Tesla-SpaceX chip factory expansion

What happened: Elon Musk, through Tesla and SpaceX, is expanding into semiconductor manufacturing with the "Terafab" project. On March 23, 2026, Musk announced plans for two advanced chip factories in Austin, Texas, aiming to meet increasing demand for chips at Tesla, SpaceX, and Musk's AI venture, xAI. The project, valued at $20 billion, will be operated jointly by Tesla and SpaceX, with the first factory expected to power cars and humanoid robots.

Market impact: The news drove Tesla's stock up 3.5% on March 23, 2026, as investors reacted to the company's entry into the semiconductor industry. The move could disrupt the existing chip supply chain, potentially reducing Tesla's reliance on external chip suppliers. It also signals a significant investment in AI capabilities, which could benefit both Tesla's vehicles and Musk's other ventures.

What to watch next: Tesla's next earnings call, scheduled for April 25, 2026, will provide more details on the Terafab project's timeline and progress. Additionally, regulatory decisions regarding potential subsidies or incentives for the new chip factories in Texas could impact the project's feasibility and timeline.