As demand for AI surges, Elon Musk is moving to secure his own supply. Elon Musk has launched Terafab, a new chip manufacturing project led by Tesla and SpaceX in Austin, Texas.
The facility aims to produce advanced chips for vehicles, robots, and space systems. It comes as Musk warns current global supply cannot meet the needs of his companies.
Terafab is designed as a vertically integrated facility. This means chip design, memory, and packaging will be handled in one location. Musk said the project targets one terawatt of computing capacity each year. That level would exceed current U.S. output.
The facility will produce two types of chips. One will power Tesla vehicles and Optimus humanoid robots. The other will support artificial intelligence systems used in space operations.
“We either build the Terafab or we don’t have the chips,” Elon Musk, on the limits of current global supply as demand continues to rise.
Musk acknowledged existing suppliers such as Samsung, TSMC, and Micron. However, he said their expansion pace cannot match future demand from Tesla and SpaceX. He added that global chip output may only cover a small portion of what his companies will require.
The project also plans to use Tesla’s Optimus robots in construction and operations. Musk said millions of these humanoid robots could support the facility over time. He did not provide a timeline for when production will begin.
Terafab reflects a shift toward in-house chip production. The facility is expected to support Tesla vehicles, robotics, and SpaceX satellite systems.
