B a c kg r o u n d
Semicon
How the conception of ASML took some convincing Back in the 1980s, Philips wasn’t particularly keen on working with the much smaller company ASM International. Only by cozying up to the Dutch government, ASMI CEO Arthur del Prado managed to nudge Philips into the partnership that we know today as ASML. Jorijn van Duijn
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round 1980, in the wake of fierce American and Japanese competition, the European Community initiated its first cohesive effort in support of the European microelectronics industry. Within the Netherlands, public awareness about the significance of microelectronics for economic growth in the future rose as well. Yet, it seemed like the Netherlands were missing the boat. This not only was a source of concern to the Dutch electronics behemoth Philips but also to the much lesser-known semiconductor equipment manufacturer ASM International. Though Philips initially would barely acknowledge the existence of the company from Bilthoven, the firms ended up working together after some shrewd manipulation of Dutch economic policy. The result of that collaboration: ASML.
Sideswiping Philips
In an interview published in January 1981, Eduard Pannenborg, director of the prestigious Philips Research Laboratory, complained about the lack of entrepreneurship and initiative with regard to microelectronics in the Netherlands. Philips was alone, according to him. This caught the eye of ASMI’s founder and chief executive, Arthur Del Prado. So far, the 49-year-old businessman had been trying in vain to get support for his growing company. Neither the Dutch government nor Philips had been willing to take 12
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up his overtures. Two weeks after Pannenborg’s interview in the newspaper, Del Prado sent a letter to the Philips executive. The letter clearly stipulated the entrepreneur’s position vis-à-vis the changing economic policies of the Dutch and European authorities: “I completely agree with many of your comments, in particular your observations concerning the absence of European industrial policy, ... and, finally, with your comments with regard to the Dutch industrial climate in relation to the lack of entrepreneurial spirit in this country.” Del Prado then continued to applaud Pannenborg’s statements about the Dutch entrepreneurial spirit, even though the businessman politely confronted the Philips executive with the fact that he didn’t practice what he preached. As a national champion in electronics, Philips itself had to lead by example: “Although we did many proposals for collaboration to Philips, time and again it was the American industry where we did find intensive support for launching almost all of our current and latest products. If you argue that the Dutch young people lack entrepreneurial spirit, I would counter that in my view Philips lacks the pioneering spirit that might co-determine the development of a Dutch ‘Silicon Valley’ in miniature.”
Although the letter was politely acknowledged by Pannenborg’s office, Philips didn’t respond. It seems that big Philips still disregarded the small Dutch company in semiconductor equipment for its size and its impetuous reputation as an equipment supplier. But Del Prado had something up his sleeve, which would turn the tide and put him and his company in the spotlight. On 19 May 1981, ASM International conducted its initial public offering (IPO) at the United States capital market for technology enterprises, the Nasdaq. A novelty for the Netherlands, ASMI being the first Dutch company to be listed there. This tour de force launched the Bilthoven corporation into the major leagues, a feat that couldn’t be ignored by either Philips or the Dutch authorities. Enjoying the new attention and admiration, Del Prado seized the opportunity to express his assessment of the Dutch climate for microelectronics publicly. In October 1981, in a page-long article in a leading Dutch national newspaper, NRC Handelsblad, he showed off his achievements and vented his frustrations about the Dutch business environment. In “Silicon Valley at the Jan Steenlaan”, Del Prado publicly restated the argument of his letter to Pannenborg earlier that year. Deliberately, if not articulated directly, he took a sideswipe at Philips. Also, the Dutch capital market had to catch it. Still, at the end of the article, he emphasized his pride
