Quantum technology now offers the chance to build a second pillar under the Dutch economy, this time centered around Delft and Leiden, argues Anton Duisterwinkel.
Quantum is booming in the Netherlands. Dozens of promising companies, many of which announce new and ever-bigger investment rounds – nicely following the familiar J-curve. More than 500 employees in total and counting. The best opportunity in the Netherlands for a new economy, according to Karien van Gennip, supervisory board member at ASML.
The province of South Holland, mainly Delft and Leiden, is the Dutch epicenter of quantum, but the region is spreading its wings in other technologies as well, including semicon (Nearfield, AIM Solutions), space and secure telecom (FSO) and defense (Robin Radar). According to Techleap, one-third of all Dutch deep-tech startups start in South Holland. All follow the typical Dutch OEM model of either using or being part of an extensive network of high-tech suppliers.
Most quantum companies specialize in modules and materials that enable quantum sensing, communication and computing systems. A recently started company aims to build a quantum computer using these modules and materials. This is a unique approach; all other quantum computer builders in the world are vertically integrated. Or used to be, as they’re slowly realizing that these weird specialists in Delft may actually produce better modules.
To enable their growth, these young companies need investments of 100 million euros or more, both young and experienced talent and a reliable, high-quality supply chain. Given the strategic importance of quantum technologies for security and economy, it’s imperative that these investments are made by European, if not Dutch, investors who have a deep understanding of the deep-tech market.
Young quantum talent is trained both in Leiden and Delft at such a level that it attracts international quantum companies to come to the Netherlands. At the same time, the young regional companies attract young quantum talent from abroad. Let’s hope that our current government will help welcome these talents to our country. Senior, experienced staff is much harder to attract, however.
At the same time, ASML is obviously and naturally entering the final slope of its innovation curve, signaled, for instance, by cost-cutting measures such as the reduction of 3,000 managers and the price pressure on the supply chain. New American legislation isn’t helping the matter. Be careful what you wish for when aiming for ‘control points’!
The supply chain of ASML has felt a dip in recent years and is looking for alternative clients. This may become urgent when (yes: when, not if) the Chinese enter ASML’s main market. They’re likely to take over at least the Chinese wafer stepper market.
These developments will hurt but not necessarily kill ASML. Non-Chinese chipmakers are probably hesitant to take up Chinese machines, fearing for IP and data safety. Moreover, ASML is diversifying, not only in AI, but also closer to its home market, in metrology for semicon. It boosted this new business, amongst others, by taking over Mapper Lithography in Delft, where it now steadily grows.
One and one is two, even in quantum. The urge for ASML to renew, its ability for large investments in deep tech and the redundancy of senior staff members all play into the needs of young quantum companies. Also, the quantum industry offers a new opportunity for the semicon supply chain.
Among the many managers who are (to be) laid off or have come to realize that their next career move will probably not be within ASML, many will try to remain active in deep tech. As more than half of the Dutch engineers received their education in South Holland, a significant number of them will be willing to go back to their roots. More than anyone else, they’ll have the experience that quantum companies need.
For the Dutch economy, it’s a big opportunity that this new industry is mainly located in Delft and Leiden and much less so in Eindhoven. The Eindhoven area will continue to grow, as far as that’s even possible in the current space, energy and talent squeeze. The supply chain in Brabant will follow suit. Next to this success, a second pillar under the Dutch deep-tech economy is already building up in Delft and Leiden. This should be supported. A second Beethoven program, investing in a new industry rather than an old one, seems more than appropriate.
