Musk Confirms TSMC Talks Over Terafab Chip Plant in Texas, Leaving Intel's Role Unchanged for Now
· TexaHub · Semiconductors, Geopolitics & Tech, Regional Tech Ecosystems
Elon Musk said TSMC is in early discussions about taking part in Terafab, the Tesla and SpaceX chip venture in Grimes County, Texas. Intel's chief executive said on 7 October that the company will keep working on the project.
What Musk confirmed
Elon Musk confirmed in early October that Taiwan Semiconductor Manufacturing Co. (TSMC) could take part in Terafab, the chip manufacturing joint venture of Tesla and SpaceX, according to Yahoo Finance's report of 5 October [1]. Musk described the contacts as "Just discussions, but something may come of it," as quoted by Android Headlines, which dated his social media post to 3 October [2].
Terafab is planned for Grimes County, Texas. Tesla and SpaceX committed an initial $16.8 billion and a workforce of at least 3,000 people, while total spending across all phases could reach as much as $119 billion, Yahoo Finance reported [1]. Android Headlines put the multi-phase range at $55 billion to $119 billion and said the site could host up to six advanced foundries, depending on federal tax incentives and customer commitments [2].
Market and partner reaction
Intel shares fell more than 4% in premarket trading on 5 October, while TSMC rose about 3% in Taiwan, according to Yahoo Finance [1]. Intel had been the first named partner, pledging in April to help design, make and package chips for the venture [3].
Digitimes, in a 5 October report whose full text is behind a paywall, described Terafab's ambitions as facing a reality check, with TSMC and Intel named as potential partners [4].
Intel says it is staying
Intel chief executive Lip-Bu Tan told Bloomberg before an event in Tokyo marking 50 years of Intel in Japan on 7 October that the company will continue to work with Terafab, The Next Web reported [3]. Intel had earlier acknowledged a role in the project but has not detailed what it involves, according to Yahoo Finance [1].
Why it matters
The venture aims to produce enough chips for one terawatt of annual computing capacity, The Next Web reported [3]. Yahoo Finance said the chips are meant for Tesla's Optimus robots and Cybercabs and for SpaceX's space-based data centers, and noted that Tesla separately signed a $16.5 billion deal with Samsung for AI6 chip production [1].
Android Headlines said the TSMC talks suggest Musk may negotiate with several suppliers rather than grant exclusivity, which would add competitive pressure on Intel's foundry ambitions [2]. No agreement with TSMC has been announced.
Sources
[1] Intel stock falls as TSMC eyes Elon Musk's Terafab venture — Yahoo Finance, 5 Oct 2026
[2] Elon Musk Confirms TSMC Talks for Texas TeraFab Chip Plant, and It Could Threaten Intel's Plans — Android Headlines, 5 Oct 2026
[3] Intel will stay on Musk's Terafab chip project, CEO tells Bloomberg — The Next Web, 7 Oct 2026
[4] TSMC, Intel named as Musk's Terafab ambitions face reality check — Digitimes, 5 Oct 2026