Graphs 7, 8 and 9 below provide the breakdown of ASML's machine sales-related revenues. Since most of the chip manufacturers are based in Asia, 75 percent of system revenues come from that region. We supply systems to 18 of the top 20 semiconductor manufacturers of the world ranked by their capital investment budgets.

ASML aims to deliver to our customers chip lithography machines with the lowest cost of ownership and highest earnings potential - a typical advanced ASML scanner can expose 150 wafers in an hour, with every final wafer valued at around Euro 4,000 (example NAND flash memory chips).
Customer satisfaction is all important to ASML. We have Account Teams that are specifically dedicated to customer satisfaction and the lifecycle of our products. What our customers want from ASML is:

1. A reliable, high-quality scanner that delivers
2. Highest volume (production capacity)
3. Smallest resolution (size of the image determines density of features)
4. Best imaging quality (positioning and uniformity of the image)
5. Tailored system at the right time and the right price

Customer satisfaction efforts are designed to ensure that customers continue to enjoy these product specifications during the lifetime of the scanner.

1. Reliability and quality of the system
Building a chip factory costs several billion dollars, which means all systems must be of the highest quality and reliability in order for the chip maker to generate a profit. Our customers have reliability targets which we are expected to meet, as well as production numbers.

Together with several customers, we have set up special task force teams to increase productivity and uptime, resulting in an overall increase in the latter.

For high-volume memory chip manufacturers we started the "million wafer club" in 2007, for scanners which expose more than one million wafers in a year, a target that initially seemed extremely challenging. The "club" numbered well over 100 "member" machines by the end of 2009.

Inevitably, in an industry that works around the clock and throughout the year, systems will break down at some point. When this happens, it is essential that the faulty part is quickly replaced with a high-quality spare. Supplier Quality Control programs were executed in 2008 and 2009 to ensure several critical parts were redesigned; these are now much more reliable than before. This quality audit is an example where we listened very carefully to our customers and used their expertise to improve our quality.

Delivery times of spare parts have improved with the opening in 2009 of our Incheon logistics center in South Korea. The center is closer to our Asian customers and eliminates parts transit from the Netherlands. It has improved delivery time to these customers by 16 to 30 hours, and emergency response time by an average 27 percent.

Our systems are monitored by our global Customer Support organization, consisting of nearly 2,000 employees worldwide who provide service, preventive maintenance and repair 24 hours a day, 7 days a week. Monitoring takes place at or near customer sites, as well as through our award-winning remote monitoring service called BRES.

2. Highest volume
ASML has led the industry for many years with its highly productive scanners. The secret to this success is the TWINSCAN dual stage platform, which avoids wasting valuable exposure time with the otherwise necessary measuring of the wafer surface which takes place in a parallel process. We have continued to increase the scan speed of our systems, which has resulted in a current capability of exposing 150 wafers an hour on our TWINSCAN XT platform, whereby each wafer contains hundreds or even thousands of chips. On our new TWINSCAN NXT platform, with less overhead and faster acceleration, we have increased the productivity specification to 200 wafers per hour, a target which we expect will be reached in the coming year.

3. Smallest resolution
As explained earlier in this report, the opportunity to image smaller structures on silicon wafers is important to our customers in increasing the functionality on a semiconductor and boosting its value, while lowering the price per computing function. ASML has led the industry by offering the tools to image the smallest structures for more than a decade (see graph 10).

We complement these most advanced scanners with a portfolio of corresponding systems for larger structures on what is known as the "less critical" layers of a chip. In this area, we compete by offering value through high productivity and image stability, resulting in high yields (yield = functioning chips per wafer).

4. Best imaging quality
However, offering customers the ability to project smaller chip structures is not enough on its own, because lithographic scanners also need to be able to position these lines with great precision on the silicon wafers. This is called "overlay" and typically accounts for a small percentage of the resolution. If the resolution of the smallest structure is 40 nanometers, the overlay may need to be as small as a few nanometers - one nanometer is a millionth of a millimeter, or four silicon atoms in a row.

In addition to this stringent overlay requirement, the consistency, or uniformity, of the structure is also important because the power running through chip circuits is affected by differing thicknesses. This so-called Critical Dimension Uniformity (CDU) is also expressed as a percentage of resolution.

Thanks to ASML's unique TWINSCAN platform and Holistic Lithography software and hardware, we have acquired the ability to deliver these very aggressive overlay and CDU requirements needed by our customers today and in the years to come.

5. Tailored system at the right time and the right price
Discovering what customers need, and when they need it is key to adding value. We meet with our customersvery regularly, from daily meetings and between customers and sales representatives and customer support to (bi-)monthly meetings with upper management from our customers and ASML management. We also host several meetings with customers at ASML, ranging from status updates and signing of tools up to high-level sales planning and customer demand to volume purchasing agreement discussions. We track these discussions on corporate tracking sheets.

The topics discussed include:

• Customer roadmaps and their alignment, insofar as possible, with ASML's roadmap. This enables us to provide the right tooling at the right time for our customers and to protect our sales
• On-time delivery of the tools is very important to customers, as their complete output plan is based on it. Through forecasting and meetings with our customers we do our best to optimize this plan
• Optimal matching of tools to customer needs

During special meetings customers also assess ASML's organization on aspects of sustainability, health and safety and quality. ASML is thus regularly evaluated and, if needed, measures are defined and taken.

While ASML scanners are becoming more expensive per machine, they are delivering more value. In fact, chip makers now need to invest less in lithographic equipment to generate one dollar of revenue with their chip products, as shown in graph 11. This is good news and means that the fundamental sustainability of ASML's business model remains in place despite increasing machine costs.

Managing the lifecycle of systems to serve customers
A related set of activities to support customer satisfaction and sustainability relates to the life cycle ofour products. ASML has programs that are unique in the stepper / scanner world. We keep track of ASML scanners in production, and when a customer no longer needs a system, ASML can upgrade, rebuild and refurbish the scanner. The scanners can then be either sold "like new" or "in good condition" with modified specifications. In addition, in some cases this program allows customers to take an older i-Line system and upgrade it to a system with a different, more advanced lightsource such as KrF.

In a typical year ASML rebuilds or refurbishes 30 to 50 machines via both factory and field refurbishment projects (23 systems were refurbished during the downturn year of 2009). The modular design of ASML systems facilitates this process as key modules can be removed from the system and sent back to the suppliers for rework. Once refurbished, the modules are reinstalled on the system. This includes modules like the lens, wafer stages, reticle stage and wafer handlers. Systems can also be converted or rebuilt into a new model.

The systems that go into the ASML refurbishment program are mostly decommissioned from older Memory or Logic chip factories. The systems that come out can be five to 20 years old. After refurbishment these systems usually begin a new life in factories that are more focused on niche applications. Examples include Thin Film Heads, MEMS, Analog, Power Amplifies (GaAs), Lasers (GaN), LED and Solar. In addition, many mainstream manufacturers such as the Foundries prefer to buy used systems when they need to add capacity for their more mature technology products.

For PAS 5500 (an older ASML machine for 200 mm wafers), the factory refurbishment program has become so successful that ASML decided to stop manufacturing new machines. It now only provides customers with factory refurbished machines that are customized for their application with full warranty but are more cost-effective and more resource-friendly. To serve this particular activity, ASML has set up a center of excellence (ACE) in Taiwan where these systems are refurbished. This is closer to Asian customers, which improves stability of service and customer interaction while reducing logistics and travel.

Options and upgrades are also used to increase the output of existing tools and thus consume less floor space and less energy per wafer output. Over the life of the tools we have often increased the productivity by 50 percent or more and thus effect a large decrease in energy cost per wafer (details of productivity gains in the Environmental chapter). For spare parts used by the installed base, ASML has a repair exchange program that enables recycling of used parts, thus saving costs and reducing scrap. Approximately 50 percent of the spare parts provided to maintain systems are repairable and included in the exchange program.

In addition to refurbishments, ASML also helps to relocate systems for customers. Each year we move more than 100 machines (approximately three percent of our installed base) at customers' request. This means that an unchanged system is moved either at a customer's site, between customer sites, or between customers.

Very few ASML scanners have been withdrawn from use. To date we estimate that only five to 10 percent of the total machines shipped since the company's inception in 1984 have been decommissioned, according to ASML tracking data.

Systems that are decommissioned by customers are typically used for spare parts and customers sell metal contents for re-use to scrap metal companies. The limited amount of remaining waste is almost completely non-hazardous, such as plastic wiring, glass, ceramics and composites.

Customer events
As a set of customer activities, ASML organizes a number of programs and activities for customers. These include:

• Technical Symposiums near customer facilities in order to give engineers without travel budgets access to new technologies being driven by ASML. In 2008, we organized four seminars in North America and five in Asia, where we also organized two User Meetings.
• Advanced Technology Review, an annual conference near our headquarters in Veldhoven. Customers and key suppliers are invited to send R&D engineers to get an update on lithography roadmaps.
• Every year ASML invites a Chief Technology Officer from one of its customer companies to present the keynote speech at the two-day seminar known as the internal ASML Advanced Technology Review in Veldhoven. At this seminar, internal papers from ASML employees and key suppliers are solicited and chosen for presentation. This event has grown to become one of the world's biggest Semiconductor Lithography Conferences, drawing over 2,000 participants.
• An annual meeting, called the Advanced Manufacturing Review, in which customers' manufacturing and operational engineers are invited to Veldhoven to share best practices on lowering the cost of ownership and maximizing machine output in the working factories.

Customer satisfaction award
Our commitment to customer satisfaction was recognized when ASML achieved a top three position in customer satisfaction rankings amongst large suppliers of semiconductor equipment. The rankings were done by VLSI Research, an independent industry research firm that surveyed customers representing 95 percent of the world's total semiconductor market. We shared the top three satisfaction rankings with non-lithography producers, which means our customer satisfaction ratings surpassed every lithography competitor for the seventh year in a row. Survey participants rewarded ASML with the highest rating of 8.65 in technical leader-ship, praising the company for being the "technical leader in industry". Since 1988, VLSI Research's annual survey has provided chip makers such as Intel, Samsung, Qualcomm, Texas Instruments and TSMC an opportunity to evaluate the equipment performance and customer service of equipment suppliers.