The global chip manufacturing industry is facing an unprecedented transformation. ASML's decision to leave the Netherlands, a leading company in this industry, has triggered extreme anxiety among the Dutch government. This is not only related to the economic lifeline of the Netherlands, but also will affect the global chip industry pattern and the trend of Sino-US technology wrestling.
1. What is ASML?
ASML is a global leader in lithography machines, and its products are indispensable equipment for chip manufacturing. As a multinational company headquartered in the Netherlands, ASML employs more than 42,000 people in more than 60 offices worldwide. It mainly provides advanced lithography equipment to chip manufacturers such as Intel, Samsung, TSMC, etc., enabling them to mass-produce integrated circuits. With its leading position in lithography, ASML is now worth more than $397 billion, making it Europe's most valuable technology company.
China is one of the important markets for ASML. ASML's business development in China has been affected by the fact that the United States has been trying to restrict ASML's export of advanced equipment to China for many years in order to hinder the improvement of China's chip strength. Despite this, ASML's 2023 financial report shows that the proportion of revenue from China has still doubled. This shows that China is still an important and indispensable market for ASML.
2. Why is ASML considering leaving the Netherlands?
Although ASML is a company based in the Netherlands, it has employees from 143 different countries. About 40% of the 23,000 employees in the Netherlands are expatriates. These international talents are essential to ASML's innovative development. The Dutch government's recent possible anti-immigration policies, including the removal of tax incentives for highly skilled immigrants and restrictions on foreign students' admission to Dutch universities, put ASML at risk of a talent shortage.
In addition to immigration policies, other factors such as housing shortages may also prompt ASML to consider leaving the Netherlands. ASML CEO Peter Wennink has publicly stated that if the company is unable to secure enough qualified talent in the Netherlands to support growth, they will have to relocate their operations to other regions. The company has expressed its intention to move the business away or expand elsewhere to the Dutch government, according to Wenningk.
3. The response of the Dutch government
Faced with the risk of ASML's possible departure, the Dutch government set up a task force codenamed the "Beethoven Plan", led by Prime Minister Mark Rutte himself. The government is making every effort to convince ASML to continue investing in the Netherlands and to consult with the company's top management on development plans. One option to consider is to "reverse" the previous practice of removing tax incentives for high-skilled immigrants.
The reason why the Dutch government is so focused on retaining ASML is because this company is vital to the Dutch economy and employment. ASML is not only the largest publicly traded company in the Netherlands, but also a leader in the country's high-tech industry. Once ASML leaves, it will deal a heavy blow to the Netherlands' chip industry status and innovation strength.
Fourth, the impact of leaving
If ASML does decide to leave the Netherlands, the impact will not be limited to the Netherlands itself. As the "heart" of the global chip manufacturing industry, the departure of ASML will inevitably trigger a major adjustment in the global chip industry map.
For China, ASML's withdrawal will undoubtedly exacerbate the development dilemma of China's chip industry. Since ASML is currently the only company capable of producing EUV lithography machines, its departure will further make it more difficult for China to obtain advanced chip-making equipment. This will undoubtedly hinder China's efforts in chip autonomy.
In the context of the technological confrontation between China and the United States, ASML's decision to leave the Netherlands will further intensify the wrestling between the two countries in the field of chips. The United States has always hoped to curb China's chip strength by restricting ASML's exports to China, and if ASML really "turns back" and leaves Europe, it will inevitably put the United States in a more passive position in this strategic contest.