TSMC, Samsung Weigh Adding Chip Factories in UAE, WSJ Says

Jennifer George
Jennifer George September 23, 2024

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Leading chip giants, Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. are exploring opportunities to set up major chip factories in the UAE to accommodate the surging global demand for AI computing. The Wall Street Journal reported that discussions are in the early phases and may not “pan out” as several technical roadblocks lie ahead. According to the paper, “projects of the scale under consideration could cost more than $100 billion to complete.”

On Sunday, WSJ reported that key executives from TSMC have visited the UAE to conceptualize the chipmaker’s latest plant complex in the Emirates, which would rival TSMC’s original chip facility headquartered in Taiwan. People with knowledge of the development at Samsung have also confirmed that “emissaries have been sent to the Middle Eastern country recently to talk about major new [chip] operations.” Though Samsung refused to comment on these developments, TSMC has stressed executing confirmed chip projects in the US, Japan, and Germany as its primary focus.

The UAE aims to emerge as a global force in the AI chip race, with key partnerships with OpenAI CEO Sam Altman to expand machinery and systems for the technology in the country. This shift toward AI innovation and cloud computing underscores the UAE’s goal to carve a post-oil future. Companies like G42, an Abu Dhabi-based AI firm, pioneer and champion the country’s growth in the global AI landscape. In 2024, G42 secured a $1.5 billion investment from Microsoft Corp. to establish two centers locally to advance AI adoption in the UAE.

In a recent statement, G42 confirmed a landmark partnership with Nvidia to create a climate technology lab. This partnership marks the firm’s first collaboration with Nvidia, whose chips have been essential for advancing AI software. But the UAE’s steady climb up the AI chip ladder has rattled its allies in the West. The UAE’s bilateral relations with China will expand to the exchange of AI technology, which directly threatens the US efforts to stifle China’s AI capabilities.

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