In a bid to meet future demand for artificial intelligence chips, two of the world’s leading chip manufacturers, Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung Electronics Co., are reportedly exploring plans to build massive semiconductor factories in the United Arab Emirates (UAE), according to a recent report by the Wall Street Journal.
Potential $100 Billion Investment
Executives from both companies have recently visited the UAE to discuss the potential construction of advanced manufacturing facilities. Although these discussions are still in the preliminary stages, the estimated combined cost of the factories could exceed $100 billion, making it a significant investment in the region’s growing technology sector.
UAE’s Role in Global Chip Production
If the plans materialize, the UAE plants would be funded by the Abu Dhabi-based sovereign investment fund Mubadala, as part of a larger initiative to develop the nation’s domestic tech industry. These new factories could also play a pivotal role in increasing global semiconductor production, particularly in AI chip manufacturing, and could contribute to reducing the costs of these high-demand components.
Companies Remain Cautious
While the discussions are ongoing, both TSMC and Samsung have not yet committed to the project. A spokesperson for TSMC commented, “We are always open to constructive discussions on ways to promote the semiconductor industry, but we remain focused on our current global expansion projects and have no new investment plans to announce at this time.” Samsung has yet to issue a public response to the reports.
Impact on AI Chip Market
The potential UAE-based chip factories could provide a significant boost to global production capacity, which is expected to be crucial as demand for semiconductors, especially those used in AI servers, continues to rise. By increasing supply, the new plants could also contribute to lowering the prices of AI chips, benefiting industries that rely heavily on these components.
