A few days ago, after news broke that Elon Musk and his Terafab project are looking to start working with TSMC, we were left in the dark about Intel's role in the project. However, we are finally getting confirmation straight from Intel CEO Lip-Bu Tan that the collaboration will continue, despite TSMC being in talks with Terafab. Previously, we learned that the Terafab project wants to license the 14A node from Intel and possibly other technologies, which would kickstart production at the Texas campus where Elon Musk plans to initiate another wave of semiconductor manufacturing on American soil.

The talks with TSMC began when managers at Terafab started questioning whether Intel could deliver on its promise of node excellence with 14A, and TSMC showed interest. However, Intel is not out of the picture, as Intel IP will be the base of Terafab for now. TSMC will not operate any capacity on its own, and Elon Musk confirmed on X that everything will be built and operated by the Terafab team, with TSMC having the option to sublease some capacity. This means that TSMC will not be lending any node IP to Terafab but could instead aid with knowledge work in building and maintaining a fab, gaining some extra manufacturing capacity in return.The goal of Terafab is to consolidate the entire chip manufacturing process under one roof. The plant aims to integrate several stages of semiconductor production at a single site, including logic fabrication, memory, packaging, testing, and mask production. This setup is unusual, as these steps are typically spread across multiple specialized facilities and companies.

Additionally, simply investing more funds does not guarantee a solution. Building a competitive fab from scratch requires years of execution, including sourcing parts from companies like ASML, Lam Research, KLA Corporation, and Tokyo Electron. These companies often receive orders years in advance before delivering machinery to TSMC, Samsung, or Intel. Thus, creating a supply chain for equipment, raw materials, and other necessary components will take years to develop. Terafab has reportedly already begun ordering tools for its manufacturing process from these firms, so we can expect the first silicon in a few years.