TSMC is in active discussions with Elon Musk regarding the Terafab project, a chip fabrication facility in Grimes County, Texas. During the Q3 2026 earnings call on October 15, TSMC CEO C.C. Wei stated that the company must operate any facility involved in the collaboration.
This position conflicts with plans shared by Musk on October 7, where he indicated that SpaceX would build and operate the plant, potentially limiting TSMC to a subleasing role. Public discussions about the project emerged in early October 2026.
Terafab is a joint initiative involving Tesla, SpaceX, and xAI, aiming for 1 terawatt of annual AI computing capacity. The first phase of the project requires an investment of approximately $16.8 billion, with construction beginning in August 2026 at the former Gibbons Creek coal plant site.
Intel has been a development partner for Terafab since April 2026 and has committed to utilizing its 14A manufacturing process. The project intends to integrate logic, memory, packaging, and testing within a campus spanning over 100 million square feet.
