SpaceX Announces $16.8B Semiconductor Fab (Terafab) – Vertical Integration Threatens External Chip Suppliers

SpaceX is building its own $16.8B semiconductor fab in Texas, consolidating chip production for AI satellites and terminals. New details: Terafab scale confirmed at 100M sq ft (5x larger than current record), with chip allocation split 25% Optimus robots and 75% AI spacecraft. Musk claims $1T revenue by 2030. SpaceX/Tesla will build natural gas plants and battery arrays to power the fab, deepening vertical integration and reducing grid dependence. Intel is also involved as a chip partner, adding a new dimension to the supply chain. The fab is 50x the size of Pentagon's planned fab, with 2028 completion. This vertical integration could reduce reliance on external suppliers like STMicroelectronics and Nvidia, though Nvidia remains the exclusive AI chip partner. The scale suggests massive internal demand for AI chips, but it challenges the long-term growth thesis for chip suppliers. The fab is a major strategic move that could reshape supplier dynamics and requires close monitoring of its impact on STMicro, Nvidia, Intel, and other component makers. Morgan Stanley's hyperscaler inclusion and $159B capex projection for SpaceX in 2027 align with the fab's massive scale and AI infrastructure supercycle.