1 week Ago By Tobias Mann
Despite finding itself at the center of the United States' trade war with China, the United Arab Emirates (UAE) is quickly establishing itself as a hotbed for AI development and its aspirations could soon extend to semiconductor manufacturing. According to a Wall Street Journal report citing unnamed persons familiar with the matter, executives from Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung Electronics — the world's two most prolific foundry operators — recently visited the oil-rich nation to discuss the development of chip fabs in the country.
The projects reportedly being discussed would be massive in scale, involving multiple complexes that would cost more than $100 billion to complete. While that might sound like an incredible sum, in the context of semiconductor manufacturing, it's middle of the road: Large-scale semiconductor manufacturing facilities can easily cost $15-$20 billion a piece and are only one piece of a much broader supply chain, which also involves research and development, testing, assembly, and advanced packaging, to name a few. Discussions are in the "early phases" but the facilities would be bankrolled by the UAE.
To be clear, neither TSMC nor Samsung Electronics have committed to building in the region. And if they do, they face numerous hurdles. TSMC didn't directly address talks of a fab in the UAE, but told The Register , it is "open to constructive discussion on ways to promote development of the semiconductor industry, but we remain focused on our current global expansion projects and have no new investment plans to disclose at this time.
" Samsung Electronics didn't immediately respond to a request for comment; we'll let you know if we hear anything back. From a practical standpoint, the UAE's climate isn't exactly conducive to semiconductor manufacturing despite what might seem like an abundance of the chief ingredient. That's because these plans require large volumes of hyper-clean water, which is used to rinse the wafers during the lithography process.
This is potentially problematic as the majority of the UAE's water supply comes from desalination plants. If that weren't enough, any foundry developments in the country would also need to be accompanied by an influx of skilled labor, something that's already proving problematic in the United States and Europe. It's estimated the US alone faces a shortage of at least 70,000 engineers, technicians, and computer scientists by the end of the decade.
However, perhaps the biggest hurdle facing the UAE's technological aspirations isn't a practical one, but rather a geopolitical one. The country is one of several Middle Eastern nations that have found themselves at the center of the US-China trade war. Over the past few years, the oil-rich nation has worked to diversify its economy and establish itself as a technological powerhouse in the Middle East as it made sweeping investments in artificial intelligence (AI).
However, these efforts have been threatened in recent years by export restrictions aimed at preventing China from using the Middle East as a proxy for obtaining sensitive technologies, which have made it challenging to import GPUs and other AI accelerators from US companies. These controls have already proven to be troublesome for UAE state-backed companies like G42, which has come under intense scrutiny by Biden administration officials for its ties to Chinese firms. Last fall, reports surfaced that US intelligence agencies had raised alarms that G42 may be supplying China with advanced technologies and genetic data describing millions of people.
In the wake of these revelations, G42 has reportedly cut ties with its Chinese partners, including Huawei. In spite of intense scrutiny and US export restrictions, G42 has pushed ahead with its AI ambitions soliciting the help of several American companies in doing so. In July 2023, G42 invested roughly $900 million in Cerebras Systems to develop a global network of AI supercomputers based on its waferscale compute architecture.
Under the deal, G42 would have priority access to these systems' compute capacity to remotely develop and train models. This spring, Microsoft invested $1.5 billion into the firm aimed at accelerating AI developments using Azure across the Middle East, Central Asia, and Africa with the proviso that both companies would do their best to ensure the "secure, trusted, and responsible development and deployment of AI.
" Naturally, the deal attracted the condemnation of some US officials. However in the months since then, US-Middle East relations appear to be improving. Earlier this month, it was reported that Nvidia had secured US approval to resume shipments of GPUs to the UAE.
While the UAE has dominated headlines, it's far from the only Middle Eastern nation looking to capitalize on AI's disruptive potential. Saudi Arabia has announced similar investments in AI infrastructure. Last week, Mountain View, California-based AI chip designer Groq announced a strategic partnership with Saudi Arabian oil conglomerate Aramco to develop an AI datacenter based on its LPU accelerators in the country.
The news comes as Nvidia is said to be nearing an agreement with US agencies to resume shipments of GPUs to the country as well..
