Billionaire Elon Musk announced the launch of Terafab, a $25 billion chip fabrication plant at Gigafactory Texas in Travis County, Texas. The facility will be a joint venture between Tesla Inc., SpaceX Corp., and xAI Corp., consolidating all stages of semiconductor manufacturing under one roof.
Terafab aims to produce up to one terawatt of computing power annually-making it the largest semiconductor fab ever built. It will manufacture 2-nanometer chips, the most advanced node currently in commercial production, and scale to one million wafers per month, surpassing 70% of TSMC’s current global output.
The project will focus 80% of its capacity on custom AI chips for orbital satellites, leveraging higher solar irradiance and efficient heat dissipation in space to reduce operational costs. The remaining 20% will power Tesla’s self-driving vehicles, Cybercab robotaxis, Optimus humanoid robots, and xAI’s Grok data centers.
Musk stated that Terafab is essential to realizing his vision of a galactic civilization with cities on Mars and the moon. Millions of Optimus robots will help construct and operate the facility.
Production timelines remain unspecified, but the A15 inference chips are expected to enter volume production in 2027. ![Photo: Tesla]