Elon Musk Confirms TSMC Talks for $16.8 Billion Texas Terafab Project

Update: Saturday, October 3 – Elon Musk has confirmed talks are underway with TSMC about a role in his $16.8 billion Terafab chip project in Texas. Responding to a post from Whole Mars Catalog about the reported discussions, Musk wrote: “Just discussions, but something may come of it.” He stopped short of announcing a deal, but the comment confirms the talks are real. The original reporting below, first published Friday, October 2, is what preceded that confirmation.

An unconfirmed rumor reported Friday, October 2, by Bloomberg columnist Tim Culpan claims TSMC is exploring ways to work with Elon Musk’s Terafab semiconductor venture in Texas, a $16.8 billion chip project involving Tesla and SpaceX. Culpan, writing in an exclusive for Culpium, said the Taiwanese foundry giant may use Terafab as an anchor client for a future semiconductor site in the state.

Terafab is reportedly a joint venture between Tesla and SpaceX focused on building a massive semiconductor manufacturing site in Grimes County, Texas. The project is said to carry an initial investment of $16.8 billion and is reportedly intended to produce chips for artificial intelligence, robotics and space applications.

According to earlier reporting, Intel joined Terafab as a partner in April 2026. Culpan’s latest report now claims TSMC is considering how it could participate, potentially adding another major semiconductor company to the proposed Texas project. The reported site is said to be the largest chip manufacturing facility planned in Texas, although details surrounding its scale, production technology and construction timeline have not been officially confirmed.

If the reported discussions are accurate, TSMC’s possible involvement could give the project access to the company’s semiconductor manufacturing expertise, should an agreement be reached. Reaction to the rumor has been mixed. Some observers have argued that TSMC’s experience could strengthen the project and help support Tesla and SpaceX’s growing demand for specialized chips, following Tesla’s AI5 chip development. Skeptics have questioned the potential fit, particularly given TSMC’s historical reluctance to move its most advanced manufacturing processes to the United States.

Significant details remain unconfirmed. Culpan’s report does not claim that a final agreement has been signed, and no official terms, timelines or investment commitments involving TSMC have been disclosed. At the time of Culpan’s report, Tesla, SpaceX and TSMC had not confirmed the reported discussions. Until the companies provide additional details, the claimed partnership’s terms remain unconfirmed.