TSMC in early talks with Musk’s Terafab on Texas chipmaking, Intel shares slide 4%

Key Summary

TSMC is in preliminary talks with Terafab, a joint effort between Tesla, SpaceX, and xAI, to collaborate on chip manufacturing in Texas, according to Elon Musk. The discussions cover two possible structures: TSMC operating the facility itself with Terafab as the anchor customer, or TSMC contributing its manufacturing expertise with other investors holding majority ownership. Intel, Terafab's first manufacturing partner, saw its shares fall 4% on the news. No agreements have been reached, and both options remain on the table. The project aims to produce approximately 1 terawatt per year, with a potential footprint of over 100 million square feet and a first phase investment of approximately $16.8 billion.