TSMC, Samsung consider building chip factories in UAE, WSJ reports

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The world’s biggest chipmakers, Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung Electronics are reportedly considering building major new factories in the UAE in the coming years to meet the soaring demand for artificial intelligence (AI) computing.

Sources familiar with the matter told The Wall Street Journal that TSMC executives visited the UAE recently and discussed a plant complex on par with some of the company’s largest and most advanced facilities in Taiwan.

Similarly, South Korea’s Samsung also recently sent its senior leaders to the Emirates to discuss major new operations in the Gulf state.

Under the initial terms being discussed, the projects would be funded by the UAE, with a central role for Abu Dhabi-based sovereign development vehicle Mubadala, according to a WSJ report. The broader goal would be to increase global chip production and help bring chip prices down without hurting chipmakers’ profitability.

A Mubadala spokesman told WSJ that Abu Dhabi technology investment firm MGX had made semiconductor manufacturing a pillar of its strategy and was “in regular dialogue with partners around the world,” although there are no specific plans currently for a facility in the UAE.

However, discussions with TSMC and Samsung are still in the preliminary phases, and they face technical and other hurdles that could prevent them from panning out.

TSMC and Samsung’s potential projects could pave the way for the next phase of industry expansion following an era of manufacturing growth spurred by government subsidies in the US, Europe and East Asia.

The UAE aims to become a regional hub and testing ground for AI. That includes potentially backing OpenAI CEO Sam Altman’s ambitious plan to expand machinery and systems for the technology.

Abu Dhabi’s G42 is central to the UAE’s push into AI. The AI firm secured a $1.5bn investment from Microsoft earlier this year, and the companies recently unveiled plans to create two centres locally to develop AI industry standards.

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