Peter Wennink: Yeah. I think you have to — you have to understand where these tools are being used for. The vast majority of our shipments to China is mid-critical to mature and that’s really where our business is. Of course, like I said earlier, there’s a handful of fabs, not customers, fabs that have been identified as ready for advanced semiconductor manufacturing. So those will — those are now excluded, but the vast majority is mid-critical to mature. Will that level off? I don’t think so. And why don’t I think so? Because you need to realize where those chips are being used for. I mean, China is by far — over 50% of all worldwide investments in renewable energy is in China. That’s wind, that’s solar, that’s the buildout of the grid, the electrification.
The buildup of the EV manufacturing capacity in China is significant. Industrial IoT is a significant driver. Next to that is also the continuous telecommunications infrastructure rollout. That’s all mid-critical to mature stuff. And as it happens, China invests a lot there. It’s a big country, 1.4 billion people. So there is a lot of semiconductor need, and this is exactly when we look at the expansion plans of our Chinese customers. It’s exactly what they — where they are putting their capacity at work in these areas. And if you look at the total consumption of semiconductors by the Chinese manufacturing industry, then China imports more semiconductors than they import oil. On top of that, you see the significant increase in these new transitions.
That means that if China wants to come to a certain level of self-sufficiency, yeah, have still a huge gap to cover to be completely self-sufficient. So it’s also logical that they actually invest in this type of semiconductor technology because it’s for internal use. And I think so it’s — I don’t think we will see a peak this year and next year, but I think there will be going forward a significant demand coming out of China for mid-critical and mature technology, and for all the reasons that I just mentioned.
Krish Sankar: Got it. Thanks a lot, Peter. Thank you.
Operator: Thank you. We will now go to the next question and your next question comes from the line of Aleksander Peterc from Societe Generale. Please go ahead.
Aleksander Peterc: Yes. Hi. Good afternoon and thank you for taking my question. Could you help us understand what is the percentage of shipments into China this year that would actually fall under the restrictions that will be in place for the 1st of January next year? That would be my first question. And then the follow-up, just very briefly, you could tell us how far out you’re currently booked in EUV into 2024 or for in DUV. Thank you.
Peter Wennink: Yeah. I’m just writing down. So on the China growth, what — the percentage shipment this year that is now excluded, it’s anywhere between 10% and 15%. So the vast majority is mature and mid-critical. And I think like I said in the answer to the previous call, I think that is what will basically remain because of the buildout of that capacity is actually needed for all the transitions that I just mentioned. So it’s 10% to 15%.
Aleksander Peterc: Thank you.
Roger Dassen: And on the EUV backlog, I mean, we’re currently looking at a backlog of around EUR19 billion for EUV, but of course, that is a combination of the shipments that we still have to go this year and then for ’24 and ’25. And by the way, it also includes High-NA. So that’s a — so there is a substantial part of the shipments that we envisage in ’24 are included, but not everything, but a substantial part is covered by the EUV backlog, as I just referenced it.
Aleksander Peterc: Okay, great. Thank you. It’s just that 3800 will be — so next year is all 3800, right?
Roger Dassen: No, no. Next year will be a mix of 3600 and 3800.
Aleksander Peterc: Thank you.
Roger Dassen: You’re welcome.
Operator: Thank you. We will now go to the next question and your next question comes from the line of Sara Russo from Bernstein. Please go ahead.
Sara Russo: Hello. Thanks for taking my question. So in your result package, you had indicated that you’re seeing Memory utilization remaining on the low side, and — but you are beginning to see some recovery in Logic and sort of indicated a potential bottoming of the cycle later this year. Can you give us any more specifics on the utilization levels and trends across Memory versus Logic? Any difference — like more specifics on the differences you’re seeing across those end markets?
Peter Wennink: No, I’m not going to give you precise utilization levels because they’re all different for our customers, but it is bottoming out on Logic. That’s what we’ve seen. I think we’ve already indicated that I think last quarter that we saw this very early first indication. I think that has continued, yeah, so which is good. But also I think that you have — need to look at that in the context of what I said earlier that inventory levels downstream are normalizing and upstream, they’re still a bit elevated. So this is in that context that that makes all sense. I think on Memory, we don’t see that — that upturn yet, so we just have to look at and just follow this closely when that will happen, but generally when we see this upturn in Logic, somewhere down the line, Memory will follow.
It’s — Logic working without Memory is not — is — does not make sense either. So it’s probably a timing issue, but we’ll follow it closely. And like I said, there are other indications. Also some articles that I just read last week from Korea that for the first time in 12 months, you see NAND shipments going up, first indications of DRAM spot prices going up now. So these are early indicators. So that’s why our expectation is that what we’ve seen for Logic now over the last three months will also follow in Memory.
Sara Russo: Great. Thanks. And maybe just a follow-up on the backlog topics. So I mean, in the past, you’ve given us a sense for what share of the backlog is China demand and it’s sort of a lot of 2022 orders led to the significant increase in China. Have you seen that shift at all? It was sort of sitting around 20%. Is that shifted down now that you’re able to ship more to China and meet more of those orders? Has that come down or does that continue to remain in that range?
Peter Wennink: No, I think it’s the — I think it’s the same. I think we said the China part of our business this year could be over 20%, and I think it’s about the same range for the backlog. Yeah. So that has remained the same.
Sara Russo: Great. Thank you very much.
Operator: Thank you. We will now go to the next question, and your next question comes from the line of Francois Bouvignies from UBS. Please go ahead.
