SpaceX, Tesla to Build ‘Terafab’ Chip Factories in Texas Amid Global Shortage

SpaceX, Tesla to Build ‘Terafab’ Chip Factories in Texas Amid Global Shortage

SpaceX and Tesla have announced plans to construct “Terafab,” two advanced chip manufacturing facilities in Austin, Texas, aimed at addressing growing semiconductor demand across their operations.

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The initiative, unveiled by CEO Elon Musk, comes amid a global chip shortage, with Musk stating that current production levels meet only about three percent of his companies’ future requirements.

According to the plan, one factory will produce chips for Tesla’s electric vehicles and its Optimus humanoid robots, while the second facility will focus on specialized chips for artificial intelligence-powered satellites operated by SpaceX.

Musk said the combined output of the two factories is expected to reach one terawatt of computing capacity per year — a figure he noted would be roughly double the current computing capacity generated across the United States.

He acknowledged existing semiconductor partners, including Samsung, TSMC, and Micron Technology, but stressed that demand from his companies is projected to outpace global supply.

“We either build the Terafab or we don’t have the chips,” Musk said during a presentation in Austin, underscoring the urgency behind the project.

While no specific timeline was provided, the proposed facilities signal a major push by SpaceX and Tesla to secure chip independence and scale their ambitions in artificial intelligence, robotics, and space technology.

SpaceX, Tesla to Build ‘Terafab’ Chip Factories in Texas Amid Global Shortage