Musk reveals Terafab's chip production plan for 2028

Elon Musk has announced that ASML and other key semiconductor equipment suppliers have sped up their deliveries for the Terafab project. During a live SpaceX earnings call on X, he revealed that the joint venture between Tesla and SpaceX aims to start volume chip production at its Texas facility by Q3 or Q4 of 2028. This timeline is described as highly aspirational and carries a wide range of potential outcomes.

Musk said the company will start producing its first test chip at its research facility in Austin, Texas, in the second quarter of 2027. He also shared his near-term goals for the AI companies he leads, expecting them to have 2.5 to 3 gigawatts of computing capacity by the end of 2026. He is confident about adding another 10 gigawatts in 2027, aiming for a total of 13 gigawatts by the end of that year.

Meanwhile, the next-largest semiconductor project, Project Stargate, is expected to reach full capacity in the 2030s. Meta's Hyperion project has a similar timeline. To hit the 13 gigawatts milestone, Musk plans to deploy a massive 440,000-GPU Nvidia training cluster by the end of Q2 2027.

Musk also boasted that once fully operational, Terafab will have commercial value comparable to the top 20 global country GDPs from a single physical building. For context, the 20th country on the list is Switzerland, with a GDP of around $1.14 trillion. This facility, located in Texas, plans to manufacture 1 terawatt of AI computing power per year, and will fabricate logic, memory, and advanced packaging internal architectures in one place.

To support these ambitious plans, Terafab will utilize traditional extreme ultraviolet (EUV) lithography systems with Intel's 14A manufacturing node technology. Intel joined the venture in April 2026 to help co-develop and refactor silicon fabrication technology, providing access to its state-of-the-art 14A manufacturing process.

ASML, the sole supplier of EUV lithography systems, is a critical partner in this venture. Terafab's first EUV tool was reportedly slated for delivery in mid-2027, according to unofficial sources. These companies will also provide front-end processing, metrology, and process control machinery. Tesla and SpaceX are also in talks with about 10 South Korean equipment makers, including Hanmi Semiconductor, known for advanced packaging equipment, and HPSP, a high-pressure hydrogen annealing equipment manufacturer, as well as firms providing specialized piping components and process valves.