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Musk confirms TSMC talks on Terafab chip plant in Texas

TSMC could own and run a fab for Musk’s $16.8 billion Terafab project, a Taiwan-based newsletter reported; Musk called it “just discussions,” and TSMC has not commented.

Motion Media News Staff

Oct 5, 2026

3 minutes

Aerial view of TSMC's large Arizona chip-plant campus under construction in the desert, with cranes, factory buildings and solar-panel-covered parking.

Photo: Hunter Trick (TrickHunter), CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0), via Wikimedia Commons (source)

Elon Musk has confirmed that his Terafab semiconductor project is in talks with Taiwan Semiconductor Manufacturing Co. (TSMC), writing on X on Saturday, Oct. 3: "Just discussions, but something may come of it."

Musk was replying to a report from Culpium, a Taipei-based newsletter run by technology journalist Tim Culpan, which said late Friday that TSMC was looking at options for teaming up with SpaceX's Terafab. "The most likely scenario is for TSMC to try to own and operate the new factory," Culpan wrote, adding that the plans were "not set in stone." TSMC has not commented on the talks, Tom's Hardware and Taiwan News reported.

How a deal could work

Under the structure Culpan considers most likely, TSMC would own and run a new fab while SpaceX and Terafab put in equity, sign guaranteed purchase agreements, or both, Tom's Hardware reported. In a second option, SpaceX would hold majority ownership and TSMC would invest less but supply operating know-how and its process technology. Tom's Hardware described both as speculative, noting that nothing is official.

A tie-up would raise questions about Intel, which has been slated to provide its 14A manufacturing process to Terafab, Tom's Hardware said. TSMC would likely bring its own process technology instead.

Culpan also reported that recent talk of a TSMC expansion into Texas is tied to the Terafab effort, according to Taiwan News. A late-September DigiTimes report said TSMC was weighing as many as six advanced fabs in Texas, in addition to its Arizona hub, DatacenterDynamics reported.

The Terafab project

DCD puts the price of Terafab, planned for Grimes County, Texas, at $16.8 billion. SpaceX has said the plant will have a workforce of at least 3,000, drawn largely from Grimes and neighboring Brazos County, and county commissioners voted 4-1 in June to grant the project a full property tax abatement, according to DCD.

Musk first pitched Terafab at Tesla's shareholder meeting in November 2025, arguing that even the best-case output from Tesla's chip suppliers would fall short of its needs, DCD reported. In March 2026 he confirmed plans for a chip plant in Austin next to Tesla's headquarters, run jointly by Tesla and SpaceX, and Intel said the following month that it had joined. In August, Musk called the planned fab "the largest and most valuable building on Earth by far," DCD said.

Separately, Musk said on X over the weekend that SpaceX will rename its AI and cloud unit, SpaceXAI, to SpaceXSI, following President Donald Trump's push to call AI "super intelligence," DCD reported.

What's next

TSMC's Texas plans were expected to come up at the company's Oct. 15 earnings conference, Taiwan News reported, citing Taiwan's Central News Agency. Culpan wrote that he plans to publish more on how the talks began in the coming days.