Musk Reported Ready to Renegotiate TSMC Role in Terafab Project

Elon Musk is set to renegotiate TSMC's role in the Terafab wafer fab project, Taiwan's DigiTimes reported on 2 November, citing supply-chain sources. The report lands less than four weeks after Musk publicly shut down any TSMC operating role. He wrote on X on 7 October: "No, we will build and run the fab. Let there be ZERO doubt about that."

DigiTimes filed the story from Hsinchu. Only the headline and opening lines sit outside its paywall. Those lines say Musk's stance has softened from his original position of building and running the fab himself, with TSMC limited at most to subleasing part of the site's land. DigiTimes frames the shift as supply-chain talk, not a confirmed deal.

What changed between October and November?

Musk's position moved twice within a single month. On 3 October, replying on X to a post about TSMC exploring a Terafab role, he wrote: "Just discussions, but something may come of it." Four days later he closed the door. "Maybe TSMC subleases part of the Terafab if they want, but nothing more than that," he wrote on 7 October.

The DigiTimes report describes exactly that sublease-only position as the starting point Musk has now moved away from. Neither Musk, Tesla, SpaceX nor TSMC has confirmed the renewed talks. The readable portion of the article gives no terms, no investment figure and no timetable.

What is on the negotiating table?

Dan Nystedt, an analyst who flagged the report on X on 1 November as a rumor, summarized the reported talks as covering "operational control, joint investment, technology." His summary of the paywalled article also lists bottlenecks including advanced packaging and PCB and substrate integration.

Advanced packaging is the step that turns finished wafers into usable AI chip modules. It sits at the center of the reported discussion, alongside substrate integration, because those capacity constraints now shape who builds AI chips and how fast.

The distinction matters commercially. In Musk's 7 October framing, TSMC's only possible role was tenant. The terms Nystedt lists would determine whether TSMC stays a tenant or takes an equity and operating stake in the facility.

How big is Terafab supposed to be?

Korean outlet THE ELEC reported on 20 October that Terafab's goal is a fab able to process 1 million wafers a month within 10 years. Industry observers expect the initial facility, at 100,000 wafers per month, to be completed before 2030. The 10-year target is 10 times the first facility by simple arithmetic.

THE ELEC also reported that the companies are working with Intel on logic semiconductors, remain in discussions with TSMC, and that Terafab was in talks with about 10 Korean suppliers. Tesla, SpaceX and xAI announced in March that they would jointly pursue the project, but they have not disclosed a separate corporate entity or ownership structure. That gap leaves the question of who would control a TSMC role open in public records.

What remains unconfirmed

DigiTimes attributes Musk's softer stance entirely to supply-chain sources. The paywalled portion could not be independently read. It is not established whether any TSMC role would go beyond the land sublease Musk allowed for on 7 October.

The scale of the project explains why control is contested. A 1-million-wafer-per-month target within a decade would place Terafab among the largest single-site capacity plans in the industry, and advanced packaging capacity remains a chokepoint for AI chip supply. Until either Musk or TSMC speaks, the story is a report of a changed posture, with the reported talks turning on who controls, funds and packages the output of the fab.