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Made in Eindhoven: the small Dutch city that has become a tech powerhouse

Washington’s efforts to block China’s access to high technology are concentrated in two places outside the United States: Tokyo and Eindhoven.

The small, few-story Dutch city, with its historic core wiped out during the second world war, is home to ASML, which produces the world’s most advanced silicon chip making machine. They make semiconductors that are used in everything from smartphones to rockets.

Eindhoven’s technology sector has attracted EU commissioners, who regularly visit in an effort to understand how a place in industrial decline in the early 1990s transformed into a tiger economy in the region. sector, growing at 8% per year. Its companies and academics file nearly 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, €3 billion per year, is spent here.

A large part comes from ASML, Europe’s most valuable semiconductor company with a market capitalization of 250 billion euros. Signify, the former lighting division of Philips, chipmaker NXP and truck maker DAF are also Eindhoven-based innovators.

Jos Benschop, ASML’s senior vice president of technology, said Eindhoven has played an important role in the company’s growth thanks to its centuries of experience in high-tech manufacturing. “We have a lot of cooperation here. We operate globally but proximity to people is very important,” he said in an interview at ASML’s burgeoning campus on the outskirts of the city.

company’s unique ultraviolet lithography (EUV) Machines cannot be built without VDL, a local family-owned company dedicated to solving complex engineering challenges, he said.

“It was very easy to invent. It’s hard to turn it into something you can actually do.” The most advanced machines are worth around $170 million each, and as of 2019, their export to China has been banned by Dutch government.

The Hague has now agreed with the US to restrict some less advanced machines but has not disclosed details. The company still has a 40 billion euro order backlog and is hiring about 250 people a month in the city and expanding its factory to meet demand.

Brainport Development, home to some of the city's startups
Brainport Development, home to some of the city’s startups © Marco Hofsté/FT

Paul van Nunen, director of Brainport Development, the regional development agency, says Eindhoven’s transformation story resembles the story of a disruptive startup with only a kitchen table, garden shed and houses. maverick invention.

But it has two unique Dutch components: a more encroaching government model that brings politicians, companies and unions together to find common solutions; and Philips, the electronics group that started making light bulbs in Eindhoven in 1891.

Van Nunen’s office on the old Philips research campus overlooks the courtyard where ASML started a joint venture with ASMI, another local chipmaker, in a hut in 1984.

In the early 1990s, major employers such as Philips and DAF closed factories in the face of low-cost competition from Asia. Mayor Rein Welschen invited the head of local employers’ associations, technical universities and business leaders to his home, and they came up with a plan to fight back.

When Philips moved its headquarters to Amsterdam in 2001, the public and private sectors worked together to reuse laboratories and retain employees.

Van Nunen said: “Eindhoven got a better deal out of the move. “When I was younger, this whole area was a no-go zone — only Philips employees could enter. Now it is a place of cooperation.”

Another Philips research facility has become the Hi-Tech campus, home to more than 260 companies including TomTom, Siemens and Huawei. American investment Oaktree Foundation bought it in August 2021.

Companies there are developing artificial intelligence, quantum computing, and photonics — microchips that run on light, not electricity.

“This is the smartest square kilometer in the world,” said Johan Feenstra, CEO of Smart Photonics. It took advantage of old Philips cleanrooms to set up a photon chip production line. They can cut power usage of data centers and are deployed in remote areas.

Smart Photonics has raised €38 million from Dutch investors and now employs almost 150 people from 30 countries.

next to the offices of Smart Photonics, has raised 38 million euros from Dutch investors
Inside the office of Smart Photonics, the company raised 38 million euros from Dutch investors © Marco Hofsté/FT

Eindhoven University of Technology is one of the recruitment sources. Robert-Jan Smits, president, said the organization believes in the benefits of involving students in real-world projects, such as the world’s longest 3D printed bridge at Nijmegen.

“Eindhoven is unique. Myself, CEOs and politicians, we meet often. With my bike, I can go to ASML, Philips and NXP in no time,” says Smits.

“We support the region, by region and by region. Our job is not to make ASML bigger. It is to create more ASML.”

The region is expected to create 70,000 jobs over the next decade and is asking for government funding to double the size of universities, boost practical skills training and build housing.

Jeroen Dijsselbloem, the mayor of Eindhoven, said his city has “unique potential” if it is given cash by the government.

The former Dutch finance minister added that the region should also draw support from the EU as the bloc seeks to reduce its reliance on China and the US for technology and investment.

“If we talk about strategic autonomy for Europe. . . Brussels needs to realize that there are not many such options. One of the options is definitely this area.”



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