TSMC and Samsung in Talks with UAE Government
Top executives from Taiwan's TSMC recently visited the United Arab Emirates (UAE) to discuss the possibility of building a large-scale semiconductor manufacturing complex in the country within the next few years. This project could significantly expand global semiconductor production and help reduce prices without compromising manufacturers' profitability.
The potential collaboration involves TSMC and Korea's Samsung Electronics, the world's leading players, who have reportedly been in discussions with their UAE counterparts about constructing a manufacturing plant of a similar scale to TSMC's current facility in Taiwan, which is the largest in the world and features advanced manufacturing processes.
It's reported that TSMC is considering partnering with Samsung Electronics to bring this project to life. To explore this possibility, Samsung Electronics has recently sent senior officials to the UAE to assess the feasibility of the plan. The project is estimated to be worth over US$100 billion, with preliminary discussions indicating that funding may come from the UAE's sovereign wealth fund, Mubadala, among others.
Mubadala, a significant player with $300 billion in investable assets as of the end of last year, has indicated interest in this venture. MGX, a state-run investment company established by the UAE government to invest in artificial intelligence (AI) projects, views semiconductor production facilities as a potential investment focus. Although ongoing talks with global partners have been confirmed, Mubadala has stated that there is no concrete plan for establishing a semiconductor manufacturing facility in the UAE at this stage.
Despite the early stage of discussions, the project could face several technical challenges, such as the significant amount of purified water required for semiconductor production and the current lack of skilled workers in the UAE who can manage such an advanced manufacturing facility.
There are also geopolitical considerations, as the United States has expressed concerns about the potential impact of this project on the flow of semiconductors to China. TSMC and Samsung Electronics have engaged in discussions with U.S. government officials about the feasibility of establishing the plant in the UAE and ensuring that the U.S. can oversee semiconductor production and logistics at the facility. A White House National Security Council (NSC) spokesperson confirmed that the U.S. has been working closely with the UAE in advanced technological sectors over the past two years, indicating that the US-UAE partnership remains on a positive trajectory.