Tesla Terafab chip factory plan: $119B investment

Tesla is considering “Terafab,” a vertically integrated chip manufacturing facility to support Tesla vehicles and robots, xAI servers, and SpaceX systems, with potential expansion into space-based data centers. The Tesla Terafab chip manufacturing facility proposal could cost up to $119 billion across all phases, after an estimated first phase price tag of about $55 billion. The plan combines multiple parts of chipmaking under one roof, including chip design, lithography, wafer fabrication, testing, and packaging. At full scale, Tesla envisions 1 terawatt of chips per year, targeting 1 million wafers per month. Grimes County, Texas is the leading site option, though other locations are reportedly still under review. Before the full Terafab build, Tesla expects a smaller pilot fab at Giga Texas, projected to cost around $3 billion to validate processes for the larger project. The article also says Intel is reportedly being considered as a partner. Overall costs have reportedly risen from earlier estimates near $25 billion to the current $55 billion for the first phase and up to $119 billion total. For traders, the key takeaway is that Tesla Terafab chip manufacturing facility headlines signal major capex and supply-chain strategy risk/reward, which can influence broader tech-sector sentiment rather than directly changing crypto fundamentals.