TAIWAN Semiconductor Manufacturing Co. is evaluating building an advanced production facility in the United Arab Emirates and has discussed the possibility with officials in President Donald Trump’s administration, according to people familiar with the matter, a potentially major bet on the Middle East that would only come to fruition with Washington’s approval.
The company has had multiple meetings in recent months with Steve Witkoff, the US special envoy to the Middle East, and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. Those conversations are a continuation of talks that began under President Joe Biden’s administration but had died down by the end of his term.
The project being discussed is a substantial investment in what’s called a gigafab — a complex of six factories similar to what TSMC is building in Arizona. The total cost of such a facility in the UAE is unclear. TSMC plans to spend $165 billion on its Phoenix project, which also includes research and packaging facilities.
The timeline for a potential UAE site also remains unclear, the people said, emphasizing that a groundbreaking is likely several years away, if not longer. Whether TSMC moves forward at all is contingent on buy-in from Washington, where some senior Trump administration officials are concerned about the national-security and economic implications of the world’s top chip manufacturer expanding to the Gulf, the people said. TSMC has been working with the US government since Trump’s first term on its Arizona project — for which it won $6.6 billion in federal funding — and the company is cognizant of sensitivities in Washington around any additional overseas facilities.
A TSMC spokeswoman said the company would not comment on market rumors and is focusing on its current expansion plans. The White House and Witkoff’s office didn’t respond to requests for comments. The UAE foreign affairs ministry and MGX also didn’t respond to queries.
The Wall Street Journal reported last year on TSMC’s conversations about a UAE facility under the Biden administration.
TSMC is one of the most important companies in the semiconductor supply chain — and by extension the global economy. It produces the lion’s share of cutting-edge chips designed by the likes of Nvidia Corp. and Advanced Micro Devices Inc., components that serve as the brains of electronic devices and are essential for training artificial-intelligence models. TSMC long operated exclusively on its home turf in Taiwan, but moved to open plants in Japan, Germany and the US in recent years — in part due to the supply-chain and geopolitical risks of concentrating semiconductor production on an island that Beijing views as Chinese territory.
A facility in the UAE would be a major new phase of TSMC’s overseas expansion and a substantial win for the Gulf nation’s ambitions to become a Middle Eastern AI powerhouse. While the UAE currently lacks a workforce capable of operating such a plant, it offers ample land, energy and financial resources. TSMC executives visited the UAE last year to scope out the possibility of building factories there.
Some Biden administration officials were open to the idea, people familiar with the matter said — provided the UAE agreed to stringent conditions that were viewed as a non-starter by the Gulf nation. Among those terms, one person said, were assurances that the US would be guaranteed a certain share of production capacity from the facility, especially in times of crisis, and that the US would have de-facto sovereignty over the site itself. Those talks eventually reached a stalemate, and Biden’s team stopped considering the idea a real possibility by the end of his time in office.
After Trump entered the White House, the UAE tried again, as part of broader bilateral negotiations to facilitate more AI collaboration between the two countries. In addition to seeking a TSMC fab, Emirati officials had long been vying for easier access to Nvidia chips for AI data centers than was possible under Biden — and key people on Trump’s team were eager to strike such a deal. Officials including White House AI and Crypto Czar David Sacks have argued that Washington should aggressively spread American technology into AI infrastructure around the world — with security guardrails — to block China from capturing those markets.
In those recent talks, which focused on chip exports to UAE data centers, the Gulf nation also sought US support for a TSMC facility there, Bloomberg has reported. Sacks expressed openness to the idea in a meeting with Emirati officials ahead of Trump’s trip to the Gulf earlier this month, people familiar with the matter have said, but officials tabled the TSMC issue for separate ongoing conversations. The AI accord unveiled during Trump’s trip doesn’t include any US endorsement of a TSMC plant in the UAE, Bloomberg has reported.
Back in Washington, some senior members of the Trump administration remain skeptical of or outright opposed to the idea, the people said. Their concerns fall broadly into two buckets: fears that another overseas TSMC project could jeopardize its US investment, and worries that a facility in the UAE specifically could benefit China or Iran.
TSMC’s Phoenix site is the crown jewel of Washington’s efforts to revitalize domestic semiconductor manufacturing with the 2022 Chips and Science Act, which set aside $52 billion in subsidies for the industry. Trump officials want to avoid a possible UAE plant draining financial or managerial resources from that project, which the company has already warned could get more expensive if Trump follows through on threatened semiconductor tariffs.
Beyond economic competitiveness, some administration officials are concerned about a UAE site on national security grounds, given the Gulf nation’s deep ties to China and Iran’s influence in the region, the people said.
A TSMC factory in the UAE, those officials have argued, poses a much greater risk than an AI data center operated in large part by US companies. While Washington can exert some control over shipments of already-manufactured semiconductors — through a regulatory licensing process and government oversight of data centers that house the chips — a TSMC plant would enable the UAE to produce its own chip supplies and develop know-how that could benefit Beijing if the Gulf nation’s political allegiances shift in the future. –BLOOMBERG
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