Elon Musk confirms talks with TSMC for the Terafab chipmaking venture, naming Intel as the only other disclosed partner in the joint chip factory initiative.
Elon Musk confirmed early Saturday that TSMC and his Terafab semiconductor initiative are in discussions about a potential collaboration, though he offered few details. "Just discussions, but something may come of it," Musk wrote in an X post. TSMC has not commented publicly.
The talks were first reported Friday by Tim Culpan's Culpium newsletter. Under the arrangement Culpan considers most probable, TSMC would own and operate a new facility while SpaceX or Terafab could invest in the venture, commit to buying a guaranteed volume of chips, or combine both approaches. The ownership structure remains under discussion.
A second option would place SpaceX in control with majority ownership, with TSMC investing less but providing operational expertise and process technologies. Culpan also reported that TSMC's rumored plans to build a fab complex in Texas are tied to supporting Terafab.
The first arrangement would resemble TSMC's JASM and ESMC joint ventures in Japan and Germany, where local partners provide capital and demand while TSMC contributes process technology and operates the fabs. The second structure, with SpaceX holding majority ownership while TSMC operates the facility, would be a first for the world's largest contract chipmaker. Neither plan is official. Culpan noted that additional scenarios could exist, and both should be treated as speculation.
The development raises questions about Intel's position in Terafab. Intel is currently slated to supply its 1.4nm-class 14A process technology to produce chips for Musk's companies. If TSMC joins the venture, Intel's 14A could be replaced with TSMC's own advanced node. TSMC is also a leading advanced packaging supplier, so another possibility is that Terafab would produce chips in Texas using Intel's 14A process and package them in the same location, where TSMC could play a role.
While Intel has a broad cross-patent license agreement with TSMC, Terafab does not. Producing chips using an Intel-developed node could potentially infringe on TSMC patents, which may be one reason Musk needs to maintain a close relationship with TSMC, possibly including equity stakes in Terafab.
Musk does not appear interested in making Terafab a foundry that competes with Intel Foundry, Samsung Foundry, or TSMC. His stated need is an uninterrupted and surplus supply of custom silicon for SpaceX, Tesla, and xAI to support their AI, automotive, and space programs. Given that broad strategic objective, Musk is likely flexible on tactics and structure.
Neither TSMC nor Intel has issued a statement on the discussions. No timeline has been announced for a decision.