Taiwan Semiconductor Manufacturing Co. (TSM) and Samsung Electronics Co. (SSNLF) are considering building large-scale semiconductor manufacturing facilities in the United Arab Emirates, with the value of these projects potentially exceeding $100 billion.
What happened: TSMC executives recently visited the UAE to explore the possibility of building a complex of factories to rival the company’s largest facility in Taiwan. Similarly, senior Samsung executives have visited the UAE to discuss possible chip-making operations in the region, The Wall Street Journal reported, citing people familiar with the matter.
Those talks are still in their early stages and face significant technical and logistical challenges. The UAE will fund the projects, with Abu Dhabi-based government development agency Mubadala playing a central role. Mubadala is keen to develop the country’s high-tech industry and increase global semiconductor production.
The UAE’s ambitions reflect a global effort to expand semiconductor production to meet the demands of the AI boom, but major technical and political hurdles remain, including the need for ultra-clean water and securing engineering talent.
TSMC and Samsung have met with US government officials over concerns about shipments of advanced AI chips to China, the UAE’s trading partner, and the reports say those concerns need to be resolved before construction can begin.
“While we are always open to constructive discussions about ways to promote the development of the semiconductor industry, we remain focused on our current global expansion projects and have no new investment plans to disclose at this time,” a TSMC spokesperson said in an emailed response to Benzinga.
Samsung did not immediately respond to Benzinga’s request for comment.
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Why it matters: The talks between TSMC and Samsung come at a time when the Middle East is becoming increasingly important to the global semiconductor industry.
Microsoft recently called for greater transparency about U.S. export restrictions that are slowing deliveries of AI chips to the region after it invested $1.5 billion in G42, the UAE’s largest AI company, hoping to use it as a gateway to markets in Africa and Asia.
Additionally, NVIDIA has begun supplying advanced chips to Saudi Arabia, positively influencing market sentiment in the Middle East and Asia. The move comes after the United States reconsidered advanced semiconductor sanctions against Saudi Arabia that were initially imposed in 2023 due to national security concerns.
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This story was produced with Benzinga Neuro and edited by Kaustubh Bagalkote.
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