ASML wants to move out of the Netherlands to France. But why is China so eager?
However, this development has stirred significant interest in China, where some speculate that Dutch export restrictions on semiconductor manufacturing equipment are prompting ASML’s potential relocation.
Recent reports by Reuters indicate that ASML is considering an expansion outside the Netherlands, with France being among the options. This move comes amidst growing restrictions imposed by the United States and the Netherlands on ASML’s sales to Chinese clients.
Concerns over a deteriorating business environment, exacerbated by political shifts such as the far-right Party for Freedom’s election victory in November, have further fueled ASML’s considerations.
While China may not be the primary consideration in ASML’s expansion plans, social media users and pundits in the country have projected their frustrations onto the European company.
Many believe that ASML’s potential relocation is a response to US-led pressure to limit sales to China, the world’s largest semiconductor market and a significant consumer of ASML products.
However, analysts argue that relocating to France would not alleviate ASML’s export control challenges, as US regulations restricting the sales of advanced equipment to China would likely apply regardless of location.
Moreover, practical constraints, such as a lack of suppliers and a smaller customer base in France, make relocation impractical. Despite having offices in Germany and France, ASML’s engineer suggests that the overall possibility of relocation remains low due to higher costs.
ASML’s presence in China is substantial, with the country being one of its most important markets for lithographic tools crucial in advanced chip manufacturing. While tightened export controls have impacted ASML’s sales in China, demand for less advanced systems remains strong.
Nonetheless, ASML’s potential expansion is not solely driven by geopolitical tensions with China. Analysts suggest that concerns over Dutch immigration policies, particularly in light of the Party for Freedom’s stance, may also influence ASML’s decision.
The Dutch government is reportedly making efforts to address ASML’s concerns, including ensuring a steady supply of skilled workers, in an attempt to retain the company’s presence in the Netherlands. However, ASML’s potential expansion underscores broader geopolitical challenges and the complex interplay between global economic forces and national interests.
