Musk Says Suppliers to Expedite Chip Machines for Terafab as Factory Targets 2028
SpaceX and Tesla plan to begin mass production at their Texas chip fabrication plant by late 2028, relying on accelerated deliveries from equipment vendors to meet the schedule.
By Jayden Sweiler ·
Elon Musk announced on October 20 that critical equipment suppliers for the Terafab semiconductor project are accelerating their shipments to support a tight production schedule. Speaking during a SpaceX quarterly earnings broadcast on X, the CEO stated that volume chip production at the Gibbons Creek, Texas facility is targeted for the third or fourth quarter of 2028. He cautioned that this timeline remains highly aspirational and carries "big error bars." "These are very aggressive dates, and we're very appreciative of ASML and all of our other suppliers in accelerating equipment deliveries in order to achieve this outcome," Musk said.
The project represents a joint manufacturing venture between Tesla and SpaceX. While the main facility aims for volume production in late 2028, SpaceX plans to produce its first experimental test chip at a research fabrication facility in Austin, Texas, around the second quarter of 2027. The facility is designed as a vertically integrated operation capable of producing 1 terawatt of AI computing power annually by fabricating logic, memory, and advanced packaging architectures in one location. Once fully scaled, Musk claimed the commercial value of the output would rank within the top 20 global country GDPs from a single building.
The manufacturing process will rely on extreme ultraviolet lithography systems utilizing Intel's 14A node technology, with Intel having joined the venture in April 2026 to assist with technology development. ASML, which is the sole supplier of these high-cost lithography tools, is considered the most critical partner for the project. Unofficial sources previously indicated the first EUV tool was scheduled for delivery in mid-2027, though it is unclear if this corresponds to the expedited schedule Musk referenced. Other equipment suppliers for the venture include Applied Materials, Lam Research, KLA, Tokyo Electron, and several South Korean manufacturers.
Beyond the manufacturing plant, Musk discussed plans for artificial intelligence infrastructure. He expects to have 2.5 to 3 gigawatts of computing capacity active by the end of 2026. He also expressed confidence in adding an incremental 10 gigawatts in 2027, aiming for a total of 13 gigawatts of AI compute by the end of next year. To reach this target, SpaceX and xAI are acquiring next-generation Nvidia hardware, with plans to launch a 440,000-GPU Nvidia "Vera Rubin" training cluster by the end of the second quarter of 2027.
For comparison, other major projects are moving at different scales. The restructured 10 gigawatt Project Stargate is expected to reach full capacity in the 2030s, as is Meta's 5 gigawatt Hyperion project. However, experts have questioned the feasibility of Terafab's 1 terawatt ambition. Research firm Gartner estimates total global AI-optimized data center capacity at roughly 44 gigawatts as of late 2026, which is roughly 4.4 percent of Terafab's planned annual output.
The facility aims to reduce reliance on external foundries to prevent shortfalls in cutting-edge AI processors. The chips produced will supply Musk's xAI clusters, self-driving vehicles, Optimus humanoid robots, SpaceX's orbital AI data center, and the broader AI industry.
Source: Tom's Hardware
