Taiwan Semiconductor Manufacturing Co. (TSMC) will not establish a manufacturing facility in the Middle East, according to Chairman and CEO C. C. Wei.

During the company’s annual shareholders’ meeting on June 3, 2025, Wei dismissed reports of a potential chip foundry in the United Arab Emirates (UAE), stating, “Two words: we won’t.”

Wei also addressed rumors of discussions with United States and UAE officials regarding this project, labeling them as speculative.

He compared these claims to previous unfounded rumors about TSMC considering a stake in Intel.

🔗 Source: Focus Taiwan

🧠 Food for thought

1️⃣ TSMC’s strategic facility decisions reflect deeper geopolitical calculations

TSMC’s rejection of UAE manufacturing expansion follows a clear pattern of highly strategic facility placement decisions that balance geopolitical considerations with business needs.

The company has methodically expanded manufacturing beyond Taiwan, including investments in the US and Japan, specifically to mitigate geopolitical risks and enhance supply chain resilience 1.

These decisions are especially significant considering TSMC’s dominant position, producing approximately 90% of the world’s advanced chips and holding about 56% of global foundry market share 2.

Wei’s direct “we won’t” response regarding UAE expansion likely reflects TSMC’s careful navigation of US-China tensions, as the company has faced increasing pressure from US politicians regarding its global operations 2.

This careful positioning is crucial because TSMC serves as Taiwan’s “silicon shield,” its strategic importance recognized in global security discussions and complicating potential Chinese military action against Taiwan 1.

2️⃣ AI demand drives TSMC’s exceptional growth trajectory

TSMC’s maintained 24-26% growth forecast for 2025 significantly outpaces broader industry projections of 11-19% growth, demonstrating its dominant position in high-growth semiconductor segments 3, 4.

This optimistic outlook aligns with Wei’s statement that AI chip demand exceeds supply, reflecting industry-wide expectations that generative AI chips alone will represent over $150 billion in 2025 sales 3.

The semiconductor market is increasingly bifurcated, with explosive growth in AI and data center segments while traditional segments like PCs and smartphones face stagnation. This trend benefits TSMC given its leadership in advanced manufacturing nodes 5.