TSMC Denies Plans for UAE Chip Factory Amidst Global Semiconductor Competition
Abu Dhabi, UAE – Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest chipmaker, has denied reports that it is planning to build a large-scale chip factory in the United Arab Emirates.
The company issued a statement onSeptember 23, stating that it currently has no concrete plans for new overseas investments. This comes after a report by The Wall Street Journal on September 22, which claimed that both TSMC and its rival Samsung Electronics were in discussions with the UAE government to build a chip factory with a potential cost exceeding $100 billion.
According to the report, the UAE government, specifically theMubadala Investment Company, one of its three sovereign wealth funds, would be the primary financier for the project.
TSMC, in its statement, acknowledged the importance of constructive discussions promoting the development of the semiconductor industry, butemphasized its focus on existing global expansion plans.
The Wall Street Journal report highlighted the significant technical and political hurdles facing both companies in establishing a factory in the UAE.
One major challenge lies in the availability of ultra-pure water, a crucial component in chip manufacturing. The UAE primarily relies on desalinated seawater, which does not meet the purity requirements for chip production and would require further purification processes.
Another obstacle is the potential for political tension. Both TSMC and Samsung have been in discussions with the US government regarding their potential UAE projects. US officials are concerned that advanced chips manufactured in the UAE could potentially be exported toits rivals.
TSMC is currently constructing factories in Arizona, USA; Dresden, Germany; and Kumamoto, Japan. The Kumamoto facility, which is expected to begin production of 12nm, 16nm, 22nm, and 28nm chips in the fourth quarter ofthis year, is the company’s first factory in Japan. The Arizona facility is slated to begin production of 4nm chips in the first half of 2024, while the Dresden factory is scheduled to start production in 2027.
The potential for a TSMC factory in the UAEcomes amidst a growing global competition for semiconductor dominance. The US and Europe have both introduced their own Chips Acts to bolster their domestic chip industries, making TSMC, with its leading-edge technology, a highly sought-after partner.
The UAE, meanwhile, is aiming to establish itself as a major hub forthe global chip industry. In February, reports emerged that OpenAI CEO Sam Altman was in discussions with investors from the UAE and other countries to establish a chip network with an estimated investment of $5 trillion to $7 trillion.
While TSMC’s denial of immediate plans for a UAE factory may be a setbackfor the country’s ambitions, the company’s statement did not rule out future possibilities. The ongoing global competition for semiconductor dominance suggests that the UAE’s efforts to attract major chip manufacturers are likely to continue.
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