TSMC Weighs Role in Elon Musk’s Texas Terafab Project

TSMC has confirmed it is evaluating Texas for further US chip manufacturing and is discussing a possible role in Elon Musk’s planned Terafab complex, the company said on Thursday 15 October.

Speaking during TSMC’s third-quarter earnings conference, chairman and chief executive C.C. Wei said the company had sent teams to Texas to assess its options. He said discussions with Musk were continuing, but no final decision or agreement had been reached.

“We sent the teams to Texas to do all the evaluation,” Wei said. “We are still in discussion. If we have any solid conclusion, we will share with you.”

Control remains the sticking point

TSMC’s position is that any fab it uses or operates must be run by TSMC. “Either way, it will be possible, but the fab has to be run by TSMC,” Wei said.

That does not neatly match Musk’s public position. Musk said on 7 October that his companies would build and run Terafab, while suggesting TSMC could potentially sublease part of the complex. The final ownership, operating and production arrangements have not been confirmed.

Terafab was announced in March as a joint effort involving Tesla, SpaceX and xAI, aimed at producing chips for AI, vehicles, humanoid robots and space-related computing. SpaceX has since selected Grimes County, Texas, for the project, according to Tom’s Hardware.

Intel remains part of the picture

Terafab previously announced a technology relationship with Intel, with plans to use Intel’s next-generation 14A process. Intel chief executive Lip-Bu Tan has said Intel remains involved. It is not known whether a TSMC-operated line could sit alongside Intel 14A-based production at the same site.

TSMC is already pursuing a substantial US build-out in Arizona, where its planned investment totals US$265 billion across 10 fabs, two advanced-packaging facilities and an R&D centre. Its first Arizona fab began high-volume N4 production in late 2024, while further sites are planned for N3, N2 and A16 technologies.

What happens next

For now, this is an exploration rather than a factory commitment. TSMC has not disclosed a Texas location, investment figure, chip process, capacity or start date for any facility linked to Terafab.

For UK buyers, there is no immediate impact on the cost or supply of phones, PCs or other gadgets. The longer-term significance is supply-chain resilience: TSMC produces more than 90% of the world’s most advanced chips, according to the Associated Press, and expanded manufacturing outside its existing hubs could eventually give major technology customers more production options.