Samsung Draws a Line at Joining Musk's 'Terafab'

There are suggestions that TSMC could join Elon Musk's 'Terafab' project — the massive in-house semiconductor production base envisioned by the Tesla CEO. The speculation stems from a post Musk made on X on December 3 (local time), stating, "Just discussions, but there might be a meaningful outcome." On December 6, foreign outlets including The Globe and Mail reported that a model in which Tesla provides capital and volume while TSMC oversees factory operations and process technology was being floated, mainly in investment banking circles.

The industry's response has been negative. TSMC's advanced production capacity for cutting-edge nodes such as 3-nanometer and 2-nanometer is already sold out for years to come. Analysts say a foundry struggling to meet its own demand has little incentive to dispatch personnel and technology to run Musk's factory on its behalf.

Concerns over technology misappropriation are also cited as an obstacle. Tesla has a track record of co-developing batteries with Japan's Panasonic since 2009, then building the Gigafactory in Nevada in 2016 to absorb manufacturing know-how before declaring the internalization of its proprietary '4680 battery' and sharply cutting its purchase volumes. Based on this history, observers note that semiconductor manufacturers are unlikely to hand over hundreds of highly confidential process recipes (PDK) and yield know-how.

TSMC's management philosophy also runs counter to the joint venture theory. Since its founding, TSMC has adhered to the principle of "never competing with its customers." Directly taking charge of Terafab operations, critics point out, would be a frontal violation of this rule.