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He noted that Tesla was struggling to ramp up production due to the newness of parts and the lack of an existing supply chain. That parts problem feeds a still larger ambition: TeraFab, Tesla's plan to build its own semiconductor plant combining logic, memory and advanced packaging under one roof — a project Nvidia's chief executive has said will be difficult to pull off.
Buoyed by its accelerating growth, Intel raised its 2026 capital expenditure budget from $18 billion to $20 billion and forecast elevated spending through 2027 to outfit its advanced manufacturing facilities. Tan has since secured multibillion-dollar investments from Nvidia and SoftBank, and announced plans to work with Elon Musk on his “Terafab” manufacturing project, all while pursuing company-wide cuts.
Terafab was announced by Musk back in March and was essentially a massive, vertically integrated semiconductor manufacturing project that would provide all the chips the three companies needed for their AI initiatives without needing third-party ...
Optimus, chips and the widening bet The spending extends well beyond robotaxis. Tesla is pursuing Terafab, a chip manufacturing project shared with SpaceX and xAI, which Musk described as a dependency for Optimus.
📌 UPDATE — July 26, 2026 Construction of the Terafab joint venture chip fabrication facility at Giga Texas is now officially underway. Four new building permits have been issued specifically for the Advanced Technology Chip Fabrication ...
The AI1 reference design, with a peak power of 150kW, can accommodate 72 of the most advanced AI chips made by Nvidia (equivalent to a single server rack in a terrestrial data centre). But other chips could also be used, and SpaceX plans to start manufacturing its own at a giant factory called Terafab.
However, there was no true indication of where Terafab would end up, but most believe it will likely be somewhere in Texas. Business Insider has reported that SpaceX plans to build out Terafab in Grimes County, Texas, but this is unconfirmed.
Ultimately, these moves help strengthen ... against Samsung. Jukan has discussed a joint venture, and going by the original Korean source, this fab would shift entirely to memory production. Setting aside the severe hit to Intel’s own capacity, unless they are banking on TeraFab 14A lines ...
(NYSE:TSM) and Samsung, as chip and memory supply becomes a growing bottleneck for Tesla’s AI ambitions. The remarks came as Musk outlined Tesla’s Terafab project, a proposed facility to consolidate chip logic, memory, and packaging development for Optimus.
Musk unveiled Terafab in March as a fully integrated chip project that would bring design, fabrication, and advanced packaging under one roof, targeting more than 1 terawatt of AI computing capacity a year.
Elon Musk’s massive Terafab project, which will be the first true conglomeration between each of his major entities, is set to get its final location soon, the CEO said on Tesla’s recent earnings call.
However, there was no true indication of where Terafab would end up, but most believe it will likely be somewhere in Texas. Business Insider has reported that SpaceX plans to build out Terafab in Grimes County, Texas, but this is unconfirmed.
— Winston Cho, HollywoodReporter, ... 2026 SpaceX and Telsa already formed a joint venture in March, a factory in Austin called Terafab to fabricate microchips....
Demand for advanced manufacturing remains intense, while alternatives still trail in scale, yield or capacity. Still, customers are looking for options. Google has reportedly explored Samsung production as the TSMC capacity crunch deepens, while SpaceX’s proposed Terafab shows how AI companies want more control over chip supply.
He said Terafab is necessary to avoid AI chip constraints that would limit Optimus production. Tesla has placed equipment orders for a development fab in Austin intended to combine lithography mask production, logic, memory, packaging and chip testing under one roof.
Musk also disclosed Tesla’s plan for a chip development facility called Terafab. He said the company wants to dramatically shorten development time for custom AI chips by handling logic design, memory, lithography mask development, packaging and testing in one place.
Elon Musk addresses shareholder questions about a potential merger between Tesla (TSLA) and SpaceX (SPCX), noting their growing operational overlap before deferring to Tesla's General Counsel, who highlights their strategic partnership and joint work on initiatives like Terafab and Digital Optimus.
Capital expenditure (CAPEX) was projected at more than $25 billion this year and is expected to increase over the next two to three years due to robotaxi, Optimus, semiconductors (Terafab), solar manufacturing, and expansion of AI computing ...
There's "more and more overlap" between the two companies, Musk said on the call. He pointed in particular to Terafab, SpaceX's planned chipmaking venture, which he said is "really going to be a gigantic project."