Elon Musk is planning the largest chip factory in history. The proposed 'Terafab' facility could cost up to $119 billion and would serve as the central hardware hub for his expanding empire: Tesla electric vehicles and robots, xAI artificial intelligence servers, SpaceX systems, and even proposed space-based data centers.
Terafab is a vertically integrated semiconductor operation. Instead of outsourcing chipmaking steps globally, this single facility would handle design, lithography, wafer fabrication, testing, and packaging under one roof.
The initial phase is estimated at $55 billion. At full scale, Musk envisions producing 1 terawatt of chips per year, roughly 1 million wafers per month. Grimes County, Texas, is the leading candidate for the site.
Before the full Terafab vision materializes, Tesla plans to build a smaller $3 billion pilot fab at Giga Texas to test the technology. Intel is reportedly being considered as a partner for the project.