ASM International N.V.

Mary Jo Dieckhaus - IR Chuck del Prado - President and CEO Peter van Bommel - CFO

Robin van den Broek - ING Tammy Qiu - Berenberg Peter Olofsen - Kepler Cheuvreux Chetan Udeshi - JPMorgan Jim Fontanelli - Arete Edwin de Jong - SNS

Thank you. ASM issued its 2014 fourth quarter and year results last evening.

For those of you, who have not seen the Press Release it along with the latest investor presentation is accessible on the website asm.com. We remind you that this conference call may contain information relating to ASM's future business or results in addition to historical information.

These forward-looking statements involve risks and uncertainties that could cause actual results to vary materially from those expressed or implied in such statements. These include without limitation, statements relating to revenues, margins, cost reduction programs, liquidity, breakeven levels, strategies and economic conditions.

Please refer to the ASMI press releases and filings with the U.S. Securities and Exchange Commission on Form 20-F and 6-K for more information on the risk factors that could affect results.

All forward-looking statements are based on information as of today Thursday March 5, 2015 and the Company assumes no obligation to update these statements. I will now turn the call over to Chuck del Prado, President and CEO Mr.

Del Prado?

Thank you Mary Jo. Welcome to everybody on the call today.

Looking back to the year as a whole 2014 was an important and successful year for ASMI. We delivered record revenue and results for our long-term business.

Our combined ALD and (PE)ALD business had a great year as we further expanded the base of high volume manufacturing customers. Profitability increased substantially which also reflected execution on our manufacturing and supply chain programs.

Strong cash generation allowed us to start €100 million share buyback program in Q4 last year. In addition we intend to increase the dividend by 20% to €0.60 per share.

I would like to thank all of our employees for their outstanding commitment and hard work that contributed to the successful results in 2014. Let’s now review our fourth quarter and full year 2014 financial results, starting with the fourth quarter.

Revenue in the fourth quarter was in line with our expectations at €124 million up 2% from the third quarter and down 2% from the fourth quarter of 2013. In terms of product lines the key driver was again our combined ALD and (PE)ALD visage.

By market segment fourth quarter revenue was led by memory customers followed by the logic and foundry segments. The gross margin remained at the strong level of 43% in the fourth quarter, stable compared to the third quarter and up from 39% level in the fourth quarter of 2013.

Similar as in the third quarter gross margin benefited from a healthy revenue mix and continued strong utilization levels. SG&A expenses increased by 8% compared to the previous quarter.

Excluding certain one-off items mainly related to the reassessment of vesting of options and the employee share based composition skills, SG&A would have been stable. R&D expenses increased by 18% compared to the third quarter.

We generated operating income of €13 million in the fourth quarter, down from 17 million in the third quarter and 16 million in the fourth quarter of 2013. The operating margin remains in the double-digit in the fourth quarter at nearly 11%.

Financing result in the quarter was €8.2 million positive, mainly consisting of a translation gain, in the third quarter the financing result included a translation gain of €16.6 million. As we discussed in previous quarters, a substantial part of ASMI's cash position is denominated in U.S.

dollar. The appreciation of the U.S.

dollar in the last couple of quarters led to the aforementioned translation gains. Result from investment which included our 40% share of the net earnings share from ASM PT amounted to €9 million for the quarter, down from €31 million in the previous quarter and up from nearly €2 million in the year ago period.

These figures exclude the ongoing amortization charge and purchase price allocation which amounted to €6 million in the fourth quarter. As earlier communicated these ongoing amortization charges are projected to continue at about the same level until 2017.

Note that ASMPT's net earnings in the fourth quarter included a provision for tax related expenses in Hong Kong. Excluding this one-off negative impact our results from investments would have been €9 million higher.

In the fourth quarter ASMPT shares fell quarter-on-quarter by 29% to HKD3.4 billion reflecting the seasonal pattern in its business. Compared to the fourth quarter of 2013 however sales increased by 25% of which 11% due to the consolidation of the newly acquired deck business.

ASMPT's net earnings on a 100% basis decreased from €77 million in the third quarter to 23 million. Excluding the one-off tax provision ASMPT's net earnings would have been €45 million.

In Q4 2013 also on a 100% basis ASMPT's net earnings amounted to €5 million and €13 million excluding one-offs. ASMPT reported bookings of $343 million for the fourth quarter a decrease of 36% compared to the third quarter but an increase of 17% compared to the fourth quarter 2013, of which 11% is related to the consolidation of the [indiscernible] business.

Now turning back to ASM's consolidated operations. ASM's net earnings on a normalized basis amounted to $27 million in the fourth quarter down from 60 million in the third quarter and up from 9 million in the last quarter of 2013.

Our new orders in the fourth quarter remained at a strong level of €154 million only marginally below the level in the third quarter and up 16% compared to the year ago period. As such orders were slightly above our guidance.

Orders were primarily driven by our combined (PE)ALD and ALD business. In terms of customer segments bookings were led by the memory segment both DRAM and NAND Flash followed by logic.

Now let’s take a look at the full year results. Our net sales increased by 21% in 2014 marking a new record high for our frontend operations.

And again outperforming the wafer fab equipment market as a whole. Gross margin improved by 400 basis points to 43% year-over-year.

As we discussed in earlier calls we started a number of programs in 2013 to further increase the efficiency and flexibility of our manufacturing operations and supply chain. These measures included new outsourcing initiatives, a stronger focus on sourcing and complete the subassemblies and the migration of a larger part of our supply base to Asia.

In 2014 the growth margin benefited from the effects of these programs. Next to the solid revenue performance and a continued positive mix.

We believe we are tracking well against our structural target for our gross margins of high-30s to low-to-mid 40s. On a quarterly basis gross margin will continue to be impacted by factors such as a revenue mix and utilization.

SG&A expenses as a percentage of sales drop to 15%, 15% of sales in 2014 down from 16% in 2013. R&D decreased from 13% to 12% of sales.

Operating profit improved strongly in 2014 doubling from €45 million to €91 million. The operating margin increased from 10% to nearly 17% and surpassed the previous high of year 2011.

Results from investments on a normalized basis increased from €21 million to €61 million. And on a reported basis results from investments amounted to €39 million and this compared to a little over €1 billion in 2013 on a reported basis which was mainly reflected the net remeasurement gain on the ASMPT shareholding that year.

Normalized net earnings increased from €46 million to €160 million in 2014. On a per share basis normalized net earnings increased from €0.71 to €2.49.

So looking at our balance sheet a cash flow, at the end of December cash flow the cash amounted to €386 million down from €410 million at the end of September. This decrease was mainly due to cash spent on share repurchases partly offset by positive currency effects.

At the end of December net working capital increased to €108 million up from €100 million at the end of the third quarter. This increase was mainly caused by transaction differences and an increase in finished goods that were already shipped to customers but not yet turned into revenue during the quarter.

The number of outstanding days of working capital measured against quarterly sales, increased to 78 at the end of the fourth quarter up from 73 days at the end of September and 77 days at the end of 2013. Cash flow from operations amounted to €11 million during the fourth quarter down from €23 million in the previous quarter.

For the year as whole we generated €118 million and operating cash flow from operations up from €48 million in 2013, mainly on the back of improved profitability. Free cash flow for the year doubled to €79 million.

In the fourth quarter we spent €32 million on the buyback of 953,000 of our owned shares at an average price of €33.45 per share. An amount of €29 million was settled during the quarter and this followed on the €100 million share buyback authorization that we announced last October as part of our commitment to use excess cash flow to benefit of our shareholders.

At the end of December we completed approximately 30% of the program and for today that is about 48%. As announced earlier the buyback will end on completion of the program but ultimately in November 2015.

We publish a weekly update of our share repurchases on our website. The number of outstanding basic shares amounted to approximately 63 million shares at the end of December down from 63.7 million at the end of the third quarter.

During the year we received €20 million in dividends on our 40% shareholding in ASMPT. Last year we paid a dividend to our shareholders of €0.50 per share for a total amount of €32 million.

This year to show our confidence in sustainability of our profits we intend to propose a dividend €0.60 per share an increase of 20% for approval at our upcoming AGM in May. So let's now look a little bit more at our business.

2014 was another great year for our combined ALD and (PE)ALD business. As a market leader, we benefited from strong growth in ALD market in 2014.

Following growth in customer deployment and the development of new applications over the last years, ALD has turned into a key growth driver for our company. Our ALD and (PE)ALD product lines accounted for more than half of our total equipment revenue in 2014.

ALD is now firmly established as a key enabling technology, some of our leading customers have already ramped multiple technology generations based on our ALD equipment. In the more recent years, we have successfully penetrated additional customers.

In 2014, we have seen some of these new customers deploying our ALD and (PE)ALD systems for the first time in substantial volumes. Over time, we have also achieved some more robust and balanced customer mix on the back of success in ALD.

Apart from expanding our presence in the logic foundry segment, we also have built as you know strong customer relationships in the memory sector. Our (PE)ALD equipments is an enabling technology for [space defined double patterning] and used by virtually all of the leading memory customers.

On the back of our [Technical Difficulty] to the memory segment, we were able to take full advantage of the strong demands for memory customers for leading edge equipment during the year. Building out our leadership in ALD is a key element in our growth strategy.

We continue to invest significant resources in further strengthening the competitiveness of our platforms and on the development of new ALD and (PE)ALD applications that will support our customers in transitioning to the next technology node. Growth prospects for the ALD market remain strong.

For many authorization in 3D device architecture such as FinFET and new and more complex material integration schemes increase the needs for more precise film deposition which in turn will continue driving the demand for ALD at the most advanced technology nodes. As the market leader with more than 15 years of developing this technology and with the broadest offering of ALD and (PE)ALD solutions, we believe we are well positioned to benefit from further growth, so looking at the market environment as a whole, following a drop in 2013 wafer fab equipment spending rebounded strongly year-over-year in 2014 by approximately 15%.

The second half of last year was not a strong as the first half of the year as some customers absorbed the investments they made in earlier periods actually in that applies to logic and foundry. Overall growth in wafer fab equipment spending in 2014 was for a large part driven by strong increases in the memory sector.

VLSI and Gartner expect another positive year for our industry in 2015 with the further mid-single-digit increase year-over-year. In the logic foundry sector, wafer fab equipment spending is expected to be driven by investments in the 16-nanometer and 14-nanometer nodes and to a lesser extent in initial spending in the 10-nanometer node, although the exact timing of these investments is still uncertain.

In memory the short-term outlook continues to be supported by healthy spending in DRAM on the 20-nanometer node and in 1x or 18-nanometer and 16-nanometer NAND flash. So now let's look at the company's outlook.

As we stated in our press release that was released some hours ago, for the first quarter of 2015 we expect the sales between EUR150 million and EUR160 million and for the second quarter we expect the double-digit sales increase as compared to the first quarter. And for the second half of the year, second half of 2015, the current visibility is limited.

And the first quarter order intake is expected to be in the range of somewhere between EUR145 million and EUR165 million. Well that was the end of our introduction, so at this point we of course myself and my colleague Peter van Bommel our Company's CFO are happy to take any questions you may have.

I wanted to dig in a little bit on the foundry momentum. I think statements you said in your introductory remarks already indicates that probably memory is your main driver for our H1 guidance.

But I was wondering if you could comment on what, if you look at these and see statements, assumption statements they've set ahead that they will spend more and probably on the 40 nanometer, 60 nanometer FinFET [to gave] architectures. So I was wondering if you can elaborate a little bit on to what extent that’s expected or the momentum is included in our H1 guidance.

And also if you could say something on the number of ALD tools that are needed for certain installed capacity compared to your non-FinFET gate architectures, do you see that the numbers of machines going up basically for 25,000 wafers starts per month. Or do you see that flat.

That’s the first question. Second question is on the foreign exchange rate, you used in your guidance I presume fairly large part of your sales will be dollar.

So I was wondering if you already included basic needed the curving ForEx or is it still an somewhat outdated ForEx rate you have used. Thirdly if you look at your balance sheet I think if you correct for the announced shareholder returns and you look at the dividend inflow from ASMPT, I think if you correct your net cash positive for those items immediately you are still a north of 300 million net cash.

So given the fact that you're probably going to generate pretty healthy cash flow during the year it will probably raise questions what’s important, what’s high on the agenda, is it more likely that you will renew your share buyback or is M&A also high on the agenda? And so let`s leave it at that and I will leave the floor for others and probably comeback later.

Thanks.

Okay Robin, so first on your question on the little bit more guidance for the first half and more specifically some color on foundries. We view that memory is strong -- will stay a strong contributor in overall in the first half of the year and likely somewhat better contribution from foundry also, starting to take place in the first half.

And if you look at Q1 specifically we do expect memory to stay at in terms of compared to Q1. We do expect memory to stay at a healthy level.

And that the contribution from foundry is going to increase compared to the later parts of last year. But that is in our opinion a mix of initial maybe next note in ’16 and ’14 business but also some tools that are more advanced for more future nodes.

So, let’s say that this is where in ’14 and ’16 the bookings will likely be spread out throughout the year and on the initial signs will be accomplishable in Q1 and from a billings point of view Q1 will -- yes, memory will likely say the strongest contributor. That’s an answer on your first question.

And then FinFET, non-FinFET. I assume that, that question relates to logic foundry primarily then we can say mainly the primarily I would say the business is focused on the advanced note.

So FinFET relate. So answers the first basis related question.

So let’s focus on the financials and questions you had and Pete will take over.

First of all Robin your questions to ForEx. We are very late compared to others reporting of Q4 numbers, so we are filing the quarter already.

So we found it a little bit silly on now to talk about currency comparable so that’s the reason why we have given a guidance also in numbers this time. And there we already have included the currency development.

I mean you never know what’s going to happen in the remaining weeks of the quarter but I think that the guidance of sales that we have provided is pretty deep representing the current view and current development of currencies. With regards to the dividend payment, as you know already many years four or five years we always have explained towards the outside world that we want to provide our shareholders with a sustainable dividend.

We are pretty confident about how the results are developing, so that is justifying the fact we think that we increase our dividend from €0.50 to €0.60, it's a 20%. We also always have stated that excess cash will be used one way or another to the benefit of our shareholders and we're still in the middle of the program, the share buyback here we have given some color on it.

So approximately 90 million have been taken out by the end of last year. So that's in the cash numbers of 386, we're going to take out another 70 million in the course of 2015 and when that will reach to excess cash further that we take it on that moment and then we will use that, original remark that I made still applies.

And maybe to come back on what Chuck said, I am still bit confused on the number of ALD tools you might need for 40 nanometer, 60 nanometer FinFET versus you had a 20 nanometer or 28 nanometer, 32 nanometer logic nodes. So Chuck if you can maybe shed some more light there that will be helpful.

Yes, we view that most of the -- our current visibility is that most of the logic foundry investments will be made in 2015, we'll be focused on the most advanced -- the need for the most advanced node.

But will the reliance to build certain capacity of chips will be higher to ALD, so if you need ALD for one layer at the 28 nanometer 32 nanometers will it be two layers at 40 nanometers 60 nanometers FinFET?

It's customer dependent and it's customer dependent and we view that for the logic foundry it will be more volume dependent than it is a significant increase in layers.

Firstly I would like to understand the driver behind the increased R&D, is that because of you are working on something more exciting or is that the refreshment of the product? And secondly I will like to understand from a competition perspective basically the market is getting really attracted in terms of growth CAGR.

So compared to same time last year are you seeing competitors joining the market and just wondering from a benchmarking perspective do you have any data or feedback from the customer that your too is better than the competitors or it is on par or some color will be helpful?

Let me first take that question Tammy about R&D. A big increase I have in earlier calls indicated that we expect that we gladly will increase our R&D, representing also the higher activity levels.

We have seen slightly steep step up in the fourth quarter. There were basically three reasons for that, one is relatively small reason we're dollar company which is reporting in euro, so we have some currency impact as we disclosed also in our quarterly reports, that has caused approximately 300,000 higher R&D costs but that's not a major issue.

There are two things, one is that we're indeed stepping up our R&D efforts, so you might have seen in your balance sheet and in our cash flow that we're increasing our CapEx and that has to do with new investments that we're doing for our customers, in helping us to run the new projects that we're dealing with certain customers and depreciations related to that is in the R&D. So that's all ALD related we're also in one of reps going into a two shift operation.

We did that in the course of the fourth quarter. So those costs were leading to an increase of approximately €1.5 million in the fourth quarter.

Then there were some specific projects which we're running with certain customers to join development projects that are more or less one-offs. So coincidently that led in the fourth quarter to a higher cost increase, and that's approximately 1 million.

So that gives you a little bit of a color. So some structural issues of 1.5 million, the currencies and then the one-offs, but please bear in mind that given also the guidance that we have given that we expect that our sales will increase substantially in the first half of 2015, that is caused by more and more activities that we have with customers and as already indicated definitely leads to a gradual increase of our R&D efforts and with that the cost.

My old remarks remain that we expect that our R&D cost will be somewhere between in the low to mid-teens in the longer-term. I think that gives you sufficient color I suppose with regard to R&D.

So on the, finally on the competitive dynamics, we talked about that in earlier calls that there's an increased focus on ALD among our competitors and also about the first inroads that is remade by some of our competitors in selected parts of the market. And that is -- yes that is something we anticipated since the market is getting so big and that is something we have to live with.

We are engaged with our customers in such a broad spectrum of ALD products that here and there in selected parts, we will meet competitors. And yes we have seen that in 2014 and we expect that to continue in the coming years.

At the same time, we are strongly focused and successful in winning new business and new opportunities, so tied to Robin's question earlier, maybe either short-term some applications in foundry are flat but there are so many opportunities in seeding tools already that will be booked this quarter or likely focused on new applications in logic and foundry that may hit the market in 2016. So that's addressing your question and also further explanation on Robin's question earlier.

And so part of the bigger picture that our target is that although there is increased competition in bigger pool -- in our dollar pool, our target is to maintain our leadership position even with more competition. We believe we can grow our revenue in a very healthy way given there are strong prospects for continued growth of the ALD market and our R&D projects ongoing with our customers.

Follow up on earlier questions on foundry. Just to get it clear in '14 foundry demand was pretty much front-end loaded did you mean to indicate that in '15 it will be more evenly stressed over the year is that the way you're looking at it.

Yes I think that's correct. You say maybe in earlier years it was front-end loaded, we now don’t see it's front-end loaded for the 14-nanometer 16-nanometer node.

It's what we – the increased activity that we likely will see in Q1 on a bookings level is more a mix of 14-16 and programs we have ongoing seeding programs for the nodes beyond 14-16 that we are already strongly engaged on with our customers.

And when you say that you will book seeding tools in Q1 you mean you will book this in your revenues bigger or are you referring to the order intake?

No, we're talking about bookings so that would mean that the revenue of those tools would show up in the later quarter.

Okay. And could that affect your gross margin due to seeding tools have a lower gross margin than tools that you ship for high volume production?

Look we always have indicated Peter is that as far as gross margin is concerned that we expect that our margins will remain in that high 30s to low to mid 40s and that takes also into account this sort of tools, so it could lead in one quarter there if the gross margin is slightly impacted by that, but I think it's part of the earlier given guidance.

And then going back on the earlier discussion on competition in ALD the inroads that some of the competitors are making, are they making inroads in applications where you have been the dominant player and where your customers are seeking a second source or is the competition making inroads into new applications that you may not be addressing?

It's primarily the first, the first category Peter where we have been -- say that the primary or sometimes only player and where clearly there is a strong drive from customers to develop a strong [indiscernible].

And I assume that your customers do some benchmarking do you have the idea that your competitors have been able to catch up, or do you still think you have a lead of your competitors.

I don’t want to go into an explicit competitive analysis here also because I don’t want to share everything. But in general I think the customers like we shared before at some point in time when market get a certain size they take a conscious choice to develop competitors.

And sometimes in more material markets they get closer to your performance and sometimes they don’t get well completely on par but it’s still good reason for customers for specific devices that they have in the factory or just for cost reasons to still bring them in. So that’s the way you should see this.

But we are -- I can tell you we are very strongly analyzing our competitive position in all the applications we are engaged in and even when we get the impression that some competitors are in certain applications catching up. Then we know what to do at the ahead of the curve again.

So that’s just part of the business we are in. And again it’s let me emphasize that’s not across the board because we are engaged in such a broad spectrum across thermal and plasma ALD but it’s happening in specific areas.

Final question on epitaxy, you launched a new platform in 2012 and one of the ambitions you had was to gain market share or increase your presence in the logic in the seamless market. Has there been any progress thus far that you can share with us?

I respect your question, there is nothing to report on that that is meaningful to you at this moment in time.

Can you maybe update us on where you believe the current size of the ALD market is and where you think it could go in the next couple of years. I think you said in one of the previous calls that you offered a analyzing to potential of that.

So I was wondering if you have an update on that. My second question is on the impact of FX on your gross margin.

I was wondering whether Peter is able to say anything maybe about the mismatch in cost of materials versus revenue. So I was mainly hoping for a bit more tailwinds on FX on your gross margins.

And the third one is actually coming back all maybe investments in growth and R&D bit and actually related to the CapEx number which indeed was a bit high in a quarter. Should we take that as also as a more sustainable run rate for CapEx or is that also clearly a one off increase?

So Phil first on the size of the ALD and in October and you saw we mentioned that we initially estimate of the ALD market early in 2014 we assessed it at $400 million and we updated the estimate for 2014 to north of $600 million in the October earnings call and based on that we said that we expect a doubling of the market in the next three years to four years taking 2014 as a base line. So that means that the market will grow strongly beyond $1 billion in the upcoming years.

And we are absolutely convinced that this is the case. And looking back to 2014 our view is that indeed the ALD market ended up clearly north of 600 million and expect also the ALD market to grow with double-digit percentage in this year.

When you look to the ForEx part, I mean we are little bit of a boring company that suspect. In our results we also indicate what the impact is of our currency development.

And when you look to it then you see that on sales that the impact was approximately 2% than on SG&A and R&D cost. So the ForEx impact Q-on-Q was also approximately 2%, while the gross profit margin as a percentage remained stable Q-on-Q.

So yes, we see some impact of growth -- on the gross margin in absolute amounts because as a percentage its rather neutral and that comes due to the fact that we have nearly a natural hedge in our operations and that makes at least a currency risk very low but also because benefits that might come as a consequence of that limited to only the absolute numbers in euros. Then you look to CapEx then Q4 was I will say rather high levels, so I would not call that the new standard.

As I mentioned earlier we are doing some extra CapEx investments on this moment mainly related to the new programs that we're running with customers, so for that we need additional CapEx and depreciation of that is part and parcel then of the R&D expenses. So I expect that the Q4 was a peak and I do not expect that coming back in the next quarters to come.

First question Chuck can you talk about any locking that you have with your ALD tools, because you have been the sole supplier for at least two three years now. So do you think you have a locking material ALD tools in terms of process recipe that customers may have developed using your tools which may be difficult to switch immediately to new supplier.

And secondly as we move to a new generation nodes, how -- I mean do you see any inflation in your ASP for ALD tools as well? Thanks.

Okay, so lock in, yes, that would be great and there is of course the way we tried to lock in is just stay ahead of the curve, because we have been the ALD supplier and started these developments in the late 90s. So by just developing a strong relationship with our customer we stay ahead in most of the cases compared to competition.

But you cannot prevent that in every incidence. So here and there the entry barrier is maybe somewhat lower and somewhat more material applications, and competition will step in.

And again also from a commercial point of view there will be a strong drive from customers to do that to create some leverage here and there. And that's just part of the maturing market that grows beyond $1 billion in size.

But yes, we view that since we have the broadest ALD portfolio in the industry we view that in many of those applications we have the edge in time, in terms of time over the competitions. So just we had to make the right choices and so far we're confident that based on that we can stay in a leadership position and again our percentage market share of the whole market may go down little bit and that is normal.

But we view that it will still allow us, we believe that it will still allow us to grow significantly faster than the market like we have done on average over the last four years. On ASP, yes, ASP price is there any price pressure?

That's what you are asking. Yes in parts of the market that is the case.

But it's just that in parts of the market where applications get a little bit more mature then always, like with every technology in our industry, customers will shift by focusing more on improved cost of ownership. And then we address it in the right way and improve cost of ownership that's about improved functionality, higher throughput, better maintainability, even improving the footprints somewhat in a smart way on a later version of the product.

That's what we're all doing to maintain competitive in those parts of the markets. Yes, and we also have developed as a company in these ALD engagement also in terms of culture and engineering focus by strengthening our focus in the organization on cost and efficiency, besides technology much more than in the past.

So I trust that answers your question.

Just on ASP question, so what you're saying you're not necessarily seeing a significant pricing pressure but at the same time in your new nodes with your newer tools you're not necessarily seeing a big increase in the pricing of tools as well so it's more stable status quo at this point in time on pricing?

Well I don’t know, I meant to say that in certain parts of -- in certain applications, it's easier to defend the price or improve your margins then in more mature markets where also as a result of that, customers are trying to introduce competitors.

So just a few questions if I may. Firstly on 28-nanometers.

It looks roughly it's like the number of wafers being allocated to high-K metal gates at the 28-nanometer node by the foundry is increasing in 2015 versus 2014. So I was wondering, if you could speak to the opportunity that presents from a year-on-year perspective in terms of revenue?

Secondly, if you could talk to the potential risk of tool reuse as Samsung ramps 3D NAND in the second half of this year and whether these tools are likely to reallocated into DRAM as clearly they won't be needed for space defined double-patterning as those wafers get moved to 3D NAND? And then thirdly, whether you guys have looked at or are looking at the Atomic Layer edge markets and whether that's something that might represent an opportunity for you in the future?

Thank you.

Well Jim thanks for your questions. So on 28-nanometer, we view that -- yes our view at this moment in time is that our customers in 28 have ample capacity to accommodate the volume there that that will not have a significant upside impact on our outlook.

Again the positive impact should come from investments in the more advanced nodes maybe still some tools in 20, but more likely in 14-nanometer node. So that's -- again for logic and foundry, that's what we are -- I think your question is focused on.

Just to understand that though, specifically for high-K metal gate clearly there's quite a significant amount of capacity being reallocated inside 28 to high-K metal gate which I presume is significantly more an ALD intensive than non-high-K. And so [indiscernible] wafers inside 28 aren't increasing.

I will presume ALD intensity into the overall 28-nanometer node is increasing year-on-year, is that not the case?

Yes well your question is do we see that being translated into more tools for those nodes. And then well our question is we don’t see is as strong -- a significant impact of that on our P&L for 2015 yet.

That may change, but that is not -- that's not the case. So then, yes you were asking whether we see any risk of 3D NAND building capacity in 2015 for our forecast outlook for the year in some of our other applications.

And well then the answer is no. We don’t see that.

Let`s say the 3D engagement we have then the applications in let's say [indiscernible] NAND or DRAM are likely different from the needs our customers have in 3D NAND, so we don’t see an immediate link in terms of our capacity installed or the impact of that on our demand, we don’t see it immediately. Again our view on that could change based on dual customer input, but we don’t see that.

And then your last question is on Atomic Layer edge. We are not an edge company, we're a deposition company.

And but -- yes -- well we always look at what future needs our customers may have. And this will just be reviewed as part of our let's say strategic reviews that we have on an ongoing basis, but there are no specific ALE activities to report in this meeting at this moment in time.

A few questions left about product introductions, what types of products are you planning to introduce in 2015? I think you said something about introducing new machines in 2016.

And a second question is on your diversified geographic whether the client base in 2014 significantly that was in the press release, could you say something about the geographical spread of these new customer base?

So first on the new product introductions, yes, well, so what we mainly mean with new product introductions is that we are continuously working on new applications, new processes for addressing the device roadmaps of our customers. So we are now introducing working with our customers and using development programs in memory and logic and foundry, addressing process and hardware needs for their technology nodes in one two years from now.

So that’s we meant for example, in the foundry space that some initial tools maybe shipped to due to let`s say explore it in early phase how these processes work ahead of the next technology node. And that happens in foundry but that happens in logic now also preparing for the 10 nanometer nodes in logic and it happens in memory for example in the [VNAND] where engage with customers as we speak on those new programs.

So that’s the way you should view our product innovations and developments ongoing with customers focused on generating new future revenue. Then on the geographic spread.

I think what is key there is that overtime it has been very important for the company, is that we have developed a much strong base outside logic into memory and foundry. So historically the company if you look a few years back we were very logic centric and ALD allowed us to expand strongly in first in foundry.

So that’s basically generating a little business in Asia among which Taiwan and also in memory among which Korea and Japan. So outside let’s say the traditional European and U.S.

area and that is a must because as you may know way more than 50% of the CapEx spend in this industry is in Asia. And that’s what we have seen in the company and elaborate on that a little bit more in 2014 has been a year, where in the years before that we -- 2012 2013 we were able to really get our if you look at our revenue from the company to get the spent of it was in the top three of this industry more in line with the overall CapEx spending by the top three in this industry.

We get that percentagewise more in line with what their overall spend is as part of the total CapEx spending in the industry that was the initial step we took. And 2014 also we have made a big, big step also in getting significantly more business in the top four to top-10 and get the percentage of their contribution to our sales, much more in line with what their spending level is as a percentage of total CapEx in the industry.

So we are happy with that trend, and we have a lot of good work on our plate in front of strengthening those relationships.

Maybe to comeback on your competitive position, with your Q3 release you said you were still on boarding trading edge technology clients. I was wondering if that still the case.

And if that’s happening then I presume that those clients [niche your ALD tool] and apparently the more conventional the positioning delivery guys probably [indiscernible] [applied materials] are not able to fill in that demand. So shouldn’t we get from that that your ALD positioning is clearly better than your competitors.

And secondly you stated that you expect the ALD market to grow with double-digit this year. I was wondering if you could say a little bit more on the percentage of revenues that’s connected to ALD.

I think at the end of 2012 we were already close to 50%. So presumably that has grown more towards the 70% level.

And another question is on, I think [indiscernible] is a lot more ambitious on the level of ALD market, I think they think that it will be $1.5 billion in 2017. So I was wondering what kind of a definition differences that could be if you are aware of that?

Thank you.

Yes, okay Robin. Yeah on the competitive -- your competitive question, there is not much more to add otherwise I may to start to repeat myself, a competitive position again has not in our opinions significantly change in a way that has let's say compared to a quarter ago has the level of amount of applications where we run into competition, has that increased compared to four months ago, I don't think so.

So that's the only thing I can add more color to your question. Answering the first question then on the amount of how much ALD we present as part of total sales in the introduction may not have been clear but we stated that more than 50% of equipment revenue of the company is now represented in ALD (PE)ALD and that's why I said in the introduction.

And then on the size of the ALD markets, we said okay in three to four years taking 2014 as a baseline market should at least double with 600 million as a base line, so that would add up to 1.2 or so, but maybe sometimes some of the research companies take also some furnished ALD business into account. And that increases the and further and we're talking really about to seeing a way for many part of the market that we're primarily focused on.

So it's good that you asked that question, because we mentioned also that always that level of detail about what markets, how we define the market and we would like to reiterate that here.

And can you maybe say what part of your business is services?

Yes, we have not specified that so far.

No. [indiscernible].

Sorry to hop on this competition question. But just understand your -- at least your customer psychology, if you look at some FinFET adoption in '14, '16 clearly there has been significant yield issues around getting that technology up.

About 70% yields and Samsung already looking to do that by the mid-year point. So it's been a long and painful gestation period for FinFET.

Why would a potential customer for ALD look outside of ASMI in what is already a very tricky technology roadmap roll out? Are you saying customers look second sourcing for '14 '16 or is it -- would you anticipate '14, '16 being effectively an ASMI market for its initial inception in the first 12 to 18 months whilst yield is still an issue.

Yes, I think you're -- okay, I understand we don't have -- let's put it this way, we don't have the impression at all that customers have been moving away from us specifically from a yield point of view. So in the FinFET area I think logic foundry in FinFET area we're in pretty good shape from that point of view.

And we don't have the impression that from a yield point of view that that has been the strongest driver for customers to look at other vendors if it's more commercially driven but yes, again it's only in few selected applications that that is happening at this point in time. [Hope that] provides a little bit more color to that.

Yes, well I will like to thank you an extensive dialogue more questions in the last few calls, so means that well, to us an indication that you are all very strongly involved with the company and Pete and I trust that we provided you some more color on the release of that we sent out some hours ago and of course we're looking forward to follow up with each of you also through Victor Bareño our Investor Relations responsible person in the coming days and weeks. But stay in touch and thanks again for attending the call today.

Thank you good bye.