Alat: Saudi Arabia’s High-Tech Manufacturing National Champion

On February 1, 2024, Saudi Arabia launched yet another company. The Saudi Public Investment Fund established Alat—a strategic initiative specializing in the industrial sector, which is another step in diversifying the Saudi economy and expanding its non-oil sector. This is a goal the oil and gas kingdoms of the Gulf have been pursuing for the past decade—all in preparation for their broader socioeconomic transformations, such as Vision 2030.

Photo credit above: Riyadh City Aerial View Skyline

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Alat's Global Partners in North America and East Asia

Due to its sovereign wealth fund-backed prominence, in just its first month, Alat established partnerships with Florida, USA-based Carrier Global, China's Dahua Technology, Japan's SoftBank Group, and the Kingdom's own Tahakom, all filling a certain sector and need. More recently, on January 8th, 2025, Chinese manufacturer Lenovo announced a $2 billion zero coupon convertible bond investment by Alat in the company, supporting the creation of a Riyadh regional HQ for Lenovo that will create 1,000 jobs in the Kingdom.

The Saudi authorities ran their figures, and if it all goes well for them–then kudos to them, they will have achieved a major success.

Alat's Super-Ambitious Targets

They project a $100 billion worth of investments by several interested parties by 2030, and that Alat will contribute over $9.3 billion annually to the non-oil sector of the Saudi Kingdom, and create enough jobs for 39,000 people, and the company itself is pursuing several projects and grand plans. For example, a $150 million facility just for the fabrication of industrial robots, and another $200 million for the establishment of a facility for future R&D.

Alat focuses on several sectors, such as:

• Advanced manufacturing and semiconductors.

• Development of smart devices and infrastructure.

• Production of robotic systems and energy-efficient solutions.

• Research and development for de-carbonization and clean energy.

To quote directly from the Saudi Press Agency, “Alat will serve local and international markets by manufacturing products within seven key business units, including advanced industries, semiconductors, smart appliances, smart health, smart devices, smart buildings, and next-generation infrastructure”. It's also expected to produce over 30 categories of products and goods.

Since the Kingdom intends to achieve a zero-carbon emissions goal, Alat will play a large part in that, as the company aims to leverage the vast solar and other renewable energy resource of the Saudi deserts to offer sustainable solutions.

There are obviously several benefits for the Saudis. For one, Alat will contribute to the economic growth of the Kingdom, the aforementioned 39,000 jobs created will also be beneficial, and the massive investments in Alat is estimated to pay off, by making KSA the MENA region leader in electronics, robotics, and smart infrastructure.

Of course, it has not even been a full year since the establishment of a company, but the facilities are expected to be online and operational by early 2025.

I also think it's important to quote the mission statement of Alat, to give a general idea of what the company intends to do:

“Alat is a company focused on transforming global industries (electronics and industrials) and creating a world-class manufacturing hub in the Kingdom of Saudi Arabia powered by clean energy to build a better tomorrow. Alat will deliver sustainable manufacturing to help global companies reduce their emissions and move towards zero-carbon manufacturing. Alat, a PIF company, is an essential enabler of the Saudi Vision 2030 goals for economic diversification, industrial development, innovation, and job creation."

"Alat's primary goal is to ensure that global companies set up sustainable manufacturing solutions in Saudi Arabia, benefitting from abundant clean energy resources, the country´s unique geolocation, and its investments in technology. Initially, its key strategic business areas will be semiconductors, smart devices, smart buildings, smart appliances, smart health, advanced industrials, and next gen infrastructure."

There are 6 objectives as stated by Alat, which are the following:

1- Raising the level of manufacturing through tech-driven innovation powered by clean energy.

2-Enabling the private sector, by enhancing opportunities and strategic partnerships.

3-Contributing to [Saudi Arabia] reaching net zero by 2060.

4-Enhancing and developing the tech sector.

5-Fostering innovation, research and development and localizing expertise.

Alat and the Overly Ambitious Targets for Renewables in Saudi Arabia

Their sustainability figures are quite interesting, and they seem to be quite serious about it. Some may prove to be bridges being built too far to span.

For example, one of the objectives of Alat, and of the Saudi 2030 Vision, is that 50% of all Saudi energy comes from renewable sources. An estimated $200 billion is being invested in the renewable energy sector, and that the Saudi Kingdom will have 58.7 Gigawatts worth of capacity of solar and wind in the Kingdom by 2030. Despite the Kingdom's abundance of empty desert land in which solar panels and wind turbines could be installed, the high cost of installation, maintenence and eventual replacement, especially for wind turbines, may prompt a Saudi shift to nuclear power to satisfy the long-term net-zero requirements. Hence the Kingdom's nuclear energy discussions with GE Hitachi Nuclear in the USA as well as France's Areva, and more controversially for the Saudis' Western partners, Russia's Rosatom and China's CNNC.

To summarize, while this state-backed company has just begun, it's important to keep an eye on Alat and check on this project in five years. The amount of work for Alat to achieve their objectives in just six years would be staggering, a truly heroic feat of labor.