Bloomberg reports that Taiwan Semiconductor Manufacturing Co. (TSMC) is assessing the feasibility of constructing a state-of-the-art production facility in the United Arab Emirates (UAE), a move that would represent a significant strategic expansion into the Middle East. This prospective venture hinges on approval from Washington.
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Sources indicate that in recent months, TSMC has held several discussions with Steve Witkoff, the U.S. special envoy to the Middle East, as well as representatives from MGX, a prominent investment entity led by the brother of the UAE’s president. These meetings are said to be a continuation of dialogues initiated during President Joe Biden’s term, which had largely subsided toward the end of his administration.
The proposed undertaking centers on the construction of a “gigafab” — a large-scale manufacturing complex composed of six individual fabrication plants. This would mirror TSMC’s massive project currently underway in Arizona. While the projected investment for the UAE-based facility has not yet been disclosed, for reference, TSMC’s Phoenix development, which also includes research and chip packaging capabilities, is expected to cost approximately $165 billion.
As of now, the timeline for initiating construction in the UAE remains uncertain. Sources emphasize that if the project proceeds at all, it would be several years before any groundbreaking occurs. The decision to advance will heavily depend on alignment with U.S. policy, particularly as some senior members of the Trump administration are reportedly apprehensive about the national security and economic consequences of the world’s leading chipmaker establishing operations in the Gulf region. TSMC has collaborated closely with the U.S. government since Trump’s initial term, especially on the Arizona project, for which it secured $6.6 billion in federal funding. The company remains acutely aware of Washington’s concerns over further overseas expansion.
As a linchpin in the global semiconductor ecosystem, TSMC plays an indispensable role in the worldwide economy. It manufactures the vast majority of advanced chips designed by industry leaders such as Nvidia Corp. and Advanced Micro Devices Inc. — critical components that power modern electronics and facilitate the training of artificial intelligence models.
Historically, TSMC’s operations were confined to Taiwan, but the company has in recent years diversified its footprint by establishing facilities in Japan, Germany, and the United States. This geographic diversification reflects growing concerns over the geopolitical and supply-chain risks associated with maintaining a semiconductor production hub on an island that China considers part of its territory.
https://www.embedded.com/tsmc-is-considering-building-chip-manufacturing-plants-in-the-uae
