Dutch Government In Panic Mode Over Keeping ASML In The Country

Updated The Dutch government is reportedly concerned that chipmaking equipment vendor ASML may move operations out of the country due to policy decisions that would restrict its ability to hire skilled staff.

Reports in The Netherlands say the government has even set up a task force dubbed "project Beethoven" to keep Europe's most valuable corporate technology asset from expanding outside of the country in response to policies such as those targeting immigration.

The Dutch government has not confirmed or denied the reports, and ASML is keeping similarly tightlipped.

ASML, which last year had a market value of $280 billion, is a significant player in the Dutch economy. It is a key developer of photolithography equipment used in chip manufacturing, and currently the only one in the world supplying the most advanced extreme ultraviolet (EUV) gear.

It is concerned about being able to continue to operate successfully in The Netherlands in light of government policies. Some of these are to curb immigration, including moves to end tax breaks for highly skilled foreign employees that are being implemented by the current administration.

According to the NL Times, CEO Peter Wennink said in an interview in January that ASML might be forced to move some activities abroad if it could not bring enough people with the right skills to its site in The Netherlands.

"Ultimately, we can only grow this company if there are enough qualified people. We prefer to do that here, but if we cannot get those people here, we will get those people in Eastern Europe or in Asia or in the United States. Then we will have to go there," he is reported to have said.

But it appears that being able to hire the right personnel is not the only concern. Problems with electricity grid congestion affecting industrial power supplies and attempts to limit nitrogen emissions are also said to be issues raised by the company.

ASML is believed to be considering France as an option for expanding operations, and it seems unlikely it would move the headquarters near Eindhoven away from The Netherlands. However, even the suggestion that it might set up some base outside the country is said to have prompted the government to take action.

The Dutch Ministry of Economic Affairs did not respond to our requests for clarification, but a spokesperson told the Reuters new agency that it could not discuss policies toward specific companies.

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ASML told The Register that it could not comment on the claims made in the Dutch press, but a spokesperson said there are concerns about the Dutch business climate which include the ability to attract and retain the right people, and that ASML is not the only company to have raised these concerns.

Sales of ASML's equipment rose by 30 percent to €27.6 billion ($29.5 billion) during 2023 as customers rushed to invest in new tools, and the company finished the year with a backlog of €39 billion ($41.7 billion) in orders.

ASML warned in its latest annual report that it faces geopolitical risks, such as the new export controls on its semiconductor equipment that the Dutch government introduced last year.

The company now has to apply for Dutch export licenses for its most advanced DUV and EUV gear, plus US government licenses for some systems destined for China. The latter market accounted for over a quarter of its net sales last year. ®

Updated to add at 1613 UTC on March 6:

The Dutch Ministry of Economic Affairs contacted us to say: "On a daily basis the government has meetings with companies varying from startups to multinationals in the interests of Dutch society, the economy, employment and future prosperity. This includes of course ASML which is a major Dutch company with a major presence and impact on the global tech markets. Something the Netherlands is proud of.

"Due to their ongoing growth demands, including in terms of enough housing for employees and up-to-date infrastructure, the government and the company exchange views on these and other subjects on a regular basis including suitable economic policies, innovation, business climate and economic security.

"We do not provide any further detailed information about the content and nature of the contact with individual companies due to business confidentiality and stock market sensitivity."