- Elon Musk said on Wednesday that Tesla and SpaceX will build and operate their Texas Terafab chip plant themselves.
- He limited any TSMC role to only a possible sublease of part of the site.
- Intel remains the main technology partner for the Terafab project.
Elon Musk has said Tesla and SpaceX will build and operate Terafab, the semiconductor plant he is developing in Texas, putting to rest speculation that Taiwan Semiconductor Manufacturing Co. (TSMC) could take over the project and its operations on any scale.
Musk posted the comment on X in reply to a video, days after telling followers he was in talks with TSMC about the project. He narrowed those talks to only the possibility of renting out floor space.
@herbertong @thejefflutz No, we will build and run the fab. Let there be ZERO doubt about that.
Maybe TSMC subleases part of the Terafab if they want, but nothing more than that.
— Elon Musk (@elonmusk) October 7, 2026
Intel to supply underlying technology
Intel will continue to work with Musk’s companies on the technology that will support and power Terafab, aimed at developing the systems that will be installed within the plant. This relationship has remained in place regardless of the increase in speculation surrounding a potential TSMC partnership.
Intel CEO Lip-Bu Tan told Bloomberg that the chipmaker will continue working with Elon Musk on the proposed Terafab semiconductor plant. Intel joined the project as a partner in April 2026.
The project and facility in general are expected to supply advanced chips across Musk’s businesses, from Tesla’s vehicles and robotics operations to SpaceXAI, a merger between Musk’s space business and xAI, the Grok chatbot developer.
Terafab is expected to be split between two factories, with one focused on chips for Tesla vehicles and humanoid robots and the other supplying hardware for AI data centers in space, with the project ultimately targeting an annual computing capacity of about 1 terawatt.
A crowded Texas chip map
TSMC is not stepping back from Texas totally, or completely uninterested in expanding within the state. The firm, whose customers include Nvidia Corp. and Apple Inc., is said to still be considering a new chipmaking campus in the state as it expands across the US, according to Bloomberg.
If the campus moves forward, it would add to an expanding semiconductor hub in Texas.
Samsung Electronics already has a plant under development in the state, with Terafab already promising extra additional chipmaking capacity. Reuters had also previously reported that SpaceX and Tesla committed $16.8 billion in initial spending on the Terafab project.
The smartest crypto minds already read our newsletter. Want in? Join them.
Opeyemi Olanrewaju
Opeyemi specializes in creating and refining high-quality content focused on cryptocurrency, global financial markets and the economy. He graduated from the University of Ibadan with an MBBS degree. He has worked as Editor-in-Chief for his College’s editorial publication and previously at CFA. For over six years, he has helped safeguard uniqueness as news editor at Cryptopolitan.
