Elon Musk wants to build the biggest chip factory ever
A new joint venture between Tesla, SpaceX, and xAI could expand chip production for Musk’s companies – if it actually delivers
Elon Musk has announced plans for a new chip manufacturing project called Terafab, which he claims will become the largest facility of its kind ever built. But they won’t be appearing in the best smartphones.
Revealed during a livestream on X (via Engadget), the project is a joint venture between Tesla, SpaceX, and xAI, and is designed to dramatically increase chip production to meet the growing needs of those companies – all of which have Musk as their CEO.
The reasoning, according to Musk, is demand. Even with major partners like Samsung, TSMC, and Micron, current manufacturing capacity only accounts for around two per cent of what Tesla and SpaceX will need in future computing power. As he put it during the stream “We either build the Terafab or we don’t have the chips.”
The long-term goal is to produce a terawatt of computing power per year, a scale Musk believes is necessary to support everything from Tesla’s Full Self-Driving systems and Optimus robots to more high-powered, durable chips for space use.
The project is expected to begin with an Advanced Technology Fab in Austin, Texas, where Tesla is already headquartered, and is estimated to cost at least $20 billion.
Musk also said the facility would produce two types of chips – one for use on Earth, and a more high-powered, durable version designed for space.
That space focus ties into another recent move from Musk. Earlier this year, SpaceX filed an application with the FCC to launch a million satellites as part of an orbital data centre concept, which would rely on large-scale computing infrastructure in space.
Musk framed Terafab as a step towards much bigger ambitions, including harnessing solar energy at scale and eventually building what he described as a “galactic civilisation”.
As with many of Musk’s announcements, though, there’s a note of caution. He has, after all, previously made big promises that haven’t always materialised as planned. Remember the Hyperloop?
Esat Dedezade
Contributor 
