ASML CEO on AI Demand, Data Centers in Space and Musk's Terafab

[00:00:00] Speaker 1: we are meeting and talking at a moment where there is a lot of focus here in europe on the decision by the u.s to impose export controls on anthropic models and europe is feeling the impact of that and it's a reminder of the questions around sovereignty particularly around ai and you are pushing hard on this what is your message to brussels what is it that europe needs to do to ensure that it is not vulnerable to those kind of supply chain risks well i think indeed there's [00:00:26] Speaker 2: a lot of discussion around that and sovereignty has become a key award because people realize that strategically if you don't have a big enough part of a certain ecosystem in this case ai you're going to be exposed to the goodwill of other parties but i think what's very important to understand when it comes to sovereignty is to get sovereignty you need innovation first you have to do things in the right order it's not enough to say i want sovereignty what's very important is make sure that innovation can happen in europe and i think that's a bit the idea of the tech creators group we have created where we believe that it is very very important to have a dialogue with the different government commission but also national government to help them to understand how to create the condition such that the ai ecosystem can develop in europe you will never have the entire ecosystem yeah right you cannot do it all it's too much or you cannot do it all at the same time but you need at least to have enough i would say skin in the game in a value in the ecosystem so that when those discussion or [00:01:39] Speaker 1: those decision happen you have a voice so where can europe have skin in the game they've got skin in the game with asml and the role that you play yeah where else can europe have skin in the game when it comes to ai well [00:01:50] Speaker 2: i think a very important place is the market itself the european market is pretty attractive right you look at 22 percent of jdp it's a very uh i would say mature market very good market so this means we are our user we are buying a lot of stuff and that's to start with a strength for europe and i think that's the reason why europe was created now if you look at the other part between maybe asml and that we have a lot of holes and sometime we discuss a lot semiconductor manufacturing yes there is a gap there but most probably not the right place to start because semiconductor manufacturing is only needed if you have people to buy a semiconductor today if we had a two nanometer fab in europe most probably most of the wafers will go to the us so since we have a strong market we have to start by looking at that and focus on what we call the market demand product and have strong industrial projects around ai application around maybe ai product then maybe our chip design and then chip manufacturing but you have to look at the entire sequence and look at it in the right order how would you current how would you [00:03:09] Speaker 1: score europe right now on a score of one to ten in this ai race well i think i've said that before i [00:03:15] Speaker 2: think that you know if we compare uh how we do on the entire ecosystem versus the us and china i think today the us is a clear winners i mean they are looking at champion across the entire ai semi ecosystem i think the one place they they were missing a bit out was manufacturing and i think they have been extremely aggressive in bringing some key company to manufacture in the us they can do that because they buy chips 80 of the advanced chips manufacturer worldwide is bought by the united states so i think the us is doing very very very well china has been investing also across the entire ecosystem i think mostly they do very well on the application side a bit less on what's before that but i think they are driving the use of ai most probably more aggressively than any other country and again when you look at europe a lot of horse so [00:04:13] Speaker 1: what's happening elsewhere today so that that gap is obviously there how interventionist should european governments be the us taking a 10 stake in intel is that a a playbook that we should copy well i think [00:04:31] Speaker 2: two things maybe so the first thing we need to have a dialogue between the industry and government so all of government is to really develop instruments regulation or lack of regulation in some cases to make the [00:04:47] Speaker 1: industry champion life a lot easier i want to ask you about the ipos that come through spacex notably and possibly open ai and anthropic coming up into the future are we underestimating the capex spend that could come about as a result of that capital raising and what it means for the demand for your lithography [00:05:04] Speaker 2: machines well if you look at you know worldwide the demand for ai infrastructure is still enormous and the demand for edge ai edge compute start to come up so the demand is continuing to go up i think a lot of us are convinced that we're going to be looking at a supply limited market for ai for semiconductor for quite a few years because the buildup of the infrastructure is is huge and i think some of the ipo you mentioned are just pointing to the opportunity that the eyes is representing are we are [00:05:42] Speaker 1: we early in this still where are we in in that in that i think we're still early because uh you know even [00:05:47] Speaker 2: a year ago uh the ai company we're already very vocal about the need for this architecture the need to build up capacity my industry the semi-industry was still a bit hesitant to move and the move really happened basically at the end of last year and very quickly and now we all need to build capacity so our customer have to build fab we have to make sure we build enough equipment to fill those fab yeah and the catch-up will take quite a bit and that's only for the infrastructure and then the application will come [00:06:22] Speaker 1: are you seeing a pull forward of orders for your duv and ev machines from customers we see a pool we see [00:06:29] Speaker 2: customer continuing to create visibility longer-term visibility telling us well this is a bit here to stay so i would say that the trend we see is still very strong towards basically demand [00:06:45] Speaker 1: run with me on this one data centers and space is that is there a potential additional revenue stream for [00:06:51] Speaker 2: for asml if if musk pulls that one off well i think you know you need a certain amount of data center and they will be in space they will be on the hearse doesn't necessarily change the number i think the discussion about data center in space is to maybe address another potential bottleneck in the ecosystem which is energy i think the discussion around putting data center in space is there because there is an idea that if you do that the energy consumption of the energy availability will be there so maybe not too much to do with you know the total data center capacity but maybe more about trying to solve another potential big issue which is energy for a data center elon musk is also looking at a terror a terror fab [00:07:38] Speaker 1: plan potentially one terawatt of power what's the potential upside for asml on that have you talked to musk about that project is is that is that is that a potential uplift as well for the business going forward well you [00:07:50] Speaker 2: know you know any added capacity of of course a potential upside for for us i think we are looking very carefully on the development on when things will happen at what speed you know new projects are opportunity as long as you're not supply limited so that's that's also important to to say that so we have to make sure that this is really being taken care but i think the terra fab is is an example of a major fab project if you look at some of the dirham project in korea you also look at million of wafer fab so that's also pretty big okay so korea and [00:08:28] Speaker 1: the build out there is going to be a driver as well yeah um staying with the us though that one of the top house republicans on the house china committee sent a letter in april suggesting that asml was going to start shipping duv lithography machines into china there's some concern there do you have a [00:08:45] Speaker 2: response to to that no it's not a response because you know we have a dialogue with every government i think you know that in the last few years we have been subject many many times to uh those kind of uh negative rumors about what we do i mean every time the rumors have been quite uh i would say potentially hurtful even for for isml and i want to say it again i mean we have been following every single rules and we continue to do that the world are changing by the way quite often and sometimes something you could do you cannot do anymore but when this happens you know we change our behavior accordingly so we are extremely cautious in trying to follow or follow basically the rule of flows it's very important and it's true for dpv that's true for euv that's true for any activity we have in china or anywhere else in the world and i can promise you there's a lot of people in asml making sure that we comply compliance is a very important uh i would say element in in a very difficult geopolitical [00:09:57] Speaker 1: environment the indian prime minister narendra modu will be here in paris tomorrow yes you've partnered with tartar yes on their aspirations around boundaries and build out of semiconductor capacity how much of a growth story potentially is india for for asml so i think so first we're very happy with this [00:10:15] Speaker 2: partnership because we are partnering at the very start at the very beginning so of course we all know that india today doesn't have manufacturing for semiconductor but you know by 2030 they believe that 10 percent of any chips will be used by india and like anyone else that become therefore a strategic question of supply and therefore they want to get their factory so first five will come up next year a lot of learning has to happen and we will help india tata for this partnership to accelerate the learning and you know as learning gets successful you grow the opportunity so we're very happy to start now because we look at that as a growing opportunity for the not the next two years but for the next five and 10 years in India and we're very happy that we are there from the start