Bijlage bij beantwoording technische vragen (PvdD) - 2023 Annual Report based on IFRS (FINAL compressed)
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We have a team dedicated to ensuring we take a sustainable packaging approach that maximizes the use of our resources and minimizes waste while ensuring the safe transport of our systems. We also have activities that aim to minimize waste across the value chain – from sourcing to customer support – enabling improvements in both hazardous and non-hazardous waste streams. We actively prevent waste by agreeing with suppliers of IT hardware to deliver in bulk instead of individual packaging. This limits the amount of packaging material. We also focus on preventing waste by agreeing with IT suppliers to only ship parts that we actually use. For example, the stands were previously included with every computer monitor ordered, even though we do not use those stands. Now the stands are no longer included in the order and therefore not produced by the manufacturer, which prevents waste. Materials used in EUV sources undergo rigorous conditions, including exposure to high temperatures, thermal cycling, corrosive liquid tin, high pressures, pressure cycling and hydrogen. These materials, such as strategic tantalum alloys and molybdenum, are both limited in availability and costly.
Ongoing trials are focused on preventing the use of virgin material by extending the lifespan of materials used in the system, enhancing material quality in the production process and improving application conditions.
Our targets and performance in 2023 Although addressing our waste performance is a relatively new focus area for us, we have already made some progress. For example, while our sales have grown by 30.2%, our waste generation from our own operations has increased at a lower rate of 24%. Read more in Our overall performance in 2023
Our actions in 2023 We have continued to focus on embedding a circular approach more deeply in our design processes. By thinking about modularity, commonality and repairability during the design phase, we can extend the lifetime of our machines and increase reuse opportunities for parts in the future, aiming to prevent waste. We have started a project to embed design for reuse in our PGP. This means that, as an example, the PGP includes a default design of a repair method for any service part. This enables parts in the installed base systems to be repaired even after any engineering change, so the new functionality may not hinder the repairability of the legacy parts. Modular design of products and components enables future upgrades, worn parts and components to be replaced as a single unit. In 2023, we successfully concluded the first phase of a feasibility study demonstrating the manufacturability of modular wafer tables, aiming to secure the reusability of over 2,600 wafer tables by 2028. We couple learnings from remanufacturing back to the design process. In 2023, for example, we improved the
design of our in-line refill module, which we have been remanufacturing since we designed it in our system. Another example is the learnings from our local repair center team in South Korea. By enabling the repairability of one of our alignment lasers, they were able to correct for the key failure mode on the ‘shutter’ that lets the light out of the laser module. Commonality in the parts design process enables a part to be used in multiple contexts within a product and in future product generations.
Looking ahead Starting from 2024, we aim to have zero waste from operations to landfill or incineration from our newly designed products, with repair and reuse requirements as part of the product requirement specification. This is part of our customer proposition. In our D&E teams, we will set up a specific ‘repair competence', which will enable people to specialize and be the subject matter experts in this field. These dedicated repair-focused teams will work with all functions in D&E and across ASML’s business. We are setting up a packaging waste reduction program with the aim to reduce waste by 2025, with targets toward 2030 under discussion. In 2024, the feasibility study for modular wafer tables for Wilton and Berlin will be finalized.
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Circular economy (continued) Extend the lifetime of our products
How we’re managing our impact As a well-maintained ASML system can last for decades and create value for more than one customer, the second principle in our circular economy approach is to extend the lifetime of our products. ASML aims to maintain systems in use as long as economically and environmentally possible, focusing on service, upgrades and refurbishment of assets, systems and goods. We are establishing customer contracts to maintain systems in the market for as long as possible, maximizing their value and avoiding obsolescence. We develop refresh packages to extend the life while maintaining a high performance. We develop lifetime extension and performance packages – productivity enhancement packages (PEPs) and system node extension packages (SNEPs) – to enhance the systems’ running period and performance. We also refurbish systems across the business – our refurbishment strategy focuses on buying back systems that are not operational in the field, harvesting parts from decommissioned systems and managing the continued availability of spare parts. This is key to the extended lifetime service we offer for our systems. We also re-sell systems as long as we can guarantee the parts. Once a fab needs to upgrade, an ‘older’ lithography system is given a new purpose in a new fab producing comparatively less sophisticated chips, such as accelerometers or radio-frequency chips.
We provide our customers with a guaranteed service roadmap until at least 2030. This means that all the support and necessary services and spare parts required to maintain their systems are expected to be available until at least 2030, subject to export control limitations. We focus on refurbishing a number of product families: PAS 5500 (with almost 1,800 systems at customer sites worldwide), TWINSCAN XT systems (2,000 systems) and, as of 2021, NXT:1950-1980 systems (1,000 systems). For the approximately 200 TWINSCAN AT systems that are still in operation, we focus on measures to proactively manage their end of life. We do this by guaranteeing the availability of spare parts for as long as possible and providing customers with sufficient notice if we can no longer guarantee part supply.
Our targets and performance in 2023 Our target for 2025 is that more than 95% of systems sold in the past 30 years should still be active in the field. To date, we have refurbished and resold almost 570 lithography systems. As of the end of 2023, 95% (2022: 95%) of all systems sold in the past 30 years are still active in the field.
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Circular economy (continued) Extend the lifetime of our products (continued)
Refurbishment is a multi-year program in which we continually invest to ensure the supply of more than 2,000 service parts for our PAS platform. This is achieved either through redesigns, harvesting parts or finding an alternative with the same form, fit and function. Where this is not possible, we are generally able to secure components through ‘last time buy’ – a supplier’s ‘last call’ for a part or component before production switches to its successor. When a part is no longer available, we redesign the parts. In 2023, we acquired a PAS 5500 parts repair company in the US that will support our ambition to sustain PAS not only through 2030, but also beyond. In addition, we intend to extend their capability to accelerate our XT parts repair competence. We track the spare parts in our portfolio to see how they are being used and identify when we expect to run out of individual items. For PAS and XT systems, we use this information to update our priorities for redesign. For TWINSCAN AT systems, we aim to continue supplying parts by harvesting them from systems that are decommissioned by our customers.
Looking ahead
95% of all lithography systems sold in the past 30 years still active in the field Installed base
We have identified and plan to execute more than 100 redesign projects for nearly 300 parts in the coming years. This is particularly relevant for electronic parts, for which the evolution of technology has been faster than in any other field.
Retired systems
6,000 5,500 5,000 cumulative # of systems sold
Our actions in 2023
4,500 4,000
We will continue to increase our focus on local repair to extend the life of the mature installed base at lower cost, reducing the need to redesign and buy new materials and parts.
3,500 3,000 2,500 2,000
The refurbishment activities we have been doing for years on our PAS systems will be extended to cover both XT and NXT systems. We are currently on track to meet our target of >95%.
1,500 1,000 500 0 1987
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2005
2011
2017
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Circular economy (continued) Reuse resources
How we’re managing our impact ASML is committed to reusing parts, packaging, tools and non-product-related resources in the value chain, focusing on the return, recondition and repurposing processes. We optimize return flows by collaborating with customers and suppliers, while learning from system usage and product returns. We recondition parts and packaging through global and local repair centers, suppliers and partners, at the best location with the lowest environmental impact. We repair buildings, assets and infrastructure. We enable the repurposing of parts, packaging, tools and devices in a new life cycle inside and outside ASML. We maximize the reuse of system parts, packaging and tools in our value chain to reduce waste and meet customer demand. Reuse is also a key contributor to our ability to ramp up capacity to cope with strong customer demand. We retrieve parts from inventory or through repair or harvesting.
Reuse also offers learning opportunities to improve the performance and lifetime of our parts and systems. We work closely with our customers and suppliers to embed learnings in design and processes throughout the value chain. We aim to reuse workplace IT assets obtained (e.g. monitors) when buildings are decommissioned. Instead of assets being disposed of at the end of their economic lifespan, they are used to set up work environments in other buildings where and when possible. Key improvement areas We focus on the following key improvement areas: • Repair centers: Repair close to where parts are needed to improve parts repair yields by reducing cycle time of root-cause analysis and repairs. • Predictable external repair flow: Simplify and standardize return and repair flows to enable us to scale activities. • Circular supplier collaboration: Incentivize suppliers to prioritize reuse over new materials. • Return quality: Ensure that parts are returned with reuse in mind – quality returns lead to quality repairs.
88%
reuse rate of defective parts, up from 87% in 2022
• Packaging and transportation tools: Increase reuse of packaging, which is the main contributor to our waste (from operations).
Our targets and performance in 2023 Our overall target is to increase the reuse rate of defective parts in ASML factories and in the field to 95% by 2025. This means successfully reconditioning at least 95% of our parts. In 2023, our reuse rate of parts was 88%, up from 87% in 2022 – on target to achieve our goal. The savings we generated from reused parts amounted to €1,311 million (2022: €781 million) and the value of scrapped parts was €206 million (2022: €146 million).
Our actions in 2023 Repair centers We are extending the number of repair centers worldwide to support the reuse of parts by returning, cleaning and reconditioning them close to where they are needed. Demand for these parts can be driven by our customers needing service parts for their installed base, or by our factories requiring parts for new systems. Currently, we have several repair centers in Asia (South Korea, Taiwan and China), the US (Wilton, San Diego) and the EU (Veldhoven). We are investigating our options to extend our network of local repair centers to other locations.
Our repair centers work with local suppliers and specialized repair partners to create a local ecosystem. By enabling repair and reuse activities and taking ownership of repairs close to where materials are needed, we are able to reduce logistics time, cost of stocking parts and our environmental impact (by reducing scrap and GHG emissions). Our customers benefit from reduced service costs and improved material availability. In 2023, we launched a dedicated cross-company team to further explore local reuse activities in Taiwan, and have begun the process of setting up a similar operation in the US. We intend to empower local teams to initiate reuse activities, as local business requirements and situations may vary. The central reuse team provides guidance and support where needed and drives roll-out of local best practices across other locations. With over 1,200 m2 of cleanroom, our dedicated reuse facilities in Veldhoven will be instrumental in this. Predictable external repair flow We are working to increase the scalability and predictability of our reuse flows in order to future-proof return and recondition processes to deal with growing demand. This includes forecasting repairs to help suppliers prepare capacity.
By combining service and factory return flows – and simplifying and automating operational planning and repair order management – we are increasing the availability of repaired parts. Our aim is to maximize reuse of parts and ensure it is the preferred option over new purchases.
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Circular economy (continued) Reuse resources (continued)
Circular supplier collaboration We are collaborating with suppliers to incentivize reuse over new purchases. We are investigating transferring used parts back to our suppliers to repair, refurbish or harvest for reuse in their new buying process, giving them more flexibility in how they can reuse parts. In 2023, we investigated how to support a new collaboration model with suppliers for reusing materials and how to adjust our processes and systems to enable it. We piloted the new way of working with eight suppliers and have started engagements with additional suppliers. Return quality Challenges that occur downstream in the value chain during the repair phase often have their origins upstream and are related to the quality of returns, for example through incorrect labeling or packaging. In 2023, we started piloting barcode scanning of defect parts in the return flow to support correct labeling. In 2024, this project will ramp up to a program to also cover all root causes of poor return quality.
Packaging and transportation tools Valuable transportation materials – such as packaging, locking and plug materials – are used to safely transport our modules and systems, either from our suppliers to our factories or from our factories to our customers. Instead of being thrown away once they reach their destination, these materials are reused. Before parts are returned for reuse, they undergo an identification process and quality check, followed by the logistical and financial processes required to bring them back into the supply chain (either to the original module suppliers or to ASML). Our goal is to standardize these processes and create a network-related solution to enable high flexibility and reduce transport, which also reduces our CO2e footprint. We are improving the reuse of packaging, lockings and plugs from the field and factory. We aim toward 100% recyclable packaging with an eye on minimizing waste and environmental impact. In 2023, we made progress in reusing thousands of small auxiliary materials, such as plugs, flanges, caps and brackets. These are now being reused for system parts in our factories or for shipping machines to our customers. Furthermore, we developed a solution to embed the reuse requirements in our design processes – and this will be fully implemented in 2024.
Circular Innovation Program
Looking ahead
The circular innovation program (CIP) is a collaboration with ImpactX and Brainport Industries. It is a four-day tailor-made program focusing on building a stronger relationship with our supply base by creating circular competencies.
Reuse roadmap In 2024, we will have more focus on the reuse program, with teams dedicated to repairs, reverse logistics, reuserelated engineering, local harvesting and repair centers worldwide.
In 2023, we consolidated CIP with the participation of eight suppliers divided into two cohorts. We run two cohorts per year and four suppliers are invited each time. Through the program we are able to close business loops, boost supplier impact and strengthen collaboration overall. The benefits are the creation of a shared vision on the circular economy, peer learning, and the joint building of competencies and knowledge around reusing products, parts and materials in the value chain.
In the context of supplier capacity, our supplier backlog is building up. We need stronger supplier collaboration, focusing on reuse over new, and working on forecasting and planning of repairs to reduce supplier repair cycle time.
The participants invited so far are first-tier suppliers; however, we want to extend the program to other tiers as well. Additionally, we have the ambition to expand CIP beyond the Brainport Eindhoven region in the Netherlands, to other locations around the world.
We are implementing a structural improvement roadmap related to repair and reuse across all functions in ASML in order to meet our 2025 targets.
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Circular economy (continued) Recycle materials
How we’re managing our impact ASML’s aim is to recycle material at end of life, focusing on the collection, analysis and reporting processes. We define the collection and sorting methods in collaboration with partners to increase recycling rates of both hazardous and non-hazardous materials, including local recycling at end of life and construction waste. We identify drivers of waste, gain insights into reasons for disposal, provide feedback to prevent waste, and improve designs and opportunities for recycling. Following our principles hierarchy, recycling materials is the final step in the process, in case we have not been able to prevent the waste, extend the lifetime of our systems and assets, or reuse our resources. As our company grows, so too does the number of our employees, the number of systems we produce, and the number and size of our facilities. We are determined to decouple growth from our overall resource consumption.
Understanding and managing our waste flows and impacts The effective monitoring and managing of waste relies on the availability of detailed and accurate insights into waste streams to and from ASML. We manage our waste through proper classification, separation, and safe disposal by waste vendors. Our contracts with waste vendors state the need for compliance with local legislation and we aim to improve how this is monitored.
Non-hazardous waste accounted for 95% (2022: 95% (6,533 tonnes)) of our total waste in 2023, of which 53% was recycled.
Hazardous waste accounted for 5% (458 tonnes) of our total waste generated, compared with 5% (380 tonnes) in 2022. Of this, 83% was recycled.
Distribution of non-hazardous waste (Total: 8,474 tonnes)
Distribution of hazardous waste (Total: 458 tonnes)
Waste data is managed through our myEHS system, which collects information from our local waste vendors along with the relevant supporting documentation, such as invoices. The data entered is checked internally and by an independent party against the supporting documentation. Distribution of waste streams (Total: 8,932 tonnes)
Wood
29 %
Hazardous liquids
83 %
General waste
28 %
Other hazardous waste (e.g. packaging, filters, lamps, etc.)
12 %
Recycling our waste plays a key role in closing the material loop – by 2030, we want to avoid energy recovery, incineration and landfill as much as possible. Our aim is to recycle materials instead of incinerating or disposing of them to landfill. Understanding our waste streams is key to identifying opportunities to increase recycling of both hazardous and non-hazardous waste.
Paper and cardboard
11 %
Cleaning wipes
4%
Electronics
2%
Batteries
1%
Metals
11 %
Other non-hazardous waste
1%
Plastic
6%
Organic waste
4%
We aim to maximize waste separation at our sites to enable increased recycling rates and easy recycling at the waste haulers'.
Construction waste
8%
Non-hazardous waste recycling
53 %
Non-hazardous waste disposed of
42 %
Hazardous waste recycling
4%
Hazardous waste disposed of
1%
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Circular economy (continued) Recycle materials (continued)
Recycling materials conserves natural resources and reduces carbon emissions. In the Netherlands, after investigating non-product-related activities, some construction waste – such as concrete – has been reused (after processing) in the construction of new buildings.
Our targets and performance in 2023 Our waste intensity in 2023 was 300 kg per €m revenue, down from 315 kg per €m revenue in 2022. This remains below the pre-COVID-19 waste intensity. To achieve our target of 209 kg per €m revenue, we need to scale up our efforts to reduce our waste streams in absolute terms and improve our recycling rate. We are increasing our efforts to reduce waste by setting up specific projects on packaging, general waste and hazardous materials. The main contributors to our packaging waste are wooden pallets. We need to extend their reuse even further and make a transition in waste treatment, from energy recovery to recycling. Another big challenge we are working on is to reduce packaging waste generated by the materials used to transport our systems and parts around the world. General waste from our offices and facilities represented 28% of the total waste in 2023. We have started projects on separation and sorting to improve its recyclability and prevent its generation. Our aim is to avoid landfill and incineration by 2030. In 2023, this accounted for 43% of our waste, including hazardous substances and construction waste. We are currently piloting an ASML solution which aims to reduce our hazardous waste by approximately 65%.
Our target is to achieve a recycling rate (excluding construction waste) of 90% by 2025. We saw a significant decrease in the recycling rate, from 75% in 2022 to 55% in 2023. The lower recycling rate in 2023 can be explained by an increased focus on our waste. New insights show that waste companies reported recycling rates using different definitions. We will continue to improve the quality of data next year and start initiatives with our waste companies to increase the recycling rate. Read more on our waste figures in Non-financial indicators - Circular economy
Our actions in 2023 Waste reduction program During the year we launched a program to reduce waste coming from non-product-related resources. This program features several different initiatives, with the first focusing on creating clear governance processes to improve waste recycling, and working on obtaining more accurate and reliable data from our waste haulers. We also gained a better overview of our waste and mapped our waste streams at the Veldhoven site, which represent 60% of our total waste. We created a circularity plan for our five largest industrial sites to improve our waste data quality and recycling rate.
The full program, which covers plans for both hazardous and non-hazardous waste, includes: • Identifying where the waste comes from (inbound versus operations) by organizing Gemba Walks (opportunities for staff to walk the work floor) to see the waste in the warehouse, factory and offices, and also by visiting our waste haulers to understand how our waste is processed • Examining what the waste consists of through a detailed sorting test (performed by one of our waste haulers) • Assessing the quantity of hazardous and nonhazardous waste • Identifying potentially large waste flows. The Veldhoven campus non-product-related waste flows are shown in the diagram on the next page • Proposing actions and process optimizations to achieve our targets
Other recycling initiatives In 2023, we started local remanufacturing of modules that capture tin from the EUV light source. As tin is a consumable, these ‘tin catch’ modules fill up and get contaminated by design. Local remanufacturing enables fast, efficient reuse with minimal shipment miles, as well as the possibility to reclaim tin for the next cycle of use. We actively support extending the life cycle of IT assets by giving them another life outside of ASML. In 2023, we donated over 300 laptops to multiple charities, mainly in the area of children's education. All IT assets that ASML can no longer use are professionally processed by a specialized partner after the end of their life cycle, with the aim of life cycle extension outside of ASML.
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Circular economy (continued) Recycle materials (continued)
Veldhoven 2023 insight current non-product-related (NPR) campus waste flows
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