Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung Electronics Co. are reportedly in talks to establish significant semiconductor manufacturing facilities in the United Arab Emirates (UAE) to meet the increasing demand for artificial intelligence (AI) computing, according to a report by the Wall Street Journal. TSMC executives have recently visited the UAE to explore the potential for a factory complex that could rival the company’s advanced operations in Taiwan.
Similarly, Samsung has sent representatives to the UAE to discuss plans for substantial new projects, as indicated by sources familiar with the companies’ strategies. However, these discussions are still in their early stages, and the realization of such projects may face various technical and logistical challenges. The estimated cost for these initiatives could exceed $100 billion.
Samsung opted not to comment on the matter, while TSMC stated in an email that its current focus is on ongoing global expansion efforts, with no new investment plans to announce at this time. The Taiwanese firm is already developing new facilities in the United States, Japan, and Germany.
The UAE is positioning itself as a regional hub for AI and is exploring ambitious projects, including backing plans by OpenAI CEO Sam Altman to enhance technology infrastructure. Gulf states have been actively seeking to diversify their economies beyond petrochemicals and view the semiconductor industry as a key growth area.
Abu Dhabi’s Mubadala investment arm is the majority stakeholder in GlobalFoundries Inc., which was initially acquired to facilitate the establishment of semiconductor manufacturing in the region. However, progress has been hindered by the lack of necessary infrastructure to support the construction and operation of high-cost chip plants.
G42, an Abu Dhabi-based technology firm, is pivotal to the UAE’s AI ambitions, securing a $1.5 billion investment from Microsoft earlier this year. The companies have recently announced plans to establish two centers focused on developing AI industry standards. Additionally, G42 is collaborating with Nvidia Corp. to create a climate technology lab, marking its first partnership with the chipmaker, whose products are essential for AI software development. G42 also has a partnership with OpenAI.
Nonetheless, the UAE’s rapid ascendance in the AI sector has raised concerns within the U.S. government regarding the potential transfer of sensitive technologies to China. In response to these concerns, G42 agreed to cease any collaborations with China ahead of the Microsoft investment.
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