TSMC considers building a gigafactory in the UAE with the support of the Trump administration.

Taiwan Semiconductor Manufacturing Co. is considering the possibility of creating an advanced manufacturing complex in the United Arab Emirates and is already discussing this idea with the administration of President Donald Trump. Meetings have taken place with the U.S. special envoy to the Middle East, Steve Witkoff, and representatives of the investment fund MGX, which is controlled by the brother of the UAE president.

These talks are a continuation of negotiations that began under President Joe Biden's administration but quieted down by the end of his term.

The potential project involves significant investments in a gigafactory similar to those that TSMC is building in Arizona. Although the exact cost of the project in the UAE is currently unknown, the company plans to spend 165 billion dollars on its project in Phoenix, including research and packaging facilities.

Support from Washington and potential risks

The discussed project will require support from Washington, as some senior officials from the Trump administration have expressed concerns regarding national security and the possible economic implications of expanding the chip maker to the Persian Gulf.

Some officials have been open to the idea, but there are also those who are skeptical of this project for many reasons, including potential consequences for American investments and fears of the benefits it might bring to China or Iran.

During the negotiations, concerns were expressed that the factory in the UAE could become an alternative for China or Iran in chip production, which could pose a threat to U.S. national security. Therefore, officials aim to avoid costs on the project in Phoenix and focus on addressing the issue of the factory in the UAE through separate discussions.

Taiwan Semiconductor Manufacturing Co. is considering the possibility of building a manufacturing complex in the United Arab Emirates. Discussions regarding this project are ongoing and will require support from Washington due to potential risks to U.S. national security.