Globalfoundries, one of the top semiconductor manufacturers, is co-investing $4 billion in a new plant in Singapore to address an ongoing shortage of chips that is affecting the automotive and electronics industries worldwide.
The US company, a unit of Abu Dhabi's Mubadala Investment Company, will finance the expansion using its own investments and those of government and long-term customers, said chief executive Thomas Caulfield during an online ground-breaking ceremony on Tuesday.
“We are expanding our global manufacturing footprint, starting with a new fab [foundry] in Singapore,” he said.
“This is a true symbol of what can be achieved by combining government and customers’ partnerships and GF investments.”
The US company will spend $1bn each to expand manufacturing capacity in the US and Germany over the next two years, he told a separate media briefing on Tuesday.
In March, Globalfoundries said it plans to invest $1.4bn in 2021 to expand its manufacturing capacity across Singapore, Europe and the US.
“Globalfoundries is currently the only global semiconductor manufacturer of scale with a global footprint and we are stepping up and meeting the challenges of the global semiconductor shortage by accelerating our investment – not only in Singapore but around the world,” said Mr Caulfield.
“Working in close collaboration with our customers and the government of Singapore is a recipe of success that we are pioneering here and looking forward to replicating in the future – in Europe and [the] US.”
Automotive manufacturers and electronics companies, including some of the world’s biggest computer and smartphone makers, face a chip shortage that has been exacerbated by the Covid-19 pandemic, which disrupted global supply chains.
Car manufacturers such as Germany's Volkswagen and Ford and General Motors in the US had to trim production due to a chip shortage, prompting the semiconductor industry to boost investments to plug the supply gap.
In March, Intel said it will invest $20bn to expand its manufacturing facilities as it expects chip shortages to spill over into next year.
In the same month, Taiwan's TSMC unveiled plans to invest $100bn over the next three years to increase its production capacity.
Semiconductor manufacturers also intend to capitalise on future demand growth sparked by growing digitisation after the onset of the pandemic.
The global market is set to expand by 19.7 per cent this year and hit $573bn next year as growth slows to 8.8 per cent, according to World Semiconductor Trade Statistics, a global trade body representing chip makers. The growth will be mainly driven by demand for memory chips.
GF is currently the only global semiconductor manufacturer of scale with a global footprint and we are stepping up and meeting the challenges of global semiconductor shortage by accelerating our investment not only in Singapore but around the world
“It took 50 years for the industry to grow to $500bn today and now it is estimated that the industry will grow to $1 trillion in roughly eight years,” said Mr Caulfield. “It is hard to overstate the amount of investment and focus [needed] in order to meet this challenge.”
The new 23,000 square metre plant will be adjacent to the company's existing campus. It will boost production of 300-millimetre-wafers by 450,000 a year, taking the total capacity of its Singapore centre to 1.5 million 300mm wafers annually. The new foundry will create 1,000 high-skilled jobs.
“We have several long-term customer agreements in place,” said Mr Caulfield.
The company has more than 250 global customers and currently operates nine manufacturing centres in the US, Germany and Singapore.
Mubadala group chief executive Khaldoon Al Mubarak said the investment in the new Singapore plant was timely, given the growing importance of chips in every aspect of life.
The pandemic has also accelerated technology trends across the healthcare, FinTech, satellite communications, education, automation, mobility and enterprise sectors and “semiconductors are vital to all these sectors, which are in themselves long-term investment priorities at Mubadala”, he said.
Since the onset of Covid-19, “the need for the companies to be digital first has accelerated at an outstanding rate and it has required almost every company, every government worldwide to adapt and think like a tech company”, he said.
Attacks on Egypt’s long rooted Copts
Egypt’s Copts belong to one of the world’s oldest Christian communities, with Mark the Evangelist credited with founding their church around 300 AD. Orthodox Christians account for the overwhelming majority of Christians in Egypt, with the rest mainly made up of Greek Orthodox, Catholics and Anglicans.
The community accounts for some 10 per cent of Egypt’s 100 million people, with the largest concentrations of Christians found in Cairo, Alexandria and the provinces of Minya and Assiut south of Cairo.
Egypt’s Christians have had a somewhat turbulent history in the Muslim majority Arab nation, with the community occasionally suffering outright persecution but generally living in peace with their Muslim compatriots. But radical Muslims who have first emerged in the 1970s have whipped up anti-Christian sentiments, something that has, in turn, led to an upsurge in attacks against their places of worship, church-linked facilities as well as their businesses and homes.
More recently, ISIS has vowed to go after the Christians, claiming responsibility for a series of attacks against churches packed with worshippers starting December 2016.
The discrimination many Christians complain about and the shift towards religious conservatism by many Egyptian Muslims over the last 50 years have forced hundreds of thousands of Christians to migrate, starting new lives in growing communities in places as far afield as Australia, Canada and the United States.
Here is a look at major attacks against Egypt's Coptic Christians in recent years:
November 2: Masked gunmen riding pickup trucks opened fire on three buses carrying pilgrims to the remote desert monastery of St. Samuel the Confessor south of Cairo, killing 7 and wounding about 20. IS claimed responsibility for the attack.
May 26, 2017: Masked militants riding in three all-terrain cars open fire on a bus carrying pilgrims on their way to the Monastery of St. Samuel the Confessor, killing 29 and wounding 22. ISIS claimed responsibility for the attack.
April 2017: Twin attacks by suicide bombers hit churches in the coastal city of Alexandria and the Nile Delta city of Tanta. At least 43 people are killed and scores of worshippers injured in the Palm Sunday attack, which narrowly missed a ceremony presided over by Pope Tawadros II, spiritual leader of Egypt Orthodox Copts, in Alexandria's St. Mark's Cathedral. ISIS claimed responsibility for the attacks.
February 2017: Hundreds of Egyptian Christians flee their homes in the northern part of the Sinai Peninsula, fearing attacks by ISIS. The group's North Sinai affiliate had killed at least seven Coptic Christians in the restive peninsula in less than a month.
December 2016: A bombing at a chapel adjacent to Egypt's main Coptic Christian cathedral in Cairo kills 30 people and wounds dozens during Sunday Mass in one of the deadliest attacks carried out against the religious minority in recent memory. ISIS claimed responsibility.
July 2016: Pope Tawadros II says that since 2013 there were 37 sectarian attacks on Christians in Egypt, nearly one incident a month. A Muslim mob stabs to death a 27-year-old Coptic Christian man, Fam Khalaf, in the central city of Minya over a personal feud.
May 2016: A Muslim mob ransacks and torches seven Christian homes in Minya after rumours spread that a Christian man had an affair with a Muslim woman. The elderly mother of the Christian man was stripped naked and dragged through a street by the mob.
New Year's Eve 2011: A bomb explodes in a Coptic Christian church in Alexandria as worshippers leave after a midnight mass, killing more than 20 people.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
