Chip-equipment maker ASML has warned an electoral victory by a far-right party in the Netherlands could pose an unexpected risk.
It’s all about staffing and whether curbs on immigration could impact hiring of key skilled workers at Europe’s most valuable technology firm.
Dutch company
ASML
(ticker: ASML) is a crucial player in the global chip supply chain due to its dominant position in supplying the ‘lithography’ machines that are essential for manufacturing semiconductors. Its customers include
Taiwan Semiconductor
Manufacturing (TSM),
Samsung Electronics
(005930.Korea), and
Intel (INTC).
However, AMSL could face some disruption if Geert Wilders, the Dutch far-right leader who has championed draconian policies against immigration, becomes the next prime minister of the Netherlands.
Wilders’ Freedom Party has just won 37 seats in the 150-seat Dutch parliament, the most of any party, and he is aiming to become the next prime minister. It is unclear if he will be able to form a governing coalition.
Wilders’ anti-immigration stance is making Dutch tech companies like ASML, which are partly reliant on foreign workers, nervous.
“Any restrictions on the amount of knowledge workers or international students, relevant for our industry, are undesirable,” an ASML spokesperson said in an emailed statement to Barron’s.
American depositary receipts of ASML were up 0.6% in premarket trading on Friday
Wilder’s party has also called for a referendum on European Union membership. The Netherlands leaving the EU –a potential ‘Nexit’ to follow the U.K.’s Brexit– would be a much bigger shock to ASML and across all of Europe.
For now, traders look to be skeptical about the chances of such a move. The euro is trading at around $1.09, broadly flat from before the election result.
“Given the overall positive public opinion on Europe within the Netherlands… we rule out a significant move on the euro or Nexit,” wrote ING analyst Marcel Klok in a research note.
Write to Adam Clark at adam.clark@barrons.com
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