The Wall Street Journal (WSJ) reported that TSMC and Samsung Electronics discussed establishing a new semiconductor plant with the United Arab Emirates (UAE).
WSJ announced on the 22nd (local time) that TSMC and Samsung Electronics’ high-level management each recently visited the UAE to discuss the construction of a large-scale factory. According to reports, the talks were held on the plan to establish a new factory with advanced facilities discussed by TSMC as the largest facility owned by Taiwan. In addition, if Samsung Electronics concludes the establishment of a new factory, it is expected to put it into practice within a few years.
Discussions are expected to proceed in the early stages with funding centered on UAE sovereign wealth fund Mubadala. Mubadala says it is talking regularly with its global partners, but it has no specific plans to build a new semiconductor plant in the UAE.
The plan to build a new plant in the UAE reflects the current AI frenzy that has led to a significant increase in demand for semiconductors. It seems that the construction of the new plant aims to increase semiconductor production and lower supply prices without losing profitability for semiconductor manufacturers.
There is a prospect that it may cost $20 billion to establish a new factory. In particular, building all facilities with multiple factories could cost over $100 billion. However, there is a possibility that it will not be realized due to technical problems and the political environment.
TSMC and Samsung have already discussed with U.S. government officials the possibility of exporting high-tech semiconductors to China. The two sides have not decided on details yet, but discussed a plan to allow the U.S. government to supervise the manufacturing and shipping process of semiconductors produced at UAE factories.
Some semiconductor manufacturing industry officials believe that U.S. concerns toward China will not be dispelled for a short period of time and explained that the construction of the new plant is likely not to begin unless this part is resolved.
JULIE KIM
US ASIA JOURNAL
