TSMC Explores Texas Investment, Potential Collaboration on Musk's 'Terafab'
The Taiwan chipmaker is considering expanding its U.S. production in Texas and is open to discussions about joining Elon Musk's proposed chip manufacturing complex.
Taiwan Semiconductor Manufacturing Co. (TSMC) is evaluating potential investments in Texas as it looks to expand its chip production capacity in the United States. The world's largest contract chip manufacturer confirmed it is open to collaborating with Elon Musk’s planned “Terafab” chip manufacturing complex in Texas.
TSMC, which produces a significant majority of the world's most advanced semiconductors, already has substantial investments in the U.S. The company has pledged $265 billion for building plants in Arizona, including $100 billion committed in July. TSMC supplies major U.S. technology firms such as Nvidia and Apple, which are key players in the artificial intelligence sector.
During an earnings conference, TSMC Chairman and CEO C.C. Wei stated that demand for AI chips continues to be exceptionally strong, with current supply capacity falling short of customer needs. He noted that TSMC is actively working to increase its output in response to requests from its large U.S. customer base. Wei confirmed that teams have been sent to Texas to conduct evaluations for potential expansion, although the plans are still under deliberation.
Wei also indicated that TSMC is in discussions regarding a role in Musk's Terafab project, emphasizing that any such facility would need to be operated by TSMC. Earlier this month, Musk confirmed discussions with TSMC about its potential involvement in Terafab, suggesting that TSMC might sublease space within the complex, while he reiterated his intention for his company to build and operate the fabrication facilities.
TSMC has increased its capital expenditure budget for the current year to between $60 billion and $64 billion, up from earlier projections. The company's Chief Financial Officer Wendell Huang indicated that spending is expected to be significantly higher in the 2026-2028 period compared to the past three years. Despite strong demand, TSMC acknowledged potential macroeconomic challenges, including rising component prices and economic uncertainties, which could impact consumer and price-sensitive end markets. As a result, the company is maintaining prudent business planning for the coming years.