Elon Musk Blinks? Tesla’s Terafab May Reportedly Lean on TSMC After All

Key takeaways

• Tesla is considering letting TSMC lead its Terafab chip plant, which could speed up development and reduce costs.
• $399.81 closing price
• $400.22 extended trading
• May/June 2025 test chip target

What happened

Tesla CEO Elon Musk is easing his earlier stance on keeping full control of the Terafab chip factory in Texas and is open to letting Taiwan Semiconductor Manufacturing Co. take a larger role in building and running the plant. The two parties are preparing to restart talks, which could shift TSMC from a sublease arrangement to primary responsibility for construction and operations while ownership and investment terms are still being negotiated. Musk previously said Tesla and SpaceX would build…

Why it matters

The shift could speed up Terafab’s development by leveraging TSMC’s proven fabrication expertise and supply chain. It also signals a potential change in Tesla’s strategy for securing advanced chip production, which could affect the company’s ability to meet its 2028 volume production target. The move may alter the…

Short-term and longer-term

Short-term. Over the next few weeks, traders should monitor any announcements on the ownership structure and investment commitments.

Longer-term. For investors, the potential partnership with TSMC could improve Tesla’s long‑term chip supply security and reduce capital intensity, aligning with the company’s broader strategy to control key technologies.