Elon Musk has confirmed that discussions are underway with TSMC over a potential role in Terafab, the massive semiconductor manufacturing project being developed in Texas by SpaceX and Tesla.
Musk confirmed the talks on X on October 3, following a report from Taiwan-based technology newsletter Culpium about a possible partnership between the two sides.
@wholemars Just discussions, but something may come of it
— Elon Musk (@elonmusk) October 3, 2026
According to the report by Culpium, the most likely arrangement would see TSMC own and operate the semiconductor facility, while SpaceX/Terafab could invest in the venture, guarantee purchases of a certain volume of chips, or both.
Another option reportedly under consideration would give SpaceX majority ownership, with TSMC taking a smaller stake while providing its manufacturing expertise and process technology.
The talks come as work moves forward on Terafab in Grimes County, Texas. The first phase is expected to require more than US$16.8 billion (C$23.9 billion) in investment from SpaceX and Tesla and create 3,000 jobs. Texas has also approved a US$30 million (C$42.7 million) Enterprise Fund grant for the project.
When complete, the facility is planned to span roughly 100 million square feet and bring logic, memory, advanced packaging and testing together under one roof. The chips are intended to support Tesla’s Optimus robots and SpaceX’s planned space-based data centres, as well as the company’s future vehicles.
Intel is already involved in Terafab and is slated to provide its 14A process technology. Whether that arrangement would change if TSMC joins the project remains unclear.
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