Taiwan Semiconductor Manufacturing Co. is evaluating Texas as artificial intelligence demand pushes advanced-chip production to new records.
Taiwan Semiconductor Manufacturing Co. confirmed October 15 that it has sent teams to Texas to evaluate a possible expansion and is discussing a potential role in Elon Musk’s planned Terafab semiconductor complex. The disclosure came during TSMC’s third-quarter earnings conference.
The Texas discussions remain preliminary. TSMC Chairman and CEO C.C. Wei said the company continues to evaluate its options, and TSMC has not announced a Texas site, investment amount, construction schedule or final agreement with Musk’s companies, per AP.
TSMC reported $46.72 billion in third-quarter revenue, up 41.2% from a year earlier, while net income climbed 68.7%. Advanced manufacturing processes at 7 nanometers and below accounted for 79% of wafer revenue, according to the company’s October 15 earnings release.
TSMC expects fourth-quarter revenue between $52.3 billion and $54.3 billion as demand for leading-edge chips remains strong. Chief Financial Officer Wendell Huang said the company expects continued demand to support the rapid ramp-up of its 2-nanometer technology.
Texas Moves Into The Center Of The AI Chip Race
A Texas expansion would place TSMC inside a state already committing billions of dollars to semiconductor manufacturing, artificial intelligence infrastructure and advanced materials.
The Dallas Express reported in August that SpaceX plans to build the first phase of its Terafab project in Grimes County with more than $16.8 billion in capital investment and 3,000 jobs. Texas approved a $30 million Texas Enterprise Fund grant for the project, which also qualified for the state’s Jobs, Energy, Technology and Innovation program.
The project aims to combine logic, memory and advanced packaging capacity in one massive complex. Musk has described Terafab as a way to meet the enormous future chip demand created by Tesla, SpaceX and artificial intelligence systems.
TSMC’s possible participation adds a major new variable. The company already manufactures advanced chips for major technology companies, including Nvidia and Apple, reported Reuters.
However, the two sides have not publicly agreed on who would control any TSMC-related operation inside Terafab. Musk said earlier this month that his companies would build and run the fab, while TSMC said October 15 that any facility producing TSMC chips would need to operate under TSMC’s control, per AP. That difference leaves the structure of any partnership unresolved.
Record Earnings Explain The Push For More Capacity
TSMC’s latest financial results help explain why the company is examining additional U.S. capacity.
Third-quarter revenue reached NT$1.49 trillion, or $46.72 billion, while net income reached NT$763.06 billion. Revenue rose 50.9% in New Taiwan dollars from the same quarter last year, and net income increased 68.7%. TSMC also raised its 2026 capital spending range to between $60 billion and $64 billion as it races to keep up with customer demand.
The company already has an enormous U.S. expansion underway in Arizona. TSMC says its planned investment there has grown to $265 billion and now includes six advanced wafer fabs, two advanced packaging facilities and a research and development center.
The Arizona buildout does not rule out Texas. Wei said October 15 that the company has evaluated capacity outside Arizona and sent teams to Texas as part of that process. TSMC already maintains a design center in Austin.
North Texas Is Building Its Own Semiconductor Corridor
The potential TSMC move would add momentum to a semiconductor and AI hardware supply chain that already reaches deep into North Texas.
Texas Instruments has already begun production at its newest 300-millimeter wafer fab in Sherman, part of a site where the Dallas-based company has outlined potential investment of up to $40 billion across four fabs. In July, Micron also committed $500 million in strategic financing to expand GlobalWafers’ 300-millimeter silicon wafer manufacturing capacity in Sherman.
North Texas is also attracting adjacent AI hardware manufacturing. LITEON broke ground in September on a McKinney campus tied to a planned $919 million investment and more than 600 jobs, while Nvidia previously announced plans to manufacture AI supercomputers in Dallas and Houston with manufacturing partners, as The Dallas Express reported at the time.
What Happens Next
The next milestone will be whether TSMC and Musk’s companies convert their discussions into a formal operating or leasing agreement.
TSMC has not disclosed a timetable for deciding whether to expand into Texas. The company also warned that rising component prices and broader economic uncertainty could pressure some price-sensitive consumer markets even as AI demand remains strong, reported AP.
For Texas, the stakes extend beyond one factory.
A TSMC manufacturing presence would place one of the world’s most important advanced-chip producers inside a state already spending heavily to capture semiconductor production and the industries that depend on it.
For now, Texas has moved from speculation to evaluation.
