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ASML's future growth in Netherlands remains uncertain

ASML logo is seen at the headquarters in Veldhoven

By Toby Sterling

AMSTERDAM (Reuters) - A crisis meeting between top executives of ASML and Dutch Prime Minister Mark Rutte led to the CEO of the Netherlands' largest company ruling out quitting the country but failed to resolve issues surrounding its future growth plans.

As chipmakers around the globe pour billions of dollars into setting up new plants to cope with soaring demand, ASML, their largest supplier, has said it will need to roughly double the size of its operations in the coming decade, but faces challenges in doing so at home.

"There is a considerable gap between the concerns of industry, and what we think is necessary, and what politicians think," ASML CEO Peter Wennink told reporters after Wednesday's meeting in Rutte's office.

If ASML cannot grow in the Netherlands "it can do so elsewhere", he said.

ASML employs 42,000 staff worldwide, half of them in the area around its headquarters in Veldhoven, Netherlands, where its machines are designed and assembled.

Attracting scarce foreign engineering talent to the Netherlands is a major issue. Others include difficulty obtaining building permits, constraints on the Dutch electrical grid, transportation bottlenecks and ensuring that there are plans in place for hospitals, schools, and housing to accommodate growth.

It emerged on Wednesday that Rutte's Cabinet has launched a campaign dubbed "Operation Beethoven" to try to address the company's concerns, having seen multinationals Shell and Unilever depart the Netherlands in recent years.

However, difficulties around staffing cannot fully be resolved by talks with Rutte's government, which is in a caretaker role following 2023 elections that saw anti-immigration parties book major gains.

While populist lawmaker Geert Wilders is negotiating a new right-wing government, parliament has approved motions to cap the number of foreign students allowed into Dutch universities and scrap a tax break for skilled migrant workers.

Ending that tax break in particular has met with criticism from ASML, industry groups, staffing experts, and many Dutch tech employers, including chipmaker NXP. More than 40% of ASML employees in the Netherlands are not Dutch.

Following Wednesday's meeting, Economy Minister Micky Adriaansens told reporters the caretaker Cabinet is now trying to "look at alternatives that do less pain."

It is not clear whether a tax break for foreigners, highly unpopular with Dutch voters, could be restored.

(Reporting by Toby Sterling;Editing by Elaine Hardcastle)