TSMC Explores Advanced Chip Manufacturing in UAE, Seeking US Approval

TSMC is once again in talks with US officials over a possible gigafab in the UAE

Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. What just happened? TSMC is once again in talks with US officials about a potential advanced chip factory in the United Arab Emirates. The plan has been floated before under the Biden administration, but now it appears to have gained new life following recent conversations between TSMC, the Trump administration, and UAE representatives. A Bloomberg report, citing sources familiar with the matter, highlights that the proposed plant would be a gigafab, essentially a sprawling complex of multiple chipmaking facilities. If it comes to pass, it would represent a massive leap in the UAE's ambitions to become a key player in this field, even though it currently lacks skilled semiconductor labor. TSMC has reportedly met several times in recent months with Steve Witkoff, the US Special Envoy to the Middle East, and MGX, a powerful UAE investment fund tied to the ruling family. The renewed interest comes amid broader negotiations around AI cooperation between the two countries. Still, don't expect bulldozers on the ground anytime soon. The idea is still in early-stage talks, and whether it advances at all hinges on how the US feels about it, particularly given the national security and economic implications. Critics inside the administration point to the UAE's ties to China and the risk of future technology transfers. AI data centers can be more easily regulated through licensing and oversight, but a chip manufacturing plant would create a pipeline of advanced know-how and local production that the US could lose control over. It's worth mentioning that TSMC is already investing heavily in the US through its Arizona project, which is expected to cost $165 billion and includes fabs, research labs, and chip packaging facilities. The US committed $6.6 billion in subsidies to help make that happen as part of the CHIPS Act. But some in the Trump administration worry that spreading TSMC's resources too thin, especially in a region with complex geopolitics like the Gulf, could backfire. Regardless of the outcome, the UAE continues to position itself as a regional tech leader and has been aggressively courting partnerships in AI, quantum computing, and cloud infrastructure. Last month, Trump announced a series of agreements with multiple Gulf countries, including the UAE, related to exporting AI chips and developing AI infrastructure.

Taiwan Semiconductor Eyes UAE Gigafab, Seeks Crucial US Green Light - Taiwan Semiconductor (NYSE:TSM)

Taiwan Semiconductor Manufacturing Co. TSM is weighing an advanced gigafab in the United Arab Emirates. The contract chipmaker is exploring a complex of six factories (similar to its Arizona fab), subject to regulatory approval from the Trump administration, given the Gulf nation's ties to China and Iran's influence in the region. Taiwan Semiconductor held meetings with Steve Witkoff, the U.S. special representative to the Middle East, and MGX officials, Bloomberg reported on Friday, citing unnamed sources familiar with the matter. Also Read: To Serve Exploding AI Chip Demand, Taiwan Semiconductor Plans 9 Advanced Factories Taiwan Semiconductor accounts for the majority share of advanced chips designed by the likes of Nvidia Corp. NVDA and Advanced Micro Devices, Inc. AMD components that serve as the brains of electronic devices and are essential for training artificial-intelligence models. Taiwan Semiconductor executives visited the UAE in 2024, aspiring for potential geographical diversification amid support from the Biden administration subject to stringent conditions. However, the talks failed to fructify. After Trump assumed charge, the UAE sought a Taiwan Semiconductor fab and vied for easier access to Nvidia chips for AI data centers. In March, the UAE announced a $1.4 trillion commitment to invest in the U.S. Wedbush analyst Daniel Ives hailed Saudi Arabia as a significant area of penetration for the AI revolution after President Trump's key trip to the Middle East. Ives noted that the market opportunity in Saudi Arabia could add another $1 trillion to the broader global AI market in the coming years, posing tailwind for Nvidia, Palantir Technologies PLTR, Microsoft Corp MSFT, Amazon.com Inc AMZN, Alphabet Inc GOOG GOOGL, Tesla Inc TSLA. Price Action: TSM shares are trading lower by 0.94% to $191.50 premarket at last check Monday. Read Next: Taiwan Semiconductor And Intel Weigh Benefits Of ASML's Pricey Chipmaking Equipment Image by Jack Hong via Shutterstock TSMTaiwan Semiconductor Manufacturing Co Ltd$191.46-0.96%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum84.29Growth95.11QualityNot AvailableValue51.36Price TrendShortMediumLongOverviewAMDAdvanced Micro Devices Inc$109.94-0.71%AMZNAmazon.com Inc$203.50-0.74%GOOGAlphabet Inc$170.80-1.19%GOOGLAlphabet Inc$169.60-1.25%MSFTMicrosoft Corp$457.60-0.60%NVDANVIDIA Corp$133.86-0.94%PLTRPalantir Technologies Inc$129.46-1.76%TSLATesla Inc$339.53-2.00%Market News and Data brought to you by Benzinga APIs