TSMC open to partnership with Elon Musk’s Terafab as chip giant's Q3 profit hits record $23.6 billion
Taiwan Semiconductor Manufacturing Co. (TSMC) is discussing a potential collaboration with Elon Musk’s Terafab chipmaking project, but the Taiwanese semiconductor giant has made clear that it would retain control over factory operations under any arrangement. The comments come as TSMC reported a record quarterly net profit of NT$763.1 billion ($23.6 billion) for July to September, extending its run of record profits to six consecutive quarters amid strong demand for artificial intelligence chips.
Speaking during an earnings call on Thursday, TSMC chief executive C. C. Wei confirmed that discussions with Elon Musk’s venture were continuing, while drawing a distinction between a potential partnership and control of manufacturing.
“We are still in discussion, let me say that,” Wei told analysts. “But the fab has got to be run by TSMC.”
The statement puts TSMC’s operational requirements at the centre of negotiations over Terafab, a proposed chipmaking complex in Texas intended to supply advanced semiconductors to Musk’s businesses, including Tesla, SpaceX and its artificial intelligence operations.
The talks come after Musk said his companies would build and operate Terafab themselves. The project is intended to give his business empire greater control over the supply of advanced chips required for artificial intelligence, robotics, autonomous vehicles and space-based computing.
Musk had previously indicated that TSMC’s potential involvement could be limited to leasing part of the planned facility rather than managing production. Neither side has disclosed the full terms of the discussions.
Intel is also involved in developing the technology intended for Terafab. Its role adds another dimension to the project, as Musk seeks to establish a manufacturing operation capable of meeting the computing requirements of his companies.
TSMC’s latest results underline its position at the centre of the global AI hardware supply chain. Net profit rose 68.7% year on year to NT$763.06 billion in the third quarter, surpassing its previous record of NT$706.56 billion in the April to June period.
Revenue climbed 50.9% from a year earlier to NT$1.49 trillion. The company manufactures advanced chips for customers including Nvidia, Apple, AMD and Broadcom, with demand for AI processors and data centre infrastructure supporting its growth.
Wei said demand for advanced chips remained “extremely robust”, including as production of the company’s 2-nanometre technology ramps up.
The chief executive said TSMC was working to expand capacity to meet customer requirements. “We have no intention to leave food on the table for others, and we want to capture every piece of business possible.”
The results come as technology companies continue to invest heavily in computing infrastructure to train and operate AI systems. TSMC expects fourth-quarter revenue of $52.3 billion to $54.3 billion, according to Reuters, while maintaining its 2026 capital expenditure forecast of $60 billion to $64 billion.
Despite the record results, TSMC is taking a cautious approach to its business planning for 2027, citing economic uncertainty and rising component prices.
“Looking ahead, we continue to observe consumer and price-sensitive end-markets segments are being challenged due to the impact of rising component prices and macroeconomic uncertainties,” Wei said. “As such, we are being prudent in our business planning going into 2027.”
TSMC is also expanding its manufacturing presence in the US. It has committed $265 billion towards chipmaking facilities in Arizona, while evaluating a potential investment in Texas. Any further expansion would come as semiconductor manufacturers seek to meet growing AI demand while navigating rising costs and uncertainty over future spending.
Sayantani Biswas is an assistant editor at Livemint with seven years of experience covering geopolitics, foreign policy, international relations and global power dynamics. She reports on Indian and international politics, including elections worldwide, and specialises in historically grounded analysis of contemporary conflicts and state decisions. She joined Mint in 2021, after covering politics at publications including The Telegraph. <br> She holds an MPhil in Comparative Literature from Jadavpur University (2019), with a specialisation in postcolonial Latin American literature. Her research examined economic nationalism through Eduardo Galeano’s Open Veins of Latin America. She also writes on political language, cultural memory and the long shadows of conflict. <br> Biswas grew up in Durgapur, an industrial town in West Bengal shaped by migration, which drew families from across India to the Durgapur Steel Plant. As the only child in a joint family, she spent years listening—almost obsessively—to her grandparents’ testimonies of struggle, fear and loss as they fled Bangladesh during the Partition of 1947. This formative exposure to lived historical memory later converged with her training in Comparative Literature, equipping her to analyse socio-economic structures and their reverberations. <br> Outside the newsroom, she gravitates towards cultural history and critical theory, returning often to texts such as Paulo Freire’s Pedagogy of the Oppressed. As a journalist, she is committed to accuracy, intellectual rigour and fairness, and believes political reporting demands not only clarity and speed, but historical depth, contextual precision, and a disciplined resistance to spectacle.
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