Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung Electronics are in preliminary discussions to establish advanced semiconductor manufacturing facilities in the United Arab Emirates (UAE), reports the Wall Street Journal.
These talks aim to address the growing demand for artificial intelligence (AI) computing capabilities.
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According to the report, executives from TSMC have visited the UAE to explore the possibility of creating a plant complex that could match their sophisticated operations in Taiwan.
Samsung, hailing from South Korea, has also dispatched representatives to the Middle Eastern nation to discuss potential new ventures.
Although these discussions are at an initial stage, and the projects may not materialise due to various challenges, the scale of the proposed developments could see investments exceeding $100bn.
Samsung has not issued any comments on the matter.
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By GlobalDataIn contrast, TSMC stated that it is currently concentrating on its exiting expansion projects, which are located in the US, Japan, and Germany, and has no new investment plans to announce at this time.
The UAE is strategically positioning itself as a regional AI hub and a testing ground for the technology.
This includes potentially supporting a bold initiative by OpenAI CEO Sam Altman to advance AI machinery and systems.
The Gulf states have been actively seeking to diversify their economies away from petrochemical dependence, eyeing the semiconductor industry as a key area for growth for over a decade.
Mubadala, Abu Dhabi’s investment arm and the majority owner of GlobalFoundries, had initially planned to construct a chip factory in the Middle East.
However, the Gulf region’s lack of necessary infrastructure has hindered such ambitions, given the immense costs and rapid obsolescence associated with chip plant construction and maintenance.
Semiconductor companies typically favour locations with established industry clusters, skilled labour, and close proximity to suppliers and support services.
G42, an Abu Dhabi-based company, is at the forefront of the UAE’s push into AI, having secured a $1.5bn investment from Microsoft earlier this year and announcing plans to establish two local centres for AI industry standards development.
G42 has also announced a partnership with NVIDIA to create a climate technology lab, marking its first collaboration with the company whose chips are crucial for AI software development.
