“The single biggest point of failure... is that 97% of the high-end chips are made in Taiwan. If that island were blockaded... it would be an economic apocalypse.” That’s not a conspiracy theorist talking. That’s U.S. Treasury Secretary Scott Bessent. Here’s why it matters: almost every advanced computer chip that powers AI — the technology running ChatGPT, self-driving cars, and everything in between — is made in one place. Taiwan. And China’s president has made no secret of his plan to take it. “The reunification of our motherland... is unstoppable,” he said this year, as Chinese warships and planes patrol the waters near Taiwan almost daily. If China succeeds, Nvidia’s own CEO, Jensen Huang, has said flatly: “China is going to win the AI race.” Two U.S. presidents have already tried to fix this. Biden tried subsidies. Trump tried tariffs. Neither one solved the core problem: America still doesn’t make enough advanced chips at home. But on May 6 of this year, Elon Musk stepped up to the plate and proposed something different: a 100-million-square-foot chip factory in Texas called the “Terafab,” designed to double America’s chip production on its own. It’s part of a bigger plan I call “XPANSE” — Elon combining Tesla, SpaceX, and his AI operations into one force built to solve America’s chip problem before China can exploit it. There’s just one issue: building something this massive requires an enormous amount of rare earth metals and the powerful magnets made from them. Right now, China controls the global supply chain for both — including 90% of the magnets. That’s a dangerous chokepoint, and China has already weaponized it once, during last year’s tariff dispute. But one little-known American company is quietly fixing that too. It just secured $1.6 billion in U.S. government funding, owns the largest known source of heavy rare earth elements in the country, and its factory sits just 70 miles from where Elon wants to build the Terafab. I don’t think that’s a coincidence. I think it’s a supply chain forming in plain sight — and most investors haven’t noticed yet. I’ve written up the full story in a report called “The U.S. Rare Earth Kingpin: The Cornerstone Manufacturer of Elon Musk’s ‘XPANSE’” — along with two more reports on the companies I believe are positioned to benefit most. Get all three reports → This isn’t just a stock story. It’s a national security story. And I believe the investors who understand it first will be the ones best positioned when it plays out. Sincerely, 
Luke Lango
Senior Investment Analyst, InvestorPlace |
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