Taiwan trade publication DigiTimes reported on 2 November that Elon Musk is set to “renegotiate” with TSMC on Terafab, citing talk in the supply chain. The report says Musk had insisted on building and operating the fab himself, with TSMC at most subleasing part of the site’s land, and has recently turned more pragmatic. DigiTimes frames it as word in the supply chain, not a confirmed deal.
That is a turn from Musk’s own words on 7 October, when he wrote on X: “No, we will build and run the fab. Let there be ZERO doubt about that.” The report came less than four weeks later.
Business Pill · Lead Time Explained
An evergreen Business Engineer explainer on lead times. It teaches the general idea only and does not discuss Terafab or TSMC.
The key insight: DigiTimes reported on 2 November, citing the supply chain, that Musk is set to renegotiate with TSMC on Terafab, less than four weeks after he wrote that TSMC could sublease part of the site “but nothing more than that.”
The DigiTimes article, filed from Hsinchu, carries the headline that Musk’s attitude has turned pragmatic and that he is reportedly set to renegotiate the Terafab cooperation plan with TSMC. Only the headline and the opening lines sit outside the paywall.
Those lines say Musk’s stance on working with TSMC has reportedly changed. He had originally insisted on building and running the wafer fab himself, only considering letting TSMC sublease part of the site’s land. Supply-chain sources say his attitude has softened.
Dan Nystedt, who flagged the report on X as a rumor, summarised the fresh talks as covering “operational control, joint investment, technology” and bottlenecks including advanced packaging and PCB and substrate integration. That list comes from his summary of the paywalled article; we could not read it in the article itself.
Terafab’s reported goal of 1 million wafers a month within 10 years versus the 100,000-wafer initial facility expected before 2030. Source: THE ELEC, 20 October 2026; the 10x ratio is our arithmetic.
What Musk Said in October
On 3 October, replying on X to a post that another user later described as being about TSMC exploring a Terafab role, Musk wrote: “Just discussions, but something may come of it.”
Four days later he shut the idea down. Replying to a post that said the likeliest deal had TSMC owning and running the fab, he wrote: “No, we will build and run the fab. Let there be ZERO doubt about that.” He added: “Maybe TSMC subleases part of the Terafab if they want, but nothing more than that.”
The DigiTimes report describes exactly that sublease-only position as the starting point Musk has now moved away from.
The Scale Terafab Is Aiming For
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 a month, to be completed before 2030.
By our arithmetic, the 10-year goal is 10 times the first facility. THE ELEC also reported that the companies are working with Intel on logic semiconductors and are 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, according to THE ELEC, but have not disclosed a separate corporate entity or ownership structure. That leaves the question of who would control a TSMC role open in public records.
The Terms Named in the Talks
In Musk’s 7 October framing, TSMC’s only possible role was as a tenant. As we read it, the terms Nystedt lists, operational control and joint investment, would bear on whether TSMC stays a tenant or takes a larger role.
Advanced packaging is the other named item. It is the step that turns finished wafers into usable AI chip modules, and it sits in the list Nystedt gives alongside PCB and substrate integration.
The Structural Read
As we read the report, the shift is about role, not just talks: DigiTimes says Musk had insisted on building and running the fab himself, with TSMC limited to subleasing part of the site’s land.
As we read it, the scale explains why the question matters: THE ELEC reported a goal of 1 million wafers a month within 10 years, 10 times the 100,000-wafer first facility by our arithmetic.
“No, we will build and run the fab. Let there be ZERO doubt about that.”
Three Implications
FOR TSMC Nystedt’s summary of the report lists operational control and joint investment among the talk topics, beyond the land sublease Musk described on 7 October.
FOR TERAFAB’S PARTNERS THE ELEC reported that the companies are working with Intel on logic semiconductors and that Terafab was in talks with about 10 Korean suppliers.
FOR MUSK’S COMPANIES THE ELEC reported that Tesla, SpaceX and xAI have not disclosed a separate corporate entity or ownership structure for Terafab.
The framework puts it this way: “The digital economy rests on a physical foundation that most people in that economy never see.”
As we read it, Terafab is that foundation in plain view: the reported talks turn on who controls and funds the fab, and on advanced packaging and substrates, according to Nystedt’s summary.
Neither Musk, Tesla, SpaceX nor TSMC has confirmed the talks. DigiTimes attributes the shift to supply-chain sources. The readable part of the article gives no terms, no investment figure and no timetable for the renegotiation.
It is also not established whether any TSMC role would go beyond the land sublease Musk allowed for on 7 October.
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On 7 October Musk wrote that TSMC could sublease part of Terafab “but nothing more than that.” DigiTimes now reports, citing the supply chain, that he is set to renegotiate with TSMC. Until either company speaks, it is a report of a softer stance, not a deal.
A note on sourcing. The DigiTimes report is paywalled; this piece relies on its headline and readable opening, which cite supply-chain sources. Musk quotes are from his X posts; scale figures are from THE ELEC; the 10x ratio is our arithmetic.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
