TSMC Open to Collaborating with Musk’s Terafab but Insists on Running the Fab
Chairman C.C. Wei revealed during TSMC's third-quarter earnings call on Thursday that teams from the company have been sent to Texas to assess a new site. Wei noted that while TSMC is open to working on Elon Musk's Terafab chip project, any fabrication facility involved would need to be operated by TSMC.
Context and Background
Terafab is a collaborative chipmaking initiative by Tesla, SpaceX, and xAI, with a $16.8 billion fab in Grimes County, Texas, planned for its first phase. Musk had previously expressed a desire for Tesla and SpaceX to operate the plant themselves, leaving TSMC with a limited role.
Key Points
- TSMC's Position: Wei emphasized that any agreement would require TSMC to run the fab, contradicting Musk's earlier statements.
- Talks with Tesla/SpaceX: TSMC is in discussions with the customer building Terafab about potential capacity utilization.
- Comparison to Joint Ventures: Wei referenced TSMC's existing joint ventures in Japan and Germany, where the company operates the fabs.
- Intel's Involvement: Intel remains a part of the Terafab project, with its CEO confirming their participation.
TSMC's Strategic Move
As TSMC weighs its own Texas campus, the discussions with Terafab come at a strategic time. The company reported third-quarter revenue of $46.7 billion, up 41% year-over-year, and expects $52.3 billion to $54.3 billion in the final quarter.
Conclusion
Wei did not provide a timeline for the Terafab talks, promising to share more details once a firm conclusion is reached.
Source: TSMC is open to working on Musk’s Terafab but says it must run the fab, The Next Web, October 15, 2026