Musk's ambitious Terafab mega-wafer fabrication project in Texas is presently engaged in discussions with TSMC about a possible collaboration. Musk has affirmed that both sides are in the midst of negotiations, and the process is still in its nascent stages. The most plausible cooperation plan envisions TSMC investing in and managing the Terafab facility, while Musk's affiliated entities will participate through equity investments and by signing capacity purchase commitments. TSMC will maintain operational control to safeguard its technological independence. This project signifies TSMC's fresh strategic initiative following its expansion in Arizona, USA, with the total investment anticipated to exceed that of the Arizona venture.

Previously, Intel had been intricately involved in the Terafab initiative. Should TSMC officially join forces, Intel's pertinent process technologies might find themselves on the periphery, though there also exists the potential for collaboration and a division of labor between the two entities. Musk has extended an invitation to TSMC to participate, aiming to harness its technological and operational prowess while sidestepping potential patent infringement risks associated with Terafab's independent production.

Terafab, a joint endeavor by Tesla, SpaceX, and xAI, is designed to establish a vertically integrated mega-chip manufacturing hub to guarantee an autonomous chip supply and cater to the colossal computing power requirements of its diverse businesses. The project is not geared towards setting up a commercially competitive wafer foundry but rather envisions producing 1 million wafers monthly in the long run, with a total investment reaching up to $119 billion.