Elon Musk says Tesla and SpaceX will build Terafab chip plant in Austin

In short: Elon Musk says Tesla and SpaceX will jointly build a $20 billion chip factory in Austin, Texas, with production planned for 2027.

What happened

Elon Musk announced a project called Terafab, a large semiconductor factory, also called a chip fabrication facility. It is planned for Austin, Texas, on Tesla’s North Campus at Giga Texas. Musk said the plant would be run together by Tesla and SpaceX and would cost about $20 billion.

Terafab is meant to make advanced semiconductors, which are the tiny parts that act like the “brains” inside electronics (similar to how an engine powers a car). Musk said the factory would target 100,000 “wafer starts” per month. A wafer is a round slice of material that chips are cut from, like cookies cut from a sheet of dough.

Musk said the plant could eventually produce 100 to 200 billion AI and memory chips per year, using a “2-nanometre process.” That term describes how small the chip features are, and smaller usually means more computing power in the same space. He also said current suppliers like Taiwan Semiconductor Manufacturing Co and Micron cannot meet all of Tesla’s future needs.

The plan includes two chip types, one for vehicles, robotaxis, and Tesla’s Optimus humanoid robot, and another high-power chip for space uses at SpaceX and xAI. Musk also talked about a long-term goal of a “terawatt” of computing power per year, but he did not give a timeline for reaching that.

Why it matters

If this factory happens on schedule, it could reduce how much Musk’s companies rely on outside chip makers at a time when many industries want more chips for AI. It could also strengthen Texas’s role as a chip manufacturing center, but large chip plants often take many years and extremely complex equipment to get running.

Source: The Verge AI