Elon Musk has confirmed that TSMC and his Terafab semiconductor initiative are in talks. The potential collaboration would have TSMC build and operate a facility dedicated exclusively to Tesla, SpaceX, and xAI. Musk wrote on X that the talks are "just discussions, but something may come of it," while TSMC has not commented publicly.
According to Tim Culpan's Culpium newsletter, the most likely structure would have TSMC own and run the fab, with SpaceX or Terafab investing or committing to guaranteed chip purchases. An alternative would give SpaceX majority ownership while TSMC contributes process technology and operational expertise. The first model mirrors TSMC's joint ventures in Japan and Germany; the second would be a first for the world's largest contract chipmaker.
The involvement of TSMC could also affect Intel's previously reported role in supplying its 1.4nm-class 14A process to Terafab. If TSMC brings its own node, Intel's 14A may be dropped. Additionally, Terafab lacks the cross-patent license that Intel holds with TSMC, which could create patent complications. Musk's broader goal is not to compete with established foundries but to secure a steady supply of custom silicon for his companies.