TSMC confirms Musk Terafab talks, eyes Texas expansion

Taiwan Semiconductor Manufacturing Co. has sent teams to Texas to look at adding U.S. manufacturing capacity outside Arizona, CEO C.C. Wei said on the company's third-quarter earnings call on Thursday, October 15, according to Dow Jones. Wei also confirmed that TSMC is in talks over Elon Musk's Terafab chipmaking project. He drew a firm line on one point: any plant making TSMC chips must be run by TSMC.morningstar.com

"We are still in discussion, let me say that," Wei told analysts. "But the fab has got to be run by TSMC," Bloomberg reported. No decision has been made.finance.yahoo.com

Texas Joins the Map

Wei said TSMC "did expand our capacities consideration to see outside Arizona" and named Texas as one option. He also said TSMC had spoken with "one of our customer who try to build a fab, Terafab," about whether it could use that capacity, according to the call transcript. "If we have any solid conclusion, we will share with you," he added. Wei said large U.S. customers want TSMC to expand in the country, and he pointed to support from the U.S. government, TrendForce reported. He said TSMC is open to either a partnership or owning facilities outright, Dow Jones reported.finance.yahoo.com+2

TSMC pledged another $100 billion for Arizona in July, which brought its total commitment in that state to $265 billion, per Dow Jones.morningstar.com

Who Runs Terafab

Wei's comments clash with what Musk has said. Terafab is based in Texas and is meant to supply chips to Tesla ↘ 2.15% and SpaceX. Musk said last week that his companies would "build and run the fab" and that TSMC would at most lease capacity, Bloomberg reported. Intel ↘ 4.56% is helping develop the technology for the plant, and Intel CEO Lip-Bu Tan has said the company will stay involved, according to TrendForce. Neither TSMC nor Musk's side has given terms for any deal beyond confirming that talks are happening.trendforce.com+1

Record Quarter Backdrop

These talks come as AI chip demand keeps running ahead of supply. TSMC's third-quarter net profit rose 69% to a record NT$763.06 billion, and revenue rose 51% to NT$1.494 trillion. The company raised its full-year revenue growth forecast to about 44% and kept its 2026 capital spending budget at $60 billion to $64 billion, Dow Jones reported. The company also plans another 3-nanometer fab in Tainan, Taiwan, with volume production scheduled for the first half of 2028, according to the transcript.finance.yahoo.com+1

TSMC is trying to keep up with customers while competing with Samsung and Intel. Wei signaled that the company will chase every opening. "We have no intention to leave food on the table for others," he said, per Dow Jones.morningstar.com