❯ TSMC is reportedly exploring work with Musk’s Terafab and a possible presence in Texas

From complaint to cooperationAccording to Culpium, the independent outlet of former Bloomberg columnist Tim Culpan, citing people familiar with the matter, TSMC is exploring ways to work with Elon Musk’s Terafab project and help the new chipmaker run its factories in Texas. TSMC is also weighing a presence in Texas and could make Terafab the anchor customer of a new campus.

What Terafab isTerafab is a chip manufacturing project funded jointly by Tesla and SpaceX, sited in Grimes County, Texas. According to Yahoo Finance, the two companies filed an initial investment of $55 billion with the county in May, which could rise to $119 billion at full buildout. The chips are for Tesla’s self-driving system, Robotaxi and Optimus robots, and for SpaceX’s satellites and orbital data centers. Musk says he is building it because TSMC and Samsung are expanding too slowly.

Two options, nothing signedAccording to MacGeneration, relaying Culpium’s report, the companies are studying two options. In one, TSMC owns and operates the factory while Terafab takes a stake or guarantees purchases. In the other, Terafab keeps majority ownership and TSMC supplies technology and expertise. Nothing has been signed, and TSMC declined to comment. Musk had earlier indicated he wanted to use Intel’s 14A process for some chips. The full Culpium article is behind a paywall.

No shortcuts in chipmakingAccording to Startup Fortune, TSMC CEO C.C. Wei has said there are “no shortcuts” in the foundry business, and that a new fab typically takes two to three years to build and another one to two to ramp. If TSMC steps in, Terafab avoids some detours, while TSMC turns a potential rival into a customer. TSMC has already committed $265 billion to Arizona, so Texas would be an addition.

▪ SIGNALMusk built his own fab because TSMC was too slow and may end up asking TSMC for help, which says more about the barrier to advanced chipmaking than any earnings report.