Taiwan Semiconductor Manufacturing Company (TSMC), the Taiwanese contract chipmaker, is discussing a possible role in Elon Musk's Terafab project in Texas, according to multiple reports.
The talks could turn what looked like an Intel-led supply arrangement into a race between foundries, the companies that manufacture chips designed by others.
Musk confirmed the discussions over the weekend, responding to a report that TSMC was exploring ways to work on Terafab's Texas facilities.
"Just discussions, but something may come of it," he wrote.
Musk has indicated TSMC could supplement rather than replace Intel.
Intel shares fell more than 4% in premarket trading on Monday and were still down 2.26% after the open.
Intel was the first major chipmaker tied to Terafab, and Musk said in April that Tesla planned to use Intel's next-generation 14A process for chips at the project.
Intel has described the effort, alongside SpaceX and xAI, as addressing a semiconductor supply shortage.
Terafab's goal is 1 terawatt of annual compute capacity, with the site's first phase valued at roughly $16.8 billion and plans for at least 3,000 workers.
Intel has said external engagement on 14A is progressing, with early design commitments expected from the second half of 2026 into 2027.
A durable Terafab relationship is therefore important to proving the node commercially.
TSMC is not short on leverage, as its Arizona buildout is planned to reach $265 billion.
The company has separately been evaluating its own Texas expansion.
