Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung Electronics Co. are in talks to construct massive chip factories in the United Arab Emirates (UAE) to meet the growing demand for artificial intelligence computing. According to sources cited by the Wall Street Journal, TSMC executives recently visited the UAE to discuss building a plant complex that could rival its cutting-edge facilities in Taiwan. Meanwhile, Samsung has also sent representatives to explore similar possibilities.
Though these discussions are in the early stages, the projects face several technical and logistical challenges. A factory of this scale could cost more than $100 billion. TSMC and Samsung have yet to confirm any concrete plans, with TSMC focusing on existing expansion projects in the US, Japan, and Germany.
The UAE is eager to position itself as a regional hub for AI technology, diversifying its economy away from petrochemicals. The Gulf states have long targeted the semiconductor industry for growth, and Abu Dhabi’s Mubadala investment arm owns GlobalFoundries, though previous efforts to build chip plants in the region have faced difficulties due to a lack of infrastructure.
AI development in the UAE is gaining traction, with G42, an Abu Dhabi-based firm, securing a $1.5 billion investment from Microsoft Corp. and partnering with Nvidia Corp. to create a climate technology lab. However, the UAE’s growing AI ambitions have drawn concerns from the US, particularly over the potential sharing of sensitive technology with China.