Oman opens the door to chip industry in the Middle East
The chip industry is attracting the attention of many investors. It is a sector with a lot of projection and in which many countries believe they can make a significant profit. In addition to the Asian and American supremacy in the semiconductor sector, the Middle East is looking to join in. Oman is hosting the World Semiconductor and Chip Summit with the aim of boosting investment in this field. Oman, along with the United Arab Emirates and Saudi Arabia, was one of the first countries in the region to commit to this.
The three countries, aware of the crisis that the world is going through due to the shortage in chip production, are committed to a product that adapts to the businesses in which they are already established. Arabia and the UAE have major investors in technology, and adding the semiconductor industry would be an added value for the increasing number of companies that choose to invest in the regional leaders. Especially because, as Oman says, the Gulf has not yet managed to attract part of the investment niche that they now want to encourage, with the help of chips.
The current situation in this sector is not very promising. In addition to the existing shortage of chips, there has been a decrease in production as a result of the Russian invasion of Ukraine. It is worth remembering that the importance of this sector is underpinned by the fact that virtually all technological products require chips. From mobile phones to electric cars, aeroplanes, computers and even state-of-the-art weaponry.
In addition, chips are a key component of devices that are highly complex to produce and depend on global supply chains that are still weak. This is why the Gulf countries are not the only ones to have set their sights on chips. Taiwan and China are leading the race to dominate this market, but the United States has made a strong entry. As early as July last year, the US Senate passed legislation to boost domestic semiconductor production.
"Creating beneficial incentives for semiconductor production" is what the Americans call this initiative, which will allocate around 52 billion dollars to support chip production. To this must be added 100 billion for research and development over the next five years. In fact, some of the world's most important companies in this sector, such as TSMC (Taiwan Semiconductor Manufacturing Company), Intel and Samsung are already setting up new plants in North America, the first two in Arizona and the last in Texas.
In anticipation of this move, Riyadh launched the Middle East's first programme dedicated to electronic chip manufacturing technology in March 2022. This is precisely the focus of the Muscat summit. The conference in the Omani capital sent a message of optimism to the countries of the region that there are incentives to attract investors. Ali al-Shaidani, undersecretary of Oman's Ministry of Transport and Communications, believes the goal is to bring in "international companies specialised in this industry" and to add value to the country by "training and qualifying local skills".
The data on this industry only confirms that it is one of the most promising industries in the world. Since 2013, the semiconductor sector has grown from $315 billion to $676 billion at the end of last year. This, coupled with around 1.1 trillion chips being sold in 2021, generating a volume of between $500 billion and $600 billion a year, makes the Middle East keen to step up its efforts to enter a booming market.
