Elon Musk has publicly shut down speculation that TSMC will own or operate Terafab, writing on X on October 7: "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."

The statement closes a door that Musk himself had left ajar five days earlier. On October 2, tech journalist Tim Culpan reported that TSMC was exploring ways to help run Terafab's factories. Musk replied on October 3 that the talks were "just discussions, but something may come of it" — wording that left open a scenario where the world's largest contract chipmaker took operational control.

Under a sublease arrangement, TSMC could rent a section of the complex to produce chips, comparable to a tenant occupying one floor of an office tower. Ownership, equipment decisions and daily operation would remain with Tesla and SpaceX.

What does the ruling change for Terafab?

The clarification defines the operating model for one of the largest semiconductor construction projects in the United States:

• Site: Grimes County, Texas, about an hour from Houston; confirmed by SpaceX in August.
• First-phase cost: $16.8 billion.
• Total projected spend: up to $119 billion across all phases.
• Commitment to date: a $10 million payment sent to the county under a tax abatement deal, with civil work slated to begin shortly.
• Capacity target: enough chips per year to supply one terawatt of computing power — roughly 50 times the current annual output of the entire global AI chip industry.

Musk unveiled Terafab in March as a joint project between Tesla, SpaceX and xAI, arguing that existing suppliers cannot expand fast enough to meet his companies' projected demand. The output is designated for Optimus humanoid robots, Cybercab vehicles and Full Self-Driving computers, plus chips for SpaceX's planned orbital data centers.

Tesla currently designs its own AI chips but pays outside manufacturers — including TSMC and Samsung — to fabricate them. Owning the factory removes the need to compete with every other chip customer for capacity on someone else's production lines.

Why did TSMC's involvement draw so much attention?

TSMC chairman C.C. Wei has said a new fab typically takes two to three years to build and another one to two years to reach full output. Tesla and SpaceX have never operated a fab, which is why TSMC's process expertise attracted intense interest in Culpan's report.

Musk's answer signals he would rather build that capability in house than hand control of a project central to Tesla's robotics and autonomy roadmap to an external operator.

Where does Intel stand?

Intel remains part of the project. The company signed on in April to help design, build and package chips for Terafab, with its 14A manufacturing process expected to supply the full-scale plant. CEO Lip-Bu Tan told Bloomberg this week that Intel will keep working on Terafab despite the TSMC chatter.

Musk has also framed the project's ambition in physical terms. "Terafab Texas will be the largest and most valuable building on Earth by far," he wrote on August 6.

The Terafab partnership structure now stands as: Tesla and SpaceX providing capital and offtake, Intel contributing process technology on the manufacturing side, and TSMC — at most — as a tenant.