Key Points Elon Musk officially announced plans for his Terafab project in March to make chips for Tesla, SpaceX and xAI. New filings show the first phase will cost $55 billion and could scale to $119 billion for the buildout. Ben Bajarin, a chip analyst at Creative Strategies, said Musk is embarking on a "15-year strategy." In this article Tech Intel is positioned to benefit from the ongoing AI boom as manufacturing capacity is getting harder to come by at Taiwan Semiconductor Manufacturing , where giants like Nvidia and Apple have reserved their chipmaking availability for years to come. Ben Bajarin, a chip analyst at Creative Strategies, said Musk is embarking on a "15-year strategy," knowing that his companies need to control the supply chain as "it would be very, very hard for them to have any priority at TSMC." "You don't just wake up one day and say, 'I'm going to be a foundry,'" Bajarin said. "It's a very mature process with constraints across the board on how these things get made." On a Tesla earnings call in January, Musk said key chip suppliers couldn't possibly produce enough hardware to satisfy the automaker's needs, and that building a Terafab was "actually also going to be very important to ensure that we are protected against any geopolitical risks." Musk said on the more recent earnings call that Tesla was "still working out the details of the Terafab deployment," and that the company would be building a research fab at its factory in Austin, costing around $3 billion and "capable of maybe a few thousand wafers per month." "SpaceX is going to take care of the initial phase of the scaled up Terafab," Musk said on the call. SpaceX's financials have been coming to light ahead of a planned public offering in the coming months. The company filed confidentially for an IPO in April, weeks after the merger with xAI valued the combined entity at $1.75 trillion. Tesla and SpaceX didn't immediately respond to a request for comment.