Elon Musk has confirmed that his companies are in active discussions with Taiwan Semiconductor Manufacturing Company (TSMC) regarding a potential partnership for his Terafab semiconductor manufacturing. The confirmation comes as a report claimed that the talks explore establishing a dedicated chip manufacturing plant focused entirely on supplying Musk’s companies, including Tesla, SpaceX and artificial intelligence (AI) startup xAI.
How the deal may work
Currently, Intel is slated to deliver its 1.4-nanometer-class Intel 14A process node to manufacture semiconductors for SpaceX, Tesla and xAI under the Terafab banner.
If TSMC secures an agreement to build and operate the facility using its own manufacturing nodes, Intel’s 14A technology could be pushed out of the equation entirely, according to Tom’s Hardware. Under the first plan, TSMC would directly own and run the fab. SpaceX or Terafab would contribute capital investments, sign binding minimum chip purchase agreements, or combine both commitments. Background insights highlighted by Culpium suggest that persistent industry rumours regarding TSMC eyeing a chip fabrication complex in Texas may be closely linked to supporting the Terafab project. The emergence of TSMC may introduce major uncertainty around Intel’s existing ties to Terafab.