Tesla confirms equipment orders for TeraFab, targets in-house chip production to break supply bottleneck Electric Vehicles ... With SpaceX's first public earnings report approaching, investors are looking for fresh insight into the company's operations and future satellite deployment plans, viewing the results as an important barometer for the global satellite communications market.
Tesla already supplies batteries and manufacturing technologies for some SpaceX projects, while the companies are jointly developing Terafab, a semiconductor manufacturing facility designed to produce AI chips.
Tesla's AI5 chip "will initially go into Optimus," ahead of the cars. And Musk said Tesla expects "to announce a location soon" for its Terafab chip plant, "without which we will be constrained in our ability to scale Optimus production, because we simply won't have enough AI chips."
The site of the demolished Gibbons Creek Power Plant in Grimes County, about 15 miles east of College Station, is seen on June 7. The site and surrounding area are the approximate location of the proposed SpaceX Terafab semiconductor chip manufacturing plant. (Jay Janner/Austin American-Statesman)
Musk did, however, mention possible ... intelligence efforts. SpaceX and Telsa already formed a joint venture in March, a factory in Austin called Terafab to fabricate microchips....
Musk did, however, mention possible ... on artificial intelligence efforts. SpaceX and Telsa already formed a joint venture in March, a factory in Austin called Terafab to fabricate microchips....
Wed, July 22, 2026 at 6:32 p.m. EDT · Elon Musk explains that Tesla's (TSLA) new Terafab development facility in Austin will bring lithography, logic, memory, packaging, and testing under one roof to accelerate AI chip development necessary ...
The closer you look, the more amazed you are. Optimus will have that capability. It will have human and then superhuman dexterity. It's really going to be quite something. Let's see, Terafab. The Terafab, we expect to announce a location soon, and provide more details about our plans in that regard.
The closer you look, the more amazed you are. Optimus will have that capability. It will have human and then superhuman dexterity. It's really going to be quite something. Let's see, Terafab. The Terafab, we expect to announce a location soon, and provide more details about our plans in that regard.
SpaceX, xAI, and Tesla are collaborating on the Terafab facility in Texas to mass-produce AI chips, while SpaceX is also constructing an 11-million-square-foot Gigafactory in Texas for end-to-end production of AI satellites.
That same month, the chipmaker also revealed it had joined Elon Musk's 'TeraFab' project, with the SpaceXAI set to use Intel’s 14A chip manufacturing process at the fab.
According to background research, the current construction activity is taking place on the North Campus of Giga Texas in Austin, which is designated for initial prototype fab operations. The full-scale Terafab manufacturing complex is separately planned for Grimes County, Texas, near the Gibbons Creek Reservoir.
That kind of vertical integration matters for understanding the competitive dynamics here. Terafab means the combined entity is working on its own silicon, not solely dependent on Nvidia or other third-party chip suppliers.
“Terafab” sits at 84%, more than double “Intel” at 39%. Musk has said the Austin chip complex will run on Intel’s (NASDAQ:INTC) 14A process, reportedly making Tesla the first major customer named for the technology, yet traders expect ...
Business Insider has reported that SpaceX plans to build out Terafab in Grimes County, Texas, but this is unconfirmed. ... Musk confirmed recently that it would not be on Giga Texas property, as it is simply too large.
Terafab aims to produce one terawatt of AI processors annually, a production rate that is fifty times the combined output of all existing semiconductor fabrication facilities worldwide.
SpaceX's February 2026 acquisition of xAI is instrumental in its AI compute constellation plans because it effectively gives SpaceX a major internal customer and a sandbox for testing satellite performance. What's more, SpaceX, xAI, and Tesla are collaborating on the Terafab facility in Texas to mass-produce AI chips, enabling these companies to secure their own compute rather than relying on other suppliers.
Intel has also been involved in assisting Elon Musk’s vision for a Terafab chip factory. Market rumors have suggested that cloud giants including Google and Meta Platforms Inc. (META) are in talks with Intel to adopt its EMIB advanced packaging technology as an alternative to TSMC’s capacity-constrained CoWoS.