Saudi Arabia’s National Semiconductor Hub strategy aims to attract 50 world-class chip design companies to the kingdom in less than six years by providing them access to a 1-billion-riyals ($266.5 million) technology fund, supported by deep tech venture capital firms.

The announcement was made on the first day of the Future of Semiconductors Forum 2024, a two-day event being held in Riyadh, where government entities, chip design companies, and industry players have gathered to devise a gameplan that positions Saudi Arabia as the Silicon Valley of the Middle East.

“The semiconductor industry is projected to become a $1 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,” said Dr Mohammed AlOtaibi, Acting Head of the Saudi Research Development and Innovation Authority (RDIA), while speaking at the forum. “To support this growth, the RDIA is creating one national umbrella for the local semiconductor industry to thrive over next few years.”

The National Semiconductor Hub will establish a design hub that will help build the required knowledge to create a future-proof ecosystem for Saudi, as part of its Vision 2030 goals.

Dr. Naveed Sherwani, CEO of the US-based Rapid Silicon Company, world-renowned chip expert and the brainchild behind the Saudi semiconductor hub, revealed the initiative will focus on building an ecosystem of companies that will design and manufacture different fab chip companies.

“We are looking to create a value of SAR50 billion in five to six years as part of the Saudi Vision 2030 by resolving to attract 50 fab semiconductor companies here over this period,” Sherwani said, adding that three companies had already been signed on, with a total of 10 having shown interest to join.

To attract talent to Saudi, which will include “25 world-class experts” and “5,000 engineers”, the National Semiconductor Hub strategy has drawn out a 10-point incentive plan, ranging from lucrative salaries, a relocation package, and premium residency, along with access to the SAR1 billion fund.

“Companies that are eager to establish themselves in this new Silicon Valley will have access to a fund created by a consortium of deep tech venture capitalists, which is starting with SAR1 billion,” Sherwani added.

Saudi has been heavily involved in next-generation technology in recent months, including the launch of its $100 billion investment firm Alat, a Public Investment Fund (PIF) entity that deals in semiconductors and advanced industries. The company was launched in February with the aim to create 39,000 direct jobs and achieve a direct non-oil GDP contribution of $9.3 billion in the kingdom by 2030.

(Reporting by Bindu Rai, editing by Seban Scaria)