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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.

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Speaker 2: Let's bring you that conversation live with the CEO of ASML.

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Speaker 3: Christoph Fouke, speaking to Bloomberg's Tom Giles. We can listen

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Speaker 3: in now.

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Speaker 4: After that surprise cuts to the outlook from asmling around

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Speaker 4: the world. But last week you had to do some

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Speaker 4: expectation resetting in terms of bookings, in terms of your

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Speaker 4: outlook for twenty twenty five and how long the chip

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Speaker 4: recovery will extend, you said on the call today. Without AI,

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Speaker 4: the market would be very sad if you asked me.

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Speaker 4: That definitely spread some sadness in the market, in the

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Speaker 4: stock price. Could you give us a sense when you

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Speaker 4: talked about the new expectations, you focused on a couple

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Speaker 4: of things, some of your customers, customers like Samsung and Intel,

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Speaker 4: but also China, And so I'm wondering if you could

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Speaker 4: give us a sense of unbalanced how much of your

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Speaker 4: resetting expectations was related to changes in China versus weakness

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Speaker 4: in some of the large customers that I mentioned.

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Speaker 2: Yeah, So I think last week we said a few things,

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Speaker 2: and I think the first thing we said was that

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Speaker 2: we still CAI as a huge opportunity for the industry,

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Speaker 2: and we still see even upside on the short term.

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Speaker 2: So I think AI has been with us now for

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Speaker 2: a couple of years. It's created a lot of excitement,

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Speaker 2: and like all our peers in the industry, I do

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Speaker 2: believe that AI will bring a tremendous opportunity for this industry.

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Speaker 1: So that's the first thing we have said. So I

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Speaker 1: said on the long term.

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Speaker 2: AI is going to build up a real strong opportunity

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Speaker 2: for the industry.

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Speaker 1: Now on the short term.

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Speaker 2: I think you're aware of that not everyone is surfing

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Speaker 2: yet on the AI web. I think some company have

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Speaker 2: been doing extremely well, of course, and Vidia comes to

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Speaker 2: mind TSMC because they are providing the first one, the product,

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Speaker 2: the second one the process that is going to manufacture

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Speaker 2: the product. So they're very strong. I think you see,

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Speaker 2: and I'm sure you will see that in the weeks

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Speaker 2: to come, a very very strong demand. Now, what we

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Speaker 2: also said is that not every semiconductor manufacturer is involving AI.

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Speaker 2: Some of them are doing chiaps for more traditional application mobile, PC, automotive,

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Speaker 2: and that part of the market is not recovering as

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Speaker 2: quickly as we hoped, and it does recover, so we

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Speaker 2: see progress and people are reporting that, but it's slower

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Speaker 2: maybe than a lot.

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Speaker 1: Of us expected.

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Speaker 2: And I would say that concern quite a few companies.

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Speaker 2: All the companies in fact that today are not directly

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Speaker 2: benefiting from.

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Speaker 1: The AI boost. That's a bit the split of the

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Speaker 1: market we see today at least.

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Speaker 4: Does that mean that we shouldn't expect a full recovery

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Speaker 4: until twenty twenty six.

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Speaker 2: Well, that's always very difficult to say, because you know,

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Speaker 2: there's something we watch every quarter. You know, last week's

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Speaker 2: people were maybe a bit disappointed that we didn't give

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Speaker 2: more heads up, but that's something we just keep watching.

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Speaker 2: And you know, in the last three months, for example,

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Speaker 2: we have seen that people we are starting to push

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Speaker 2: the break.

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Speaker 1: When do they start to push.

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Speaker 2: The accelerator again, we don't know, because you know, when

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Speaker 2: you become cautious, its usually takes a bit of time

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Speaker 2: before you look at the longer term again. But you know,

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Speaker 2: long term we see gross, We see tremendous opportunity, which

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Speaker 2: means that at some point of time this has to come.

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Speaker 2: Twenty twenty five, by the way, we still see as

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Speaker 2: a grocer for the industry for SML, the gross is

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Speaker 2: not as high as I think a lot of people

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Speaker 2: expected by Dan but still a gross here. We also

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Speaker 2: expect twenty six to be a gross here, but it's

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Speaker 2: too early to know to quantify that in very high

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Speaker 2: accuracy or very high precision.

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Speaker 1: Got it.

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Speaker 3: I want to talk a little bit about China.

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Speaker 4: At one stage they accounted for almost half of total revenue.

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Speaker 4: What you shared with the market was that we have

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Speaker 4: to think about China in its more historical perspective, where

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Speaker 4: it accounted for something more like twenty percent of total

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Speaker 4: revenue for you as a company, I'd like to get

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Speaker 4: a sense from you of how much of that changing

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Speaker 4: viewpoint on China is coming from weakness internally versus limits

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Speaker 4: on what Chinese manufacturers can buy given export controls.

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Speaker 2: Yeah, so maybe first a step back. If you look

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Speaker 2: at China. You know we just talked about AI, AI

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Speaker 2: is very advanced to me conduct term manufacturing advanced chips.

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Speaker 2: China for a few years now is focusing on what

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Speaker 2: we call mainstream semiconductor. So semiconductor we used to.

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Speaker 1: Talk about IoT.

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Speaker 2: You know, all those chips that you have in all

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Speaker 2: the product making those products smarter. That the type of

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Speaker 2: chips China is basically manufacturing today.

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Speaker 1: One part of.

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Speaker 2: The reason for that is, of course the restriction that

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Speaker 2: have been applied on EUV as you know, which have

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Speaker 2: prevented China to move to very advanced node. So the

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Speaker 2: focus of China is on mainstream semiconductor. The demand for

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Speaker 2: that has boomed in twenty twenty one twenty two. As

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Speaker 2: a resource, the demand we had in China in twenty

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Speaker 2: twenty one twenty two has boomed as well. And twenty

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Speaker 2: one twenty two was the time, if you recall, where

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Speaker 2: the demand was extremely high and amer was struggling to

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Speaker 2: deliver tools to everyone.

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Speaker 1: Therefore we couldn't.

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Speaker 2: Deliver a large part of the demand in China. Backlog

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Speaker 2: in China grew twenty twenty three. The rest of markets

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Speaker 2: often we got tools we could ship to China, same

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Speaker 2: in twenty twenty four. So the level of business we

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Speaker 2: had with China twenty three twenty four was more of

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Speaker 2: a resource of the non deliver capacity in twenty two

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Speaker 2: twenty one than anything else. And we've always explained that,

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Speaker 2: you know, our quarter at fifty percent of the business

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Speaker 2: in China, almost fifty percent.

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Speaker 1: This was not normal.

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Speaker 2: This was a peak resulting from basically a lack of

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Speaker 2: delivery before. The normal business in China is around twenty

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Speaker 2: twenty five percent, and that's the normal demand related to mainstreams.

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Speaker 2: Tom Conductor and I think we're going to go back

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Speaker 2: to those number over time.

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Speaker 4: But there is something artificial about the way we think

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Speaker 4: about China as a purchaser of equipment like asmls in

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Speaker 4: the sense that many countries around the worlds principally have

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Speaker 4: have have been exerting export controls on the country. Are

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Speaker 4: those controls going to become even more stringent? For example,

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Speaker 4: China is not able to buy your most advanced machines.

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Speaker 4: Is it possible that those restrictions could extend to the

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Speaker 4: DUV level, which is used for more mainstream products.

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Speaker 1: Yeah.

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Speaker 2: So if you go back to the root cause, or

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Speaker 2: the the prime motivation of export controlly to us to

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Speaker 2: prevent China to have access to advanced technology, EWE is

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Speaker 2: not in China. By not having you in China, we

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Speaker 2: pretty much stop the ability of China to go beyond

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Speaker 2: the five maybe free anometer note may be able to

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Speaker 2: do a few chips. You may see some of that

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Speaker 2: in the press because of course everyone is watching very carefully.

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Speaker 2: But fundamentally, by not having ev we have placed China.

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Speaker 2: The regulation have placed China I would say ten to

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Speaker 2: fifteen years behind. When it comes to advanced technology. We

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Speaker 2: always talk about China. We usually forget to mention the

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Speaker 2: fact that while those restrictions have applied on China and

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Speaker 2: V a lot of work has been done with other

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Speaker 2: player and industry Intel, TSMC, Samsung on the most advanced

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Speaker 2: IV technology as we know it today, et.

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Speaker 1: Cetera, et cetera.

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Speaker 2: So there's been a lot of work down every single

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Speaker 2: day to continue to widen if you want this technology

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Speaker 2: gap and EVIE is a key element to be able

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Speaker 2: to do advanced technology, you know. I think Intel has

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Speaker 2: proven to the world a few years ago that without

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Speaker 2: ev life was getting impossible. That's also true for China.

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Speaker 2: So this limit part of the activity there.

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Speaker 4: Based on your interaction, it's the Prime Minister of the

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Speaker 4: Netherlands with the Foreign Ministry, is it your expectation that

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Speaker 4: the restrictions will become even more limiting on China's ability

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Speaker 4: to purchase machinery like asmls.

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Speaker 2: Well, if you look at the geopolitic landscape, I think

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Speaker 2: it's clear that the United States will continue to apply

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Speaker 2: pressure on their life for more restriction. Now the question

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Speaker 2: the discussion we have with the Dutch Prime Minister, I

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Speaker 2: would say, the European political leader, because at the end

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Speaker 2: of the day, we are a technology champion company, right,

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Speaker 2: so these other people we have this discussion with, and

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Speaker 2: the question is what is right for the Netherlands, what

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Speaker 2: is right for Europe and as a result, what is

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Speaker 2: right for SML. So what restriction makes sense when it

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Speaker 2: comes to national security which has been the prime argument,

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Speaker 2: and where does it right because, like I said, a

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Speaker 2: lot of the focus in China today is on mainstream

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Speaker 2: semiconductor and this is very different from you know AI.

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Speaker 1: So that's the discussion we have. Is think the pressure will.

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Speaker 2: Continue to be there because you know, if you look

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Speaker 2: at the landscape, that's what it is. But I think

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Speaker 2: that the discussion will get more sophisticated over time, the

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Speaker 2: stake will become higher, and I think that country like

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Speaker 2: the Netherlands, all of Europe where again we belong to,

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Speaker 2: will also more and more start to discuss what makes

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Speaker 2: sense for US?

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Speaker 4: Does it make sense for the European Union to be

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Speaker 4: to work in such close concert with the US in

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Speaker 4: making it difficult for China to get access to these

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Speaker 4: machines at what stage and do you find yourself wishing

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Speaker 4: that the Dutch government and maybe the EU government would

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Speaker 4: push back harder on some of the restrictions that the

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Speaker 4: US would like you to impose.

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Speaker 2: Well, I think you know, as a European citizen right Dutch,

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Speaker 2: I would say residents, not citizens, as you know. I

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Speaker 2: like to know that they do what is right for

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Speaker 2: Europe and for the Netherland. I think that's the most

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Speaker 2: important things we have always said in SML.

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Speaker 1: We don't make the law. I'm not a politician. I

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Speaker 1: don't know half of.

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Speaker 2: What they know, of course, and they may be good

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Speaker 2: reason to restrict and if there is a good reason

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Speaker 2: to do so, and our government believe that, then we

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Speaker 2: will go with it.

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Speaker 1: Of course.

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Speaker 2: I think what's very important is to have the discussion

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Speaker 2: with them so that they understand what we do, maybe

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Speaker 2: understand the industry bit better, and they are better equipped

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Speaker 2: to really decide what is good again overhaul the for

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Speaker 2: your European countries and for the Netherlands.

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Speaker 4: Done your interaction with your customers in China and globally,

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Speaker 4: is it your perception that the motivations for export controls

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Speaker 4: are truly about national security interests and regional security interests

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Speaker 4: versus economic competition. In other words, how much do you

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Speaker 4: think this is about keeping China from becoming economically more

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Speaker 4: competitive with the rest of the world versus these are

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Speaker 4: legitimate security threats.

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Speaker 2: Yeah, so Tom, I could almost turn you back to

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Speaker 2: question right. You almost have a rectory question I see

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Speaker 2: in here, and what you see happening is more and

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Speaker 2: more people asking themselves this exact question. And if you

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Speaker 2: look at the press, I think there is a real

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Speaker 2: debate happening. That's one of the debate easy treaty about

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Speaker 2: national security. We know that there is, of course a

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Speaker 2: strong economic competition between the US, Europe, China.

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Speaker 1: We see it everywhere.

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Speaker 2: People question how much of that as a play in

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Speaker 2: the decision. The other debate you start to see, which

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Speaker 2: is I think is also related is does it help

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Speaker 2: us or does it hurt us? I think a lot

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Speaker 2: of companies in the US that start to also question

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Speaker 2: is that a good thing for us? And I think

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Speaker 2: that's the key debate to have, because, like I said,

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Speaker 2: I think at the end of the day, we need

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Speaker 2: our governments to do the right thing for their people,

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Speaker 2: and I think those debate are far more. I say

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Speaker 2: that active far more lively than they were two years ago,

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Speaker 2: and I think it's very good.

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Speaker 1: I think it's very good.

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Speaker 2: Because most probably these bring us to what I would

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Speaker 2: call a more rational discussion and a more balanced set

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Speaker 2: of decision moving forward. So I think we can only

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Speaker 2: welcome debate in such complicated issues.

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Speaker 3: Thank you. I want to talk a little bit more.

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Speaker 3: Let's bring things a little bit more local to the Netherlands.

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Speaker 4: Where ASML has discussed with the Dutch cabinet it wants

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Speaker 4: to operate successfully in the country. Your predecessor Wennex said,

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Speaker 4: if the Netherlands shuts down and we cannot get immigrants

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Speaker 4: or foreign students, then fine, you should accept the consequences. Now,

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Speaker 4: the Dutch government, to its credit, has set up a

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Speaker 4: task force said it will spend billions of euros in

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Speaker 4: the Einhoven region to keep ASML at home. My question

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Speaker 4: is is that enough, particularly in a world where there

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Speaker 4: is a coalition led by a far right lawmaker that's

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Speaker 4: looking to implement the strictest ever anti immigration policies. The

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Speaker 4: cabinets working on areas to restrict labor migration. You are

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Speaker 4: dependent on labor from not just domestic but around the world.

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Speaker 4: How concerned are you about the forces at work bringing

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Speaker 4: this anti immigrant rhetoric and policy to the Dutch government.

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Speaker 2: Yeah so here also, maybe if you take a bit

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Speaker 2: of airs step back, think that this is almost an

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Speaker 2: issue for Europe. What you describe as it's happening in Netherlands,

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Speaker 2: it's happening in many countries.

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Speaker 1: As we speak. It's happening in the US, it's happening

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Speaker 1: in the US.

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Speaker 2: And what we try to do again in our discussion

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Speaker 2: with our government, every government wants to have company like

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Speaker 2: ASML in Europe, in the Netherlands, right, anyone wants that.

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Speaker 1: The more the better.

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Speaker 2: But to be able to have company like this, you

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Speaker 2: need a few things. You need to have access to capital,

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Speaker 2: access to people, access to energy, you need to have

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Speaker 2: a place to build your factory. All those conditions have

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Speaker 2: to be there. And if you want to compete with

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Speaker 2: other country China, the US, whatever, not only you need

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Speaker 2: to have those conditions, but those conditions has to be

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Speaker 2: as good as possible so that you can be competitive.

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Speaker 2: Because this industry is extremely competitive and no one should

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Speaker 2: ever take any success for granted. Right, of course, the

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Speaker 2: story of SML is great, but it's only great after

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Speaker 2: forty years of very hard walk and this is you know,

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Speaker 2: something you have to preserve, so we need all those

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Speaker 2: conditions to be there. I think, you know, the Drage

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Speaker 2: report was also a good way to summarize what the

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Speaker 2: entire industry in Europe think and our government have to

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Speaker 2: work on that. And you know, of course there's a

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Speaker 2: bit of you know, immigration is a bit of a topic.

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Speaker 1: Of the day because that's a way to get people attention.

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Speaker 2: And I think what we have said is we have

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Speaker 2: built our company with one hundred more than one of

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Speaker 2: the nationalities. So bringing tenants from everywhere has been an

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Speaker 2: absolute condition for success and this has to continue. The

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Speaker 2: good news is that you said, I think people are listening. Okay,

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Speaker 2: maybe when you know, you get down to business, people

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Speaker 2: are more reasonable that maybe when they run a campaign

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Speaker 2: or try to get elected.

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Speaker 4: Does it make sense for ASML to consider locating or

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Speaker 4: relocating some operations outside of the Netherlands as at least

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Speaker 4: a contingency measure to ensure that you have access to

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Speaker 4: those ingredients that you mentioned that over forty years have

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Speaker 4: made ASML a great company.

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Speaker 2: So the treashold to do that is pretty high for

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Speaker 2: us because we are developing extremely sophisticated machines. Technology in

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Speaker 2: fact is a combination of many many technologies that we

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Speaker 2: have to bring together. Our supply chain is eighty percent

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Speaker 2: of it around the Netherland, Germany, in Netherland, France, Italy

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Speaker 2: very close our engineer our R and D is now,

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Speaker 2: of course almost fully in the Netherlands. We have RNDY

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Speaker 2: center also in the US, but I would say the

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Speaker 2: large part of it is in the Netherlands. And one

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Speaker 2: very important things because of the complexity of our tools,

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Speaker 2: we want to keep our research developments very close to

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Speaker 2: our manufacturing center.

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Speaker 1: Because what you may not.

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Speaker 2: Realize is every two years we make a new step

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Speaker 2: on our machines, so we have to improve them every

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Speaker 2: couple of years like our customer. And it's meant that

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Speaker 2: every two years we build new machine and we have

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Speaker 2: to teach our manufacturing people very quickly to be able

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Speaker 2: to build a new machine. So there's been a long

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Speaker 2: lasting principle in ICML that we want to keep R

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Speaker 2: and D and manufacturing together, and we like to do

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Speaker 2: that in the Netherlands because this is where we are.

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Speaker 2: So the threashold to change that ethic is very high

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Speaker 2: and I would say new things like geopolitics give us

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Speaker 2: even more reason to stay in the Netherlands so that

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Speaker 2: we can build this very strong relationship with Dutch government,

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Speaker 2: with the European countries around us to also get the

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Speaker 2: support of those government activity.

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Speaker 4: So it's not really being considered now to maybe locate

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Speaker 4: some operations elsewhere.

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Speaker 2: We have operation elsewhere further, but we will only grow

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Speaker 2: dose operation based on the activity we have in the

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Speaker 2: different countries. But we don't at all consider to move

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Speaker 2: a large part of our operation outside of the Netland,

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Speaker 2: not at all.

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Speaker 4: European Union has a multi tens of billions of dollars

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Speaker 4: plan to expand local manufacturing capacity, with a goal of

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Speaker 4: doubling output from the region to twenty percent of the

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Speaker 4: global market by twenty thirty In your estimation, is this

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Speaker 4: a realistic expectation and what are some of the hurdles

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Speaker 4: that the region needs to overcome. This is the idea

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Speaker 4: of increasing the region's capacity to be a bigger producer

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Speaker 4: of global of chips to the global market.

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Speaker 1: Yeah, so I think it's very simple.

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Speaker 2: If you want to achieve this kind of target, you

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Speaker 2: have to build capacity. If we look at, for example,

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Speaker 2: where we ship our system today, most of our systems,

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Speaker 2: eighty percent of our system are still being shipped to Asia,

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Speaker 2: so Asia remains at least for quite.

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Speaker 1: A few years.

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Speaker 2: I would say that the key manufacturing place for semiconductor.

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Speaker 2: To get to thirty percent share of the output, you

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Speaker 2: have to take more than thirty percent of the tool

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Speaker 2: that are going to be shipped. We don't see that yet,

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Speaker 2: so I think that mostly the progress is not as

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Speaker 2: fast as some people hope. I think you have also heard,

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Speaker 2: of course, some major delay right in some of the

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Speaker 2: factory in the US. So this is pointing to most

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Speaker 2: probably a slower execution. But you know, you only can

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Speaker 2: start to believe the target would be achieved when the

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Speaker 2: capacity build is exceeding thirty percent of the total worldwide capacity,

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Speaker 2: which is not the case yet.

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Speaker 4: In our introduction, Caroline reminded us that we have an

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Speaker 4: election in the US in a couple of weeks.

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Speaker 3: You might have heard about.

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Speaker 2: It, do you.

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Speaker 3: It's very close so far in the polls.

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Speaker 4: Would you expect conditions for the global chip making world

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Speaker 4: to become better under one candidate versus the other in

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Speaker 4: the US?

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Speaker 2: Well, you know there's a lot of yeah, of course,

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Speaker 2: like anyone else. You know, I followed the election in

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Speaker 2: the US and you can see a lot of polarization.

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Speaker 2: I think in the debates there's one topic that still

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Speaker 2: is I would say shared by both side in the US.

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Speaker 2: It's China. That's one I think one m of agreement.

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Speaker 2: So we don't expect major changes there. We expect the

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Speaker 2: pressure on export called hol in China to remain. To

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Speaker 2: tell you exactly how this will play out, I really

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Speaker 2: don't know.

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Speaker 1: To be an SSEC.

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Speaker 4: Do you think it'll be ratcheted up? Do you think

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Speaker 4: that pressure will be you talked about it's going to remain.

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Speaker 4: Do you expect it to be ratcheted up?

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Speaker 1: I think you know. I told you the pressure will

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Speaker 1: be there after. I don't know. It's speculation.

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Speaker 2: If you know one a candidate may may want to

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Speaker 2: do more than the other. I don't know, but like

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Speaker 2: I said that most probably will not come.

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Speaker 1: Without a debate.

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Speaker 2: And I think that you know, this is what we've

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Speaker 2: seen happening now for for a few months.

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Speaker 1: But we'll see.

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Speaker 3: At Bloomberg Tech, we like to talk about new products.

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Speaker 4: You've got a new one coming out high NAUV. We

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Speaker 4: showed an image of it earlier three hundred and eighty

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Speaker 4: million dollars one of our sizes and the scopes. It's

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Speaker 4: the it's the size of a bus or a size

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Speaker 4: of a small Amsterdam flat. Some of Amasmhal's customers have

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Speaker 4: raised concerns about the price tag.

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Speaker 3: One SVP and.

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Speaker 4: A major customer said, I like the high naeuv's capability,

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Speaker 4: I don't like the sticker price. What's your what are

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Speaker 4: you concerned that the price tag could affect demand for it?

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Speaker 4: And I'm asking this as someone who has about one

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Speaker 4: hundred percent market sharing it, so I understand no.

400
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Speaker 2: So you know, I had the question many many times

401
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Speaker 2: in the last few months, and I always gave the

402
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Speaker 2: simple answer. We never build a product in SML with

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Speaker 2: the idea that the new product would be more expensive

404
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Speaker 2: than the previous one. Of course the price is higher,

405
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Speaker 2: but the price of all our product has been higher

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Speaker 2: over time, and the reason for that is that the

407
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Speaker 2: value they bring is even higher. So I think the

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Speaker 2: reason why we make ANA is basically to enable Summer

409
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Speaker 2: to look at new design, so to create more flexibility

410
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Speaker 2: to look at the ability to go down another two, three,

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Speaker 2: four nodes, which for this industry at the end of

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Speaker 2: the day is the highest value we can ever generate.

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Speaker 1: You know, someone customer to me.

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Speaker 2: You know, AI can happen today because we have this

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Speaker 2: free and anometer node. We couldn't do AI with a

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Speaker 2: previous note because this would have been too expensive, This

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Speaker 2: would have been too much energy consumption. And in fact,

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Speaker 2: for AI to really span out in all applications like

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Speaker 2: we all dream of, there will be a need of

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Speaker 2: another two free notes to make sure that the cause

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Speaker 2: goes down, to make sure that the energic consumption goes down.

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Speaker 2: I NA is going to contribute to that. You know,

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Speaker 2: what we dream of in CML for the next five

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Speaker 2: ten years is going to contribute to that. And the

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Speaker 2: value of i NA is to continue to enable more

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Speaker 2: slow to go with of course nowadays a bunch of

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Speaker 2: other technology, but this is huge value.

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Speaker 3: You know.

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Speaker 2: It's also discussing with Caroline to say, you know AI

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Speaker 2: is coming. It came, you know, like it's a big bang, right,

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Speaker 2: and we know that as long as we continue to

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Speaker 2: drive the industry, there will be another big bang at

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Speaker 2: some point which no one can even start to dream off.

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Speaker 2: But this has been the story of this industry and

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Speaker 2: this is what INNA is going to contribute to all right,

436
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Speaker 2: so customer will adopt INNA when the value of it

437
00:25:34,640 --> 00:25:37,320
Speaker 2: is right, and they will continue to use all the

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Speaker 2: other lithography product of course, at the same time, my.

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Speaker 4: Last question for you before I let you go, we

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Speaker 4: saw during the pandemic the what can happen when we

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Speaker 4: lose control over the supply chain. Do you feel like

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Speaker 4: it's it would be necessary for ASML to somehow use

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Speaker 4: its cash pile to do more to gain control over

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Speaker 4: the supply chain, have a little bit more power and

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Speaker 4: decision making, whether that would be making acquisitions or increasing

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00:26:09,800 --> 00:26:12,040
Speaker 4: stake in one of your suppliers such as seis.

447
00:26:13,200 --> 00:26:13,440
Speaker 1: Yeah.

448
00:26:13,520 --> 00:26:15,720
Speaker 2: So it's a very good question, by the way, because

449
00:26:17,200 --> 00:26:19,480
Speaker 2: we said the market is going to be a bit

450
00:26:19,560 --> 00:26:23,840
Speaker 2: less than we expected in twenty five. At the same time,

451
00:26:23,840 --> 00:26:26,919
Speaker 2: we are continuing to build the capability we were missing

452
00:26:26,960 --> 00:26:29,560
Speaker 2: in twenty twenty two. So that part SML has not

453
00:26:29,640 --> 00:26:33,439
Speaker 2: stop because it takes time to do that, and we have,

454
00:26:33,680 --> 00:26:38,480
Speaker 2: of course had those discussions with our suppliers. Most of

455
00:26:38,480 --> 00:26:42,959
Speaker 2: our suppliers are partners. Zeice is a true partner. They

456
00:26:43,040 --> 00:26:47,080
Speaker 2: understand our industry how much as we do. We call

457
00:26:47,160 --> 00:26:51,320
Speaker 2: a relationship with Zice two company one business. I mean,

458
00:26:51,359 --> 00:26:53,760
Speaker 2: the business is the same and we still have a

459
00:26:53,760 --> 00:26:55,960
Speaker 2: bit our different ways to do things.

460
00:26:56,400 --> 00:26:57,640
Speaker 1: What I'm trying to say is that.

461
00:26:57,560 --> 00:26:59,879
Speaker 2: For most of our supplier we have a very strong

462
00:27:00,040 --> 00:27:03,600
Speaker 2: alignment to make sure that we can meet the supply

463
00:27:03,720 --> 00:27:04,680
Speaker 2: challenge of the industry.

464
00:27:05,800 --> 00:27:07,240
Speaker 1: Only in very.

465
00:27:07,440 --> 00:27:13,520
Speaker 2: Rare exception we are acquiring some of the suppliers. The

466
00:27:13,560 --> 00:27:17,080
Speaker 2: reason for that is usally, if they cannot scale fast enough,

467
00:27:17,119 --> 00:27:20,400
Speaker 2: if they cannot invest to the level we need them

468
00:27:20,440 --> 00:27:22,639
Speaker 2: to invest. Ak Seimer was a good example of that

469
00:27:22,920 --> 00:27:26,400
Speaker 2: when Simer had to develop UV this was just too

470
00:27:26,480 --> 00:27:31,439
Speaker 2: much too quickly. Therefore we brought them in. We have

471
00:27:31,600 --> 00:27:35,280
Speaker 2: another few examples, but that's the exception. We try to

472
00:27:35,359 --> 00:27:39,040
Speaker 2: keep the supply chain separated because this allows us, if

473
00:27:39,040 --> 00:27:41,359
Speaker 2: the deliver as we need to be a lot more

474
00:27:41,400 --> 00:27:43,720
Speaker 2: agile on our product and with our customers.

475
00:27:43,720 --> 00:27:45,240
Speaker 1: So the model is very powerful.

476
00:27:45,280 --> 00:27:48,760
Speaker 4: We believe Christoph, thanks for being with us today. Please

477
00:27:48,840 --> 00:27:50,480
Speaker 4: join me in thanking Hey Smlco.

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00:27:50,600 --> 00:27:51,280
Speaker 3: Christoph fin qu