TSMC Posts Record $24 Billion Profit, Confirms Talks on Musk's Texas 'Terafab'

TSMC just booked a record 763.1 billion new Taiwan dollars in quarterly net profit — nearly $24 billion, up 69% year-on-year — and used the moment to confirm it's in talks to join Elon Musk's planned "Terafab" chip complex in Texas.

The company revealed the discussions during its Thursday earnings conference, following earlier media reports that the world's dominant chipmaker was scouting capacity beyond its massive Arizona footprint.

"We sent the teams to Texas to do all the evaluation," Chairman and CEO C.C. Wei told analysts, adding the plan remains under deliberation.

What does the Terafab deal actually look like?

Here's where it gets interesting for anyone tracking semiconductor supply chains. Wei stressed that any TSMC plant in Texas must be run by TSMC itself.

Musk sees it differently. He confirmed on X earlier this month that talks have happened, but drew a hard line on control: "we will build and run the fab." Under Musk's framing, TSMC would at most sublease part of the Terafab site.

So the two sides agree they're talking. They disagree on who holds the keys. That gap — operating control of a fabrication plant — is the single biggest unresolved issue, and it's the one practitioners should watch.

The numbers behind the push

TSMC produces over 90% of the world's most cutting-edge chips and supplies Nvidia and Apple. It has already pledged $265 billion toward plants in Arizona, including $100 billion committed in July.

Revenue for the July-September quarter came in at 1.49 trillion new Taiwan dollars — roughly $46 billion, up 51% from a year earlier. That beat expectations.

"The AI market continues to be very strong," Wei said. "The demand, actually, is still far above our capability today to supply, and we're working very hard to narrow the gap."

Translation: TSMC's customers, most of its large U.S. ones included, are pressing for capacity the company physically can't deliver yet. Texas is one option under consideration to fix that.

The spending spree gets bigger

TSMC has raised its capital expenditure budget for this year to $60 billion to $64 billion, up from its earlier estimate of $52 billion to $56 billion — an increase of roughly $8 billion at the midpoint.

Chief Financial Officer Wendend Huang said spending between 2026 and 2028 will be significantly higher than the past three years. For context, that means the biggest capex program in the industry is still accelerating, not plateauing.

A word of caution for 2027

The Hsinchu-based company flagged risks alongside the record results.

"Looking ahead, we continue to observe consumer and price-sensitive end market segments are being challenged due to the impact of rising component prices and macroeconomic uncertainties," Wei said. "As such, we have been prudent in our business planning going into 2027."

What does this change for the industry? If TSMC and Musk can settle the control question, Texas becomes a second major U.S. hub for advanced chipmaking — and the AI capacity crunch that Wei says still outruns supply gets another, faster route to relief.