Elon Musk has said that SpaceX is in talks with TSMC regarding the former’s $16.8 billion TeraFab project in Grimes County, Texas.

Following reports from Taiwan-based journalist Tim Culpan that TSMC was exploring ways to work with SpaceX on the project, Musk replied to a user on X sharing the report, writing: “Just discussions, but something may come of it.”

Citing sources familiar with the situation, Culpan initially reported that discussions between the two companies were the result of plans currently being considered by TSMC to establish a presence in Texas, following the expansion of the chip maker’s manufacturing hub in Arizona.

A report from DigiTimes in late September 2026 stated TSMC was evaluating plans to build up to six advanced chip fabs in the Lone Star state.

According to Culpan, the most likely scenario would be for TSMC to own and operate a new fab in the state, with SpaceX signing on to the project with equity and/or guaranteed purchase agreements. However, prior to Musk’s confirmation of the talks, Culpan said the plans were not finalized, and other cooperation agreements were also being considered.

The idea for the TeraFab was first floated by Musk at a Tesla annual shareholder meeting in November 2025. At the time, Musk said that if Tesla were to extrapolate the best-case scenario for chip production from its suppliers, it still wouldn’t be enough, which had led him to propose the Tesla ‘TeraFab’ – “it’s like giga but way bigger.”

He went on to confirm plans to build a semiconductor plant in Austin, Texas, in March 2026, with the site set to be adjacent to Tesla’s headquarters and run as a joint venture between the automaker and SpaceX. The following month, Intel announced it had joined the TeraFab project, with Musk later claiming the fab would use the chipmaker’s 14A chip manufacturing process.

In August, Musk described the fab as “the largest and most valuable building on Earth by far,” adding that “TeraFab will be 50 times the size of the Pentagon when complete.” According to SpaceX, the facility will employ at least 3,000 people, many of whom will be from Grimes and nearby Brazos County. In June 2026, the project secured a 100 percent property tax abatement after County commissioners voted 4-1 to approve three proposals.

In other Musk news, following President Donald Trump’s rebranding of Artificial Intelligence (AI) to Super Intelligence (SI), Musk also took to his social media platform X over the weekend to post: “No more AI. SI. It’s better.”

When asked if there was a possibility of renaming SpaceXAI, SpaceX's AI and cloud division, to SpaceXSI, Musk replied: “Yes, we will make that change.”