Abu Dhabi to setup chip foundry in four years

In 2007 Mubadala, one of the sovereign investment vehicles of Abu Dhabi, became the largest shareholder in AMD after an investment totaling $622 Million. Their current holding in AMD stands at some 20%.

One would expect a substantial presence of AMD in the UAE and, while it established an office in Dubai, their regional operations did not seem to extend beyond the basic sales and marketing operations. However, the relationship between the two entities continues to grow.

In 2009, the companies invested in Globalfoundries, a spin-off from AMD which has already begun to pick up some foundry business around the world, including the production of chips for AMD and a contract to build semiconductors for the Xbox 360.

Earlier this month, Dirk Meyer, the CEO of AMD, told Emirates Business in an interview that the company does see opportunities for it to design chips in the region:

“We have chip design centers around the world, including in India and China, and the capabilities by Dubai Silicon Oasis present interesting future opportunities. In time we will [design chips in the UAE], and it’s hard to be specific on the time frame. There is a definite opportunity in such a partnership,” he told Business 24-7 during an interview.

It’s interesting to note that Dubai Circuit Design, a company fully-owned by the Dubai Silicon Oasis Authority, already designs chips for Synopsys, Atmel and Movidius in the United Arab Emirates

The big news today, however, is that the Chairman of the Advanced Technology Investment Company (ATIC), Mr. Waleed Al Muhairi, announced that the we should expect to see the first foundry in Abu Dhabi in four years, and that the semiconductor industry in the capital will employ up to 40,000 people in the Emirate. Impressive!

This significant announcement was made during a speech at an Energy Conference in Abu Dhabi. It’s also worth mentioning that it was only last week when the board of Chartered Semiconductor, the third largest chipmaker, approved a $1.8 Billion takeover bid by ATIC.

This deal would make Globalfoundries, a contract chipmaker owned by ATIC and AMD, a major player in the semiconductor industry, possibly surpassing the second largest player UMC.

Speculation is now rife that the venture may also involve the Massachusetts Institute of Technology (MIT), which recently established the Masdar Institute of Science and Technology with Masdar, a Mubadala initative. Mr. Muhairi is the Chief Operating Officer of the Mubadala Company.

During the conference, L Rafael Reif, MIT’s Provost, made a very cryptic statement implying that the prestigious institution is evaluting options for collaboration with Abu Dhabi.

During his speech, Mr. Al Muhairi acknowledged that the Emirate will need to enhance and overhaul its education system if it is to become a serious contender in the semiconductor industry. Today  the United Arab Emirates ranks 75th amongst nations in the World Economic Forum’s Global Information Technology Report (produced with INSEAD).

So, will Abu Dhabi become a global technology hub? Only time will tell. I have to admit, though, after witnessing first-hand what the Emirate had achieved with the F1 race, I have no doubt that if they really put their head to it, they will!