{"slug": "musk-thanks-micron-for-chips-and-builds-a-55bn-fab-to-replace-it", "title": "Musk thanks Micron for chips, and builds a $55bn fab to replace it", "summary": "Elon Musk thanked Micron on Tesla's quarterly call for a significant memory allocation on reasonable terms, but Tesla and SpaceX are jointly building Terafab, a chip fab at Giga Texas that could cost $55bn to $119bn, to secure future supply. Musk said the project is not about leverage but ensuring enough chips, as Tesla is not among Micron's top 10 customers and faces supply constraints in the AI-driven memory market.", "body_md": "Memory chips are the oil of the AI boom, and right now they are hard to get. So when Elon Musk used Tesla’s quarterly call to publicly thank [Micron](https://thenextweb.com/news/micron-q3-fy2026-earnings-revenue-hbm-ai-memory), it was worth noticing. Suppliers rarely get shout-outs. Scarce ones do.\n\nMicron recently gave Tesla a “significant allocation” of memory on “reasonable terms,” Musk said, according to [Bloomberg](https://www.bloomberg.com/news/articles/2026-07-22/musk-says-micron-gave-tesla-significant-supply-of-memory-chips). That matters, because memory is in short supply and [prices are high](https://thenextweb.com/news/ddr2-memory-prices-surge-ai-shortage-legacy-dram). The global build-out of AI has soaked up chips and left other industries scrambling.\n\nThe thank-you, though, sat oddly next to Musk’s longer game. He is quietly building the capacity to not need Micron at all.\n\n## Enter Terafab\n\nThe project is called Terafab, a joint effort between Tesla and [SpaceX](https://thenextweb.com/news/musk-spacex-1-trillion-revenue-2030) to make computing and memory chips at, in Musk’s words, 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.\n\nThe full build-out could run from $55bn to $119bn, [CNBC](https://www.cnbc.com/2026/05/06/elon-musks-spacex-chip-fab-in-texas-to-cost-up-to-119-billion.html) reported, with Intel signed on to help design and fabricate.\n\nMusk was blunt about the reason. Terafab is “not to get leverage over our chip suppliers,” he said. “It is to ensure that we have enough chips down the road.” The industry, he argued, is not growing fast enough in logic or memory to meet his needs “unless we also make chips ourselves.”\n\n## Not even a top customer\n\nThere is a humbler truth underneath. For all Tesla’s fame, it is not a memory heavyweight. Neither Tesla nor SpaceX ranks among Micron’s top 10 customers, according to Bloomberg data.\n\nTesla also lacks the chequebook of the hyperscalers [locking up supply](https://thenextweb.com/news/micron-and-anthropic-sign-a-multi-year-ai-memory-supply-deal) for years. Micron did not respond to a request for comment, though it has [every reason](https://www.benzinga.com/trading-ideas/long-ideas/26/07/60637429/elon-musks-unexpected-micron-moment-a-strange-twist-in-teslas-earnings-call) to keep a marquee name happy.\n\nSo the gratitude and the fab are two sides of the same worry. Tesla needs chips it cannot reliably buy, from a supplier whose bigger customers come first, in a market where [Micron’s value has soared](https://thenextweb.com/news/micron-1-27-trillion-valuation-ai-memory-wall-street).\n\nThanking Micron today and building Terafab for tomorrow is not a contradiction. It is the plan. Whether a car company and a rocket company can also become a chipmaker is the $119bn question.\n\n## Get the TNW newsletter\n\nGet the most important tech news in your inbox each week.", "url": "https://wpnews.pro/news/musk-thanks-micron-for-chips-and-builds-a-55bn-fab-to-replace-it", "canonical_source": "https://thenextweb.com/news/musk-micron-tesla-memory-chips-terafab", "published_at": "2026-07-23 14:25:39+00:00", "updated_at": "2026-07-23 15:00:38.818479+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-chips", "ai-infrastructure", "ai-startups"], "entities": ["Elon Musk", "Tesla", "Micron", "SpaceX", "Terafab", "Intel", "Giga Texas"], "alternates": {"html": "https://wpnews.pro/news/musk-thanks-micron-for-chips-and-builds-a-55bn-fab-to-replace-it", "markdown": "https://wpnews.pro/news/musk-thanks-micron-for-chips-and-builds-a-55bn-fab-to-replace-it.md", "text": "https://wpnews.pro/news/musk-thanks-micron-for-chips-and-builds-a-55bn-fab-to-replace-it.txt", "jsonld": "https://wpnews.pro/news/musk-thanks-micron-for-chips-and-builds-a-55bn-fab-to-replace-it.jsonld"}}