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ASML Holding N.V. 30 June 2008

Company News Alert

Substantial common stock price decline since our 1Q 08 update report

Common BUY The ASML Holding N.V. (ASML) common stock price has witnessed a substantial decline since our 1Q
08 update report dated 16 May 2008, reflecting investor concerns regarding global economic health
Stock and slowdown in the semiconductor sector. Despite our expectation of a difficult FY 2008, ASML is
Ticker: ASML.AS poised for sustained long term growth driven by demand for the company’s advanced product
portfolio as the industry will continue to move to lower technology nodes. Subsequently, we maintain
Target price: €21.77 our current BUY rating for the ASML common stock.
Current price: €15.37
Price change
We will reassess the common stock rating for once the company announces its 2Q 08 results.
since last report: (20.5%)

ADR BUY We reiterate our BUY rating for the ADR based on our fundamental outlook. We no longer expect a
significant currency impact on the European common stock over our investment horizon.

Ticker: ASML
Target price: US$36.39
Current price: US$24.58
We will reassess the ADR (1 ADR = 1 common share) rating for ASML once the company announces
Price change
its 2Q 08 results.
since last report: (18.5%)

Supervisor: Shilpen Shah

Analyst: Abhilasha Jha
Editor: Heloise Capon
Global Research Director:
Satish Betadpur, CFA
Investment horizon - short term actionable trading strategies
This report addresses the needs of strategic investors with a long term investment horizon of 6-12 months. If this
report is provided to you by your broker under the Global Settlement, you may now also access (free of charge) the
short term trading outlook that we publish from time to time for this issuer, looking at the coming 5-30 days for
readers with a shorter trading horizon. These are available online only at www.researchoracle.com

Next news due:

2Q 08 results, 16 July 2008 In our 1Q 08 update report dated 16 May 2008, we reiterated the ASML common stock a BUY with a
6-12 month target price of €21.77, indicating a potential upside of 12.5%. The common stock has
since declined 20.5%. The ADR was also reiterated a BUY with a 6-12 month target price of US$36.39
and has since depreciated by 18.5%.

In line with most technology stocks around the world, ASML has experienced significant erosion in its
stock price as the semiconductor industry continues to struggle, reflecting investor concerns regarding
the health of the global economy, triggered by the subprime mortgage crisis in the US, inflationary
pressures and reduced consumer spending. Moreover, on 11 June 2008, the Semiconductor Industry
Association (SIA) reduced its global semiconductor industry growth forecast for 2008 from its previous
forecast of 7.7% to 4.3% y-o-y. Speculation that the company might issue a warning on lower margins,
identified in a Dow Jones report dated 19 June 2008, triggered a decline of 6.4% in the stock price on
the day. The Amsterdam Exchange Index has declined 13.1% since our previous update report,
reflecting macroeconomic concerns, closing at 425.92 on 27 June 2008.

We expect a gross margin of 39.8% in 2Q 08 for the company, which is slightly lower than
Management guidance of 40% and further anticipate a 92 bps y-o-y decline in gross margin to 40.0%
in FY 2008. However, despite our anticipation of a difficult FY 2008, we believe that ASML is poised for
sustained long term growth driven by demand for the company’s advanced product portfolio as the
industry will continue to move to lower technology nodes. Hence, we maintain our current BUY rating
for the ASML common stock.

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