So just curious how you’re thinking about, and I know you don’t want to talk about specific customers, but how you’re thinking about broadly — more broadly speaking, the potential for reuse and what impact that might have on EUV demand?Peter Wennink Yes. I think, that in general has always been the case. I mean, customers will use the tools for the node where they need to use them. So, it’s all — it’s a matter of how big is the node. I think, if the 3 nanometer node or the 5 nanometer node is small or is big, that will drive the demand for EUV tools and customers are like us, business people, they will allocate their capital that they have on the balance sheet wherever they see fit.So, that is more a question of, how big are those nodes? Yes.
And we currently believe when we listen to the customers that they believe the 3 nanometers is a very big node. Well, what they don’t sell on the 5, they can match another 3, then we will use those machines in the 3 node, but then it’s the node size that really drives the needs for the EUV tools.And this is what is reflected currently in the customer demand that we’re currently seeing, and this actually is part of the answer to the questions I received from question number one and two this afternoon. So, we still see the demand, the overall demand, for EUV and Deep UV to be up next year and that is a reflection of what our customers believe their installed capacity needs to be and that’s based on how big they think their nodes going to be and that’s driven by what they see from their customers as the end demand.And, I think, when it comes back to your first question of pushing and pulling, that’s particularly true for Deep UV, not so much for EUV.
I think, we’ve seen — in Deep UV, we have seen — especially in the memory space, we have seen, you can imagine, 3D NAND, they don’t use EUV, but market situation isn’t optimal. So, you see there pushbacks, but those tools are happy will be taken up by the IDMs and by our customers in China, for instance. So, it’s particularly — the pushing putting is a Deep UV event.C.J. Muse Very helpful. And just a quick follow-up question on domestic China. I think you said 20% of calendar 2023 revenues, can you confirm that? And if that’s right, then roughly 50% of your non-EUV tool business will be domestic China in 2023 and so the question there is, how sustainable are the demand trends there beyond 2023?Peter Wennink Well, I think the math is correct and I think it was — one of our analysts asked the same question, yes, I think the 45% — you’re about right — the 45% to 50% is about right.
I think, it’s very sustainable. In my latest trip to China, I spoke to many customers and also to some end customers and the expansion plans, especially when it comes to issues like the EUV transition, when it comes to the rollout of the communication networks, when you talk about the energy transition, that’s all in that mid-critical to mature domain and the number of end products that they are planning to produce is significant and the semiconductor capacity base to support that is not there yet. It’s being built. And this is why I think it’s sustainable.I think, we’re underestimating. I can sound like a broken — like a broken record, I suppose. I think, all underestimating the end demand for mature and mid-critical semiconductors. The application space for those semiconductors is so wide and every time — you could say, well, I’m biased, because I’ve been there now very recently and I talk to those customers and those end customers, but I’m convinced that that is needed.And so, I think, it’s very sustainable.
Also, when I look at the expansion plans in the major centers in China, whether it’s Beijing or Shanghai or Shenzhen, those fabs will be there. The end markets are there and it’s going to be a lot of China for China. So, yes. So, I think, it’s sustainable. But, again, it’s my view based on my latest visit.C.J. Muse Thank you.Operator Thank you. We will now go to your next question. And your next question comes from the line of Mehdi Hosseini from SIG. Please go ahead. Your line is open.Mehdi Hosseini Yes. Thanks for taking my question. The first one is for you Peter. How should I think about the EUV mix shift in 2023? And I’m more interested in the mix of 3800E versus 3600D?Peter Wennink Yes. Okay. Well, you can think about this very clearly that it’s going to be 3600, that’s what, and very few of 3800, because the 3800 shippers are really push towards the end of the year, partly because the 3800 has new technology that is similar to the technology used in High-NA.
So, it’s — basically, it’s the system integrations, High-NA and 3800, they run side by side, so that pushes it towards the end of the year.And when it comes to some of the supply issues that we’ve seen over the last quarters also particularly pertain to this technology, to the 3800 and High-NA technology, so that push — has pushed it all back towards the end of the year. So, I would — in your models, I would focus on the 3600D.Mehdi Hosseini Okay. The initial 3800E shipment start at 200 wafers per hour throughput?Peter Wennink Sorry, the 30 –?Mehdi Hosseini So, the initial 3800E come with 200 wafer per hour throughput.Roger Dassen 195. Yes. 195, Mehdi. Okay.Mehdi Hosseini Thank you, Peter. And then my second question. Peter, you mentioned in your prepared remarks that with China, the risk is seeking license for NXT:2000, which I didn’t think is available.
In the current earning conference calls, you have talked about the 5% downside risk to backlog due to increased restrictions. So, how can I reconcile the 5% downside risk to NXT:2000 that I don’t think is available yet?Peter Wennink Yes. I think, while it’s the NXT:2000 – we don’t make NXT:2000s anymore, we make 2050s and the 2100s, but that’s just a number. It’s basically the NXT:2XXX. I think, the 5% that we said in previous call had to do with the indirect effect of it, because it had to do with the October 7 rule, where basically we were able to ship lithography tools to China. You have to distinguish between the October 7 U.S. rules and this new trilateral rules, which are the Dutch export control rules.The advanced immersion, which we interpret as NXT:2XXX are the Dutch rules, not the October 7 rules, we could ship every immersion — Deep UV immersion tool to China, only if there would have been a restriction on deposition and etch, for instance, then we could be the indirect victim of this, and this was the 5%.Now, currently where we are today, I think, almost all of the Chinese customers that I know have actually changed their roadmaps back from anything that potentially falls under this October 7 U.S. rules, because they don’t want to be blocked.
So, they basically are reverting back to 20 nanometer and above, yes, which I just mentioned is a very significant market.The Chinese domestic market for that product is huge. Yes. So they’re just reverting back. That means that they don’t order 2050s or 2100s, they will order the 1980s. Yes. And that’s what they’re doing. So, I think, the 5% actually goes down to — but it’s not relevant anymore, yes. It is now — it’s basically governed by the potential Dutch rules, which means that, is 1980 up, which by the way it’s not under export control as we see it today and that means that market is still open and that’s a significant demand.Mehdi Hosseini Thanks for clarification and details.Operator Thank you. We will now go to our next question.
And your next question comes from the line of Sara Russo from Bernstein. Please go ahead. Your line is open.Sara Russo Hi. Thanks for taking my question. In the commentary and the video that you released this morning and from what you had said during Q4, you mentioned that you’re prioritizing shipment over system starts based on customer asks in that, that’s helping you to — that can help drive the strong system sales for this quarter, can you talk a little bit more about the operational dynamics of that and sort of what are the follow-on effects for next quarter and throughout 2023? And then I have a quick follow-up.Roger Dassen Yes. The operational consideration, first and foremost, was to make sure that caverns are emptied, right, that you can — that you really can — that systems that we’re waiting for final parts were being completed and we’re being sent to the — we’re being sent to customers in that — in Q4.
So that’s what it’s. We really wanted to make sure that both on customer — based on customer demand and on getting caverns clean, getting all the inventory records clean, that was the reason why we did and why we really prioritized the shipment over stocks.Currently, it does have an impact then on the output and for the shipments in Q1, and that’s what you see. I think in all likelihood, what you will continue to see is that, in the quarters to come, you will see outputs go up again and there you will see output go up again also commensurate with the increase in capacity that we’re having. So, that’s what you — that’s in all likelihood what you’re going to see in the quarters to come.So, if nothing changes on the revenue recognition for the fast shipment, we talked about that in — on prior calls, then in all likelihood what you’re going to see is that the €1.5 billion that we’re now lower in terms of fast shipments carrying into — from Q1 into Q2 versus what we received from Q4 into Q1, the €1.5 billion you might expect that we are going to over the next three quarters are going to build those and as a result of that have more output in those quarters for that €1.5 billion in comparison to the revenue that we’ve recognized.
So that again, by the end of the year, we would be back to the €3 billion.Sara Russo Okay, great. And then — Roger Dassen And as I also mentioned before, at the end of Q2, we will give you an update of where we stand in our discussions with customers, because as we mentioned on previous calls, there is an opportunity that if customers accept the shorter testing cycle that comes with the fast shipments, if customers are fully accepting that testing cycle upon shipment, then actually we could for those customers and for those tools, we could start recognizing upon shipment again and that would mean that the fast shipment saga at least for those customers will come to an end and that would mean that in fact we could start recognizing upon shipment again.If that’s going to be the case, then the €3 billion would be lower by the end of the year, but it would also mean that in all likelihood revenue during this year will be up.Sara Russo That makes sense.
Yes. And, as a follow-up, is there any — does that have any sort of — all of that have any impact on average lead time, or is there anything that we should consider as far as anticipating changes to lead times as the orders come down and the — sort of, some of the orders not normalized, and the backlog begins to normalize when you change those lead times?Roger Dassen No, I think, lead time is as it is. I think, what you’ve seen is that the — with an order book that has 2x the system sales in there, the order time actually becomes larger than your normal lead time. I mean, that’s the — that’s what you’re — that’s where you’re going to see — that’s what you saw as a result. And Peter talked about the backlog and talk about lumpy order intake.
