ASML Holding NV ADR (ASML.US) Q3 earnings call: order intentions extend to 2029/30, Intel Corporation High-NA has exposed over one million wafers, Samsung to adopt for mass production in 2028, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR in 2030.

ASML Holding NV ADR (ASML.US) reported record third-quarter revenue and gross margin, driven by continued investment in AI-related logic and memory chip capacity, which boosted demand for semiconductor manufacturing equipment. Third-quarter total net sales reached EUR 11.7 billion, near the upper end of the company's guidance range. Net system sales were EUR 8.4 billion, with EUV systems contributing EUR 4.1 billion and non-EUV systems contributing EUR 4.3 billion. EUV system sales included one High-NA EUV system. Logic accounted for 54% of net system sales, while memory accounted for 46%. Installed base management sales, including services and upgrades, totaled EUR 3.3 billion, beating company guidance by nearly EUR 400 million. Chief Financial Officer Roger J. Dassen said the outperformance was mainly driven by demand for productivity upgrades in EUV and deep ultraviolet (DUV) systems. Gross margin was 57.5%, above guidance, benefiting from a high-margin component within the installed base management business. Net income was EUR 5 billion, including about EUR 500 million in gains from an increase in the valuation of ASML Holding NV ADR's initial investment in Mistral AI. Earnings per share were EUR 12.95. Looking ahead to the fourth quarter, ASML Holding NV ADR expects sales of between EUR 14.2 billion and EUR 15.2 billion, with a gross margin of about 57%. Installed base management sales are expected to be about EUR 3.7 billion. For the full year, the company expects total net sales of EUR 44 billion to EUR 45 billion, with a gross margin of about 56%. This outlook implies sales growth of about 36% year over year, mainly driven by expected EUV sales growth of more than 45%, about 20% growth in non-EUV-related system sales, and about 50% growth in installed base management sales. As of the end of the third quarter, ASML Holding NV ADR held EUR 12.7 billion in cash and equivalents and short-term investments. Free cash flow was EUR 11.4 billion, which Dassen said reflected customer order momentum and related prepayments. During the quarter, the company repurchased about EUR 4.1 billion of shares under its 2026-2028 buyback program and paid an interim dividend of EUR 1.88 per ordinary share. A second interim dividend of EUR 1.88 per share is scheduled to be paid on November 4. Capacity Expansion Amid Strong Demand Chief Executive Officer Christophe D. Fouquet said the pace of AI infrastructure buildout remains strong, while supply shortages in advanced logic and memory chip nodes have further intensified and pushed the shortage window further out. He said customers expect demand for their products to exceed supply at least through 2028, and are therefore accelerating capacity planning and considering extending expansion beyond that period. ASML Holding NV ADR said it is increasingly receiving orders for 2028, and customers have also expressed intentions to place orders for 2029 and 2030. Management said it has not yet accepted those longer-dated orders because the company is evaluating total demand and its own expected capacity for those years before allocating output among customers. The company expects to produce about 65 low-NA EUV systems in 2026, up nearly 50% from the 44 shipped in 2025. The company now also expects DUV immersion system deliveries in 2026 to be similar to last year, despite initially lower production targets. ASML Holding NV ADR had previously planned to increase capacity for both Low-NA EUV and DUV immersion systems by 30% in 2027 and has been evaluating another 30% increase in 2028. Dassen said the current plans for 2027 and 2028 cannot fully meet customer demand, and the company is now exploring further expansion beyond the 2028 growth level previously considered. Fouquet said the company does not currently view Carl Zeiss or other suppliers as bottlenecks to the planned capacity expansion, but ASML Holding NV ADR is still working closely with its supply chain. Management identified improving factory floor space utilization and shortening cycle times as important levers for expanding output. Productivity Upgrades and Technology Roadmap ASML Holding NV ADR plans to begin small-volume introduction of its next-generation Low-NA EUV system, the NXE:3800F, in early 2027. The system has a specified throughput of 260 wafers per hour, compared with 230 wafers per hour for the NXE:3800E. The company also plans to introduce a next-generation critical DUV immersion system with throughput of up to 330 wafers per hour. Fouquet said higher-throughput tools give customers more wafer capacity and create additional value, and ASML Holding NV ADR expects to capture that value through pricing. Dassen said completed pricing discussions with customers led to price increases for the company's most critical high-volume products. Those changes are not expected to have a significant impact on 2026 results, will begin contributing gradually from 2027, and are expected to be fully reflected from 2028. Dassen said a large portion of the price increases should help improve gross margin, though some of the benefit will be used to cover costs related to ASML Holding NV ADR's capacity ramp and supply chain expansion. High-NA EUV Progress Management highlighted growing momentum for ASML Holding NV ADR's next-generation lithography technology, High-NA EUV. Fouquet noted that Intel Corporation (INTC.US) has exposed more than 1 million wafers using High-NA EUV systems, with performance matching or exceeding comparable layers patterned with Low-NA EUV. According to ASML Holding NV ADR, Samsung and Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) have each announced plans to introduce High-NA EUV into mass production in 2028 and 2030, respectively. With availability of the existing High-NA installed base approaching 90%, Fouquet said adoption should increase "node by node" over time. ASML Holding NV ADR and Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR also launched an industry initiative to develop larger EUV photomasks. The initiative aims to build a 12-inch mask pilot line by 2031 and reach mass production by 2033. Fouquet said broad customer support for the initiative shows the industry expects High-NA EUV usage to continue increasing over time. The company also shipped its first YieldStar 550 metrology system in the quarter. ASML Holding NV ADR said this overlay measurement system is designed to support tighter process control requirements for 14-angstrom logic nodes and 1D DRAM nodes, while offering more than 60% higher productivity than the previous generation YieldStar. Conference Call Content Head of Investor Relations - Jim Kavanagh Chief Executive Officer - Christophe D. Fouquet Chief Financial Officer - Roger J. Dassen Operator: Good day, and thank you for waiting. Welcome to ASML's 2026 third-quarter financial results conference call on October 14, 2026. After the speakers' introductions, we will conduct a question-and-answer session. If you would like to ask a question during the call, please press 11 on your telephone. You will then hear an automated prompt confirming that your hand has been raised. To withdraw your question, please press 11 again. Please note that today's call is being recorded. I would now like to turn the call over to Mr. Jim Kavanagh. Please go ahead. Jim Kavanagh: Thank you, operator. Welcome, everyone. I am Jim Kavanagh, ASML's Head of Investor Relations. Joining me on the call today are ASML CEO Christophe D. Fouquet and our CFO Roger J. Dassen. Today's call is about ASML's 2026 third-quarter results. The call will last 60 minutes, and questions will be taken in the order received. This call is also being webcast at www.asml.com. A transcript of management's opening remarks and a replay of the call will be available on our website shortly after the call concludes. Before we begin, I would like to remind listeners that management's comments during this call will include forward-looking statements. These forward-looking statements involve significant risks and uncertainties. For a discussion of risk factors, I encourage you to review the safe harbor statement in today's press release and the presentation on our website at www.asml.com, as well as ASML's Annual Report on Form 20-F and other documents filed with the U.S. Securities and Exchange Commission. I would now like to turn the call over to Christophe D. Fouquet for a brief introduction. Christophe D. Fouquet: Thank you, Jim. Welcome, everyone, and thank you for joining our 2026 third-quarter results conference call. Before we begin the Q&A session, Roger and I would like to provide an overview and some comments on our 2026 third-quarter results, as well as some additional perspective on the current business environment and future business outlook. Roger? Roger J. Dassen: Thank you, Christophe, and welcome, everyone. I will start by reviewing our 2026 third-quarter financial results and then provide guidance for the fourth quarter and full-year 2026. Let me begin with our third-quarter results. Total net sales in the 2026 third quarter were a record EUR 11.7 billion, at the high end of our guidance range, reflecting strong execution in our capacity ramp. Net system sales were EUR 8.4 billion, including EUR 4.1 billion in EUV system sales, including one High-NA EUV system sale, and EUR 4.3 billion in non-EUV system sales. Within net system sales, logic accounted for 54% and memory accounted for 46%. Installed base management sales in the quarter were EUR 3.3 billion, nearly EUR 400 million above our guidance, mainly due to strong demand for productivity upgrade products in EUV and DUV. Gross margin in the quarter was above guidance at 57.5%, mainly driven by the contribution from a very high-margin component of our installed base management business. Our operating expenses were in line with guidance, with R&D expenses of about EUR 1.2 billion and SG&A expenses of about EUR 400 million. The effective tax rate in the third quarter was 16.1%, and the expected annualized effective tax rate for full-year 2026 is about 17%. Net income in the third quarter was EUR 5 billion, including about EUR 500 million from an increase in the valuation of our initial investment in Mistral AI, representing 42.5% of total net sales, with earnings per share of EUR 12.95. Turning to the balance sheet. At the end of the third quarter, our cash, cash equivalents and short-term investments were EUR 12.7 billion. Third-quarter free cash flow was EUR 11.4 billion, supporting strong customer order momentum and related prepayments. Turning to cash returns to shareholders. In the third quarter, ASML paid its first interim dividend for 2026 of EUR 1.88 per ordinary share. In addition, we repurchased about EUR 4.1 billion of shares in the third quarter under the current 2026-2028 share buyback program. The second quarterly interim dividend for 2026 will be EUR 1.88 per ordinary share, payable on November 4, 2026. Next, I would like to discuss our expectations for the fourth quarter and full-year 2026. We expect fourth-quarter total net sales of between EUR 14.2 billion and EUR 15.2 billion, with a gross margin of about 57%. We expect fourth-quarter installed base management sales of about EUR 3.7 billion. We expect fourth-quarter R&D expenses of about EUR 1.2 billion and SG&A expenses of about EUR 400 million. For the full year, we expect total net sales of between EUR 44 billion and EUR 45 billion in 2026, with a gross margin of about 56%. Total net sales are expected to increase about 36% year over year, reflecting our expectation of more than 45% growth in EUV, about 20% growth in non-EUV-related system sales, and about 50% growth in installed base management sales. Turning to end use. This year, we expect logic net system sales to grow about 10% and memory net system sales to grow about 75%. Memory growth is driven by both customer capacity expansion and increased EUV adoption at advanced DRAM nodes. As previously stated, we continue to expect China to account for about 20% of our total net sales this year. In summary, the third quarter was a record in both total net sales and gross margin, and we expect our business to continue accelerating in the fourth quarter as we execute against very strong customer demand for our products and services. I would now like to turn the call back to Christophe. Christophe D. Fouquet: Thank you, Roger. If we step back and look at the market environment, we see the pace of AI buildout continuing to be very strong. Supply shortages in advanced logic and memory nodes continue to intensify in both scale and duration. Against this backdrop, we had very constructive discussions with customers throughout the quarter, and the demand signals we are receiving continue to strengthen. Our leading-edge high-volume customers are sharing very good visibility, driven by a growing number of long-term commitments with their customers. This extended visibility has led them to conclude that demand for their products will exceed supply at least through 2028. As a result, customers are accelerating capacity build plans and preparing for further expansion beyond 2028 to better meet expected demand levels. For us, their drive to add capacity translates not only into greater near-term demand across our overall lithography portfolio, but also into improved long-term visibility and demand, especially for EUV products. As customers turn their attention to demand beyond 2027, our order momentum continues to strengthen. We are increasingly receiving orders for 2028, and customers have also expressed interest in placing orders for 2029 and even 2030. As our customers prepare to meet growing demand, we in turn remain focused on increasing capacity to support their needs. Roger will now share more details on our latest plans to provide additional capacity to customers. Roger? Roger J. Dassen: Thank you, Christophe. We have been very successful in our capacity ramp this year. For Low-NA EUV, we expect production of about 65 systems in 2026, an increase of nearly 50% from the 44 systems shipped last year. For DUV immersion systems, although we initially targeted production levels far below the prior year, we now expect 2026 deliveries to be similar to 2025. Looking ahead, we shared last quarter our intention to increase capacity for Low-NA EUV and DUV immersion systems by 30% in 2027 and to study another 30% increase in 2028. However, given the dynamics this quarter, we now expect our current planned output levels for 2027 and 2028 will not fully meet customer demand. As a result, we continue to intensify efforts to produce more systems, especially beyond 2027. To achieve this, we are now studying expanding 2028 capacity even above the 30% year-over-year growth target we were studying last quarter, across both Low-NA EUV and immersion systems. In addition to shipping new systems, we are supporting customer demand for more wafer capacity through productivity upgrades in the EUV and DUV installed base and through the introduction of new products. The ability to add capacity through upgrades within the same footprint is very attractive to customers because the effect is an immediate increase in output capability. We remain committed to this important value driver, expanding the upgrade portfolio for customers in the coming years and offering new productivity options. New product introductions are another lever we are using to support increased wafer capacity. We plan to begin small-volume introduction of our next-generation Low-NA EUV system, the NXE:3800F, in early 2027. The system is specified at 260 wafers per hour, compared with the NXE:3800E system's capability of 230 wafers per hour. We also plan to introduce a next-generation critical deep ultraviolet immersion system running at 330 wafers per hour. These new products will ramp over the coming years, providing the industry with additional wafer capacity. I will now turn the call back to Christophe for a technology update. Christophe D. Fouquet: Thank you, Roger. In the quarter, we saw meaningful progress in High-NA EUV. Several industry announcements provided evidence of the technology moving from development to production. Intel announced it has exposed more than 1 million wafers using its High-NA EUV systems, with performance matching or exceeding comparable layers patterned with Low-NA EUV. In addition, Samsung and TSMC each announced plans to introduce High-NA EUV into high-volume manufacturing in 2028 and 2030, respectively. With availability of the existing High-NA EUV fleet approaching 90%, we now expect increased adoption at these nodes. To further ensure chipmakers can fully leverage the benefits of High-NA EUV, we also launched an industry-wide initiative with TSMC to develop larger EUV photomasks. This collaboration aims to establish a 12-inch mask pilot line by 2031 and enter production in 2033. Broad support for this transition reflects customer interest in maximizing the value of High-NA EUV and investing in next-generation technology. In summary, the combination of very strong demand fundamentals, improved visibility and rising lithography intensity strengthens our confidence in the business trajectory. The focus remains on supporting our customers as they continue to expand capacity for their logic and memory nodes through our multiyear period, while also delivering enhanced productivity by executing our technology roadmap. In the third quarter, we also shipped our first YieldStar 550B metrology system. This overlay measurement system is designed with higher accuracy and precision to support tighter process control requirements for logic 14-angstrom nodes and DRAM 1d nodes. The system is designed to provide more than 60% higher productivity than the previous generation YieldStar, enabling customers to measure more wafers and thereby accelerate yield improvement in their processes more quickly. This latest-generation system continues to support large-scale customer adoption of YieldStar, with demand expected to more than double over the coming years compared with 2025. Finally, the transition of High-NA EUV to high-volume manufacturing creates a highly attractive opportunity for customers to enhance the economics of their future roadmaps. We remain fully committed to helping them insert it successfully. With that, we are happy to take your questions. Jim Kavanagh: Thank you, Roger, and thank you, Christophe. The operator will soon guide you through the Q&A protocol. Before that, I would like to ask everyone to limit themselves to one question, with a brief follow-up if necessary. This will allow us to take as many callers as possible. Operator, please give the final instructions and then connect the first question. Q&A Session Operator: Thank you. As a reminder, to ask a question, please press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 1 again. We will now take the first question. Today's first question comes from Joe Quatrochi of Wells Fargo. Please go ahead. Joe Quatrochi: Yes. Thank you for taking the question. I was wondering if you could provide some additional color on the capacity expansion beyond 30% that you need. And relative to the mid-80s number we discussed last quarter, what do you think you can do in 2027? Christophe D. Fouquet: Well, I think we are basically working very hard to add capacity. As Roger explained, we did a lot of work this quarter, and that is now real. The same will be true next year and in 2028. The reason, as we explained, is that we continue to see customers asking for more tools. Now, if we look at some of the opportunities we see, it is of course easier for us to realize them later. So mainly in 2028 rather than in the near term. So that is what we are looking at. I will not give new numbers for 2027 or 2028 because it is too early to give those numbers now. We will continue to do everything we can to get additional capacity. Joe Quatrochi: Okay. And then as a follow-up, you talked in your prepared remarks or in the transcript about value-based pricing having a bigger impact in 2027 and 2020? Can you share some additional details on that and how to think about the gross margin trajectory from here? Roger J. Dassen: Yes. So that is two questions, right? First, on pricing. As we mentioned in July, at that time we were in conversations with customers about price increases. The conversations have been completed and did result in price increases for what we call our most critical products for customers. So that is done. As we also -- you mentioned -- as we said in our prepared remarks, this will not have an impact on 2026. You will see some impact in 2027, but I would say the full impact really begins in 2020. So from 2028 onward, you will see a sustained impact, but during 2027, you will see it begin to show up in a positive way in revenue and average selling prices and gross margin. Your second question on gross margin is obviously a broader question. But let me answer it. So what are the favorable and unfavorable factors for gross margin? As you can see, gross margin this quarter was very, very strong. Stronger than we expected. I would say mainly due to the EUR 400 million extra in our upgrade business. But we should also not forget that if you look at the full-year 56%, it is not just the upgrade business. Right? It is also higher volume. It is also because we have a very strong Low-NA EUV business in there. A very strong immersion business. So those are all helpful. And then, obviously, the question is how does this develop in the years after this year? Right? So what is the impact for 2027 and beyond? Of course, we will not give a gross margin percentage for 2027. That will be given in January 2027. But if you look at the key drivers of gross margin this year, you have to ask yourself how much of that can carry into 2027. First, volume, plus the 30% growth in 2027 that Christophe just told you about, should of course help. Right? As long as we can control the cost of adding capacity, volume should give you better fixed cost coverage. So that should be positive in that respect. The second factor is product mix. Again, the two key drivers of volume are the additional 30% in immersion and Low-NA EUV. Both are obviously very positive from a gross margin perspective. Of course, we will continue to add quite a bit of dry business this year and next year as well. I would say the strength in EUV demand and immersion demand in the mix should also help. And then, as you mentioned, we have price increases, which, as I mentioned, will have some impact in 2027, with a bigger impact you will see in 2028, but it will have some impact in 2027, and that will be helpful. Finally, on the positive side, I might point to the product mix effect within EUV. Right? Next year's product mix effect will be better than this year's because this year we still have quite a few DE models in our mix. Next year that will no longer be as pronounced, and we will also have some APPS in there. That will help within total EUV. So those are the key factors. And then what are the things we need to be watchful of? First, as I mentioned, are ramp costs. Right? So how much cost are we incurring as we ramp for 2027 and beyond? So that is one thing we need to manage well. And then the swing factor is the upgrade business. Because as we mentioned, the upgrade business this year has been very, very strong. That does raise the question of how sustainable the upgrade business is. If you dig into the sustainability of the upgrade business, there are a few elements to keep in mind. First, as of today, we still see a fairly large addressable market for the upgrade business. If you look at the number of upgrades we have executed in the field, that is quite a lot of tools, but there are still quite a lot of tools that have not yet been upgraded. So that gives you good potential for the coming quarters and the year after. Second, as we mentioned in the video, we are also actively driving upgrade products. So we will bring new upgrade products to market, which of course will open up an entirely new addressable market for us in the installed base. So that is helpful. And then, of course, there is the question of how the market will continue in a market environment where current demand exists. As we just said, there is significant demand for these upgrades. So I would say upgrades are an important swing factor in the gross margin development we see for 2027 and beyond. This year has been very strong. But I think, at least on our side, we are doing everything we can to create as many opportunities as possible for the upgrade business going forward. Joe Quatrochi: Thank you for all the details. Thank you. Roger J. Dassen: You're welcome. Operator: Thank you. Today's next question comes from Krish Sankar of TD Cowen. Please go ahead. Krish Sankar: Yes. Hi. Thank you for taking my question. Christophe or Roger, my first question, I understand you do not want to give exact capacity numbers. I just want to know, in a strong demand environment, is there a natural ceiling to your EUV output, whether due to VDL or Carl Zeiss capacity? In other words, if demand is there, could you do 140 or 150 units in 2028? Also, are you concerned that customers are pulling orders forward or giving larger forecasts just to secure a position? I have a brief follow-up after that. Christophe D. Fouquet: Yes. So maybe let me try to answer both questions. First, on what we are doing to increase capacity. I think I mentioned this earlier. This is a task we started a few months ago. I think there are really three elements. The first is optimizing our existing production sites so that we can basically build our machines. As you know, we have a fairly large footprint, and we have started to ensure that most of that footprint can be used for output. This is true for Low-NA EUV. By the way, it is also true for DUV, including immersion. That has already created some opportunities that we can leverage and build on this year, next year and in 2028. The second, I think a very big opportunity and still a major parameter, is cycle time. Meaning the time we spend in the factory on a given machine. As we mature, for example on the NXT:1380E, we are able to shorten cycle times for certain given sequences, but we are also able to further optimize the sequences. Meaning that some of the things we initially need to do to validate a tool, over time, in agreement with customers, we believe no longer need to be done. I would say we can push this approach quite far. This is one of the truly key levers we see, basically, to move forward. As I mentioned earlier, the opportunities continue to materialize over time. That gives us more hope and more opportunity. And then, of course, the supply chain, indirectly, your question or comment is that we have to supply the supply chain. This is something we take into account, starting with Zeiss. We do not believe Zeiss is a bottleneck today. For the capacity expansion we are discussing. Even beyond the 30% in 2028 we mentioned. We have done a lot of work with the entire supply chain in recent years to ensure that the supply chain will not be our problem. So we of course continue to watch this very carefully. We understand that every time we add capacity, of course, we create more challenges there. So we do that. The last thing I would say is that we have time. I mean, if you look at the progress we have made this year, I think it is very significant. We feel quite good about next year. And the time we have, again, for next year, for 2028, remains important for us to continue to be very creative across all those dimensions. So that is the answer to your first question. On the second, I think I mentioned in my introduction that we had very good conversations with customers. The conversations are not just about how many tools they need. They are also about exactly when those tools will land in their fabs. And when it comes to what we call demand, the increased demand we refer to, I think we are very well positioned to validate demand through the more detailed plans customers share with us regarding fab construction, releases and so on. So I think when we talk about demand, when we refer to demand in those discussions, we really mean demand that we believe is real, rather than demand inflated by any potential purchasing behavior by customers. Krish Sankar: Understood. That is very helpful, Christophe. Then a brief follow-up for Roger. On value-based pricing, is this across the board? Is it for systems, services, spare parts, everything? I guess based on your comments, you are not repricing the backlog. Can you clarify? Thank you. Roger J. Dassen: Yes. Krish, I will not share exactly how we are doing it. But as I mentioned, we are raising prices for what we call our most critical products. The products that bring the most value to customers. So these are high-end, high-volume manufacturing products. These are the products that provide the most value to customers in the current environment, and these are the products for which we are raising prices. You will also understand that upgrade prices are closely linked to tool prices. So that -- that -- they will also follow, upgrade prices will also follow this pattern. That is how we are doing it, exactly how we do it, when we do it and so on. I do not want to go into any details. But the bottom line is that you will begin to see the effect during 2027. But the full effect you will begin to see from 2028 and beyond. Krish Sankar: Thank you very much, Roger. Roger J. Dassen: You're welcome. Operator: Thank you. Today's next question comes from Sandeep Despande of JPMorgan. Please go ahead. Analyst: Thank you for letting me ask a question. My question goes back to your indication that you are considering adding more than 30% capacity in 2028. Being able to add capacity involves multiple components, and some of ASML's suppliers will need to add physical capacity to be able to provide you with that kind of huge volume growth, especially given that there is already 30% growth in 2027. Have those discussions already begun with customers? Will ASML need to pay any substantial amounts to those suppliers to increase capacity? Are there any particular obstacles? And how is the whole supply chain being managed to be able to produce more capacity in 2028, given that you yourself do not have additional physical capacity before 2029? I have a brief follow-up after that. Thank you. Christophe D. Fouquet: So I will try to add a little to what I said earlier. I think the only real challenge we have with the supply chain is ensuring that they can ramp. I think on their side, there is no issue with the strength of demand or the strength of the ramp. I think the main challenge with all our suppliers, because in this case it is with all suppliers, is ensuring that they can grow 30% per year. Now Roger mentioned earlier in his introduction. We grew EUV by 50% this year, which basically shows that these are things we can do together with suppliers. As you can imagine, this is a discussion we have with them regularly. We mentioned 30% growth in 2027 and more than 30% growth in 2028, and that is the result of our confidence that the entire supply chain can of course follow our own demand, whether for EUV or DUV. I would say this exercise can of course be extended as needed. Because we are also continuing to add suppliers. So we continue to ensure that we have more and more people who can produce some of our parts. Especially non-critical parts. When it comes to very critical parts, you know, Zeiss again comes to mind, and we are absolutely strategically aligned with the industry's trajectory and therefore with the demand trajectory. So these are very, very detailed and intensive discussions. But again, every number we share with you is the result of our verification that the supply chain can of course follow those numbers. Analyst: Thank you, Christophe. A quick one, Roger, on gross margin. Your fourth-quarter gross margin guidance is down from this quarter despite significantly higher revenue? And then, again on your earlier answer about value-based pricing, should we assume that most of the value-based pricing-related increase will flow directly to the gross margin line? Or is there a margin number attached to those increases? Roger J. Dassen: On the first one, fourth-quarter gross margin, it is slightly lower than the third quarter. That is mainly related to some ramp costs we see. Right? So we are ramping for the growth Christophe just talked about. That has a small impact on the gross margin expectation. That is why you would expect the fixed cost coverage benefit from higher volume to be offset, and more than offset, by the additional costs we are now incurring in the fourth-quarter ramp. That is the main reason there. As far as the price increases and the extent to which the price increases fully add to gross margin, of course, the same applies. Right? I mean, one of our arguments in the conversations with customers is that we are incurring costs to ramp. So ramp costs give you some additional cost. So it will certainly add to gross margin. But again, you will see us incur some ramp costs in 2027 to reach the higher numbers Christophe just talked about. Both for ourselves and for the supply chain, for the reason you just mentioned. Right? We need to ensure the supply chain is fully aligned with our targets. And for that, it also means some help in some places to make that happen. So part of the price increase needs to cover the extraordinary ramp we are going through. But I would say a large part of it still directly adds to gross margin. Analyst: Thank you, Roger. Operator: Thank you. Today's next question comes from Franois Bourvignet of UBS. Please go ahead. Francois Bourvignet: Thank you very much. Just to follow up on this shortage situation. Obviously, we are in a very unprecedented period, with your customers facing capacity constraints. But today, you also claim that on your side, demand will also exceed supply. So, I mean, the usual behavior is for people to order as much as possible. Especially if you start to see some ramp to ensure they get tools. We have seen in other industries some long-term agreements, some prepayments, to try to get a truer sense of demand. I was wondering whether you are considering changing the way you contract with customers in these times? For example, increasing prepayments, or recognizing more firm orders earlier. To ensure your customers are committed. Roger J. Dassen: Yes. If we talk about this, we have said before that if you place an order with ASML, it is not a flimsy piece of paper that you put your name under. It comes with two serious commitments. One serious commitment is the commitment of a prepayment, which, as I qualified earlier, is large enough to hurt. So that is one element. Second, the purchase order is a real commitment. On both sides of the equation, that also means it is deep. If you want to get out of that commitment, it will not be easy. Right? There is a cost to that, not just the prepayment. And more than that. So therefore, before a customer signs a purchase order with ASML, they have made up their mind. They do not do it lightly. On whether you would accept orders earlier? Well, as Christophe mentioned, we receive requests from customers asking us to accept their orders and purchase orders for 2029 and 2030. The only reason Christophe phrased it that way, saying customers are asking us, and therefore we have not yet accepted those orders, is that we want to make sure we have a clear picture of the overall demand for 2029 and 2030, what customers are signaling now. And compare it with the capacity expansion we see at that time. We want to do that because we do not want to accept orders now from customers A, B and C and then tell customer D, who has not yet placed orders for 2029 and 2030. Sorry. We are sold out. I mean, that would be completely inappropriate for customers who have been our business partners for a long time. So we are really using this time now to compare. To get a good understanding of what the total demand is that customers are signaling for the 2029, 2030 timeframe. What does that look like? What is our reasonable expectation of capacity for the 2029, 2030 timeframe? Once we have that picture, we are ready to accept orders. And also accept the commitment on our side to execute those orders. So our only hesitation at this stage is that we really want to do our homework and be very diligent in accepting the orders customers are offering us, to ensure that no customer feels left out. Francois Bourvignet: Thank you. That was a very detailed and good answer. The second question is on the High-NA news flow. I mean, Christophe, you mentioned high-volume manufacturing in memory in 2028. And TSMC in 2030. If I look back at Low-NA, when we started high-volume manufacturing, I mean, we saw significant growth between shipments in those years. So I was wondering whether we should think about High-NA shipments increasing significantly on top of that in 2028, and potentially reaching double-digit High-NA shipments as we move forward. Christophe D. Fouquet: Well, I think we are still looking at a very early ramp. I think you will indeed see that every year our customers will need more tools. As they validate in manufacturing that they like High-NA, and they likely plan to use more layers over time. I think the announcement, and TSMC's push first on 12-inch critical quality, is very interesting there, because the first signal it gives is that, in customers'