TSMC discusses Musk’s Texas Terafab plan while insisting on control of any plant it runs

TSMC confirmed at its October 15 third-quarter earnings call that it is discussing a possible role in Elon Musk’s proposed Terafab project in Texas and evaluating expansion in the state. Chairman and CEO C.C. Wei said TSMC had sent teams to assess the opportunity, but described the plan as still under deliberation. The decision matters for customers seeking more chipmaking capacity, though the talks have produced no firm conclusion.

Who would run a Texas Terafab plant?

Wei said a Texas plant operated by TSMC would have to be run by TSMC. The South China Morning Post reported that he stressed the company would retain operational control of any partner factory. That condition leaves a central part of the proposed arrangement unsettled: the reports do not establish what TSMC would own, finance or operate, or the scope of its involvement.

Fortune reported that Musk had confirmed discussions with TSMC earlier in October, said ‘we will build and run the fab,’ and described TSMC as at most subleasing part of Terafab. The reports do not explain how that position would fit with Wei’s condition for a plant operated by TSMC. Neither account establishes an agreed ownership or operating structure for Terafab.

AI demand drives TSMC’s capacity search

The Texas evaluation comes as major U.S. customers seek more capacity and demand for AI chips remains strong, according to both reports. Fortune reported Wei saying demand was above TSMC’s current supply capability and that the company was working to narrow the gap. Those pressures explain why another U.S. location is under consideration, but the evaluation has not become a Texas investment commitment.

TSMC’s July-to-September results underline the scale of that demand. Fortune reported quarterly net profit of NT$763.1 billion, up 69% from a year earlier, and revenue of NT$1.49 trillion, up 51%. The company set a 2026 capital-expenditure budget of $60 billion to $64 billion, while its finance chief expected spending across 2026–2028 to be significantly higher than in the previous three years. Those company-wide figures are not a budget for Terafab.

TSMC has already pledged $265 billion for plants in Arizona, Fortune reported, including a $100 billion commitment in July. Texas is being considered as an expansion beyond that existing U.S. focus. TSMC also cautioned about broader economic uncertainty and difficulties in consumer and price-sensitive markets as it planned prudently for 2027. Neither report gives a Texas construction or production timetable.