This here is the problem for most of EU countries.
We Dutch are proud how easy it is to do business here. Maybe, compared to some other countries. But starting a BV here and 1 month later finding a representative of a trade union (metal sector, which somehow semiconductors fall under together with car garages, petrol stations, steel factories..) and asking me to come to their office in person to explain what we do, and calculate how much their cut will be was weird at first. Of course being extremely busy with actual business, I forgot, and got a letter with an 100k Euros invoice attached. Apparently they assumed 15 employees with 45k gross salary, and thought this is a fair trade union contribution! When I didn't respond to that, while discussing it with our lawyers, they sent a fine over this invoice which made it 140k. This is all within 3-4 months of registering mind you! At the end the lawyers handled that, but yeah, what the hell..
These trade unions are notorious for that. I worked as a labor legal advisor and especially the unions for temporary employment agency start 'barking' and demand loads of money (even from years back). Sometimes it's not even clear which union is applicable.
You probably have all the info right now, but make sure everything is 'in line'. I mean, have your company codes at the tax authority match the applicable union match the actual things that your company does. Depending on the jobs of the employees, it might be smart to split the company into multiple legal entities.
All in all you can be happy that this happened within a couple of months. Finding this out when you're years underway and then having to pay millions... I've seen plenty of these cases.
Want to start a business in The Netherlands? Make sure to do a 'CAO check' first, think about how to structure your company (one entity? multiple entities? what job goes where?), and do these checks again once you pivot or make certain changes to the actual work that your company does.
The rationale for this is also pretty simple: somebody got to pay for all this nice social security. They say it's part of the risk of being an entrepreneur.
Yeah our case was strange because we develop chips and design software related to it. Belastingdienst categorized us wrongly as metalelektro, and we got this guys (Cometec) within two weeks of that. In the meantime we have applied this sector assignment to be corrected, which eventually happened while we were getting threatened into bankruptcy by these guys.
What I don't understand is, we got a lot of help from RVO, Belastingdienst etc before and during incorporation. Nobody talked about this! We got sone numbers from Belastingdienst about social security contributions per sector, but like 15% cut per employee wasn't mentioned once. To this date I don't know what legal basis do they have to ask for this amount of contribution. Nobody mentioned any law, or a decision by ministery of social affairs. Very strange to deal with this, because it's literally someone showing up and asking for money without telling even based on what.. It gave very strong gang vibes, which was surprising for me as I was always a member of a trade union.
Yeah, that stuff can be scary, I understand. It might almost feel extortionate. You had labor lawyers look at the applicable CAO and pension rules?
I quickly checked their website and it's a little unclear (so don't consider this legal advise), but their legal basis is probably the CAO. If that particular CAO has been made mandatory by law (which happens for certain industries that need tighter control from government, like temporary employment agencies), than it automatically applies to companies doing the exact work that's described in the CAO ('werkingssfeer').
It's a shame that RVO and Belastingdienst did not warn you correctly. The Netherlands does not want entrepreneurs, they want everybody cozy at their jobs at some big company.
Do you happen to be in or around Nijmegen with your chip development?
> The Netherlands does not want entrepreneurs, they want everybody cozy at their jobs at some big company.
Totally agreed. Those big companies in return get a lot of benefits from the government. Most investment in semiconductors for example are going into the already big, and let's be honest, not do competitive companies to keep the alive.
We're in the Randstad. Nijmegen is nice but together with old Philips its semiconductor ecosystem has declined quite a bit.
Individuals pay like 25-30 Euronth contribution, which is tax deductible. Employers can pay a lot, like 10% or more, which is often going to a social security fund.
Semiconductors is extremely cyclical. One of the reasons TSMC survived the previous boost-boom cycles is their caution. If you overexpand, you risk going out of business in the next downturn.
AFAIK only Apple has been commiting to wafers up to 3 years in the future. It would be a crazy bet for NVidia to do the same, as they don't know how big will be the business.
I don't get the VHDL or Verilog hate. Digital IC design engineers have no problem with them. True, most of the industry moved to SystemVerilog, mainly for simulation and verification reasons.
It's the weirdnesses of FPGAs though. You aren't really designing a gate level circuit at the end. I'm not sure Verilog or VHDL are to blame here. Maybe they aren't fit for purpose to begin with. I hate the toolchains too. They got worse (sluggish, more paid IPs etc) in the last 15 years. IC design tools cost A LOT more (like 2-3 orders of magnitude more) comparatively but they just work at least!
This isn't a moat ASML can keep for long though. There can be alternatove technologies to achieve the same goal. So far only China has that incentive. The real problem is process scaling is slowing down. How many more generations of lithography machines will ASML design? Probably not many. This means there will be no edge left in 5 or 10 years, as eventually brute force will work and China will achieve the same lithography resolution.
Till that point, they are just going all in with cheap coal + solar, so even if they use older machines and run longer exposure times, even if they achieve lower yields and toss away a lot of the dies, they are still economically competitive. At the end cheap enery solves a lot of the issues.
Nowhere close, but pace now seems faster than estimated, i.e. original western estimate is they won't even get EUV prototype up until 2030s.
Right now their chips are already "economically" competitive, as in SMIC is starving on 20% margins vs ASML/TSMC/NVIDIA getting gluttonous on 50-70%, at least for enterprise AI. Current scarcity pricing = litho costs borderline rounding error, 1500 Nvidia chip flips for 30000, 6000 huawei chip flips for 20000. The problem is really # of tools access and throughput. They can only bring in so many expensive ASML machines, including smuggling, which caps how much wafers they can afford to toss at low yield. They figure out domestic DUV to 2000 series and throughput is solved.
Hence IMO people sleeping on Huawei 9030 on 5nm DUV SAQP, still using ASML DUV for high overlay requirement processes, domestic DUV to fill rest. But once they figure out SAQP overlay, which will come before EUV, they're "set". For cost a 300m-400m ASML EUV, PRC can brrrt tools at BOM / cost plus margin. Think 40 domestic DUVs and associated infra for price of one ASML EUV to run 8x lines with 30% yield and still build 2x more chips normalized for compute that they can run on cheap local energy to match operating costs. Then they have export shenanigans like bundle 5nm chips with renewable energy projects and all of sudden PRC data center + energy combo deals might be globally competitive with 3/2nm. Deal with our shitter chips for now, once they deprecate we give you something better when our processes narrows gap, and you have bonus power to boot because some jurisdictions, building grid is harder than building fabs.
How does one even smuggle an ASML machine? I'd assume the machine stops working if the GPS position doesn't compute, at end of life I wouldn't expect ASML to allow these devices nor their components to end up on the second hand market, I'd expect the future transfers to require continued permission of ASML, much like weapons distribution.
The machines live indoors, far from being able to see GPS signals. Sure, you could require that there be an antenna run to the roof, but you can spoof that stuff.
The thing that helps prevent smuggling of ASML machines is that a) there are few of them (i.e., people would notice), b) it requires tremendous effort to move them at all, let alone without anyone noticing.
Considering that these tools are installed in seismically active areas [0], the last thing a customer would want is for the tool to zeroise itself because of an earthquake.
These machines are not like John Deere tractors. If you own the hardware, you own it. They won't be connected to internet. Security first!
Smuggling part is happening on the old machines before EUV. There's a lot of them available on the second hand market thanks to Europe and US keep shutting down their old fabs. I don't think any DUV machine is smuggled. Even if they physically smuggled one, you need a team of ASML engineers to set it up and calibrate. You can guess what ASML will do in this case.
By the way, let's don't forget: ASML doesn't have any problems with China. They are incredibly annoyed with US and Dutch governments. This is potentially the biggest market they are missing out. Even then, they won't tolerate a summugling operation.
The US is close to having that incentive, if the rift between the US and Europe keeps widening. The Netherlands has one lever, but damn it's a long one.
ASML develops and ships their machines at the pleasure of Uncle Sam because the USA licensed them the tech and remains a crucial part of the supply chain intentionally. It's not a lever. It's a partnership that is mutually beneficial and neither side can really ruin the other without damaging themselves.
ASML will instantly stall at that point. The EUV light sources are built in the US under US export control regulation. No EUV light source means no ASML EUV machine. I get that some European chest-beating sounds good because there's not very much tech in Europe, but this is an intentional transnational supply chain. It's no accident that the US chose ASML to develop this tech rather than Canon or Nikon. Close ally deep within the US military shield from nearby air bases.
The biggest losers from any such actual attempt by Europe will be Western Europe and the US.
I really like that Europeans are starting to be more patriotic. It's good to see. It's also fortunate that European leaders are aware of Europe's position and role in geopolitics.
An alternative manufacturer, but not a supplier, no.
The US exerts sufficient control over ASML that this will not happen without NATO ending. And the end of NATO (which would be a geopolitical shift more profound than the Fall of the Berlin Wall) and a replacement with some Chinese EUV light source risks the scuttling of all ASML facilities and devices. This is vapor above a coffee cup.
The scenario I'm imagining is in fact the US further destabilizing NATO, in which case Europe wouldn't feel bound by any of the agreements we've made with Americans. Failing that, I don't think any of what was said above is relevant.
ASML owns the company that builds the light source. They acquired it, it's a US company, which is why US export controls apply, that's all. If needed, they could replicate the subsidiary in the EU.
This is too far from correct for any correction to be anything but a full restatement of the facts. Moving the tech over requires US approval. Listen, the Dutch are not going to risk it. Even if they were, ASML would not risk it because all of their customers wouldn't buy anything from a company that's on the EAR Entity List (which is where they'd end up if they tried this without the US allowing it) without US approval. I don't get why people are saying this stuff. It's like saying "Oh yeah, so you divide by zero and then multiply both sides and ta-da". Like, the whole statement is nonsensical.
To enable the whole thing to work you'd need the US to have shrunk to the equivalent of Canada in influence. I'm not saying that's impossible, but in that scenario, the Dutch might well be trying to keep Russians out of Amsterdam and the Turks out of Germany rather than trying to pull an IP heist on the Americans.
You can buy an e-book on Kindle and Amazon still controls what you do with it, right? ASML's ownership of Cymer is like that, except it's the US instead of Amazon.
Specifically control is related to the Foreign Direct Product Rule, where in which the US claims jurisdiction over any foreign product containing 25% or more of US-origins (Cymer, etc)
I think Europe is bluffing that they can go their own way. They can't. They won't try. Europe has been whining that they're going to catch up since the 80s, but they've yet to do it.
If you didn't care about exposure time, you could build 2nm chips with brute-force electron beam lithography. But the limited throughput confines EBL to research and very low-volume applications. ASML's EUV-based processes are what permit industrial-level scaling, ultimately because parallel beams of electrons repel each other while parallel beams of photons don't.
I don't personally understand why suitable EUV light sources are so hard to build, but evidently, they are. It sounds like a big deal if China is catching up in that area.
They can do 7nm and 5nm. Multiple patterning basically. I don't know when it doesn't scale anymore. Moat likely 4x patterning is the max you want to do.
Made me reflect on my own persuasion of thin desires and my struggle to control them.
It also made me see that my hobbies and my career are actually about following my thick desires. I'm in tech, yes. But I chose, among all the possibilities, to be an analog circuit designer. The analog part is what makes it a long hard skill to master, and my day job feels like constant learning from my interactions woth the world. I can't imagine doing anything which isn't interacting with the actual physical world!
We Dutch are proud how easy it is to do business here. Maybe, compared to some other countries. But starting a BV here and 1 month later finding a representative of a trade union (metal sector, which somehow semiconductors fall under together with car garages, petrol stations, steel factories..) and asking me to come to their office in person to explain what we do, and calculate how much their cut will be was weird at first. Of course being extremely busy with actual business, I forgot, and got a letter with an 100k Euros invoice attached. Apparently they assumed 15 employees with 45k gross salary, and thought this is a fair trade union contribution! When I didn't respond to that, while discussing it with our lawyers, they sent a fine over this invoice which made it 140k. This is all within 3-4 months of registering mind you! At the end the lawyers handled that, but yeah, what the hell..
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