Previously, there were rumors about the desire of the head of OpenAI to organize the production of chips in the Middle East to more effectively solve the problem of the shortage of computing accelerators. Now The Wall Street Journal clarifies that Samsung Electronics and TSMC are already negotiating with the UAE authorities. The total value of enterprises that can be built in this country could reach $100 billion.
Image Source: Samsung Electronics
Senior management of TSMC, as noted, even visited the UAE for negotiations on this topic. A Taiwanese company is considering the possibility of building a modern production complex in the UAE, comparable in size to those in Taiwan. South Korean Samsung Electronics also sent delegates to the UAE for similar negotiations. The UAE authorities are ready, through investment companies under their control, to subsidize the construction of chip production plants in order to keep the profit level of TSMC or Samsung at an acceptable level. Foreign enterprises would cost both companies more to build, so this difference must be covered by subsidies to offset the difference in costs.
Another problem is access to highly purified technical water supplies. The UAE receives the bulk of its water from the sea using desalination, but chip production requires the use of very clean water, and its extraction will also cost a pretty penny when starting chip production in the UAE. But there will be no problems with cheap energy resources, since climatic conditions allow for the production of a lot of electricity through solar panels, and hydrocarbon fuel is available in abundance in the region.
According to rumors, the interests of the UAE government in potential projects with TSMC and Samsung will be represented by a subsidiary of the same Mubadala, which is the main investor of GlobalFoundries, founded in 2009 after the separation of production assets from AMD. At first, Mubadala had plans to build a GlobalFoundries facility in the UAE, but they were not destined to come true. Later, Arab investors literally gave up when faced with the need to spend significant sums on developing 7nm technology, and GlobalFoundries had to abandon its launch into mass production. One way or another, Mubadala manages a portfolio of assets totaling $300 billion, so it could partially finance the construction of a complex of enterprises worth $100 billion if there was political will.
The project could also encounter a shortage of qualified personnel to organize advanced chip production in the UAE, but using the example of the American TSMC enterprise in Arizona, it is already clear that the company can import the necessary specialists from Taiwan until local ones are trained.
Another point that inevitably arises in the light of US control over the export of technology to the Middle East concerns the receipt of appropriate export licenses by TSMC and Samsung if they are ready to begin equipping their enterprises in the UAE with technological equipment of American origin. Representatives of the US National Security Council told the WSJ that they have been working with the UAE authorities over the past two years in terms of advanced technologies, and the partnership is developing in the right direction. Sources note that without the blessing of the US authorities, TSMC and Samsung will not be able to begin building factories in the UAE, as the American government fears the leakage of advanced technologies and products to China.