Musk Says TSMC-Terafab Cooperation Talks Are in Early Discussion Stage
On October 3, reports emerged that TSMC is exploring cooperation with Terafab, the chip manufacturing project backed by SpaceX and Tesla, and is considering the project as a major customer for its future Texas wafer fab. Responding on social media, Elon Musk said the talks are only at a discussion stage but “could make progress.”
The two structures being discussed are TSMC owning and operating the new plant, with Terafab participating through equity investment, a long-term supply agreement, or a combination; or Terafab holding a majority stake while TSMC takes a smaller investment and contributes technology and operational expertise.
Citing sources familiar with the matter, the report said TSMC is considering building a large chip manufacturing complex in Texas worth tens of billions of dollars, partly driven by growing demand for AI hardware, and that the potential plan is linked to Terafab. The complex could include up to six wafer fabs, each costing up to $20 billion. TSMC has also expanded its Arizona investment to $265 billion.
Terafab, first unveiled by Musk in November 2025, is a 2-nanometer chip manufacturing project. SpaceX announced in August that the facility would be located in Grimes County, Texas, with an initial investment of over $16.8 billion and about 3,000 jobs expected, targeting silicon wafer production around 2029. Intel joined the project in April and supports chip manufacturing, but the cooperation has reportedly made limited progress.
