[News] TSMC Sends Team to Assess Texas Fab Expansion, Confirms Terafab Talks but Insists on Operating Control

What happened

TSMC is considering expanding its U.S. manufacturing footprint into Texas, with growing demand from American customers prompting the company to evaluate additional capacity beyond Arizona. On the October 15, 2026 third-quarter 2026 earnings call, Chairman and CEO C.C. Wei said TSMC has already sent teams to Texas to assess conditions for a potential expansion; he noted TSMC has a large U.S. customer base with clients urging the company to expand in the country, and highlighted support from the U.S. government as a factor in considering further investment, with Texas now among the locations under evaluation. On Terafab, Wei confirmed the company is in discussions over the project but said the outcome remains uncertain, and emphasized that any fab involving TSMC would have to be operated by the company itself. This follows a different position from Elon Musk on October 7: according to Reuters, Musk said his companies would build and operate Terafab, suggesting TSMC could potentially sublease part of the facility but would not take an operational role, leaving the potential partnership structure uncertain. Separately, according to Reuters citing Bloomberg, Intel CEO Lip-Bu Tan said Intel would remain involved in the Terafab project. TSMC also expects gross margin dilution from overseas fabs to be closer to 2 percentage points in 2026, widening to 3-4 percentage points over the next few years as more overseas fabs ramp up; it has nearly 20 fabs worldwide, including 13 in Taiwan and approximately five to six overseas facilities under construction. To support sustained demand for its N3 node, volume production at its new Tainan Science Park fab remains on track to begin in the first half of 2027, and it has decided to add another fab in Tainan with volume production scheduled for the first half of 2028; its second Arizona fab has completed construction with equipment installation underway and volume production expected in the third quarter of 2027, slightly ahead of schedule; and TSMC plans to begin 3nm volume production at its second fab in Japan in 2028.

Impact and signal

Affected components and suppliers

Source and time

Source: TrendForce · 10/14/2026 · View original source