Thirdly, if Intel licenses 14A technology to Terafab, the agreement would almost certainly contain extensive provisions governing access to Intel IP, process information, equipment configurations, and personnel. Putting TSMC engineers and manufacturing operations inside the same facility could create contractual and IP-isolation issues even if TSMC never directly touches the Intel production line. In fact, IP protection would be extraordinary at Terafab, which will complicate its operation.
Fourthly, if indeed two chipmakers end up in the same fab building, or even in the same campus, responsibility for downtime becomes messy. In the case of a Terafab-owned power distribution system, water plant, chemical system, or cooling installation fails and takes someone's production offline, determining operational responsibility and financial liability for potentially hundreds of millions of dollars of affected wafers would be considerably more complicated than at a site controlled by one company.
Finally, if Terafab can equip enough cleanroom space by the end of the decade to satisfy semiconductor requirements of Tesla, SpaceX, and xAI while still leaving substantial capacity available to TSMC, that would raise questions about whether the project had significantly overbuilt capacity in its initial phases.
Since Musk's statements at X are deliberately vague, it is hard to interpret them. In fact, there might be a conceptual problem with Musk's statement. If TSMC installs its own tools, hires its own employees, brings process technology, and production management, while Terafab just provides land, shell, and infrastructure, calling this a 'sublease' undersells what would be a TSMC fab embedded within the Terafab campus. Alternatively, if Terafab provides the tools and infrastructure and TSMC just operates them, that starts to look much closer to precisely the kind of TSMC operational involvement Musk appears to be denying.
Anyhow, while Intel has confirmed its involvement in the project and Musk wants TSMC to be part of it as well, the latest comments raise more questions than they answer.
Follow Tom's Hardware on Google News , or add us as a preferred source , to get our latest news, analysis, & reviews in your feeds.
Anton Shilov Social Links Navigation Contributing Writer Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.
alan.campbell99 File under 'Elon says a thing'. Salt merchants should be making a killing in relation to his statements. Reply
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/semiconductors/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/semiconductors/musk-rejects-rumors-of-tsmc-takeover-of-terafab-intel-reaffirms-14a-node-deal-as-musk-floats-cleanroom-sublease#main
- https://www.tomshardware.com/membership
- Spotifast lets you enjoy Spotify tracks while lowering RAM usage by 5x or more
- From Training to Production, NVIDIA and CoreWeave Close the Loop on Agentic AI
- This $7.99 TP-Link gigabit switch lets you cheaply upgrade your home network, and it's back at its lowest ever price
- AMD's EPYC Verano AI host CPU will reportedly use a special SB1 socket
- Grab a SteelSeries Apex Pro keyboard at up to 50% off — save up to $120 on one of the best gaming keyboards you can buy today
Informational only. No financial advice. Do your own research.