Elon Musk confirmed over the weekend that he has been talking to TSMC about Terafab, the planned semiconductor manufacturing project tied to Tesla and SpaceX. “Just discussions, but something may come of it,” Musk wrote in an X post early Saturday. The talks were first reported Friday by Tim Culpan’s Culpium newsletter, which described a potential collaboration under which TSMC would build and operate a facility exclusively serving Musk’s Tesla, SpaceX and xAI companies. TSMC has so far remained silent.
Terafab was announced in March 2026 as a joint chipmaking venture, with Intel previously named as the only other partner. The project has had a bumpy start: earlier coverage documented a cease-and-desist order before a single chip was made, alongside drone footage of rapid construction progress at the site. Bringing in TSMC, the world’s dominant leading-edge foundry, would be a step change in the project’s credibility and a departure from the usual merchant-foundry model, since the facility would serve only Musk’s companies.
Markets treated the news as a foundry share shift. TSMC’s US-listed shares rose 2.75 percent to $485.80 on Monday, a record, while Intel fell 2.63 percent to $116.19 after dropping about 4 percent in early trading. The read-across touched the AI chip complex: Broadcom rose, while Qualcomm and AMD slipped. For the sector, the development underscores how the AI capacity race is pulling new, deep-pocketed buyers directly into fab construction at a moment when foundry utilization and leading-edge allocation are already strategic questions.