In order to build the "Silicon Valley of the Middle East", Saudi Arabia established a national semiconductor center

The semiconductor industry is vertical

2024-06-08 20:58Posted in Beijing, creators in the field of science and technology

THIS ARTICLE IS SYNTHESIZED BY THE SEMICONDUCTOR INDUSTRY (ID: ICVIEWS).

Focusing on chip design, Saudi Arabia wants to reduce its dependence on oil.

Saudi Arabia has launched a new strategy to establish the country as a hub for semiconductor design, and the country hopes to diversify its economy away from oil by developing its semiconductor industry.

Saudi Arabia has announced the creation of a National Semiconductor Center to support fabless chip companies designing new chips, with the goal of attracting 50 such companies to the kingdom by 2030. Naveed Sherwani, head of the new center, said the program will focus on simpler chips rather than cutting-edge technology, and that chip manufacturing will continue to take place at international foundries at least in the medium term.

"We're not trying to replace Nvidia or challenge Intel," Shchervani said in an interview on the sidelines of the Future Semiconductor Forum in Riyadh. ”

Saudi Crown Prince Mohammed bin Salman is looking to tap into new industries to boost non-oil revenues, a move that underscores the growing importance of semiconductors to Saudi Arabia. The country's broader vision is to become a regional leader in advanced technology, with plans to build data centers, artificial intelligence companies, and chip manufacturing bases.

In February, Alat, a $100 billion investment company under Saudi Arabia's sovereign wealth fund, was launched with a mission to invest in new manufacturing hubs to support Saudi Arabia's tech ambitions and find partners in the chip space.

Ross Jatou, president of Alat's semiconductor division, said the company plans to produce 1 million wafers by 2030 and is expected to generate about $10 billion in revenue. This may mean that Alat may participate in discussions about local manufacturing by Saudi emerging chip design companies in the future.

Shchervani said the new center is currently focused on attracting and supporting new fabless chip companies, with three companies already signed up to join the program and another 10 companies expressing interest in joining.

"We wanted to make this a place like Silicon Valley," said Shchervani, who is also the CEO of Rapid Silicon, a provider of AI technology solutions, "and we offered free space and a variety of compensation and relocation incentives." There are a total of 10 preferential policies for any business that wants to set up a company here. ”

These incentives include the support of a new fund of 1 billion riyals (currently about 1.936 billion yuan) from Saudi Arabia. Shchervani said companies that hire Saudi employees will receive government funding to cover half of their employees' salaries for two years.

Middle Eastern capital bets on Chinese AI companies

Recently, there was news that the investors in the latest round of financing of Chinese artificial intelligence start-up Zhipu AI include capital from the Middle East. It is reported that Saudi Aramco's Prosperity7 fund's US$400 million investment in Zhipu AI, which makes Zhipu AI valued at about US$3 billion, not only reflects the growing international attractiveness of China's AI technology, but also provides the company with new opportunities to further expand the international market, and also reflects the strategic layout of Middle Eastern capital in the global technology field.

In order to move away from dependence on oil as a single source of economic growth, Middle Eastern countries are actively promoting economic diversification and technological innovation, and AI technology is seen as the key to achieving this goal. The global search for the source of AI technology has also become an important goal for these Middle Eastern capitals. Although there were various factors in the past, and some Middle Eastern funds that had invested in this field in China did not increase or withdrew outright, it is not difficult to see that the thirst for new technologies has also given new options for capital in different regions.

Saudi Arabia in particular, whose Vision 2030 plan aims to drive social reform and economic diversification through technological innovation, and the development of AI technology is critical to achieving this vision. Saudi Arabia's investment in Zhipu AI can be seen as part of its global AI layout, as well as a reflection of its economic transformation and national strategy. The addition of Middle East capital not only brings financial support to Zhipu AI, but also brings international vision and resources, which will help Zhipu AI occupy a more favorable competitive position in the global AI field.

As early as last year, the head of the domestic head venture capital institution who went to the Middle East for research revealed that the attention and research on artificial intelligence in the entire Middle East region is very cutting-edge, and as early as around 2019, a university focusing on artificial intelligence has been set up with a national strategic vision, which shows that it has a forward-looking vision for the judgment and prediction of cutting-edge technology.

As the executor of the national strategic investment, the global AI layout of Middle East Capital will naturally pay attention to China's AI model. This investment also reflects China's growing position in the global AI race, its technological strength and innovation capabilities have been recognized by the international market, and the pace of China's AI technology "going global" is also accelerating. At the same time, it also provides new opportunities for Chinese AI companies to build AI infrastructure and technical cooperation with the Middle East and other regions.

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