Chip giants TSMC and Samsung reportedly mull building mega factories in the UAE

Leading chipmakers TSMC and Samsung are discussing mega factory building projects in the United Arab Emirates (UAE), according to a report published by the Wall Street Journal (WSJ). The source report indicates that investments of $100 billion or more are being considered. However, neither TSMC nor Samsung confirmed any specific plans. To be clear, we aren’t talking about a TSMC and Samsung hook-up in the UAE; they would invest and build in the region separately.

According to the WSJ, top TSMC executives have recently visited the UAE to explore expanding manufacturing operations. Interestingly, the world’s largest contract chipmaker “talked about a plant complex on par with some of the company’s largest and most advanced facilities in Taiwan,” said unnamed people familiar with the matter. Projects like this could be worth more than $100 billion, according to the WSJ.

The claims regarding TSMC are undoubtedly eye-catching, if not a little superstitious, as the Taiwanese firm is well known for limiting its crown jewels, its top technologies, to facilities on its home turf. Even its newest factories in old and trusted allied nations like the USA, Germany, and Japan don’t tread on the toes of its most advanced facilities in Taiwan – so why should the UAE be any different?

In response to Reuters questions about its purported UAE plans, TSMC said it hasn’t announced anything new. Instead of addressing the question directly, it repeated a boilerplate statement about always being open to constructive discussion on the development of the semiconductor industry. 

Moving on to the Samsung rumors, we have a similar story. The source report says senior Samsung execs have also recently visited the UAE to discuss factory building plans. According to the WSJ, such projects may be funded by the UAE, with a central role for the Abu Dhabi-based Mubadala investment company. Plans are still in the early stages, and various technical and other hurdles must be navigated. According to Reuters, Samsung declined to comment when quizzed about its UAE plans.

The UAE has featured quite frequently in tech news in recent months. We have reported on the oil-rich Middle East being at the center of an influence war between the U.S. and China. Over recent months, the pull of the U.S. and the more advanced technologies of its allies seems to have won the region over. This was likely inevitable as countries like the UAE seek to diversify from fossil fuels into technology, with eyes on AI in particular.

Megafactories run by TSMC and Samsung inside the UAE would help cement the country’s position as a Middle East tech hub, delivering enviable access to the latest semiconductors. 

The best-known AI /tech company based in the UAE is probably G42. Earlier this month, this pivotal firm got the green light from the U.S. to import advanced Nvidia GPUs for its data centers, joining its Cerebras-powered systems. G42 is also known to have divested from China-backed projects and purged its data centers of Chinese parts. Perhaps the timing of these decisions signals that the doors to mega factory investments from companies like TSMC and Samsung are now open.