September 23, 2024 – According to a report by the Wall Street Journal yesterday, both Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung Electronics have been exploring the possibility of building large-scale wafer fabs in the United Arab Emirates (UAE).
The report indicates that the UAE is discussing an advanced semiconductor manufacturing complex, which could potentially include multiple wafer fabs with an overall cost exceeding $100 billion. This project is expected to be funded by the UAE government, with Mubadala, the country’s sovereign investment fund, playing a pivotal role.
Mubadala aims to bolster the development of the domestic technology industry and seek alternative economic growth drivers beyond oil wealth. By attracting these two leading foundry giants to set up factories in the UAE, it could also enhance global semiconductor production capacity and potentially drive down chip prices without affecting manufacturers’ profitability.
In the wafer foundry sector, Mubadala previously acquired GlobalFoundries in 2008 and had discussed the possibility of building a fab in the UAE. However, those plans ultimately fell through.
Sources close to TSMC revealed that the company’s executives recently visited the UAE to discuss the construction of a large-scale production facility comparable to its factories in Taiwan. Similarly, Samsung Electronics’ top management has also been to the UAE recently, exploring the feasibility of launching a significant chip foundry business in the country over the next few years.
These discussions, however, are still in their early stages and face numerous challenges, including natural resources, human resources, and geopolitical considerations.
One significant challenge is the requirement for large amounts of ultrapure water in chip manufacturing processes such as silicon wafer cleaning. Most of the water used in the UAE is desalinated seawater, which is costly and not sufficiently pure for semiconductor production. This necessitates the construction of additional large-scale deep purification facilities.
Furthermore, the UAE currently has a modest semiconductor supply chain and a shortage of talent in the chip industry, making it difficult to meet the substantial demand for engineers at advanced wafer fabs.
A Mubadala spokesperson stated that MGX, a technology investment company where Mubadala is a cornerstone partner, views semiconductor manufacturing as one of its strategic pillars and regularly engages in dialogue with partners worldwide. However, the spokesperson did not directly address the rumors regarding the wafer fab plans.
Recently, MGX, along with Microsoft, BlackRock, and GPI, established an AI infrastructure investment fund with a size exceeding $30 billion.
