The Scoop
Saudi Arabia’s sovereign wealth fund has dismissed Alat CEO Amit Midha — a former Dell executive hired three years ago to run the $100 billion fund intended to make the kingdom an electronics manufacturing powerhouse. Alat also dropped plans to invest in semiconductor production, according to people familiar with the matter.
Midha was removed earlier this year, the people said, amid a wider review of the kingdom’s spending plans that led it to cancel some of its most ambitious projects. A team focused on semiconductors has been reassigned, and some people have been laid off as part of the spending review. The company is committed to its other electronics manufacturing projects, and is shifting resources intended for computer chips to support a newer plan developed by the kingdom to become a global data center hub, they said.
Dr. Muhammad Nasser Aldawood, head of industrials and mining at the nearly $1 trillion Public Investment Fund (PIF), has been named acting CEO of Alat.
A spokesperson for Alat confirmed Aldawood had been appointed acting CEO “in accordance with the company’s governance framework and is consistent with its long-term strategic plans.” The company’s “operations, partnerships, and strategic direction remain firmly in place,” according to the spokesperson.
Midha didn’t respond to requests for comment.
The changes at Alat predate the war, during which Iranian attacks have damaged facilities around the Gulf, including petrochemical plants, metals facilities, and data centers. That has led to questions about whether the region can safely host advanced manufacturing facilities.
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Alat was launched by PIF with great fanfare in early 2024 — Midha was tapped a year in advance of its unveiling — and is chaired by Crown Prince Mohammed bin Salman, the country’s de facto ruler, a sign of its central role in Saudi Arabia’s diversification drive.
The firm’s track record has been mixed: Alat was intended to do deals with foreign firms to encourage them to open plants across various sectors, and Alat signed a series of deals to bring manufacturing to Saudi Arabia, but couldn’t succeed in building a semiconductor industry that would complement the country’s wider manufacturing ambitions.
Alat has announced deals to make air conditioning units, robots, and surveillance equipment (in partnership with a Chinese company banned by the US). More significantly, it invested $2 billion in Lenovo, which agreed to make Riyadh its regional headquarters and open a computer plant in the capital. It also invested in Germany’s TK Elevator, which committed to manufacture in the kingdom.
When Alat launched, Midha said the firm would do a semiconductor investment in 2024 and was already in talks with potential partners. But several attempts to invest in chipmakers and secure agreements to build chip plants in the kingdom failed due to competition from other countries, the people said. Governments in Asia, Europe, and the US rushed to build their own semiconductor factories after the pandemic exposed the risk of global supply chains that relied heavily on plants in Taiwan.
Semiconductor plants typically cost tens of billions of dollars and often need significant government subsidies, which has become more challenging for Saudi Arabia as the kingdom reconsiders some Vision 2030 projects amid — prewar — lower oil prices.
Notable
- SoftBank CEO Masayoshi Son offered a slightly cryptic update on plans to build a robot factory in Saudi Arabia while on a panel with Midha, Semafor reported.
- Saudi Arabia launched a plan to incentivize chip design firms to set up in the country in 2024, Bloomberg reported.