Lithography specialist ASML decides to stay in Eindhoven, for now

At a time when the semiconductor industry is shrouded in mystery about who is ASML’s second customer of high numerical aperture (NA) extreme ultraviolet (EUV) lithography machine after Intel acquired the first one for its upcoming 14A process node at its fab in Hillsboro, Oregon, ASML has resolved a long-standing matter about its future.

The world’s largest supplier of semiconductor manufacturing equipment has been pondering about moving to another country amid unfavorable business conditions in the Netherlands. Multinationals Shell and Unilever moved their headquarters to London in 2018, citing an unfavorable change in Dutch tax law.

Figure 1 A year after its birth in 1984, ASML moved to a newly built office and factory in Veldhoven, an Eindhoven suburb just a few kilometers from the Philips research labs. Source: ASML

Now ASML—the Netherlands’ largest company and Europe’s largest technology outfit—is having second thoughts due to the government’s immigration policies, housing market shortage, and phasing out of the beneficial tax measures for expats. ASML, which employs 42,000 staff worldwide, has nearly half its workforce based in and around its headquarters in Veldhoven, Netherlands.

It’s important to note that more than 40% of ASML’s 23,000 employees in the Netherlands are not Dutch. In fact, ASML’s initial response was sparked after anti-immigration parties made substantial gains in Netherlands’ 2023 elections. In January 2024, ASML’s then-CEO Peter Wennink warned that his company was highly reliant on skilled foreign labor.

“The consequences of limiting labor migration are large, we need those people to innovate,” he told the press. “If we can’t get those people here, we will go somewhere where we can grow.” That thrust the caretaker cabinet into action, leading to the “Operation Beethoven” initiative to address ASML’s concerns, reported the largest daily newspaper in the Netherlands, De Telegraaf.

The outcome of this government initiative led to a $2.7 billion investment package to improve infrastructure in the Eindhoven region to prevent ASML from moving operations abroad, reported Reuters. The initiative, also aiming to turn Eindhoven into a booming technology hub, will include a large expansion capable of housing 20,000 new employees near Eindhoven’s airport.

The $2.7 billion investment striving to create favorable business conditions for ASML and other Dutch tech outfits will encompass housing, education, transportation, and the electric grid. The infrastructure and highway buildup will also benefit ASML’s headquarters in Veldhoven, a suburb of Eindhoven.

It’s an ambitious undertaking by the Dutch government, and it shows the leverage that successful tech companies have in the socioeconomic context. At the same time, this ambitious expansion plan in Noord-Barbant, an Eindhoven suburb, is merely a letter of intent right now.

That means it’s a long-term undertaking, and that there won’t be any improvements in infrastructure aspects like housing in the short term. “Of course, we have a Plan B, but we want to expand here due to what Veldhoven and Eindhoven have to offer,” said Roger Dassen, ASML’s financial director. “The government also recognizes the circumstances we need to grow.”

Figure 2 The Dutch maker of semiconductor lithography equipment is under immense pressure to maintain its position as an undisputed leader in chip manufacturing gear. Source: ASML

The Dutch paper De Telegraaf, which first reported Operation Beethoven, also mentioned France as a potential destination for ASML’s future expansion. So, while expansion in the Eindhoven region suits ASML because of its existing operations, it has a Plan B in case of failure.

It all comes at a crucial time for the semiconductor lithography titan. It’s nervously charting the opportunity of a lifetime that comes with an unprecedented chip manufacturing boom spanning from Asia to Europe to the United States.

ASML has promptly identified the issues surrounding its future growth, showing its preparedness to fulfill the soaring demand for cutting-edge semiconductor manufacturing equipment. A company spokesperson summed it well by saying that “The decision we need to take is not if we (will) stay, but where we (will) grow.”

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The post Lithography specialist ASML decides to stay in Eindhoven, for now appeared first on EDN.

Lithography specialist ASML decides to stay in Eindhoven, for now

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