TSMC said during an earnings conference Thursday that TSMC is open to collaborating with Elon Musk's planned Terafab chip manufacturing complex in Texas. TSMC Chairman and CEO C.C. Wei confirmed that TSMC is discussing participation in the project. Wei stressed that a TSMC plant in Texas must be operated by TSMC.
Musk confirmed earlier this month that discussions had taken place with TSMC about a potential role in Terafab. However, Musk said Musk's team would build and operate Terafab, with TSMC at most subleasing part of the complex.
Wei said TSMC has explored expanding capacity outside Arizona, with Texas among the options under consideration, confirming earlier media reports. Wei said TSMC sent teams to Texas to conduct evaluations. Wei said the expansion plan remains under deliberation.
TSMC reported record net profit of 763.1 billion new Taiwan dollars (nearly $24 billion) for the July-September quarter. Net profit exceeded expectations and rose 69% from a year earlier. Quarterly revenue reached 1.49 trillion new Taiwan dollars ($46 billion), up 51% year-on-year. TSMC's earnings are viewed as an indicator of global AI development during a worldwide expansion of AI computing power.
Wei said the AI market remains very strong. Wei said demand remains far above TSMC's current supply capacity and that TSMC is working to narrow the gap. Wei said TSMC is expanding in response to requests from most of TSMC's large U.S. customers to increase capacity.
TSMC has said TSMC's capital expenditure budget for this year is $60 billion to $64 billion. TSMC's previous estimate earlier this year was $52 billion to $56 billion. Chief Financial Officer Wendell Huang said spending between 2026 and 2028 will be significantly higher than spending during the past three years.
TSMC is based in Hsinchu, Taiwan, and produces over 90% of the world's most cutting-edge chips. TSMC supplies U.S. technology companies including Nvidia and Apple. TSMC has pledged $265 billion to build plants in Arizona, including $100 billion committed in July. TSMC is one of the world's most valuable public companies.
TSMC also cautioned that macroeconomic challenges lie ahead. Wei said rising component prices and macroeconomic uncertainties are challenging consumer and price-sensitive end markets. Wei said TSMC has therefore been prudent in business planning going into 2027.
TSMC Confirms Talks with Elon Musk on Texas Terafab Project
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Summary
TSMC confirmed talks with Elon Musk on the Texas Terafab project during its earnings call. CEO C.C. Wei stressed that any Texas plant must be operated by TSMC. Musk had earlier said his team would build and operate Terafab, with TSMC possibly subleasing part of the site. On-chain analysis shows growing interest in semiconductor-linked assets. TSMC is also evaluating expansion options outside Arizona and reported a record $24 billion net profit for Q3, fueled by AI demand.
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