Who will actually run Terafab, the giant chip plant Tesla and SpaceX plan to build in Texas, got a blunt answer this week. Elon Musk said his companies will build and operate it themselves, and that TSMC, the world's largest contract chipmaker, would get at most a corner of the building.
What Musk said
The question came up after Tim Culpan's Culpium newsletter reported that TSMC and Terafab were discussing a deal, and laid out a likely scenario in which TSMC would own and operate the fab while Musk's companies invested or committed to buying chips, according to Tom's Hardware. Musk confirmed talks had happened but didn't elaborate at the time.
When a later post on X suggested TSMC was the most likely owner and operator, Musk shut that down. "No, we will build and run the fab," he wrote, as quoted by Quartz and Tom's Hardware. "Let there be ZERO doubt about that. Maybe TSMC subleases part of the Terafab if they want, but nothing more than that."
Where Intel fits
Intel joined the project in April, when Terafab said it would make chips on Intel's next-generation 14A process. Intel CEO Lip-Bu Tan told Bloomberg on Wednesday that Intel will remain involved, according to Quartz and Tom's Hardware. What that involvement covers is still unclear: Tom's Hardware notes Intel is generally expected to license 14A to Terafab, but it isn't known whether Intel will also help ramp production. Cleanroom Technology describes a possible TSMC role as developing alongside Intel's, not replacing it.
Tom's Hardware also raises a practical problem with the sublease idea. TSMC's own processes use different tools, materials and contamination controls than a fab tuned for Intel's 14A, so any TSMC space would effectively be a separate fab under the same roof.
What it means for Tesla investors and owners
Terafab is meant to supply chips for Tesla vehicles, Optimus robots, SpaceX and xAI, so its control and timing matter for Tesla's AI plans. Keeping control means Tesla and SpaceX take on running a full-scale semiconductor fab, something neither company has done before, as Cleanroom Technology points out. That's a big operational bet on top of Tesla's car, robotaxi and robot work.
Tesla stock rose about 3% on Friday to close at $382.70, a move widely linked on X to Musk's comments, though stocks move for many reasons. Nothing changes for current owners yet: the plant is still on paper, no TSMC agreement has been announced, and the Intel license terms haven't been published. Expect questions on it at Tesla's Oct. 21 earnings call.
