Taiwan Semiconductor Manufacturing Co. (TSMC) is actively assessing Texas as a location for new advanced‑chip capacity after AI‑driven demand surged to record levels. The company disclosed on Oct. 15 that it has dispatched evaluation teams to the state and is in preliminary talks about a role in Elon Musk’s planned Terafab semiconductor complex.
Preliminary talks, no firm commitments
TSMC Chairman and CEO C.C. Wei emphasized that the discussions remain exploratory. The firm has not announced a Texas site, investment amount, construction schedule or a final agreement with Musk’s companies, according to the Associated Press.
Strong financial backdrop
In its third‑quarter earnings release, TSMC reported $46.72 billion in revenue, up 41.2 % from a year earlier, and net income that rose 68.7 %. Advanced processes of 7 nanometers and below generated 79 % of wafer revenue. The company projects fourth‑quarter revenue between $52.3 billion and $54.3 billion, driven by continued demand for leading‑edge chips.
Chief Financial Officer Wendell Huang said the firm expects sustained demand to support a rapid ramp‑up of its 2‑nanometer technology, underscoring the need for additional U.S. capacity.
Texas’s semiconductor push
Texas already commits billions of dollars to semiconductor manufacturing, AI infrastructure and advanced materials. In August, the Dallas Express reported that SpaceX intends to build the first phase of the Terafab project in Grimes County, backed by more than $16.8 billion in capital investment and an estimated 3,000 jobs. The state approved a $30 million Texas Enterprise Fund grant for the project, which also qualified for the Jobs, Energy, Technology and Innovation program.
Musk describes Terafab as a one‑stop hub that combines logic, memory and advanced packaging to meet the massive chip demand generated by Tesla, SpaceX and AI systems. If TSMC joins the effort, its participation would add a world‑leading advanced‑chip producer to the complex.
Partnership details still unresolved
While Musk has said his companies would build and operate the fab, TSMC maintains that any facility producing its chips must remain under TSMC control. The two sides have not publicly agreed on governance, leaving the structure of any partnership unsettled.
Existing U.S. footprint
TSMC already operates a large expansion in Arizona, where the company’s investment has grown to $265 billion and includes six advanced wafer fabs, two advanced packaging facilities and an R&D center. The firm also maintains a design center in Austin and continues to evaluate capacity options beyond Arizona.
North Texas is already attracting semiconductor activity. Texas Instruments recently began production at a new 300‑millimeter wafer fab in Sherman, part of a broader $40 billion investment plan. Micron pledged $500 million to expand GlobalWafers’ 300‑millimeter silicon wafer capacity in the same city. Additional AI hardware projects are underway, including LITEON’s McKinney campus and Nvidia’s announced AI supercomputer manufacturing in Dallas and Houston.
Potential impact
A TSMC presence would reinforce Texas’s strategy to become a national hub for advanced‑chip production and AI hardware. The move could generate thousands of high‑skill jobs, stimulate local supply chains and further diversify the state’s economy.
TSMC warned that rising component prices and broader economic uncertainty could pressure price‑sensitive consumer markets, even as AI demand stays strong. The company has not set a timetable for a Texas decision, and the next milestone will be whether the parties formalize an operating or leasing agreement.
Original reporting: The Dallas Express — read the source article.
