In a major win for the Dutch tech industry, chip giant ASML intends to remain and further expand in the Netherlands.

The chip machine manufacturer has signed a non-binding letter of intent with the City Council of Eindhoven, eyeing a potential expansion at the Brainport Industries Campus (BIC), west of the city.

Located at Eindhoven’s Brainport region — a major tech and innovation hub in Europe — BIC is dedicated to the high-tech manufacturing industry. For ASML, BIC represents an “interesting option,” Roger Dassen, the company’s CFO, said in a statement. That’s because of the campus’ close proximity to Veldhoven, where the company is based.

The preliminary agreement seems to be allaying fears over ASML’s rumoured relocation abroad. While the company has never confirmed or denied such a move was on the cards, it did raise concerns about talent attraction challenges and the overall business climate in the Netherlands.

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“Ultimately, we can only grow this company if there are enough qualified people,” Peter Wennink, ASML’s CEO, told RTL in January.

“We prefer to do that here, but if we cannot get those people here, we will get those people in Eastern Europe or in Asia or in the United States.”

A potential relocation would have a major impact on the Dutch tech sector and economy. ASML isn’t simply a world-leading supplier of chip-making equipment. It’s also the world’s sole manufacturer of extreme ultraviolet (EUV) lithography machines — which are needed for the most advanced chips.

In addition, the chip machine-maker is one of the biggest employers and most profitable businesses in the Netherlands, reaching a €27.6bn turnover in 2023.

In an attempt to keep its tech crown jewel at home, the Dutch government launched “Operation Beethoven” last month. The €2.5bn initiative aims to improve infrastructure, housing, technical education, and talent attraction — epsecially in the Eindhoven region.

All of the above are key aspects for accommodating ASML’s expansion.

“Decisions about future locations of our company must be supported by favorable conditions, such as the availability of talent, infrastructure, housing and by a strong investment climate in general,” Roger Dassen, the company’s CFO, said in a statement.

“The recently announced government measures contribute to this.”

However, the deal isn’t set in stone just yet. Discussions will continue and a final decision from both parties is expected in June.

If the plan moves forward, ASML could double its existing workforce in the Netherlands, which now stands at approximately 20,000 people.

Micky Andriaanses, Minister of Economic Affairs and Climate, characterised the agreement as “good news.” “[It] confirms confidence in our business climate in the Netherlands and underlines the government’s support for the chip sector,” the minister said on X.

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