Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s leading chipmaker, is evaluating a potential expansion into the United Arab Emirates, with discussions centered on building a massive advanced fabrication complex—known as a gigafab—in the Gulf nation, according to a Bloomberg report citing people familiar with the matter.
The proposed project would mark a bold step for both TSMC and the UAE. If realized, it would be the first time the Taiwanese company establishes such a large-scale facility in the Middle East, a region with ambitions to become a key player in artificial intelligence and advanced technology infrastructure.
According to Bloomberg, TSMC has held multiple meetings in recent months with Steve Witkoff, U.S. special envoy to the Middle East, and representatives from MGX, an influential Emirati investment entity led by the UAE president’s brother. These talks resumed under the Trump administration after earlier discussions under President Joe Biden had stalled due to stringent U.S. conditions.
The envisioned facility would mirror TSMC’s existing $165 billion Arizona project, comprising six fabrication plants with cutting-edge production and research capabilities. However, people familiar with the matter caution that a UAE site would still be years away from groundbreaking and would only move forward with explicit U.S. approval.
While TSMC declined to comment on what it called “market rumors,” Bloomberg noted that concerns in Washington could delay or derail the proposal. Some senior Trump administration officials are reportedly worried about the economic and national security implications of building such a facility in a region with ties to China and Iran.
These concerns include fears that a UAE gigafab might drain resources from TSMC’s critical Phoenix, Arizona site—seen as the centerpiece of America’s effort to rebuild domestic semiconductor manufacturing under the 2022 Chips and Science Act. The U.S. has committed $6.6 billion in subsidies to support that project.
According to Bloomberg, TSMC executives and UAE officials previously explored the idea under Biden, but talks faltered when the U.S. demanded guaranteed access to chip production during crises and even de facto sovereignty over the facility—terms the Gulf nation rejected.
Since then, the UAE has renewed its push under Trump, integrating the TSMC proposal into a broader package of bilateral tech cooperation, including easier access to Nvidia chips for AI development. While the AI accord unveiled during Trump’s recent Gulf visit did not mention TSMC, Bloomberg reports the topic remains under active discussion.
National security hawks in Washington continue to raise red flags. Unlike AI data centers—which operate under U.S. export controls and licensing regimes—a chip fabrication facility would empower the UAE to manufacture semiconductors independently, potentially exposing critical technology to foreign influence.
Despite these risks, some within the Trump administration—such as AI and Crypto Czar David Sacks—are reportedly supportive, arguing that expanding U.S.-aligned tech infrastructure globally could serve as a bulwark against China’s ambitions.
As the world’s most advanced chipmaker, TSMC plays a central role in the global semiconductor ecosystem, producing components used in everything from smartphones to AI systems developed by companies like Nvidia and AMD. Once focused solely on Taiwan, the company has in recent years diversified its footprint, building or planning plants in Japan, Germany, and the U.S. to mitigate geopolitical and supply chain risks.
A move to the UAE would significantly bolster the Gulf nation’s aspirations to be a tech hub but would also signal a new phase in the global reshuffling of semiconductor production—one that hinges heavily on Washington’s geopolitical calculations.
For now, the future of a TSMC gigafab in the UAE remains uncertain. But as Bloomberg reports, it has become a high-stakes issue at the intersection of global tech, diplomacy, and strategic competition.
