Texas Chip Gig: Musk Claims Suppliers Speeding Up Terafab Deliveries
Elon Musk asserts that key equipment makers are accelerating shipments to support a 2028 production target for the Tesla and SpaceX semiconductor joint venture.
By Gabriela Ivanov ·
The semiconductor landscape is shifting rapidly as major players race to secure manufacturing capacity for the AI boom. During a live broadcast of the SpaceX Q3 2026 earnings call on X yesterday, October 20, Elon Musk announced that critical equipment suppliers are moving faster to support the Terafab project.
Musk stated that ASML and other key suppliers have expedited shipments for the ambitious facility. This joint venture between Tesla and SpaceX aims to produce chips in volume by the third or fourth quarter of 2028. The CEO described this timeline as highly aspirational and noted that it carries significant uncertainty. He expressed gratitude for the suppliers' efforts to accelerate deliveries to meet these aggressive dates.
The primary manufacturing facility is located in Gibbons Creek, Texas. SpaceX also plans to produce its first experimental test chip at a separate research fab in Austin, Texas, around the second quarter of 2027. The project is designed to be vertically integrated, handling logic, memory, and advanced packaging in one location. It utilizes traditional extreme ultraviolet lithography systems based on Intel's 14A manufacturing node technology.
Intel officially joined the venture in April 2026 to help refactor silicon fabrication technology. ASML, the sole commercial supplier of the required lithography systems, remains a pivotal partner. Other major contributors include American firms Applied Materials, Lam Research, and KLA Corporation, as well as Japan's Tokyo Electron. Tesla and SpaceX are also in discussions with about ten South Korean equipment manufacturers for specialized components and process control tools.
Musk claimed that once fully operational, Terafab's output could rival the GDP of the twentieth largest nation on earth. For perspective, Switzerland currently holds that position with a GDP of roughly $1.14 trillion. The facility targets an annual output of one terawatt of AI computing power. This massive scale is intended to supply chips for xAI clusters, self-driving vehicles, Optimus robots, and SpaceX's orbital data centers.
Despite the bold claims, experts have questioned the feasibility of the one terawatt goal. Research firm Gartner estimates that total global AI-optimized data center capacity is currently around 44 gigawatts. That figure represents only a small fraction of Terafab's planned output. Global capacity has grown significantly since 2022, but the jump to terawatt scale remains a monumental challenge for the industry.
The announcement highlights the intense competition for semiconductor equipment. Suppliers are under pressure to deliver as capacity remains tight across the supply chain. Musk's roadmap suggests a reliance on next-generation hardware, including a large Nvidia Vera Rubin cluster planned for 2027. The project aims to mitigate future shortages by bringing production in-house for the broader AI ecosystem.
