And seeing those inflection points, I think there is little risk to the downside, to answer your question. Now, could there be — could there be an opportunity to the upside? That would effectively mean that what we see in 2025, for reasons of a faster recovery in the cycle, will be pulled in into the back half of 2024. That could be — that could be an upside, yeah, but this is where we are. This is where our thinking is, and this is where thinking of our customers is, and this is how we reflect on our view of 2024.
Janardan Menon: Understood. And just a small follow-up on China. As you referred to, the official regulations coming out of the US government yesterday, if you look at the chuck overlay numbers of 2.4 nanometer, it seems to capture the 1980 as well. And what you are saying is that because it’s — only the advanced manufacturing facilities will be covered by that and that’s a handful, but do you think that that could be a moving target through the course of the year? I mean, could you — could new fabs continuously be added to that or taken away from that? So does that sort of cloud the overall visibility on where China could actually end up just from a geopolitical standpoint over the next 12 months?
Peter Wennink: Well, I think that last where the geopolitical confrontation would end up is a billion dollar question, I suppose, but no — I think basically two answers. One, what — how the regulations are currently structured is like — the Japanese have also done the same thing. They basically say all immersion, but export controls will only apply to advanced manufacturing, which is only those five fabs. Now, could that grow? Yes, but that has always been there. That particular risk in terms of export controls being enlarged to what it is today, that’s a risk that we’ve always had. Yeah. So that is basically a function of what you ended your question with, is how the geopolitical escalation will happen going forward. We don’t know.
I mean, we just have to live with what the regulation is today, and you need to realize that this regulation, which is an amalgamation, a consolidation of the October 7 proposal of last year with the trilateral agreement between the Dutch, the Japanese and the Americans, has led to this situation of this handful of fabs. So it’s — so this is also the result of, you could say, in-depth discussions, multilateral discussions between governments. Now, I don’t say that that’s never going to change, but that’s what you need to consider also. So we are where we are. I don’t have a crystal ball to predict where geopolitics will go and how it will escalate, but we need to work from where we are. And I can assure you that the results that currently on the table in terms of regulation are the result of very deep discussions between governments.
That are not just on a lazy Sunday afternoon being prepared. This is very deep. So, yes, it can change, but then also, I think the geopolitical situation first needs to change. And then, of course, like I said, I don’t have a crystal ball.
Roger Dassen: And Janardan, a final element in the conversation, building on what Peter was just saying, and he said it before. Obviously, the regulation really aims at advanced semiconductor manufacturing. And I think you’d simply have to recognize that most of the Chinese customers have gotten the message already last year, and as a result of that, have really shifted to what we call mid-critical and mature manufacturing. That’s what you see them do. So as a result of that, I would say the number of fabs that are still involved, number of our customers and fabs that are still involved in advanced manufacturing have gone down dramatically. And as a result of that, we can now talk about a handful of fabs that are associated with that. So —
Peter Wennink: Yeah.
Roger Dassen: If that’s the objective, then that is completely in line with —
Peter Wennink: Has been achieved.
Roger Dassen: Exactly what now has been achieved.
Peter Wennink: That’s a good point, Roger. When we do the roadmap discussions with our Chinese customers, they all moved back, not forward. They all moved back. And they do that because what I — it was an answer to a previous question because if you look at the demand for mid-critical, low mid-critical and mature semiconductors and you look at the significant transitions that also China is going through and where in many areas they’re leading, whether it’s electrical vehicles, or whether it’s the energy transition, the square inches of silicon that is needed to support that are massive. So they actually need to build that capacity, which, by the way, they’re not going to be self-sufficient because the demand, the local demand is simply too high, I mean, but they will be more self-sufficient, but not fully. Yeah. And so there’s no downside for our Chinese customers to actually move their roadmap in that direction.
Janardan Menon: Understood. Thank you so much.
Skip Miller: All right. Thank you all. We are now at the end of the hour. So if you are unable to get through on this call and still have questions, please feel free to contact ASML Investor Relations department with your questions. Now, on behalf of ASML, I’d like to thank you all for joining us today. Operator, if you could formally conclude the call, I’d appreciate it. Thank you.
Operator: Thank you. This concludes the ASML 2023 Third Quarter Financial Results Conference Call. Thank you for participating. You may now disconnect.
