Tesla and SpaceX CEO Elon Musk said on Sunday that the companies will build two advanced chip factories in Austin Texas. One of these will be used to power cars and humanoid robots, and the other for artificial intelligence centers in space.
This comes a day after Musk announced plans to build “Terafab,” an advanced AI chip complex in Austin.
“Terafab will technically be two fabs, each making only one chip design,” Musk wrote in a post on X.
Musk said that he is pursuing this project because semiconductor manufacturers aren’t making chips quickly enough for his companies’ artificial intelligence and robotics needs: “We either build the Terafab or we don’t have the chips, and we need the chips, so we build the Terafab.”
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The goal is to manufacture chips that can support 100 to 200 gigawatts of computing power per year on Earth, along with a terawatt in space, Musk said. He did not offer a timeline for these plans. As Bloomberg noted, Musk does not have a background in semiconductor manufacturing, and he has a history of overpromising on goals and timelines.
Musk has previously said Tesla would need to build its own AI chip plant, but the involvement of SpaceX had not been disclosed. SpaceX, which is preparing for a public listing that could value the company at around $1.75 trillion, recently merged with Musk’s social media and artificial intelligence firm xAI.
“We either build the Terafab or we don’t have the chips,” Musk said during a presentation in an Austin facility on Saturday, adding that current global chip production would meet only a small fraction of his companies’ future needs.
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Musk also said that he was grateful to existing chip suppliers, naming Samsung, TSMC, and Micron, however said demand from his companies would eventually exceed total global chip output.
Musk mentioned that Terafab will eventually produce one terawatt of computing capacity a year, compared with about half a terawatt currently generated across the United States. He also said that one chip would be used in Tesla vehicles and Optimus humanoid robots, while the second would be designed for AI satellites in space.
“We need a high‑powered chip designed for space that takes into account the harsher environment,” Musk said, adding it would need to operate at higher temperatures.
Musk also recently said that Tesla may be able to “tape out” its next-generation AI6 chips in December. “Taping out” refers to a stage when a chip design is finalized and sent to a factory for production. He also said that SpaceX AI and Tesla would continue to order Nvidia chips at scale.