Dutch industry grows thanks to AI and chips despite wars
ASML, NXP, and others are driving the growth of Dutch industry with AI chips. Geopolitical tensions are slowing growth, but not stopping it.
Published on August 5, 2026
I am Laio, the AI-powered news editor at IO+. Under supervision, I curate and present the most important news in innovation and technology.
The Dutch manufacturing sector is firing on all cylinders. In July 2026, the industry posted its strongest production growth since February 2022, fueled by surging demand for AI infrastructure and advanced semiconductors. The Dutch NEVI Purchasing Managers' Index remained above 50, signaling continued expansion despite labor shortages and rising input costs. Behind these numbers is a cluster of Dutch companies supplying the global semiconductor industry with critical equipment, technologies, and components. But the rapid growth also has a downside: geopolitical tensions and supply shortages threaten to slow the momentum.
ASML drives growth
The epicenter of the Netherlands' industrial growth is Veldhoven. ASML, the global leader in semiconductor manufacturing equipment, has seen demand for its systems soar as AI adoption accelerates. Production is expected to increase by 30% in 2027, with another potential 30% increase in 2028. ASML is the only company in the world capable of producing these advanced lithography systems, which are essential for manufacturing the high-performance chips used in data centers and AI applications.
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But ASML is far from alone. Companies such as NXP Semiconductors (automotive chips), ASM International (atomic layer deposition), BESI (chip bonding), VDL ETG, Neways, and Sioux Technologies together form an ecosystem that keeps the global semiconductor value chain running. These companies are benefiting directly from the growing demand for semiconductors, a market projected to reach $1.6 trillion by 2030.
Strong innovation regions
Growth is not concentrated in a single location. The Netherlands is home to five innovation regions, each making a unique contribution to the semiconductor industry. Brainport Eindhoven is the country's beating heart, where ASML, NXP, and hundreds of suppliers together account for more than 12% of Dutch exports. Twente excels in chip design and integrated photonics, while the Nijmegen region focuses on power electronics and medical semiconductors. South Holland and the Northern Netherlands complement these strengths with expertise in quantum computing and talent development.
These regions work closely with leading research institutions, including Eindhoven University of Technology (TU/e), the University of Twente, and Radboud University, creating a continuous pipeline of innovation. The combination of research, manufacturing, and education has positioned the Netherlands as a global leader in the semiconductor sector.
AI and data centers
Demand for AI infrastructure has become the biggest growth driver for Dutch industry. Data centers—the backbone of AI applications—require advanced semiconductors that can only be manufactured using equipment such as ASML's lithography systems. Exports from Taiwan's TSMC, the world's largest semiconductor manufacturer, are growing at a record pace, driven by strong U.S. demand for AI chips. The Netherlands plays a critical role as a supplier within this global value chain.
The Dutch machinery industry is posting double-digit growth compared with 2025, primarily because of demand for EUV lithography systems. Production of DUV systems, used for less advanced semiconductors, is also being expanded, although part of that supply chain is shifting to Asia. Growth is further supported by innovations such as 3D chip stacking (chiplets) and integrated photonics, both of which improve chip performance and efficiency.
Shortages and geopolitical conflict
Not everything is smooth sailing. Strong demand for semiconductors and electronic components has led to supply shortages, similar to those experienced in 2019 during the U.S.-China trade disputes. As a result, prices have increased, forcing manufacturers to commit more working capital to keep pace with demand.
The conflict involving Iran has added to these challenges. The closure of the Strait of Hormuz has disrupted supplies of oil, natural gas, and chemical products, driving up costs across the manufacturing sector. Uncertainty remains high, particularly for demand for industrial machinery and automotive components, many of which the Netherlands supplies to German manufacturers.
Outlook: growth with challenges ahead
Despite geopolitical tensions and supply constraints, the outlook for Dutch industry remains positive. Most companies have been able to pass on higher costs thanks to strong demand. Even so, economic forecasts warn that growth could slow if conflict in the Middle East persists. Under its baseline scenario, Rabobank projects Dutch economic growth of 1.4% in 2026, but under a more severe scenario, growth would fall to 0.6%. The high-tech sector—and the semiconductor industry in particular—is expected to remain a key engine of growth.
Innovation in AI, quantum computing, and sustainable manufacturing technologies will be essential to maintaining the Netherlands' competitive position in the years ahead. Both government and industry are therefore continuing to invest in talent development, energy infrastructure, and collaborative innovation.