Elon Musk confirms SpaceX in discussions with TSMC for potential advanced chip manufacturing facility in Texas; SpaceXAI rebranded to SpaceXSI (Space Intelligence).
Elon Musk has confirmed that SpaceX is in talks with TSMC regarding the company's $16.8 billion TeraFab project in Grimes County, Texas. Following reports from Taiwan-based journalist Tim Culpan that TSMC was exploring collaboration on the initiative, Musk responded on X: "Just discussions, but something may come of it."
According to Culpan's reporting, which cited sources familiar with the matter, the talks stem from TSMC's plans to establish a manufacturing presence in Texas following its Arizona expansion. A late September DigiTimes report indicated TSMC was evaluating construction of up to six advanced chip fabs in the state.
The most likely scenario, Culpan reported, would involve TSMC owning and operating a new fab in Texas, with SpaceX participating through equity stakes and/or guaranteed purchase agreements. However, Culpan noted that prior to Musk's confirmation, such plans remained unfinalized, with other cooperation agreements also under consideration.
The TeraFab concept was first introduced by Musk at Tesla's November 2025 annual shareholder meeting, where he explained that even extrapolating the best-case chip production from its suppliers would prove insufficient, prompting the proposal for Tesla's "TeraFab—it's like Giga but way bigger." In March 2026, Musk confirmed plans for a semiconductor plant in Austin, Texas, to be built adjacent to Tesla's headquarters as a joint venture between Tesla and SpaceX. Intel joined the project in April, with Musk later stating the fab would use Intel's 14A manufacturing process.
By August 2026, Musk was describing the facility as "the largest and most valuable building on Earth by far," stating that "TeraFab will be 50 times the size of the Pentagon when complete." SpaceX has projected the facility will employ at least 3,000 workers, many from Grimes and nearby Brazos County. In June 2026, the project received a 100 percent property tax abatement after county commissioners voted 4-1 to approve three proposals.
In related news, following President Donald Trump's rebranding of Artificial Intelligence (AI) to Super Intelligence (SI), Musk posted on X: "No more AI. SI. It's better." When asked about renaming SpaceXAI, SpaceX's AI and cloud division, to SpaceXSI, Musk confirmed: "Yes, we will make that change."