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Musk confirms TSMC discussions over Terafab

Elon Musk has confirmed discussions with TSMC about Terafab, a project intended to supply chips to Tesla, SpaceX and xAI. TSMC has not commented, and no settled collaboration structure has been announced. Reported scenarios include a TSMC-owned and operated facility or majority ownership by SpaceX, with investment and chip-purchase commitments among the possible arrangements.

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Vertical silicon wafers in a transparent carrier on a rail transfer system, with plain white machine panels in an empty cleanroom.

Musk confirms talks; TSMC has not commented

Elon Musk confirmed on October 3 that discussions about Terafab were taking place with TSMC. He did not announce a completed partnership. TSMC has not commented. The confirmation followed reporting on a possible collaboration involving the chipmaking project backed by Musk's companies, with the eventual scope of any relationship still unsettled.[1], [2]

Reporter Tim Culpan's Culpium newsletter described a possible facility dedicated to chips for Tesla, SpaceX and xAI. Terafab is presented as a way to secure custom silicon for Tesla's automotive work, SpaceX's space vehicles and xAI's AI systems. In the arrangement Culpan considers most probable, TSMC would own and operate the facility. SpaceX or Terafab could provide investment, commit to purchasing a guaranteed volume of chips, or combine both commitments. These are reported possibilities. Musk's confirmation of discussions does not establish that the companies have accepted that ownership structure or agreed to those purchase terms.[1]

Different ownership scenarios are being described

Another scenario would give SpaceX a majority stake, with TSMC making a smaller investment while supplying process technology and operating expertise. The report compares the TSMC-owned arrangement with its JASM venture in Japan and ESMC venture in Germany, where local partners contribute capital and demand while TSMC provides manufacturing technology and operates the fabs. Majority ownership by SpaceX would be a different structure. The accounts explicitly describe both possibilities as speculation, rather than two settled choices on the negotiating table. Other structures remain possible, and no ownership agreement has been announced.[1]

Manufacturing and packaging roles remain unsettled

Intel remains another named Terafab partner, linked to plans to supply its 1.4-nanometre-class 14A process technology. The TSMC discussions do not confirm any change to Intel's role. TSMC also provides advanced packaging, and the report raises a packaging relationship as a possibility distinct from manufacturing. Culpan links reported plans for a TSMC fab complex in Texas to possible support for Terafab, but fabrication and packaging in Texas are separate proposed contributions. The companies have not specified which production stage a collaboration would cover or announced a selected manufacturing process.[1]

For more information on this topic, you can read the related columns.

References

  1. News sourceTom’s HardwareMusk confirms TSMC discussions over Terafab↩1↩2↩3↩4
  2. News sourceDIGITIMESMusk confirms talks with TSMC over his Texas chip factory project↩
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