The proposed facility will combine logic chip manufacturing, memory production and advanced packaging under one large domestic manufacturing complex in the United States.
Tesla chief executive Elon Musk has revealed that the company’s ambitious Terafab Project, a massive in-house semiconductor manufacturing initiative, will officially launch in seven days.
Announcing the update on X, Musk wrote: “Terafab Project launches in 7 days.” The facility is expected to become a cornerstone of Tesla’s strategy to gain full control over the production of advanced artificial intelligence chips.
Short for tera-scale fabrication plant, the Terafab is planned to be significantly larger than Tesla’s existing Gigafactories. The proposed facility will combine logic chip manufacturing, memory production and advanced packaging under one large domestic manufacturing complex in the United States.
According to Musk, the plant will be crucial to meet the massive demand for custom AI chips needed to power Tesla’s expanding AI ecosystem, including Full Self-Driving systems, Robotaxi fleets, the Optimus humanoid robot programme and the Dojo supercomputer cluster.
Currently, Tesla depends on external semiconductor manufacturers such as TSMC and Samsung. However, Musk has repeatedly highlighted geopolitical risks and the enormous scale of Tesla’s AI ambitions as key reasons for building an in-house manufacturing capability.
Musk first introduced the idea of Terafab during Tesla’s 2025 annual shareholder meeting, suggesting that a facility far larger than existing Gigafactories may be necessary to achieve the chip volumes required for future AI systems. He later reaffirmed the plan during Tesla’s January 2026 earnings call, hinting that a major announcement would follow.
The Terafab initiative marks a major expansion of Tesla’s vertical integration strategy, pushing the electric vehicle manufacturer deeper into the semiconductor industry. Construction is expected to begin soon after the project’s formal launch, with long-term production targets potentially rivaling or exceeding those of the world’s leading chipmakers.
Following Musk’s announcement, Tesla’s shares moved higher in after-hours trading, reflecting investor confidence in the company’s move to secure its AI hardware supply chain.
