TSMC Will Work on Musk’s Terafab, but Only if It Operates the Fab

TSMC said it is open to working with Elon Musk’s joint chip‑making venture, Terafab, but the company must run the fabrication facility. The statement came during TSMC’s third‑quarter earnings call, where chairman and chief executive C.C. Wei added that the parties have not yet agreed on any terms.

Terafab is a collaboration between Tesla, SpaceX and xAI that aims to build a $16.8bn semiconductor plant in Grimes County, Texas. The first phase is intended to supply chips for Musk’s cars, robots and data centres, and Intel has also agreed to stay on the project to provide its 14A manufacturing process.

Intel will remain part of Terafab, supplying its 14A manufacturing process.

TSMC has sent teams to Texas to explore additional capacity for its U.S. customers, including a possible new cluster beyond its existing Arizona base. Wei said the company is in talks with Terafab customers about how the new facility might be used, and that large U.S. customers have requested more capacity.

Musk’s position differs: in a post on X, he said Tesla and SpaceX would build and run the plant themselves, leaving TSMC only with a small opening. He added that TSMC could sublease part of Terafab if desired, but nothing more than that.

TSMC reported third‑quarter revenue of $46.7bn, up 41% from a year earlier, and it expects $52.3bn to $54.3bn for the final quarter. Wei gave no timeline for the Terafab talks, saying the company would share more once a firm agreement is reached.