Elon Musk confirms discussions with TSMC for Terafab chipmaking collaboration

Musk Confirms TSMC Discussions

Elon Musk confirmed that discussions are underway with TSMC regarding a potential collaboration for his Terafab semiconductor production initiative. The discussions center on TSMC potentially building and operating a facility dedicated to producing chips for Tesla, SpaceX, and xAI. Musk stated that while these are "just discussions," something may result from them.

Proposed Collaboration Models

One proposed arrangement suggests TSMC would own and operate the new facility, with SpaceX/Terafab potentially investing or committing to chip volumes. Another option being considered would give SpaceX majority ownership, with TSMC providing operational expertise and process technologies. These models are currently under discussion, with TSMC remaining silent on the matter.

Impact on Intel's Role

The potential involvement of TSMC raises questions about Intel's previously announced role in Terafab. Intel was slated to supply its 1.4nm-class 14A process technology for Terafab. If TSMC becomes involved and brings its own node, Intel's 14A process could be excluded from the project.

Comparison to Existing Ventures

The 'Plan A' scenario, where TSMC owns and operates while partners provide capital and demand, resembles TSMC's JASM and ESMC joint ventures in Japan and Germany. However, the 'Plan B' structure, where SpaceX holds majority ownership and TSMC operates, would be a new model for TSMC.

Speculative Nature of Plans

As nothing is official, the discussed 'Plan A' and 'Plan B' are considered speculative. There may be other options, such as 'Plan C,' 'Plan D,' or 'Plan E,' under consideration. TSMC's advanced packaging capabilities could also be a factor, potentially involving chip production in Texas using Intel's 14A and subsequent packaging by TSMC.