Chips powering rockets, robots and cars are at the heart of Elon Musk’s bold Terafab plan in Austin, promising trillion‑watt output and reshaping semiconductor capacity.
Elon Musk has unveiled plans to build two semiconductor fabrication plants in Austin, Texas, as part of a venture called Terafab, aimed at supplying advanced chips for Tesla and SpaceX. The announcement, made during a live stream on his platform X, outlined ambitions to produce computing power equivalent to one trillion watts annually.
Musk confirmed the facilities would manufacture chips for Tesla’s vehicles and humanoid robots, as well as high-powered chips for space applications.
The factories will be located on a 100 million-square-foot site, though Musk did not disclose investment figures. Media estimates place the project’s value at around US$25 billion. He emphasised the global shortage of AI chips, noting that current production capacity stands at about 20 gigawatts per year, far below his company’s requirements.
While acknowledging reliance on suppliers such as Samsung, TSMC and Micron, Musk said their expansion pace was insufficient, prompting the decision to build Terafab.
The facility will integrate all stages of chip production, including lithography, logic and memory fabrication, testing and packaging, within a single complex. Musk described this as enabling a rapid feedback loop for design improvements.
Around 20% of annual output will serve terrestrial uses, including Tesla’s Full Self-Driving systems and Optimus robots, while the remainder will support space-based projects such as orbital data centres.
SpaceX has already filed an application with the Federal Communications Commission for an ‘Orbital Data Centre System,’ proposing a constellation of 1 million satellites to harness solar energy to meet AI demand.
This would surpass the scale of Starlink, which currently operates over 9600 satellites. Musk argued that falling launch costs make space-based AI infrastructure increasingly viable, particularly given environmental concerns surrounding terrestrial data centres.
Terafab is a joint initiative between SpaceX, Tesla and xAI. Its launch coincides with broader US semiconductor expansion, including TSMC’s new fabs in Arizona and Intel’s ongoing construction in Ohio.
