Chipmaker Taiwan Semiconductor Manufacturing Co (TSMC) is evaluating the construction of an advanced production facility in the United Arab Emirates (UAE), Bloomberg reported.

This potential expansion aligns with TSMC’s global growth strategy, as the company has been in discussions with US officials, including Steve Witkoff, the US special envoy to the Middle East, the publication said, citing people familiar with the matter.

The company had also held multiple meetings with officials from investment vehicle MGX, the sources added.

The proposed project involves a significant investment in a gigafab, a complex of six factories similar to TSMC’s facility in Arizona.

While the total cost of a UAE facility remains unclear, TSMC’s Phoenix project in Arizona involves a $165bn investment, including research and packaging facilities.

The timeline for the UAE site is uncertain, with groundbreaking likely several years away, the report added.

TSMC’s decision to proceed will depend on the support from the US, where some officials express concerns over national security and economic implications.

TSMC collaborated with the US government since Trump’s first term on its Arizona project, receiving $6.6bn in federal funding.

TSMC produces chips designed by companies such as Nvidia and Advanced Micro Devices. These components are vital for electronic devices and AI models.

Historically, TSMC operated mainly in Taiwan but has now expanded to Japan, Germany, and the US to mitigate supply-chain and geopolitical risks.

Although the UAE currently lacks a skilled workforce for such a plant, it offers ample land, energy, and financial resources.

TSMC executives visited the UAE last year to explore the feasibility of building factories there, the publication said.

In May 2025, TSMC announced plans to open a chip design centre in Munich, Germany.

The facility is expected to contribute to the development of advanced chips for applications such as AI.