The Netherlands defies Europe’s tech trend thanks to ASML
Lead — The Netherlands' economic resilience stands out against the wider European landscape, largely driven by ASML's pivotal role in the semiconductor sector per the full note from ing-think. ASML's influence is expected to contribute significantly to Dutch GDP, with estimates suggesting its economic footprint could reach as much as 2.2% by 2026. Despite the broader challenges faced by Europe in keeping pace with the tech boom in the US and Asia, the Netherlands' focused advantages exemplified by ASML's position offer a unique narrative. The implications for FX traders lie in how shifts in tech investment catalyze broader economic trends in the region.
What the desk is arguing
The desk views the Netherlands as an emerging beacon of resilience within a lagging European tech environment, underscored by ASML's dominance in the semiconductor industry. Per the full note, ASML's projected contribution to the Dutch economy is anticipated to rise to 1.6% of value-added by 2026, with its true economic impact potentially reaching 2.2% when considering the extensive ecosystem surrounding the firm.
Moreover, ASML's ecosystem is poised to generate significant productivity spillovers throughout the Dutch economy, positioning the Netherlands to benefit uniquely from the global AI investment cycle. These dynamics set the Netherlands apart from its European counterparts that struggle to reap the rewards of technological advancements.
Where it sits in our coverage
Our current consensus target for the EUR/USD is 1.075, reflecting a modest range between 1.04 and 1.12, which acknowledges the diverging trajectories of the Dutch and broader European economies. The following firms provide specific forecasts that align with this view: - jpmorgan: Targeting 1.10 for March 2026 - bofa: Contrarily predicting a lower 1.04 for the same tenor.
How other firms see it
Within the current landscape, jpmorgan and bofa present contrasting outlooks on the EUR/USD trajectory. While jpmorgan sees a stronger euro buoyed by technological growth in the Netherlands, bofa remains cautious, predicting depreciation against the backdrop of broader European weaknesses.
Traders might want to watch how this narrative plays out against the backdrop of the EUR/USD exchange rate and its correlation to tech investment trends across Europe and the US, particularly as domestic growth narratives evolve.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01The Netherlands is set to outperform the broader European tech sector, largely due to ASML.
- 02ASML's economic footprint is projected to reach 2.2% by 2026, with significant productivity spillovers.
- 03Contrasting forecasts from **jpmorgan** and **bofa** showcase polarized views on the EUR/USD outlook.
- 04Ongoing geopolitical concerns and talent shortages may pose risks to the growth of the tech sector in the Netherlands.
Market implications
Traders should monitor the EUR/USD pair closely, especially as it approaches key levels of 1.075. Additionally, the upcoming earnings reports from ASML may influence market sentiment and position the euro against the dollar, reflecting broader economic trends.
Risks to this view
Potential risks to this bullish sentiment include geopolitical tensions impacting semiconductor exports and domestic constraints limiting growth potential. Should ASML face significant supply chain disruptions or regulatory setbacks, the positive outlook for the Dutch economy might reverse.
Articles The Netherlands defies Europe’s tech trend thanks to ASML Published 07:03 Manufacturing, Construction and Retail TMT The Netherlands Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download While Europe has lagged the US and Asia in capitalising on the global tech boom, the Netherlands stands out as an exception. ASML and its semiconductor equipment give the Dutch economy a unique position in the global AI investment boom, with an economic footprint that could reach 2.2% in 2026 Marcel Klok and Bert Colijn ASML in Veldhoven. The tech company is one of the most important suppliers of machines for the semiconductor industry The Netherlands stands out in Europe for its ability to benefit from the global tech boom thanks to ASML and the semiconductor-equipment cluster.
ASML has become a macroeconomic force in its own right: its direct contribution could reach 1.6% of Dutch value-added in 2026. Its true economic footprint is even larger. Including domestic suppliers and investment, we estimate ASML’s contribution could reach 2.2% in 2026.
The benefits go beyond current GDP: ASML’s highly productive ecosystem may generate wider productivity spillovers across the Dutch economy. Success also creates concentration risk. ASML’s growing weight means semiconductor swings can increasingly affect Dutch economic growth.
Geopolitics could hinder growth through restrictions on export markets and disruptions to critical foreign inputs. Constraints may also be domestic: shortages of talent, space and other supply-side bottlenecks could limit further rapid growth of the cluster. The Dutch economy is profiting from the strong global tech cycle The Netherlands is an exception to Europe's difficulty in capturing the full benefits of the global tech boom.
According to the IMF's latest World Economic Outlook , the Netherlands is among the countries most exposed to the global AI investment cycle through trade, a trend that is boosting growth across the economies involved. This is predominantly due to the strength of computer chip equipment maker ASML and the wider semiconductor ecosystem surrounding it. ASML has rapidly become the largest European company by market capitalisation and is becoming a dominant force in the Dutch economic outlook.
In fact, changes in turnover expectations have become valuable insights for the Dutch near-term economic outlook . Mario Draghi has warned that Europe risks becoming trapped in older technologies. Yet thanks to ASML and the ecosystem around it, the Netherlands occupies a pivotal position in the AI-driven technology boom and is reaping substantial economic benefits from it.
In this note, we quantify the ASML impact on the Dutch economy and discuss its implications. We argue that ASML’s importance to the global economy has helped cushion the impact of shocks such as the energy crisis and recent trade tensions in the Netherlands. We also argue that it is set to boost the Dutch economic outlook, and while it comes with certain vulnerabilities, it is a key driver of modernisation and productivity growth in the years to come.
Share of machinery in the Dutch economy has accelerated in the last 10 years thanks to ASML Already familiar to industry experts and increasingly recognised by the broader public, ASML is a Dutch company and the world's sole producer of leading-edge lithography tools essential for advanced semiconductor manufacturing. Developing these advanced technologies requires substantial R&D expenditure. As there are not yet competitive alternatives to its most advanced lithography tools, this gives ASML a strong position in price negotiations.
That makes ASML quite profitable. However, customer TSMC has recently shown some reluctance to adopt ASML’s newest technology, initially viewing the tools as too costly, highlighting that the company’s pricing power has its limits. Nevertheless, ASML generates substantial value-added (see below for our methodology on how we estimate the direct value-added contribution and the wider impact for the Dutch economy).
While the company is a multinational, its main production and R&D activities are based in the Netherlands. As a result, it is mostly Dutch GDP that is boosted by the expansion of ASML. [1] ASML's rise is clearly visible in industry data. Since 2017, the share of machinery in total Dutch gross value-added has increased.
Trends like the introduction and increasing popularity of smartphones, cloud-based services, social media and the demand boom in (ICT) goods during the Covid lockdowns have been very beneficial for semiconductor-related businesses, including producers of semiconductor lithography systems. This trend has accelerated with the rise of large language models and the broader AI investment cycle, lifting the machinery industry's share of the Dutch economy to around 2.7% in current prices and 2.9% in constant prices by 2025. Machinery industry has strongly risen in direct importance for the Dutch economy Share of machinery industry in total gross value-added of the Netherlands Source: Statistics Netherlands (CBS), ING Research "> Source: Statistics Netherlands (CBS), ING Research Half of the Dutch machinery industry is ASML Admittedly, ASML is not the only machinery company in the Netherlands, and not all machinery expansion can be attributed to just this business.
Other large tech companies in the semiconductor equipment manufacturing cluster include ASM and BESI. Other well-known Dutch companies active in the wider machinery industry include VDL Groep (e.g. food, packaging, and agricultural robots, also an important supplier to ASML), Vanderlande (e.g. logistics systems) and Lely (e.g. cattle milking robots and feeding systems). Yet, ASML accounts for about half (€33.7bn in 2025) of the turnover of the Dutch machinery industry. [2 ] ASML alone is on track to account for 1.6% of the Dutch economy For each euro of turnover, ASML creates about 50 cents of value-added with its own activities, of which we (perhaps somewhat conservatively) assume that 40 cents can be assigned domestically, which is slightly less than the 42 cents of the total machinery industry.
We therefore estimate that the direct contribution of ASML to Dutch GDP has risen from a modest 0.1% in 1995 to a substantial 1.3% in 2025. That is significant for an economy with a high development level and a high degree of diversification. Based on ASML’s own expectations (of which we take the midpoint of €44.5bn) and our own economic growth forecasts, this may well be 1.6% in 2026.
ASML's share in the Dutch economy is growing even larger Estimated share of ASML and machinery industry in total gross value-added* of the Netherlands *In current prices Source: Statistics Netherlands (CBS), ASML and ING Research estimates "> *In current prices Source: Statistics Netherlands (CBS), ASML and ING Research estimates Including the wider ASML ecosystem, its share of the Dutch economy is even larger ASML's success is closely tied to the ecosystem that has developed around it. Many of its suppliers are located around Veldhoven, where ASML's headquarters are, making the broader value chain key to the company's success. To track the wider impact of ASML (and the machinery industry) on the Dutch economy, we estimate and aggregate the following three impacts (over time): Direct impact: ASML’s/machinery’s own gross value-added share in total gross value-added Indirect impacts [3] : 2a.
Domestic value-added content of intermediate consumption. This is the value-added created by other Dutch firms that supply inputs for the production of ASML/machines. In ASML's case, this may also include inputs provided by the machinery industry. 2b.
Domestic value-added content of gross capital formation: This is the value-added created by other firms in the Netherlands that result from providing productive assets. In the absence of ASML-specific data, we investigate the indirect impacts by looking into intermediate inputs and investment of the Dutch machinery industry, using input-output tables. About half of the gross intermediate inputs come from the Netherlands, half from abroad.
For each euro of total intermediate consumption by the machinery industry/ASML, about 20 cents of domestic value-added is created. This means that intermediate consumption by the total machinery industry has an impact of 0.8% of total Dutch value-added. If we scale this to the size of ASML, this means the domestic impact of intermediate consumption by ASML is 0.3% of the Dutch economy in 2025 (and is forecast at 0.4% in 2026).
This is still quite sizeable. The machinery industry sources a large share of its inputs from within the sector, although many of these suppliers are located abroad. For ASML, these include both strategic partners and external suppliers, such as ZEISS SMT in Germany, as well as subsidiaries like Cymer in San Diego.
Other important suppliers include wholesale trade, metal products manufacturing, and professional services such as legal and management consultancy. Within the Netherlands, however, temporary job agencies are among the biggest beneficiaries of the sector's activity, alongside other firms in the machinery industry. Domestic temp job agencies profit most from the machinery industry Estimated indirect impact – value-added created due to intermediate inputs demanded by the machinery industry as share of total Dutch value-added* in 2025 in %, top 5 industries except machinery *In current prices Source: Based on input output table for the Dutch economy in current prices for 2025 by Statistics Netherlands (CBS), ASML and ING Research estimates "> *In current prices Source: Based on input output table for the Dutch economy in current prices for 2025 by Statistics Netherlands (CBS), ASML and ING Research estimates Impact via investment, especially R&D The second indirect contribution to the economy is the domestic value-added content of gross capital formation.
While the impact of ASML and the broader machinery industry through investment is smaller than that of their own production and supply-chain activity, it remains significant enough to have a meaningful effect on the Dutch economy. For 2025, we estimate the contribution through investment at 0.2% for ASML and 0.1% for the broader machinery industry. For ASML, we expect this contribution to remain at 0.2% in 2026.
This captures the economic impact generated beyond the investment that is done within machinery/ASML. Own in-house R&D is not included in this estimate since it is already included in the direct impact and would otherwise be counted twice. From our analysis based on input tables, we can conclude that when it comes to sourcing, R&D investment is the most important capital asset type for the sector: on average, this was about 57% of gross capital formation.
The second and third-most important are other machinery and equipment and computer software and databases, followed by buildings and computer hardware. Adding the direct impact and the two indirect impacts, we estimate the total impact of the machinery industry and ASML on the Dutch economy at 3.7% in 2025 (and forecast it for ASML at 2.2% in 2026). While this falls short of the 3.8% contribution Nokia made to the Finnish economy in 2000 (excluding indirect effects), it is nevertheless highly significant.
Total impact of the ASML cluster on the Dutch economy is expected to grow to 2.2% Estimated impact of ASML, in % of total Dutch gross value-added* *In current prices Source: Statistics Netherlands (CBS), ASML and ING Research estimates "> *In current prices Source: Statistics Netherlands (CBS), ASML and ING Research estimates Wide economic benefits The gains are likely not limited to the output and employment of the machinery industry. Aggregate productivity levels in the Netherlands would probably also be lower without the presence of this export giant. Not only are ASML's own activities highly productive, but joint research by the CPB and Statistics Netherlands also shows that firms supplying exporters tend to be among the most productive companies in the Dutch economy, second only to the exporters themselves.
Moreover, international case-specific evidence suggests that the benefits of hosting a globally competitive high-tech champion may extend beyond its direct value-added and purchases from domestic suppliers (see here for an example). Participation in the supply chain of a leading multinational can improve productivity, scale, management practices and the ability of suppliers to attract new customers. These spillover effects are difficult to quantify, but they suggest that ASML's contribution to long-term Dutch prosperity may be larger than what can be observed in national accounts alone.
Should the Netherlands worry about a Nokia effect? Despite the wide economic benefits, the strong dependence of value-added on one industry and one company in particular can also be a vulnerability for the Dutch economy. What may now be a strength that other countries envy may later turn into an economic weakness.
As a large part of ASML’s business is known to be cyclical, macroeconomic swings may be exacerbated and shocks may be limited not only to cyclical fluctuations but can be more permanent as well. This is despite the fact that ASML is increasingly becoming a services provider for its installed base. These services are typically less cyclical, with lower utilisation by customers also providing opportunities to undertake maintenance and upgrades.
Even global market leaders can lose their edge when markets change, as Nokia's difficulties following the advent of smartphones illustrate. At its peak around 1998-2000, the share of Nokia in Finnish GDP was close to 4%, but in 2011 it had fallen to 0.5%. OECD analysis suggests that the prolonged contraction of Finland's computer sector was closely linked to Nokia's decline following the rise of smartphones, and may explain at least 30% of the productivity slowdown in the rest of the Finnish business economy during 2009-13.
The estimate is based on industry-level effects rather than Nokia specifically, but it highlights how disruptive a shock to a dominant firm can be, even within a highly developed technology ecosystem. But the Netherlands is a more diversified economy than Finland was at the peak of Nokia’s strength. Our estimate of a 2.2% total impact on the economy of ASML so far is still well below the 3.8% (excluding indirect effects) Nokia once contributed in 2000 as a single company to the Finnish economy .
The diversification is evident in other thriving high-tech sectors like pharma and IT services, which are also contributing substantially to growth this decade. Geopolitical fragmentation brings risks to both markets and critical inputs for chip machines The Dutch machinery industry’s deep integration into global trade is a source of strength, but also creates a vulnerability to geopolitical fragmentation. For ASML, this is currently the case outside the European Union, as semiconductor manufacturing is predominantly based outside Europe.
Both ASML and the broader machinery industry depend heavily on continued access to foreign markets and to highly specialised inputs from abroad. IMF analysis shows substantial geographic concentration on both sides : export demand is particularly exposed to disruptions involving the US, Germany, China and South Korea, while the supply of several critical machinery inputs is concentrated in a relatively small number of countries. These risks are no longer hypothetical: US restrictions already limit exports of ASML’s most advanced machines to China, while further measures, including the proposed Match Act , could constrain Dutch exports further.
At the same time, our analysis of Eurostat input-output data shows that foreign intermediate inputs for the Dutch machinery industry are particularly dependent on Germany, the rest of the world, including Taiwan and South Korea, and the US. Geopolitical tensions can therefore hit the sector from both directions: by restricting where Dutch machinery can be sold and by disrupting access to the critical inputs needed to produce it. For the Dutch economy, this brings a downside risk to growth.
Export market restrictions can weaken foreign demand, while disruptions to critical inputs can constrain domestic production and investment. Through the sector’s extensive domestic supply chain, such shocks can spill over to suppliers and other parts of the economy. In the longer run, geopolitical fragmentation could also undermine an important source of Dutch productivity: the ability of highly specialised firms to source the best inputs internationally and sell their products globally.
The same international specialisation that has made the Dutch high-tech sector so successful therefore also makes it vulnerable when geopolitics interferes with trade. High-tech is reshaping the Dutch economy, but can growth continue at this pace? Since the mid-2010s, ASML has evolved from a highly successful technology company into a business of genuine macroeconomic significance for the Netherlands.
Its direct and indirect contribution to Dutch value-added is now large enough to influence national developments and has helped the Dutch economy benefit much more than countries around it from the global AI investment boom. ASML also strengthens the European tech ecosystem, for instance through its partnership with imec, its collaboration with TNO on the photonic chip pilot line, and its investment in Mistral AI. These initiatives could support new technologies and future growth opportunities.
For the years ahead, the question is whether the Dutch economy can continue to accommodate the rapid growth of the chip-machine-making cluster. The Dutch economy has shown signs of strain in recent years as limits to talent, space and other supply-side constraints are the main source of concern for future growth. In 2024, the Dutch government decided to invest €2.5bn to improve the business climate for the sector, but overall concerns around talent availability and specific bottlenecks in the economy that we wrote about repeatedly (see for example here , here and most recently here in Dutch ) remain.
Despite challenges, we do expect that the growth of the ASML cluster will remain an important structural driver for economic growth in the Netherlands. Footnotes [1] In our estimates, we assume that 80% ends up in Dutch value-added. This is the unweighted average share of the Netherlands in R&D full-time equivalents and profit before taxation, based on ASML’s Public Country-by-Country Report 2025 and Tax Report 2025 . [2] This was 47% in 2024, based on the latest available annual figures of Statistics Netherlands for turnover of the machinery industry of €60.6bn.
Recently, Statistics Netherlands reported that the turnover of the Dutch chip industry was €42.5bn in 2024 . Be aware that this is based on a new ad hoc definition of the industry that also includes chip producers and businesses outside the machinery industry that supply the chip machinery industry and excludes the production of other types of machinery, using microdata that are not publicly available. [3] Note that these indirect impacts can only be estimated for subsets of firms/industries, since the indirect impact of one firm/industry is always the direct impact of another firm/industry. Otherwise, there would be double-counting of value-added.
To avoid such double counting, we exclude the value-added created by the machinery industry that results from intermediate consumption and investment of the machinery industry from our calculations. Methodology: Based on details that are only publicly available for 2025, we estimate the gross value-added (in current prices) of ASML’s own production (the “direct impa
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