Musk Says Just Discussions, and Intel's Terafab Deal Starts to Wobble: TSMC Is Exploring the Texas Fab
On October 2 the tech newsletter Culpium reported exclusively that TSMC is exploring a role in Elon Musk's Terafab chip project in Texas. Early on October 3 Musk responded on X: just discussions, but something may come of it.
Three key facts
Terafab is a joint project of SpaceX, xAI and Tesla, planned for Grimes County, Texas, with a first phase exceeding $16.8 billion and a goal of producing terawatt-scale compute every year. Intel announced on April 7 that it was joining, with Terafab set to use Intel's 14A process, and SpaceX's IPO filing in May described the Terafab framework. So far Intel is the project's only named manufacturing partner.
The report lays out two possible arrangements: TSMC owns and operates a new fab with SpaceX and Terafab investing or committing to buy chips, or SpaceX holds a majority stake with TSMC supplying the technology and operations. Either way, TSMC's process would most likely replace Intel's 14A. TSMC has not commented. There is no timeline, no contract and no dollar figure.
Intel shares fell about 2% on Monday to around $117. The stock had more than doubled since Intel joined Terafab in April.
WangDou's Take
A tweet outweighs a factory. That is the power structure of the American chip industry right now. In April Intel landed the 14A order and the stock doubled. In October TSMC walks in to explore, and the stock gives it back. In plain language: the landlord has not signed yet, and a richer tenant from next door is already touring the apartment. 14A is Intel's entire bet on a foundry comeback, and Terafab is the only big customer it can name. Musk has never wanted to prop up American manufacturing. He wants whoever can build his chips fastest. TSMC holds a 2-nanometer production line. Intel holds a 14A roadmap. Something may come of it is an invitation to TSMC and an ultimatum to Intel.
Source: The Globe and Mail / Motley Fool · Elon Musk Confirmed Terafab Talks With TSMC · Culpium