lithograph manufacturer ASML remains in the Netherlands

ASML, a market leader in lithography systems, employs 23,000 employees, about 40% of whom are not Dutch citizens. Europe's largest technology company buys components from around the world, but assembles its equipment in Veldhoven, the Netherlands. Due to the global growth in demand for its products, the company plans to expand progressively. These plans were hindered by the actions of officials, so ASML decided to move its headquarters to another state. But it seems that the management was convinced. How exactly? Details are under the cut.

What about the relocation of headquarters and production?

In 2018, multinational companies such as Shell and Unilever already left the country after unfavorable changes in Dutch tax laws, moving to the UK. Not taking this experience into account, the government decided to limit the number of foreign students at the country's universities – a key source of labor for Dutch technology companies. “The consequences of restricting the migration of valuable employees are enormous. We need these people to innovate. If we can’t attract them to the Netherlands, the company will have to move to where there are opportunities for growth,” Peter Wennick, CEO of ASML, said at the time.

Chip manufacturers today have many opportunities to attract investment. Billions of dollars are being poured into opening new factories, and the United States and EU are offering companies generous subsidies to keep the West competitive with China in the race for advanced technology.

ASML CEO Peter Vennick warned that his company was heavily reliant on highly skilled foreign workers and raised concerns about the deteriorating business climate in the country. In early March 2024, at a meeting in The Hague, Vennick said: “Some of the factors that made ASML a great company are now under pressure,” likely referring to a plan to end a tax break for highly skilled foreign workers.

ASML also noted that so far officials have failed to adequately improve infrastructure in the Eindhoven region – from roads and housing to power grids. And according to the results of the recent survey Among large Dutch companies, it turned out that more than ten of them are considering moving their activities outside their home country. And ASML was among them.

Amid the risk of ASML moving, presumably to France, the government initiated negotiations with the manufacturer. The joint efforts of the country's political leaders were called “Operation Beethoven.” “I don’t know if ASML will leave the Netherlands. The company wants to grow. And it plans to expand aggressively, in a way that puts pressure on our infrastructure. We are holding intensive negotiations with the company to find out how we could solve this,” said Minister of Economy Miki Adriaansens.

Government guarantees and hopes for growth

In March 2024, the Dutch government announced that it was willing to provide €2.5 billion to improve infrastructure in the Eindhoven region as a guarantee for ASML. Economy Minister Miki Adriaansens confirmed that the funds will be used to improve living conditions, education, transport links and electricity networks in Eindhoven, the country's emerging technology hub where ASML is based. The government also hinted at its intention to take measures to reduce the tax burden on business after a number of negative statements from the largest Dutch firms: “By taking these measures, we assume that ASML will continue to invest and maintain its statutory, tax and actual headquarters in the Netherlands.” .

ASML, while forecasting a decade of growth in the computer chip business, has made no secret of the fact that it expects a “significant” expansion of its operations in the Netherlands, given “favorable business conditions such as the availability of high-quality talent, infrastructure, housing, and an optimal business climate.” In its emailed statement, ASML said it was not a question of whether to leave or stay in the country. The company is looking for an environment where it will have opportunities for continued growth, regardless of location.

However, the steps taken by the government have had a positive impact on the situation. In March, ASML and the management of Eindhoven signed a letter to study the possibility of expanding ASML in a sparsely developed area in the north of the city, near the airport. There are plans post production facilities with approximately 20,000 new employees. ASML Chief Financial Officer Roger Dassin noted that his organization would prefer to maintain its core operations in the Netherlands, as close as possible to the location of its offices and industrial facilities. According to him, reciprocal steps by the country's government can be considered as prerequisites for the development of a favorable investment climate.

Recently it became known that ASML spent 53 million euros, net of taxes, to purchase almost the entire industrial area south of Kempenbahn in Veldhoven, including a street with houses, a poultry farm, a sports club and commercial premises. ASML also acquired other properties in the area to gain access to the entire property and the land underneath it. According to the plan, some buildings will be demolished. Several other owners of the land and properties on it are continuing negotiations with ASML, so the amount spent will be higher.

Over the next few years the company will be involved in construction and development and will most likely remain in the Netherlands.