TSMC Considers Advanced Chip Plant in UAE

TSMC is evaluating a potential advanced chip manufacturing facility in the UAE, aligning with its global expansion strategy. The project could be quite costly, resembling TSMC’s existing Phoenix facility, and involves discussions with U.S. officials. TSMC’s expansion also connects to its past collaborations with the U.S. government, emphasizing chip production for major tech companies.

Taiwan Semiconductor Manufacturing Company (TSMC) is reportedly assessing the possibility of establishing a state-of-the-art chip production facility in the United Arab Emirates (UAE). Sources cited by Bloomberg indicate that this potential expansion fits into TSMC’s overarching global growth strategy, which has involved discussions with U.S. officials, including Steve Witkoff, the Special Envoy to the Middle East. This could potentially pave the way for further investments in the region.

In addition to the talks with U.S. representatives, TSMC has reportedly engaged with executives from MGX, an investment vehicle, about this ambitious project. The proposed facility could include a gigafab—essentially a complex made up of six factories—which is similar to TSMC’s existing facility in Arizona. However, the estimated cost for this UAE venture has not yet been disclosed.

For context, TSMC’s Phoenix project represents a significant investment, estimated at around $165 billion, which encompasses research, development, and packaging facilities. The timeline for launching the UAE site appears vague at this moment, with reports suggesting that groundbreaking could be several years down the line.

Crucially, TSMC’s decision to move forward hinges on support from the U.S. government. There are lingering concerns among officials regarding national security and the economic ramifications of such an investment in the UAE. Historically, TSMC has cooperated with U.S. authorities since Donald Trump’s presidency and received $6.6 billion in federal funding for its Arizona operations.

The semiconductor giant plays a critical role in producing chips for major companies like Nvidia and Advanced Micro Devices. These chips are essential for a variety of electronic devices and increasingly important to advancements in artificial intelligence. Notably, TSMC has expanded its operations beyond Taiwan, having established a presence in Japan, Germany, and the U.S. to alleviate risks related to supply chains and geopolitical tensions.

The UAE, despite its current shortage of a skilled workforce for such advanced manufacturing, boasts ample land, energy resources, and financial backing that could make it an attractive location for TSMC’s new facility. TSMC executives also visited the UAE last year to assess the viability of constructing manufacturing facilities there.

In related news, TSMC announced plans in May 2025 for a chip design center in Munich, Germany, which is set to focus on developing advanced semiconductors specifically for applications in AI. This move further emphasizes TSMC’s push towards global investment and technological innovation.

In summary, TSMC is exploring the possibility of building a chip production facility in the UAE, a move that reflects its strategic initiative to grow internationally. The project, which may involve substantial investments and complex production arrangements, is currently contingent on U.S. government support and the nurturing of local talent in the UAE. TSMC’s recent expansions in Japan, Germany, and ongoing developments indicate a broader trend toward enhancing global manufacturing capabilities in technology sectors.

Original Source: www.verdict.co.uk