Elon Musk announced the Terafab project, a large plan to manufacture custom chips for robotics, artificial intelligence, and space data centers, Bloomberg News reports (open copy). The facility will be built in Austin, Texas, and operated jointly by Tesla and SpaceX. Musk, who leads both companies, described it as starting with an advanced technology fab. This means a semiconductor manufacturing plant equipped to produce and test various kinds of chips.
Musk explained that the semiconductor industry grows too slowly to supply the huge number of chips his companies will need in the future. Existing suppliers cannot fully meet the demand as Tesla focuses more on robotics, self-driving vehicles, and AI. He stated that without building the Terafab, the companies would lack necessary chips.
The scale and purpose of Terafab
The project aims to support massive computing power. It targets producing chips for 100 to 200 gigawatts of computing on Earth each year. In space, it plans for up to one terawatt per year, where a terawatt equals one trillion watts. Musk has mentioned the facility could make advanced 2 nanometer chips, referring to very small and efficient chip designs measured in billionths of a meter.
The plant will create two main types of chips. One type will be optimized for edge computing and inference, mainly for Tesla's cars, robotaxis, and Optimus humanoid robots. Edge computing processes data close to where it is created, while inference means using trained AI models to make predictions. The other type will be a high-power chip suited for space use by SpaceX and xAI. Musk noted that xAI, now a subsidiary after SpaceX acquired it in February, will use most of the chips.
Musk also showed ideas for future space projects, including small AI data center satellites with 100 kilowatts of power, aiming for megawatt levels later. He mentioned plans for launching satellites from the moon using a mass driver, a device to propel objects into space.
The project could strengthen Texas as a chip production center and ties together Musk's companies in AI efforts. A SpaceX video of the Terafab announcement (jump to 20 min.) frames the project as "Announcing TERAFAB: the next step towards becoming a galactic civilization."