Tech & AI
Tesla and SpaceX build Austin research chip fab to speed design work
Elon Musk said Terafab, the research chip fab Tesla and SpaceX are building in Austin, may cut chip work that normally takes a year to a month. Tesla shareholders own part of that bet.
Quick Read
- Elon Musk said the Terafab research chip fab in Austin may cut chip work that normally takes a year to a month.
- Terafab is a joint chipmaking project of Tesla and SpaceX, and Musk invited chip engineers to join it in a post on X.
- Tesla shares rose on Friday but still ended the week lower and below their 52-week high.
- Musk gave no cost figure for the research fab.
What did Musk say about the Austin chip fab?
Elon Musk runs both Tesla (Nasdaq: TSLA) and SpaceX. He said a research chip fab in Austin may cut to a month work that would normally take a year. A fab is a factory that makes computer chips.
Why it matters: He made the comments on Friday in a conversation with Ron Baron at the Baron Investment Conference. Musk then shared a clip of the talk in a post on X. In it, he invited engineers who want to test radically new chip designs quickly to join the project. Terafab is a joint chipmaking project of SpaceX and Tesla.
Why would a research fab speed things up?
Musk framed the fab around fast iteration: making new chip designs, testing them and changing them quickly. A fab built for research could let the companies run those loops in-house instead of waiting on outside factories.
The month-versus-year comparison is Musk's own claim. Neither his remarks nor his post gave a cost, a size or an opening date for the Austin site.
How did Tesla and SpaceX shares trade?
Tesla shares rose 4.2% on Friday to $358.22, adding $57 billion in market value. SpaceX shares rose 8.6% to $134.27.
Friday did not undo Tesla's week. The stock tumbled 10.8% on Thursday and ended the week down 10.4%, losing $160 billion in market value. It closed 26.9% below its 52-week high of $489.88.
Tesla accounts for 1.6% of the value of the 500 largest U.S. companies. Its Friday gain added $69 to $100,000 spread across them by size.
What comes next?
What’s next: The next scheduled market event is the October consumer price index, the monthly inflation report, due Nov. 10 at 8:30 a.m. ET. It shapes expectations for the Fed's next rate decision, which can sway how investors value fast-growing companies like Tesla.
For readers
What it could mean for you: If you own Tesla shares directly, you own part of the Terafab chip bet, with no other holdings to offset the company's own news. SpaceX shareholders hold the same project from the other side. Any detail on spending or progress could change how investors value the project, and the stock may react to it.
Questions and answers
What is Terafab?
Terafab is a joint chipmaking project between SpaceX and Tesla. It includes a research chip fab being built in Austin, Texas.
What did Elon Musk say about the Austin chip fab?
At the Baron Investment Conference, Musk said the research fab may cut to a month what would normally take a year. He later shared a clip of the talk on X and invited engineers working on new chip designs to join the project.
Do Tesla shareholders own part of Terafab?
Terafab is a joint project of Tesla and SpaceX, so Tesla shareholders own part of the chip bet.
The numbers
| Tesla (TSLA) price | $358.22 |
|---|---|
| Tesla (TSLA) change | +4.23% |
| Tesla (TSLA) market value | $1.4 trillion |
| Tesla (TSLA) 52-week high | $489.88 |
| Space Exploration Technologies (SPCX) price | $134.27 |
| Space Exploration Technologies (SPCX) change | +8.62% |
| Space Exploration Technologies (SPCX) market value | $1.8 trillion |
| S&P 500 change | +0.31% |
| 10-year Treasury yield | 4.86% |
Week ended Friday
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Not investment advice.
