Dutch Invest €2.5 Billion in Eindhoven Area to Keep ASML on Side

Diederik Baazil, Bloomberg News

ASML headquarters and factory in Veldhoven, Netherlands.

, Bloomberg

(Bloomberg) -- The Dutch government will spend €2.5 billion ($2.7 billion) on infrastructure and education projects in the Eindhoven region after the tech giant ASML Holding NV threatened to expand abroad.

The funds will be spent on upgrading the area’s road, bus and train network, for education of technical workers as well as vocational training, and for housing projects, according to a statement emailed by the government on Thursday.

ASML is based in Veldhoven, just west of the city of Einhoven in the country’s south. Over half of its more than 42,000 employees are based there, according to the company.

The government has set up a task force codenamed “Beethoven” to keep Europe’s most valuable technology company from expanding outside of the Netherlands, as concerns mount about the country’s business climate. ASML is the Netherlands’ and Europe’s most valuable tech firm.

Read more: Dutch Business Is Pushing Back Against Anti-Immigration Politics

“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.

ASML, which produces the world’s most sophisticated lithography machines that are used to produce chips, is at the center of a global fight for chip dominance and US efforts to keep advanced technologies out of the hands of China’s 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.

The decision on how and where to best manage ASML’s growth could fall on Christophe Fouquet, a French national, who’ll take over as CEO when Wennink retires in April.

Still, ASML welcomed Thursday’s announcement. “We have a preference to achieve a significant part of our expansion plans in the Netherlands, provided that such expansion plans are supported by favorable business conditions,” said ASML spokesperson Monique Mols, who cited the availability of skilled talent, infrastructure and housing.

“The plans presented today, if supported by parliament, strongly support those business conditions, and will continue to work with the Dutch government to finalize our decision making regarding our expansion,” Mols said in an emailed response.

(Updates with ASML’s response in final two paragraphs.)