In addition to historical information, this Annual Report contains statements relating to our futureexpected business, and / or results. These statements include certainresults projections, business trends and other matters that are "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995. You can generally identify these statements by the use of words like "may", "will", "could", "should", "project", "believe", "anticipate", "expect", "plan", "estimate", "forecast", "potential", "intend", "continue" and variations of these words or comparable words. They appear in a number of places throughout this Annual Report and include statements with respect to our expected trends and outlook, strategies, corporate priorities, expected semiconductor industry trends, R&D and 2024capital expenditures and 2030 market opportunities and roadmap and revenue potential and other statements under the section titled “Semiconductor industry trends and opportunities”, expected trends in markets served by our customers, expected market growth and drivers of such trends and growth, expected financial results, including expected sales, EUV revenue, service revenue, expected trends in working capital, gross margin, capital expenditures including expected capital expenditures, R&D and SG&A expenses, cash conversion cycle, target and expected effective annualized tax rate, sales targets and outlook for 20212022 and other statements under "-Trend Information", annual revenue opportunity and potential and growth outlook for 2025, expected growth in 2021,2022, outlook for 2025 and 2030 and other statements under the section titled “Long-term growth opportunities”, expected continued growth in free cash flow generation, investments in the future and cash returned to shareholders, our Strengths, Weaknesses, Opportunities and Threats (SWOT), expected demand for upgrades, semiconductor industry dynamics and industry opportunities, expected trends in customer demand and demand for particular systems and upgrades and expected trends in end markets, including Memory, Logic and Foundry, including the continuation of investment by Logic customers in ramping new nodes and stronger lithography demand from memory customers, expected benefits of High-NA and planned target to start shipment of High-NA systems and high-volume production of systems using High-NA by 2025, 20242025-2026, market opportunities for semiconductor industry end markets, expected innovation drivers, expected drivers of long-term stakeholder value, expected trends in DUV systems revenue, expected DUV sales and the expectation that DUV will continue to drive value for our customers and be used in production in most layers of their chips, expected benefits of Holistic Lithography and expected installed based management revenues, our supply chain strategies and goals, customer, partner and industry roadmaps, ASML’s applications business, expected development of High-NA and its benefits, including the expected timing for development of future generation EUV systems, expected growth in EUV revenue thesales compared to sales of DUV, expected benefits of the indirect interest in Carl Zeiss SMT GmbH and the acquisition of Berliner Glas, expected EUV adoption, expected EUV margins and margin improvement in our systems and service via cost reduction and value delivery, expected productivity and benefits of our tools, systems, and projects, EUV productivity targets and goals, potential future innovations and system performance, expected shipments of our tools and systems, including demand for and timing of shipments, statements with respect to DUV and EUV competitiveness, the development of EUV technology and EUV industrialization, expected productivity upgrade releases, enabling high-volume production of next generation chips and expected designs of such chips and their benefits, and revenue recognition, predicted growth in wafer production, sustainability targets, goals and strategies, shrink being a key driver supporting innovation and providing long-term industry growth, lithography enabling affordable shrink and delivering value to customers, environmental, diversity and sustainability strategy, ambitions, goals and targets, including circular procurement goals, targeted greenhouse gas emission and waste reduction, recycling and recyclingrefurbishment initiatives, investments and investments,goals and energy-saving strategies and targets, including statements on targeting zero carbon emissions and indirect emissions from energy use across operations and reducing intensity of all other emissions in the value chain from the making and use of ASML’s products by 2025, charity goals, the impact of the fire at our facility in Berlin on our production, repair center expansion and targets, our expectation of the continuation of Moore’s Law and that EUV will continue to enable Moore’s Law and drive long-term value for ASML well beyond the current decade, tax strategy, capital allocation policy, dividend policy, our expectation to continue to return cash to our shareholders through share buybacks and dividends including our proposed dividend for 20202021 and statements relating to our share buyback program for 2020-2022,2021-2023, and statements with respect to the expected impact of accounting standards.

These forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about the business and our future financial results and readers should not place undue reliance on them. Forward-looking statements do not guarantee future performance, and actual results may differ materially from projected results as a result of certain risks, and uncertainties. These risks and uncertainties include, without limitation, those described under How we manage risk - Risk factors. These forward-looking statements are made only as of the date of this Annual Report. We do not undertake to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

None of this would be possible without the people at ASML and our partners. First of all our people – with their creativity, perseverance, resilience and ingenuity in difficult times, they are crucial to the success of our business. In addition, we rely on partnerships with our customers as well as inpartnerships with our dedicated suppliers, despite the ASML community. But it was alsosetbacks they faced during the COVID-19 crisis. We rely on national and local governments to facilitate a yearsocial and economic infrastructure that brought new learnings. For me personally, for instance, if you'd asked me 12 months ago if I could lead a company of over 28,000 people of which over 80% were at home, I would have said: “Are you out of your mind? Of course that won't work!" But this is what happened in 2020 – and it has worked.allows us to be successful. We even managed to close the acquisition of Berliner Glas Group, and welcomed around 1,600 new colleagues into ASML.

There are several megatrends in the electronics industry that are shaping our digital, connected world and ship systems to our customers. The situation was very dynamic and I am impressed with the way that we managed to deal with the many challenges. This is how, collectively, we limited the impact of COVID-19 on our company. We kept up our strong financial performance and we were ableare expected to continue to return capital through dividendsfuel growth across the semiconductor market, such as artificial intelligence, 5G, virtual reality, gaming, simulation and share buybacks.visualization applications, and the intelligent cloud and edge. With a growing number of mobile and sensor-enabled applications and services, our society will rely more and more heavily on distributed computing and storage solutions. The electronics industry is booming – there are around 40 billion connected devices in use today, and that number is expected to grow to 350 billion in the next ten years based on external source data.

Another aspect of the growth we’re seeing today is that it’s not only in the most advanced nodes – a challenging year? lot of the distributed computing and storage solutions I mentioned above require mature lithography technology to manufacture. We expect that by 2025, about two-thirds of our total system sales will be EUV and the rest will be DUV and metrology and inspection. This expected EUV percentage is lower than what we predicted in 2018, but that doesn't mean that the EUV market has shrunk – as a matter of fact, it is expected to grow. But the DUV and metrology and inspection markets are expected to grow even faster.

The global economic consequences of COVID-19 had a limited impactpandemic has alerted governments around the world that global supply chains can create significant geographical dependencies on ASML' results. Declining consumer spending on smartphonesservices, raw materials and automotive was offset by increasing investments in 'working-from-home' electronics, datacenters and the communications network infrastructure neededend products. Governments increasingly realize that this now also turns out to support an economy where data is an important driver of economic value and productivity.

Second,for semiconductors. Since semiconductors play an increasingly important role in the market segmentgrowth and continuity of customers who produce Memory chips, who startedlarge industrial complexes and the year in a 'wait and see' mode, but showed signs of recovery throughout the year. The Memory segment routinely experiences supply and demand swings, which you need to visualize as a continuously upward swinging trend.

We believe that the advantages of scaling as expressed by Moore’s Law will continue throughout this decade and beyond. We will therefore relentlessly invest in innovation. In addition, we strive to ensure that ASML and its supply chain will be able to fulfill the increasing demand for more wafers to support advanced and mature technology. We will do this by increasing the productivity of all our machine types and by adding more advanced ASML systemsmanufacturing capacity.

To increase our own production capacity, we will focus on building more machines by driving down cycle time for both EUV and DUV, on adding more people and tooling, and on increasing our production space. Together with our supply chain partners, we are actively adding capacity to make the smallest features on the chip even smaller. If the global economymeet future customer demand.

Our product portfolio is strong or when new data-hungry applications are introduced, the demand for Memory rises even faster. In this case, the Memory makers need to add new production lines or even entirely new fabs. To support the projected bit growth, we expect that customers will need to add more capacity, as observed invery much aligned with our Q4 results.

ASML operates in an industry that has considerable innovation power. Digital technology itself can help drive societal progress and has the release of new upgrades and the interest and capability of our customers.

Driven by our values and commitment to corporate responsibility, we want to have a positive role in society – for our employees, through the onlinecommunities around us, and off-line channels ateveryone involved in our disposal.innovation ecosystem and supply chain. We are expanding on our community engagement, and with our new diversity and inclusion strategy, we want to improve our performance in this regard.

The last couple of years have posed new challenges to all of us that have required agility, patience and perseverance to overcome. As a global society we are faced with unparalleled challenges, but with its great workforce, partnerships and innovative power, ASML is constantly reminded oflooking toward the realityfuture with confidence, preparing for even more sustainable growth. We can only do that ASML systems are at the heart of our customers’ fabs, and in many cases our systems are even at the heart of our customers’ business strategies. This isby continuing to be a tremendous responsibility that should weigh heavily on all our shoulders. This feeling of responsibility and humility starts with the people who design and develop new systems and solutions. It continues with the folks who assemble the systems in our factories and our service engineers in the field. It is carried all the way to our office staff who provide support to their colleagues around the world. As long as we cherish this 'customer-centricity', we will continue to deserve the trust that our customers have put in us.

For all the ways we have moved forward as a society, the world still faces crucial challenges for the future. We must change how we think and act on themes that impact everyone, likesuch as energy use, climate change, mobility and access to healthcare and nutrition.

As the innovation leader that makes vital systems for chip manufacturing, we are proud to not only be a partplay our role as technology enabler in the innovation ecosystem of these solutions, but also the ones who are making them possible.semiconductor industry. We can only playdo this role if we continue to challenge the status quo, tap into the collective knowledge of our global ecosystem and create an environment where people can contribute, learn and grow. At ASML, we believe our purpose is to unlock the potential of people and society by pushing technology to new limits.

The long-term growth of the semiconductor industry is based on the principle that the energy, cost and time required for electronic computations can be reduced by shrinking transistors on microchips. One of the main drivers of shrink is the resolution that lithography systems can achieve, which is mainly determined by the wavelength of the light used and the numerical aperture of the optics. A shorter wavelength – like a finer brush used for painting – can print smaller features. A larger numerical aperture can focus the light more tightly, which also leads to better resolution. To enable shrink, what we do – lithography – is key.

As such, weWe are a focused supplier of holistic lithography solutions to all of the world’s major chipmakers. Our mission, together with our partners, is to provide leading patterning solutions that drive the advancement of microchips. Through our sustained investment in and dedication to research and development, we seek to innovate at least at the same pace as our customers. We put our innovations in the hands of chipmakers as quickly as possible by engineering in parallel, not sequentially, while ensuring their quality, reliability, manufacturability, and serviceability.

To help solve humanity’s toughest challenges while at the same time addressing our own, we must continue to amplify ASML's core values that created our success – Challenge, Collaborate, Care.challenge, collaborate and care.

We challenge boundaries, question the status quo and stand up for the ideas we believe in. We’re comfortable with discussion and debate, because it is often inherent to stress-testing and championing an idea. This is what enables us to push technology forward,

keep things simple and do things with care and attention. We alwayscontinue to challenge ourselves to add value for our customer,customers, ensuring that we continually improve across key aspects, likesuch as safety, quality, efficiency and cost.

As a system architect and system integrator, we collaborate to tap into our collective potential. Together with our partners in our ecosystem, we expand our knowledge and skills, learn from each other, and share approaches to deliver the best results. What we do is unique, and we need each other to make it possible. As we continue to grow and our ecosystem of partners expands, this collaborative mindset becomes even more essential to success.

As we push technology further together, we have to do so with care. As an industry leader, we realize that our impact extends from people, to society, to the planet. We care not only for those we work with, but for our customers, suppliers, the world we live in, and the communities where we do business. We believe in integrity and respect for people and their human rights. We take personal responsibility to create a safe, inclusive and trusting environment where people from all backgrounds are encouraged and enabled to speak up, contribute, learn, make mistakes, and grow. We also take careseek to create claritybe clear in how we organize ourselves to achieve our goals, making sure we have a clear framework for what we do and how we do it.

TheseWe believe that these values will help our company and our employees to make smart decisions that will benefit all stakeholders. Our valuespurpose and purpose,values, together with the great responsibility we have as an industry leader, make us keenly optimistic for the future.

Our company was founded in 1984 in Eindhoven under the name of ASM Lithography, a joint venture between Philips and ASM International. As they moved into their new space near the Philips factories at Strijp-T in Eindhoven, our first employees could never have imagined that in just three decades, ASML would be a global innovation leader.

We’ve grown from our humble beginnings to a global force through relentless focus on innovation, sheer customer focus through tough times, and a willingness to rely on others to come to a better result.

Although we’re constantly looking to the future, where we have come from is just as important to us as we evolve. These pioneering behaviors have been key to our success over the past 3637 years, and they’ve become even more important to us as we continue to define our purpose and articulate the values that underpin everything we do. Understanding what made us successful in the past will help us maintain our success in the future.

Innovation is rarely a straight line. We've always known that it takes laser focus, multidisciplinary teamwork and a keen eye for how we can best help our customers. And even then, we've had to show grit. It took a decade of tenacity to get our technology off the ground. We've all cared for this company like it was our own,unconditionally and are proudly committed to its success. We believed then as we do now that even the biggest challenge can be overcome by chipping away,through perseverance, if necessary with hundredsthousands of people over many years.

Lithography is a driving force in the creation of more powerful, faster and cheaper chips. Today’s most advanced processors, based on the Logic N5 node, contain billions of transistors. But shrinkingShrinking transistors further is becoming increasingly difficult. Wedifficult, but we aren’t as close to the fundamental limits of physics as some would think. Next-generation chip designs will include more advanced materials, new packaging technologies, and more complex 3D designs, which will create the electronics of the future.

The manufacturing of chips becomes increasingly complex as semiconductor feature sizes shrink, while the imperative to mass produce at the right cost remains. Our holistic lithography product portfolio helps to optimize production and enable affordable shrink by integrating lithography systems with computational modeling, as well as metrology and inspection solutions. Our computational models enable our customers to optimize their mask design and tape-out time.time (the time to send the final design to the manufacturer for production). This works through mask-correction software to prepare and modify the design for optimized exposures, while the metrology and inspection solutions help in analyzing and controlling the manufacturing process in real time.

A lithography system is essentially a projection system. Light is projected through a blueprint of the pattern that will be printed (known as a ‘mask’ or ‘reticle’). With the pattern encoded in the light, the system’s optics shrink and focus the pattern onto a photosensitive silicon wafer. After the pattern is printed, the system moves the wafer slightly and makes another copy on the wafer.

Moore’s Law, a prediction made over half a century ago, setsets the pace for our industry. Gordon Moore predicted that computing would dramatically increase in power, and decrease in relative cost, at an exponential pace. In other words, the number of transistors (tiny electrical switches) on an integrated circuit will double every two to three years at the same cost. This opens up two options to make microchips faster and more powerful: by using the same number of transistors on a chip at half the cost, or by doubling the number of transistors at the same cost. Even today, the power of this prediction is the fundamental principle of the semiconductor industry and the driving force for innovations that benefit our daily lives.

At ASML, our job is to help the industry continue Moore’s Law. Our goal has always been to reduce the critical dimension (CD) – the smallest structure that a lithography system can print. This is defined by Rayleigh’sthe Rayleigh criterion, the equation on which all our innovation isinnovations are based:

ASML's goal has always been to reduce the critical dimension. By reducing the wavelength and increasing the numerical aperture, our systems can print IC structures in increasingly smaller feature sizes. If our customers can print smaller structures, the chips can be smaller and the costcosts per transistor become cheaper, which in turn makes it more profitable for our customers.

Extending Moore’s Law is becoming increasingly complex and costly. What will always be needed is a way to mass produce IC designs at the right cost. That’s where the full scope of ASML’s product portfolio will continue to play a big role to ensure affordable transistor shrink. We continue to push our entire system portfolio to new productivity levels and imaging performance. OurWe believe that our EUV 0.33 and High-NA0.55 NA lithography will help enable tomorrow’s most advanced chips. In our computational lithography solutions, we’re bringing machine learning and big data to the forefront in predicting both lithography and metrology processes, withstriving for 100% accuracy. Finally, weWe have developed an entirely new class of e-beam inspection systems to help our customers control defectivity in manufacturing in next-generation chip nodes, as those smaller structures can hardly be detected with optical inspection.

Over the past 40 years, we have gradually evolved from the era of PCs and mobile devices into the cloud era, where almost every aspect of our lives is now stored and managed online. The semiconductor industry isnext step of our digital future will be about distributed intelligence, driven by affordable scaling (the ability to make smaller transistors at the right price)seamless integration of communication, computation and artificial intelligence (AI). ThisAll these trends require more computing power, which in turn is powered by ASML’s holistic lithography product portfolio. We provideaccelerating the demand for more powerful and energy-efficient microchips.

With our customers, withwe share a suite of patterning solutions to mass produce patterns on silicon, allowing themcommitment to increase the value and lowerenergy efficiency performance of microchips. Together, we have a vision of the costnext 20 years to improve energy efficiency three-fold every two years, through system scaling including ongoing improvements in the resolution of a chip. Our portfolio is aligned with industry trends and our customers’ product roadmaps, which require lithography-enabled shrink beyond the current decade.

Over the last 15 years, the main driver of productivity and imaging performance so that chipmakers can continue to shrink nodes. However, as shrink continues, our customers face unprecedented engineering, material, structural and manufacturing difficulties. Our holistic lithography solutions integrate products from across our portfolio to help address these challenges. We help customers achieve their pattern fidelity requirements through increased control over the quality and consistency of the patterns being printed on the chip with our metrology and inspection systems and computational lithography solutions. In addition, we support our growing installed base with best-in-class customer support. Our highly differentiated solutions provide unique value drivers for our customers and ASML, working together to ensure affordable shrink.

ASML remains focused on enabling system scaling through shrink. We are integrating our complete product portfolio into a holistic lithography solution to accelerate EUV source technology,optimize and helpedcontrol the lithography process. We do this through optimizing litho parameters, overlay, critical dimension (CD) and optical proximity correction (OPC), and by reducing the edge placement error (EPE) as well as improving our defect inspection capabilities.

We are uniquely able to solve several technical challenges to enable the EUV infrastructure to meethelp our customers high-volume manufacturing requirements. This partially explains why ASMLfind, measure, and correct for patterning variations. Our main focus is on improving EPE (the difference between the world’s only manufacturerintended and the printed feature edge of EUV lithography systems.

How do we achieve that? We use scanner metrology, optical metrology, e-beam metrology and inspection to bring data from every relevant step in the process flow together. By analyzing all data in a higher numerical aperture (NA), known as High-NA technology. Our customers have ordered R&Dsingle framework, our applications can then provide a feedback loop to the lithography system to evaluatemake the high-volume production opportunities in the 2025 time frame. This technology will enable geometric chip scaling beyond the current decade, offering resolution and overlay capability that is 70% better than our current EUV platform.

Our deep ultraviolet (DUV) products are the industry backbone, supporting all semiconductor market segments. We offer immersion and dry lithography solutions that help manufacture a broad range of semiconductor nodes and technologies.keep innovating on all wavelengths. Our DUV immersion and dry systems lead the industry in productivity, imaging and overlay performance for the high-volume manufacturing of the most advanced Logic and Memory chips,chips.

We continue to systematically develop our product portfolio to optimize the installed base for our customers, while continuingincreasing our focus on productivity and performance upgrades and additional services to deliver value for the matured nodes.support our customers’ wafer demand.

Our extreme ultraviolet (EUV) product roadmap will help us drive affordable scaling well into the same chip.

Chip manufacturing with EUV helps reduce the amount of 10 nm DRAM nodes. The NXT:2050i is based on a new version of the NXT platform, which includes new developmentscritical lithography masks (-40%) and process steps (-30%) when compared to non-EUV manufacturing. This results in the reticle stage, wafer stage, projection lens,significant defect, cost and exposure laser. Thanks to these innovations, the system delivers better overlay control at higher productivity than its predecessor.

In everything we do, a trusted relationship with our computational lithographycustomers is key. Our comprehensive product portfolio is therefore aligned with our customers' roadmaps to deliver cost-effective solutions in support of all their applications, from advanced to mature nodes. We are aware that commonality across our DUV and patterning-control software solutions, these systemsEUV platforms allows faster and more cost-effective innovation, production and maintenance. That is why we increasingly focus on using common technology across our portfolio.

We are investing in the energy efficiency of our products to help chipmakers achievereduce the highest yieldenergy needed to produce a wafer. In addition, we have a strong roadmap to reduce waste. We are committed to re-using parts, tools and best performancepackaging whenever possible in mass production.our value chain. We are working together with our customers and suppliers to remanufacture used system parts, re-using them as new parts to prevent unnecessary waste.

But our systems are just one part of the process involving numerous suppliers and chip-making equipment. Every step and every machine in the process is important. That’s why collaboration and innovation are key. From academics who help us understand and bend the laws of physics, to customers who identify new possibilities and suppliers that translate our ideas into products and technology – we collaborate to succeed. This huge collaborative network that we call the semiconductor industry is at the cutting edge of our business depends on strong, sustainable relationships with all stakeholdersdigital future.

Product development in the value chainsemiconductor industry is managed through so-called ‘roadmaps’, which is essentially planning product development. When an idea has become a more specific definition, this transforms into a roadmap giving guidelines on how the product development should proceed during the next couple of years. By combining the roadmap of our customers and the technological feasibility, we design a product roadmap that outlines the specifications and functionalities of new types of machines that are feasible for us to achieve the desired innovations in semiconductor technology. We use input from stakeholdersproduce and trends inthat meet our industry and societycustomers’ demands.

For more than a decade, we have applied our business, sotailor-made modular innovation and product development process, which we invest in their career developmentcall the Product Generation Process (PGP). PGP describes the way we develop products at ASML, how we introduce these products to the market, and well-being.

Every day at ASML, more than 10,00011,000 of the brightest minds in R&D take on the exciting challenge to innovate the most advanced lithography systems in the world. We manage this process by balancing our customers’ needs, product capabilities and technology solutions. To stay ahead, we invest heavily in R&D. In 2020,2021, we spent €2.2€2.5 billion on R&D, compared to €2.0€2.2 billion in 2019.2020.

The constant stream of new ideas is crucial to fill our technology pipeline that flows through the so-called ‘innovation funnel’. Here we select new ideas that have the potential to advance our products and customer application. Ideas that successfully pass the ‘proof of concept’ stage in our Research department are transferred to the Development & Engineering (D&E) department. D&E takes them on into our Product Generation Process (PGP) for product development. We then build and test system prototypes in the necessary environments. Prototypes that pass these tests may eventually lead to new product releases.

Our D&E engineers drive our machines forward by creating new components or subsystems, integrating them into the functional system, or developing new applications to help move the industry forward.

We continuedon’t say 'no' to make solid progress in EUV. For example, in 2020 we successfully introduceda challenge. Our global research and D&E teams were challenged to create a new vacuum chamber forwafer clamp design that could be manufactured faster while meeting tighter specifications. After two years of research, design and engineering, our team launched the EUV light production, the so-called modular vessel. The success of this breakthrough modular vessel project was due to close collaboration with customers, technology partners and suppliers, and a dedicated effort to integrate competences.

Unlike any other module in the customer.

In 2021, travel restrictions and other mitigation measures related to COVID-19 continued to limit our in-person interactions to a large extent. Our account teams adapted quickly, introducing alternative solutions such as more local Voice of the Customer initiatives and remote customer interviews. Local account and support teams visited our customers at their locations, interviewed them on video, and then shared feedback with teams at ASML. Except for live presentations with large audiences, we were able to adhere to our regular schedule of interactions throughout the year.