Over the course of 50 years we have grown to become a global company that develops innovative solutions for our customers, and manages the best interests of our investors, our employees, society and other stakeholders. Read on to discover what we achieved in 2018.
The demand for smaller, faster and cheaper semiconductor chips continues to rise, driven by advancements in cloud computing, artificial intelligence, smartphones and the Internet of Things.
Our technology is the first step towards making it all possible, as our R&D investment in new materials, new products and new processes means we can help our customers develop their technology roadmap, and further extend Moore’s Law.
In 2018, this led to the introduction of the Synergis ALD tool, which leverages the core technologies from our Pulsar and EmerALD ALD products for high productivity thermal ALD applications. The new Synergis tool allows us to address more ALD applications and therefore increases our served market. Together with our other products and services, this contributed to our strong financial results, which included:
We operate in a fast-paced industry that continues to reshape the world, and our innovative technology enables the semiconductor industry to achieve advancements in computing, communications, energy, transportation, medicine and beyond.
To ensure that we can continue to make a difference to our customers, employees, and company stakeholders, in 2018 we concentrated on the following three key elements of our strategy.
In addition to our fundamental R&D efforts, we continuously expand and deepen our strategic cooperation with key customers, suppliers, chemical manufacturers, and research institutes. This approach enables us to remain innovative and swiftly meet the changing demands of our customers.
We are a key player in the deposition equipment segments for ALD and epitaxy, and a focused niche player for PECVD and vertical furnaces. As a leader in the segment, ALD has turned into a key growth driver for our business, from which we support virtually all of the leading customers in the semiconductor industry. Our newest ALD tool, Synergis, is designed to address a wide range of existing and new ALD applications, effectively increasing the market we serve.
In addition to our internal optimization programs, we are working with our suppliers to improve fundamental quality through statistical methods and process controls. In addition to addressing the technology needs of our customers, we also focus on further increasing equipment throughput and equipment reliability, thereby lowering the cost per wafer of our wafer processing systems.
In 2018, we achieved revenue growth of 11% reaching a record high revenue of €818 million, with sales increasing mainly in the logic, DRAM and analog segments. By industry segment, our 2018 revenue stream was led by memory, closely followed by the logic and foundry segments.
While our ALD product lines continued to be our key sales driver in 2018, accounting for more than half of total equipment revenue, our other product lines also contributed strongly. In our epitaxy product line we increased sales, following the strong growth we achieved in 2017, and we saw additional sales increases in PECVD and vertical furnaces.
Our industry experienced continued growth in 2018, with worldwide semiconductor industry sales increasing by around 14%. This was driven by high memory prices and broad-based electronics demand for cloud services, mobile devices, automotive and industrial applications. These drivers helped the wafer fab equipment market grow by around 10% in 2018.
Our 2018 sales grew to record levels, reaching €818 million. ALD continued to be the key driver, although the other product lines also made a strong contribution.
We benefited from a further increase in wafer fab equipment spending following the very strong market growth in 2017. Our operating profit increased to €124.3 million from €113.2 million in 2017, while the operating profit margin remained stable.
New bookings increased by 22% in 2018 to €942 million, with equipment bookings for ASMI as a whole led by logic, followed by foundry and then memory. Total research and development (R&D) expenses, excluding impairment charges, decreased by 1% in 2018 compared to 2017, mainly as a result of higher capitalization of development expenses.
Our 2018 sales grew to record levels, reaching €818 million. ALD continued to be the key driver, although the other product lines also made a strong contribution.
We benefited from a further increase in wafer fab equipment spending following the very strong market growth in 2017. Our operating profit increased to €124.3 million from €113.2 million in 2017, while the operating profit margin remained stable.
New bookings increased by 22% in 2018 to €942 million, with equipment bookings for ASMI as a whole led by logic, followed by foundry and then memory. Total research and development (R&D) expenses, excluding impairment charges, decreased by 1% in 2018 compared to 2017, mainly as a result of higher capitalization of development expenses.
During 2018, we returned approximately €607 million to shareholders in the form of dividends, share buybacks and the capital return. This was up from €281 million in 2017 and €140 million in 2016.
Over the 2010-2018 period, we returned more than €1.6 billion to the financial markets through dividends, share buybacks, return of capital, and buyback of convertible bonds.
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In 2018, we paid a dividend of €0.80 per common share and we will propose to the forthcoming AGM to declare a dividend of €1.00 per share for 2019. The proposed 2019 dividend will mark the ninth consecutive year that we have paid a dividend.
We are an equipment supplier mainly to the semiconductor manufacturing industry. We design, manufacture, and sell equipment and services to our customers for the production of semiconductor devices, or integrated circuits. The semiconductor capital equipment market is composed of three major market segments: wafer-processing equipment, assembly and packaging equipment, and test equipment. Through our Front-end business, we are active in the wafer processing segment. Additionally, as per December 31, 2018, we had a 25.33% stake in ASM Pacific Technology (ASMPT), which is a leading supplier of assembly and packaging equipment to the semiconductor, LED, and electronics markets.
We conduct our Front-end business through wholly-owned subsidiaries, the most significant being ASM Front-End Manufacturing Singapore Pte Ltd (FEMS), located in Singapore, ASM Europe BV (ASM Europe), located in the Netherlands, ASM America Inc (ASM America), located in the United States, ASM Japan KK (ASM Japan), located in Japan, and ASM Korea Ltd (ASM Korea), located in South Korea. The locations of our facilities allow us to interact closely with customers in the world’s major geographical market segments: Europe, the United States, and Asia.
Our wafer processing business supplies equipment to the leading semiconductor manufacturers in the logic, foundry and memory markets, primarily for the deposition of thin films. The logic market is made up of manufacturers who create chips that are used to process data; the foundry market consists of businesses that operate semiconductor fabrication plants to manufacture the designs of other semiconductor companies; and the memory market covers manufacturers who make chips that store information either temporarily or permanently, such as random access memory (RAM). We also supply equipment to leading manufacturers of analog semiconductor devices.
The principal markets that we address in wafer processing are selected segments of the deposition equipment market. The total deposition equipment market was estimated to be US$15.2 billion in 2018 (VLSI Research, January 2019). Within this market we focus on the following segments: vertical furnaces, epitaxy, PECVD, and ALD. ALD is an advanced technology that deposits atomic layers one at a time on wafers. This process is used to create ultra-thin films of exceptional quality and flatness. Plasma is sometimes used to enhance the process further (Plasma Enhanced ALD, or PEALD) and enables the deposition at reduced process temperature.
Our investment in ASM Pacific Technology (ASMPT) represents the Back-end business. The Back-end operations are conducted through facilities in Hong Kong, the People's Republic of China, Singapore, Malaysia, and Germany. On March 15, 2013, we reduced our shareholding in ASMPT from 52% to around 40%. The sale of the 12% stake in ASMPT caused and required the deconsolidation of ASMPT. Since that date, our share of the net result of ASMPT is reported on the line share in income of investments in associates. In April 2017, we sold a stake of 4.9% and in November 2017 we sold a stake of 9.1% in ASMPT. Our current shareholding in ASMPT is 25.33%.
Estimated growth in the market for wafer fab equipment (WFE) was around 10% year-over-year in 2018. While the first half of the year was still strong, overall WFE spending in the second half started to slow down, due to a substantial weakening of the memory segment. Investments in the NAND flash segment weakened in 2018 and were particularly lower in the second half of the year. This was not unexpected as customers made strong investments in both new capacity and 3D-NAND conversions over the last few years, for which they now need some time to digest. In the DRAM segment, WFE spending was up for the full year, but also started to slow down in the second half. Advanced Logic WFE was up for the full year and even accelerated in the second half, driven by investments in the advanced nodes. Foundry spending decreased for the year but accelerated in the second half, as the mix of spending started to shift towards early investments in the 5nm technology generation.
The following table shows the operating performance for 2017, versus 2018:
(EUR million) | 2017 1 | 2018 | Change | |||
New orders | 773.6 | 942.1 | 22% | |||
Backlog | 176.3 | 301.5 | 71% | |||
Book-to-bill | 1.0 | 1.2 | ||||
Revenue | 737.4 | 818.1 | 11% | |||
Gross profit | 305.9 | 334.3 | 9% | |||
Gross profit margin % | 41.5% | 40.9% | ||||
Selling, general and administrative expenses | (99.9) | (121.4) | 22% | |||
Research and development expenses | (92.8) | (88.6) | (5%) | |||
Operating result | 113.2 | 124.3 | 10% | |||
Operating margin % | 15.3% | 15.2% | ||||
Financing income / (expense) | (30.7) | (0.1) | 30.5 | |||
Income taxes | (4.6) | (15.4) | (10.8) | |||
Net earnings before share in income of investments in associates | 77.9 | 108.7 | 30.8 | |||
Share in income of investments in associates | 89.6 | 48.4 | (41.2) | |||
Result from sale ASMPT shares | 284.9 | – | n/a | |||
Net earnings | 452.4 | 157.1 | (295.3) | |||
Net earnings per share, diluted | €7.63 | €2.96 | €(4.67) | |||
Net earnings per share excluding effects from the sale of ASMPT shares | €3.21 | €3.19 | €(0.02) |
The following table shows certain consolidated statement of profit or loss data as a percentage of net sales for our operations for 2017 and 2018:
2017 | 2018 | |||
Revenue | 100.0% | 100.0% | ||
Cost of sales | (58.5%) | (59.1%) | ||
Gross profit | 41.5% | 40.9% | ||
Selling, general and administrative expenses | (13.6%) | (14.8%) | ||
Research and development expenses | (12.6%) | (10.8%) | ||
Operating result | 15.3% | 15.2% | ||
Net interest income (expense) | (0.0%) | (0.2%) | ||
Foreign currency exchange gains (losses) | (4.1%) | 0.2% | ||
Share in income of investments in associates | 12.2% | 5.9% | ||
Result from sale ASMPT shares | 38.6% | 0.0% | ||
Earnings before income taxes | 62.0% | 21.1% | ||
Income taxes | (0.6%) | (1.9%) | ||
Net earnings from operations | 61.4% | 19.2% |
The sales cycle from quotation to shipment for our Front-end equipment generally takes several months, depending on capacity utilization and the urgency of the order. Usually, acceptance is within four months after shipment. The sales cycle is longer for equipment that is installed at the customer’s site for evaluation prior to sale. The typical trial period ranges from six months to two years after installation.
Our revenues are concentrated in the United States, Europe and Asia. The following table shows the geographic distribution of our revenue for 2017 and 2018:
Year ended December 31, | ||||||||
(EUR million) | 2017 | 2018 | ||||||
United States | €199.5 | 27.1% | €175.9 | 21.5% | ||||
Europe | 106.7 | 14.5% | 165.6 | 20.2% | ||||
Asia | 431.2 | 58.5% | 476.6 | 58.3% | ||||
€737.4 | 100.0% | €818.1 | 100.0% |
A substantial portion of our revenue is for equipping new or upgraded fabrication plants where device manufacturers are installing complete fabrication equipment. As a result, our revenue in this segment tend to be uneven across customers and financial periods. Revenue from our ten largest customers accounted for 83.1% and 79.2% of revenue in 2017 and 2018, respectively. The composition of our ten largest customers changes from year to year. The largest customer accounted for more than 10% of revenue in 2017 and 2018.
Currency changes led to a 3% decrease in revenue compared to 2017.
Our revenue increased by 11% in 2018 to a new record high of €818 million. The impact of currency changes resulted in a decrease of 3%. Sales increased primarily in the logic, DRAM and analog segments. By sales per product line, ALD continued to be the key driver, although the other product lines also made a strong contribution in 2018. We benefited from a further increase in wafer fab equipment spending following the very strong market growth in 2017. In the second half of 2018, the WFE market started to slow down, due to a weakening of memory investments, particularly in the NAND segment. ASMI sales remained strong in the second half of the year, thanks to a relatively strong exposure to the logic and foundry markets where investments picked up in the latter part of 2018.
By industry segment, our 2018 revenue stream was led by memory, closely followed by the logic and foundry segments. In 2017, revenue was led by foundry, followed by memory then logic.
Within memory, the majority of revenue was related to the DRAM segment. In the DRAM segment we recorded strong growth as we benefited from industry-wide investments in new capacity, as well as conversions of existing capacity to the most advanced nodes. Revenue in the 3D-NAND memory segment decreased in 2018 as demand slowed, particularly in the second half of the year. In 2017 the segment was still our key driver.
Revenue in the logic segment increased strongly in 2018, reaching a record high, compared to a relatively stable 2017. Investments in leading-edge technologies were markedly higher, as the mix shifted more towards the most advanced 10nm node during the course of the year. While sales from foundry customers decreased in 2018, they remained at a healthy level and picked up meaningfully in the second half, driven by early investments in 5 nanometer. It is also worth noting that we booked growth in the analog segment. While smaller than our other segments, analog saw a strong increase in demand across a broad base in 2018, resulting in a meaningful contribution to our overall annual revenue growth.
The ALD product lines continued to be our key sales driver in 2018, and again accounted for more than half of total equipment revenue. We recorded increased demand for advanced ALD applications in primarily the DRAM and logic/foundry segments.
Our other product lines also contributed strongly. In our epitaxy product line we increased sales, following the strong growth we achieved in 2017. We continued to ship our Intrepid ES systems for an advanced CMOS application in high volume manufacturing. These shipments were primarily part of the tool win from a leading foundry customer that we announced in April 2017.
In addition, we saw a strong increase in demand for our epitaxy tools in the power analog segment. In PECVD we recorded additional sales increase, supported by spending on advanced device manufacturing in the NAND and logic segments. Our vertical furnaces product line also performed well, as we experienced strong increases in the analog and logic markets.
In 2018, we achieved strong revenue growth of 13% from our spares and services business, following solid double-digit growth in 2017. This business line accounted for 23% of our total revenue in 2018, up from 22% in 2017. We have started in 2018 to disclose sales breakdown between spares and services, and equipment sales.
ALD is now firmly established as a key enabling technology. In logic, foundry, and memory, our leading customers have already ramped several technology generations based on our ALD equipment. In 2018, we again made further progress, in cooperation with our customers, to expand the number of ALD process steps and applications for the most advanced technology nodes.
An important step was the introduction of the Synergis. This is our newest ALD tool which is designed to address a wide range of existing and new ALD applications, effectively increasing the market we serve. Our ALD equipment is an enabling technology for spacer-defined multiple patterning, which is used by leading customers in DRAM memory and the logic and foundry market. In addition, ALD is a core technology for high-k metal gate and advanced FinFET applications in the logic and foundry sectors. In the memory market, ALD is also increasingly being used for critical process steps in next-generation 3D-NAND devices.
In recent years, we have further broadened our customer base and strengthened relationships with key customers. Following several years of steady growth in customer deployment and the development of new applications, ALD continues to be a key growth driver for our company. At the same time, the other product lines also showed strong momentum in 2018, driven by the expansion in the epitaxy market, focused investments in the other product lines, and a healthy market in analog during the year.
The following table shows new orders levels for 2018 and the backlog for 2017:
Year ended December 31, | ||||||
(EUR million) | 2017 | 2018 | % Change | |||
Backlog at the beginning of the year | 156.7 | 176.3 | 13% | |||
New orders | 773.6 | 942.1 | 22% | |||
Revenue | (737.4) | (818.1) | 11% | |||
FX-effect | (16.6) | 6.3 | ||||
Adjustment IFRS 15 | – | (5.1) | ||||
Backlog as per reporting date | 176.3 | 301.5 | 71% | |||
Book-to-bill ratio (new orders divided by net sales) | 1.0 | 1.2 |
The backlog includes orders for which purchase orders or letters of intent have been accepted, typically for up to one year. Historically, orders have been subject to cancellation or rescheduling by customers. In addition, orders have been subject to price negotiations and changes in specifications as a result of changes in customers’ requirements. Due to possible customer changes in delivery schedules and requirements, and to cancellations of orders, our backlog at any particular date is not necessarily indicative of actual sales for any subsequent period.
For the year in total, our new bookings increased by 22% in 2018 to €942 million. The book-to-bill, as measured by orders divided by revenue, increased from 1.0 in 2017 to 1.2 in 2018. Equipment bookings in 2018 for ASMI as a whole were led by the logic, followed by foundry and then memory.
Bookings in the first half of 2018 were at levels comparable to 2017, €206 million in the first quarter and €176 million in the second quarter. Bookings increased to record highs in the second half of 2018. The third quarter increased to €258 million and the fourth quarter showed a record high of €302 million.
We finished the year with an order backlog of €302 million, an increase of 71% compared to the end of 2017.
Total gross profit developed as follows:
Year ended December 31, | ||||||||||
Gross profit | Gross profit margin | Increase (decrease) percentage points | ||||||||
(EUR million) | 2017 | 2018 | 2017 | 2018 | ||||||
Front-end | 305.9 | 334.3 | 41.5% | 40.9% | (0.7) ppt |
The gross profit margin decreased to 40.9% in 2018 compared to 41.5% in 2017.
The gross margin decreased slightly in 2018 from 41.5% to 40.9%. This decrease was entirely due to initially lower margins on newly introduced products, a substantial increase in evaluation tools shipped to customers and new growth initiatives such as investments in the expansion of our service organization. The impact was especially visible in the first half of the year with a gross margin of 40.3%, while gross margins improved in the second half to 41.2%.
Currency changes led to a 3% decrease in gross profit compared to 2017.
Total selling, general and administrative expenses developed as follows:
Year ended December 31, | ||||||
(EUR million) | 2017 | 2018 | % Change | |||
Front-end | 99.9 | 121.4 | 22% |
Selling, general and administrative (SG&A) expenses increased by 22% in 2018 compared to the previous year. As a percentage of sales, SG&A expenses were 15% in 2018 and 14% in 2017. SG&A included legal costs related to a patent disputes and restructuring expenses of €0.2 million in 2018.
The impact of currency changes on SG&A expenses resulted in a decrease of 2% year-over-year.
Total research and development (R&D) expenses, excluding impairment charges, decreased by 1% in 2018 compared to the previous year, mainly as a result of higher capitalization of development expenses. As a percentage of sales, R&D expenses decreased to 11% compared to 13% in 2017. Currency changes resulted in a 3% decrease in R&D expenses year-over-year.
Total research and development expenses developed as follows:
Year ended December 31, | ||||||
(EUR million) | 2017 | 2018 | % Change | |||
Front-end: | ||||||
Research and development expenses | 114.1 | 125.3 | 10% | |||
Capitalization of development expenses | (38.6) | (49.7) | 29% | |||
Research and development grants and credits | (0.3) | (0.3) | (2%) | |||
Amortization of capitalized development expenses | 13.3 | 12.0 | (9%) | |||
88.5 | 87.3 | (1%) | ||||
Impairment capitalized development expenses | 4.3 | 1.3 | (70%) | |||
Total | 92.8 | 88.6 | (5%) |
Impairment of capitalized development expenses related primarily to the development of new technology that is now no longer in-demand from customers.
We continue to invest strongly in R&D. As part of our R&D activities, we are engaged in various development programs with customers and research institutes. These allow us to develop products that meet customer requirements and obtain access to new technology and expertise. The costs relating to prototypes and experimental models, which we may subsequently sell to customers, are charged to the cost of sales.
Our R&D operations in the Netherlands, Belgium, and the United States receive research and development grants and credits from various sources.
The operating result developed as follows:
Year ended December 31, | ||||||
(EUR million) | 2017 | 2018 | % Change | |||
Front-end: | ||||||
Before special items | 118.3 | 125.8 | 6% | |||
Impairment charges | (4.3) | (1.3) | (70%) | |||
Restructuring expenses | (0.8) | (0.2) | n/a | |||
Including special items | 113.2 | 124.3 | 10% |
Operating profit increased to €124.3 million from €113.2 million in 2017, and the operating profit margin remained stable.
Impairment charges in 2018 and 2017 related to capitalized development expenditures and assets.
Financing costs mainly reflect translation results. A substantial part of our cash position is denominated in US dollars.
Results from investments, which primarily reflects our shareholding in ASMPT, decreased to €60.8 million from €112.4 million in 2017. These exclude the amortization of intangible assets related to ASMPT. During the year, our stake in ASMPT increased slightly to 25.33%.
Total sales as reported by ASMPT increased by 12% to US$2.5 billion in 2018. Sales of the Back-end equipment business increased 7% in 2018. The growth was led by the IC/discrete market. ASMPT performed very well in segments such as automotive, internet of things, power management, radio frequency filters and advanced packaging. Sales of SMT Solutions increased by a strong 19% for the full year driven by automotive, industrial electronics and the internet of things.
ASMPT decreased gross margins from 40.2% to 38.0% in 2018. On a 100% basis ASMPT decreased net profits by 21%. For further information on ASMPT, please visit the website www.asmpacific.com.
The income tax expense of €15.4 million (2017: €4.6 million) reflects an effective tax rate of 9.0% (2017: 1.0%). For further information on tax, see Note 22 to the consolidated financial statements.
Net earnings developed as follows:
Year ended December 31, | ||||||
(EUR million) | 2017 | 2018 | Change | |||
Front-end: | ||||||
Before special items | 83.0 | 110.2 | 27.2 | |||
Impairment charges | (4.3) | (1.3) | 3.0 | |||
Restructuring expenses | (0.8) | (0.2) | 0.6 | |||
Total | 77.9 | 108.7 | 30.8 | |||
Back-end: | ||||||
Investment in ASMPT | 112.4 | 60.8 | (51.6) | |||
Amortization other intangible assets from purchase price allocation | (22.8) | (12.3) | 10.5 | |||
Result from sale of ASMPT stake | 284.9 | – | (284.9) | |||
Total | 374.5 | 48.4 | (326.0) | |||
Net result from operations | 452.4 | 157.1 | (295.3) |
The following table shows the cash flow statement:
(EUR million) | 2017 | 2018 | ||
Net earnings from operations | 452.4 | 157.1 | ||
Adjustments to cash from operating activities: | ||||
Depreciation, amortization and impairments | 52.1 | 55.4 | ||
Income tax | 4.6 | 15.4 | ||
Share in income of investments in associates | (89.6) | (48.4) | ||
Gain on sale of ASMPT shares | (284.9) | – | ||
Share-based compensation | 7.8 | 8.2 | ||
Non-cash financing costs | 29.6 | (0.1) | ||
Changes in other assets and liabilities: | ||||
Accounts receivable | (37.9) | (9.2) | ||
Inventories | (40.3) | (23.0) | ||
Evaluation tools | (4.9) | (23.0) | ||
Accounts payable and accrued expenses | 28.4 | 48.8 | ||
Other assets | 2.5 | (25.0) | ||
Income tax paid | (3.9) | (19.5) | ||
Net cash from operating activities | 116.1 | 136.8 | ||
Capital expenditures (net) | (43.3) | (63.3) | ||
Capitalized development expenditure | (38.6) | (49.7) | ||
Purchase of intangible assets | (2.4) | (1.1) | ||
Dividend received from associates | 36.5 | 29.1 | ||
Proceeds from sales of ASMPT shares | 690.7 | – | ||
Net cash from / (used in) investing activities | 642.8 | (84.9) | ||
Purchase treasury shares | (239.6) | (355.0) | ||
Debt issuance fees paid | (0.1) | – | ||
Proceeds from issuance of treasury shares | 13.3 | 4.8 | ||
Dividend paid to shareholders ASMI | (41.5) | (43.6) | ||
Capital repayment | – | (208.8) | ||
Net cash used in financing activities | (267.9) | (602.6) | ||
Foreign currency translation effect | (32.7) | 0.1 | ||
Total net cash provided / (used) | 458.3 | (550.6) |
Working capital at December 31, 2018 was €202.7 million (2017: €180.2 million). Working capital consists of: inventories, accounts receivable, other current assets, accounts payable, provision for warranty and accrued expenses and other payables. The number of outstanding days of working capital, measured against quarterly sales, decreased from 77 days at December 31, 2017 to 72 days at December 31, 2018.
The following table lists the total number of employees, exclusive of temporary external workers:
December 31, | ||||
Geographical location | 2017 | 2018 | ||
Europe: | ||||
- the Netherlands | 143 | 151 | ||
- EMEA | 171 | 189 | ||
United States | 555 | 576 | ||
Japan | 228 | 248 | ||
South Korea | 221 | 273 | ||
Singapore | 395 | 463 | ||
Asia, other | 187 | 281 | ||
Total | 1,900 | 2,181 |
We had 2,181 employees as per December 31, 2018. The following table lists the number of employees per function:
December 31, | ||||
Function | 2017 | 2018 | ||
Research and development | 497 | 544 | ||
Manufacturing | 361 | 456 | ||
Marketing and sales | 268 | 277 | ||
Customer service | 597 | 716 | ||
Finance and administration | 177 | 188 | ||
Total | 1,900 | 2,181 |
Our Dutch operations, which employed 151 staff as per December 31, 2018, is subject to standardized industry bargaining under Dutch law, and is required to pay wages and meet conditions established as a result of negotiations between all Dutch employers in their industry and unions representing employees of those employers. As required by Dutch law, management in our Dutch facilities meet with a works council consisting of elected employee representatives to discuss working conditions and personnel policies, as well as to explain major corporate decisions and to solicit their advice on major issues.
The assembly and packaging segment, ASMPT, had 14,800 employees as per December 31, 2018 (December 31, 2017: 16,400).
Subsequent events were evaluated up to March 5, 2019, which is the issuance date of this Annual Report 2018. There are no subsequent events to report.
Our liquidity is affected by many factors, some of which are related to our ongoing operations while others are related to the semiconductor and semiconductor equipment industries, and to the economies of the countries in which we operate. Although our cash requirements fluctuate based on the timing and extent of these factors, we believe that cash generated by operations, together with the liquidity provided by our existing cash resources and our financing arrangements, will be sufficient to fund working capital, capital expenditures and other ongoing business requirements for at least the next twelve months.
On December 31, 2018, our principal sources of liquidity consisted of €286 million in cash and cash equivalents and €150 million in undrawn bank lines.
For the most part, our cash and cash equivalents are not guaranteed by any governmental agency. We place our cash and cash equivalents with high-quality financial institutions to limit our credit risk exposure.
We generated cash from operating activities of €136.8 million in 2018 (2017: €116.1 million). We used cash €84.9 million in investing activities (2017: €642.8 million generated) and €602.6 million (2017: €267.9 million) in financing activities.
We were debt-free as of December 31, 2018.
The original maturity date of the credit commitment was December 16, 2021 and in 2018 we exercised the option to extend the date by one year. This means that the maturity date of the credit commitment of €150 million is now December 16, 2022 with an extension option for one year. As per December 31, 2018, this facility was undrawn.
The credit facility of €150 million includes two financial covenants:
These financial covenants are measured twice each year, on June 30 and December 31. We were in compliance with these financial covenants as per December 31, 2018.
See Notes 11, 16, and 17 to the consolidated financial statements for more on our funding, treasury policies and our long-term debt.
The assembly and packaging segment of our business is organized in ASM Pacific Technology Ltd (ASMPT). Net cash of our 25.33%-owned associate was €249.8 million on December 31, 2018. The cash resources and borrowing capacity of ASMPT are not available to our wafer processing equipment segment.
Although two directors of ASMPT are directors of ASMI, ASMPT is under no obligation to declare dividends to shareholders or enter into transactions that are beneficial to us. As a substantial shareholder, we can participate in the shareholders' approval of the payment of dividends, but cannot compel their payment or size. Cash dividends received from ASMPT during 2018 and 2017 were €29.1 million and €36.5 million, respectively.
The market value of our 25.33% investment in ASMPT was approximately €867 million as per December 31, 2018.
We are exposed to market risks (including foreign exchange rate risk), credit risk, liquidity risk, and equity price risk. We may use forward exchange contracts to hedge foreign exchange risk. We do not enter into financial instrument transactions for trading or speculative purposes. See note 17 to the consolidated financial statements for financial risk factors.
We have developed forecasts and projections of cash flows and liquidity needs for the upcoming year. These take into account the current market conditions, reasonable possible changes in trading performance based on such conditions, and our ability to modify our cost structure as a result of changing economic conditions and sales levels. In the forecasts, we have also taken into account: the total cash balances amounting to €286 million on December 31, 2018; the ability to renew debt arrangements and to access additional indebtedness; and whether or not we will comply with our financial covenants. Based on this, we believe that our cash on hand at the end of 2018 is adequate to fund our operations, and our investments in capital expenditures and to fulfill our existing contractual obligations for the next twelve months.