With an “insanely fast” production schedule to meet, Musk is reportedly softening on who should be in charge.
Elon Musk is reportedly reconsidering his ambition to independently build and operate Terafab in Texas. Citing supply chain sources, Digitimes reports that a new round of negotiations is being prepared about an arrangement in which TSMC takes on primary responsibility for fab construction and operations.
Not satisfied with capacity expansion rates from incumbent chip firms, Musk announced plans earlier this year to start his own chip manufacturing operation in Texas. Terafab is intended to secure chip supplies for his other businesses, including Tesla’s autonomous driving systems and Optimus humanoid robots. Employing Intel’s 14A manufacturing process, the target is to reach volume production in the third or fourth quarter of 2028, which Musk acknowledged as an “insanely fast time frame in chip production.”
“I think it’s accurate to say it’s one of the hardest things to do in the world. I don’t want to be complacent or entitled or anything, but I think probably we’ll figure out how to make chips better than anyone. Honestly. I don’t know how long it’s going to take us to do that. It might take us quite a few years,” Musk said on a livestream in mid-October.
Musk has always insisted on his own companies running Terafab themselves, for example writing on X on 7 October: “We will build and run the fab. Let there be ZERO doubt about that.” However, there have been discussions about TSMC leasing part of the facility. The Taiwanese foundry has acknowledged the talks between the two companies, but CEO C.C. Wei has made clear that any fab involving TSMC would have to be operated by TSMC itself. If the Digitimes report is correct, Musk would now be more open to that idea.
Separately, TSMC is evaluating Texas as a possible expansion location. Wei has confirmed that a team had assessed potential sites following requests from US customers and offers of government assistance. No concrete expansion plan has been finalized.
Top image credit: Terafab
