Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung are reportedly considering building large-scale chip factories in the United Arab Emirates (UAE), the Wall Street Journal writes.
The two companies are among the top semiconductor manufacturers globally. TSMC, headquartered in Taiwan, is known for producing advanced chips for major tech companies like Apple and Nvidia. Samsung, based in South Korea, is a key player in the semi conductor market, particularly noted for its memory chips and cutting-edge fabrication technologies.
The UAE’s location, which is highly strategic on their part, is a major factor driving this recent consideration. Positioned as a gateway between Europe and Asia, the UAE offers an advantageous hub for global trade. Additionally, the UAE government has been actively working to diversify its economy beyond oil and are investing heavily in technology and innovation sectors.
Currently, much of the world’s semiconductor production is concentrated in East Asia. Diversifying manufacturing locations, such as establishing chip factories in the UAE, could reduce the risks of the supply chain being affected by natural disasters and geopolitical tensions.
The UAE’s favorable business environment, including tax incentives and robust infrastructures, also has its appeal as a potential site for these mega factories. Like earlier mentioned, the country has been making strides in developing its tech ecosystem, with initiatives like the Dubai Silicon Oasis and Abu Dhabi’s Hub71, to attract tech companies and startups.
However, the decision to build these factories is not yet finalized, according to WSJ. Both TSMC and Samsung are conducting feasibility studies to assess the viability of such a significant investment. These studies will consider various factors, including the availability of skilled labor, supply chain logistics, and the overall economic environment in the UAE. If the plans proceed, the construction of these factories would require a substantial investment, potentially running into billions of dollars. However, on the other hand, this investment would not only boost the UAE’s economy, but could also enhance its position as a global tech hub.