How Europe's largest chip company has sent Netherlands' government into 'panic'

Europe’s largest technology company chipmaking-machine supplier ASML Holding NV is said to have sent the Dutch government into a panic after warning it can’t commit to growing in its home country unless the political climate becomes more amenable to attracting foreign talent. ASML has even reportedly threatened to move to France. According to reports, the Dutch government is talking with semiconductor equipment maker ASML, to ensure that the Netherlands' largest company does not move to another country.The news was first reported by newspaper De Telegraaf, which cited anonymous sources and said the ministries involved had dubbed the effort "Operation Beethoven".
Late last month, the Dutch government presented a plan to spend 2.5 billion euros ($2.7 billion) on improving infrastructure in the Eindhoven region to keep ASML from leaving. “With these measures, the government assumes that ASML will make further investments in the Netherlands and maintain the location of its statutory, tax and actual headquarters in the Netherlands,” the government said in its statement.
What makes ASML so big and important
ASML is the largest supplier of equipment to computer chip makers globally. ASML dominates the market for lithography systems, used to help create the circuitry of chips. It is currently said to be conducting one round of expansion and expects to need more in the coming years as the global demand for chips increases. Europe's largest tech company sources parts from around the globe but currently assembles its machines in Veldhoven, Netherlands before shipping them to major computer chipmakers.
According to analysts, if ASML is throwing its weight around at home, it is "because it’s really, really big — worth around 20% of the Dutch stock-market benchmark index, 10% of the euro-zone blue-chip index and 2.5% of the MSCI global technology index," as per a report in news agency Reuters.
What are the issues that ASML has raised
ASML is reported to have complained about excessive red tape and inconsistent policy making as well as measures aimed at reducing immigration even though the computer chip sector depends on highly skilled immigrant workers.
Chip companies in the country are also reported to be critical of plans to cut tax breaks on investment, and want the government to continue innovation subsidies that they said played a big role in the Netherlands' emergence as a European hub in the global chip industry.
ASML, computer chip companies testify to parliament on tax, policy needs
A group of eight companies led by ASML recently asked the Dutch parliament to back policies that will boost the country's chip industry, including retaining tax breaks on investment and skilled labour.
What ASML said on measures taken by the Dutch government
“We have to come to the conclusion that we can grow responsibly in the Netherlands. And we have not yet drawn that conclusion,” ASML Chief Executive Officer Peter Wennink said earlier this month, according to a report in Bloomberg.
The report further added that the decision on how and where to best manage ASML’s growth could fall on Christophe Fouquet, a French national, who will take over as CEO when Wennink retires in April.