Building a Saudi Arabian Silicon Oasis

Amit Midha, CEO of Alat (left) & Masayoshi Son, chairman and CEO of SoftBank Group (right)

Riyadh-headquartered Alat has been established to create what it calls a world-class manufacturing electronics hub in the heart of Saudi Arabia.

The PIF owned company has an investment budget of $100bn and is looking to use renewable energy technologies — ranging from solar to wind and hydrogen — to help power up the manufacturing and creation of 34 product categories, ranging minimal additional programming, for industrial assembly and applications in manufacturing and production.

One of these partnerships is a new joint venture (JV) set up between Softbank and Alat. The pair plan to build industrial robots that will perform tasks, with this. If you think about the way that we look at the world, we look at four themes: the impact of artificial intelligence on businesses, sustainability, supply chain resilience, and innovation capital. When we think about our mission of building this global sustainable manufacturing hub and we look at partnerships, we really look at these four areas which have disruption in the technology space and the global supply chain.

The facility that the JV will create in the Kingdom is dubbed a ‘lighthouse factory’ and it will build robots, said Brian Rogove, the co-chief of corporate development at Alat. Rogove recently sat down with Gulf Business to tell us more.

Before we get into your new deal with Softbank, tell us what Alat is exactly and why it’s so important to the electronics and manufacturing space in the GCC.

“It’s something that we’re very excited about. Our mission is really simple: to build a world-class global sustainable manufacturing hub here in the Kingdom of Saudi Arabia. And global is an important part of from semiconductors to smart devices and smart appliances. After being set up earlier this year, Alat moved quickly last month to set up four new key partnerships to start turning the GCC’s biggest economy into the world’s next advanced technologies hub.

And Alat is also backed by Saudi Arabia’s Public Investment Fund (PIF), correct?

“We are. Our shareholder is the PIF and they’ve been generous enough to give us $100bn of committed capital for this ambitious mission that we have. We take that responsibility very, very seriously and we look to fulfill that mission.

Tell us more about what’s involved with your partnership with SoftBank.

With SoftBank, we’re excited about our partnership with them. In particular, we’re excited about the fact that you’ll actually start seeing robots manufactured in a plant in Saudi Arabia coming off the production line by the end of this calendar year. For us, it’s not just about the announcements, it’s about execution and we’re in the execution phase of this ambitious mission that we have. When we think about next-generation infrastructure — which is one of our seven strategic business units — we particularly think about robotics and AI robotics.

What will these robots be used for? Give us some examples of how they’re going to make an impact in our day-to-day lives.

They will be used in production for high precision manufacturing for a lot of different global purposes.

Apart from Softbank, there are three other partnerships that you’ve lined up as well. Tell us about them.

I’ll start with Carrier – a partnership that we’re very excited about. One of our strategic business units is smart heating and cooling, and we’re thrilled to be working with Carrier which is a world-class organization when it comes to HVAC (heating, ventilation, and air conditioning). So we’ve announced a partnership with them where we will both have global research and development for data center cooling as well as manufacturing here in the kingdom. And that’s something that we’re really excited about. If you look at just data center growth, and the heating and cooling needs in particular, we think that this global partnership with them in that arena, both from an R&D as well as manufacturing footprint, is something that we get very excited about.

Is your goal to ultimately compete with other global technology hubs such as Shenzhen or Taiwan, or are you aiming for something different?

I think the word ‘compete’ is probably not the right word to use when we think about the global supply chain. I think the thing that we’ve all learned in the last five years, particularly post-Covid, is the importance of supply chain resiliency, whether it’s across sectors such as national security or health. I can remember the days of not being able to get masks, for example, during the pandemic. So I think that’s taught governments and companies that being solely reliant on any jurisdiction is something that probably is not robust. And I think in almost every single boardroom of every company in the world, people are talking about supply chain resiliency. Again, if you look at our mission of building this world-class sustainable manufacturing hub in the kingdom, we’ll play a role in that supply chain resiliency. And the role that we will play will be one whereby people are aligned with our mission of sustainable manufacturing powered by clean energy. Added to this, when we think about globalization, there are people who want to have global partners but they also want to be able to have globalization that’s local. And we think that the geographic location of Alat, our access to clean, reliable and inexpensive renewable energy is something that’s going to be attractive. And that’s why we’re really excited about it. So we really don’t look at it as competing against other parts of the world – we look at it as being complementary.

It’s interesting that you talk about the renewable energy side of Alat. How much will solar panels, for example, power all the facilities there?

We don’t just look at one aspect of power; we look at the entire ecosystem. I think solar will play a part. I think green hydrogen will play a part, and I think wind will play a part. It’ll be a mix. Even if you look at just the Kingdom on its own, putting Alat aside, their own ambition is to have a wide mix of energy along the lines of what we’ve just talked about. At Alat, we’ll have a mix of solar, wind, and hydrogen. We won’t be solely reliant on one form of energy.

Your background is in semiconductors. You’ve been in Singapore for the last several years as well. What brought you to Saudi Arabia and Alat?

I started my career in semiconductors in 1996, which seems like an age ago. And that’s actually what originally brought me to Asia. When I first came to Asia, where I was working in advanced microelectronics and semiconductor packaging, it was the early days and a lot of that manufacturing was done in Asia and Southeast Asia, Korea, Japan and Taiwan. And I saw the transformation. I saw the transformation that advanced manufacturing had on these countries. I can remember going to countries like China in the 1990s, places such as Guangzhou and Shenzhen and places in Taiwan where they were trying to find out how they were going to get engineers. Fast forward more than 20 years later and now they’re world class hubs for advanced manufacturing. I see that same opportunity for the kingdom to play a similar role, particularly with sustainable manufacturing. In Saudi Arabia, we have access to talent and we have the ability to train talent. We have the natural resources, and we have the financial resources to really I think be a player on the global stage in these industries that we’re focused on.

I’ve seen this journey for 25 years in Asia myself. I remember the first time coming here to Saudi Arabia and it reminded me of going to Shanghai in 1996, except that Saudi Arabia has more ambition and a quicker timeframe to do it. It’s something to get pretty excited about.