Elon Musk and TSMC Discuss Texas Chip Foundry

Elon Musk is in early-stage discussions with Taiwan Semiconductor Manufacturing Co. (TSMC) to establish a semiconductor production initiative called Terafab in Texas. The proposed foundry would exclusively supply custom silicon to Musk's companies, including Tesla, SpaceX, and xAI.

Potential ownership models include a joint venture similar to TSMC's operations in Japan and Germany, or a structure where SpaceX holds majority ownership while TSMC provides operational expertise and process technology. Alternatively, TSMC could own and operate the plant while SpaceX invests and purchases the chips. TSMC Chairman and CEO CC Wei noted that construction and scaling for such a facility typically requires two to three years for building and another one to two years for capacity expansion.

Intel is currently a partner slated to provide 1.4nm-class 14A process technology to Terafab, though a partnership with TSMC could potentially displace Intel's role. This potential venture follows TSMC's broader expansion in the United States, which includes a planned $165 billion investment to build six advanced wafer fabrication facilities in Arizona.