TSMC is considering using capacity at Elon Musk’s Terafab chipmaking project in Texas, but would require the fab it uses to be operated by TSMC, according to Tom’s Hardware. The publication attributed that position to chairman and chief executive C.C. Wei during a Thursday earnings call with analysts and investors.
The reported discussions form part of TSMC’s evaluation of additional U.S. manufacturing capacity beyond Arizona. Wei’s comments, as quoted by the publication, described ongoing negotiations and an operating requirement, rather than a completed agreement to participate in Terafab.
Operating control is central to the discussions
Tom’s Hardware quoted Wei as saying TSMC was discussing whether it could use capacity at Terafab. “We are discussing with them to see whether we can be utilizing that actual capacity also,” he said, according to the publication. “So, we are still in discussion.”
When asked about TSMC’s possible involvement, Wei was quoted as saying: “Either way, it will be possible, but the fab has to be run by TSMC.” His reported answer made operating responsibility a condition of participation.
That position differs from the arrangement Musk had described, according to Tom’s Hardware. The publication reported that Musk wanted Terafab to operate the facility, with TSMC able to sublease part of its cleanroom. It also said Musk had previously acknowledged the negotiations, while TSMC had declined to comment at that stage.
The distinction concerns how manufacturing would be managed within the complex. Musk’s reported description offered TSMC access to space; Wei’s reported remarks required TSMC to run the fab it would use. The comments quoted by Tom’s Hardware did not resolve how those positions might fit within a shared facility.
Tom’s Hardware discussed a possible arrangement in which Terafab would own the complex and TSMC would independently operate production lines in leased space. That was presented as a potential compromise, rather than an agreed structure or a proposal announced by either party.
Texas considered for expansion beyond Arizona
According to Tom’s Hardware, Wei said TSMC had sent teams to Texas to evaluate manufacturing expansion opportunities. He described the state as one of the options under consideration as the company examined locations outside Arizona for additional American production capacity.
“We expanded our capacity consideration to see outside Arizona, whether we can get another chance to expand our capacity,” Wei was quoted as saying. He also identified Terafab as a fab project being pursued by one of TSMC’s customers, according to the publication.
Wei’s reported remarks connected the Terafab discussions with that broader capacity review, without identifying Texas as a selected location. He said TSMC would share a conclusion if one was reached. The quoted comments did not specify an investment amount, a production start date or a finalized division of operating responsibilities.
Reported earnings and revenue outlook
Tom’s Hardware also reported TSMC’s third-quarter 2026 revenue at $46.72 billion, up 41.2% from a year earlier and 16.2% from the preceding quarter. The publication put net income at approximately $23.9 billion, an increase of 68.7% year over year, and gross margin at 66.4%.
The publication attributed the earnings growth to elevated demand for chips used in AI infrastructure. Those figures accompanied its account of Wei’s expansion comments, although the reported Terafab discussions concerned potential manufacturing capacity and did not establish a committed project.
For the fourth quarter of 2026, Tom’s Hardware reported TSMC revenue guidance of $52.3 billion to $54.3 billion and gross-margin guidance of 65% to 67%. Against the third-quarter revenue figure cited by the publication, the midpoint of that revenue forecast represents approximately 14% sequential growth. The figures describe an outlook for the quarter, rather than completed results.