Taiwan is universally recognised as the central hub of global semiconductor production, a concentration made possible above all by the Taiwan Semiconductor Manufacturing Company (TSMC), the undisputed leader in the sector. Founded in 1987, TSMC today holds over half of the global contract semiconductor market, playing a strategic role for the island’s economy and for the global technology industry. Its chips power devices from well-known giants such as Apple, Nvidia and Qualcomm. Its centrality is not only economic but also geopolitical, since every shift in global technological supply chains inevitably passes through TSMC’s laboratories and plants.
Leaving aside Taiwan’s consolidated position for a moment, in recent years the Arab Gulf has begun to emerge as a key partner for Taipei, particularly the UAE and Saudi Arabia. The Gulf states, backed by their sovereign wealth funds and long-term visions (Bahrain, Qatar, Saudi Arabia and the UAE’s 2030 visions, Kuwait’s 2025 and Oman’s 2040), are seeking to diversify their economies and position themselves as advanced technology centres. Their interest is focused on semiconductors and digital technologies, the pillars of modern global infrastructures.
In the case of the Emirates, negotiations with TSMC revolve around the creation of a large industrial complex in Abu Dhabi. There is talk of a “gigafab” supported by the Mubadala fund and led in collaboration with entities such as MGX and G42. The project aims at large-scale production of advanced chips, part of the broader UAE strategy to establish itself as a global leader in artificial intelligence and digital infrastructures, as demonstrated by the mega-project Stargate and the agreement signed to import hundreds of thousands of Nvidia AI chips from the US.
Meanwhile, almost quietly, Saudi Arabia is weaving ever-closer ties with Taiwan within the framework of Vision 2030 and the NEOM project. The kingdom aims to create a local ecosystem dedicated to the design and production of semiconductors, investing in joint ventures with Taiwanese companies not only for chips, but also for electric mobility and AI infrastructures. The strategy is clear: reduce dependence on international suppliers and develop an autonomous supply chain with a strong component of training, talent, and technology transfer.
Sanctions, Tariffs, and the New Geopolitics of Chips
In a world currently shaped by sanctions, tariffs and growing economic fragmentation, the emergence of a Taiwan-Gulf axis takes on entirely new significance. The US has strengthened controls and restrictions on exports of advanced semiconductors to China, preventing the export of next-generation chips produced by TSMC for Chinese companies such as Huawei. The limitations now affect products at 7nm or below, those intended for the most advanced applications, especially in the field of artificial intelligence.
The tariffs between the US and China, as well as those between Taipei and Washington, have redrawn the industrial geography of chips, driving the search for alternative supply chains outside Beijing. Increasingly, companies—faced with new costs between 10% and 25%—are relocating production segments to countries considered geopolitically safer, such as India, Vietnam, and ASEAN states, thus creating new connections and vulnerabilities in the global supply chain.
In this scenario, Gulf countries are emerging as “neutral” and economically attractive partners: not only do they provide capital, but they also offer an operational base outside the main global tension zones. The UAE, in particular, has secured a historic agreement with Washington to receive 500,000 Nvidia AI chips annually, becoming the first country in the region with this capability and giving a boost to data centre and supercomputing projects in the Middle East context.
The Limits of a Taiwan-Gulf Axis
Despite the many, perhaps endless, potentialities of this new alliance, significant limits remain. First and foremost, the need for controls and transparency in exports is crucial: US pressure on Taiwan, and directly on TSMC, remains extremely high to prevent sensitive technology from leaking to China through triangulations from the Gulf area. A telling example is TSMC, which struggles to guarantee full traceability of chips along the supply chain, despite increasingly stringent regulations and inspections.
Moreover, advanced semiconductor production entails enormous technical and environmental challenges: the scarcity of ultra-pure water, the need for highly qualified human capital, raw material logistics, and the fragility of regional supply chains all impose a qualitative leap that will require years and systemic investments at the local level.
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In the international context marked by supply chain crises, escalation of sanctions, tariffs and blockages, the possible formation of a Taiwan-Gulf axis represents both a “leap forward” for the security of the global industry and a pragmatic response to geopolitical volatility. Taiwan, with TSMC as its main player, attracts Gulf capital and ambitions, while the Emirates and Saudi Arabia deploy all their strategic neutrality, liquidity and access to new markets. If they can cooperate by ensuring security, compliance, and local investments, this new route could truly redefine the global weight of both regions in the semiconductor game.