Taiwan's TSMC and Samsung in talks with UAE to build fab complexes

台灣台積電和三星正與阿聯酋洽談興建晶圓廠

Proposed UAE venture could be cluster of multiple factories worth US$100 billion


TAIPEI (Taiwan News) — Taiwan Semiconductor Manufacturing Company (TSMC) has reportedly talked with United Arab Emirates (UAE) officials about building factory complexes in the Gulf state.

Individuals familiar with the discussions told The Wall Street Journal that senior TSMC executives recently visited UAE to discuss matters regarding a facility comparable to the firm's largest and most sophisticated plants in Taiwan. Other sources indicate Samsung Electronics is also considering investing in chip manufacturing in the UAE over the next few years, with senior leaders visiting the country to explore the possibility.

The report cautioned that these discussions are still in the early stages and face technological and other challenges, which means the plans may ultimately not materialize. Under the preliminary talks, the UAE would fund the projects, with the Abu Dhabi-based and state-owned Mubadala Investment Company playing a central role.

Beyond boosting its domestic tech industry, the plan's overall objectives include boosting global chip production and helping lower chip prices without harming manufacturer profits.

A spokesperson for Mubadala said that MGX, a state-backed tech investment firm leading some of the UAE’s most significant AI investments, said UAE has made semiconductor production a strategic focus and is “in regular dialogue with partners around the world,” but that there are no detailed plans for such a project in the UAE at this time.

Due to rising costs, a state-of-the-art chip plant could now cost as much as US$20 billion (NT$640 billion). The proposed UAE venture could potentially be a cluster of multiple factories with a total investment exceeding US$100 billion.

Among the hurdles to overcome is the lack of super-clean water needed for rinsing the silicon wafers as the UAE gets most of its water through desalination, which would necessitate significant purification. In addition, the UAE lacks a pool of local engineers, meaning talent would need to be imported from the chipmakers' home countries and elsewhere.