WEBVTT - ASML CEO Christophe Fouquet Talks AI Demand, Future of Chips.

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio News.

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<v Speaker 2>Let's get to Paris, Back to France where Opening Trade

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<v Speaker 2>co host Tom McKenzie is standing by with the CEO

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<v Speaker 2>of ASML at the Viva Tech conference.

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<v Speaker 1>Time take it away, Matt.

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<v Speaker 3>Yes, the CEO of Europe's most valuable company, a SML

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<v Speaker 3>that plays that central role, of course in the semiconductor.

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<v Speaker 1>Space, Christoph Fouque.

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<v Speaker 3>Christoph, we are meeting and talking at a moment where

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<v Speaker 3>there is a lot of focus here in Europe on

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<v Speaker 3>the decision by the US to impose export controls on

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<v Speaker 3>anthropic models, and Europe is feeling the impact of that,

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<v Speaker 3>and it's a reminder of the questions around sovereignty, particularly

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<v Speaker 3>around AI. And you are pushing hard on this. What

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<v Speaker 3>is your message to Brussels. What is it that Europe

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<v Speaker 3>needs to do to ensure that it is not vulnerable

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<v Speaker 3>to those kind of supply chain risks.

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<v Speaker 4>Well, I think in did a lot of discussion around that,

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<v Speaker 4>and sovereignty has become a key ward because popore realize

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<v Speaker 4>that strategically, if you don't have a big enough part

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<v Speaker 4>of a certain ecosystem in this case AI, you're going

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<v Speaker 4>to be exposed to the goodwill of other parties. But

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<v Speaker 4>I think what's very important to understand when it comes

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<v Speaker 4>to sovereignty is to get sovereignty, you need innovation first.

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<v Speaker 4>You have to do things in the right order. It's

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<v Speaker 4>not enough to say I want sovereignty. What's very important

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<v Speaker 4>is make sure that innovation can happen in Europe.

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<v Speaker 5>And I think that's a bit.

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<v Speaker 4>The idea of the Tech Creators Group we have created

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<v Speaker 4>where we believe that it is very very important to

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<v Speaker 4>have a dialogue with the different government commission but also

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<v Speaker 4>national government to have helped them to understand how to

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<v Speaker 4>create the condition such that the AI ecosystem can develop

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<v Speaker 4>in Europe.

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<v Speaker 5>You will never have the entire.

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<v Speaker 4>Ecosystem, but you cannot do it all it's too much

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<v Speaker 4>or you cannot do it all at the same time.

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<v Speaker 4>But you need at least to have enough off I

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<v Speaker 4>would say skin in the game in a value in

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<v Speaker 4>the coosystems, so that when those discussion on those this

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<v Speaker 4>shion happen, you have a pos.

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<v Speaker 3>So where can Europe have skin in the game. They've

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<v Speaker 3>got skinn in the game with ASML and the role

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<v Speaker 3>that you play. Yeah, where else can you have skin

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<v Speaker 3>in the game when it comes to AI.

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<v Speaker 4>Well, I think a very important place is the market itself.

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<v Speaker 4>The Europe and market is pretty attractive, right you look

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<v Speaker 4>at twenty two percent of GDP, it's a very I

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<v Speaker 4>would say match your market, very good market. So this

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<v Speaker 4>means we are user, we are buying a lot of stuff,

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<v Speaker 4>and that's to start with a strength for Europe, and

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<v Speaker 4>I think that's the reason why Europe was created. Now,

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<v Speaker 4>if you look at the other part between maybe ASML

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<v Speaker 4>and that, we have a lot of horse and sometimes

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<v Speaker 4>we discuss a lot semiconduct and manufacturing. Yes there is

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<v Speaker 4>a gap there, but most probably not the right place

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<v Speaker 4>to start because semiconcter manufacturing is only needed if you

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<v Speaker 4>have people to buy a semiconductor. Today, if we are

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<v Speaker 4>the tunanometer of fab in Europe, most probably most of

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<v Speaker 4>the wafers will go to the US.

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<v Speaker 5>So since we have a strong.

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<v Speaker 4>Market, we have to start by looking at that and

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<v Speaker 4>focus on what we call the market demand product and

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<v Speaker 4>have strong industrial projects around AI application, around maybe AI

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<v Speaker 4>products then maybe are cheap design and then chip manufacturing.

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<v Speaker 4>But you have to look at the entire sequence and

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<v Speaker 4>look at it in the right holder.

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<v Speaker 1>How would you score Europe right now on a score

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<v Speaker 1>of one to ten in this AI.

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<v Speaker 5>Race, Well, I think I've said that before.

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<v Speaker 4>I think that you know, if we compare how we

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<v Speaker 4>do on the entire ecosystem versus the US and China,

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<v Speaker 4>I think today the US is the clear winners.

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<v Speaker 5>I mean they are.

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<v Speaker 4>Looking at champion across the entire AI SUMI ecosystem. I

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<v Speaker 4>think the one place they were missing a bit out

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<v Speaker 4>was manufacturing, and I think they have been extremely aggressive

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<v Speaker 4>in bringing some key company to manufacture in the US.

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<v Speaker 5>They can do that because they buy chips.

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<v Speaker 4>Eighty percent of the advanced chips manufacturer worldwide is bought

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<v Speaker 4>by the United State. So I think the US is

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<v Speaker 4>doing very very well. China has been investing or so

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<v Speaker 4>across the entire ecosystem. I think mostly they do very

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<v Speaker 4>well on the application side, a bit less on what's

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<v Speaker 4>before that, but I think they are driving the use

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<v Speaker 4>of AI mostly more aggressively than any other country. And again,

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<v Speaker 4>when you look at Europe, a lot of horse so

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<v Speaker 4>I would say, you know, how family quite behind what's

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<v Speaker 4>happening elsewhere today, So.

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<v Speaker 3>That gap is obviously there. How interventionists should European governments be?

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<v Speaker 3>The US taking a ten percent stake in Intel. Is

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<v Speaker 3>that a playbook that we should copy?

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<v Speaker 5>Well, I think two things.

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<v Speaker 4>Maybe, so think we need to have a dialogue between

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<v Speaker 4>the industry and government, the commission.

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<v Speaker 5>Viewers.

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<v Speaker 4>Compared to what's happening in the US or in China,

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<v Speaker 4>this has been missing and I think the responsibility.

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<v Speaker 2>All right, it looks like we are losing the feed there,

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<v Speaker 2>which is always how it goes at a tech conference.

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<v Speaker 2>The Wi Fi doesn't work in any case. We'll get

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<v Speaker 2>back to Bloomberg's Tom mackenzie and the CEE of ASML

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<v Speaker 2>as soon as we can recover that at the Viva

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<v Speaker 2>Tech Paris conference. Okay, apparently they're talking again, so we'll

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<v Speaker 2>see if the tech holds up.

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<v Speaker 4>The goal of government is to really develop instruments regulation

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<v Speaker 4>or lack of regulation in some cases, to make the

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<v Speaker 4>industry champion life a lot easier.

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<v Speaker 3>I want to ask you about the IPOs that come

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<v Speaker 3>through SpaceX, notably and possibly open aanthropic coming up into

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<v Speaker 3>the future. Are we underestimating the CAPEX spends that could

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<v Speaker 3>come about as a result of that capital raising and

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<v Speaker 3>what it means for the demand for your lithography machines.

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<v Speaker 4>Well, if you look at you know, worldwide, the demand

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<v Speaker 4>for AI infrastructure is still enormous and the demand for

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<v Speaker 4>AGI H compute start to come up, so the demand

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<v Speaker 4>is continuing to go up. I think a lot of

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<v Speaker 4>US are convinced that we're going to be looking at

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<v Speaker 4>the supply limited market for AI pos semiconductor for quite

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<v Speaker 4>a few years because the build up of the infrastructure

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<v Speaker 4>is huge, and I think some of the IPO you

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<v Speaker 4>mentioned are just pointing to the opportunity that they is

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<v Speaker 4>a present.

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<v Speaker 1>We are we early in this Still, where are we

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<v Speaker 1>in that? In US?

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<v Speaker 5>Sequential early?

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<v Speaker 4>Because you know, even a year ago, the AI company,

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<v Speaker 4>we're already very vocal about the need for this architecture,

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<v Speaker 4>the need to build capacity. My industry, the semi industry

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<v Speaker 4>was still a bit exitant to move. And the move

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<v Speaker 4>really happened basically at the end of last year and

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<v Speaker 4>very quickly. And now we all need to build capacity.

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<v Speaker 4>So our customer have to build fab We have to

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<v Speaker 4>make sure we build enough equipment to fill those fab Yeah,

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<v Speaker 4>and a catch up will take quite a bit and

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<v Speaker 4>that's only for the infrastructure, and then the application will come.

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<v Speaker 3>Are using a pull forward of also TVV machines from customers.

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<v Speaker 4>We see a pool, we see customer continuing to create visibility,

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<v Speaker 4>longer term visibility telling us well, this is a bit

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<v Speaker 4>here to stay. So I would say that the trend

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<v Speaker 4>we see is still very strong towards basically demand.

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<v Speaker 3>Run with me on this one, data centers in space.

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<v Speaker 3>Is there a potential additional revenue stream for ASML? If

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<v Speaker 3>Musk pulls that one.

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<v Speaker 4>Off, well, I think you know, yes, you need a

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<v Speaker 4>certain amount of data center and they will be in space,

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<v Speaker 4>they will be on the hearst, doesn't necessarily change a number.

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<v Speaker 4>I think the discussion about data center in space is

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<v Speaker 4>to maybe address another potential bottomleck in the ecosystem, which

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<v Speaker 4>is energy. I think the discussion around putting data center

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<v Speaker 4>in space is there because there is an idea that

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<v Speaker 4>if you do that, the energy consumption or the energy

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<v Speaker 4>availability will be there. So maybe not too much to

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<v Speaker 4>do with, you know, the total data center capacity, but

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<v Speaker 4>maybe more about trying to solve another potential big issue,

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<v Speaker 4>which is energy for a data center.

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<v Speaker 3>Elomsk is also looking at a terror fab potentially one

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<v Speaker 3>terrawat of power. What's the potential upside for a SML

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<v Speaker 3>on that. Have you talked to Usk about that? Project.

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<v Speaker 1>Is that a potential uplift as well for the business

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<v Speaker 1>going forward?

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<v Speaker 4>Well, you know, you know, any added capacity of of

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<v Speaker 4>course a potential upside for for us. I think we

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<v Speaker 4>are looking very carefully on the development on when things

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<v Speaker 4>will happen at wet speed. You know, new projects are

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<v Speaker 4>opportunity as long as you're not supply limited. So that's

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<v Speaker 4>also important to say that. So we have to make

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<v Speaker 4>sure that this is really being taken care But I

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<v Speaker 4>think the Terra fab is an example of a major

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<v Speaker 4>fab project. If you look at some of the DRAM

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<v Speaker 4>project in Korea, you also look at million of way

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<v Speaker 4>for fabs, so that's also pretty big.

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<v Speaker 3>Okay, So career and the build out there is going

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<v Speaker 3>to be a driver as well. Staying with the US

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<v Speaker 3>though that one of the top House Republicans on the

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<v Speaker 3>House China Committee sent a letter in April suggesting that

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<v Speaker 3>SML was going to start shipping DUV lithography machines into China.

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<v Speaker 1>They have some concern there. Do you do you have

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<v Speaker 1>a response to that.

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<v Speaker 4>No, it's not a response because you know, we have

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<v Speaker 4>a dialogue with every government. I think you know that

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<v Speaker 4>in the last few we have been subject many many

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<v Speaker 4>times to those kind of negative rumors about what we do.

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<v Speaker 4>I mean every time, the rumors have been quite I

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<v Speaker 4>would say, potentially hurtful even for SML.

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<v Speaker 5>And I want to say it again.

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<v Speaker 4>I mean, we have been following every single rules and

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<v Speaker 4>we continue to do that. The wad are changing, by

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<v Speaker 4>the way quite often, and sometimes something you could do

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<v Speaker 4>you cannot do anymore. But when this happened, you know,

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<v Speaker 4>we change our behavior accordingly.

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<v Speaker 5>So we are.

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<v Speaker 4>Extremely cautious in trying to follow or follow basically the

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<v Speaker 4>whole of flaws.

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<v Speaker 5>It's very important.

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<v Speaker 4>And that's true for DPUV, that's true for EUV, that's

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<v Speaker 4>true for any activity we have in China or anywhere

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<v Speaker 4>else in the world. And I can promise you there's

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<v Speaker 4>a lot of people in SML making sure that we comply.

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<v Speaker 4>Compliance is a very important I would say, elements in

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<v Speaker 4>a very difficult geopolitical environment.

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<v Speaker 3>The Indian Prime Minister narendro Romoti will be here in

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<v Speaker 3>Paris tomorrow. Yes, you've partnered with Tatar on their aspirations

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<v Speaker 3>around boundaries and build out a semiconduct capacitated. How much

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<v Speaker 3>of a growth story potentially is India for AIRS?

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<v Speaker 4>And yeah, so I think So first, we're very happy

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<v Speaker 4>with this partnership because we are partnering at the very start,

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<v Speaker 4>at the very beginning. So of course we all know

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<v Speaker 4>that India today doesn't have manufacturing for the mechanic tur

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<v Speaker 4>but you know, by twenty thirty they believe that ten

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<v Speaker 4>percent of any chips will be used by India and

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<v Speaker 4>like anyone else, that become therefore a strategic equation of

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<v Speaker 4>supply and therefore they want to get their factory. So

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<v Speaker 4>first five will come up next year. A lot of

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<v Speaker 4>learning has to happen and we will help India Tata

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<v Speaker 4>through this partnership to acce read a learning and you know,

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<v Speaker 4>as learning gets successful, you go to the opportunity. So

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<v Speaker 4>we're very happy to start now because we look at

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<v Speaker 4>that as a growing opportunity for not in the next

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<v Speaker 4>two years, but for the next five and ten years

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<v Speaker 4>in India, and we're very happy that we are there.

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<v Speaker 5>From the Star