Elon Musk has announced details of the Terafab project, an in-house chip manufacturing facility for Tesla, SpaceX, and xAI. The plant is being built in Austin, Texas, and will be jointly operated by Tesla and SpaceX. The goal is ambitious: to produce chips with a capacity of up to one terawatt of computing power per year.
Elon Musk has announced details of the Terafab project, an in-house chip manufacturing facility for Tesla, SpaceX, and xAI. The plant is being built in Austin, Texas, and will be jointly operated by Tesla and SpaceX. The goal is ambitious: to produce chips with a capacity of up to one terawatt of computing power per year.
Terafab, Bloomberg reports, will be located next to Tesla’s existing headquarters and gigafactory in Austin. Two types of chips are planned: one for edge and inference — for cars, robo-taxis and Optimus robots; the second — a powerful space chip for SpaceX and xAI. The technological process — 2 nanometers. xAI, which SpaceX acquired in February, will use the vast majority of the chips produced.
The reason for the venture is simple and cynical: neither TSMC, Micron, nor Samsung can keep up with Musk’s appetites. He already has deals with all three — and says none of them can fully cover Tesla’s needs while the company refocuses on robotics, autonomous driving, and AI.
«Either we build Terafab, or we won’t have chips. And we need chips — that’s why we’re building them,» Musk said at a presentation in Austin before Texas Governor Greg Abbott.
The first type of chips is optimized for inference and edge computing. Main consumers: Tesla electric cars, robo-taxis and Optimus humanoid robots. Capacity: 100–200 gigawatts of computing per year.
The second type is a high-power chip for space. It is designed for terawatts of computing and is intended for SpaceX’s orbital data centers and xAI infrastructure.
A separate part of the presentation is a miniature satellite-data center. SpaceX already filed an application with the FCC in January to launch one million such satellites into orbit. The first sample will have a capacity of 100 kilowatts. «Future satellites will probably reach the megawatt level,» Musk said.
Funding for these space data centers is one of the main reasons for SpaceX’s planned IPO. According to Bloomberg, the company expects to raise up to $50 billion, which could value it at more than $1.75 trillion. SpaceX has been considering a confidential IPO application since March.
Terafab is another step towards merging all of Musk’s companies into a single technology ecosystem. Tesla already integrates xAI’s Grok chatbot into its cars, sells Megapack batteries for xAI data centers, and in January announced a $2 billion investment in xAI with a framework agreement for cooperation. SpaceX acquired xAI in February. Now, it’s a joint chip factory.
If Terafab works, Texas could become the new center of US chip production.
