From 24/7 Wall St. · Rich Duprey · · 1m 10s
Taiwan Semiconductor Wants SpaceX Terafab
TSMC demands operating control for SpaceX's Terafab chip plant to avoid margin loss.
In brief
TSMC demands operating control for SpaceX's Terafab chip plant to avoid margin loss. TSMC requires running SpaceX's Terafab chip plant to protect margins as U.S. customers push for capacity expansion. Originally reported by 24/7 Wall St..
TSMC Confirms Talks with SpaceX
Taiwan Semiconductor confirmed talks with SpaceX over the Terafab chip plant on October 15, 2026.
“We are still in discussion, let me say that. Either way it would be possible.”
TSMC's Hard Line on Operation
TSMC CEO C.C. Wei set a firm condition: TSMC must operate the Texas fab to protect margins.
“We will build and run the fab”
U.S. Customers Push for Capacity
TSMC expanded U.S. capacity to serve large U.S. customers and meet growing demand.
“We work very hard to expand our capacity in the U.S. This is necessary because most of our large customers are in the U.S.”
TSMC's Financial Performance
TSMC reported $46.72B third-quarter revenue with 66.4% gross margin and 22% HPC growth.
“Third-quarter revenue reached $46.72B at a 66.4% gross margin”
SpaceX's AI Chip Demand
SpaceX's AI segment revenue rose 247% to $2.56B with $15.83B in AI computing capex.
“In the second quarter, its AI segment revenue rose 247% to $2.56B”
TSMC's Margin Concerns
Overseas fabs reduce TSMC's gross margin by 2% for 2026, potentially 3%-4% over next few years.
“Management said overseas fabs will reduce gross margin by about 2% for full-year 2026”
TSMC's Next Steps
TSMC shares fell 3.05% to $416.90 after earnings, with TSMC promising more details on Terafab.
“If we have any solid conclusion, we will share with you”
The short version
TSMC requires running SpaceX's Terafab chip plant to protect margins as U.S. customers push for capacity expansion.
