First step in acquiring Tesla, Inc. (TSLA.US)? Wedbush: SpaceX or using Terafab chip factory to pave the way for a merger next year.

According to Wedbush, the giant Terafab chip manufacturing plant that Tesla, Inc. (TSLA.US) and SpaceX plan to build in Austin, Texas, could signify the first step towards a merger between the two as early as next year. Last weekend, Tesla, Inc. and SpaceX CEO Elon Musk announced plans for a new semiconductor joint venture called Terafab, which will be built in Austin, Texas. Terafab will consist of two advanced chip factories jointly operated by Tesla, Inc. and SpaceX. Musk's aim is to better control semiconductor supply in areas such as artificial intelligence, Siasun Robot & Automation, and space computing. In an investor report released on Wednesday, Wedbush analysts stated, "The Terafab project, a collaboration between Tesla, Inc. and SpaceX, is expected to cost up to $25 billion and, once operational at Tesla, Inc.'s Giga Texas plant, will become the largest semiconductor wafer fab in human history. The project focuses on chip design, lithography, manufacturing, memory production, advanced packaging, and testing. Initial production targets are expected to be 100,000 wafers per month, scaling up to 1 million wafers per month, approximately 70% of the global output of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, with the goal of producing 100 billion to 200 billion custom artificial intelligence and memory chips annually to support Tesla, Inc.'s FSD, Cybercab, and Optimus production lines." Wedbush noted, "Since the chip production capacity of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR and Samsung is insufficient to meet Musk's goals, the factory will gradually increase its capacity to meet the company's computational needs, which currently exceed supply capacity. Current artificial intelligence computational output is about 20 GW per year, accounting for only about 2% of these companies' demand." They added, "While the specific timeline for the project is uncertain, this will accelerate the company's ambitious artificial intelligence development strategy. We believe this will lay the foundation for Tesla, Inc. to become an artificial intelligence giant in the coming years, with chip and memory supply expected to be the biggest constraint. We also believe this is the first step towards the eventual merger of Tesla, Inc. and SpaceX, with the merger expected to be completed in 2027."