Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest foundry firm, is reportedly considering the construction of a massive semiconductor plant named "Giga Fab" in the United Arab Emirates (UAE) that could produce more than 100,000 wafers per month. Bloomberg News reported on the 30th of last month (local time) that TSMC has been meeting with U.S. Middle East special envoy Steve Wietkopf and UAE sovereign wealth funds MGX among others over the past several months.
The UAE plant planned by TSMC will resemble the six semiconductor plant complexes currently being developed in Phoenix, Arizona, and will encompass not just production facilities but also research laboratories and packaging facilities as a comprehensive technological hub. Although the move into the Middle East is aimed at diversifying global supply chains, its realization is contingent upon approval from the U.S. government.
Concerns have been raised in certain quarters of the U.S. political arena that TSMC's expansion into the Middle East could pose a threat to national security, particularly with the potential re-election of former President Donald Trump. The UAE's close economic and diplomatic ties to China have raised issues regarding the risk of technology leaks and geopolitical tensions with Iran. Accordingly, it has been reported that the UAE has resumed negotiations following the establishment of Trump's second administration.
There have been many criticisms that the Middle East is unsuitable as a semiconductor production base due to its hot and dry climate, the lack of skilled engineers, and issues related to industrial water resources. However, the UAE is actively working to attract the semiconductor industry, leveraging its financial power, energy, and land infrastructure.