TSMC Considering Advanced Chip Plant in UAE

TSMC is evaluating plans for a new advanced chip manufacturing facility in the UAE as it expands globally. Discussions with US officials and investment groups are ongoing, although concerns about national security may influence the project’s progress. The UAE offers resources but lacks skilled labor for such operations.

Taiwan Semiconductor Manufacturing Co (TSMC) is reportedly considering building a cutting-edge chip manufacturing plant in the United Arab Emirates (UAE). This evaluation is part of TSMC’s strategy to expand globally, as noted by Bloomberg, which mentioned conversations held with US officials, including Steve Witkoff, the US special envoy to the Middle East.

Sources indicate that TSMC has also engaged in discussions with representatives from investment entity MGX. The envisioned facility could involve a significant investment in what is termed a gigafab, reminiscent of TSMC’s existing complex in Arizona, which houses six factories. Specific financial details of the UAE project remain undetermined, however, TSMC’s initiative in Phoenix comprises a staggering $165 billion investment that includes research and packaging.

When it comes to the timeline, the UAE site may not see groundbreaking for several years. TSMC’s final decision will hinge on support from the US, where concerns about national security and economic issues have been voiced by some officials. The company has been collaborating with the US government on its Arizona project since the Trump administration, receiving approximately $6.6 billion in federal assistance.

TSMC is a critical player in the semiconductor industry, producing chips designed by major firms like Nvidia and Advanced Micro Devices. These chips are essential for diverse electronic devices and AI systems. Historically, TSMC has operated primarily in Taiwan, but has recently branched out to countries including Japan, Germany, and the US to lessen supply-chain vulnerabilities and address geopolitical risks.

Although the UAE is currently at a disadvantage in having a skilled workforce for such advanced operations, it does provide ample land and resources like energy and finance. In fact, TSMC executives visited the UAE last year specifically to assess the viability of constructing manufacturing facilities there. In a related development, TSMC announced in May 2025 the establishment of a chip design center in Munich, Germany, which aims to enhance the development of advanced chips for AI applications.

TSMC is actively assessing the possibility of a new chip manufacturing plant in the UAE as part of its broader global expansion strategy. Conversations with US officials and investment partners indicate a serious commitment to this potential project, despite concerns surrounding national security. This initiative aligns with TSMC’s recent efforts to diversify its operational bases while addressing supply chain challenges.

Original Source: www.verdict.co.uk