The Kingdom of Saudi Arabia (KSA) has been taking several steps to diversify its economic development. The nation is reducing its dependency on crude oil and actively shifting its focus to the tech landscape. We’ve already seen developments in the field, with the government building multiple innovation centers and allocating tech and AI funds.
In another initiative, Saudi Arabia has announced plans to enter the semiconductor industry. Identifying a significant growth opportunity in the sector, the nation is looking to attract chipmakers and become a semiconductor hub.
Recently, government entities, chipmakers, and multiple industry players gathered in Riyadh for a two-day Future of Semiconductors Forum 2024. Organized by KACST (King Abdulaziz City for Science and Technology) and KAUST (King Abdullah University of Science and Technology), the participants at the forum discussed plans to position Saudi Arabia as the Silicon Valley of the Middle East.
Amidst the discussions, KSA announced plans to set up a National Semiconductor Hub. With the hub, it intends to attract around 50 world-class chipmakers within 2030, providing them access to healthy tech funding of 1 billion Riyals ($266.5 million). Deep tech venture capital firms are also expected to back the initiative.
Speaking at the forum, Mohammed Al Otaibi: acting head of the Saudi Research Development and Innovation Authority (RDIA) said: “The semiconductor industry is projected to become a USD1 trillion industry in the next few years and Saudi Arabia must play a role in this growth, both regionally and globally, over the coming years. To support this growth, the RDIA is creating one national umbrella for the local semiconductor industry to thrive over the next few years."
The National Semiconductor Hub is expected to contribute to KSA’s larger Vision 2030. The hub will attract talent and resources, building the knowledge base required to create an advanced ecosystem that the nation desires.
Naveed Sherwani, the brainchild behind the National Semiconductor Hub said: “We are looking to create a value of SAR50 billion in five to six years as part of the Saudi Vision 2030."
They have laid out active plans to attract talent to the Kingdom and establish themselves as an attractive location for chipmakers. The aim is to attract around 5,000 engineers and 25 world-class experts to provide their advice and guidance.
Adding to this, Sherwani mentioned: “We’ve freed space. We provide them with all kinds of incentives for salary, for relocation. In total, there are 10 incentives we will provide to anybody that wants to start a company here”.
As per its representatives, the National Semiconductor Hub is focused on developing a network of work chip companies without fabrication sites, that will design new semiconductors and attract new chipmakers. The hub already has three companies signed up, with 10 more in the works.
“We’re not trying to replace Nvidia or challenge Intel,” said Sherwani, “We want to do humble beginnings. Once we have built a base, then we can talk."
The initiative is also aimed to support the development of products from the Saudi Arabia National Technology Development Program, while also attracting talent to the sector.
“We want to make this place feel like Silicon Valley,” Sherwani told Bloomberg.
The hub is also expected to play a major role in boosting local industries, scaling R&D, and accelerating innovation throughout the semiconductor industry.
Speaking at the forum, Ross Jatou, president of Alat Semiconductors, said: “We will make this a reality with the National Semiconductor Hub and the support of KACST and KAUST. While Silicon Valley took decades to build, our collaboration through the National Semiconductor Hub will accelerate this process”.
We’ve seen Saudi Arabia get highly involved in modern technology and innovation. In fact, the Kingdom has recently set aside $40 billion to invest in AI technology. Their venture into the semiconductor space underlines their interest in the industry.
Highlighting the perceived potential of the initiative, Alotaibi said: “The hub will [not only] build the knowledge required for this industry, but also promote Saudi Arabia as an attractive relocation country for international semiconductor design companies”.