TSMC Considering Advanced Chip Plant in UAE

TSMC is evaluating a new advanced chip manufacturing plant in the UAE as part of its global expansion strategy. Talks with U.S. officials and investment firms are ongoing, although national security concerns may play a crucial role in the decision. Although workforce challenges exist, the UAE offers critical resources. TSMC continues its expansion beyond Taiwan, recently announcing a facility in Germany.

Taiwan Semiconductor Manufacturing Co (TSMC) is reportedly assessing the possibility of establishing a cutting-edge chip manufacturing plant in the United Arab Emirates (UAE), according to Bloomberg. This comes as part of its larger global expansion strategy. The chipmaker has been in talks with U.S. officials, including Steve Witkoff, who serves as the U.S. special envoy to the Middle East, as per sources familiar with the matter.

In addition, TSMC has had several discussions with representatives from MGX, an investment vehicle, suggesting there’s serious interest in pursuing this initiative. The concept centers around creating a gigafab, a complex that would consist of six factories, akin to TSMC’s facility in Phoenix, Arizona. While the overall investment for the UAE operation is not yet disclosed, it’s worth mentioning that the Phoenix project commanded a hefty $165 billion commitment, which also encompasses research and packaging facilities.

As for the timeline, it appears that groundbreaking for the UAE site may still be a few years away, according to the report. The decision for TSMC to move forward hinges heavily on support from U.S. officials, who harbor concerns regarding national security and economic repercussions. TSMC’s collaboration with the U.S. government has been ongoing since the Trump administration, particularly for its Arizona venture where the company benefitted from $6.6 billion in federal funding.

Notably, TSMC manufactures chips that are essential for tech giants like Nvidia and Advanced Micro Devices. These chips are integral to numerous electronic gadgets and AI systems, reflecting TSMC’s vital role in the semiconductor supply chain. Although historically based primarily in Taiwan, TSMC has broadened its production reach to regions including Japan, Germany, and the U.S. in response to supply chain and geopolitical challenges.

Currently, while the UAE might not possess the specialized workforce necessary for such a sophisticated plant, it offers significant advantages like abundant land, energy resources, and financial backing. TSMC executives already conducted a visit to the UAE last year to evaluate the potential of setting up manufacturing operations there.

Additionally, in an announcement made in May 2025, TSMC revealed plans for a chip design center in Munich, Germany, which is expected to facilitate the development of advanced chips geared toward AI applications.

In summary, TSMC is exploring the establishment of a new chip plant in the UAE as part of its global strategy. While discussions with U.S. officials and investment vehicles are underway, concerns about national security may influence the decision. The UAE’s landscape offers potential advantages, though it lacks a skilled workforce at present. This move, if confirmed, could mark another significant step in TSMC’s expansion across multiple regions.

Original Source: www.verdict.co.uk