In Tesla's earnings call, Musk deflected a question about a possible tie-up following months of speculation: "We can't talk about, you know, combining companies and that kind of thing on an earnings call—it has got to be done with the appropriate process." Musk did note there is "more and more overlap" between his two firms, pointing to Starlink's integration in Cybertrucks, and TeraFab, a proposed AI chip manufacturing venture between Tesla, SpaceX and the for
The Fremont factory has halted Model S and Model X production to make room for Optimus lines, while key suppliers including Samsung, TSMC, Panasonic, and Micron are investing billions to build a supply chain that largely does not exist. Musk also acknowledged growing operational overlap between Tesla and SpaceX — including Grok AI, Starlink connectivity, and the joint Terafab chip project — but declined to discuss merger speculation on the earnings call.
Developed jointly by Tesla and SpaceX, Terafab is a large-scale semiconductor manufacturing project that Musk described as critical to Tesla's future. The facility will help produce the AI chips needed to scale Optimus, Tesla's humanoid robot.
Tesla already supplies batteries and manufacturing technologies for some SpaceX projects, while the companies are jointly developing Terafab, a semiconductor manufacturing facility designed to produce artificial intelligence (AI) chips.
Tesla has placed equipment orders for an in-house semiconductor development facility in Austin it calls TeraFab, CEO Elon Musk confirmed during the company's Q2 2026 earnings call on July 22, marking a significant step toward chip self-sufficiency.
Additionally, Tesla also began ... in Texas. Additionally, the company is developing its Terafab chip manufacturing facility with SpaceX and Intel to support future AI infrastructure....
Tesla's remarks came as Musk discussed the company's plans to build Terafab, a semiconductor development facility intended to accelerate production of custom AI chips for projects including Optimus.
The stock took off in early April and kept running, eventually eclipsing its dot-com era high, as the company joined Elon Musk's Terafab project, issued a blockbuster forecast and President Donald Trump touted a deal with Apple Inc. to design and produce chips in the US.
The project is called Terafab, ... unprecedented scale. A research fab is going up at Giga Texas, a roughly $3bn start able to turn out a few thousand wafers a month....
The framework agreement, disclosed in SpaceX’s S-1 filing, sets out a general plan for the future development of Terafab, with specific projects to be negotiated separately. Tesla’s $2 billion investment in xAI was converted into 18,990,195 shares of SpaceX Class A common stock, representing less than 1% ownership.
We should also get updates on Tesla’s internal AI chip roadmap and the massive TERAFAB project with SpaceX and Intel. The event will be live-streamed on Tesla’s website, X, and YouTube via an audio-only feed. Update: You can re-listen to the event below, or you can read our summary of the entire earnings call. ... The questions for Tesla’s Q2 2026 earnings call come directly from the Say platform, where investors vote on the questions they most want answered.
During the earnings call, Musk talked up Tesla's Terafab ambitions but gave little detail other than calling it an "amazing initiative" and confirming that equipment orders had been placed for the development fab in Austin. ... "It's intended to have lithography mask production, and then logic, memory and packaging, and chip testing all under one roof," he said.
Musk said Tesla’s proposed Terafab semiconductor initiative is aimed at developing advanced AI chips for Optimus, while also confirming SpaceX is involved in the effort.
He predicted spending would ramp up in the next 2-3 years as the company builds a new solar panel factory, installs more AI compute, and breaks ground on a massive 'Terafab' semiconductor fab that Tesla is building with SpaceX.
The Grok chatbot is embedded in Tesla vehicles, Tesla is supplying batteries and manufacturing know-how to SpaceX, and Terafab is a jointly relevant AI chip facility. Q1 disclosures flagged a semiconductor fab under construction in Austin, and Tesla ...
Tesla already supplies batteries and manufacturing technologies for some SpaceX projects, while the companies are also jointly developing Terafab, a semiconductor manufacturing facility designed to produce AI chips.
“Well, as you can tell from all the many collaborations on so many fronts with SpaceX, there’s more and more overlap, especially with Terafab, that’s really going to be a gigantic project,” Musk said.
TERAFAB: Tesla confirmed development of a dedicated AI chip fabrication facility involving SpaceX and xAI, targeting specialised AI logic and memory chips at an estimated cost of $20 billion.
Musk said Starlink could prevent autonomous vehicles from entering “Bermuda Triangles” of poor cellular coverage, while Grok, Digital Optimus and Terafab represent additional areas of collaboration. Musk said Starlink is being integrated into Cybercab and could eventually be added to other Tesla vehicles in markets where the satellite service operates.
Tesla disclosed that equipment orders have already been placed for an Austin development fab intended to combine lithography-mask production, logic, memory, packaging, and chip testing under 1 roof. Management described the configuration as designed to support extremely rapid iterative cycles for experimental AI chips. Terafab was characterized as necessary to prevent semiconductor availability from constraining Optimus production.