TSMC Denies Plans for New Factory in UAE, Citing No Concrete Plansfor Overseas Investment
Abu Dhabi, UAE – Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest chipmaker, has denied reports that it is planning to build a new factory in the United Arab Emirates.
The company issued a statement onSeptember 23, stating that it has no concrete plans for new overseas investments at this time. This statement comes in response to a report published by the WallStreet Journal on September 22, which claimed that TSMC and Samsung Electronics were both in discussions to build large-scale chip factories in the UAE, with potential costs exceeding $100 billion.
The proposed project, according to theJournal, would be funded by the UAE, with Mubadala, one of the country’s three sovereign wealth funds, playing a key role.
While TSMC acknowledged its openness to constructive discussions that promote semiconductor industry development, it emphasized its focus on its existing global expansion plans.
The Wall Street Journal report highlighted significant technical and political hurdles facing both TSMC and Samsung in establishing factories in the UAE.
One major challenge is the availability of ultra-pure water, a critical component in chip manufacturing. The UAE primarily relies ondesalinated seawater, which does not meet the stringent purity requirements for chip production and would require further purification.
Another obstacle stems from concerns raised by US officials regarding the potential for advanced chips manufactured in the UAE to be shipped to competing countries. Both TSMC and Samsung have been engaged in discussions with the US governmentregarding the proposed projects.
TSMC currently has factories under construction in Arizona, USA; Dresden, Germany; and Kumamoto, Japan. The Kumamoto facility is expected to begin mass production of 12nm, 16nm, 22nm, and 28nm chips in the fourth quarter ofthis year. The Arizona factory is scheduled to start producing 4nm chips in the first half of next year, while the Dresden facility is slated to begin production in 2027.
The news comes amid a growing geopolitical landscape marked by uncertainty, with both the US and Europe implementing their own ChipsActs to bolster domestic chip industries. TSMC, possessing the most advanced chip manufacturing technology globally, has become a key target for both regions.
The UAE, meanwhile, has ambitions to become a major hub for the global chip industry. In February, reports surfaced that OpenAI CEO Sam Altman was in discussions with investorsfrom the UAE, among other locations, to establish a chip network with a potential investment of $5 trillion to $7 trillion.
The denial by TSMC underscores the complexities and challenges involved in establishing large-scale chip manufacturing facilities, particularly in regions with unique environmental and geopolitical considerations. While the UAE remains committed to itsaspirations of becoming a global chip hub, the future of these potential projects remains uncertain.
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