Washington’s efforts to block China’s access to high-end technology homed in on just two places outside the US: Tokyo and Eindhoven.
The small, low-rise Dutch city, whose historic core was obliterated during the second world war, is home to ASML, which produces the world’s most advanced silicon chipmaking machines. These make the semiconductors used in everything from smartphones to missiles.
Eindhoven’s tech sector has attracted EU commissioners, who routinely visit in an effort to understand how a place hit by industrial decline in the early 1990s transformed into a regional tiger economy, expanding by 8 per cent annually. Its companies and academics file almost 500 patents per 100,000 inhabitants annually, one of the highest rates in the world. And a quarter of Dutch private sector research and development, €3bn a year, is spent here.
A big chunk comes from ASML, Europe’s most valuable semiconductor company with a market capitalisation of €250bn. Signify, the former Philips lighting division, chipmaker NXP and truckmaker DAF are also innovators based in Eindhoven.
Jos Benschop, ASML’s senior vice-president for technology, said Eindhoven had been vital to the company’s growth because of its century-long experience of high-tech manufacturing. “We have so many collaborations here. We operate globally but proximity to people is so important,” he said in an interview at ASML’s growing campus on the edge of the city.
The company’s unique extreme ultraviolet (EUV) lithography machines could not have been built without VDL, a local family-owned company that focuses on solving complex engineering challenges, he said.
“It is very easy to invent. It is hard to turn it into something you can actually make.” The most advanced machines are worth about $170mn each and, since 2019, their export to China has been banned by the Dutch government.
The Hague has now agreed with the US to restrict some less advanced machines but has not yet disclosed details. The company still has a €40bn order backlog and is hiring about 250 people a month in the city and enlarging its factory to meet demand.
Eindhoven’s transformation story was akin to that of a disruptive start-up setting out with just a kitchen table, garden sheds and maverick inventors, said Paul van Nunen, director of Brainport Development, the regional development agency.
But it has two uniquely Dutch ingredients: the polder model of government, which brings politicians, companies and unions together to find joint solutions; and Philips, the electronics conglomerate that started making lightbulbs in Eindhoven in 1891.
Van Nunen’s office on a former Philips research campus overlooks the yard where ASML started as a joint venture with ASMI, another local chip-machine maker, in a hut in 1984.
By the early 1990s, big employers such as Philips and DAF were shutting factories in the face of cheap competition from Asia. Mayor Rein Welschen invited the head of the local employers’ association, the technical university and business leaders to his home and they came up with a plan to fight back.
When Philips shifted its headquarters to Amsterdam in 2001, public and private sectors worked together to repurpose the labs and retained the staff.
“Eindhoven got the better deal from the move,” said van Nunen. “When I was young this whole area was a forbidden zone — only Philips employees could get in. Now it is a place of collaboration.”
Another Philips research base became the High Tech campus, home to more than 260 companies including TomTom, Siemens and Huawei. US investment fund Oaktreebought it in August 2021.
Companies there are developing artificial intelligence, quantum computing and photonics — microchips powered by light rather than electricity.
“This is the smartest square kilometre in the world,” said Johan Feenstra, chief executive of Smart Photonics. It has taken advantage of old Philips clean rooms to set up a production line for photon chips. They can cut power use by data centres and be deployed in remote areas.
Smart Photonics has raised €38mn from Dutch investors and now employs almost 150 people from 30 countries.
Eindhoven University of Technology is one source of recruits. Robert-Jan Smits, the president, said the institution believed in the virtue of involving students in practical projects, such as the world’s longest 3D-printed bridge at Nijmegen.
“Eindhoven is unique. Myself, the CEOs and politicians, we see each other often. On my bicycle I can get to ASML, Philips and NXP in no time,” Smits said.
“We are for the region, with the region and by the region. Our job is not to make ASML bigger. It is to create more ASMLs.”
The region expects to create 70,000 jobs in the next decade and is asking for government cash to double the size of the university, increase practical skills training and build homes.
Jeroen Dijsselbloem, Eindhoven’s mayor, said his city had “unique potential” if given government cash.
The former Dutch finance minister added the region should also attract support from the EU as it seeks to curtail its reliance on China and the US for technology and investment.
“If we talk about strategic autonomy for Europe . . . Brussels needs to realise that there are not that many options. One of the options is definitely this region.”
Made in Eindhoven: the small Dutch city that became a tech powerhouse Republished from Source https://www.ft.com/content/c702c9f0-7f45-47d2-a0b3-6a6525e4b583 via https://www.ft.com/companies/technology?format=rss