Semiconductor Market in Saudi Arabia

Saudi Arabia’s Emerging Semiconductor Ecosystem: Government Initiatives, Foreign Investment & Strategic Roadmap

The Saudi Arabia Semiconductor market was valued at USD 4,370 Million in 2024 and is projected to grow to USD 6,277 Million by 2030, with a compound annual growth rate (CAGR) of 6.6% from 2025 to 2030

Saudi Arabia is emerging as a leading force in the Middle East semiconductor landscape, positioning itself as a regional hub for advanced technology and electronics manufacturing. The nation's strategic location and strong government support through national transformation initiatives are driving significant investments in semiconductor infrastructure.

Riyadh is actively fostering collaborations with global semiconductor companies to establish local manufacturing and research units. Additionally, projects like NEOM and other smart city developments are creating a demand for cutting-edge electronics, which in turn boosts domestic consumption.

The government is placing a strong emphasis on talent development by partnering with academic institutions and implementing technology training programs to support the industry. Furthermore, the growing use of semiconductor components in critical sectors such as defense, telecommunications, energy, and automotive is accelerating demand in the market.

Saudi Arabia sees the semiconductor market as an essential part of its industrial and digital transformation plan, which aims to diversify its oil-dependent economy. The ecology in the region is changing as a result of this change, and high-tech industries are drawing foreign direct investment.

The growing usage of smartphones, laptops, and IoT devices is increasing the need for advanced semiconductor components.

The increasing use of smartphones, laptops, smart TVs, and wearable technology in Saudi Arabia is significantly driving the demand for semiconductors. As the population becomes more digitally connected and tech-savvy, the desire for advanced consumer electronics continues to grow. These devices rely on various semiconductor components, including memory chips, microprocessors, sensors, and logic integrated circuits (ICs).

The rise in remote work, e-learning, and digital entertainment especially in the post-pandemic world has further fueled the consumption of high-performance electronic gadgets. Additionally, local retailers and e-commerce platforms are expanding access to international electronics brands, which has led to greater adoption among households.

This expanding consumer base is encouraging manufacturers and suppliers to enhance their presence in the Saudi market. Consequently, domestic demand for semiconductors is increasing, not only for finished products but also for assembly, testing, and integration services. The continued consumption of electronics is creating a stable foundation for local semiconductor innovation and production initiatives.

Saudi Arabia is making the growth of its semiconductor sector a top priority as part of its Vision plan to diversify its economy away from oil.

Saudi Arabia aims to reduce its reliance on oil by promoting the development of non-oil sectors, including advanced manufacturing, technology, and digital infrastructure. A key focus of this transformation is the semiconductor industry. The government is actively encouraging the growth of domestic chip design, research, and manufacturing capabilities. By investing in this high-tech sector, Saudi Arabia seeks to build a knowledge-based economy, foster innovation, and create skilled jobs.

Public-private partnerships and targeted government incentives are supporting tech startups and attracting international semiconductor companies to establish operations in the country. These initiatives are laying the groundwork for a sustainable semiconductor ecosystem that can serve various sectors, including defense, aerospace, healthcare, and communications.

As part of its diversification strategy, Saudi Arabia is aligning its policy frameworks, funding mechanisms, and infrastructure development to attract global players, aiming to become a hub for advanced semiconductor manufacturing and innovation in the Middle East.

Projects like NEOM are accelerating the integration of semiconductors for connectivity, automation, and digital control systems.

Saudi Arabia’s ambitious smart city projects, including NEOM, the Red Sea Project, and Qiddiya, are revolutionizing urban development and infrastructure. These initiatives rely on advanced digital technologies such as AI, IoT, 5G, autonomous systems, and cloud computing, all of which depend heavily on semiconductor devices. Smart traffic systems, energy grids, surveillance systems, and autonomous mobility solutions require a dense network of sensors, processors, and communication chips.

The government is investing in the development of digital infrastructure, including data centers, telecom networks, and smart buildings, all of which rely on robust semiconductor supply chains. This urban transformation is generating consistent, large-scale demand for logic chips, memory modules, microcontrollers, and analog integrated circuits. As Saudi Arabia accelerates its journey toward becoming a technologically advanced nation, the semiconductor sector is positioned at the core of its digital infrastructure, providing both the foundational and enabling technologies necessary for future-ready urban ecosystems.

The rise in electric vehicle adoption and smart mobility is fueling demand for chips used in automotive electronics and battery management systems.

The Saudi automotive sector is undergoing a transformation towards electric vehicles (EVs), connected cars, and smart mobility, driven by sustainability goals and a growing consumer interest in advanced vehicle technologies. EVs require significantly more semiconductors than traditional internal combustion engine vehicles, as these chips are essential for managing battery power, charging systems, navigation, infotainment, and autonomous driving features.

Furthermore, the integration of smart city infrastructure with intelligent transportation systems is increasing the demand for vehicle-to-everything (V2X) communication chips and sensors. The local assembly of vehicles and the rising interest in EV imports are creating opportunities for semiconductor suppliers to cater to the expanding automotive electronics market.

The Saudi government is actively supporting this transition by providing incentives for EV adoption and developing infrastructure, including EV charging networks. As automotive innovation accelerates, Saudi Arabia’s semiconductor market is positioning itself to supply the critical technologies needed for electric, connected, and autonomous vehicles, thereby enhancing its role in the future mobility ecosystem.

International collaborations and foreign investments are helping establish semiconductor manufacturing and R&D capabilities within the Kingdom.

Saudi Arabia is actively developing strategic partnerships and promoting foreign direct investment (FDI) to enhance its domestic semiconductor industry. By collaborating with global leaders in chip design, manufacturing, and testing, the Kingdom is gaining access to advanced technologies, skilled talent, and best practices. Government entities and sovereign wealth funds are supporting international ventures by providing incentives such as tax benefits, regulatory support, and access to infrastructure. These partnerships are crucial for establishing local semiconductor fabrication plants, research and development centers, and training institutes.

Multinational corporations are increasingly pursuing joint ventures with Saudi companies, which boosts technology transfer and helps develop the local ecosystem. Additionally, the involvement of global players enhances the credibility and scalability of the domestic market. These strategic alliances are vital to Saudi Arabia's goal of becoming a regional center for semiconductor innovation, ensuring long-term supply chain resilience and global competitiveness in advanced electronics manufacturing.

Competitive Landscape

Some of the major companies operating within the Saudi Arabia Semiconductor market are: Saudi Electricity Company, Intel, Samsung Electronics, Qualcomm, NVIDIA, Infineon Technologies, STMicroelectronics, ON Semiconductor and Others.