RIYADH: Controls imposed on exports of semiconductors by the Biden administration in the US are leading to chip shortages, according to an expert.
“We actually need very advanced chips for AI (artificial intelligence), however, because of the United States export control, we cannot get them,” Wesley Shu, CEO of Formosa+, told Arab News on the sidelines of the Global AI Summit in Riyadh on Thursday.
One potential solution being explored is the establishment of a Saudi-backed data center in Taiwan.
“It can circumvent the situation of United States export control, because the AI data center will not be owned by Saudi Arabia, but the computing power will be owned by Saudi Arabia,” Shu said.
The Kingdom’s ambitious megaprojects, including The Line in NEOM, will need state-of-the art processing power to function effectively, according to the tech professor-turned-businessman.
Taiwan is home to the world’s leading chipmaker, the Taiwan Semiconductor Manufacturing Company, and currently has 46 percent of the world’s semiconductor foundry capacity.
Having historically enjoyed good relations with Saudi Arabia, Taiwan, Shu said, is well placed to support the Kingdom’s goals.
US companies traditionally provide the world’s most sophisticated semiconductor technology.
However, the Biden government recently tightened restrictions on exports of technology relating to semiconductors and quantum computing, citing national security concerns.
A major global chip shortage during the COVID-19 pandemic also highlighted weaknesses in the supply chain.
With the aim of bolstering national self-sufficiency, Saudi Arabia in June announced the launch of its National Semiconductor Hub program.
The program aims to establish 50 semiconductor design companies in the Kingdom by 2030.
“I think that dependence is not healthy … what we should do is build our own capability,” NSH chairman Naveed Sherwani told Arab News in a recent interview.
But for Shu, it is crucial for the Kingdom to make the most of Taiwanese expertise to build self-sufficiency while simultaneously mitigating the effect of US export controls.
A former professor, Shu founded Formosa+ in 2023 to facilitate the transfer of expertise from Taiwan to Saudi Arabia.
“In Saudi Arabia we are starting from scratch,” he said. “The crown prince, he has ambition. We know that there are some obstacles we need to conquer. However, because this is fresh, and we have an ambitious country, with Taiwan, we can work together.”
Having a reliable supply of technologically advanced semiconductors is essential for achieving some of the grand ambitions of Vision 2030.
A cornerstone of Vision 2030 is the planned megacity of NEOM. Its linear city The Line is designed to use a highly advanced transport system that will reduce commuting time for its residents.
For Shu, this is one area where the Kingdom will need to employ highly-advanced semiconductor technology.
“We’ll talk about The Line. We need to have some kind of dashboard, or some kind of control center to control everything in The Line,” he said.
“This is a 3D city, right? So, we have a very, very huge task about traffic control, about flow control, about the customer. We need very advanced chips for AI.”
