The Mubadala-GlobalFoundries Nexus
The UAE’s most consequential technology asset may be one that operates primarily outside its borders. Mubadala Investment Company’s ownership of GlobalFoundries, the world’s third-largest contract chipmaker, positions Abu Dhabi within the semiconductor supply chain at a scale that no other Gulf state approaches. This position was not acquired through organic domestic industry development but through strategic investment, beginning with the acquisition of AMD’s manufacturing operations and subsequent consolidation into what became GlobalFoundries.
GlobalFoundries operates fabrication facilities in the United States, Germany, and Singapore, producing chips for automotive, communications, defence, and industrial applications. The company’s decision to forgo pursuit of leading-edge process nodes below seven nanometres, announced in 2018, refocused its strategy on mature and differentiated process technologies where demand remains robust and competition from Taiwan’s TSMC is less dominant.
The 2021 initial public offering of GlobalFoundries on the NASDAQ provided partial liquidity while Mubadala retained a controlling stake. The listing subjected the company to public market scrutiny and reporting requirements while maintaining Abu Dhabi’s strategic influence over its direction.
Strategic Value in an Era of Fragmentation
Global semiconductor supply chain disruptions, intensified by pandemic-era shortages and geopolitical tensions between the United States and China, have elevated chip manufacturing from an industrial commodity into a strategic asset. National governments across the developed world have committed substantial subsidies to domestic semiconductor production, recognising the dependency risks exposed by concentrated manufacturing in East Asia.
The UAE’s position through GlobalFoundries provides indirect participation in this strategic revaluation. GlobalFoundries has secured significant incentive packages from the United States under the CHIPS Act and from the European Union under its own semiconductor investment programmes. These public subsidies effectively co-fund capacity expansion alongside Mubadala’s private investment, enhancing the financial and strategic returns on the UAE’s semiconductor position.
However, the benefits to the UAE itself are mediated by geography. GlobalFoundries’ fabrication facilities are located in other nations, subject to those nations’ export controls, security regulations, and industrial policies. The UAE’s ownership provides financial returns and boardroom influence but does not translate directly into sovereign manufacturing capacity or guaranteed chip supply.
Domestic Semiconductor Ambitions
Developing semiconductor manufacturing within the UAE faces fundamental challenges that distinguish it from other technology ambitions the country has pursued. Chip fabrication requires enormous capital investment, measured in tens of billions of dollars per facility. It demands ultra-pure water supplies in desert environments, stable and abundant electrical power, and a workforce with highly specialised skills that takes years to develop.
The UAE’s approach has focused on adjacent capabilities rather than attempting to replicate fabrication facilities domestically. Chip design, packaging, testing, and the development of semiconductor applications represent areas where the country’s existing technology workforce and infrastructure can contribute. Design houses and fabless semiconductor companies require engineering talent and computing resources rather than the physical infrastructure of fabrication.
Investment in semiconductor research at UAE universities and through the Technology Innovation Institute contributes to building intellectual capacity in chip architecture and design. These efforts operate on long timescales and may not produce commercially significant output for years, but they establish foundations for participation in higher-value segments of the semiconductor value chain.
Geopolitical Navigation
The semiconductor sector has become a primary arena for geopolitical competition, with the United States imposing increasingly restrictive export controls on advanced chip technology to China and its allies. The UAE occupies a complex position in this landscape. Its ownership of GlobalFoundries, a major US-based manufacturer, intertwines its commercial interests with American industrial policy. Simultaneously, Chinese technology investment in the UAE and the country’s trade relationships with China create potential friction points.
The UAE has navigated these tensions by maintaining alignment with US export control frameworks while preserving commercial relationships with Chinese technology companies in areas outside restricted categories. This balancing act requires continuous calibration as the boundaries of technology competition shift and expand.
GlobalFoundries’ own customer base spans both allied and non-aligned nations, and the company’s compliance with US export regulations constrains its ability to serve certain markets. For Mubadala, the strategic value of GlobalFoundries must be assessed net of these geopolitical constraints, which limit commercial flexibility in ways that purely domestic technology investments do not.
Supply Chain Positioning
Beyond GlobalFoundries, the UAE has invested in other segments of the semiconductor supply chain. Packaging and assembly operations, electronic design automation tools, and semiconductor equipment represent potential investment targets that complement the existing manufacturing position. The country’s logistics infrastructure, including its status as a major air cargo hub, supports distribution roles within the global chip supply chain.
The semiconductor industry’s shift toward advanced packaging technologies, including chiplet architectures and heterogeneous integration, creates opportunities for new entrants in segments that require less capital intensity than leading-edge fabrication. The UAE’s potential to develop packaging and testing facilities domestically is more feasible than replicating front-end fabrication, and these capabilities carry growing strategic value as packaging complexity increases.
Investment Horizon
The semiconductor industry operates on investment cycles measured in decades. Fabrication facilities require five to seven years from planning to production, and process technology development extends over similar timescales. The UAE’s patient capital model, channelled through sovereign wealth funds with multi-generational mandates, is well suited to the industry’s temporal demands. Whether the strategic patience that characterises UAE sovereign investment can sustain semiconductor commitments through industry cycles, geopolitical disruptions, and competing investment opportunities will determine the long-term value realisation from this technology position.