00:00How are you reading into the current AI demand picture right now, especially off the back of what we heard
00:05from ASML?
00:09Yes, good morning, Jen. Thanks for having me on the show.
00:13I echo the words that Stephen used before.
00:17The commentary of the ASML CEO yesterday was very bullish, you know, perhaps even more bullish than we used to
00:26from the past.
00:26I think a year ago he was talking about, well, we don't know whether we will see growth in 2026.
00:34Now it turns out that ASML is on the track to reach something like 15 percent revenue growth, not only
00:41this year, but also for the years to come.
00:44The market, I think, is looking into CapEx.
00:49That is the big word, CapEx from the big tech companies that will report later on next week.
00:55Alphabet will be the first one.
00:57But indeed, TSMC is now first, and it's exactly the guidance on the CapEx number that the market is looking
01:04for.
01:05They have already indicated, like Stephen stated, 58 billion.
01:10The market consensus probably is something slightly north of 60, but the whispering numbers are even higher than that.
01:18So a lot depends on what TSMC will come out with in the meeting after the earnings release.
01:26Is your expectation then for any negative or downsides in the release that we'll get Jean-Paul?
01:36It's not so much the negative in the numbers, because ASML was so bullish.
01:42They don't do that for nothing.
01:44You know, for the coming years, this industry will grow.
01:47There is an accelerated need for the most advanced chips, three nanometer, even two nanometer.
01:54ASML cited that some customers are already stepping up to look in 1.4 nanometers.
02:02That train will continue to ride, but it's now the pace in which we will get there.
02:08You know, we will get there earlier than perhaps 2030 that the market was thinking of before.
02:16And that is where TSMC's guidance come in as crucial.
02:23So then, what is the picture then, Jean-Paul, if we think about some of the demands and what these
02:30companies specifically manufacture in terms of machines?
02:34Is there any concern around potentially ASML or TSMC driving themselves into a bottleneck?
02:40How much do you read into that?
02:43Yes, correctly.
02:44That is definitely a thing that is on the table.
02:47So, you know, I think the starting point here is that, driven by the U.S., governments are predetermined.
02:56You know, they want to win in the AI race.
03:00And particularly the U.S. companies, they feel they are ahead of the field.
03:04So they want to invest more rapidly to make sure they become very dominant, not only next year, but for
03:11the years to come.
03:12And from that point of view, they can also export the AI technology to more countries, like we've seen in
03:19different other sectors with products that they have developed more rapidly.
03:24Now, ASML is very crucial to that.
03:27There have been thoughts that ASML might become a bottleneck because they produce these huge EUV machines that you cannot
03:35rapidly scale up.
03:37So in that sense, the earnings report yesterday was very bullish.
03:42The numbers that Stephen already gave from 65 machines to 85 next year and perhaps 110 low EUV, low NA
03:56EUV machines in 2028.
03:58That is really stepping up.
04:00Yeah, and we need to see whether that is enough or that will still, even though it's 70 percent higher
04:06than this year's number, whether it still will be a bottleneck because companies want to move faster.
04:12And that's where we get back to the CAPEX numbers that we will hear today and next week.
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