Taiwan chipmaker TSMC explores Texas investment to expand production in the US
TSMC said demand from U.S. customers is outpacing supply and it is still discussing whether any Terafab facility would be run by the company.
- On Thursday, TSMC Chair and CEO C.C. Wei confirmed the company is in discussions with Elon Musk's Terafab project in Texas, insisting that any resulting fab "has to be run by TSMC."
- Terafab, a $16.8 billion semiconductor complex in Grimes County, Texas, broke ground in August 2026 to supply chips for Musk's automotive, robotics, and data center businesses.
- Earlier this month, Musk posted on X that Tesla and SpaceX would build and operate the facility, stating TSMC could at most "sublease part of the Terafab," contrasting sharply with Wei's operational demands.
- TSMC has sent evaluation teams to Texas to assess potential sites, though no formal agreement has been reached as discussions remain ongoing between the two sides.
- Surging AI demand prompted TSMC to raise 2026 capital expenditure to $60 billion to $64 billion, reflecting a broader strategy to expand global manufacturing capacity beyond its existing Arizona facilities.
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TSMC's assessment of setting up a factory in Texas has raised concerns about industrial relocation. However, the key to competition has shifted to the "AI brain" that controls manufacturing knowledge. Taiwan should consolidate its core position in R&D and innovation, and turn its global layout into an opportunity for industrial upgrading to maintain a long-term competitive advantage.
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TSMC has dispatched teams to inspect U.S. data center construction and power supplies as it plans $60-64B in annual capex and eyes Texas expansion. CEO C.C. Wei says AI demand still outstrips supply despite record earnings. The scouting reflects caution at the top of the AI chip chain.
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