By March 2027, TSMC will announce a Texas chip factory for Elon Musk’s companies, capturing US$3–3.6 billion in chip revenues away from intel.

On 15 October, TSMC’s chief executive insisted that the company must operate any factory it joins. Musk, however, wants his companies to run Terafab, with TSMC only leasing space. With neither side willing to give up control, TSMC is more likely to build its own factory nearby and supply Musk directly. This follows its approach in Japan, where TSMC has an operating stake despite backing from Sony, Denso and Toyota. TSMC has also committed US$265 billion to US manufacturing, signalling its ambition to establish a production foothold in the US. The potential revenue is substantial. At reported prices of US$25,000-30,000 per wafer with a prospective initial demand reaching 10,000 wafers per month. Intel stands to lose the most. Terafab is one of its highest-profile potential customers for its next-generation 14A process, but SpaceX describes the project as non-binding. Intel’s foundry business lost US$2.1 billion last quarter, and the company will not expand 14A production without firm orders. If Musk chooses TSMC, which already supplies his other companies, Intel’s ambition to become a leading US chip foundry could suffer a major setback.