Taiwan Semiconductor Eyes UAE Gigafab, Seeks Crucial US Green Light

Taiwan Semiconductor Manufacturing Co. TSM is weighing an advanced gigafab in the United Arab Emirates.

The contract chipmaker is exploring a complex of six factories (similar to its Arizona fab), subject to regulatory approval from the Trump administration, given the Gulf nation’s ties to China and Iran’s influence in the region.

Taiwan Semiconductor held meetings with Steve Witkoff, the U.S. special representative to the Middle East, and MGX officials, Bloomberg reported on Friday, citing unnamed sources familiar with the matter.

Also Read: To Serve Exploding AI Chip Demand, Taiwan Semiconductor Plans 9 Advanced Factories

Taiwan Semiconductor accounts for the majority share of advanced chips designed by the likes of Nvidia Corp. NVDA and Advanced Micro Devices, Inc. AMD components that serve as the brains of electronic devices and are essential for training artificial-intelligence models.

Taiwan Semiconductor executives visited the UAE in 2024, aspiring for potential geographical diversification amid support from the Biden administration subject to stringent conditions. However, the talks failed to fructify.

After Trump assumed charge, the UAE sought a Taiwan Semiconductor fab and vied for easier access to Nvidia chips for AI data centers.

In March, the UAE announced a $1.4 trillion commitment to invest in the U.S.

Wedbush analyst Daniel Ives hailed Saudi Arabia as a significant area of penetration for the AI revolution after President Trump’s key trip to the Middle East. Ives noted that the market opportunity in Saudi Arabia could add another $1 trillion to the broader global AI market in the coming years, posing tailwind for Nvidia, Palantir Technologies PLTR, Microsoft Corp MSFT, Amazon.com Inc AMZN, Alphabet Inc GOOG GOOGL, Tesla Inc TSLA.

Price Action: TSM shares are trading lower by 0.94% to $191.50 premarket at last check Monday.

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