Musk’s “high-risk, high-payoff” plan relies on a rapid loop of fabrication, testing, new masks, and redesigned chips.

  • Musk says Tesla and SpaceX want to make and test about 10 chip designs a year at Terafab’s Giga Texas research fab.
  • He compared the goal with the roughly two years he says a significant chip design typically takes to reach volume production.
  • The research fab is part of the broader Terafab vision, which Musk has called two factories for separate chip designs and uses.

Tesla and SpaceX will aim to make and test about 10 chip designs a year at Terafab’s Giga Texas research fab, CEO Elon Musk said, accelerating a development process he says can take two years for one significant design to hit volume production. 

TSLA stock rose 0.6% overnight heading into Monday, while SPCX gained 1.2%. Over the past week, TSLA climbed 3%, while SPCX gained 2%. 

Musk’s 10-Design Chip Goal

Musk said the companies want to challenge what he sees as risk aversion in chipmaking. “I think what we want to do with Tesla and SpaceX on the chip fab is really try some of these high-risk, high-payoff bets,” he said in an interview.

He called the 10-design goal a faster cycle of making and testing chips, not putting 10 different designs into mass production each year. “We want to do more like 10 designs per year,” he said, adding that two years from design start to volume fabrication is considered fast for a major chip.

The proposed Giga Texas research fab would bring chip fabrication, testing, packaging and mask production together in one building. Musk said that the team could test a chip, make new lithography masks and build another version without breaking the iteration cycle. “Some of these, when you’re trying a bunch of different things, a bunch of them won’t work out,” he said, but faster testing could help accelerate progress.

Musk added: “I have no idea how to make chips, but we’ll figure it out.” He said reaching the ambitions could take years: “It might take us quite a few years, but over time I’m pretty sure we could do it.”

Terafab’s Bigger Chipmaking Vision

Musk called the research lab’s “complete loop” a powerful tool: “So you’re making a complete computer, testing it, then making new masks and then a new chip, and having that iterative loop be super fast in the same building.”

He said Tesla would start with conventional equipment, modify it to improve throughput and eventually build custom machines around production bottlenecks. The research fab’s 10-design target is distinct from the larger Terafab plan, which Musk has called two factories, each making one chip design. The broader project is intended to supply chips for Tesla vehicles and Optimus robots, as well as AI data centers in space. 

Why TSMC Is Looking At Texas

Tech journalist Tim Culpan traced the Terafab discussions to a longer history between Musk and TSMC. In December 2024, TSMC Chairman and CEO C.C. Wei reassured Musk about chip supply, telling him: “As long as you’re willing to pay, your chips will definitely be there.”

Culpan reported that TSMC and Texas held more serious discussions in the first half of 2026, with senior Taiwanese executives meeting Texas officials. The report said that TSMC was considering a Texas presence as it expanded in Arizona, and could need an anchor customer for a new Texas fab. 

Musk confirmed recently that talks with TSMC were underway, saying, “Just discussions, but something may come of it.” Four days later, he said Tesla and SpaceX would build and run Terafab themselves, while allowing TSMC to sublease part of it. Intel, which joined the project in April, is also involved. Tesla has said it plans to use Intel’s 14A manufacturing process for Terafab chips.

How Do Retail Traders Feel About TSLA And SPCX?

On Stocktwits, retail sentiment for TSLA was ‘bearish’ amid ‘normal’ message volume, while sentiment for SPCX was ‘neutral’ amid ‘high’ message volume.

Year to date, SPCX is up 1%, while TSLA is down 15%. 

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