For chip stocks, the remarks reinforce that Terrafab is a long-dated threat to incumbent foundries rather than a near-term one, which limits any read-across to TSMC and Samsung while Musk’s companies keep buying their output. Intel stands to gain the most direct benefit as a joint venture partner, giving its foundry ambitions a high-profile anchor customer. For Tesla, the project adds a large, open-ended capital commitment with a multi-year payoff, a factor investors will weigh against the strategic value of securing AI chip supply. Musk’s admission on timing may help temper expectations that had run ahead of execution.---Earlier:Why a few words from Elon Musk can (and did!) move a $600 billion+ chipmakerSpaceX just officially announced two massive milestones for Starlink Mobile---Musk still thinks he can beat the world’s chipmakers at their own game, but for once he isn’t promising to do it quickly.Summary:Musk said his companies would probably work out how to make chips better than anyone, citing their expertise in custom equipment, but conceded it could take quite a few yearsTerrafab is planned for Grimes, Texas, as a joint venture between Tesla and SpaceX alongside Intel, with an initial investment of more than $15 billionThe 100 million square foot facility will be built in phases on around 3,000 acres; SpaceX controls more than 13,000 acres at the siteState filings point to a construction start on December 1, 2026, and completion by the end of 2028SpaceX shares recently climbed back above their $135 IPO price, making Musk the world’s first trillionaireElon Musk said his companies would probably work out how to make semiconductors better than anyone, citing their experience building customised manufacturing equipment, but conceded that reaching that point could take quite a few years, Bloomberg (gated) reported on Saturday.Speaking at an X event over the weekend, Musk described chipmaking as one of the hardest things to do in the world and said he did not want to sound complacent. The measured tone contrasts with the project’s launch in Austin in March, when he billed Terrafab as the most ambitious chip-building effort in history and argued that global fabrication capacity covered only around 2% of what Tesla and SpaceX would need.Terrafab is set to be built in Grimes County, Texas, roughly an hour northwest of Houston, as a joint venture between Tesla and SpaceX alongside Intel. Bloomberg put the initial investment at more than $15 billion. The facility is planned at 100 million square feet and will be built in phases on a footprint of about 3,000 acres, although SpaceX controls more than 13,000 acres at the site. Texas government filings in September listed a planned construction start of December 1, 2026, with completion targeted for the end of 2028.Cost estimates have varied widely. Texas Governor Greg Abbott said in August that the first phase would involve nearly $17 billion in capital investment and create 3,000 jobs, while earlier county filings referred to far larger sums across all phases.The plant’s main purpose is high-volume production of Tesla’s AI5 chips, reducing reliance on outside foundries such as TSMC and Samsung that Musk’s companies currently compete with every other technology group to access. Musk has said they will keep buying from existing suppliers in the meantime.The comments came as SpaceX, which listed in June, moved back above its $135 initial public offering price, a gain that made Musk the world’s first trillionaire. With construction yet to begin, the December start date will be the first concrete test of whether Terrafab keeps to its stated schedule. What is Terrafab?The project: Terrafab is a planned semiconductor manufacturing complex backed by Elon Musk’s companies, run as a joint venture between Tesla and SpaceX with Intel as a partner. Tesla’s own materials spell it “Terafab.”Why Musk wants it: Musk argues existing chipmakers cannot expand fast enough to supply the AI chips his companies need for self-driving cars, Optimus humanoid robots, AI data centres and planned solar-powered satellites. He has said current global capacity covers only a small fraction of that demand.What makes it different: The plan is to bring the whole process under one roof, from chip design and fabrication of logic and memory chips through to packaging and testing. Most of the industry splits these steps across separate companies and sites. Musk says this would let his teams design, test and revise chips far faster.What it will make: Two broad types of chip: one for robots and vehicles, and a radiation-hardened version designed for computing in orbit. The first priority is volume production of Tesla’s AI5 chip.Where and when: The main site is in Grimes County, Texas, northwest of Houston, preceded by a smaller research fab at Tesla’s Austin plant, where ground was broken in April. State filings point to construction starting in December 2026 and finishing by the end of 2028.The big caveat: Musk’s companies have no track record in chip manufacturing, one of the most complex and capital-intensive industries in the world, and Musk himself now says mastering it could take years. This article was written by Eamonn Sheridan at investinglive.com.