Elon Musk Rules Out Potential TSMC Role in Terafab Operations

(Bloomberg) -- Elon Musk said his business empire will build and operate Terafab independently, quashing speculation about industry leader Taiwan Semiconductor Manufacturing Co. swooping in to run his ambitious chipmaking venture.

Based in Texas, the Terafab project is Musk's effort to break into the business of fabricating chips, in service of his companies Tesla Inc. and SpaceXAI. While Musk had recently said he's in discussions with TSMC, the trillionaire clarified in an X post on Wednesday that the only matter under consideration is for TSMC potentially leasing some part of the planned site and wouldn't involve any operational role.

"Maybe TSMC subleases part of the Terafab if they want, but nothing more than that," Musk said in a response to a video posted on his social network. TSMC did not immediately respond to an emailed request for comment.

US chipmaker Intel Corp. is helping Musk's companies with developing the technology that'll go inside the Terafab. The facility is expected to supply advanced semiconductors for the needs of Musk's empire, across the Tesla carmaking and robotics business and the consolidated SpaceXAI that includes both spacefaring technology and the xAI group developing Grok. On Wednesday, he stressed that his companies would "build and run the fab."

TSMC, for its part, is weighing an expansive new chipmaking campus in Texas, Bloomberg News reported last week. The company, whose key customers include US giants Nvidia Corp. and Apple Inc., is building up its facilities in the country. If it decides to proceed with expansion in Texas, that would add to the state's growing base of chipmaking expertise and capacity, as it has Samsung Electronics Co. developing a plant there as well as the Terafab project.