TSMC Explores Texas Campus With Musk’s Terafab as Potential Anchor

TSMC Considers New Texas Semiconductor Campus

Taiwan Semiconductor Manufacturing Co. (TSMC) is considering a new semiconductor manufacturing campus in Texas as it expands its US production footprint to meet growing demand for advanced AI chips. The potential project could involve multiple fabrication plants and add tens of billions of dollars in investment, according to people familiar with the plans. The discussions remain at an early stage and have not been finalised.

The possible Texas expansion would come on top of TSMC’s planned $265 billion investment in Arizona. The company has been increasing its US manufacturing capacity as demand from AI chip designers puts pressure on existing production resources.

Musk’s Terafab Could Become an Anchor Customer

A separate report from technology journalist Tim Culpan says TSMC is exploring ways to work with Elon Musk’s Terafab project in Texas. One possibility is for Terafab to serve as an anchor customer for a future TSMC facility, although the structure of any potential cooperation has not been finalised.

Musk confirmed on October 3 that discussions between TSMC and Terafab were taking place, saying the talks were still only discussions but could lead to an agreement. This provides public confirmation that the two sides have been in contact, while leaving the scope of any partnership unresolved.

Terafab Targets Large-Scale Chip Production

Terafab is a semiconductor project backed by Musk’s companies, including SpaceX and Tesla. The first phase has been announced with an investment of more than $16.8 billion and is expected to create about 3,000 jobs in Grimes County, Texas. State documents describe a much larger potential project across multiple phases, with a possible investment of up to $119 billion.

The planned facility is intended to produce advanced logic and memory chips for applications including Tesla’s AI systems, Optimus humanoid robots and SpaceX’s computing requirements. Intel had previously joined the project to contribute chip design, fabrication and packaging expertise, but recent reports indicate that discussions over Intel’s role have stalled.

AI Demand Drives US Manufacturing Expansion

TSMC’s potential Texas campus reflects the semiconductor industry’s effort to add production capacity closer to major AI customers. North American customers accounted for more than 75% of TSMC’s wafer revenue during the first part of 2026, while demand for advanced AI hardware has pushed the company to increase equipment procurement.

For now, neither a TSMC Texas campus nor a formal TSMC-Terafab partnership has been confirmed. TSMC has declined to comment on market rumours surrounding the Texas investment. Any project would also depend on factors including the economics of building additional fabs and the future of US semiconductor manufacturing incentives.