The Taiwanese semiconductor manufacturer, TSMC, is negotiating about its potential role in Elon Musk's Terafab factory in the state of Texas. These recently initiated negotiations include discussions on the timing and scaling of building a new wafer manufacturing plant.
Timing of Factory Construction
CC Wei, the Chairman and CEO of TSMC, noted that the time required for the construction and development of the new factory could be a key factor in the ongoing discussions. According to him, building a new wafer manufacturing plant will take about two to three years, and increasing production capacity may require an additional one to two years. He described this timing as a "fundamental factor" in the manufacturing industry.
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Ownership and Investment Models
According to reports, one of the options being discussed is for TSMC to own and operate the Texas factory, while SpaceX invests in the project and purchases the chips produced at this facility. Another option is for SpaceX to hold a majority stake in the factory. Elon Musk has also confirmed on platform X that talks with TSMC are in the early stages.
This anticipated project in Texas comes as TSMC continues to expand its presence in the United States. Taiwan's Ministry of Economic Affairs has approved TSMC's requests for a $44 billion investment in the United States since December 2020.
In March 2025, TSMC announced plans for an additional $100 billion investment in Arizona, which adds to the previous $65 billion plan, bringing the total planned investments in the state to $165 billion.
The Arizona expansion plan includes increasing the number of advanced wafer manufacturing facilities from three to six, as well as two advanced integrated circuit assembly units and a dedicated research and development center.
Overall, the ownership structure and TSMC's final role in Terafab Texas are still under discussion, and given that these negotiations are in the early stages, operational and investment arrangements have not yet been finalized.
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