Tesla’s Secret Weapon: Inside the $119 Billion TERAFAB Project

Elon Musk's $119B Terafab could become one of the most ambitious semiconductor projects ever proposed. But why does Musk want his own massive AI chip factory?

Terafab is designed to bring advanced semiconductor manufacturing, packaging, testing, and computing infrastructure closer together. The project involves Tesla, SpaceX, and xAI, with plans centered around producing the computing hardware needed for autonomous vehicles, Optimus robots, AI systems, satellites, and potentially computing in space.

The project could eventually reach $119 billion across multiple phases, with the facility planned at an enormous scale in Texas. Tesla also plans to use Intel's 14A semiconductor process, giving the project a connection to one of the biggest names in chip manufacturing.

But Terafab is about more than building chips. Musk's strategy is to gain greater control over the hardware supply chain while creating a faster connection between chip design, manufacturing, testing, and the machines tha