Saudi Arabia establishes National Semiconductor Center, creating 'Silicon Valley of the Middle East'
2024-06-12
Saudi Arabia establishes National Semiconductor
Center, creating 'Silicon Valley of the Middle East'
With the changes in the global economic landscape and the acceleration of technological innovation, Saudi Arabia is actively seeking economic diversification to reduce its dependence on oil exports. Saudi Arabia is one of the largest countries in the Middle East and also the world's largest oil exporting country, with abundant oil resources. Its economy largely relies on the oil industry.
With the advancement of technology, the development of semiconductor and artificial intelligence (AI) technology has become a key area of focus for the country.
On June 6, 2024, Saudi Arabia announced the establishment of the National Semiconductor Center, aimed at developing semiconductor companies capable of designing new chips and planning to attract 50 companies to settle in Saudi Arabia by 2030. The center has signed contracts with multiple companies and plans to conduct mid-term chip manufacturing overseas.
Naveed Sherwani, the head of the National Semiconductor Center, stated that their strategy is to gradually advance and start from the basics. "We do not intend to replace Nvidia or challenge Intel, but to start from a small scale, lay the foundation, and then plan for a bigger picture.
Shelvani stated that the current focus of the new center is to attract and support new fabless chip companies. Three companies have signed up to join the program, and an additional 10 companies have expressed their intention to join.
We want this place to be like Silicon Valley, "said Shervani, who is also the CEO of Rapid Silicon, a provider of artificial intelligence technology solutions." We provide free space and offer various incentives for compensation and relocation. There are a total of 10 preferential policies that apply to any enterprise that wants to establish a company here
It is reported that the Saudi government has announced the establishment of an investment fund worth approximately 1 billion riyals (about 266 million US dollars) to support companies that choose to establish business in the country. This investment fund specifically targets a fund focused on investing in semiconductor startups, aiming to support startups with innovative technologies and business models in the semiconductor field. By providing necessary financial support and resource docking, it helps these companies grow in semiconductor technology and industry development, thereby promoting Saudi Arabia's layout in high-tech and future industries, and promoting the implementation of economic diversification strategies.
Saudi Arabia's sovereign wealth fund PIF plans to create a fund of approximately $40 billion specifically for investing in artificial intelligence technology. This will make Saudi Arabia one of the world's largest investors in AI technology. The Saudi Arabian Sovereign Wealth Fund (PIF), also known as the Public Investment Fund (PIF), is the largest sovereign wealth fund in Saudi Arabia and the world's largest fund of its kind. PIF was founded in 1971 and represents the Saudi government in investing, playing a key role in the diversification and sustainable development of the country's economy. PIF invests in a wide range of fields both domestically and internationally, including but not limited to technology, energy, entertainment, sports, infrastructure, real estate, and recently semiconductors and commercial aerospace.
PIF has also established Alat Company, a wholly-owned subsidiary that specializes in the fields of technology and manufacturing. The establishment of Alat is part of Saudi Arabia's "Vision 2030" strategy.
The Saudi Public Investment Fund (PIF) has discussed potential partnerships with top Silicon Valley venture capital firms such as Andreessen Horowitz to explore how to operate this technology fund and the role of these companies in it.
PIF's AI investment fund marks Saudi Arabia's intention to become one of the major investors in the global AI field, attracting and nurturing leading AI companies through this massive funding, and further promoting Saudi Arabia's position in global technology competition. It is reported that Prospery7 Ventures, LLC Fund (part of PIF) has participated in the financing of Chinese startup AI companies.
Recently, the US government seems to have taken measures to restrict the export of certain technologies to the Middle East, including AI related semiconductor technologies. According to Bloomberg citing sources familiar with the matter, the US government has slowed down the issuance of licenses to Nvidia and AMD and other new product manufacturers for "mass exports" of artificial intelligence products to the Middle East, and conducted a national security assessment of the development of artificial intelligence in the Middle East. However, the time required for the assessment is unknown, and the specific definition of "mass exports" is unclear. The pressure and policy adjustments from the United States have undoubtedly added complexity and uncertainty to these investment activities, prompting Saudi Arabia to consider geopolitical risks when making investment decisions.
The Saudi government's establishment of the National Semiconductor Center, Semiconductor Investment Fund, and PIF's AI Investment Fund are all aimed at actively promoting economic transformation, reducing dependence on oil, promoting diversification, and developing the digital economy.
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