Billions for the chip sector warmly welcomed in Eindhoven, but uncertainty remains

• Nando Kasteleijn

  editor Tech

The message from the outgoing cabinet today was clear: we have heard the cry from the chip sector. The billion-dollar plan to preserve that sector for the Eindhoven region has been warmly welcomed by chip machine maker ASML and chip manufacturer NXP. At the same time, uncertainty remains for the time being.

Mayor Dijsselbloem of Eindhoven played an important role in the discussions with The Hague as chairman of Brainport from the region. “Thanks to a long history, the largest company in the world in the field of making chip machines is located here in Eindhoven,” he says.

Dijsselbloem is referring to ASML, the crown jewel of the Dutch economy and by far the most important chip company in our country. “That company is facing a very major expansion decision. They actually want to double in size and I think it is a national interest to make that possible in the Netherlands.”

ASML today says it welcomes the steps, but does not promise that growth will take place in the Netherlands anyway. “We are in the process of finalizing the decision-making.” The chip giant does emphasize that it prefers the Netherlands.

The educational institutions involved, Fontys Hogeschool, Summa College and TU Eindhoven, call the outgoing cabinet’s plan good news: “This can be a major step towards significantly increasing the numbers of students in the technical disciplines at secondary vocational education, higher professional education and university.”

Although ASML has become the face of what has come to be called ‘project Beethoven’, it is about retaining more tech companies in the region. Today’s plan focuses on three things: strengthening education, tackling infrastructure and building new homes in the region.

According to Dijsselbloem, there are two things that are beyond his control when it comes to keeping the companies. This primarily concerns the export of ASML machines to China, which has been gradually limited in recent years. The government promises more European coordination in this area.

In addition, there is the tax policy, which affects the entire business community in the Netherlands. The House of Representatives has reduced tax benefits for businesses to cover other plans. This has not gone down well in the chip sector, among others.

This concerns, for example, the so-called expat scheme, which means that foreign employees have to pay less tax. This arrangement has been simplified, while companies say it is necessary to attract talent from outside.

The other sore point is the purchase of own shares. That is still untaxed, but there is now an additional 15 percent tax. That can quickly cost a company tens to hundreds of millions of euros and that is money that they do not have to pay in other countries. Internationally operating companies find it difficult to explain this to their foreign directors and shareholders.

In the letter to Parliament about the billion-dollar boost, the outgoing cabinet acknowledges the concerns of the business community. This is also being worked on, but the House will have a decisive vote. The question is what works and what doesn’t.

The companies are watching it closely. “We understand that in addition to these actions, other, essential actions in the tax area are being prepared,” NXP writes. “We hope that they will also have a positive outcome.”

“Those political topics may also take more time,” says Dijsselbloem, referring to tax policy, among other things. “It gives me optimism to think: it is possible.”

The mayor ends with an appeal to politicians in The Hague. “These companies bring top talent from all over the world. PhD physicists come here to help build the next smart machine. Please let us welcome them to the Netherlands.” He also invites the new cabinet to make concrete agreements about this.