Musk confirms TSMC talks for chip production as Intel remains Terafab's only named partner

Musk's Terafab chip project may be about to add another heavyweight player. According to a report, Musk has confirmed he is discussing chip manufacturing collaboration with TSMC, while Intel remains the only partner officially named so far, planning to supply 14A, roughly 1.4nm-class, process technology to the project.

The report notes the talks are still at the discussion stage and may not lead anywhere. Even so, bringing TSMC to the table already gives Terafab's manufacturing path far more room to imagine.

The interest stems from the fact that Intel and TSMC are longtime rivals at the leading edge. The report sketches a possible hybrid: the advanced front end continues to be supplied by Intel using 14A, while the back end brings in TSMC to cover fab operations, yield and packaging.

The logic is not hard to follow. Leading-edge process is only one part of chipmaking; whether a product reaches volume often hinges on yield ramp, fab operations and advanced packaging, areas where TSMC has built deep experience. Intel is strong on the process roadmap, while TSMC is strong at turning a process into reliable volume production.

The context is what Terafab is meant to be: not a foundry taking outside orders, but a vertically integrated project to build custom chips for Tesla, SpaceX and related businesses, aimed at securing a steady, sufficient supply of in-house silicon and reducing reliance on outside manufacturing. That also explains why Musk has repeatedly stressed cutting dependence on outside chip supply.

For the industry, an Intel-plus-TSMC arrangement would mean two rival foundries potentially splitting work around one very large project, a notable shift in the story of US domestic chipmaking and AI compute supply.

What to watch next is whether the talks move from discussion to contract: whether Intel's 14A is finalized, what role TSMC takes, and whether such a hybrid can satisfy both capacity and yield requirements.