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TSMC, Samsung mull building big chip factories in UAE, WSJ reports

Daniel Nenni

Daniel Nenni

Admin
Staff member
TSMC logo is seen at TSMC Museum of Innovation in Hsinchu

TSMC logo is seen at TSMC Museum of Innovation in Hsinchu, Taiwan May 29, 2024. REUTERS/Ann Wang/File Photo

Sept 22 (Reuters) - Two of the world's largest chipmakers, TSMC and Samsung Electronics have discussed building potential chip projects in the United Arab Emirates in coming years which could be worth more than $100 billion, the Wall Street Journal reported on Sunday.

Top executives at TSMC have visited the UAE recently and talked about a plant complex on par with some of the company’s largest and most advanced facilities in Taiwan, WSJ said citing people familiar with the interactions.

South Korea-based Samsung Electronics, the maker of smartphones, TVs and memory chips, is also considering major new chip-making operations in the country in the years ahead, the paper said citing unnamed sources.

TSMC and Samsung did not immediately respond to a Reuters request for comment.

Senior figures at Samsung Electronics visited UAE recently and discussed the idea, WSJ reported, adding that the discussions were still in the early phases and may face technical and other hurdles.

Under initial terms being discussed, the projects would be funded by the UAE, with a central role for Abu Dhabi-based sovereign development vehicle Mubadala, according to WSJ.

The paper added that the broader goal would be to increase global chip production and help bring prices down without hurting chip-makers’ profitability.

As tech deals in the region speed up, Washington has become increasingly concerned about the UAE and other Middle Eastern countries becoming a conduit for advanced U.S. AI technology reaching China.

 
Daniel Nenni said:
TSMC logo is seen at TSMC Museum of Innovation in Hsinchu

TSMC logo is seen at TSMC Museum of Innovation in Hsinchu, Taiwan May 29, 2024. REUTERS/Ann Wang/File Photo

Sept 22 (Reuters) - Two of the world's largest chipmakers, TSMC and Samsung Electronics have discussed building potential chip projects in the United Arab Emirates in coming years which could be worth more than $100 billion, the Wall Street Journal reported on Sunday.

Top executives at TSMC have visited the UAE recently and talked about a plant complex on par with some of the company’s largest and most advanced facilities in Taiwan, WSJ said citing people familiar with the interactions.

South Korea-based Samsung Electronics, the maker of smartphones, TVs and memory chips, is also considering major new chip-making operations in the country in the years ahead, the paper said citing unnamed sources.

TSMC and Samsung did not immediately respond to a Reuters request for comment.

Senior figures at Samsung Electronics visited UAE recently and discussed the idea, WSJ reported, adding that the discussions were still in the early phases and may face technical and other hurdles.

Under initial terms being discussed, the projects would be funded by the UAE, with a central role for Abu Dhabi-based sovereign development vehicle Mubadala, according to WSJ.

The paper added that the broader goal would be to increase global chip production and help bring prices down without hurting chip-makers’ profitability.

As tech deals in the region speed up, Washington has become increasingly concerned about the UAE and other Middle Eastern countries becoming a conduit for advanced U.S. AI technology reaching China.

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Basically free fabs for TSMC and Samsung?
 
hist78 said:
We can't deny the passion and patience of Abu Dhabi's sovereign fund Mubadala has placed on the Globalfoundries.
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They made money by holding $amd (initially obtained through the amd/globalfoundry deal). That is probably why they are so intent on doing another one, :).

If I were them, I would do a deal with IFS now.
 
kevin01 said:
They made money by holding $amd (initially obtained through the amd/globalfoundry deal). That is probably why they are so intent on doing another one, :).

If I were them, I would do a deal with IFS now.
Click to expand...
Then it will make more sense to have GF to acquire IFS.
 
hskuo said:
Then it will make more sense to have GF to acquire IFS.
Click to expand...
GF or Mubadala cannot afford buying IFS outright (which has huge future investment commitments, etc).

IFS is like VC type of investment, losing money, but having big potential. I think certain type of big money will be interested in this kind of investments (with the right set up, of course).
 
kevin01 said:
GF or Mubadala cannot afford buying IFS outright (which has huge future investment commitments, etc).

IFS is like VC type of investment, losing money, but having big potential. I think certain type of big money will be interested in this kind of investments (with the right set up, of course).
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The US Government would block any foreign entity from controlling IFS.

I'm puzzled why the UAE would give Samsung any money to build fabs there when there are virtually no takers for their foundry services (besides their own captive customer, Samsung Electronics).
 
everybody looks at options. If you offer me a free fab, I will have a discussion with you.

As I have said before, the first fab in any country or even state is the hard one as you need massive infrastructure. Do a 130nm Fab first and see if you can get it up and running
 
osnium said:
Basically free fabs for TSMC and Samsung?
Click to expand...

Mubadala has long rejected chip business for... the the obvious reason of financials being insane. Mubadala's own management are more or less professional, disciplined people, not prone to jumping on sensational opportunities. I crossed with the guy who personally signed the termination note on the GloFo deal a few times at UAE tech expos. He said: 15 years break even period in worst case scenario, because they would have to build the chemical industry from scratch to support the fab.

The thing now is that the guy who pushes this is prince Tahnoun, a rather bombastic personality who spends money on shiny new things: bitcoins, AIs, hacking companies. He wants to prove himself. It's hard for Mubadala's managers to say no now
 
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MKWVentures said:
Do a 130nm Fab first and see if you can get it up and running
Click to expand...

100% that, and that you cannot do a new 130nm now, no 200mm equipment left on the market. And paying TE, AM to custom make obsolete equipment for a new 200mm fab doesn't work financially at all.

And attracting talent to UAE........... would be 10 times harder than luring Taiwanese to Arizona. US has at least passports on the table, UAE only ever gave them to few foreign billionaires. The country is extremely boring, unless you talk of dubious adult entertainment in Dubai.
 
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Paul2 said:
100% that, and that you cannot do a new 130nm now, no 200mm equipment left on the market. And paying TE, AM to custom make obsolete equipment for a new 200mm fab doesn't work financially at all.

And attracting talent to UAE........... would be 10 times harder than luring Taiwanese to Arizona. US has at least passports on the table, UAE only ever gave them to few foreign billionaires. The country is extremely boring, unless you talk of dubious adult entertainment in Dubai.
Click to expand...
And this is a kind of a predicament:

"How do you do an entry level fab these days?"

200mm service is in demand, is relatively cheap, and is the only service most small niche fabless will be able to afford.

But building new 200mm fabs makes no sense financially, and the cheapest 300mm fab still costs more than that. 300mm MOQs are too high for 200mm service customers. And whoever is willing to pay more, can pay for a lower node.

In between a shuttle run, and the smallest economical non-shuttle order, there is abyss below <130nm
 
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