TAIWAN Semiconductor Manufacturing Company (TSMC) and Samsung Electronics have discussed building major new factories in the United Arab Emirates in coming years to help satisfy soaring demand for artificial intelligence (AI) computing, The Wall Street Journal (WSJ) reported.
Executives from TSMC, the world’s largest chipmaker, have visited the UAE recently to discuss building a plant complex that could rival the company’s advanced facilities in Taiwan, the newspaper said on Sunday (Sep 22), citing sources familiar with the interactions.
South Korea’s Samsung has also sent emissaries to the Middle Eastern country recently to talk about major new operations there, The Wall Street Journal said, citing separate sources with knowledge of the company’s strategy.
The Wall Street Journal said the discussions are in early phases and the projects might not pan out, given the array of technical and other hurdles they face. Projects of the scale under consideration could cost more than US$100 billion to complete, the paper said.
The UAE is angling to become a regional hub and testing ground for AI. That includes potentially backing an ambitious plan by OpenAI chief executive officer Sam Altman to expand machinery and systems for the technology.
More broadly, the Gulf states have been trying to decrease their reliance on petrochemicals. They have been targeting the semiconductor industry as a growth opportunity for more than a decade. Abu Dhabi’s Mubadala investment arm is the majority owner of GlobalFoundries, the former factory operations of Advanced Micro Devices. That purchase was originally intended to lead to the building of a factory in the Middle East.
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But such efforts have struggled in part because the Gulf lacks the infrastructure needed to justify building chip plants, which cost tens of billions of US dollars to construct and equip – and rapidly become obsolete if they are not updated. Chipmakers prefer to build the factories in clusters where they can take advantage of skilled worker pools, existing infrastructure, and proximity to suppliers and support.
G42, an Abu Dhabi-based firm, is central to the UAE push into AI. It lined up a US$1.5 billion investment from Microsoft earlier this year, and the companies just announced plans to create two centres locally to develop AI industry standards.
G42 said last week that it would team up with Nvidia to create a climate technology lab. The tie-up was the firm’s first partnership with Nvidia, whose chips have been vital to the development of AI software. G42 also has an accord with OpenAI, the creator of ChatGPT.
But the UAE’s rise as an AI power also has drawn concerns from the US government, which wants to ensure the country is not delivering sensitive technology to China. Ahead of the Microsoft deal, G42 agreed to end any cooperation with that country. BLOOMBERG
