TSMC, Samsung in talks to build chip factories in UAE
TSMC and Samsung Electronics are reportedly planning to set up chip manufacturing facilities in the United Arab Emirates (UAE). The Wall Street Journal reports that these projects could possibly exceed $100 billion in investment. This move signifies a major shift in the global semiconductor landscape, as top executives from both companies have recently visited the UAE, to explore the feasibility of these ambitious ventures.
TSMC's potential investment
TSMC, a leading player in the global semiconductor industry, is contemplating the development of a plant complex in the UAE. This facility could rival some of its biggest and most advanced facilities in Taiwan. Despite these discussions being at an early stage, they indicate TSMC's serious consideration toward investing in this region. However, TSMC has maintained that while it is open to discussions promoting development of the semiconductor industry, it currently has no new investment plans to announce.
Samsung's expansion strategy
South Korea's Samsung is also planning to set up major new processor-making operations in the UAE. Known for its production of smartphones, televisions, and memory chips, Samsung's interest in the UAE signifies a significant step in its global expansion strategy. The overarching goal of these initiatives would be to raise global semiconductor production capacity, possibly leading to lower chip prices without compromising the profitability of chipmakers.
US concerns over advanced AI technology reaching China
The potential chip making facilities in the UAE have drawn attention from Washington. There is rising concern about the possibility of advanced US AI technology reaching China through intermediaries in the Middle East. As tech-related deals in the region increase, the geopolitical implications of such investments are becoming increasingly complex. TSMC and Samsung have had discussions with US government officials, who are concerned about shipments of advanced AI chips into China, a UAE trading partner.
UAE's advancements in AI
The UAE has made significant progress in its effort to be a player in advanced technologies. OpenAI Chief Executive Sam Altman has talked with investors in the UAE, about dramatically expanding production of chips, power and other essential inputs for developing AI—efforts that could entail investment of as much as $5-7 trillion. Emirati entities have forged ties with other big firms in AI, including a stake in the start-up Anthropic of nearly $500 million.
