Elon Musk has confirmed that 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 or run its operations on any scale.

Musk posted the remark on X in reply to a video, days after telling followers he was in talks with TSMC about the project. He subsequently narrowed the scope of those discussions to the possibility of renting out floor space at the facility.

@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

https://x.com/elonmusk/status/2107721071571128709

The distinction carries weight because chip fabrication is typically handled by specialized contract manufacturers such as TSMC and Samsung, which produce chips for companies — including Nvidia Corp. and Apple Inc. — that design silicon without fabricating it themselves. Running Terafab directly would place Tesla and SpaceX in the operator role, a step fewakers or space companies have taken in advanced chipmaking.

Intel to supply underlying technology

Intel will continue to work with Musk's companies on the technology that will support and power Terafab, developing the systems that are to be installed within the plant. That relationship has remained in place regardless of the rise in speculation surrounding a potential TSMC partnership, giving the project an established US-based chip manufacturer among its partners even as Musk keeps operations in-house.

Intel CEO Lip-Bu Tan told Bloomberg that the chipmaker will keep working with Elon Musk on the proposed Terafab semiconductor plant, as reported by Reuters. Intel joined the project as a partner in April 2026.

The facility is expected to supply advanced chips across Musk's businesses, from Tesla's vehicle and robotics operations to SpaceXAI, the merger between Musk's space business and xAI, the developer of the Grok chatbot.

Terafab is expected to be split between two factories: one focused on chips for Tesla vehicles and humanoid robots, and the other supplying hardware for AI data centers in space. The project ultimately targets an annual computing capacity of about 1 terawatt.

A crowded Texas chip map

TSMC is not stepping back from Texas entirely. According to Bloomberg, the company — whose customers include Nvidia Corp. and Apple Inc. — is still considering a new chipmaking campus in the state as it expands across the US. 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 set to bring additional chipmaking capacity of its own. Reuters had also previously reported that SpaceX and Tesla committed $16.8 billion in initial spending on the Terafab project.

What remains unresolved are the two possibilities Musk's post left open: whether TSMC moves forward with its own Texas campus, and whether any sublease arrangement at Terafab comes together.