Elon Musk has unveiled plans for a semiconductor facility called Terafab in Austin, Texas, aimed at bringing chip design, manufacturing and packaging under one roof. In a presentation streamed live on X, Musk said the semiconductor industry is failing to keep up with demand, leaving his companies scrambling for chips. “We’re very grateful to our existing supply chain, to Samsung, TSMC, Micron and others, but there’s a maximum rate at which they’re comfortable expanding. That rate is much less than we would like, and we need the chips, so we’re going to build the Terafab.”
The Terafab will be a joint venture between Tesla and SpaceX and is expected to target two types of 2nm-node chips: one type optimized for edge and inference (for use in vehicles or robots) and another for high-power AI applications. SpaceX recently absorbed Musk’s XAI venture, announcing plans to build AI data centers in space.
Musk didn’t provide a timeline for when the Terafab will begin production or reach volume output. He did say the initial output target was 100,000 wafer starts per month, with ambitions to scale to 1 million wafer starts per month at full capacity. For context, TSMC’s peak output for a recent leading-edge node is estimated to be in the 150,000-250,000 wpm range.
