Musk Attempted to Acquire TSMC Wafer Fab for Chip Manufacturing Plan Terafab, Pivots to Partnership After Rejection
Korean media reports Elon Musk sought to directly acquire TSMC, Intel, and Micron fabs for his Terafab plan. After rejection, he shifted to partnerships, with TSMC insisting on retaining operational control.
According to a report by Korean outlet THEELEC, Tesla and SpaceX CEO Elon Musk attempted to directly acquire wafer manufacturing facilities from Intel, TSMC, and Micron before launching his ambitious Terafab chip manufacturing initiative. Following these rejections, Musk pivoted to seeking cooperation with global semiconductor giants.
Intel has already formed a direct alliance with Terafab, assisting the project through its Intel 14A manufacturing technology. However, the partnership with TSMC remains contentious. While earlier reports suggested negotiations were underway, Musk later clarified that TSMC could only serve as a "subcontractor" in the plan. In response, TSMC President C.C. Wei confirmed discussions with Musk during an earnings call but emphasized that TSMC must "personally operate the wafer fab" for any collaboration to proceed.
The Terafab plan aims to reach an initial capacity of 100,000 wafers per month by 2030, with a long-term goal of 1 million wafers per month. For context, TSMC alone expects its leading-edge 2-nanometer process capacity to reach 120,000 wafers per month by the end of 2026. Industry observers note that despite Terafab's massive targets, its share of global chip manufacturing remains limited.
Musk's primary motivation for building Terafab is to secure sufficient chip supply for Tesla's Full Self-Driving (FSD) vehicles and Optimus humanoid robots. This episode highlights the practical constraints facing AI giants attempting vertical integration: even with capital and clear demand, bypassing traditional foundries' insistence on operational control proves difficult.