Monday, September 23rd 2024
TSMC and Samsung Consider Building $100 Billion Semiconductor Facilities in Middle East
TSMC and Samsung are reportedly in talks with the United Arab Emirates (UAE) to establish chip factories in the Gulf nation. As reported by the Wall Street Journal, this "desert dream" aligns with the UAE's ambitious plans to diversify its economy beyond oil and become a key player in the AI sector by building chips for AI domestically. The UAE and neighboring Saudi Arabia plan to leverage their oil wealth to invest in cutting-edge manufacturing, with AI emerging as a primary focus due to its high computational demands. Successful implementation of chip factories could significantly boost the region's AI capabilities and impact the global semiconductor supply chain. However, the project faces substantial challenges. Previous attempts to establish semiconductor manufacturing in the Gulf, such as the GlobalFoundries initiative over a decade ago, have yet to progress beyond initial planning.
The current proposal faces even greater obstacles, with estimated costs exceeding $100 billion for a state-of-the-art facility and necessary infrastructure. Geopolitical concerns add another layer of complexity. Recent US export restrictions of certain chips to the Gulf region may complicate the transfer of advanced manufacturing processes to the UAE. Despite these hurdles, the potential benefits are significant. For the UAE, success would represent a major step towards economic diversification and technological leadership. TSMC and Samsung could gain a strategic presence in a region eager for technological advancement. TSMC noted that the company focuses on current expansion projects in the US, Japan, and Germany, while Samsung declined to comment.
Source:
Wall Street Journal
The current proposal faces even greater obstacles, with estimated costs exceeding $100 billion for a state-of-the-art facility and necessary infrastructure. Geopolitical concerns add another layer of complexity. Recent US export restrictions of certain chips to the Gulf region may complicate the transfer of advanced manufacturing processes to the UAE. Despite these hurdles, the potential benefits are significant. For the UAE, success would represent a major step towards economic diversification and technological leadership. TSMC and Samsung could gain a strategic presence in a region eager for technological advancement. TSMC noted that the company focuses on current expansion projects in the US, Japan, and Germany, while Samsung declined to comment.
23 Comments on TSMC and Samsung Consider Building $100 Billion Semiconductor Facilities in Middle East
I guess its good for UAE overall though, and if TSMC is willing to risk it then its still one additional location to secure chips. War is less likely to breakout in two places than just one place after all. But I wouldn't call it a geopolitical win given how hot this region is.
The Saudis / UAE have been trying for decades to reach an advanced economy where they stop relying upon oil as their main income. I welcome these attempts and recognize this kind of ambition to be beneficial to the world. But it doesn't change the geopolitical reality of their neighbors or the risks in placing $100 Billion factories in such a hot region.
Not sure where all this silicon is going to go. Makes sense in a world where everyone upgrades every year or two, but those days are behind us. Desktop, phones, laptops, etc. I buy for several years now, and I have a feeling this is the new trend among majority of people.
And yes, "AI" is driving demand. Opinions on how much of a joke it is currently being implemented (and those I have plenty of) are irrelevant.The power differential between Saudi/UAE and Iran is the reverse of that between China-Taiwan. There is as much risk a significant conflict erupts there as that of the ridiculous plot of Homefront (the game) becoming a reality. Saudi and UAE are very stable countries. With exception to the former's southern borders, they haven't really seen much conflict since the 19/20th centuries. Having enough guns (and foreign support) ensures that things remain as such for the foreseeable future.Read some articles a few days ago about Brits throwing a fit about their engineers pulling a Wilfred Thesiger and setting sail to Arabia. So...
It's idiotic. And I don't see most of it better than the menace that is cryptocurrency. But where money is involved, "shouldn't do this" is a conclusion that depends only on the RoI.
This isn't a political comment, I know the rules, it just doesn't makes sense to build it there. It's a hot area and tomorrow no one says that the whole region will not be anti-West. I think the only way they can lure TSMC or Samsung to move high end equipment there, is if they take over the whole cost of the fab. And even then I do expect US to try to convince TSMC and Samsung to avoid building there.
Solid gold toilet included??Well not that long ago, there was a nuke plant called Chernobyl, a large % of its output was just to power an air/missile radar. A nuke site needs lots of employees, so easy to see the government green lighting it. Probably need another 1/2 dozen governing/regulating bodies like WANO, etc. to give the ok as well. Typically, you're not allowed to do nuclear unless you can do it safely.
Here ya go TSMC. A list of promising locations for your next fab.
simple.wikipedia.org/wiki/List_of_active_volcanoes
This statement makes as much sense as saying chips act would boost Russian Migs (perhaps even less).