To keep ASML permanently in the Netherlands, 5 to 8 billion euros are needed. A multiple of the 2.5 billion euros that the government and region pledged at the end of March, according to answers from Mayor Jeroen Dijsselbloem to the Eindhoven city council.
Under the name of the Beethoven project, the government and the region worked out an extensive package of measures in three weeks that should ensure that ASML makes a major expansion investment in the Netherlands, instead of abroad.
Leaving due to ‘harsh’ business climate
Chairman Peter Wennink repeatedly threatened the latter this year, because the Dutch business climate became too harsh for the international chip machine manufacturer.
Among other things, a reduction in tax benefits for foreign employees did not work for ASML, because the company became less attractive as an employer than foreign competitors. “If we cannot get the people here, we can get them in Eastern Europe, Asia or the US. Then we will go there,” said recently departed CEO Wennink.
2.5 billion is too little
The government and the region provided 2.51 billion euros for measures for education, knowledge and spatial infrastructure. This assistance seemed to bear fruit when ASML announced on April 22 that it would investigate with the municipality of Eindhoven whether the desired expansion can take place in Eindhoven, on the so-called Brainport Industries Campus.
But 2.5 billion euros is not enough for the region to pay for all the investments needed until 2040, Mayor Dijsselbloem said at meetings on April 3 and 15 this year. This concerns money for housing construction, accessibility, facilities and the availability of talent.
5 to 8 billion euros
“What we have submitted to the government is that we have an investment task until 2040 that will require 5 to 8 billion euros. But the government has pushed back by saying that it cannot commit to this type of major expenditure at this time. The cabinet is outgoing and on another table a cabinet is being formed that is having difficulty raising the money,” Dijsselbloem said.
The outgoing cabinet could not go further than 2.5 billion for the period up to 2030. The region is therefore not yet ready for the period after that. “Given the housing construction task and accessibility problems, we will have to work again with subsequent cabinets, plural, for the remaining billions,” said the Eindhoven mayor.
Insecurity
For ASML, it means continued uncertainty about what financial director Roger Dassen calls ‘favorable conditions’ that ‘should support investment decisions’. ASML prefers to keep its core activities in the Netherlands as close as possible to the existing locations in Veldhoven.
The company has bought and continues to buy just about everything it could buy there in recent years, on the De Run industrial estate. But given the rapid growth that ASML expects in the coming years, Veldhoven will probably reach physical limits before 2030.
On the east side, ASML is constricted by a hospital. There are roads and highways to the north and south of the existing campus. And to the west, almost everything there is to swallow has been swallowed up, making a second location for growth after 2030 a dire necessity.
Mixed feelings
So that should be the campus in Eindhoven, if everything comes together. There are mixed feelings in the Eindhoven city council.
“There are major uncertainties,” says Tjeerd Ritmeester of coalition party PvdA. “We are not completely reassured.” Because let’s face it: an expansion of ASML in Eindhoven means 20,000 new employees and, in the slipstream, perhaps another 50,000 at suppliers.
Headache files: housing, electricity
Where do you put all those families, in a municipality where the housing market is already very tense? The region has already committed to the construction of more than 45,000 homes through a so-called housing deal. An additional 17,000 homes must now be added and another 2,200 student homes. “That can actually only be done by going up,” says Jonas Roothans of the Party for the Animals.
And then we’re not even talking about the power supply. ASML will have to be connected to the electricity grid. But according to grid operator Enexis, there are already waiting lists of companies that want to be connected. In Eindhoven-Noord there are 106 applications that will not be honored until 2027 at the earliest. An expansion of the station for large business customers is not yet planned.
“Will there be sufficient social facilities in the future?” asks Eva de Bruijn of GroenLinks. Think of doctors, primary schools, but also libraries and cultural facilities.
However, it is expected that the majority of the council will agree to the arrival of ASML. And Dijsselbloem thinks that a cabinet of PVV, NSC, VVD and BBB – if it comes about – will also support ASML’s expansion plans. “We also kept in touch with parliamentary factions during the consultation with the cabinet and those discussions went so well that we think there is broad support in the House for this regional package.”
Unsure
However, Dijsselbloem is not completely certain that subsequent cabinets will also pull their purse strings. “Political circumstances can change, because other priorities are set or there are major setbacks in the central government and then everything can come up for discussion.”
The forming parties themselves are keeping a low profile for the time being. “It’s about what is needed and what we can afford,” says Member of Parliament Henk Vermeer of the BBB. “That is leading and we will have to look at that in due course.”
The VVD says it is pleased that the current cabinet has made money available to retain ASML and that additional investments are a subject for the formation table. According to Femke Zeedijk of NSC, who has worked for ASML, decision-making about the period after 2030 is not yet on the agenda. The PVV did not want to say anything about the matter.
And that means that an expansion of ASML near Eindhoven is not yet a done deal.
