Physix FrontierPhysix Frontier · News Briefing Card (IT Home · Oct 11, 2026)
Musk says Tesla and other companies will build own chip fab, initial investment over $15B
KEY FACTS
- Speaking to customers and investors outside the Tesla factory in Austin, Texas, Musk said he currently does not know how to make microchips.
- He said his companies, drawing on their experience building custom equipment, could likely find a way to make chips better than anyone else.
- He acknowledged that chip manufacturing is one of the hardest things in the world and could take years to figure out.
- Musk plans to build a chip manufacturing plant called Terafab in Grimes, Texas, through a joint venture involving Tesla, SpaceX and Intel.
- The plant's initial investment is expected to exceed $15 billion.
KEY DATA
Over $15 billionTerafab initial investment
100.603 billion yuanInitial investment in RMB approx.
PHYSIX OBSERVATION
Musk treats chip manufacturing as the next engineering problem to conquer, but making chips is not on the same difficulty scale as making cars or rockets. $15 billion is just the ticket to entry; TSMC and Samsung's moat is decades of process accumulation. What is worth watching is that he brought Intel into the joint venture, which shows he also knows that Tesla and SpaceX alone cannot fill in the manufacturing shortfall.
Source: IT Home report