SpaceX and Tesla are moving into chip manufacturing with Terafab, a massive semiconductor facility in Texas. The project starts with an initial investment of $16.8 billion and could reach $119 billion if fully expanded.
Terafab will cover 9.3 million square meters — roughly the size of 1,300 soccer fields. The facility is designed to bring chip manufacturing, packaging and testing under one roof, giving SpaceX and Tesla greater control over their semiconductor supply.
The biggest demand is expected to come from AI and robotics. The chips are intended for Tesla’s Optimus humanoid robots, Cybercab autonomous vehicles and SpaceX’s space-based data centers.
The companies expect their future operations to require more than 1 terawatt of computing power. Producing chips in-house could therefore reduce their dependence on external semiconductor suppliers.
Terafab is designed to combine logic and memory chip production, packaging and testing within a single complex. Intel is also involved in the project, bringing semiconductor manufacturing expertise to the initiative.
If fully scaled, Terafab could become a major part of the semiconductor supply chain supporting AI, robotics and space technologies — while giving Musk’s companies much greater control over the chips powering their products.
