SpaceX’s Terafab Probably Won’t Deliver Very High Profits, Despite Taiwan Semiconductor’s Limited Role

SpaceX (SPCX) and Tesla (TSLA) CEO Elon Musk recently stated that his two companies would build and manage Terafab, the planned Texas-based chip factory. Despite earlier speculation that Taiwan Semiconductor (TSM), also known as TSMC, would partially own and manage the plant, Musk clarified that "Maybe TSMC subleases part of the Terafab if they want, but nothing more than that."

Still, SpaceX will presumably share some of the profits from the facility with Tesla, so its profits from the factory probably won't be very high even if TSMC plays no role in managing the plant. Intel (INTC) may get a cut of the profits as well, or at least charge fees in exchange for the use of its 14A technology. That could meaningfully impact profits related to the project.