Samsung Electronics (005930.KS) Executive Chairman Jay Y. Lee has traveled to the United Arab Emirates, a country facing near-wartime regional uncertainty, in a visit analysts said will add momentum to group-wide efforts in the Middle East, including advanced chip supplies tied to the construction and operation of artificial intelligence data centers and the expansion of combined-cycle power plant projects.
For his first trip to the Middle East in about a year, Lee chose the Al Dhafra gas-fired power plant, a $1.35 billion (about 1.8 trillion won) project won by Samsung C&T (028260.KS) through a consortium with UAE builder Trojan General Contracting. Scheduled to begin operating next year, the Al Dhafra plant is being built to supply about one gigawatt of electricity to AI data centers, making it a core piece of infrastructure symbolizing the "AI transformation," or AX, that the UAE is pushing at the national level.
Samsung is focusing on the astronomical AI infrastructure investments the UAE is pursuing to move away from an oil-centered economy. Abu Dhabi National Oil Co. plans to invest about $150 billion (198 trillion won) in energy infrastructure by 2030, while Abu Dhabi Future Energy Co. is pursuing a $6.5 billion (8.6 trillion won) clean energy generation project. The UAE is also accelerating "Operation 300bn," which aims to expand manufacturing's contribution to gross domestic product to 300 billion dirhams (about 110 trillion won) by 2031, as well as its "Make it in the Emirates" policy to build an advanced manufacturing ecosystem.
The UAE is working with global big tech firms to build a U.S.-UAE AI campus in Abu Dhabi with capacity of up to 5 gigawatts. Stargate UAE, which will be located there, is a one-gigawatt AI computing cluster being built by local AI company G42, with OpenAI and Oracle among those taking part in its operation. The first 200-megawatt facility is targeted to begin operating this year. The initial investment the South Korean government has proposed for the project alone exceeds 30 trillion won.
Using Lee's on-site strategy meeting as a springboard, Samsung plans to go beyond supplying individual products or equipment and to target the local market with differentiated competitiveness spanning AI and energy infrastructure construction through advanced manufacturing. The group has concluded that as the Middle East's industrial structure shifts rapidly from oil and gas to AI and advanced manufacturing, a new market is opening for Samsung that runs from power generation and transmission infrastructure to semiconductors, cooling equipment supplies, data center operations and direct investment.
The AI data center projects the UAE is pursuing require generation facilities and transmission networks capable of supplying large volumes of electricity reliably, cooling equipment to remove heat from servers, and batteries to cope with outages and power fluctuations. Samsung Electronics has world-class competitiveness in the advanced chips AI data centers need, while its subsidiary FläktGroup is competitive in cooling solutions. Samsung SDS (018260.KS) can supply comprehensive solutions for data center operations, and Samsung SDI (006400.KS) can provide energy storage systems to handle emergency backup power.
In energy infrastructure, the group plans to pursue new orders based on experience accumulated across a range of Middle East projects. Samsung C&T took part in building the Barakah nuclear power plant as well as the Al Dhafra gas-fired plant. In July last year, it signed a memorandum of understanding with Emirates Nuclear Energy Corp. for joint development of and investment in global nuclear and small modular reactor projects, broadening the scope of their cooperation.
Samsung E&A (028050.KS) has also built up engineering, procurement and construction capabilities in refining, gas and petrochemical plants. It won the large TAZIZ methanol project in the UAE last year and is carrying out energy projects in Saudi Arabia and elsewhere.
Industry watchers are also focusing on the possibility that Samsung, which has secured large amounts of cash from the semiconductor "super cycle," could move into capital investment by working with affiliates to invest directly in local UAE companies or set up joint ventures. Six Samsung companies — Samsung Electronics, Samsung C&T, Samsung SDS, Samsung SDI, Samsung Life Insurance (032830.KS) and Samsung Fire & Marine Insurance (000810.KS) — invested $1 billion last month in Helix Digital Infrastructure, an AI infrastructure firm set up by U.S. investment firm KKR, part of a diversification of how the group cooperates with partners.
Lee, who has built solid networks with senior UAE figures, is expected to be a major asset in pushing through near-wartime uncertainty on the ground to win orders and investment. In November last year, Lee discussed cooperation with Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan to coincide with President Lee Jae-myung's visit to the UAE.
"As the UAE and other Middle East countries move into fostering advanced manufacturing on top of energy projects, the scope for cooperation with Samsung Group affiliates is widening," a business community official said. "Another vast door of opportunity has opened for Samsung."
Lee also shared a meal with employees who have remained at the construction site despite the unstable situation, offering encouragement. He praised staff working in the sweltering heat and listened to their living conditions overseas, work difficulties and suggestions. They also exchanged views on obstacles encountered in carrying out overseas projects and on current local business issues.
