Taiwan Semiconductor Manufacturing Company TSM is considering establishing an advanced gigafactory in the United Arab Emirates.
The chip manufacturer is looking into creating a complex of six production facilities, akin to its site in Arizona, pending necessary regulatory clearances from the U.S. government due to the UAE’s connections with China and Iran.
According to unnamed sources, Taiwan Semiconductor convened discussions with Steve Witkoff, the U.S. Middle East special representative, as well as MGX officials, as reported by Bloomberg on Friday.
Related: Taiwan Semiconductor Prepares to Meet Rising Demand for AI Chips with Nine New Advanced Factories
The majority of advanced chips designed by companies such as Nvidia Corp. NVDA and Advanced Micro Devices, Inc. AMD are manufactured by Taiwan Semiconductor, which are critical for the operation of electronic devices and essential for training AI models.
In 2024, executives from Taiwan Semiconductor visited the UAE to explore potential geographical diversification, receiving some backing from the Biden administration under strict conditions, but the negotiations did not lead to a successful outcome.
Following Trump’s administration, the UAE expressed interest in acquiring a Taiwan Semiconductor fab while seeking easier access to Nvidia chips for AI data centers.
In March, the UAE revealed a $1.4 trillion investment commitment towards the United States.
Wedbush analyst Daniel Ives acknowledged Saudi Arabia as a pivotal market for AI development following President Trump’s significant visit to the Middle East. Ives highlighted that the market potential in Saudi Arabia could contribute an additional $1 trillion to the global AI market in the years to come, positively impacting companies such as Nvidia, Palantir Technologies PLTR, Microsoft Corp MSFT, Amazon.com Inc AMZN, Alphabet Inc GOOG GOOGL, and Tesla Inc TSLA.
Price Update: As of the latest premarket trading, TSM shares are down by 0.94%, priced at $191.50.
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