Elon Musk says his own companies will build and run Terafab, the giant chip factory planned in Texas, and that TSMC will not. On Wednesday, October 7, he replied to a post on X, “No, we will build and run the fab.” He added that TSMC could sublease part of the site if it wants, and nothing more than that. This story is about a week old.
How it got here
On October 2, a report said TSMC was exploring ways to help run Terafab’s factories. A day later Musk called it “just discussions, but something may come of it.” His October 7 reply narrows that: TSMC could rent space, but would not own or operate the plant.
What Terafab is
Terafab is a joint plan by Tesla, SpaceX and xAI, announced in March, to make chips for Tesla’s robots and driving computers and for SpaceX’s AI plans. Musk says existing suppliers cannot expand fast enough. The site is in Grimes County, Texas, about an hour from Houston. The stated goal is chips with one terawatt of computing power a year once the plant is fully built.
The first phase is estimated at about $16.8 billion, and Texas tax-incentive filings put the total at up to $119 billion if all four phases are built. About 3,000 jobs are planned. Intel joined the project in April, and its chief executive has said Intel will stay in it.
Our take: Musk’s reply settles who runs the plant, but not how much space TSMC might take. Terafab is still a plan, and chip factories take years: TSMC’s own chairman has said a new fab can take two to three years to build and one to two more to reach full output. The dollar figures and the terawatt goal are targets, not production. Tesla’s spending plans will come up again when it reports results on October 21: Tesla Sets Its Q3 Earnings Report for October 21.
