Terafab Expansion: Musk Claims Suppliers Accelerating Chip Plant Timeline
The joint venture between Tesla and SpaceX aims for mass chip production by late 2028, relying on expedited deliveries from key equipment makers.
By Ama Boateng ·
Elon Musk announced on October 20 that major semiconductor equipment providers, including ASML, have agreed to fast-track deliveries for the Terafab manufacturing facility. This development supports the aggressive schedule for the joint megaproject undertaken by Tesla and SpaceX. Musk made these remarks during a live broadcast of SpaceX’s third-quarter 2026 earnings call on X, outlining the next steps for the ambitious venture.
The primary target for the facility, located in Gibbons Creek, Texas, is to achieve volume chip production by the third or fourth quarter of 2028. Musk described this schedule as "highly aspirational" and noted it carries significant uncertainty, referring to "big error bars." He expressed gratitude to ASML and other vendors for moving equipment ahead of schedule to meet these demanding dates. A secondary goal involves producing the first experimental test chip at the Austin, Texas, research fabrication site by the second quarter of 2027.
In addition to the hardware roadmap, Musk detailed the computing capacity targets for his AI ventures. He expects these operations to reach 2.5 to 3 gigawatts of active computing power by the end of 2026. For 2027, he expressed high confidence in adding another 10 gigawatts, suggesting that reaching a total of 13 gigawatts by year-end is a near-certainty. To support this expansion, SpaceX and xAI are aggressively procuring next-generation NVIDIA architecture, with plans to bring a 440,000-GPU Vera Rubin training cluster online by the end of the second quarter in 2027.
The Terafab project is designed as a vertically integrated, multi-billion-dollar facility capable of manufacturing 1 terawatt of AI computing power annually. It will handle logic, memory, and advanced packaging internally. Musk claimed that the commercial value of this output could place the single facility within the top 20 global economies by GDP, a figure comparable to Switzerland’s current economic output. The plant will utilize Intel’s 14A manufacturing node technology alongside traditional extreme ultraviolet lithography systems.
Intel officially joined the Terafab initiative in April 2026 to co-develop and refactor silicon fabrication processes. ASML, the exclusive commercial supplier of the $400 million EUV lithography machines required for leading-edge production, remains a critical partner. Unofficial sources previously indicated that the first EUV tool was slated for delivery in mid-2027, though it is not yet confirmed if this aligns with the expedited timeline Musk referenced. Other key suppliers include Applied Materials, Lam Research, KLA Corporation, and Tokyo Electron, which provide front-end processing and metrology equipment.
The supply chain for Terafab extends to approximately ten South Korean firms currently in negotiations. These include Hanmi Semiconductor, known for advanced packaging, and HPSP, a manufacturer of high-pressure hydrogen annealing equipment. Additional partners are supplying specialized piping and process valves. This broad network of suppliers is essential as the project aims to mitigate future shortages of cutting-edge AI processors from external foundries like TSMC. The chips produced will serve Musk’s xAI clusters, self-driving vehicles, Optimus robots, and SpaceX’s orbital data centers.
Despite the optimism surrounding the accelerated timeline, industry experts have raised questions about the feasibility of the 1 terawatt annual output goal. Gartner estimates that total global AI-optimized data center capacity stands at roughly 44 gigawatts as of late 2026. This represents only 4.4% of Terafab’s planned production capacity. While EpochAI notes that global AI computing capacity has grown by approximately 3.3 to 3.4 times per year since 2022, the sheer scale of Terafab’s ambition remains a point of debate among technical analysts.
The project’s progress depends heavily on the ability of these global suppliers to maintain tight capacity while expediting deliveries. As the semiconductor industry continues to face constraints, the success of Terafab’s timeline will be a significant indicator of the sector’s ability to scale. Musk’s team remains focused on hitting the 2028 production milestone, viewing the facility as a cornerstone for the next generation of AI infrastructure.
Source: Tom's Hardware
