How The UAE can rescue the Global Trade from the current Trade Tensions and who will be the allies....

Not long ago, The entire Human Race had to withstand the most devastating Pandemic from the last 100 Years that disrupted the Global Trade, particularly the Supply Chains of The Semiconductor Industry.

The BACKGROUND of Global Semiconductor Value Chain was characterized by the following :-(1)

 Critical Dependencies on Advanced CHIPS from Taiwan and South Korea(2)THE USA Intellectual Property Leadership with regards to CHIP DESIGN and AUTOMATION(3)[56 % of Semiconductor Wafers are sourced from Japan(4)The European Union dominates The Research and Manufacturing of The necessary equipments needed for Manufacturing Semiconductor ChipsThe equipments manufactured by The ASMC of The Netherlands are used to manufacture Leading Edge Semiconductor Chips, particularly by Taiwan's TSMC and South Korea's Samsung ElectronicsThe European Union is Also Home to the innovative research facilities such asIMEC (Belgium)LETI(France)FRAUNHOFER (Germany)(5)

By 2022, the end of Pandemic, Taiwan and South Korea manufactured 92 % of the Leading Edge Semiconductor Chips.

(6)

The Manufacturing of Trailing Edge Semiconductors was dominated by China.By 2024, China was home to 31 Foundries manufacturing Trailing Edge Semiconductor Chips that equalled in total the number of Foundries manufacturing Trailing Edge Semiconductor Chips in Taiwan and The USAThe Leading Edge Semiconductor Chips - 10 Nanometers or lesser in size

The Trailing Edge Semiconductor Chips - 28 Nanometers or more

Uses of Leading Edge Semiconductor Chips

Artificial IntelligenceInternet of ThingsRoboticsQuantum ComputingMachine Learning

Uses of Trailing Edge Semiconductor Chips

CarsDisplaysIndustrial EquipmentsAppliancesMedical Monitoring EquipmentsSmartphones

The Background of The Trade Tensions between The USA and China

Before 2017,

i)The USA-China Trade was at USD 550 Billion per Year

(ii)China held The USA Treasury Bonds to the amounts of USD 1 Trillion

While the trade ties between The USA and China date back to 1979, the relations suffered at the hands of Theft of The USA Intellectual Property, Unfair Trade Practices, and Currency Manipulation leaving behind a negative impact on The USA - China Trade.While the above mentioned can be called allegations, they resonate with sentiments of The American People.

With the beginning of The First Office Term as President of The United States of America by Mr Donald Trump in January 2017, the world became withness to Resistance to The Unfair Trade Practices, Theft of American Intellectual Property and Currency Manipulation.

While these allegations can neither be denied nor be confirmed, the Resistance gained a firm ground with beginning of The Second Office Term as President of The United States of America by Mr Donald Trump in January 2025

50% Tariff on Chinese Semiconductor imports, effective January 1, 2025

Particularly, The Trailing Edge Semiconductor Chips that continue to find widespread applications in Vehicles, Industrial Tools, and Home Electronics

The Tech and Auto Sectors of the World have faced a short-lived turbulence so far.

With American Resistance to Unfair Trade Practices on one side and The Chinese Counter Tariffs on the other side, the Global Markets had begun to expect probable volatility.

But this is where The UAE's Strong Trade Relationships with allies like The USA and -The Republic of India - come to the rescue of The Global Semiconductor Industry.

THE UAE-THE USA STRATEGIC TRADE RELATIONSHIP

While The USA and The UAE are working closely towards building Clean Room Infrastructure and Supply Chain Hubs, The UAE's Damac announced investment of USD 20 Billion into building Data Centers in The USA with the beginning of The 2nd Office Term as President of The United States of America by Mr Donald Trump.

The USA-THE UAE- THE REPUBLIC OF INDIA TRADE RELATIONSHIP

While Areas such as Emerging Tech, Infrastructure, Space Tech, Clean Energy dominate The Relationship between The USA - The UAE -and- The Republic of India, The Semiconductors Manufacturing Industry is an equally significant element of The Trade Relationship.

The USA-UAE Trade Relationship

(with respect to Global Semiconductor Manufacturing Industry)

While The USA and The UAE are working closely towards building Clean Room Infrastructure and Supply Chain Hubs, The UAE's Damac announced investment of USD 20 Billion into building Data Centers in The USA with the beginning of The 2nd Office Term as President of The United States of America by Mr Donald Trump.

 The UAE-India Trade Relationship(With respect to Semiconductor Manufacturing Industry)

The pre-existing Trade Relationship between India and The UAE derives further strength from The Strategic Partnership of The UAE-India with respect to Semiconductor Manufacturing Industry

(1)

Significant investments by The UAE in AI, Chip Design Startups in The UAE and in India

The UAE's investments in Artificial Intelligence Startups in The UAE

Back in 2017, His Highness His Excellency Vice President of The UAE, Prime Minister of The UAE and Ruler of Dubai, Sheikh Mohammed Bin Rashid Al Maktoum, appointed Mr Omar Sultan Al Olama as Minister of State for Artificial Intelligence, Digital Economy and Remote Work Applications.The UAE becoming the First Country in The World to have a Ministry Dedicated to AI is a testimony of The UAE's commitment to achieving AI Prowess

The UAE currently hosts 490 AI Companies

Artificial Intelligence Strategy 2031 aims to increase AI’s contribution to GDP to Dh335 billion ($91 billion) and reduce government operational costs by 50%.

Additionally, the Dubai Future Accelerator Fund, with a Dh10 billion ($2.7 billion) allocation, has played a crucial role in attracting AI-driven startupsAdditionally, the Dubai Future Accelerator Fund allocated Dh10 billion ($2.7 billion)

The UAE is expected to be the World's Capital of AI Startups

The investments into Artificial Intelligence by The UAE are growing at a record pace of 20% per year

The UAE investments into The Indian ARTIFICIAL INTELLIGENCE and The Semiconductor Manufacturing Industry

Under PM Modi's leadership, the Indian sophistication in The field of AI, is rapidly evolving(i)

The Collbaoration between 3AI - The Largest Artificial Intelligence Platform from India and The UAE Government is one among a large number of AI Collaborations between The UAE and India.

(ii)

Next Orbit Ventures, a UAE-backed investment fund, committed over $3 billion for a semiconductor fab project in India (Gujarat). They aim to build manufacturing and R&D facilities.

This venture also includes chip design and AI-based applications, where India’s engineering strength comes in.

(iii)

Dubai Silicon Oasis (DSO) and Indian Startups (DSO), a tech hub in Dubai, has signed MoUs with Indian chip design startups and engineering service providers.

3. 
   

(iv)

India-UAE IIT Delhi-Abu Dhabi Campus focusee on AI, advanced electronics, and semiconductors.And creates a bridge for Indian chip design education and research to directly connect with UAE’s industry needs.

4. 
   

India’s Prowess: Faculty and students working on VLSI design and electronics now have a UAE base for R&D and startup incubation.

(2)

The UAE-India Relationship with respect to The UAE's Unrivaled Dominance in The Logistics Sector of The World

The MOU between RITES, a leading infrastructure firm under Ministry of Railways of India, and The DP World underscores a robust partnership via the UAE-India Virtual Trade Corridor (VTC) and facilitates the The Logistics between India and The UAE with Multimodal Logistics Parks, Free Trade Zones, Port Connecticvity, and Rail Freight Zones playing an important role

The DP World-RITES MoU further expands the Supply Chain Routes between India and The UAE

The Emergnce of The Unrivaled Dominance of The UAE in The Logistics Sector of The World

The UAE is the heart of The Global Logistics Industry as it is located at the crossroads of Europe, Africa and The Americas

The UAE is home to Jebel Ali Ports, Abu Dhabi Ports, Dubai International Airports, Al Maktoum International Airports

The UAE is also home to The Global Logistics Powerhouse - DP World - which is currently active in 75+ countries of The World and champions the Global Supply Chain Solutions while managing the Ports, Terminals, Economic Zones and Inland Logisitics

WHAT LIES AT STAKE FOR THE GCC?

While the effects of The Trade Tensions are expected to result an increase the in prices of Electronics and Automobiles and Construction and Real Estate in the short term, The UAE presents a limitless potential towards a successful rescue of Global Trade from Trade Imbalances.

The Trilateral Semiconductor Manufacturing Corridor betweenThe USA- The UAE - The Republic of India 

will feature collaborations on the Fronts of

(i) Tech and Research and Development.and Innovation (The USA)

(ii) Trade and Investment (The UAE)

(iii) Manufacturing and Assembly ( India)

THE INDIAN SEMICONDUCTOR MANUFACTURING INDUSTRY BOLSTERED BY THE INDIA-US TIES

[Officially the arrival of The Indian Semiconductor Manufacturing Industry on The World's Stage began with The US Chip Giant Micron's investment into a Semiconductor Chip Assembly, Testing Facility in India's Gujarat,

Followed by

Tata Electronics Limited and Analog Devices Inc. Of The USA forming a strategic partnership as well

OTHER INDIAN TIE-UPS FOR SEMICONDUCTOR MANUFACTURING INDUSTRY IN INDIA include

Followed by

The Tata Electronics Limited and Power Semiconductor Manufacturing Corporation of Taiwan signing an agreement together for India's First Semiconductor Fabrication Plant in Dholera of Gujarat

followed by

Tata Electronics Limited and Tokyo Electron Limited forming a strategic partnership aimed at Semiconductor Equipment Infrastructure

With The developments in The Indian Semiconductor Manufacturing Industry taking place at a record pace, India is soon emerging as a hub of Semiconductor Chip Design

With The USA's leadership of Technology, R&D, and Innovation the world can avoid being overdependent on East Asia for Semiconductor Innovation

The Jebel Ali Port and UAE Free Zones can emerge as Distribution Hubs, and Financing Hubs for Semiconductors

Dubai and Abu Dhabi can channelize Sovereign Wealth Investments and Private Capital into Technology

India becomes a Low-Cost, High Talent alternative for Semiconductor Manufacturing as it creates Millions of Skilled Jobs, Advances Tech Education, and builds Industrial Self Reliance

[The UAE thus proves its potential as a Tech Neutral Ground where major powers of the world collaborate and thus reduces the risk of Diplomatic Tensions

By acting as a bridge for Global Trade and Capital, The UAE rescues the world from an economic fragmentation and thus mitigates the Global Trade Tensions

How all of the above mentioned goals can be achieved(1)The UAE and India provide Non Aligned Production and Trade Zones

 (2)The Distribution of Expertise between The USA, The UAE and The Republic of India reduces single point dependency

The Trilateral Semiconductor Manufacturing Corridor betweenThe USA- The UAE - The Republic of India will feature collaborations on the Fronts of

Tech and Research and Development.and Innovation (The USA)

Trade and Investment (The UAE)

Manufacturing and Assembly ( India)

• ANIRUDH VAISHYA

• -TheOptimisiticJournalist