0%	(1,649.2)	25.8%
Adjustments in respect of tax exempt income	1,571.7	(25.4)%	1,674.6	(26.2)%
Adjustments in respect of prior years’ current taxes	6.7	(0.1)%	1.3	—%
Adjustments in respect of prior years’ deferred taxes	1.4	—%	(4.8)	0.1%
Movements in the liability for uncertain tax positions	(57.2)	0.9%	3.4	(0.1)%
Change in unrecognized deferred tax assets	(21.4)	0.3%	(23.7)	0.4%
Effect of change in tax rates	(2.9)	—%		—%
Other credits and non-taxable items	(12.3)	0.2%	1.8	—%
Income tax benefit (expense)	(63.5)	1.0%	3.4	(0.1)%

1.As a percentage of income before income taxes, including net income of subsidiaries.

ASML Holding N.V. forms a tax unity together with several of its Dutch subsidiaries and all tax positions attributable to

the fiscal unity are reported at the level of ASML Holding N.V. The deferred and other tax liabilities include net

deferred tax liabilities of €303.1 million (2021: €221.1 million) which mainly consist of a deferred tax liability on

capitalized R&D expenditures within the fiscal unity.

For information regarding the settlement of income taxes within the fiscal unity, see Note 8 Commitments, guarantees

and contingencies.

5. Short term investments

Investments with original maturities at the date of acquisition greater than 3 months and 1 year or less are presented

as short-term investments. Fair value changes in these investments, which are not temporary, are recognized in the

Company Statement of Profit or Loss. Short-term investments have insignificant interest rate risk.

See Consolidated Financial Statements - Notes to the Consolidated Financial Statements - Note 4 Cash and cash

equivalents and short-term investments.

6. Financial fixed assets

Financial Fixed Assets relates to our investments in subsidiaries and loans to subsidiaries. Changes in investments in

subsidiaries and loans to subsidiaries during 2022 and 2021 were as follows:


(in millions, €)	Investments	Loans	Total
Balance at January 1, 2021	18,776.4	16.8	18,793.2
Capital contributions / additions	495.7	18.2	513.9
Capital repayments / repayments of loans	—	—	—
Dividends received	(10,692.1)	—	(10,692.1)
Net income from subsidiaries	6,286.5	—	6,286.5
Effect of exchange rates	95.4	1.9	97.3
Derivative financial instruments	38.7	—	38.7
Proportionate share of other comprehensive income from associates	22.0	—	22.0
Balance at December 31, 2021	15,022.6	36.9	15,059.5

Capital contributions / additions	378.7	0.6	379.3
Capital repayments / repayments of loans	—	(10.4)	(10.4)
Dividends received	(7,689.9)	—	(7,689.9)
Net income from subsidiaries	6,490.5	—	6,490.5
Effect of exchange rates	69.5	1.6	71.1
Derivative financial instruments	(8.8)	—	(8.8)
Proportionate share of other comprehensive income from associates	37.7	—	37.7
Balance at December 31, 2022	14,300.3	28.7	14,329.0

A revolving credit facility agreement exists with one of the subsidiaries of ASML Holding N.V. The available credit

facility amounts to USD 30 million as of December 31, 2022 and bears variable interest. An amount of USD 30 million

(2021: USD 30 million) was outstanding under this credit facility at the end of 2022.

For a list of our main subsidiaries, see Consolidated Financial Statements - Notes to the Consolidated Financial

Statements - Note 27 Subsidiaries and Associates.

7. Long-term debt

Long-term debt and our current portion of long-term debt consist of our Eurobonds. See Consolidated Financial

Statements - Notes to the Consolidated Financial Statements - Note 16 Long-term debt, finance income and finance

costs.

8. Commitments, guarantees and contingencies

ASML Holding N.V. has assumed joint and several liabilities in accordance with article 403 Part 9 of Book 2 of The

Dutch Civil Code with respect to the following Dutch subsidiaries: ASML Netherlands B.V., Cymer B.V., ASML

Trading B.V. and HMI B.V. Furthermore, ASML Holding N.V. has guaranteed all liabilities outstanding at

December 31, 2022, until all are satisfied in full, in accordance with section 479C of the UK Companies Act 2006

with respect to its overseas subsidiary ASML (UK) Ltd (registered number SC176574).

From time to time, we provide guarantees to third parties in connection with transactions entered into by our

subsidiaries in the ordinary course of business. As of December 31, 2022, we have guarantees for a total of €80

million outstanding.

ASML Holding N.V. forms a tax unity together with certain of its Dutch subsidiaries, for purposes of Dutch tax laws

and are as such jointly and severally liable for the tax debts of the unity: The fiscal unity comprises as of

December 31, 2022 of ASML Holding N.V., ASML Netherlands B.V., ASML Trading B.V. and Hermes Microvision

Incorporated B.V. All tax positions attributable to the fiscal unity (current and deferred) are reported at the level of

ASML Holding N.V., whereby income tax expense is allocated to the Dutch subsidiaries based on the individual profit

before tax multiplied by the statutory tax rate. Within the fiscal unity, the tax positions are subsequently settled with

the subsidiaries.

9. Personnel

All employees of ASML Holding N.V. are based in the Netherlands. The average number of employees employed by

ASML Holding N.V. in 2022 is 5 (2021: 5).

For information regarding the remuneration of the (former) members of the Board of Management and Supervisory

Board see Consolidated Financial Statements - Notes to the Consolidated Financial Statements - Note 28 Board of

Management and Supervisory Board Remuneration.

Other benefits and expense reimbursement as disclosed in Consolidated Financial Statements - Notes to the

Consolidated Financial Statements - Note 28 Board of Management and Supervisory Board Remuneration include

social security costs for an amount of €45.2 thousand (2021: €45.5 thousand).

10. Shareholders' equity

(Before appropriation of net income)


Year ended December 31 (€, in millions)	Notes1	Share Capital2	Share Premium	Treasury Shares at Cost	Retained Earnings	Legal Reserves3	Net Income	Total
Balance at January 1, 2021		37.6	4,259.2	(863.2)	6,557.5	1,613.0	3,696.8	15,300.9
Prior year net income		—	—	—	3,696.8	—	(3,696.8)	—
Components of comprehensive income:
Net income		—	—	—	—	—	6,134.6	6,134.6
Share of OCI from associate		—	—	—	—	22.0	—	22.0
Foreign currency translation		—	—	—	—	95.4	—	95.4
Gain (loss) on financial instruments4	25	—	—	—	—	38.8	—	38.8
Total comprehensive income		—	—	—	—	156.2	6,134.6	6,290.8
Purchase of treasury shares		—	—	(8,560.3)	—	—	—	(8,560.3)
Cancellation of treasury shares		(1.2)	—	6,926.6	(6,925.4)	—	—	—
Share-based payments	20	—	131.7	—	—	—	—	131.7
Issuance of shares		0.1	(21.5)	74.1	(3.7)	—	—	49.0
Dividend paid		—	—	—	(1,368.3)	—	—	(1,368.3)
Development expenditures		—	—	—	(293.9)	293.9	—	—
Balance at December 31, 2021		36.5	4,369.4	(2,422.8)	1,663.0	2,063.1	6,134.6	11,843.8
Prior year net income		—	—	—	6,134.6	—	(6,134.6)	—
Components of comprehensive income:
Net income		—	—	—	—	—	6,395.8	6,395.8
Share of OCI from associate		—	—	—	—	37.7	—	37.7
Foreign currency translation		—	—	—	—	68.9	—	68.9
Gain (loss) on financial instruments4	25	—	—	—	—	(8.9)	—	(8.9)
Total comprehensive income		—	—	—	—	97.7	6,395.8	6,493.5
Purchase of treasury shares		—	—	(4,639.7)	—	—	—	(4,639.7)
Cancellation of treasury shares		(0.3)	—	2,333.7	(2,333.4)	—	—	—
Share-based payments	20	—	66.4	—	—	—	—	66.4
Issuance of shares		0.1	(4.2)	87.5	(1.6)	—	—	81.8
Dividend paid		—	—	—	(2,559.8)	—	—	(2,559.8)
Development expenditures		—	—	—	(600.9)	600.9	—	—
Balance at December 31, 2022		36.3	4,431.6	(4,641.3)	2,301.9	2,761.7	6,395.8	11,286.0

1.Note reference numbers included in the table above relate to the notes in the Consolidated Financial Statements.

2.As of December 31, 2022, the number of issued shares was 403,138,042. This includes the number of issued and outstanding shares of 394,589,411 and the number of treasury shares of 8,548,631. As of December 31, 2021, the number of issued shares was 406,475,276. This includes the

number of issued and outstanding shares of 402,601,613 and the number of treasury shares of 3,873,663.

3.Legal reserves consist of reserves that have to be established in certain circumstances in accordance with the Dutch Civil Code. The legal reserves consist of other comprehensive income from associate, the hedging reserve, the currency translation reserve and the reserve for capitalized

development expenditures made by our subsidiaries and are equal to the amounts as recorded in our Consolidated Financial Statements. See Consolidated Financial Statements - Notes to the Consolidated Financial Statements - Note 22 Shareholders’ equity.

4.The gain (loss) on financial instruments includes income taxes recognized directly in other comprehensive income for the amount of €(5.2) million (2021: €6.5 million, 2020: €(3.2) million).

For further information related to Equity, see Consolidated Financial Statements - Notes to the Consolidated Financial Statements - Note 22 Shareholders’ equity.

11. Derivative financial instruments

We use derivative financial instruments for the management of foreign currency risks and interest rate risks. See

Consolidated Financial Statements - Notes to the Consolidated Financial Statements - Note 25 Financial risk

management.

General

The Group has exposure to the following risks from its use of financial instruments:

–Credit risk;

–Liquidity risk; and

–Market risk (including foreign currency risk and interest rate risk).

In the Notes to the Consolidated Financial Statements, information is included about the Group’s exposure to each of

the above risks, the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s

management of capital.

These risks, objectives, policies and processes for measuring and managing risk, and the management of capital

apply also to the Company Financial Statements of ASML Holding N.V. Further quantitative disclosures are included

below.

Fair value

The fair values of most of the financial instruments stated on the Company Balance Sheet, including loans to

subsidiaries, accounts receivable, cash at bank and in hand and current liabilities, are close to their carrying amounts.

For further information, please see Note 6 Financial fixed assets and Note 12 Amounts due from / due to subsidiaries.

The estimated fair value of the forward foreign exchange contracts and interest rate swaps at December 31, 2022

and 2021 are:


As of December 31	2021		2022
(€, in millions)	Assets	Liabilities	Assets	Liabilities
Interest rate swaps — fair value hedges	83.9	—	1.7	226.8
Forward foreign exchange contracts — no hedge accounting	2.7	3.0	37.4	11.7
Total	86.6	3.0	39.1	238.5
Less non-current portion:
Interest rate swaps - fair value hedges	47.3	—	—	179.0
Total current portion	39.3	3.0	39.1	59.5

12. Amounts due from / due to subsidiaries

Interest on amounts due from subsidiaries is calculated based on monthly base rates plus a market-conform mark-

up. Interest on amounts due to subsidiaries is calculated based on monthly base rate, minus a small fee, with a

minimum of 0%. All balances due from/due to subsidiaries are repayable on demand.

13. Principal accountant fees and services

For information regarding auditor’s fees, see Consolidated Financial Statements - Notes to the Consolidated Financial

Statements - Note 29 Principal accountant fees and services.

14. Subsequent events

Refer to Note 30 Subsequent events as included in the Notes to the Consolidated Financial Statements.

Veldhoven, the Netherlands

February 15, 2023

Prepared by

The Board of Management:

Peter T.F.M. Wennink

Martin A. van den Brink

Roger J.M. Dassen

Christophe D. Fouquet

Frédéric J.M. Schneider-Maunoury



		Other information

		IN THIS SECTION

		280	Appropriation of profits
		280	Adoption of the Financial Statements
		280	Voting rights
		280	Branch offices
		281	Independent auditor’s report



ASML ANNUAL REPORT 2022	STRATEGIC REPORT	GOVERNANCE	FINANCIALS	279

Appropriation of profits

A brief summary of the most significant provisions of our Articles of Association has been included in Consolidated

Financial Statements - Notes to the Consolidated Financial Statements - Note 22 Shareholders’ equity.

Adoption of Financial Statements

The Board of Management will submit our Annual Report, together with an independent auditor’s report in respect

thereof, to the General Meeting of Shareholders for adoption.

Voting rights

We are subject to the relevant provisions of Dutch law applicable to large corporations (the "structuurregime"). These

provisions have the effect of concentrating control over certain corporate decisions and transactions in the hands of

the Supervisory Board. Members of the Board of Management are appointed by the Supervisory Board. The

Supervisory Board shall notify the General Meeting of intended appointments to the Board of Management. General

Meetings will be held at least once a year. We do not solicit from or nominate proxies for our shareholders. However,

shareholders and other persons entitled to attend General Meetings of Shareholders may be represented by proxies.

EGMs may be held as often as deemed necessary by the Supervisory Board or Board of Management and must be

held if one or more ordinary or cumulative preference shareholders jointly representing at least 10% of the issued

share capital make a written request to that effect to the SB and the BoM specifying in detail the business to be dealt

with.

Resolutions are adopted at General Meetings by an absolute majority of the votes cast (except where a different

proportion of votes are required by the Articles of Association or Dutch law) and there are generally no quorum

requirements applicable to such meetings. In the General Meeting each share confers the right to cast one vote.

Refer for further details including special voting rights to Consolidated Financial Statements - Notes to the

Consolidated Financial Statements - Note 22 Shareholders’ equity.

Branch offices

ASML has branch offices in Belgium, France, Ireland, Israel, Italy, Russia, Korea and Taiwan that operate under the

respective trade names Cymer B.V. Belgium branch, Cymer B.V. France branch, Cymer B.V. Ireland branch, Cymer

B.V. Israel branch, Cymer B.V. Italy branch, ASML Hong Kong Ltd. Korea branch, The Branch of the Private Limited

Liability Company ASML Trading B.V., ASML Hong Kong Ltd. Taiwan branch, ASML Taiwan Ltd. Tainan branch,

Hermes Microvision Incorporated B.V. STSP branch and Hermes Microvision Incorporated B.V. - Taiwan branch.

Independent auditor’s report

To: the General Meeting of Shareholders and the Supervisory Board of ASML Holding N.V.

Report on the audit of the financial statements 2022 included in the Annual Report

Our opinion

In our opinion:

–the accompanying consolidated financial statements give a true and fair view of the financial position of ASML

Holding N.V. as at December 31, 2022 and of its result and its cash flows for the year then ended, in accordance

with International Financial Reporting Standards as adopted by the European Union (EU-IFRS) and with Part 9 of

Book 2 of the Dutch Civil Code.

–the accompanying company financial statements give a true and fair view of the financial position of ASML Holding

N.V. as at December 31, 2022 and of its result for the year then ended in accordance with Part 9 of Book 2 of the

Dutch Civil Code.

What we have audited

We have audited the financial statements 2022 of ASML Holding N.V. (the Company) based in Veldhoven. The

financial statements include the consolidated financial statements and the company financial statements.

The consolidated financial statements comprise:

1.the consolidated statement of financial position as at December 31, 2022;

2.the following consolidated statements for 2022: profit or loss, comprehensive income, changes in equity and cash

flows; and

3.the notes comprising a summary of the significant accounting policies and other explanatory information.

The company financial statements comprise:

1.the company balance sheet as December 31, 2022;

2.the company statement of profit or loss for 2022; and

3.the notes comprising a summary of the significant accounting policies and other explanatory information.

Basis for our opinion

We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our

responsibilities under those standards are further described in the ‘Our responsibilities for the audit of the financial

statements’ section of our report.

We are independent of ASML Holding N.V. in accordance with the ‘Verordening inzake de onafhankelijkheid van

accountants bij assurance-opdrachten’ (ViO, Code of Ethics for Professional Accountants, a regulation with respect

to independence) and other relevant independence regulations in the Netherlands. Furthermore, we have complied

with the ‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of Ethics).

We designed our audit procedures in the context of our audit of the financial statements as a whole and in forming

our opinion thereon. The information in respect of going concern, fraud and non-compliance with laws and

regulations, climate-related risks and the key audit matter was addressed in this context, and we do not provide a

separate opinion or conclusion on these areas.

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Information in support of our opinion

Summary

Materiality

–Materiality of EUR 250 million

–3.4% of income before income taxes of 2022

Group audit

–Coverage of 96% of total assets

–Coverage of 96% of total net sales

Key audit matter

–Revenue recognition - Identification of distinct performance obligations and allocation of the total contract

consideration, and revenue cut-off

Fraud/Noclar, Going concern and Climate related risks

–Fraud & Non-compliance with laws and regulations (Noclar) related risks: presumed risk of management override of

controls and revenue recognition, identified in the auditing standards

–Going concern related risks: no going concern risks identified

–Climate related risks: We have considered the impact of climate-related risks on the financial statements and

described our approach and observations in the section ‘Audit response to climate-related risks’.

Opinion

–Unqualified

Materiality

Based on our professional judgement we determined the materiality for the financial statements as a whole at EUR

250 million (2021: EUR 210 million). The materiality is determined with primary reference to income before income

taxes. We consider income before income taxes as the most appropriate benchmark following our analysis of the

common information needs of users of the financial statements. We have also taken into account misstatements and/

or possible misstatements that in our opinion are material for the users of the financial statements for qualitative

reasons.

We agreed with the Audit Committee of the Supervisory Board that misstatements in excess of EUR 12.5 million

would be reported to them, as well as smaller misstatements that in our view must be reported on qualitative

grounds.

Scope of the group audit

ASML Holding N.V. is at the head of a group of entities. The financial information of this group is included in the

financial statements of ASML Holding N.V. The group has a high level of centralization of operations in the

Netherlands, which our audit approach mirrors.

For the residual population not in scope we performed among others analytical procedures in order to corroborate

that our scoping remained appropriate throughout the audit.

By performing the procedures mentioned above, we have been able to obtain sufficient and appropriate audit

evidence about the group’s financial information to provide an opinion about the financial statements.

The audit coverage of total assets and total net sales is 96% and 96%, respectively.

Audit response to the risk of fraud and non-compliance with laws and regulations

In chapter Strategic Report of the annual report, management describes its procedures in respect of the risk of fraud

and non-compliance with laws and regulations and the supervisory board reflects on this.

As part of our audit, we have gained insights into the Company and its business environment, and assessed the

Company’s risk management and internal controls in relation to fraud and non-compliance. Our procedures included,

among other things, assessing the Company’s Code of Conduct, Speak Up Policy, incidents register and its

procedures to investigate indications of possible fraud and non-compliance. Furthermore, we performed relevant

inquiries with management, the Audit Committee of the Supervisory Board and other relevant functions, such as

Internal Audit and Legal. As part of our audit procedures, we:

–obtained an understanding of how the company uses information technology (IT) and the impact of IT on the

financial statements, including the potential for cybersecurity incidents to have a material impact on the financial

statements;

–assessed other positions held by management and other employees and paid special attention to procedures and

governance/compliance in view of possible conflicts of interest;

–evaluated investigation reports on indications of possible fraud and non-compliance;

–evaluated correspondence with supervisory authorities and regulators as well as legal confirmation letters;

In addition, we performed procedures to obtain an understanding of the legal and regulatory frameworks that are

applicable to the Company and identified the following areas as those most likely to have a material effect on the

financial statements:

–Export legislation (reflecting the Company’s global customer base);

–Information protection legislation (reflecting the Company’s significant number of patents and research and

development expenditures);

–Employment legislation (reflecting the Company’s significant and geographically diverse work force, including

General Data Protection Regulation).

We, together with our (forensics) specialists, evaluated the fraud and non-compliance risk factors to consider whether

those factors indicate a risk of material misstatement in the financial statements. This included the assessment with

respect to the potential violation of export control regulations as explained in the Commitments and contingencies

note.

Based on the above and on the auditing standards, including the relevant presumed risks laid down in the auditing

standards, we identified fraud risks with respect to revenue recognition and management override of controls, of

which the first is described as part of our key audit matter.

Management override of controls (a presumed risk)

Risk:

–Management is in a unique position to manipulate accounting records and prepare fraudulent financial statements

by overriding controls that otherwise appear to be operating effectively We identified this risk primarily in the areas

where judgment is involved as management may rationalize unrealistic or unreliable assumptions used in

developing estimates, notably in relation to revenue recognition and valuation of deferred tax assets.

Responses:

–We evaluated the design and the implementation and, where considered appropriate, tested the operating

effectiveness of internal controls that mitigate fraud and non-compliance risks, such as processes related to journal

entries and estimates.

–We performed a data analysis of high-risk journal entries and evaluated key estimates and judgments for bias by

the Company’s management, including retrospective reviews of prior years’ estimates with respect to revenue

recognition (we refer to our key audit matter) and valuation of the deferred tax assets. Where we identified instances

of unexpected journal entries or other risks through our data analytics, we performed additional audit procedures to

address each identified risk, including testing of transactions back to source information.

–We performed data analyses on selected balance sheet and profit and loss balances to identify possible increased

fraud risks.

–We incorporated elements of unpredictability in our audit, including changing our criteria for selecting high risk

journal entries.

Our evaluation of procedures performed related to fraud and non-compliance with laws and regulations did not result

in an additional key audit matter.

We communicated our risk assessment, audit responses and results to management and the Audit Committee of the

Supervisory Board.

Our audit procedures did not reveal indications and/or reasonable suspicion of fraud and non-compliance that are

considered material for our audit.

Audit response to going concern – no significant going concern risks identified

Management has performed its going concern assessment and has concluded that it is justified that the financial

reporting is prepared on a going concern basis. To assess the management’s assessment, we have performed,

among other things, the following procedures:

–we considered whether management’s assessment of the going concern risks includes all relevant information of

which we are aware as a result of our audit;

–we analyzed the Company’s financial position as at year-end and compared it to the previous financial year in terms

of indicators that could identify significant going concern risks.

The outcome of our risk assessment procedures did not give reason to perform additional audit procedures.

Audit response to climate-related risks

The Company has set out its ambitions relating to climate change in the chapter ”ESG at a glance” of the annual

report. The Company’s key ambition is to achieve carbon neutrality with net zero emissions in its operations (scope 1

and 2) by 2025. Additionally, it aims to achieve net zero emissions in its supply chain by 2030, and net zero

emissions from the use of its products by its customers (scope 3) by 2040. In addition, it is the Company’s goal to

have zero waste from operations to landfill or incineration by 2030.

Management, supported by its external advisor, has performed scenario analyses, against the background of the

Company’s business and operations, how climate-related risks and opportunities and the Company’s own ambitions

could have a significant impact on its business or could impose the need to adapt its strategy and operations. These

analyses include both transition and physical risks. Management considers that these scenarios provide a reasonable

range of potential impacts applicable to the Company. Management prepared its assessment based on a holistic

approach concluding that no material impact is identified on the FY2022 financial statements.

As part of our audit we performed a risk assessment of the impact of climate-related risk and the ambitions of the

Company in respect of climate change on the FY2022 financial statements and our audit approach. In doing this we

performed the following:

–To understand management's assessment we:

–performed inquiries with relevant functions in the Company including the Board of Management and the Audit

Committee of the Supervisory Board;

–inspected relevant supporting documentation, such as management’s climate risk analysis.

–We have evaluated climate related fraud risk factors, including the KPI related to EUV energy use per wafer pass as

linked to Management’s remuneration. We have assessed whether this results in a risk of material misstatement of

the financial statements due to fraud.

–We have made use of KPMG climate risk experts to:

1) assess the Company’s climate risk assessment and reporting in line with TCFD recommendations,

2) inspect the Company’s climate risk adaptation and mitigation assessment (including climate change strategy), and

3) obtain insights into potential business implications of the climate risks and opportunities identified on ASML. These

insights provided us with a better understanding how climate-related risks and opportunities may affect ASML and

the preparation of the 2022 financial statements.

KPMG’s climate risk experts were involved in obtaining an understanding of management’s process, participated in

the inquiry sessions and inspected the aforementioned documentation.

Based on the procedures performed we considered whether there is a risk of material misstatement specific to

climate relative to the going concern assumption and the valuation of long lived assets. Considering that the evolution

of the Company’s product offering is allowing for more energy efficient operations of end customers, and the risk

assessment work performed, we did not identify a risk of material misstatement specific to climate and thus no

further audit response is considered necessary.

Furthermore we have read the other information presented in the annual report supplementing the financial

statements with respect to climate-related risks and considered whether such information contains material

inconsistencies with the financial statements or our knowledge obtained through the audit.

Our key audit matter

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the

financial statements. We have communicated the key audit matter to the Supervisory Board. The key audit matter is

not a comprehensive reflection of all matters discussed.

This matter was addressed in the context of our audit of the financial statements as a whole and in forming our

opinion thereon, and we do not provide a separate opinion on this matter.

Revenue recognition - Identification of distinct performance obligations and allocation of the total

contract consideration, and revenue cut-off

Description

As disclosed in note 2 to the consolidated financial statements, net system sales was EUR 15,430.3 million for the

year ended December 31, 2022. Sales of systems are usually entered into with customers under Volume Purchase

Agreements (VPAs). These VPAs contain multiple performance obligations, for example delivery of goods, installation,

warranty and training. Once these performance obligations are identified, the total contract consideration, including

discounts, offer of free goods or services and credits that can be used towards future purchases, is allocated to the

performance obligations.

We identified revenue recognition, and specifically the identification of performance obligations in certain VPAs as well

as the allocation of the total contract consideration, including discounts, offer of free goods or services and credits

that can be used towards future purchases, as a key audit matter since it is inherently judgmental, and complex. As a

result, evaluating the Company’s judgments regarding the identified performance obligations, notably the estimate of

the number of systems to be delivered, and the allocation of the total contract consideration to these performance

obligations required a high degree of auditor judgment.

In addition, given the high value of individual systems, we identified a risk that revenue related to certain system sales

is not recognized when control is transferred to the customer, resulting in revenue not being recognized in the correct

accounting period.

These risks inherently include the fraud risk that management deliberately overstates or understates revenue, as

management may feel pressure to achieve planned results.

Our response

The following are the primary procedures we performed to address this key audit matter. We evaluated the design

and tested the operating effectiveness of certain internal controls related to the key audit matter. This includes

controls related to VPA assessments for the identification of performance obligations and the allocation of the total

contract consideration to these performance obligations, the correct application to individual sales transactions, and

transfer of control assessments for revenues recognized around accounting period end.

We evaluated the identification of performance obligations and the allocation of the total contract consideration by

inspecting a selection of VPAs and the related documentation, performing inquiries with relevant operational functions

in the Company, and performing sensitivity analyses, to assess the impact of the estimated number of systems to be

delivered on the allocation. Furthermore, we tested a selection of recognized sales transactions under VPAs and

performed a retrospective review of prior period estimates to assess management’s ability to estimate the number of

systems to be delivered. In addition, we checked the accuracy of the Company’s model used to allocate the contract

consideration to the identified performance obligations.

Finally, we inspected a selection of individual sales transactions before and after year-end to assess whether revenue

was recognized in the correct accounting period by, among others, inspection of VPAs and purchase orders,

inspection of client acceptance documents, inquiry with third parties and performance of stock counts.

Our observation

The results of our procedures relating to the accounting of revenue recognition for identified distinct performance

obligations and allocation of total contract consideration in complex revenue contracts, and revenue cut-off in relation

to system sales before and after year-end were satisfactory.

Report on the other information included in the annual report

In addition to the financial statements and our auditor’s report thereon, the Annual Report contains other information.

Based on the following procedures performed, we conclude that the other information:

–is consistent with the financial statements and does not contain material misstatements, and

–contains the information as required by Part 9 of Book 2 of the Dutch Civil Code for the management report and

other information.

We have read the other information. Based on our knowledge and understanding obtained through our audit of the

financial statements or otherwise, we have considered whether the other information contains material

misstatements.

By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and

the Dutch Standard 720. The scope of the procedures performed is less than the scope of those performed in our

audit of the financial statements.

Management of ASML Holding N.V. is responsible for the preparation of the other information, including the

information as required by Part 9 of Book 2 of the Dutch Civil Code.

Report on other legal and regulatory requirements and ESEF

Engagement

We were engaged by the General Meeting of Shareholders as auditor of ASML Holding N.V. on April 30, 2015, as of

the audit for the year 2016 and have operated as statutory auditor since that financial year.

No prohibited non-audit services

We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on specific

requirements regarding statutory audits of public-interest entities.

European Single Electronic Format (ESEF)

ASML Holding N.V. has prepared its annual report in ESEF. The requirements for this are set out in the Delegated

Regulation (EU) 2019/815 with regard to regulatory technical standards on the specification of a single electronic

reporting format (hereinafter: the RTS on ESEF).

In our opinion the annual report prepared in XHTML format, including the marked-up consolidated financial

statements as included in the reporting package by ASML Holding N.V., complies in all material respects with the

RTS on ESEF.

Management is responsible for preparing the annual report including the financial statements in accordance with the

RTS on ESEF, whereby management combines the various components into one single reporting package.

Our responsibility is to obtain reasonable assurance for our opinion whether the annual report in this reporting

package complies with the RTS on ESEF. We performed our examination in accordance with Dutch law, including

Dutch Standard 3950N ’Assurance-opdrachten inzake het voldoen aan de criteria voor het opstellen van een digitaal

verantwoordingsdocument’ (assurance engagements relating to compliance with criteria for digital reporting). Our

examination included among others:

–Obtaining an understanding of the entity's financial reporting process, including the preparation of the reporting

package;

–Identifying and assessing the risks that the annual report does not comply in all material respects with the RTS on

ESEF and designing and performing further assurance procedures responsive to those risks to provide a basis for

our opinion, including:

–Obtaining the reporting package and performing validations to determine whether the reporting package containing

the Inline XBRL instance document and the XBRL extension taxonomy files have been prepared in accordance with

the technical specifications as included in the RTS on ESEF;

–Examining the information related to the consolidated financial statements in the reporting package to determine

whether all required mark-ups have been applied and whether these are in accordance with the RTS on ESEF.

Description of responsibilities regarding the financial statements

Responsibilities of management and the Supervisory Board for the financial statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with

EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, management is responsible for such internal

control as management determines is necessary to enable the preparation of the financial statements that are free

from material misstatement, whether due to fraud or error. In that respect management, under supervision of the

Supervisory Board, is responsible for the prevention and detection of fraud and non-compliance with laws and

regulations, including determining measures to resolve the consequences of it and to prevent recurrence.

As part of the preparation of the financial statements, management is responsible for assessing the Company’s ability

to continue as a going concern. Based on the financial reporting frameworks mentioned, management should

prepare the financial statements using the going concern basis of accounting unless management either intends to

liquidate the Company or to cease operations, or has no realistic alternative but to do so. Management should

disclose events and circumstances that may cast significant doubt on the Company’s ability to continue as a going

concern in the financial statements.

The Supervisory Board is responsible for overseeing the Company’s financial reporting process.

Our responsibilities for the audit of the financial statements

Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient and

appropriate audit evidence for our opinion.

Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all

material errors and fraud during our audit.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could

reasonably be expected to influence the economic decisions of users taken on the basis of these financial

statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the

effect of identified misstatements on our opinion.

A further description of our responsibilities for the audit of the financial statements is included in appendix of this

auditor's report. This description forms part of our auditor’s report.

Amstelveen, February 15, 2023

KPMG Accountants N.V.

P.J. Groenland – van der Linden RA

Appendix

Description of our responsibilities for the audit of the financial statements

We have exercised professional judgement and have maintained professional scepticism throughout the audit, in

accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit

included among others:

–identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or

error, designing and performing audit procedures responsive to those risks, and obtaining audit evidence that is

sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement

resulting from fraud is higher than the risk resulting from error, as fraud may involve collusion, forgery, intentional

omissions, misrepresentations, or the override of internal control;

–obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are

appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the

Company’s internal control;

–evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and

related disclosures made by management;

–concluding on the appropriateness of management’s use of the going concern basis of accounting, and based on

the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast

significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material

uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial

statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit

evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause a

company to cease to continue as a going concern;

–evaluating the overall presentation, structure and content of the financial statements, including the disclosures; and

–evaluating whether the financial statements represent the underlying transactions and events in a manner that

achieves fair presentation.

We are solely responsible for the opinion and therefore responsible to obtain sufficient appropriate audit evidence

regarding the financial information of the entities or business activities within the group to express an opinion on the

financial statements. In this respect we are also responsible for directing, supervising and performing the group audit.

We communicate with the Audit Committee of the Supervisory Board regarding, among other matters, the planned

scope and timing of the audit and significant audit findings, including any significant findings in internal control that we

identify during our audit. In this respect we also submit an additional report to the audit committee in accordance with

Article 11 of the EU Regulation on specific requirements regarding statutory audits of public-interest entities. The

information included in this additional report is consistent with our audit opinion in this auditor’s report.

We provide the Audit Committee of the Supervisory Board with a statement that we have complied with relevant

ethical requirements regarding independence, and to communicate with them all relationships and other matters that

may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Audit Committee of the Supervisory Board, we determine the key audit

matters: those matters that were of most significance in the audit of the financial statements. We describe these

matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in

extremely rare circumstances, not communicating the matter is in the public interest.



		Non-financial statements

		IN THIS SECTION

		288	Assurance Report of the Independent Auditor
		290	About the Non-financial information
		296	EU Taxonomy
		298	Non-financial indicators



ASML ANNUAL REPORT 2022	STRATEGIC REPORT	GOVERNANCE	FINANCIALS	287

To: the General Meeting of Shareholders and the Supervisory Board of ASML Holding N.V.

Our conclusion

We have reviewed the non-financial information of ASML Holding N.V. (hereafter:’ the Company’) for the year ended

31 December 2022 (hereafter: the non-financial information) included in the Annual Report 2022 of ASML Holding

N.V. (hereafter: the Annual Report). A review is aimed at obtaining a limited level of assurance.

Based on the procedures performed nothing has come to our attention that causes us to believe that the non-

financial information included in the Annual Report is not prepared, in all material respects, in accordance with the

reporting criteria as described in the ‘Reporting criteria’ section of our report.

The non-financial information is included in the Strategic Report chapter (pages 4-148) as well as the Non-financial

statements (pages 287-315) of the Annual Report. The following specific paragraphs are out of scope for the

assurance engagement: Q&A with the CTO (pages 19-20), Q&A with the CFO (pages 40-42), Financial performance

(pages 43-49), Risk (pages 51-67), Our stories (Pages 7,21,29,39,50,68,148) and EU Taxonomy (pages 296-297).

Basis for our conclusion

We performed our review in accordance with Dutch law, including Dutch Standard 3810N: "Assurance engagements

relating to sustainability reports", which is a specified Dutch standard that is based on the International Standard on

Assurance Engagements (ISAE) 3000: "Assurance Engagements other than Audits or Reviews of Historical Financial

Information (Attestation engagements)". This engagement is aimed to obtain limited assurance.

Our responsibilities in this regard are further described in the ‘Auditor’s responsibilities’ section of our report.

We are independent of ASML Holding N.V. in accordance with the ‘Verordening inzake de onafhankelijkheid van

accountants bij assurance-opdrachten’ (ViO, Code of Ethics for Professional Accountants, a regulation with respect

to independence). Furthermore, we have complied with the ‘Verordening gedrags- en beroepsregels

accountants’ (VGBA, Dutch Code of Ethics).

We believe the assurance evidence we have obtained is sufficient and appropriate to provide a basis for our

conclusion.

Reporting criteria

The non-financial information needs to be read and understood together with the reporting criteria. ASML Holding

N.V. is solely responsible for selecting and applying these reporting criteria, taking into account applicable law and

regulations related to reporting.

The reporting criteria used for the preparation of the non-financial information are the Universal Standards of the

Global Reporting Initiative (GRI) and the applied supplemental reporting criteria as disclosed in section ‘About the

non-financial information’ of the Annual Report.

Materiality

Based on our professional judgement we determined materiality levels for each relevant part of the non-financial

information and for the non-financial information as a whole. When evaluating our materiality levels, we have taken

into account quantitative and qualitative considerations as well as the relevance of information for both stakeholders

and the Company.

We agreed with the Supervisory Board that misstatements which are identified during the review and which in our

view must be reported on quantitative or qualitative grounds, would be reported to them.

Scope of the group review

ASML Holding N.V. is the parent company of a group of entities. The non-financial information incorporates the

consolidated information of this group of entities to the extent as specified in ‘About the non-financial information’ of

the Annual Report.

Our group review procedures consisted of both review procedures at corporate (consolidated) level and at entity

level.

By performing our review procedures at entity level, together with additional review procedures at corporate level, we

have been able to obtain sufficient and appropriate assurance evidence about the group’s non-financial information

to provide a conclusion about the non-financial information.

Limitations to the scope of our review

The non-financial information includes prospective information such as ambitions, strategy, plans, expectations and

estimates. Inherently the actual future results are uncertain. We do not provide any assurance on the assumptions

and achievability of prospective information in the non-financial information.

References to external sources or websites in the non-financial information are not part of the non-financial

information itself as reviewed by us. Therefore, we do not provide assurance on this information.

Board of Management's responsibilities

The Board of Management is responsible for the preparation of the non-financial information in accordance with the

applicable criteria as described in the ‘Reporting criteria’ section of our report, including the identification of

stakeholders and the definition of material matters. The choices made by the Board of Management regarding the

scope of the non-financial information Report name and the reporting policy are summarized within the section

“About the non-financial information”(pages 290-295 of the Annual Report).

Furthermore, the Board of Management is responsible for such internal control as it determines is necessary to

enable the preparation of the non-financial information that is free from material misstatement, whether due to fraud

or error.

The Supervisory Board is, among other things, responsible for overseeing the Company’s reporting process.

Auditor's responsibilities

Our responsibility is to plan and perform our review in a manner that allows us to obtain sufficient and appropriate

assurance evidence for our conclusion.

Procedures performed to obtain a limited level of assurance are aimed to determine the plausibility of information and

vary in nature and timing, and are less in extent, compared to a reasonable assurance engagement. The level of

assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have

been obtained had a reasonable assurance engagement been performed.

We apply the ‘Nadere Voorschriften Kwaliteitssystemen’ (NVKS, Regulations for Quality management systems) and

accordingly maintain a comprehensive system of quality control including documented policies and procedures

regarding compliance with ethical requirements, professional standards and applicable legal and regulatory

requirements.

We have exercised professional judgement and have maintained professional skepticism throughout the review, in

accordance with the Dutch Standard 3810N, ethical requirements and independence requirements.

Our review included among others:

–Performing an analysis of the external environment and obtaining an understanding of relevant societal themes and

issues, and the characteristics of the Company;

–Evaluating the appropriateness of the reporting criteria used, their consistent application and related disclosures in

the non-financial information. This includes the evaluation of the results of stakeholder dialogue and the

reasonableness of estimates made by the Board of Management;

–Obtaining an understanding of the reporting processes for the non-financial information, including obtaining a

general understanding of internal control relevant to our review;

–Identifying areas of the non-financial information where a material misstatement, whether due to fraud or error, is

most likely to occur, designing and performing assurance procedures responsive to these areas, and obtaining

assurance information that is sufficient and appropriate to provide a basis for our conclusion. Our procedures

included, among others:

–Interviewing management and relevant staff responsible for the strategy, policy and results;

–Interviewing relevant staff responsible for providing the information for, carrying out internal control procedures

over, and consolidating the data in the non-financial information;

–Obtaining assurance information that the non-financial information reconciles with underlying records of the

Company;

–Reviewing, on a limited test basis, relevant internal and external documentation;

–Performing an analytical review of the data and trends.

–Evaluating the consistency of the non-financial information with the information in the report which is not included in

the scope of our review;

–Evaluating the presentation, structure and content of the non-financial information;

–Considering whether the non-financial information as a whole, including the disclosures, reflects the purpose of the

reporting criteria used.

We have communicated with the Board of Management and the Supervisory Board regarding, among other matters,

the planned scope and timing of the review and significant findings that we identified during our review.

Amstelveen, 15 February 2023

KPMG Accountants N.V.

P.J. Groenland- van der Linden RA

Reporting scope

The content disclosed in this Annual Report1 is based on the material topics identified for both ASML and our

stakeholders through the 2022 materiality assessment. As part of the materiality assessment, we asked internal and

external stakeholders to identify where in the value chain the theme has an impact. This process was conducted

within the boundaries required by the 2021 GRI Universal Standards.

Read more in:

Our material ESG sustainability topics.

The scope of the information and indicators reported for each material topic is consistent with the financial reporting

scope. Relevant exceptions and specifications can be found in the reporting scope table at the end of this chapter.

This Annual Report generally covers the performance of ASML from January 1, 2022 to December 31, 2022, and will

be published on February 15, 2023.

The financial information in this report is derived from our financial statements that are in conformity with EU-IFRS,

unless otherwise indicated. The reporting basis for the information in this report on the performance of our ESG

sustainability strategy is prepared in accordance with the 2021 GRI Universal Standards.

The 2021 GRI Universal Standards became effective as of FY22. The revised approach to materiality and the use of

topic standards resulted in a significant increase in GRI-indicators considered to be relevant to be reported by ASML.

Details of our compliance with the 2021 GRI Universal standards (GRI content index) can be found in a separate

reporting supplement available on the website. We included disclosures required as part of the EU Non Financial

Reporting Directive (NFRD) for non-financial information and diversity information. This disclosure was implemented in

2017 and is decreed as part of the Dutch Civil Code. In addition, ASML is subject to certain disclosure requirements

pursuant to Article 8 of the Taxonomy Regulation as of 1 January 2022 over reporting year 2021.

Read more in:

EU Taxonomy.

1.We publish two annual reports. One version of the annual report is prepared in conformity with US GAAP. The other version of the annual report

is prepared in accordance with EU-IFRS and also complies with Article 362.9 of Book 2 of the Dutch Civil Code. For internal and external

reporting purposes, we apply US GAAP. US GAAP is our primary accounting standard for setting financial and operational performance targets.

Reporting process

Each theme has an owner who is responsible for the theme ambition, strategy and relevant performance indicators,

as well as the timely delivery of content and relevant data for reporting and monitoring the execution of the strategy.

The data is reviewed and consolidated by Finance. Starting in 2022 a new team was set up for ESG reporting, with

the aim of tracking compliance with relevant standards.

Reporting methodology

The non-financial data disclosed in this report is derived from various sources and the way data is processed differs

within our operating subsidiaries and departments. This causes a degree of uncertainty, because of limitations in

measuring and estimating data. We continue to work on improving our sustainability control environment and data

collection processes. Please refer to the next sections where we elaborate on the methodology and assumptions

used in the reporting of our indicators.

Emissions

General remarks on methodology

The CO2e emissions reported are in line with the Greenhouse Gas (GHG) Protocol. The base year for calculating

scope 1 and 2 emissions (including GHG reductions from energy savings in projects) is 2021, when a new master

plan was started. The base year for calculating GHG emissions related to Scope 3 is 2019 (based on 2018 data), as

this was the first year in the 2019-2025 sustainability strategy planning period. During the year, no significant changes

in emissions occurred that triggered recalculations of base year emissions. The DEFRA (UK Department for

Environment, Food & Rural Affairs) 2021 emission factors are applied to convert the specified amount of energy or

activity factor to kg CO2. For scope 3 additional sources are used for conversion, with details provided in the section

on scope 3.

For scope 1 and scope 2 emissions, an operational control consolidation approach is applied to determine the

locations included in the calculation. ASML manufacturing locations considered include Veldhoven (including

Oirschot), Wilton, San Diego and Linkou, ASML Tainan and Silicon Valley. Other locations include China (Beijing and

Shanghai), South Korea (Hwasung, Icheon and Pyeong-Taek), Taiwan (Hsinchu, Tainan office), US (Chandler and

Hillsboro) and the Netherlands (Delft). This scope encompassed 95% of company GHG emissions from

manufacturing locations as well as office locations with more than 250 FTEs.

Direct (Scope 1) GHG emissions

Scope 1 emissions are expressed in kt. The CO2 footprint consists of the combustion of fossil fuels (of which only

natural gas is relevant for ASML). It is calculated by multiplying the specific consumption by local conversion factors (x

kg CO2 per m3 natural gas). In our previous annual reports, we reported on gross and net emissions, but as ASML

does not offset any of the remaining emissions, there is no difference between gross and net emissions, so the split is

no longer reported.

Energy indirect (Scope 2) GHG emissions

Scope 2 emissions are also expressed in kt and the CO2 footprint is calculated by multiplying electricity consumption of the

manufacturing locations by the market- or local emission factors (x kg CO2 per kWh). Market-based emission factors are

based on supplier emission rates. Location-based emission factors are based on information from the national, sub-national

and grid level. All emission factors are stored and checked annually by the Corporate Real Estate team within the

Sustainability Performance Indicator system (in myEHS) and calculations are done automatically in this system. Market-

based and location-based emission factors are updated annually, where applicable.

In our previous annual reports, we reported as gross our emissions before purchase of EACs via the market-based

method. We also included the market-based emissions (after purchase of EACs) as net. As ASML currently does not

offset any of the remaining emissions, there is no difference between our gross and net emissions and we only report

the market-based emissions (after purchase of EACs). This is the first year location-based emission factors are also

being reported.

Other indirect (Scope 3) GHG emissions

We measure and report the indirect emissions from our activities in the value chain – scope 3 emissions. This

category includes emissions resulted from our operations as well as the emissions from upstream supply chain and

downstream use of our products by customers. According to the GHG protocol Corporate Value Chain (scope 3)

Accounting and Reporting Standard, scope 3 emissions include 15 categories, of which nine are material for ASML.

The CO2 emissions for each category are calculated by multiplying the energy consumption of activities or activity

factors by specific emission factors (e.g., x kg CO2 per kWh or euro spend).

When using the reported information, the following methodology, assumptions and data reliability needs to be

considered:

–Due to its nature the scope 3 emissions data includes a time lag. As a result, the emissions reported in the

reporting year, are calculated by use of the actual data sources for nine months with three months estimate. In prior

years, emissions reported were calculated by use of the actual data sources from one year earlier.

–Cat.1 Purchased goods and services, Cat.2 Capital goods: Using the spend-based method, we estimate emissions for

goods, services and capital goods by collecting data on the economic value of goods and services purchased and

multiplying it by relevant secondary (e.g. industry average) emission factors (e.g. average emissions per monetary value of

goods). The DEFRA emission database is used.

–Cat.3 Fuel- and energy-related activities: Using the average-data method, we estimate emissions by using secondary

emission factors. BEIS, DEFRA, and The National Renewable Energy Laboratory emission databases are used.

–Cat.4 Upstream transportation & distribution: In general, around 90% of the emissions are calculated with the

distance-based method, for which we directly receive emissions reports from major logistics suppliers. The

remaining emissions are from smaller logistics suppliers and are estimated by taking the average ASML road freight

emission factor.

–Cat.5 Waste generated in operations: Using the waste-type-specific method, we use emission factors per waste

type and treatment method. The emission factors of Ecoinvent are used.

–Cat.6 Business travel: The DEFRA emission database is used and the following methods are applied:

–Air travel: We use the distance-based method and select the appropriate emission factors based on the distance

and travel class.

–Hotel stay: using the fuel-based method, we take hotel nights stayed and apply emission factors for the average

energy use per night in different countries.

–Car rental: we use the fuel-based and distance-based method, for which we directly receive emissions reports

from car rental companies.

–Taxi and public transportation: we apply the spend-based method, which involves determining the amount of money

spent on transport and applying secondary (Environmentally-Extended Input-Output or EEIO) emission factors.

–Cat.7 Employee commuting: we use the distance-based method, which involves collecting data on commuting

patterns from employees in the Netherlands (distance travelled and mode of transportation) and applying the

appropriate emission factors for the modes used. We take the badge swipe numbers to count the average number

of employees that come to the office. For employees outside of the Netherlands, mode of transportation data is not

yet available, so we assume they all drive by car with the same driving distances as in the Netherlands. The DEFRA

emission database is used.

–Cat.11 Use of sold products: We count the direct use-phase emissions by measuring the energy use of our

products. We estimate common full time and idle time machine user scenarios by discussing Customer Survey

data with Development and Engineering and the Marketing team. On this basis, we calculate the annual energy

consumption of each product and multiply this by the products sold in the reporting year. The figure obtained is

then multiplied by a lifetime of 20 years. Lastly, we apply the country-based emission factors from the IEA database

to convert energy consumption into emissions.

–Cat.12 End-of-life treatment of sold products: We apply the waste-type-specific method. On the basis of a high-

level estimation of the material composition of our products, we apply emission factors for specific waste types and

waste treatment methods. The Ecoinvent database is used.

GHG emissions intensity

GHG emission intensity is calculated as the total of net scope 1, 2 and 3 emissions divided by total ASML revenue.

The only gas included is CO2, since the other GHGs are negligible.

Reduction of GHG emissions

We measure and report on reductions in GHG emissions resulting from energy savings. For details of the process

used to estimate energy savings see the section Energy savings worldwide through projects in this chapter. In order

to calculate the CO2 reduction, the estimated energy savings are multiplied by local emission factors for electricity

and by gas emission factors for gas usage.

Nitrogen oxides (NOX), sulphur oxides (SOX), and other significant air emissions

We currently measure and report on Volatile Organic Compounds (VOCs) for the Netherlands and Wilton. The data

are reported in myEHS. For VOC's we calculate the air emissions to be the difference between what we have

purchased and what we have disposed to the waste vendor. For Veldhoven, the purchase value comes from our

SAP system and the disposed figures are confirmed by the waste vendor. For Wilton, the usage is monitored

manually. We plan to assess the materiality of VOCs for San Diego, San Jose, Linkou and Taiwan in 2023. We also

plan on reassessing the materiality of this indicator in 2023 to identify whether it is relevant to report on other

significant air emissions going forward.

Energy

Energy savings worldwide through projects

We report on the cumulative savings for ASML manufacturing locations through improved technical installations over

the five year energy savings masterplan period. The current masterplan runs from 2021 to 2025. The energy savings

presented in the report represent the measured or estimated savings. We measure our energy savings compared to

the energy we estimate we would have used in a business as usual scenario without the efficiency improvements

realized through dedicated energy saving projects. Energy savings include mainly reductions in the consumption of

natural gas and electricity. The reported energy savings are annualized savings from projects finalized in the reporting

year and projects implemented and are reported in TJ.

Energy consumption within the organization

Energy consumption inside the organization is expressed in TJ and includes fossil fuel and electricity consumption,

for energy purposes in the reporting period for ASML manufacturing locations. The scope encompasses 95% of

company GHG emissions from manufacturing locations as well as office locations with more than 250 FTEs. The unit

in which the energy consumed is expressed is then converted to TJ using standard conversion factors.

Energy consumption outside of the organization

Energy consumption outside the organization is expressed in TJ and is defined as the energy use throughout ASML’s

upstream and downstream activities associated with its operations. The scope is aligned with the categories reported

in our scope 3 emissions according to the GHG protocol.

The calculations will be according to the categories reported in the scope 3 emissions. For each category the

following methodology is applied:

–Cat.1 Purchased goods and services, Cat.2 Capital goods: Using the spend-based method, we estimate emissions for

goods and services, and capital goods by collecting data on the economic value of goods and services purchased and

multiplying its economic value by relevant secondary (e.g., industry average) emission factors (e.g., average emissions per

monetary value of goods [gCO2/Euro]). The emission factors from the DEFRA database are used. Total emissions are

divided by the average world emission factor for electricity and heat generation from the IEA [gCO2/kWh] to obtain the total

energy. This amount is then adjusted to the correct unit [TJoules] using energy conversion factors.

–Cat.3 Fuel- and energy-related activities: activities in this category are reported in MWh and TJ. In the case of

electricity, the energy consumption is adjusted by 5% due to the transmission and distribution losses (Worldbank),

and the total energy is calculated based on the average energy needed to produce electricity from natural gas from

EIA. Then the value is converted to TJ using the corresponding energy conversion factor. In the case of natural gas

transmission and distribution losses are assumed to be minimal and are disregarded. Then the energy calculated is

based on the cumulative energy demand, i.e. the sum of the primary energy demand to obtain the natural gas.

Finally the value is converted to TJ using the corresponding energy conversion factor.

–Cat.4 Upstream transportation & distribution: Emissions are reported in five categories: air, other, rail, road and sea.

These emissions are then divided by the corresponding fuel emission factor [kg CO2e/ kWh (Net CV)] from DEFRA.

For air it is assumed that all planes consume Aviation Spirt from fossil fuels. For sea it is assumed that the ships

consume MGO due to the restrictions in the ECA zones. For rail, it is assumed that electricity is used to power the

trains. For road and others, it is assumed that transportation is done using diesel. Finally the value is converted to

TJ using the corresponding energy conversion factor.

–Cat.5 Waste generated in operations: the emissions are reported according to the method of processing. The

methods are incineration without energy recovery and landfill. The emissions are divided by the average waste

factor emissions per tonne from DEFRA, and then multiplied by the energy consumed for the method of processing

used (factor for landfill is obtained from DEFRA and for incineration from the Minnesota Pollution Control Agency).

Recycling and incineration with energy recovery are disregarded. Finally the value is converted to TJ using the

corresponding energy conversion factor.

–Cat.6 Business travel: The DEFRA emission database is used and the following methods are applied:

–Air travel: The emissions reported for air travel are divided by the emissions per kWh of the fuel used assuming

that all planes consume Aviation Spirit from fossil fuels. The value obtained is then adjusted to the correct unit

[TJ].

–Hotel stay: The hotel nights stayed are multiply by the average hotel energy consumption per night by hotels

around the world (source: Cornell hotel sustainability benchmarking index). Then the value is adjusted to the

correct unit [TJ].

–Car rental, taxi and public transport: a similar approach to air travel is used, but instead of Aviation Spirit it is

considered that the fuel is Gasoline (DEFRA, Petrol 100% mineral).

–Cat.7 Employee commuting: the emissions are reported based on the mode of transportation used. It is assumed

that transportation by car causes 100% of these emissions, other modes are disregarded due to their low

contribution. These emissions are divided by the emissions per kWh of the fuel assuming that all cars consume

Gasoline (DEFRA, Petrol 100% mineral). Finally, the value obtained is adjusted to the correct unit [TJ].

–Cat.11 Use of sold products: The energy use of our products is known. This energy usage is multiplied by the

number of systems sold, and a lifetime of 20 years (following the GHG Protocol). The value is then adjusted to the

correct unit [TJ].

–Cat.12 End-of-life treatment of sold products: Only Landfill activities are considered, others are disregarded. The

total amount of waste is calculated from the emissions over the emission per tonne of metal waste from DEFRA,

and the energy is estimated based on the energy consumed for each tonne of waste.

As this is the first year of reporting, this indicator is based on data currently available in open-source databases.

Some of the conversion factors used may have low accuracy or represent a particular case, instead of an average.

The energy conversion factors will need to be reassessed each year to improve the accuracy and reduce estimation

uncertainty.

Energy intensity

Energy intensity is the total energy consumption within the organization normalized to revenue (TJ/million EUR). Total

energy consumption includes fossil fuels consumed for energy purposes and total purchased electricity. Diesel is

considered immaterial and not included in this calculation.

Reductions in energy requirements of products and services

We measure and report on our machines’ energy efficiency. To do so we measure power consumption based on

SEMI S23 standards for our latest NXE and NXT machine, scaled to 100% availability. For NXE we include source,

scanner, laser, PVAC & abatement and relevant cabinets. For NXT we exclude laser but include gas and water

supplies. Energy is reflected in kWh per wafer pass.

To calculate our machines’ energy efficiency (i.e., energy consumption per wafer pass) we divide Annual TEE (Total

Energy Equivalent) consumption by wafers used per year (assuming 100% availability of the system).

We report on the percentage reduction of energy consumption from a 2018 baseline which is the year we started to

work on energy savings for EUV systems.

Circular Economy

Percentage of systems sold in the past 30 years still active in the field

We monitor the number of active systems in our installed base. This includes our EUV, DUV and PAS5500 systems.

We calculated the percentage of all systems ever sold that are still in use. Some systems in the field may not be

serviced by ASML, but are operational. For the indicator '% of active systems' we apply assumptions for the portion

of systems active but not serviced by ASML. Based on historical information and experience we determine that 33%

of non- ASML serviced systems are still active in the field.

Attractive workplace for all

Ratio of base salary and total cash female / male

We report on the ratio of base salary and total cash between female and male employees. For this indicator

significant locations of operations are Asia, the US and Europe. With some exceptions, this mirrors most of the other

HR reporting.

In an update from last year, we now report this indicator more granularly. We report per employee category per

region, as opposed to reporting per employee category and per region separately.

Occupational Health and Safety

Workers covered by an occupational health and safety management system

The indicator is calculated by summing the number of employees and contractors who are covered by the reporting

system and dividing the total of this sum by the total number of employees and contractors, including those not

covered in the system. No workers have been excluded. The number of total visitors is out of scope. The definition

includes:

–Employees, permanent and temporary.

–Contractors: workers who are not employees but whose work and/or workplace is controlled by the organization,

including consultants, interns and outsourcing.

The EHS reporting system is assessed against the ISO 14001 standard as part of the internal audit. It is not certified

by an external party. The outsourced contractors that work offsite are out of the scope of the ASML EHS

management system according to the GRI definition, since ASML doesn't control their work or workplace.

Work-related injuries

We measure and report on the recordable incident rate and the number and rate of recordable injuries and high

consequence injuries. The indicators relate to all employees and contractors working under supervision of ASML and

are split by worker type (with no workers excluded).

Definitions

–A recordable incident is a work-related incident of personal injury and/or illness from events or exposures occurring

in the work environment in the reporting period for all ASML locations worldwide, which require medical treatment

beyond first aid, or cause death, or days away from work, restricted work or transfer to another job. A recordable

injury has the same definition as a work-related incident but excludes illness.

–High consequence work-related injuries are the number of work-related incidents of personal injury from events or

exposures occurring in the work environment in the reporting period for all ASML locations worldwide, which result

in days away from work or job transfer equal to or longer than 180 days.

–An injury or illness is considered work-related if an event or exposure in the work environment caused or

contributed to the condition or significantly aggravated a preexisting condition. Work-relatedness is presumed for

injuries and illnesses resulting from events or exposures occurring in the workplace, unless an exception specifically

applies. The work environment includes the establishment and other locations where one or more employees are

working or are present as a condition of their employment.

–For incidents, injuries, and high consequence work-related injuries, the rate is calculated following OSHA guidelines:

–The number of recordable incidents or injuries or high consequence work-related injuries is multiplied by 200,000

and divided by the number of employee labor hours worked. The result is then multiplied by 100%.

–Rate indicators are calculated for employees only. For contractors, no incident rate can be calculated because of a

lack of baseline HR data regarding the number of hours worked. For this category, only the absolute value is

reported.

Work-related ill health

This indicator is defined as the number of work-related ill health reported within reporting period, split by worker types

(employees and contractors), with no workers excluded.

Work-related ill health encompasses acute, recurring, and chronic health problems caused or aggravated by work

conditions or practices. These include musculoskeletal disorders, skin and respiratory diseases, malignant cancers,

diseases caused by physical agents. This disclosure covers, but is not limited to, the diseases included in the ILO List

of Occupational Diseases.

Cases of ill health are reported as the:

–Number of cases of recordable work-related ill health

–Main types (hazard groups) of work-related ill health

We apply the following definitions of worker types:

–Employees, permanent and temporary.

–Contractors: workers who are not employees but whose work and/or workplace is controlled by the organization

My EHS incident data is used to extract ill health related incidents. Mental illnesses are out of scope of EHS

management system.

Local Communities

Operations with local community engagement, impact assessments, and development programs

We measure and report on the percentage of operations with implemented local community engagement, impact

assessments, and development programs. In order to determine the percentage of total operations that each of our

locations represents, we look at the employee headcount in that location divided by the total employee headcount.

The employee headcount was chosen because it is assumed that the number of employees in a location is a strong

determinant of the impact on the local community. The calculation for this indicator entails summing the employee

counts for applicable locations and then dividing this sum by the total employee count. Currently, we have five

applicable locations with community engagement initiatives (Veldhoven (NL), Wilton, Connecticut (USA), Silicon Valley,

California (USA), San Diego, California (USA), Hsinchu (TW)). Other ASML locations with smaller community

engagement initiatives but no dedicated community engagement FTEs and programs are excluded.

Reporting scope table

The below table clarifies the scope of the data reported per theme and explains where the scope of the data provided

differs from the scope of the report’s content. Companies excluded in the scope below do not have data available for

certain subchapters.


	(Sub)chapter Annual Report		Scope
	Our company
	How we innovate		ASML worldwide
	Customer intimacy		ASML worldwide, excluding Cymer and Berliner Glas (ASML Berlin GmbH) NOTE: Techinsights ASML only
	Financial performance
	Financial performance indicators		ASML worldwide
	Energy efficiency and climate action
	Energy management and carbon footprint (scope 1 and 2)		ASML locations above 250 FTE, excluding Berliner Glas (ASML Berlin GmbH)
	Energy management and carbon footprint (scope 3)		ASML worldwide: except category 8,9,10,13,14 and 15
	Energy management and carbon footprint: Product use at our customers		ASML Products that reached a certain stage of maturity and have been measured
	Circular economy
	Reduce waste in our operations		ASML locations above 250 FTE, excluding Berliner Glas (ASML Berlin GmbH)
	Re-use parts and materials		ASML worldwide material flows NOTE: Re-use rate and Savings from re-used parts are excluding packaging
	Refurbish mature products		ASML products, excluding YieldStar and SBI/MBI metrology tools.
	Water management		ASML locations above 250 FTE, excluding Berliner Glas (ASML Berlin GmbH) – except for Total Ultra-pure water consumption and Total water recycled and re- used, which is Veldhoven (the Netherlands), Linkou (Taiwan) and HMI Tainan (Taiwan) only.
	Attractive workplace for all
	Inspiring a unified culture		ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH)
	Best employee experience		ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH) NOTE: The scope for indicator Open positions filled by internal candidates (in %) includes only open positions for which a formal vacancy has been created
	Enabling strong leadership		ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH)
	Ensuring employee safety		ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH)
	Valued partner in our communities
	Community engagement program		ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH) NOTE: Volunteering hours Technology promotion and Campus promotion ASML Netherlands only Volunteering hours for Community engagement: excludes HMI


	(Sub)chapter Annual Report		Scope
	ASML Foundation		ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH)
	Innovation ecosystem
	Public-private partnerships		ASML worldwide
	Partnerships with academia and research institutes		ASML worldwide
	Supporting startups and scaleups		ASML Netherlands
	Our supply chain
	Supply Chain		ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH)
	Supplier performance management		ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH)
	Supply chain risk management		ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH)
	Responsible Supply Chain		ASML worldwide, excluding Cymer, HMI and Berliner Glas (ASML Berlin GmbH)
	Responsible business
	Business ethics and Code of Conduct		ASML worldwide, excluding Berliner Glas (ASML Berlin GmbH)
	Product safety		ASML worldwide, excluding HMI
	Rest		ASML worldwide

Scope changes and restatements

Compared to the 2021 Annual Report, the following scope changes have occurred:

–For Community engagement we have expanded our reporting scope to include the US and Asia, as well as the

Netherlands, regarding the value of donations.

–As of 2022, our scope 3 emission consists of nine months of actual data and three months of estimated data. In

the 2023 reporting year, we will adjust the 2022 figure reported with full-year actual 2022 data. In past years, we

have reported scope 3 emission data with a one-year lag.

–We have also started reporting on our population for which gender is unknown in all of our workforce indicators.

–Finally, the methodology was changed for the attractive employer ranking for the US for 2020/2021, so the

comparative figures have been revised based on the new segmentation.

Review of this report

The Consolidated Financial Statements included in this report are audited.

As requested by our Board of Management, our non-financial information has been independently reviewed. Our

external auditor (KPMG) was asked to review this non-financial information.

For KPMG’s assurance report, including details of the work they carried out, read more in:

Non-financial statements - Assurance Report of the Independent Auditor.

EU Taxonomy disclosure

The EU Taxonomy Regulation (Regulation (EU) 2020/852) aims to create a common language and methodology for

reporting on sustainability by providing appropriate criteria for determining which economic activities can be

considered environmentally sustainable. The EU Taxonomy Regulation requires companies to report on how and to

what extent their economic activities are taxonomy aligned. The EU Taxonomy Regulation contains a list of economic

activities with performance criteria to assess the economic activities' contribution toward six different environmental

objectives. As of now, detailed requirements have been adopted for the first two of six environmental objectives:

'climate change mitigation' and 'climate change adaption' by way of the Climate Delegated Act and the

Complementary Climate Delegated Act. For the 2022 reporting period, companies are required to report what

percentage of key performance indicators (KPIs) are taxonomy aligned for these two environmental objectives. The

relevant KPIs are turnover, capital expenditure (‘CapEx’) and operational expenditure (‘OpEx’).

For the 2021 reporting period, companies were only required to disclose the proportion of the KPI that is associated

with economic activities that are eligible under the EU Taxonomy Regulation, for the 2022 reporting period companies

are also required to disclose the proportion of KPIs that is associated with economic activities that are aligned with

the two first environmental objectives of the EU Taxonomy Regulation. The determination of taxonomy aligned

activities follows a three-step approach taking into account the technical screening criteria and minimum safeguards

set by the EU Taxonomy Regulation. Taxonomy alignment means that the economic activity is taxonomy eligible,

makes a substantial contribution to at least one of the environmental objectives, while, at the same time, not

significantly harming any of these objectives and meeting minimum social safeguards, such as the OECD Guidelines

and UN Guiding Principles.

ASML Assessment:

Introduction:

ASML meets the description for some economic activities as included in the EU Taxonomy Regulation, meaning that

ASML has some eligible economic activities. The EU Taxonomy Regulation is a dynamic framework that should

expand its scope of eligible activities over time which should expand the scope aligned activities accordingly. The

relevant rules and regulations are still being developed and more guidance is expected to become available in the

coming years.

Turnover:

The EU Taxonomy Regulation seeks alignment between the KPIs set out above and the financial reporting standards

of the reporting companies. As such, total turnover for ASML equates to the “Total net sales” included in the

Consolidated Statement of Profit or Loss, which consists of “Net system sales (Note 2)” and “Net service, installation,

and field option sales”.

As set out above, the EU Taxonomy Regulation has at this time only been partially developed in legislation. Currently,

there is no sustainable economic activity which clearly matches the economic activities of ASML. The reason is that

ASML's activities do not match the EU prioritization of identifying the economic activities in sectors with high GHG

emissions such as energy and transportation. Activity 3.6 ‘Manufacturing of low carbon technologies for other

sectors’ is linked most closely to ASML’s business activities, since this activity is associated with NACE code 28.99

‘Manufacturing of semi-conductor manufacturing machinery’.

Taking the entire value chain into consideration, ASML expects to contribute substantially to GHG emission

reductions in other sectors, as disclosed in the sections: Energy efficiency and climate action. ASML is an enabler of

technologies that it believes reduce energy consumption and GHG emissions significantly. However, based on the

current application of the EU Taxonomy Regulation's eligibility criteria, ASML’s manufactured technology must

directly enable other activities to be carried out at a low carbon level of environmental performance to meet this aim.

Additionally, activity 3.6 also requires that the economic activity of the manufacturing technologies must be aimed at

substantial carbon emission reductions in other sectors of the economy to meet this aim. ASML believes that there is

currently insufficient guidance to establish that ASML met the standard for this ‘aim’. It led ASML to a conclusion that

0% of ASML’s total net sales is currently reported as eligible and therefore aligned.


Turnover (Non-GAAP measures)	Absolute Turnover	Proportion of turnover
A. Turnover of Taxonomy-eligible activities (A1 + A2)	€0m	0%
A1. Turnover of environmentally sustainable activities (Taxonomy- aligned)	€0m	0%
A.2. Turnover of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)	€0m	0%
B. Turnover of Taxonomy-non-eligible activities	€ 21,173m	100%
Total (A+B)	€ 21,173m	100%

Capital Expenditure:

ASML's total CapEx under the EU Taxonomy Regulation comprises of the following line items in the Consolidated

Financial Statement:

–Investments in property, plant, and equipment (note 13)

–Investments in intangible fixed assets (note 12)

–Additions to right-of-use assets (note 14)

The proportion of total CapEx that relates to Taxonomy-eligible activities is determined by assessing the economic

activities for each significant asset group. Insignificant assets groups compared to the overall CapEx, as defined by

the EU Taxonomy Regulation have been excluded from the analysis and accordingly are reported as non-eligible

CapEx.

This assessment resulted in the conclusion that the proportion of CapEx that related to Taxonomy-eligible activities is

limited to activities reflected in ‘Investments in property, plant and equipment’ as these can be linked to the following

economic activities listed in the Climate Delegated Act, specifically Annex I for Climate Change Mitigation:

–4.1 Electricity generation using solar photovoltaic technology

Although ASML has a proportion of CapEx that is potentially relevant to a number of economic activities under

Category “7. Construction and real estate activities”, these are nevertheless not included as eligible CapEx. The

largest group of CapEx is attributed to ASML’s own construction projects, which could potentially be considered as

activity “7.1. Construction of new buildings” or activity “7.7. Acquisition and ownership of buildings”. However, the

description of the economic activity 7.1 focuses on buildings constructed for “later sale” and the economic activity

7.7 focuses on buying real estate, whereas these ASML buildings are constructed for own use purposes.

Considering that the outcomes of the classification as economic activity 7.1 or 7.7 are inconsistent, and that the

largest group of CapEx relates to ASML’s own construction projects which are potentially not eligible, ASML has

consequently classified all its construction and other real estate activities as non-eligible due to the absence of

conclusive guidance in relation to ASML's own construction projects. If the possibility arises in the future, ASML plans

to raise this issue with the EU Commission.

Our assessment results in Taxonomy-eligible activities amounting to 0,1%. Activity 4.1 is considered as taxonomy-

eligible, but not environmentally sustainable because not all the criteria for taxonomy alignment are met. It was

concluded that, although the substantial contribution criteria of activity 4.1 are met, the ‘Do no significant harm

(DNSH)’ criteria relating to climate change adaption are not met. Accordingly, ASML reported 0% of its Capex as

taxonomy aligned.


CapEx (Non-GAAP measures)	Absolute CapEx	Proportion of CapEx
A. CapEx of Taxonomy-eligible activities (A1 + A2)	€2m	0.1%
A.1. CapEx of environmentally sustainable activities (Taxonomy-aligned)	€0m	0%
A.2. CapEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)	€2m	0.1%
-Activity 4.1 Electricity generation using solar photovoltaic technology (Annex I)	€2m	0.1%
B. CapEx of Taxonomy-non-eligible activities	€2,313m	99.9%
Total (A+B)	€2,315m	100%

Operational Expenditure:

The total OpEx for ASML under the EU Taxonomy Regulation is limited to the following line item in the Consolidated

Financial Statement:

–Research and development costs

The proportion of total OpEx that relates to Taxonomy-eligible activities is determined by assessing the economic

activities of the costs that are not capitalized but directly relate to assets on the balance sheet. The proportion of total

OpEx that relates to Taxonomy-eligible activities is determined by assessing the economic activities for each

significant expense group. Insignificant expense groups compared to the overall OpEx, as defined by the EU

Taxonomy Regulation, were excluded from the analysis and hence were considered as non-eligible.

The proportion of total OpEx that relates to Taxonomy-eligible activities can be linked to the following economic

activity:

–9.1 Close to market research, development and innovation.

This results in Taxonomy-eligible activities amounting to 1.3%. These activities are all Taxonomy-eligible, but not

environmentally sustainable activities, because not all the criteria for taxonomy alignment are met. All the

requirements for the substantial contribution criteria for economic activity 9.1 must be satisfied in order to be aligned

for the environmental objective climate change mitigation. Research and development did not meet the first

requirement of the substantial contribution criteria: ‘The activity researches, develops or provides innovation for

technologies, products or other solutions that are dedicated to one or more economic activities for which the

technical screening criteria have been set out in this Annex’. Accordingly, ASML reported 0% of its OpEx as

taxonomy aligned.


OpEx (Non-GAAP measures)	Absolute OpEx	Proportion of OpEx
A. OpEx of Taxonomy-eligible activities (A1 + A2)	€29m	1.3%
A.1. OpEx of environmentally sustainable activities (Taxonomy-aligned)	€0m	0%
A.2. OpEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)	€29m	1.3%
-Activity 9.1 Close to market research, development and innovation (Annex I)	€29m	1.3%
B. OpEx of Taxonomy-non-eligible activities	€2,253m	98.7%
Total	€2,282m	100%

General remarks:

The description of the above-mentioned activities in the EU Taxonomy Regulation does not overlap. Thus, in

determining the three KPIs as presented, there was no double counting. In addition, a reconciliation was made to the

existing breakdown of ASML’s business activities, which also limited the risk of double counting between economic

activities.

On 9 March 2022, the Complementary Delegated Act was published adding specific new nuclear energy and fossil

gas related activities to the EU Taxonomy Regulation. This is however, not relevant to ASML as ASML does not carry

out any nuclear energy and fossil gas related economic activities. Furthermore, the above mentioned economic

activities do not contribute to multiple objectives as these activities only relate to the environmental objective, climate

change mitigation.

ASML will continue to monitor further guidance regarding the EU Taxonomy Regulation.

The non-financial Key Performance Indicators (KPIs) are reported in the different chapters of our sustainability reporting within ESG. The other non-financial performance indicators (PIs) are reported in the tables below.


Customer intimacy
Description	2020	2021	2022	Comments
Overall Loyalty Score (Customer Feedback Survey)	72.6%	n/a	78.3%	The survey takes place every 24 months (the last survey was held in September 2022). As of 2022, the score shows consolidated and weighted results for ASML, Brion and HMI surveys.
TechInsights
Large suppliers of chipmaking equipment - score (scale 0 to 10)	9.3	9.2	9.4
Suppliers of Fab equipment - score (scale 0 to 10)	9.3	9.2	9.4
Technical leadership for lithography equipment - score (scale 0 to 10)	9.7	9.5	9.8


Energy efficiency and climate action – Energy
Description	2020	2021	2022	Comments
Energy consumption (in TJ)	1,412	1,689	1,633
Energy savings worldwide through projects (in TJ)	114	13	19	In 2021, we started a new masterplan period for 2021-2025 with a target to achieve 100 TJ energy savings by the end of 2025. The savings are realized by projects resulting in improved technical installation or by projects resulting in an improved production process. Types of energy included in savings: fuel and electricity. The figure from 2020 is related to the masterplan 2016-2020. The savings reported are cumulated compared with the base year; therefore, they are not comparable.
Energy intensity (per €m revenue)	n/a	n/a	0.08	The denominator is revenue and the numerator represents total energy consumption within the organization made up of total electricity consumption (in TJ) and Fossil fuels (natural gas (consumed) (in TJ).
Energy consumption outside of the organization (in TJ)	n/a	n/a	93,962
Electricity purchased per location (in TJ)
Veldhoven	802	881	837
Wilton	114	120	130
Linkou	35	34	34
San Diego	167	176	188
San Jose	—	28	25	In scope for this indicator since 2021.
Tainan	—	36	43	In scope for this indicator since 2021.
Other	—	47	50	In scope for this indicator since 2021. Other includes the locations with more than 250 FTE combined.
Total	1,118	1,322	1,307
Fossil fuels consumed from non-renewable sources (in TJ)1				Fossil fuels consumed consists of only natural gas.
Veldhoven	141	184	149
Wilton	112	127	121
Linkou	—	—	—	No natural gas is used by this manufacturing location.
San Diego	40	43	43
San Jose	—	5	6	In scope for this indicator since 2021.
Tainan	—	—	—	In scope for this indicator since 2021. No natural gas is used by this manufacturing location.
Other	—	8	7	In scope for this indicator since 2021. Other includes the locations with more than 250 FTE combined.
Total	293	367	326
Fuels consumed from renewable sources (in TJ)	—	—	—

1.The sources of the conversion factors used are the Dutch Emissions Authority and the US Energy Information Administration.


Energy efficiency and climate action – CO2e emissions
Description	2020	2021	2022	Comments
Emission intensity net scope 1+2+3 (in kton/€m revenue)	0.63	0.62	0.56	Comparison figures have been recalculated to eliminate the one-year lag in scope 3 emission data. In 2022, we made efforts to collect the emissions data in a more timely manner so we are able to report for the 2022 year, nine months of actual data and three months of estimate. Gases included is only CO2, as the other gases are negligible.
Net emission footprint change in % (Scope 1+2) - Market-based	(31)%	156%	(3)%
Scope 2 CO2e emissions (in kton) Location-based	n/a	n/a	193
Purchased CO2 (in kton)	0.9	0.9	0.74
Type of Energy Attribute Certificates (in TJ)
Guarantee of Origins (GOs)	802	883	840
Renewable Energy Certificates (RECs)	281	331	351
I-RECs	35	—	3
Total	1,118	1,214	1,194
Reduction in greenhouse gas emissions (GHG) split by (in kton):
Scope 1	n/a	n/a	0.16
Scope 2	n/a	n/a	2.41
Total	n/a	n/a	2.57
Significant air emissions – VOC	n/a	n/a	13,289
Number of significant fines and non-monetary sanctions	1	—	—	In 2020, there was one fine for HMI Beijing due to the fact that they had no environmental permit.
The monetary value of significant fines for non-compliance with environmental laws and regulations (in € thousands)	70	—	—


Circular economy – Waste management
Description	2020	2021	2022	Comments
Total waste generated (in 1,000 kg)1 & 2
Total non-hazardous waste	4,654	5,284	6,295
Total hazardous waste	372	395	380
Total construction waste	231	199	238
Total	5,257	5,878	6,913	Total waste is treated offsite, no waste treatment onsite.
Total waste by disposal (in 1,000 kg)1
Waste diverted from disposal	4,466	4,544	5,186
Waste directed to disposal	791	1,334	1,727
Total	5,257	5,878	6,913
Waste diverted from disposal: Recycling (in 1,000 kg)1				We apply recycling of waste. Other categories like preparation for re-use and composting are not applicable to ASML.
Total non-hazardous waste	3,911	4,028	4,719
Total hazardous waste	349	346	309
Total construction waste	206	170	158
Total	4,466	4,544	5,186
Waste directed to disposal: Incineration (with energy recovery) (in 1,000 kg)1
Total non-hazardous waste	411	938	1,246	2021 and 2022 saw an increase due to change in waste treatment by supplier. We have engaged with vendors and suppliers to improve the recycling rate in the future.
Total hazardous waste	9	16	37
Total construction waste	20	17	74
Total	440	971	1,357
Waste directed to disposal: Incineration (without energy recovery) (in 1,000 kg)1
Total non-hazardous waste	3	51	66
Total hazardous waste	13	27	24
Total construction waste	0	0	0
Total	16	78	90


Circular economy – Waste management
Description	2020	2021	2022	Comments
Waste directed to disposal: Landfill (in 1,000 kg)1
Total non-hazardous waste	329	267	264
Total hazardous waste	1	6	10
Total construction waste	5	12	6
Total	335	285	280
Total waste disposed (% of total waste from operations)1
Incineration (with energy recovery)	8%	17%	19%
Incineration (without energy recovery)	—%	1%	2%
Landfill	7%	5%	4%
Total	15%	23%	25%

1.The waste disposal methods are determined by information provided by the waste disposal contractor. As of 2021, we split total waste into waste directed to disposal and waste diverted from disposal, as required by the GRI. The comparison figures for 2020 are adjusted to disclose

this split.

2.During the dismantling of the Combined Heat and Power (CHP) system in Wilton, a spill of glycol onto the soil surface occurred. Because of this spill, we disposed 12.7 tons of glycol impacted soil and 3.6 tons of glycol impacted water to ensure minimum impact to the environment. This soil and

water removal is included in our waste figures of 2022.


Circular economy – Water management
Description	2020	2021	2022	Comments
Water consumption (in 1000 m3), split by:
Veldhoven	658	728	834
San Diego	80	105	115
Wilton	94	95	90
Linkou	28	26	22
San Jose	—	21	32	In scope for this indicator since 2021.
Tainan	—	30	33	In scope for this indicator since 2021.
Other	—	36	36	In scope for this indicator since 2021. Other includes the locations with more than 250 FTE combined.
Total	860	1,041	1,162	Municipal water supply.
Total ultrapure water consumption (in 1000 m3)	127	84	86	Only Veldhoven, Linkou and HMI Tainan are in scope for this indicator. The other locations are excluded from the scope because the data to report on the indicator is not yet available.
Total water recycled and re-used (in %)	1.8%	1.2%	1.6%	Only Veldhoven, Linkou and HMI Tainan are in scope for this indicator. The other locations are excluded from the scope because the data to report on the indicator is not yet available.
Water intensity (in 1000m3/€m revenue)	62	56	55	Water intensity is calculated as total water consumption (in m3) divided by total revenue (in millions).


Attractive workplace for all – Workforce indicators1
Number of FTEs (payroll and temporary)	Total ASML			Asia			EMEA			US
	2020	2021	2022	2020	2021	2022	2020	2021	2022	2020	2021	2022
Payroll employees (in FTE)	25,082	28,747	34,719	6,027	7,404	8,840	13,627	15,444	18,660	5,428	5,899	7,219
Female (in %)	17	18	19	17	17	18	17	18	20	17	17	19
Male (in %)	83	82	81	83	83	82	83	82	80	83	83	81
Unknown (in %)	n/a	n/a	—	n/a	n/a	—	n/a	n/a	—	n/a	n/a	—
Temporary employees (in FTE)	1,399	2,095	2,924	30	26	31	1,087	1,786	2,607	282	283	286
Female (in %)	16	18	19	28	19	23	19	20	20	7	8	2
Male (in %)	84	82	73	72	81	71	81	80	80	93	92	18
Unknown (in %)	n/a	n/a	8	n/a	n/a	6	n/a	n/a	—	n/a	n/a	80
Total	26,481	30,842	37,643	6,057	7,430	8,871	14,714	17,230	21,267	5,710	6,182	7,505
Total number of FTEs (by age group)
<30	4,798	6,344	8,837	1,518	2,191	2,736	2,381	3,041	4,449	899	1,112	1,652
30-50	16,848	19,058	22,736	4,300	4,933	5,778	9,615	11,007	13,170	2,933	3,118	3,788
>50	4,556	5,158	5,792	238	305	355	2,718	3,182	3,647	1,600	1,671	1,790
Unknown	279	282	278	1	1	2	—	—	1	278	281	275
Total	26,481	30,842	37,643	6,057	7,430	8,871	14,714	17,230	21,267	5,710	6,182	7,505
Total number of FTEs (payroll and temporary)
Female (in %)	17	18	19	n/a	n/a	18	n/a	n/a	20	n/a	n/a	18
Male (in %)	83	82	80	n/a	n/a	82	n/a	n/a	80	n/a	n/a	79
Unknown (in %)	n/a	n/a	1	n/a	n/a	—	n/a	n/a	—	n/a	n/a	3


Attractive workplace for all – Workforce indicators1
Number of payroll FTEs (split into full-time and part-time)	Total ASML			Asia			EMEA			US
	2020	2021	2022	2020	2021	2022	2020	2021	2022	2020	2021	2022
Full-time payroll FTEs
Female (in %)	15	16	18	17	17	18	14	15	17	17	17	19
Male (in %)	85	84	82	83	83	82	86	85	83	83	83	81
Unknown (in %)	n/a	n/a	—	n/a	n/a	—	n/a	n/a	—	n/a	n/a	—
Total	23,317	26,847	32,635	6,024	7,401	8,835	11,878	13,560	16,594	5,415	5,886	7,206


Number of payroll FTEs (split into full-time and part-time)	Total ASML			Asia			EMEA			US
Part-time payroll FTEs
Female (in %)	37	37	38	—	—	28	37	37	38	46	27	30
Male (in %)	63	63	62	100	100	72	63	63	62	54	73	70
Unknown (in %)	n/a	n/a	—	n/a	n/a	—	n/a	n/a	—	n/a	n/a	—
Total	1,765	1,900	2,084	3	3	5	1,749	1,884	2,066	13	13	13

1.There are no non-guaranteed hour employees. FTEs are reported at the end of the reporting period and excludes Berliner Glas (ASML Berlin GmbH).


Attractive workplace for all – Workforce indicators
Number of new hires payroll employees (in FTEs)	Total ASML			Asia			EMEA			US
	2020	2021	2022	2020	2021	2022	2020	2021	2022	2020	2021	2022
Number of new hires	1,932	4,373	7,130	598	1,848	2,057	879	1,737	3,306	455	788	1,767
New hires as a % of the total payroll employees	8	15	21	10	25	23	6	11	18	8	13	25
Gender
Female	454	896	1,724	123	313	415	216	432	903	115	151	406
Male	1,478	3,477	5,400	475	1,535	1,641	663	1,305	2,402	340	637	1,357
Unknown	n/a	n/a	6	n/a	n/a	1	n/a	n/a	1	n/a	n/a	4
Total	1,932	4,373	7,130	598	1,848	2,057	879	1,737	3,306	455	788	1,767
Age group
<30	854	2,392	3,581	338	1,213	1,321	329	783	1,457	187	396	803
30-50	947	1,789	3,241	253	627	730	491	848	1,708	203	314	803
>50	131	190	308	7	6	6	59	106	141	65	78	161
Unknown	—	2	—	—	2	—	—	—	—	—	—	—
Total	1,932	4,373	7,130	598	1,848	2,057	879	1,737	3,306	455	788	1,767


Attractive workplace for all – Workforce indicators
Employee attrition (in FTE)	Total ASML			Asia			EMEA			US
	2020	2021	2022	2020	2021	2022	2020	2021	2022	2020	2021	2022
Number of involuntary employee attrition	186	199	226	38	41	34	102	101	119	46	57	73
Number of voluntary employee attrition	723	1,234	1,678	201	421	530	239	341	503	283	472	645
Total	909	1,433	1,904	239	462	564	341	442	622	329	529	718
Gender
Female	189	258	372	56	78	107	69	89	129	64	91	136
Male	720	1,175	1,532	183	384	457	272	353	493	265	438	582
Unknown	n/a	n/a	—	n/a	n/a	—	n/a	n/a	—	n/a	n/a	—
Total	909	1,433	1,904	239	462	564	341	442	622	329	529	718
Age group
<30	218	337	516	73	143	220	67	69	121	78	125	175
30-50	479	806	1,063	149	292	326	179	257	383	151	257	354
>50	212	290	325	17	27	18	95	116	118	100	147	189
Total	909	1,433	1,904	239	462	564	341	442	622	329	529	718


Attractive workplace for all – Workforce indicators
Description	2020	2021	2022	Comments
Workers who are not employees (in FTE)1	n/a	n/a	1,682

1. Included in this category are consultants that are hired to perform a specific time-bound assignment based on a specific area of expertise needed, students who follow a work/learning program within ASML and students doing an internship at ASML. FTEs are reported at the end of the reporting

period.


Attractive workplace for all – Employee engagement
Engagement score we@ASML by gender	2020	2021	2022	Comments
Female	80%	78%	77%
Male	80%	78%	78%
Benchmark	73%	76%	74%


Attractive workplace for all – Employee engagement
Description	2020	2021	2022	Comments
Employee Attrition (in %)	3.8	5.4	6.0
Open positions filled by internal candidates (in %)	30	29	27


Attractive workplace for all – Employee engagement
Description	2020	2021	2022	Comments
Total training expenses (in € millions)	12	27	47	Out-of-pocket expenses for technical and non-product-related classroom trainings as recorded in MyLearning (learning management system).
Average spend on training and development per FTE (€)	494	1,020	1,491
Total number of training hours per FTE				Includes technical and non-product-related training hours (including nomination courses).
Female	26	25	41
Male	29	30	52
Unknown	n/a	n/a	304
Weighted average	28	29	50
Number of technical training hours per technical FTE				The number of technical training hours per FTE is calculated as the total technical training hours divided by the total payroll FTEs working in technical departments within Operations and R&D.
Female	22	22	41
Male	27	29	50
Unknown	n/a	n/a	347
Weighted average	26	28	49
Number of non-product-related training hours per FTE				Excluding nomination courses (leadership development programs).
Female	7	8	11
Male	4	5	8
Unknown	n/a	n/a	27
Weighted average	5	5	8
Nomination courses: Leadership development programs
Number of training hours	22,896	6,264	47,454	Due to COVID-19 only two ECAP programs started in 2021.
Number of employees attending (unique)	216	48	322


Attractive workplace for all – Diversity & inclusion
Description	Gender				Gender ratio			Age group					Comments
Male/female in managerial positions and on Supervisory Board (in headcount)1	Female	Male	Unknown	Total	Female	Male	Unknown	< 30	30 - 50	>50	Unknown	Total
Supervisory Board	4	5	—	9	44%	56%	—%	—	—	9	—	9
Board of Management	—	5	—	5	—%	100%	—%	—	1	4	—	5
Senior management	78	623	—	701	11%	89%	—%	—	311	390	—	701
Middle management	469	2,869	1	3,339	14%	86%	—%	1	1,994	1,344	—	3,339
Junior management	312	1,502	—	1,814	17%	83%	—%	64	1,480	270	—	1,814
Other	5,962	23,369	4	29,335	20%	80%	—%	7,714	18,001	3,620	—	29,335
Total	6,825	28,373	5	35,203	19%	81%	—%	7,779	21,787	5,637	—	35,203

	Gender				Gender ratio
Male/female split by sector (in FTE)	Female	Male	Unknown	Total	Female	Male	Unknown
Customer Support	1,055	7,741	8	8,804	12%	88%	—%
Manufacturing and Supply Chain Management	1,732	7,142	91	8,965	19%	80%	1%
Research and Development	2,203	11,598	121	13,922	16%	83%	1%
General and Administrative	1,520	2,217	7	3,744	41%	60%	—%
Sales and Mature Product Services	116	552	—	668	17%	83%	—%
Strategic Supply Management	545	983	12	1,540	35%	64%	1%
Total	7,171	30,233	239	37,643	19%	80%	1%

1.Temporary employees are not included in the headcount numbers.


Attractive workplace for all – Diversity & inclusion
Description	2020	2021	2022	Comments
Number of nationalities working for ASML
Asia	35	33	40
EMEA	103	108	124
US	86	90	101
Worldwide total	120	122	143
Foreign nationals working for ASML (in %)				Foreign nationals working for ASML (in %) is the percentage of payroll and temporary employees with a nationality other than the country in which the employee is working.
Asia	6	5	5
EMEA	32	33	38
US	27	28	25
Worldwide total	25	26	28


Attractive workplace for all – Labor relations
Description	2020	2021	2022	Comments
Percentage of employees covered by collective bargaining agreements	53%	52%	53%


Attractive workplace for all – Fair remuneration2
Description	2020	2021	2022	Comments
Ratio of base salary of women to men total1
Senior management	99%	99%	100%
Middle management	98%	99%	99%
Non-management	98%	98%	98%
Ratio of base salary of women to men Asia1
Senior management	n/a	n/a	102%
Middle management	n/a	n/a	98%
Non-management	n/a	n/a	95%
Ratio of base salary of women to men EMEA1
Senior management	n/a	n/a	99%
Middle management	n/a	n/a	98%
Non-management	n/a	n/a	98%
Ratio of base salary of women to men US1
Senior management	n/a	n/a	100%
Middle management	n/a	n/a	100%
Non-management	n/a	n/a	100%
Ratio of total cash of women to men total1
Senior management	99%	99%	102%
Middle management	98%	99%	98%
Non-management	97%	98%	97%
Ratio of total cash of women to men Asia1
Senior management	n/a	n/a	110%
Middle management	n/a	n/a	92%
Non-management	n/a	n/a	96%
Ratio of total cash of women to men EMEA1
Senior management	n/a	n/a	101%
Middle management	n/a	n/a	98%
Non-management	n/a	n/a	98%


Attractive workplace for all – Fair remuneration2
Description	2020	2021	2022	Comments
Ratio of total cash of women to men US1
Senior management	n/a	n/a	96%
Middle management	n/a	n/a	100%
Non-management	n/a	n/a	100%
Internal pay ratio (CEO versus employee remuneration)3	38	40	34	For more information, see Remuneration Report.

1.The base salary and total cash used for the calculation in the reporting year consists of the actual base salaries and total cash paid in the previous reporting year. Total cash is base salary plus short-term incentive.

2.From 2022, we disclose the fair remuneration per employee group split by region.

3.The calculation approach of the internal pay ratio is disclosed in the section Relationship between CEO and average remuneration (pay ratio). We revised our calculation approach to the internal pay ratio based on the December 2020 guidance from the

Monitoring Committee Dutch Corporate Governance Code in section 3.4.1.iv of the Dutch Corporate Governance Code effective as of 2021. The comparative historical numbers of the internal pay ratio have therefore been restated to include the social

security expenses in the internal pay ratio numbers. In the calculation, we have taken into account the payroll employees only, since this ensures consistency with the figures disclosed in the Consolidated Financial Statements. The ratio would be lower if we were to incorporate the temporary

employees, as they earn on average a higher remuneration.


Attractive workplace for all – Benefits which are standard for full-time and part-time employees of the organization but are not provided to temporary employees1
Type of employee benefit:	Type of employee
	Full-time employees	Part-time employees	Temporary employees	2
i. life insurance3	yes	yes	no
ii. healthcare3	yes	yes	no
iii. disability and invalidity coverage3	yes	yes	no
iv. parental leave3	yes	yes	no
v. retirement provision	yes	yes	no
vi. stock ownership	yes	yes	no

1. This table include the significant locations of operations: Taiwan, Netherlands, China, South Korea and the US. There are no part-time employees in Taiwan.

2. Generally temporary employees are not entitled to the same benefits as full-time and part-time employees because their benefits are covered by the benefit plans of their formal employer.

3. In the US part-time employees are not entitled to life insurance, healthcare, disability and invalidity coverage and parental leave benefits.


Attractive workplace for all – Employee safety
Description	2020	2021	2022	Comments
ASML recordable incident rate1	0.18	0.17	0.18	Includes illness and injuries.
Number of recordable incidents (employees)	46	48	63
Number of recordable incidents (contractors)	n/a	n/a	9
Number of fatalities	—	—	—	This relates to both employees and workers who are not employees.
Employees with work-related injuries split by:
Rate of fatalities	n/a	n/a	—
Number of recordable injuries	n/a	n/a	48
Rate of recordable injuries	n/a	n/a	0.14
Number of high-consequence injuries	n/a	n/a	2
Rate of high-consequence injuries	n/a	n/a	0.01
Main types of work-related injuries by employees (split by hazard group)
Electrical	n/a	n/a	1
Ergonomics	n/a	n/a	17
Facilities	n/a	n/a	88
Hazardous substances & materials	n/a	n/a	9
Hoisting & lifting	n/a	n/a	10
Mechanical	n/a	n/a	147
Pressure systems	n/a	n/a	1
Thermal	n/a	n/a	2
Travel	n/a	n/a	10
# hours worked	n/a	n/a	68,746,820
Workers who are not employees with work-related injuries split by:
Number of recordable injuries	n/a	n/a	8
Number of high-consequence injuries	n/a	n/a	—


Attractive workplace for all – Employee safety
Description	2020	2021	2022	Comments
Main types of work-related injuries by workers who are not employees (split by hazard group)
Electrical	n/a	n/a	1
Ergonomics	n/a	n/a	3
Facilities	n/a	n/a	18
Hazardous substances & materials	n/a	n/a	1
Hoisting & lifting	n/a	n/a	5
Mechanical	n/a	n/a	29
Pressure systems	n/a	n/a	2
Travel	n/a	n/a	1
Employees with work-related ill health split by:
Number of recordable ill-health	n/a	n/a	15
Main types of work-related ill health by employees (split by hazard group)	n/a	n/a	—
Ergonomics	n/a	n/a	22
Facilities	n/a	n/a	4
Hazardous gasses	n/a	n/a	—
Hazardous substances & materials	n/a	n/a	4
Hoisting & lifting	n/a	n/a	2
Mechanical	n/a	n/a	1
Pressure systems	n/a	n/a	1
Workers who are not employees with work-related ill health split by:
Number of recordable ill-health	n/a	n/a	1
Main types of work-related ill health by workers who are not employees (split by hazard group)
Ergonomics	n/a	n/a	2
Hazardous gasses	n/a	n/a	1
Mechanical	n/a	n/a	1

1.The 2020 and 2021 recordable incident rates include recordable incidents related to workers who are not employees. From 2022, and in line with GRI 403 standard, we separate incidents related to employees and workers who are not employees so the 2022 recordable incident rate only

includes recordable incidents related to employees.


Our supply chain – Supply chain
Description	2020	2021	2022	Comments
Total number of suppliers	4,749	4,657	4,984
Number of suppliers per region:
Asia	1,313	1,319	1,348
EMEA (excl. Netherlands)	684	702	745
Netherlands	1,477	1,459	1,584
North America	1,275	1,177	1,307
Total	4,749	4,657	4,984
Number of suppliers, split by:
Product-related	779	772	789
Non-product-related	3,970	3,885	4,195
Total	4,749	4,657	4,984	The majority are Tier 1 suppliers.
Number of suppliers, split by:
Critical	222	229	245	Critical suppliers are Tier 1 suppliers of strategic importance.
Non-critical	4,527	4,428	4,739
Total	4,749	4,657	4,984
Number of critical suppliers, split by:
Product-related	188	197	216
Non-product-related	34	32	29
Total	222	229	245
Number of suppliers in scope for risk management	235	243	264	This includes 19 critical Tier 2 suppliers.
Total sourcing spend (in million EUR)	7,645	9,045	12,402
Sourcing spend per supplier group (in %)
Product-related	68%	70%	69%
Non-product-related	32%	30%	31%


Our supply chain – Supply chain
Description	2020	2021	2022	Comments
Proportion of spending on local suppliers (in %)				We define ‘local’ as the country in which a significant location of operation is located. The significant locations of operations are the main manufacturing sites of ASML, which are located in Veldhoven, the Netherlands; Linkou, Taiwan; San Diego and Wilton, both in the United States. The manufacturing location in Tainan is immaterial for this indicator.
Veldhoven	47%	45%	45%	A relatively large amount of the total supplier spend for Veldhoven relates to Carl Zeiss (non-local).
Linkou	48%	50%	53%
San Diego	94%	92%	92%
Wilton	71%	64%	71%


Governance – Business ethics
Description	2020	2021	2022	Comments
Total number of Speak Up messages, split by:	229	396	414
Anti-corruption & bribery Speak Up messages	19	37	31	None of the Speak Up messages indicated any violation of anti-corruption laws.
Human rights	69	187	165
- of which discrimination and harassment	n/a	n/a	106


Governance – Product safety
Description	2020	2021	2022	Comments
Number of (significant) fines for non-compliance with product design related laws and regulations	—	—	—
Monetary value of significant fines for non-compliance with product design related laws and regulations	—	—	—



		Other appendices

		IN THIS SECTION

		316	Other appendices
		320	Definitions



ASML ANNUAL REPORT 2022	STRATEGIC REPORT	GOVERNANCE	FINANCIALS	316

This Annual Report contains statements

relating to our expected business, results

projections, business trends and other

matters that are “forward-looking” within the

meaning of the Private Securities Litigation

Reform Act of 1995. You can generally

identify these statements by the use of words

like “may”, “will”, “could”, “should”, “project”,

“believe”, “anticipate”, “expect”, “plan”,

“estimate”, “forecast”, “potential”, “intend”,

“continue” and variations of these words or

comparable words. They appear in a number

of places throughout this Annual Report and

include statements with respect to our

expected trends and outlook, strategies,

corporate priorities and goals, expected

semiconductor industry trends, expected

trends in markets served by our customers,

including expected growth in semiconductor

demand, manufacturing

capacity, expected semiconductor market

trends and market growth and drivers of

such trends and growth, expected financial

results, including expected sales, service

revenue, gross margin, expected capital

expenditures, R&D and SG&A expenses,

effective annualized tax rate, annual revenue

growth rate and outlook for 2023 and other

statements under “Trend Information”,

annual sales and gross margin opportunity

and potential and growth outlook and for

2025 and 2030, sales model for 2025 and

other statements under the section entitled

“Long-term growth opportunities”,

statements under the section entitled "Risk

factors", expected trends in customer

demand and demand for semiconductors

including expected trends in end markets,

including Memory and Logic, expected

development of High-NA and expected

timing to start shipment of High-NA systems

and high-volume production of High-NA

systems, for semiconductor industry market

opportunities, expected EUV and DUV and

installed based management sales and the

expectation about continuing role of DUV

systems, EUV product roadmap, our supply

chain strategies and goals, customer, partner

and industry roadmaps, expected

productivity and benefits of our tools,

potential future innovations and system

performance, expected shipments of our

tools, including demand for and timing of

shipments, statements with respect to DUV

and EUV competitiveness, the development

of EUV technology, revenue recognition,

expected demand for wafers, expected

impact of inflation, ESG strategy including

our sustainability targets, goals and

strategies, environmental, diversity and

sustainability strategy, ambitions, goals and

targets, including circular procurement goals,

targeted greenhouse gas emissions and

waste reduction, recycling and refurbishment

initiatives, investments and goals and

energy-saving strategies and targets,

including statements on targeting zero

carbon emissions and indirect emissions

from energy use across operations and

reducing intensity of all other emissions in the

value chain and the goals for timing thereof,

statements with respect to Moore’s Law,

cash return and dividend policy, our

expectation to continue to return cash to our

shareholders through share buybacks and

dividends including our proposed dividend

for 2022 and statements relating to our share

buyback program, statements with respect

to the expected impact of accounting

standards and other non-historical

statements. These forward-looking

statements are not historical facts, but rather

are based on current expectations,

estimates, assumptions and projections

about business and future financial results

and readers should not place undue reliance

on them. Forward-looking statements do not

guarantee future performance, and actual

results may differ materially from projected

results as a result of certain risks, and

uncertainties. These risks and uncertainties

include, without limitation, those described

under How we manage risk – Risk factors.

These forward-looking statements are made

only as of the date of this Annual Report. We

do not undertake to update or revise the

forward-looking statements, whether as a

result of new information, future events or

otherwise.

Appendix - Financial calendar and investor relations

Financial Calendar

April 19, 2023

Announcement of First Quarter results for 2023

April 26, 2023

Annual General Meeting

July 19, 2023

Announcement of Second Quarter results for 2023

October 18, 2023

Announcement of Third Quarter results for 2023

Fiscal Year

ASML’s fiscal year ends on December 31, 2023

Investor Relations

ASML Investor Relations supplies information regarding the company and

its business opportunities to investors and financial analysts. Our annual

reports, quarterly releases and other information are also available on our

website.

Appendix - ASML contact information

Corporate Headquarters

De Run 6501

5504 DR Veldhoven

The Netherlands

Mailing Address

P.O. Box 324

5500 AH Veldhoven

The Netherlands

Investor Relations

phone: +31 40 268 3938

email: investor.relations@asml.com

For additional contact information please visit

www.asml.com.


Name		Description
0-9
3TG		Tin, tantalum, tungsten and gold
3D NAND		A type of non-volatile flash memory in which the memory cells are stacked vertically in multiple layers.
A
A&M		Access & Mobility
ABC compliance review		Anti-bribery and corruption compliance review
ADAS		Advanced driver-assistance systems
ADI		After development inspection
AFM		The Dutch Authority for the Financial Markets (Autoriteit Financiële Markten)
AGM		Annual general meeting
AI		Artificial intelligence
AIoT		Artificial intelligence of things
Annual Report		Annual Report on Form 20-F
Applied Materials Inc.		Semiconductor equipment company
ARCNL		Advanced Research Center for Nanolithography
ArF		Argon fluoride
ArFi		Argon fluoride immersion
ASC		Accounting Standards Codification
ASC 740		Accounting Standards Codification provision for income taxes
ASML		ASML Holding N.V. and/or any of its subsidiaries
ASML Foundation		An independent charity with strong ties to ASML that supports educational initiatives for disadvantaged 4- to 18-year-olds in regions where ASML operates.
B
BAPA		Bilateral advance pricing agreements
BEAT		Base erosion and anti-abuse tax
Big data		Extremely large data sets that may be analyzed computationally to reveal patterns, trends and associations.
Big Four accounting firms		Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers
BoM		Board of Management
BOM		Brabantse Ontwikkelings Maatschappij


Name		Description
Brainport Eindhoven		A technology region in the south of the Netherlands comprising companies, educational institutions and governmental organizations.
BREEAM		Building Research Establishment Environmental Assessment Method
Brion		Brion Technologies, Inc.
C
CAGR		Compound annual growth rate
Canon		Canon Kabushiki Kaisha
CAPEX		Capital expenditures, defined as additions in property, plant and equipment plus additions in intangible assets plus additions in right-of-use assets (operating and finance).
Capital resources		Financial, manufactured, intellectual, human, social and relationship, and natural elements employed to produce goods and services.
Carl Zeiss SMT		Carl Zeiss SMT GmbH
Cash conversion rate		An economic statistic in controlling that represents the relationship between cash flow and net profit.
CCIP		Customer Co-investment Program
CCPA		California Consumer Privacy Act (US)
CCR %		Cash Conversion Rate Percentage
CD		Critical dimension
CDP		The Carbon Disclosure Project
CEO		Chief Executive Officer
CERN		The European Organization for Nuclear Research
CFO		Chief Financial Officer
CGU		Cash-generating unit
CGU ASML		ASML excluding CGU Cymer Light Sources
CHIPS and Science Act		The Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 (CHIPS Act), signed into law in August 2022, designed to boost US competitiveness, innovation, and national security.
CISO		Chief Information Security Officer
CIT		Corporate income tax
CLA		Collective labor agreement
Cleanroom		The central part of a wafer fab where wafers are processed and the environment is carefully controlled to eliminate dust and other contaminants.
CMD		Capital Markets Day
CMO		Chief Marketing Officer


Name		Description
CMOS		Complementary metal–oxide semiconductor
CO2		Carbon dioxide
Code		The Dutch Corporate Governance Code
Code of Conduct		Code of ethics and conduct
Company		ASML Holding N.V.
Computational lithography		The use of powerful algorithms and computer modeling of the manufacturing process to optimize reticle patterns by intentionally deforming them to compensate for physical and chemical effects that occur during lithography and patterning.
COO		Chief Operating Officer
COSO		Committee of Sponsoring Organizations of the Treadway Commission
COVID-19		Coronavirus disease 2019
CRC		ASML’s corporate risk committee
CRE		Corporate Real Estate department of ASML
CRMC		Capital Research & Management Company
CSRD		Corporate Sustainability Reporting Directive
CTO		Chief Technology Officer
Cyber Weerbaarheidscentrum Brainport		Foundation in the Brainport Eindhoven region that offers companies in the high-tech and manufacturing industry the opportunity to enhance their protection against cybercrime
Cymer		Cymer Inc., Cymer LLC and its subsidiaries
D
D&E		Development and engineering
DEFRA
Deloitte		Deloitte Accountants B.V.
D&I		Diversity and inclusion
DJSI		Dow Jones Sustainability Index
DRAM		Dynamic random-access memory
DUV		Deep ultraviolet
E
EAC		Energy attribute certificates
EBIT		Earnings before interest and taxes


Name		Description
EHS		Environment, health and safety
EHS Competence Center		A group within ASML that defines EHS standards, gathers best practices and helps managers implement them.
EIM		External interface module
EMEA		Europe, the Middle East and Africa
EMS		Environmental management system
EPE		Edge placement error
EPS		Earnings per share
ERM		Enterprise risk management
ERP		Enterprise resource planning system
ESA		European Space Agency
eScan		ASML’s e-beam wafer inspection system family for targeted in-line defect detection.
ESG		Environmental, social and governance
ESG score		An integrated scoring system for environmental, social and governance (ESG) factors used in credit rating decisions.
ETR		Effective tax rate
EU		European Union
EU-IFRS		International Financial Reporting Standards as adopted by the European Union
EURIBOR		Euro Interbank Offered Rate
Eurobond		A bond denominated in Euros
Euroclear Nederland		The Dutch Central Securities Depository (Nederlands Centraal Instituut voor Giraal Effectenverkeer B.V.)
Euronext Amsterdam		Euronext Amsterdam N.V.
EUV		A lithography technology that uses extreme ultraviolet light with a wavelength of 13.5 nm. This is currently the cutting edge of lithography, enabling technology nodes of 16 nm and beyond. It is used for only the most critical layers with the smallest features.
EVP		Executive Vice President
EVP HRO		Executive Vice President Human Resources and Organization
Exchange Act		US Securities Exchange Act of 1934
ExCom		Executive Committee
F
Fab		Semiconductor fabrication plant


Name		Description
Fast shipment		A fast shipment process skips some of the testing in our factory. Final testing and formal acceptance then takes place at the customer site. This leads to a deferral of revenue recognition for those shipments until formal customer acceptance, but does provide our customers with earlier access to wafer output capacity
FAQ		Frequently asked questions
Farmout supplies		Our suppliers that we work with as co-investors
FAT		Factory acceptance test
FDII		Foreign-derived intangible income
Feature		The elements that make up the pattern for a given layer of a microchip
FFHA		Foundation for Hospital Art
Fitch		A leading provider of credit ratings, commentary and research for global capital markets
Flash		A type of non-volatile memory used for storing and transferring information
Foundry		A contract manufacturer of logic chips
Fraunhofer		Applied research organization in Germany
FTEs		Full-time equivalents
FTSE4Good		Series of ethical investment stock market indices launched in 2001 by the FTSE Group.
G
G-SEED		Green Standard for Energy and Environmental Design
GAAP		Generally accepted accounting principles
GDP		Gross domestic product
GDPR		General data protection regulation
GeSI		Global e-Sustainability Initiative
GHG		Greenhouse gas
GILTI		Global intangible low-tax income
GPU		Graphics processing unit
GRI		Global Reporting Initiative
GRI standards		GRI sustainability reporting standards
H
H2		Molecular hydrogen
HDD		Hard disk drive
HMI		The brand name for ASML’s range of electron beam (e-beam) wafer inspection and metrology systems


Name		Description
Holistic lithography		Our approach to optimizing the entire microchip printing process and enabling affordable scaling in chip technology by integrating lithography systems with computational modeling and wafer metrology solutions to analyze and control the manufacturing process in real time
Horizon Europe Program		A public-private partnership that facilitates collaboration and strengthens the impact of research and innovation in developing, supporting and implementing EU policies while tackling global challenges
HR&O		Human Resources & Organization
HTSC		High Tech Systems Center
Huisman		Huisman Equipment BV
HVAC		Heating, ventilation, and air conditioning
I
IAS		International accounting standards
IBM		Installed base management
IC		Integrated circuit
ICT		Information and communication technology
ID2PPAC		Integration of processes and modules for the 2 nm node meeting Power Performance Area and Cost requirements
IDM		Integrated device manufacturer
IFRS		International financial reporting standards
Internal Control - Integrated Framework 2013		Criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission.
IP rights		Intellectual property rights
IRA		Inflation Reduction Act of 2022
IIRC		International Integrated Reporting Council
I-REC		International renewable energy certificate
IRS		Internal Revenue Service of the United States
i-line		Light with a wavelength of 365 nm, generated by mercury vapor lamps and used in some lithography systems
ILO		International Labor Organization
Imaging		The transfer of a pattern onto the photoresist on a wafer using light
imec		Interuniversitair Micro-Elektronica Centrum
Immersion lithography		A lithography technique that uses a pool of ultrapure water between the lens and the wafer to increase the lenses numerical aperture (ability to collect and focus light). This improves both the resolution and depth of focus for the lithography system.


Name		Description
Inclusion Index		The overall score related to the questions included in the we@ASML survey that specifically relate to ‘inclusion'
Intel		Intel Corporation
Internet of Things (IoT)		A network of physical objects embedded with sensors, actuators, electronics and software that allow the objects to collect and exchange data
IT2		IC Technology for the 2nm Node (EU project)
IPR		Intellectual property rights
ISO		International Organization for Standardization
J
JG+13		Job grade 13 and higher
JP Morgan Chase		A US-based global leader in financial services offering solutions to the world's most important corporations, governments and institutions
K
KLA-Tencor		KLA-Tencor Corporation
KPI		Key performance indicator
KPMG		KPMG Accountants N.V.
K-Reach		Act on the Registration and Evaluation of Chemicals in South Korea
KrF		Krypton fluoride
kt		Kilotonne or 1,000 tonnes (1 tonne = unit of mass equal to 1,000 kilograms)
kWh		Kilowatt-hour
L
LED		Light-emitting diode
LEED		Leadership in Energy and Environmental Design
LGBTQIA+		Lesbian, gay, bisexual, transgender, queer, intersex, asexual and other identities
LIBOR		London Interbank Offered Rate
Lithography		Lithography, or photolithography, is the process in microchip manufacturing that uses light to pattern parts on a silicon wafer.
Logic		Integrated devices such as microprocessors, microcontrollers and GPUs. Also refers to companies that manufacture such devices.
LTI		Long-term incentive
LXP		Learning eXperience Platform
M
MBA		Master of Business Administration


Name		Description
Memory		Microchips, such as NAND Flash and DRAM, that store information. Also refers to companies that manufacture such chips.
Metalektro		Multi-employer union plan is managed by PME (Stichting Pensioenfonds van de Metalektro).
Metrology		The science of weights and measures or of measurement.
mm		Millimeter (one thousandth of a meter)
MNP		Make Next Platform
Moody's		An American credit rating agency that provides corporate ratings.
MPS		Mature Products and Services
MSCI		Morgan Stanley Capital International
Mt		Megatonne, a metric unit equivalent to 1 million (106) tonnes, or 1 billion (109) kilograms
MW		Megawatt, a metric unit equivalent to one million (106) watt
N
NA		Numerical aperture
NAND		A binary logical operator that gives an output when it receives one or no input; a composite of ‘NOT AND’.
Nanoscale		The nanoscopic scale (or nanoscale) usually refers to structures with a length scale applicable to nanotechnology, usually cited as 1–100 nanometers.
NASDAQ		NASDAQ Stock Market LLC
Net bookings		Net bookings include all system sales orders and inflation related adjustments, for which written authorizations have been accepted.
Net zero emissions		Reaching a state of net zero emissions involves: (a) reducing scope 1, 2 and 3 emissions to zero or to a residual level that is consistent with reaching net-zero emissions at the global or sector level in eligible 1.5°C scenarios or sector pathways and; (b) neutralizing any residual emissions at the net zero target date and any GHG emissions released into the atmosphere thereafter.
NGO		Nongovernmental organization
NIIT		Net investment income tax
Nikon		Nikon Corporation
NL		The Netherlands
nm		Nanometer (one billionth of a meter)
Node		A steppingstone in the chipmaking industry’s roadmap for smaller features and more advanced microchips, describes and differentiates generations of semiconductor manufacturing technologies and the chips made with them. Nodes with “smaller sizes” refer to more advanced technologies.
Non-GAAP		A company’s historical or future financial performance, financial position, or cash flows that are not calculated or presented in accordance with the most comparable GAAP measure.


Name		Description
NPR		Non-product-related
NRE		Non-recurring engineering
NXE		The original TWINSCAN system platform for EUV lithography
NXT		An enhanced version of the original TWINSCAN system platform offering significantly improved overlay and productivity
O
OCI		Other comprehensive income
ODM		Original design manufacturer
OECD		Organization for Economic Co-operation and Development
OEM		Original equipment manufacturer
ONE		ASML’s Our New Enterprise program, which aims to improve our business processes and IT enterprise management system
Operations employees		Customer support and Manufacturing and Supply Chain Management employees
Overlay		The layer-to-layer alignment of chip structures
P
P&L		Statement of profit and loss
PAS		Philips Automatic Stepper
Pattern fidelity		A holistic measure of how well the desired pattern is reproduced on the wafer
Pattern fidelity control		A holistic approach to controlling the whole process of manufacturing advanced microchips in high volumes that aims to improve overall yields. It draws data from production equipment and computational lithography tools, analyzing it with techniques such as machine learning to provide real-time feedback.
Patterning		The process of creating a pattern in a surface to build microchips
PCAOB		Public Company Accounting Oversight Board
PFAS		Perfluoroalkyl chemicals
PGP		Product generation process
Philips		Health technology company, headquartered in the Netherlands
PHLX Index		Semiconductor sector index
Pin3S		Pilot Integration of 3nm Semiconductor Technology
PIs		Performance Indicators
PME		Bedrijfstakpensioenfonds Metalektro
Preference shares foundation		Stichting Preferente Aandelen ASML


Name		Description
Preference share option		An option to acquire cumulative preference shares in our capital
Q
Q&As		Questions and answers
QLTCS		Quality, logistics, technology, cost and sustainability
R
R&D		Research and development
RBA		Responsible Business Alliance
RC		ASML’s Remuneration Committee
REACH		Registration, evaluation, authorization and restriction of chemicals
Recoverable amount		The greater out of an asset’s fair value less costs to sell and its value in use
REMA		EUV reticle masking module
Remuneration policy		The remuneration policy applicable to the Board of Management of ASML Holding N.V.
Reticle		A plate containing the pattern of features to be transferred to the wafer for each exposure.
ROAIC		Return on average invested capital
RoHS		Restriction of hazardous substances
S
S&P		Standard & Poor's, a stock index of the United States that, due to its broad composition, gives a reliable picture of developments in the American stock market.
Samsung		Samsung Electronics Corporation
SAQ		Self-assessment questionnaire
Sarbanes-Oxley Act		The Sarbanes-Oxley Act of 2002
SAT		Site acceptance test
SB		ASML’s Supervisory Board
SBTi		Science-Based Targets initiative
Scope 1 CO2e emissions		Direct carbon dioxide emissions from resources an organization owns or controls
Scope 2 CO2e emissions		Indirect carbon dioxide emissions due to the energy an organization consumes
Scope 3 CO2e emissions		All other indirect carbon dioxide emissions that occur in an organization’s value chain
Scope 3 CO2e emissions intensity		All other indirect carbon dioxide emissions that occur in an organization’s value chain expressed as a percentage of revenue or gross profit
SDGs		United Nations' Sustainable Development Goals


Name		Description
SEC		The United States Securities and Exchange Commission
SEMI		Semiconductor Equipment and Materials International
SEMI S2		SEMI S2 – Safety Guideline, Environmental, Health, and Safety Guideline for Semiconductor Manufacturing Equipment, a set of performance-based EHS considerations for semiconductor manufacturing equipment
SEMI S23		SEMI S23 – Guide for Conservation of Energy, Utilities, and Materials Used by Semiconductor Manufacturing Equipment, guidelines for collecting, analyzing, and reporting energy-consuming semiconductor manufacturing equipment utility data
SG&A		Selling, general and administrative expenses
Shrink		The process of developing smaller transistors for more advanced chips.
SMART Photonics		Foundry for integrated photonic circuits
SoC		System on a chip
SPE Shareholders		A syndicate of three banks for the purpose of leasing ASML’s headquarters in Veldhoven.
SPIE		International society for optics and photonics
S&SC		Sourcing and supply chain
SSD		Solid-state drive
Springplank 040		Social care organization in Eindhoven offering support and guidance to homeless people
SSRA		Safety risk assessment
STEM		Science, technology, engineering and mathematics
STI		Short-term incentive
STR		Stichting Technology Rating, a non-profit organization.
Sub fab		Located under the cleanroom floor, the sub fab contains auxiliary equipment such as the drive laser
SWOT		Strengths, weaknesses, opportunities and threats
T
TAPES3		Technology Advances for Pilot line of Enhanced Semiconductors for 3nm
TCFD		Task force on climate-related disclosures
TC		ASML’s Technology Committee
TCC		Total Cash Compensation
TCFD		Task Force on Climate-related Financial Disclosures
TCJA		Tax Cuts and Jobs Act
TDC		Total direct compensation


Name		Description
Technical competence		The capabilities and spread of technical expertise among our people, and the extent to which they are embedded in our processes and operations
Thales NL		Dutch branch of the international Thales Group
Throughput		The number of wafers a system can process per hour
Tier 1 (2,3) supplier		Tier 1 suppliers are direct suppliers whereas Tier 2, 3 and beyond refer to suppliers of our suppliers
TJ		Terajoule (one trillion joules)
TNO		Nederlandse Organisatie voor Toegepast Natuurwetenschappelijk Onderzoek (Netherlands Organisation for Applied Scientific Research)
Transistor		A semiconductor device that is the fundamental building block of microchips
TSCA		Toxic Substances Control Act
TSMC		Taiwan Semiconductor Manufacturing Company Ltd.
TSR		Total shareholder return
TWINSCAN		ASML’s unique lithography system platform, with two complete wafer stages to allow one wafer to be mapped while another is being exposed, thereby enabling higher accuracy and throughput
U
UNGP		United Nations guiding principles
US		United States
US GAAP		Generally accepted accounting principles in the United States of America
US ITC		United States International Trade Commission
V
Vanderlande		A material handling and logistics automation company based in the Netherlands
VAT		Value-added tax
VIE		Variable interest entity
VLSI		VLSI Research Inc.
VNO-NCW		The Confederation of Netherlands Industry and Employers
VOC		Volatile organic compound
VP		Vice president
VPA		Volume purchase agreement
VPC		Volume parts contract
W
WACC		Weighted average cost of capital
Wafer inspection		The process of locating and analyzing individual chip defects on a wafer



	Smaller size, bigger capability is a well-established trend in the chip industry. And thanks to the joint efforts of our 39,000 people working together with suppliers, customers and innovation partners, we are taking that ever further. Every day we push the boundaries of physics and shrink patterns to help shape the future of life, work and play across the planet. Strongly embedded in a global innovation ecosystem, we enable ground-breaking technology that can help humanity manage challenges and seize opportunities by facilitating smart living and mobility, accessible healthcare, food security and the transition to renewable energy.
	Creating small patterns that enable a big impact.


Name		Description
Wafer metrology		The process of measuring the quality of patterns on a wafer
Waste intensity		The total waste in millions of kilograms (excluding construction waste) divided by revenue (in millions of euros)
Wavelength		The distance between two peaks of a wave such as light. The shorter the wavelength of light used in a lithography system, the smaller the features the system can resolve.
Website		www.asml.com
WHT		Withholding tax
Works Council		Works Council of ASML Netherlands B.V.
wph		Wafers per hour
X
XTAL		XTAL, Inc.
Y
YieldStar		ASML’s diffraction-based wafer metrology platform
Z
ZEISS		Carl Zeiss AG