Elon Musk announces Terafab project he claims will be the ‘largest chip manufacturing facility ever’

Elon Musk has announced the Terafab project, a joint venture between Tesla, SpaceX and xAI, to build the “largest chip manufacturing facility ever.” In his usual grandiose fashion, Musk claims Terafab is the next step towards harnessing the power of the sun and creating a “galactic civilization.”

Musk, CEO of all three companies, announced plans for the Terafab in a livestream on X. As the name implies, the project’s ultimate goal is to produce a terawatt of computing power each year so that it can match the companies’ growing demand for chips. Musk explained during the livestream that he’s grateful to existing supply chain partners like Samsung, TSMC and Micron, but the current capacity of chip manufacturers only adds up to about two percent to what Tesla and SpaceX needs in terms of future computing power needs.

“We either build the Terafab or we don’t have the chips,” Musk said during the event. “And we need the chips so we’re going to build the Terafab.”

The Terafab project, estimated to cost at least $20 billion, will start with the Advanced Technology Fab in Austin, Texas, where Tesla is already headquartered. Musk said that the two types of chips will be produced in the Terafab: one for terrestrial purposes, like to power Full Self-Driving or Optimus robots, and another more high-powered, durable chip to be used in space. If you’re wondering what Musk has in store for space, the SpaceX CEO filed an application with the Federal Communications Commission to launch a million satellites to create an “orbital data center” earlier this year. As promising as this sounds, it’s worth noting that Musk has previously overpromised and underdelivered on other projects, like the Hyperloop, a $40,000 Cybertruck and fully autonomous driving.