TSMC is in talks to help build Musk's Texas chip factory, and maybe run it

What happened

Late on Friday 2 October, Tim Culpan, a veteran Taipei tech reporter who now runs the independent Culpium newsletter, reported that TSMC was exploring ways to work with Terafab and help it run new chip factories in Texas. According to his sources, the most likely scenario is for TSMC to try to own and operate the new plant itself. Culpium described a second option too: SpaceX holds the majority, and TSMC takes a smaller stake while bringing its operating experience and process technology. Culpan wrote that the plans are “not set in stone”. Both setups are reported options, not confirmed terms.

On Saturday, Musk replied to a post about the story on X: “Just discussions, but something may come of it.” Taiwan’s Central News Agency carried the news the same evening, citing Culpium and Musk’s reply, and noted that Terafab could become the main customer of a future TSMC site in Texas. TaiwanPlus followed on Sunday. On Monday, DIGITIMES framed it as Musk’s chip ambitions meeting a reality check, with Intel and TSMC both named as the companies he has turned to for help.

Terafab is meant to make chips for a very short customer list: Tesla, SpaceX and xAI, and nobody else. Intel has been the named manufacturing partner, but Culpium reported that the Intel side “is not making progress”. Samsung is already in the picture as well. It signed a big multiyear chip contract with Tesla last year, and its plant in Taylor, Texas has reportedly started early production of Tesla’s AI5 chip, according to the Seoul Economic Daily.

TSMC itself has said nothing, and that silence is not a denial. Its investor relations page shows a quiet period from 5 to 14 October, when the company avoids contact with investors, ahead of its third quarter results call on Thursday 15 October at 2pm Taiwan time.

Why it matters

The Texas angle did not come from nowhere. Last week Reuters, citing two sources, reported that TSMC is evaluating a possible investment in Texas on top of everything it has promised Arizona, with plans not yet final. DIGITIMES and Taiwan’s Economic Daily News reported the same week on talk of a second American hub. Culpium now says those Texas plans are tied to Terafab. If that holds, last week’s mystery expansion and this week’s Musk talks are one story told in two parts.

It would also be a new kind of job for TSMC. It has run joint plants in Japan and Germany where local partners bring money and demand while TSMC brings the expertise and runs the floor. A fab where a rocket company owns most of the building and TSMC runs the machines would be a first for TSMC, as Tom’s Hardware points out. For Musk, the attraction is time and skill. TSMC chief C.C. Wei has said a new fab takes two to three years to build and another year or two to reach full output, and very few companies on Earth can make that schedule actually happen.

What to watch: whether Intel says anything about its own role, whether Culpan’s promised fuller account adds names or structure, and whether TSMC’s Texas plans firm up into anything official.

Sources