Key insights
- Elon Musk announced plans for Terrafab, a $15 billion semiconductor manufacturing facility in Texas, a joint venture involving Tesla, SpaceX, and Intel. Musk believes his companies' manufacturing expertise could lead to more efficient chip production than rivals, though he acknowledges it will take years. The project aims to support AI and autonomous technologies and is supported by a $30 million Texas grant. Tesla also reported stronger-than-expected third-quarter vehicle deliveries.
Investing.com -- Elon Musk said his companies could eventually manufacture semiconductors more efficiently than industry rivals, although he acknowledged that mastering chip production could take several years.
Speaking via livestream at the X Takeover event outside Tesla’s Austin gigafactory on Saturday, Musk said his companies’ experience developing customised manufacturing equipment could provide an advantage in semiconductor production.
Musk acknowledged that chipmaking remains one of the world’s most technically demanding industries and that he currently lacks direct expertise in semiconductor manufacturing.
He said his companies could nevertheless develop superior production methods, although achieving that goal might take several years.
The comments come as Musk prepares to develop Terrafab, a semiconductor manufacturing facility in Grimes, Texas, through a joint venture involving Tesla (NASDAQ), SpaceX (NASDAQ) and Intel (NASDAQ).
The project carries an initial investment exceeding $15 billion and is expected to create approximately 3,000 jobs.
Texas authorities have approved a $30 million grant through the Texas Enterprise Fund to support the development.
The planned facility will cover approximately 100 million square feet across a roughly 3,000-acre footprint, with construction taking place in phases.
SpaceX currently controls more than 13,000 acres in the surrounding area.
The semiconductor initiative forms part of Musk’s broader push to expand manufacturing capacity across his companies, including infrastructure supporting artificial intelligence and autonomous technologies.
Tesla separately reported stronger-than-expected third-quarter vehicle deliveries on Friday, shipping 486,532 vehicles worldwide against analysts’ average forecast of 463,761.
The electric vehicle manufacturer plans to spend more than $25 billion this year expanding factory operations and developing its robotaxi business.
Tesla has also secured $30 billion in new loans and credit facilities to support its growth plans.
The Terrafab project would represent a major expansion into semiconductor manufacturing, an industry requiring substantial capital investment and specialised technical expertise.
The fastest way to find out is with our Fair Value calculator. We use a mix of 17 proven industry valuation models for maximum accuracy. Get the bottom line for INTC plus thousands of other stocks and find your next hidden gem with massive upside.