TSMC and Samsung are reportedly discussing opportunities to build chip factories in the United Arab Emirates, with projects potentially being valued up to US$100 billion, according to the Wall Street Journal. TaiwanPlus speaks with Dan Hutcheson, Vice Chair of TechInsights on whether the UAE is a good investment for chips.
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00:00Taiwan's TSMC and South Korea's Samsung are reportedly looking to the Middle East to expand
00:05their chipmaking operations.
00:07According to the Wall Street Journal, top executives from both giants visited the UAE
00:12recently to look at possible investments.
00:14Taiwan Plus reached out to TSMC for comment.
00:16The company says it's always open to discussing how to develop the industry, but says it has
00:21no new investment plans at this time.
00:23For more on the potential chip opportunities in the Middle East, our reporter Joyce Sun
00:27spoke with Dan Hutchinson, the vice chair of the chip market analysis firm Tech Insights.
00:34Both TSMC and Samsung are reportedly looking into the United Arab Emirates as a possible
00:40place for more chip factories.
00:42Do you think that the UAE would be a good investment?
00:46The issue for the UAE comes down to where do they get the labor, the technical side
00:54of the labor, as well as where do they get the water.
00:56I am not optimistic in such an investment.
00:59And because you have to desalinate the water, it's incredibly expensive water.
01:05It's like running your fab with Evian water.
01:08The one caveat to that is that if you go into those countries, what you see is the countries
01:14are often running with a lot of Indian labor.
01:18That is a possibility, especially now that Modi wants to build fabs.
01:23The biggest problem is, is it's not the best place to build a factory.
01:27They do have one advantage, and that is they have a lot of solar power.
01:30But these factories have to run 724.
01:33So when the sun goes down, you kind of lose that advantage.
01:38We've been following TSMC's ongoing expansion projects in the U.S., Japan and Germany.
01:44What do you see as the biggest challenges for TSMC in terms of additional opportunities
01:50for investment?
01:51The issue that they face, though, is the geopolitical issue of everybody wanting them.
01:59They're the prom queen in the semiconductor industry, and everybody wants to date them.
02:03Everybody wants to dance with them.
02:04And they can only have so many partners.
02:06And at the same time, for TSMC, they're looking to have customers anywhere in the world that
02:13will design chips to run on their fabs where their fabs are, as opposed to building a fab
02:19somewhere.
02:20So when someone like the UAE comes knocking on their door, for them, especially now since
02:26they're doing the U.S., Japan and Germany, it's a real challenge for them going forward
02:33to start to add other places in.
02:35But everybody wants them.
02:38And so now they have to play this geopolitical issue of being polite and trying to figure
02:43out how do they not upset the whole world and make them mad at them, and still be a
02:50trusted partner.