Introduction
Saudi Arabia is making significant strides in the semiconductor industry, aiming to position itself as a global hub for chip design and manufacturing. At the recent LEAP conference in Riyadh, the country’s National Semiconductor Hub (NSH) unveiled its ambitious plans, which include attracting 50 semiconductor companies by 2030 and achieving the first chip tape-out by July 2025.
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Key Highlights
Saudi Arabia’s goal: To host 50 semiconductor firms by 2030.
First chip tape-out: Expected by July 2025.
Initial success: 16 companies accepted in the first cohort, surpassing the goal of five.
Funding strategy: $3.2 billion semiconductor fund, with $2.4 billion from private investors.
Talent development: Training programs in Saudi Arabia, Egypt, and Pakistan to address workforce shortages.
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Aiming for a Global Semiconductor Hub
The Saudi semiconductor initiative, led by the NSH, is a bold attempt to diversify the country’s economy beyond oil.
The strategy involves creating a supportive ecosystem for semiconductor companies by offering financial incentives, training local talent, and developing a robust design and manufacturing infrastructure.
Naveed Sherwani, CEO of NSH, emphasized the importance of workforce development and capital availability.
“Our goal is to bring 50 semiconductor companies to the kingdom in the next five years. By July 2025, we hope to tape out our first chip from Saudi Arabia,” Sherwani said at the LEAP conference.
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Strong Interest from U.S. Companies
Saudi Arabia’s initiative has garnered strong interest from American semiconductor companies.
According to Sherwani, 64 U.S.-based fabless semiconductor firms applied to be part of the first cohort, significantly exceeding expectations.
Of these, 16 were selected, and the country is now working to support their relocation and operational setup.
Sherwani pointed out that workforce shortages in the U.S. are a key reason why many companies are looking to expand internationally.
“Companies need access to skilled talent. The U.S. is facing a major workforce crisis, which is why many firms are considering alternative locations such as Malaysia, Singapore, and now Saudi Arabia,”Sherwani
Incentives and Funding
To attract semiconductor firms, Saudi Arabia is offering substantial incentives. Each company receives around $2 million in operational and working capital support.
The NSH is also helping firms secure funding through the newly established National Semiconductor Fund, which aims to raise $500 million as part of a broader $3.2 billion investment plan.
- Public funds: $800 million
- Private equity and venture capital: $2.4 billion
- First funding round: $500 million, of which $50 million will come from the NSH, and the rest from private investors.
The fund is backed by a consortium of 24 local venture capitalists (VCs), and the NSH is actively seeking international investors to contribute.
Building a Skilled Workforce
A critical element of Saudi Arabia’s semiconductor strategy is workforce development.
The country is focusing on training graduates from Saudi Arabia and nearby countries, including Egypt and Pakistan, through an intensive eight-month training program.
The program aims to equip engineers with skills in chip design, verification, and physical design, with a special emphasis on RISC-V and chip tape-out processes.
“Our goal is to place trained graduates into the semiconductor companies operating in Saudi Arabia,” Sherwani said.
Notably, 50% of Saudi Arabia’s engineering graduates are women, highlighting the country’s commitment to gender diversity in the tech sector.
Key Customers and Strategic Partnerships
Beyond funding and talent, having a strong customer base is crucial for the success of any semiconductor hub.
Saudi Arabia’s initiative is well-positioned in this regard, with multiple high-profile projects driving demand for locally manufactured chips:
Alat: Established in 2023 with $100 billion in investment, focusing on electronics, semiconductors, and advanced materials.
Neom Future City: A futuristic smart city that will require advanced semiconductor solutions.
Transcendence AI Infrastructure Project: A $100 billion initiative to build AI-focused data centers.
Lenovo partnership: A new 200,000-square-meter manufacturing campus set to produce laptops, desktops, and servers by 2026.
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Advancing Chiplet Technology and Manufacturing
Ali Ibrahim, Vice President of Semiconductor Strategy at Alat, highlighted the company’s hybrid approach to chip manufacturing, which includes:
- IDM foundry model: Focusing on power, sensors, and edge AI processing.
- Pure-play foundry model: Developing standard chip manufacturing facilities.
- Chip packaging capabilities: Enhancing efficiency through advanced packaging techniques.
Alat is particularly focused on chiplets—modular semiconductor components that can be combined to create more powerful chips.
Ibrahim stressed the need for an “open chiplet ecosystem” to encourage collaboration among industry players, including semiconductor IP providers, EDA tool vendors, OSATs (outsourced semiconductor assembly and test companies), and manufacturers.
“For chiplets to work, we need a shift from silicon-centric thinking to system-level co-design,“ Ibrahim stated.
He pointed to ongoing standardization efforts by organizations like UCIe, Arm, and the Open Compute Project (OCP) as essential to building this ecosystem.
Conclusion:
Saudi Arabia’s semiconductor ambitions signal a bold step toward technological self-sufficiency and economic diversification.
By attracting global chipmakers and fostering local innovation, the kingdom is positioning itself as a key player in the evolving semiconductor landscape.
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