Speaker 1: Bloomberg Audio Studios, podcasts, radio News.
Speaker 2: Let's get to Paris, Back to France where Opening Trade
Speaker 2: co host Tom McKenzie is standing by with the CEO
Speaker 2: of ASML at the Viva Tech conference.
Speaker 1: Time take it away, Matt.
Speaker 3: Yes, the CEO of Europe's most valuable company, a SML
Speaker 3: that plays that central role, of course in the semiconductor.
Speaker 1: Space, Christoph Fouque.
Speaker 3: Christoph, we are meeting and talking at a moment where
Speaker 3: there is a lot of focus here in Europe on
Speaker 3: the decision by the US to impose export controls on
Speaker 3: anthropic models, and Europe is feeling the impact of that,
Speaker 3: and it's a reminder of the questions around sovereignty, particularly
Speaker 3: around AI. And you are pushing hard on this. What
Speaker 3: is your message to Brussels. What is it that Europe
Speaker 3: needs to do to ensure that it is not vulnerable
Speaker 3: to those kind of supply chain risks.
Speaker 4: Well, I think in did a lot of discussion around that,
Speaker 4: and sovereignty has become a key ward because popore realize
Speaker 4: that strategically, if you don't have a big enough part
Speaker 4: of a certain ecosystem in this case AI, you're going
Speaker 4: to be exposed to the goodwill of other parties. But
Speaker 4: I think what's very important to understand when it comes
Speaker 4: to sovereignty is to get sovereignty, you need innovation first.
Speaker 4: You have to do things in the right order. It's
Speaker 4: not enough to say I want sovereignty. What's very important
Speaker 4: is make sure that innovation can happen in Europe.
Speaker 5: And I think that's a bit.
Speaker 4: The idea of the Tech Creators Group we have created
Speaker 4: where we believe that it is very very important to
Speaker 4: have a dialogue with the different government commission but also
Speaker 4: national government to have helped them to understand how to
Speaker 4: create the condition such that the AI ecosystem can develop
Speaker 4: in Europe.
Speaker 5: You will never have the entire.
Speaker 4: Ecosystem, but you cannot do it all it's too much
Speaker 4: or you cannot do it all at the same time.
Speaker 4: But you need at least to have enough off I
Speaker 4: would say skin in the game in a value in
Speaker 4: the coosystems, so that when those discussion on those this
Speaker 4: shion happen, you have a pos.
Speaker 3: So where can Europe have skin in the game. They've
Speaker 3: got skinn in the game with ASML and the role
Speaker 3: that you play. Yeah, where else can you have skin
Speaker 3: in the game when it comes to AI.
Speaker 4: Well, I think a very important place is the market itself.
Speaker 4: The Europe and market is pretty attractive, right you look
Speaker 4: at twenty two percent of GDP, it's a very I
Speaker 4: would say match your market, very good market. So this
Speaker 4: means we are user, we are buying a lot of stuff,
Speaker 4: and that's to start with a strength for Europe, and
Speaker 4: I think that's the reason why Europe was created. Now,
Speaker 4: if you look at the other part between maybe ASML
Speaker 4: and that, we have a lot of horse and sometimes
Speaker 4: we discuss a lot semiconduct and manufacturing. Yes there is
Speaker 4: a gap there, but most probably not the right place
Speaker 4: to start because semiconcter manufacturing is only needed if you
Speaker 4: have people to buy a semiconductor. Today, if we are
Speaker 4: the tunanometer of fab in Europe, most probably most of
Speaker 4: the wafers will go to the US.
Speaker 5: So since we have a strong.
Speaker 4: Market, we have to start by looking at that and
Speaker 4: focus on what we call the market demand product and
Speaker 4: have strong industrial projects around AI application, around maybe AI
Speaker 4: products then maybe are cheap design and then chip manufacturing.
Speaker 4: But you have to look at the entire sequence and
Speaker 4: look at it in the right holder.
Speaker 1: How would you score Europe right now on a score
Speaker 1: of one to ten in this AI.
Speaker 5: Race, Well, I think I've said that before.
Speaker 4: I think that you know, if we compare how we
Speaker 4: do on the entire ecosystem versus the US and China,
Speaker 4: I think today the US is the clear winners.
Speaker 5: I mean they are.
Speaker 4: Looking at champion across the entire AI SUMI ecosystem. I
Speaker 4: think the one place they were missing a bit out
Speaker 4: was manufacturing, and I think they have been extremely aggressive
Speaker 4: in bringing some key company to manufacture in the US.
Speaker 5: They can do that because they buy chips.
Speaker 4: Eighty percent of the advanced chips manufacturer worldwide is bought
Speaker 4: by the United State. So I think the US is
Speaker 4: doing very very well. China has been investing or so
Speaker 4: across the entire ecosystem. I think mostly they do very
Speaker 4: well on the application side, a bit less on what's
Speaker 4: before that, but I think they are driving the use
Speaker 4: of AI mostly more aggressively than any other country. And again,
Speaker 4: when you look at Europe, a lot of horse so
Speaker 4: I would say, you know, how family quite behind what's
Speaker 4: happening elsewhere today, So.
Speaker 3: That gap is obviously there. How interventionists should European governments be?
Speaker 3: The US taking a ten percent stake in Intel. Is
Speaker 3: that a playbook that we should copy?
Speaker 5: Well, I think two things.
Speaker 4: Maybe, so think we need to have a dialogue between
Speaker 4: the industry and government, the commission.
Speaker 5: Viewers.
Speaker 4: Compared to what's happening in the US or in China,
Speaker 4: this has been missing and I think the responsibility.
Speaker 2: All right, it looks like we are losing the feed there,
Speaker 2: which is always how it goes at a tech conference.
Speaker 2: The Wi Fi doesn't work in any case. We'll get
Speaker 2: back to Bloomberg's Tom mackenzie and the CEE of ASML
Speaker 2: as soon as we can recover that at the Viva
Speaker 2: Tech Paris conference. Okay, apparently they're talking again, so we'll
Speaker 2: see if the tech holds up.
Speaker 4: The goal of government is to really develop instruments regulation
Speaker 4: or lack of regulation in some cases, to make the
Speaker 4: industry champion life a lot easier.
Speaker 3: I want to ask you about the IPOs that come
Speaker 3: through SpaceX, notably and possibly open aanthropic coming up into
Speaker 3: the future. Are we underestimating the CAPEX spends that could
Speaker 3: come about as a result of that capital raising and
Speaker 3: what it means for the demand for your lithography machines.
Speaker 4: Well, if you look at you know, worldwide, the demand
Speaker 4: for AI infrastructure is still enormous and the demand for
Speaker 4: AGI H compute start to come up, so the demand
Speaker 4: is continuing to go up. I think a lot of
Speaker 4: US are convinced that we're going to be looking at
Speaker 4: the supply limited market for AI pos semiconductor for quite
Speaker 4: a few years because the build up of the infrastructure
Speaker 4: is huge, and I think some of the IPO you
Speaker 4: mentioned are just pointing to the opportunity that they is
Speaker 4: a present.
Speaker 1: We are we early in this Still, where are we
Speaker 1: in that? In US?
Speaker 5: Sequential early?
Speaker 4: Because you know, even a year ago, the AI company,
Speaker 4: we're already very vocal about the need for this architecture,
Speaker 4: the need to build capacity. My industry, the semi industry
Speaker 4: was still a bit exitant to move. And the move
Speaker 4: really happened basically at the end of last year and
Speaker 4: very quickly. And now we all need to build capacity.
Speaker 4: So our customer have to build fab We have to
Speaker 4: make sure we build enough equipment to fill those fab Yeah,
Speaker 4: and a catch up will take quite a bit and
Speaker 4: that's only for the infrastructure, and then the application will come.
Speaker 3: Are using a pull forward of also TVV machines from customers.
Speaker 4: We see a pool, we see customer continuing to create visibility,
Speaker 4: longer term visibility telling us well, this is a bit
Speaker 4: here to stay. So I would say that the trend
Speaker 4: we see is still very strong towards basically demand.
Speaker 3: Run with me on this one, data centers in space.
Speaker 3: Is there a potential additional revenue stream for ASML? If
Speaker 3: Musk pulls that one.
Speaker 4: Off, well, I think you know, yes, you need a
Speaker 4: certain amount of data center and they will be in space,
Speaker 4: they will be on the hearst, doesn't necessarily change a number.
Speaker 4: I think the discussion about data center in space is
Speaker 4: to maybe address another potential bottomleck in the ecosystem, which
Speaker 4: is energy. I think the discussion around putting data center
Speaker 4: in space is there because there is an idea that
Speaker 4: if you do that, the energy consumption or the energy
Speaker 4: availability will be there. So maybe not too much to
Speaker 4: do with, you know, the total data center capacity, but
Speaker 4: maybe more about trying to solve another potential big issue,
Speaker 4: which is energy for a data center.
Speaker 3: Elomsk is also looking at a terror fab potentially one
Speaker 3: terrawat of power. What's the potential upside for a SML
Speaker 3: on that. Have you talked to Usk about that? Project.
Speaker 1: Is that a potential uplift as well for the business
Speaker 1: going forward?
Speaker 4: Well, you know, you know, any added capacity of of
Speaker 4: course a potential upside for for us. I think we
Speaker 4: are looking very carefully on the development on when things
Speaker 4: will happen at wet speed. You know, new projects are
Speaker 4: opportunity as long as you're not supply limited. So that's
Speaker 4: also important to say that. So we have to make
Speaker 4: sure that this is really being taken care But I
Speaker 4: think the Terra fab is an example of a major
Speaker 4: fab project. If you look at some of the DRAM
Speaker 4: project in Korea, you also look at million of way
Speaker 4: for fabs, so that's also pretty big.
Speaker 3: Okay, So career and the build out there is going
Speaker 3: to be a driver as well. Staying with the US
Speaker 3: though that one of the top House Republicans on the
Speaker 3: House China Committee sent a letter in April suggesting that
Speaker 3: SML was going to start shipping DUV lithography machines into China.
Speaker 1: They have some concern there. Do you do you have
Speaker 1: a response to that.
Speaker 4: No, it's not a response because you know, we have
Speaker 4: a dialogue with every government. I think you know that
Speaker 4: in the last few we have been subject many many
Speaker 4: times to those kind of negative rumors about what we do.
Speaker 4: I mean every time, the rumors have been quite I
Speaker 4: would say, potentially hurtful even for SML.
Speaker 5: And I want to say it again.
Speaker 4: I mean, we have been following every single rules and
Speaker 4: we continue to do that. The wad are changing, by
Speaker 4: the way quite often, and sometimes something you could do
Speaker 4: you cannot do anymore. But when this happened, you know,
Speaker 4: we change our behavior accordingly.
Speaker 5: So we are.
Speaker 4: Extremely cautious in trying to follow or follow basically the
Speaker 4: whole of flaws.
Speaker 5: It's very important.
Speaker 4: And that's true for DPUV, that's true for EUV, that's
Speaker 4: true for any activity we have in China or anywhere
Speaker 4: else in the world. And I can promise you there's
Speaker 4: a lot of people in SML making sure that we comply.
Speaker 4: Compliance is a very important I would say, elements in
Speaker 4: a very difficult geopolitical environment.
Speaker 3: The Indian Prime Minister narendro Romoti will be here in
Speaker 3: Paris tomorrow. Yes, you've partnered with Tatar on their aspirations
Speaker 3: around boundaries and build out a semiconduct capacitated. How much
Speaker 3: of a growth story potentially is India for AIRS?
Speaker 4: And yeah, so I think So first, we're very happy
Speaker 4: with this partnership because we are partnering at the very start,
Speaker 4: at the very beginning. So of course we all know
Speaker 4: that India today doesn't have manufacturing for the mechanic tur
Speaker 4: but you know, by twenty thirty they believe that ten
Speaker 4: percent of any chips will be used by India and
Speaker 4: like anyone else, that become therefore a strategic equation of
Speaker 4: supply and therefore they want to get their factory. So
Speaker 4: first five will come up next year. A lot of
Speaker 4: learning has to happen and we will help India Tata
Speaker 4: through this partnership to acce read a learning and you know,
Speaker 4: as learning gets successful, you go to the opportunity. So
Speaker 4: we're very happy to start now because we look at
Speaker 4: that as a growing opportunity for not in the next
Speaker 4: two years, but for the next five and ten years
Speaker 4: in India, and we're very happy that we are there.
Speaker 5: From the Star