ASM International N.V.

Mary Jo Dieckhaus – Investor Relations Chuck del Prado – President and Chief Executive Officer

Peter Olofsen – Kepler Cheuvreux Tammy Qiu – Berenberg Chetan Udeshi – JP Morgan Jim Fontanelli – Arete Research

Thank you, Theresa. ASM issued its 2015 first quarter results last evening.

For those of you, who have not seen the press release it is accessible on the website asm.com, also available on the website at the latest Investor Presentation and the 2014 Annual Report. 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 April 24, 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.

Please go ahead, sir.

Thank you, Mary Jo, and welcome to everybody today on the call. Before we start to review of our first quarter financial results, I would like to inform you all that this is pretty historic moment this last conference call that Mary Jo Dieckhaus is hosting for us.

Starting with the Q2 2015 earnings call, which will be held on July 30, this conference call will be hosted by our Director of Investor Relations, Victor Bareño. Mary Jo has served to ASMI for over 30 years – 30 years as our primary contact in the U.S.

for analyst and investors. I would like to hear on behalf of the whole company and the investor community to take this opportunity Mary Jo to thank you for your commitment to the company for all these years.

And of course, we’ll pay separate attention outside this call on this also. So after this message, let’s now review our first quarter financial results.

Revenue in a first quarter increased to €162, up 30% from the fourth quarter and slightly exceeding our guidance for a range of $150 million to €160 million. Compare to the first quarter of 2014, revenue increased 7%.

Our combined ALD and (PE)ALD business continues to be the key writer behind increasing revenue. By market segments, first quarter revenue was left by memory customer both DRAM and NAND Flash.

The gross margin remained at the solid level of 43.3% in the first quarter, which compares to 43.0% in the fourth quarter of last year and 43.7% in the first quarter of 2014. SG&A expenses decreased by 1% compared to the previous quarter.

R&D expenses increased by 10% compared to the fourth quarter. Apart from a currency impact during the quarter, this increase is also part of our aim to keep our R&D relatively stable as a percentage of revenue overtime.

We generated operating income of €29 million in the first quarter, with an operating margin of 17.6%. This compares to operating income of €13 million in the fourth quarter and €33 million in the first quarter of last year.

Financing results in the quarter was €28 million positives and mainly consisting of a translation gain. In the fourth quarter of last year, the financing result included a translation gain of €8 million.

As a reminder, the substantial part of the ASMI's cash position is denominated in U.S. dollar and the significant depreciation of this currency in recent quarters led to the aforementioned translation gains.

Results from investments which reflects our 40% share of the net earnings from ASMPT, improved to €13 million for the quarter, up from €6 million in the year-ago period. In the fourth quarter of 2014 results from investments amounted to €9 million and to €18 million excluding one-off tax related item.

These figures exclude the ongoing amortization charge which amounted to €7 million in the first quarter. For the full year, this charge is projected at approximately €27 million.

The increase compared to 2014 is explained by depreciation of the Hong Kong dollar. In the first quarter ASMPT sales fell quarter-on-quarter by 11% to HK$3.1 billion, reflecting the seasonal pattern in the back-end industry.

Compared to the first quarter of last year, however sales increased by 23%. ASMPT’s net earnings on a 100% basis amounted to €34 million in the first quarter compared to €23 million including loss and €45 million on an adjusted basis in the fourth quarter.

ASMPT reported bookings of US$465 million for the first quarter, an increase of 36% compared to the fourth quarter and an increase of 15% compared to the first quarter of 2014. Now, turning back to ASMI's consolidated operations.

ASMI's net earnings on a normalized basis amounted to €67 million in the first quarter, up from €27 million in the fourth quarter, and up from €33 million in the first quarter of last year. Our new orders in the first quarter – our new orders remained at a strong level of €158 million, 3% above the level in the fourth quarter.

And inline with – was inline with our guidance of between somewhere between €145 million and €165 million. Similar to revenue orders were mainly driven by the combined ALD and (PE)ALD product lines.

In terms of customer segments bookings were led by the foundry segments and the memory segment. Balance – let’s now look at the balance sheet and cash flow.

At the end of March, the cash position increased to €423 million, up from €386 million at the end of December. This increase was the result of a positive currency effects on the cash position, positive free cash flow generated during the quarter.

And partly offset by cash spent on the share buyback. As discussed on earlier occasions, it is our policy to maintain a strong balance sheet and to use excess cash for the benefit of our shareholders.

Net working capital increased to €123 million at the end of March, up from €108 million at the end of the fourth quarter. However, this increase was mainly caused by a currency translation differences.

On a currency comparable basis working capital would have been €105 million at the end of March. The number of outstanding days of working capital measured against quarterly sales decreased to 68 days at the end of the first quarter, down from 78 days at the end of December.

On the back of solid profitability and improved working capital efficiency, we generated the strong operating cash flow of €36 million during the quarter, up from €7 million in the prior quarter. In the first quarter, we spend a €28 million to repurchase, 737,000 of our own shares, at an average price of nearly €38.5 per share.

This is part of the €100 million share buyback program that we announced last October. An amount of €31 million was settled during the quarter.

At the end of March, we completed approximately 60% of the program and 70% as per today. The number of outstanding basic shares decreased to approximately 62.6 million shares at the end of March, down from 63 million at the end of December and 63.7 million at the end of the third quarter.

As announced last month, we are proposed a 20% decrease in the dividends to €0.60 per share for approval at our AGM, which is scheduled for May 21. This marks the fifth consecutive year that we paid a significant dividend.

So let’s now look at our business. The strong momentum in the first quarter again shows that ALD is a solid growth driver for our company.

ALD and (PE)ALD have become mainstream technologies and support our customers in staying on Moore’s Law. And as we indicated earlier in 2014, our combined ALD and (PE)ALD business accounted for more than half of our total equipment revenue.

In the last quarters we already highlighted the expansion of our customer base. The leading manufacturers have already ramped notable device generations based on our ALD and (PE)ALD products.

For these industry leaders we have become strategic partners in the development of ALD and (PE)ALD technologies. In a more recent periods we have also penetrated new customers with our ALD and (PE)ALD products.

In 2014, we recorded a substantial first time revenue contribution from a number of these new customers as they began ramping ALD and (PE)ALD in high volume manufacturing. Including the tool record selections that we secured last year, we now supply our ALD and (PE)ALD products to all of the top 10 CapEx spenders in our industry.

We will leave this successful growth of our customer base as well as our expansion to new ALD and (PE)ALD application demonstrates the competitiveness of our products. As discussed during our last results conference call we expect our addressable product of the ALD and (PE)ALD market the single wafer and many batch [ph] part of that market to double over the next three to four years.

And that is doubling compared to a baseline of more than US$600 million in 2014. Taking this three, four year horizon, we see a number of strong market drivers.

In memory, we see a continue to growing need for advanced multiple patterning solutions. And as most listeners are probably where we have strong position with our PEALD technology for spacer defined double patterning.

In the logic and foundry segments, the transition to FinFET devices will provide significant opportunities for the ALD and (PE)ALD market in general. Over the next three to four years, we expected successful generations of FinFET devices will require a steady increase in a number of ALD and (PE)ALD process steps.

This includes ALD and (PE)ALD process steps are rising from the expected to increase need for multiple patterning in advanced logic and foundry processes. The short prospects are our ALD markets in the coming years are strong and as a market leader, we believe we are well position to benefit.

So looking at the market environment and specifically at the semiconductor end markets, conditions have recently being mixed. Against this backdrop market watchers such as Gartner and VLSI research predict slower, but still positive mid single-digit growth for the wafer fab equipment market in 2015.

In the logic foundry segment sector, equipment spending in 2015 is expected to be driven by high volume manufacturing investments in the 16 or 14-nanometer nodes and to a lesser extent on development tools for the 10-nanometer node. In the memory market, the strength of last year has carried over to this year.

Spending in memory in 2015 so far looks healthy, in DRAM on the 20-nanometer node and then NAND Flash on 18, 16-nanometer. But the timing of these investments seems somewhat waited to towards the first half of this year.

So as now look at our outlook, as we also shared with you in our press release overnight. On a currency comparable level, we expect Q2 sales to be between €180 million and €200 million, while the Q2 order intake is expected to be in the range of somewhere between €160 million and €180 million.

And for the second half of 2015, the current visibility remains limited. At this point, we’re happy to take any questions you may have.

Theresa, could you give the instructions for questions please.

Good afternoon, have two questions. First on the gross margin and then on the memory side of the business.

Starting with the gross margin, it has been around 43% for some four or five quarters in a row now. Is this as good as it gets or is there potentially some further upside to the gross margin?

And then on the memory side of the business, listening to some of your customers and some of your peers it seems that it is generally expected that 3D NAND-related spending is expected to pick up in the second half of the year. Could you talk about how ASMI is exposed to 3D NAND, which of your product lines may be involved and what kind of applications should we think of?

Okay. Let me start with the gross margin, Peter.

First of all, as for what we said in previous calls, we expect that we do – we will do gross margins into high 30s in the downturn to the low to mid 40s in an upturn. That’s still stands and maybe it’s good to give you a little bit of color on what happened in Q1 in our gross margin, because we have seen two opposite effects.

The positive effect was of course with the high sales and also the forecast that we’ve provided for the second quarter. The high loading of a factory so that worked very well.

However, the negative factor that we’ve seen especially in Q1 was the relatively week mix in the products that we have delivered. We have shifted quite some systems to new customers with relatively low margins.

So that’s a little bit of the mixed bag, so that is opposite of the 43% that you have seen in previous quarters where we mostly had our rich mix in combination with a loading which was reasonable, but was not on the high side. I think that gives you the color that you are looking for.

Yes. And then maybe one thing to clarify.

There was no meaningful impact from currencies on the gross margin.

No, no, no, that’s completely neutral. We basically have a translation difference, only a translation difference.

So what we also have disclosed in our Q report is while the impact is on the different lines there as well as the sales side, this is the gross margin that is in the different cost lines. And when you calculate that through then you will find out that there is only a translation issue.

Okay, that’s clear.

Okay. So then on – Peter, then on 3D NAND, yes, indeed it is possible, that 3D NAND will gain some traction towards the end of the year.

At the same time, we also would like to emphasize that, yes, it is clearly as shown that the transition towards 3D NAND from planar has taken much longer. And so, we still have to see how rapidly the transition now will take place as soon as it starts to accelerate a little bit towards the end of the year.

That is a remark we would like to make upfront. At the same time when that transition happens, as that transition happens it will have a mixed impact on the company.

On one hand the amount of double patterning will significantly go down. So that is negative implication to us.

At the same time new ALD applications will pop up going towards 3D NAND and we – as we have shared with you before, we have strengthened our engagement in R&D with 3D NAND over the last let's say two years. And we expect that going into next year also high-volume penetration of V-NAND will show up in our P&L.

It may not go with – at the same aggressive – immediately be at same level as the double patterning demand in planar, but we are confident that it will show up in our P&L step by step increasing as of next year. So – and that is just based on the fact that through our ALD engagement with memory throughout the years our relationships on an R&D level with these customers is very, very good, which offers us also an opportunity to build on that towards let's say the V-NAND trends that the industry is showing now.

Okay, but at this stage you are not willing to talk about which specific applications you may be targeting?

No, no, no – No. And I also don't know if by the time we will get into that market, we would be very specific on all the applications.

But we will try to share with you as much as we think is responsible also in terms of the competitive landscape that we operate in. But at this moment it is too early, Peter, to share that.

But for us it is very, very clear on what applications we are engaged. And we also have clearly identified specific applications that we expect next year to go into [indiscernible]

Okay, okay. And maybe one final question on this specific topic.

Is your opportunity in 3D NAND dependent on the number of stacks in the 3D NAND device? Because it seems that there are several generations of 3D NAND devices in development and with each generation the number of stacks will go up.

Should you benefit from the number of layers going up?

Yes, I think it is more a matter that our focus has in time increased on vertical NAND. It is just our R&D focus has increased since we have put more intellectual bandwidth in that area.

And as a result of that, the step towards 47 will enable us to really start to play a role in a meaningful way in the V-NAND space.

Okay, thank you.

Okay, you’re welcome.

Hi guys, thank you for taking my question. First one is that I would like to understand a little bit from your side what the impact is from second year income [ph] CapEx cuts, because from my understanding multi-patterning is pretty much still a foundry and logic dominant technique.

And also the second question is that from your perspective looking at what your competitor is actually saying on Monday evening, what is your view in terms of their progress into this ALD market and what advantage do you think you have against them?

Okay, okay. So first of all, Tammy, on TSMC and Intel CapEx cuts, why I think – let's put it this way, our – we have – our engagement with these customers and also our planning, our sales forecast, our bookings forecast is four to six quarters out.

And let's put it this way, the recent announcement of these customers has not significantly in a meaningful way changed our projection for the remainder of this year. We – basically we already have a certain view on the level of engagement in current and future notes that they would make.

So these public announcements did not necessarily change our view on that. So that's an answer on the first part of your question.

Then on the competitive landscape, yes, I think what you can say, and I have repeated that in many calls on the competition over the last few quarters. Yes, this market is developing into a sizable market, the ALD market, and competition is here and they are stepping up.

And, yes, that is what we are facing. And sometimes competition is looking for applications that we are not that much focused on at this moment in time.

And in other areas it is the drive of our customers for reduced cost of ownership. And yes, based upon which there is also an incentive to bring in a second supplier to create, yes, a healthy playing field.

And that is just what we are seeing. And that way the developments are not, well, necessarily different from our view three months ago.

And, yes, I think also if you look at our revenue and bookings performance in Q1 and our guidance for Q2 on sales and bookings. And yes, you can also see that the development of the company is going in – is still moving in the right direction, because of the fact that this market in general is growing and will keep growing in the next couple of years.

Again, we expect this market to double very likely next three years to four years and there is room for more than one player. And at the same time we maintain having – our ambition to maintain a leader in this part of the market has not changed.

Okay, thank you, guys. Last question, on your tool design, because from what I understand is that your competitor is having a different chamber design or two designs compared to your ALD tool.

Do you think from an architecture perspective your sort of pumping design is more kind of favored by the chip maker instead of their [indiscernible] design just purely from an architecture perspective.

Yes, I think that’s – I think our customers have to decide that. And also design also benefits also depends on what specific applications the customer is using it for.

What we know is that, without let's say going into a detailed review of the designs of our competition, is that we have 15 years of experience in this ALD business, that we have done over that 15 years a lot of CIP on our hardware, on our process technology that we have the broadest engagement in ALD in the industry with the top 10 across the broadest range of applications. So, yes, we are very focused to learn from that.

But it could very well be that for a specific application competitor may have a favorable design that this very well possible. But again, we doesn't change the comments we made a few minutes ago that we are confident that we have the design relationships with our customers at strategic level based upon which we really believe we can grow in the coming years.

And we believe we can stay a leader in this part of the industry. But there will be room for competition to also grow in this area.

It would be naive to assume that that is not going to happen. And that is just consistent with what we said all along.

I trust that, Tammy, that that answers your question?

Yes, yes, it does. Okay, thank you, guys.

Yes, it’s Chetan Udeshi from JP Morgan. A few questions.

Firstly, Chuck, when you reported full-year results a couple of months ago you didn’t – I mean you gave guidance for Q1 as well as gave some indications on Q2 as well. So, but you are not commenting on second half, third-quarter specifically, at this point.

So can you just talk about what is different this time? Is it just that the visibility is too low for you to make any comments on third quarter at this point in time?

And secondly, you also mentioned in you’re prepared remarks that you are already doing some work on 10 nanometers with some of your customers. Can you shed some light on how do you see in terms of like for like increase in terms of ALD penetration at 10 nanometers compared to maybe 14, 16?

Is that an increase that you see because of new applications, et cetera?

Okay, just on – okay, yes, thank you for the questions. So first on – yes, the second half of 2015, well the best way probably to answer is that of course our guidance for Q2 we view as we believe is pretty strong.

We have a strong sales outlook for between EUR180 million and EUR200 million. That is a bit helped also by some delayed revenue recognition of earlier tool deliveries and POs from some of our customers.

If you look at Q2 also we have a strong bookings outlook, EUR160 million to EUR180 million and that was somewhat helped also – we believe it will also be somewhat helped by some pull ins, some pull in POs likely from Q3 into Q2 from customers that would like those tools a little earlier. So taking that into account, the dynamics of Q2 and looking at the second half, for Q3 it’s very likely that we will have pretty healthy sales driven by the strong bookings guidance that we have provided to the market for Q2.

Bookings in Q3 likely could be lower in a meaningful way, they could be significantly lower than Q2 based on two factors, first of all based on the pull ins from certain customers of bookings from Q3 and Q2, as we mentioned. But also that some customers are digesting capacity maybe in part of the second half that they have built over the former quarters.

So based on that the second half as a whole in terms of sales, may show a similar pattern likely as a second half of 2014 versus the first half of 2014, that it is somewhat weaker than also this year in the second half than in the first half. But in terms of bookings beyond Q3, looking – we are looking forward to a next round of investments that logic, foundry and memory are expected to be preparing by that moment in time for next technology nodes.

And, yes, we have to see whether customers will already materially place those orders in Q4 or that they will wait until Q1 in terms of bookings. But we do know that we are well-positioned for that.

And that ties to your second part of your question to 10 nanometer engagement. Yes, in our opinion in logic foundry we are very confident that the amount of applications that we will be engaged on will significantly increase going from 16, 14 to 10.

And that is across the board.

Understood. And are you engaged with more than one customer on 10 nanometer?

Is it only with leading logic player at this point in time at 10?

No, it was more than one.

Okay, thank you.

It was basically all the key players.

Thank you.

Okay, you’re welcome.

Yes, thanks for taking my question. So maybe just a few to run through.

Firstly, could you talk about the theme of reuse? Obviously that's been quite a significant part of your peers' commentary over the reporting season thus far and quite a structural change from what we have seen through past cycles.

Could you talk about the impact on ASMI? I am guessing given ALD is a new technology [indiscernible] a couple nodes that the use is not going to be impacting you significantly, but it would be useful to get your thoughts on that.

Secondly, could you talk about what – where you see the delta for the second half? You have obviously just given some color on potentially sequentially down second half versus first half.

It would be interesting to get a feel for where you think the delta is in the second half. Again, your pier group commentary has pointed to relatively flat logic, foundry and NAND spending and a tailing off of DRAM.

It would be interesting to see whether that is the delta for you. And then thirdly, it would be interesting to understand when we look at 10 and we look at 7-nanometers where you think the key areas of opportunity lie for you.

Is it primarily within foundry and logic for multi-patterning? Is it the fact that by the time we get to that point we will probably be up at 64 per NAND and you can start reintroducing ALD significantly into that?

Where the key drivers – the technology drivers for you are as we get to 10 and 7? Thank you.

Yes. Jim, we could not understand the first part of your question, you asked three questions.

But the first part of your question could you repeat that.

Yes, it was to get your view on reuse. So there has been a lot of tool reuse from node to node, particularly from 28 and 20-nanometers down into 14, 16.

So effectively tools being transferred across from node to node and therefore not generating new orders. It would be interesting to understand whether that is part of the order trend that you guys are having to deal with at the moment or whether because ALD is such a new technology that reuse is not a factor in how you are thinking about revenues and orders over the next 12 months.

Okay, so on equipment reuse – well, it is somewhat new. Yes, it of course allows our customers to extend and optimize their investments.

But – and so we have – in some areas, in part of our product portfolio we have run into it and we are able to service our customers in the right way. In ALD we have not seen reuse in a meaningful way as it is a relatively new market.

And it's growing so aggressively that there is basically no time to really or little time to consider reuse, its more expansion of capacity. So – and also, is the pattern on reuse going to change in a meaningful way in the coming quarters and our current visibility is not.

So then on the your question on the second half, yes, I think again, we’re now we get clear guidance on Q2 and we gave quite a lot of color on the second half and I think it is too early to go into more detail on that. I trust we gave enough color.

So – than on 10-nanometer, yes the key areas, it is a combination. It is a combination of patterning demand but also new engagement, new applications that pop up in 3D – 3D FinFET areas that require our customers that drive our customers towards ALD, because just traditional CBD PBD technologies run out of steam.

And that's – and we have engaged with the customers on those 10-nanometer needs for at least two years if not more already in providing them solutions in developing their end user and end customer devices. So I think we know pretty well what very likely will go into [indiscernible] next year.

And looking at the 10-nanometer and 7-nanometer roadmap your customers and particularly if you think about Intel, they are talking about selective – potentially using selective deposition at 7-nanometer, but that’s only a 5-nanometers. Is that something you are engaging with specifically with Intel on?

In general I can say we absolutely are now already engaged in developments in general with our customers beyond the next technology node. Because basically selections for the next technology node are already in their final stages.

Customers in one or two quarters are about to make equipment may put their orders in place. So automatically that means, the R&D for the nodes beyond the next nodes already ongoing in a very intensive way.

And we are definitely a player there.

And maybe just a last question if I may. On the logic and foundry side clearly there is significant use of double patterning and multi-patterning going forward, but it's primarily been focused on litho-etch-litho-etch.

Do you see any movement towards spacer defined double patterning and therefore ALD use away from litho-etch-litho-etch, which is not an ALD user? Do you see that trend unfolding either in your foundry customer base or logic customer base?

Yes, we – if your question is, if we see patterning applications developing beyond memory into logic foundry, then the answer is yes

Okay, thank you.

Okay, you’re welcome.

Well, I would like to thank you all very much for your attendance today and for your questions. Any follow-up questions of course you may have, you can share with us through Victor Bareño, our Investor Relations Officer.

And looking forward to staying in touch, meeting you at our shareholder meeting in May during one of our road shows, upcoming road shows. Thank you again for attending today.

And have a good day or good evening. Thank you very much.