Taiwan Semiconductor Manufacturing Co (TSMC) is in talks with officials in President Donald Trump’s administration about building an advanced chip factory in the United Arab Emirates (UAE).
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The discussions are part of TSMC’s strategy to expand beyond Taiwan and reduce the risks of having too much chip production in one place.
Sources told Bloomberg that TSMC has met multiple times in recent months with US Special Envoy to the Middle East Steve Witkoff and with officials from MGX, a UAE investment firm linked to the country’s leadership. Talks reportedly began during the Biden administration but picked up again under Trump.
The project being considered would be a large chipmaking complex similar to TSMC’s $165 billion Arizona plant. That site, which includes six factories plus research and packaging facilities, is seen as the centerpiece of efforts to boost US chip production under the 2022 CHIPS and Science Act.
Any UAE project would need US approval. Some Trump administration officials are raising concerns about the national security risks and the possible impact on TSMC’s Arizona plant.
One issue is the UAE’s close ties to China and Iran’s influence in the region. Officials worry that a factory in the Gulf could benefit China if political alliances shift. Another concern is that adding a major overseas project could drain money and resources from TSMC’s Arizona investment.
There are also workforce questions. The UAE currently lacks enough skilled workers to build and operate such a plant. TSMC would likely have to bring in workers from other countries to get it up and running.
TSMC has not commented on the talks. A spokeswoman said, “The company would not comment on market rumors and is focusing on its current expansion plans.”
The White House, Witkoff’s office, the UAE Ministry of Foreign Affairs, and MGX did not respond to requests for comment.
A UAE factory would be a big move for both TSMC and the Gulf state, which is investing heavily in AI and data centers. However, officials say the timeline for any potential project is still uncertain, and a groundbreaking would likely be years away.
