Note
The UAE is in talks with Samsung and TSMC to build a semiconductor fab facility in the Persian Gulf, but the complex manufacturing process may pose challenges due to the lack of local expertise in the region. If a fab facility is established in the UAE, it will likely be manned by imported labor, primarily from South Asia, as the country lacks the necessary skilled workforce. In contrast, India is partnering with Powerchip to build a fab facility that will focus on producing lower-end chips, addressing the country’s lack of semiconductor manufacturing infrastructure. The UAE’s approach involves importing all labor and technology, while India is working on improving local infrastructure to support the fab facility, showcasing two different models for semiconductor manufacturing.
Highlights
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2024-10-26 21:19 Today we’re going to talk about semiconductors and something interesting that’s happening in the world of fabs. Dubai and Abu Dhabi, which are the two main cities in the United Arab Emirates and the Persian Gulf, are holding talks with Korea’s Samsung and Taiwan’s TSMC about building a FAB facility in the Persian Gulf in the United Arab Emirates. Normally I would just wave this away because semiconductor fabs are one of the more, if not the most complex manufacturing systems in the world. And there aren’t a lot of people in the Persian Gulf that can do basic math, much less high end engineering.
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2024-10-26 21:20 TSMC and Samsung are not the same. TSMC is what’s called a fab fabricator and Samsung is more of a conglomerate. And so TSMC is part of an ecosystem that involves several thousand companies that come together to provide the materials and the designs. And the TSMC simply puts it together.
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2024-10-26 21:20 In fact, they don’t even design the managerial process. What usually happens is a foreigner, typically someone who’s from Japan or the United States, designs a chip in league with the end user and then that design is given to tsmc and then that designer typically goes out and sources all of the materials that are necessary to make the chip, ensures that they’re high quality, and then brings them to TSMC themselves. It’s a little bit oversimplification, but think of TSMC as the world’s best direction followers. They don’t have a lot of intellectual capital in terms of interpreting the designs. That’s all managed by the American or the Japanese guy.
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2024-10-26 21:20 Instead, they have an ecosystem of hundreds of companies within Taiwan who then take individual pieces of the design and figure out how to make it most effectively.
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2024-10-26 21:21 Samsung in Korea is a little bit different. They’re more of a conglomerate, they have a design house and they handle more of the instructions building themselves. But still, these two companies, Samsung and tsmc, are two of only three companies on the planet that can make the high end chips that are smaller than 5nm. The third one is intel in the United States, which is a little bit more similar to Samsung than tsmc
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2024-10-26 21:22 UAE is basically a financial center because things concepts like interest are illegal under Islamic law. So UAE has found a way to kind of do an end run around Sharia laws and the such. And basically if you’re in the Middle east and you want your money to actually earn something, you bring it to Dubai and then Dubai does the investing, usually via third party nationals. So the idea that you could have a high end fab in UAE using local labor is hilarious.
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2024-10-25 14:53 The best chips they will make will be 28nm, which is what you are going to see in your typical car going down to 110 nanometers, which is Internet of things sort of quality.