Musk promises faster chip equipment deliveries for new Texas factory
The billionaire says major suppliers are moving faster to meet a bold 2028 production target for a massive new manufacturing site.
By Jessica Abebe ·
Consumers and tech investors may see new timelines for advanced hardware as Elon Musk confirmed that key semiconductor equipment makers are speeding up deliveries for a new Texas facility. The move is designed to support an aggressive schedule for a joint venture between Tesla and SpaceX. Musk made the announcement during a live broadcast of SpaceX's third quarter 2026 earnings call on X on October 20.
The project, named Terafab, aims to begin mass production of chips by the third or fourth quarter of 2028. Musk described this window as highly aspirational, noting that the dates carry significant uncertainty. He stated that the company is grateful to suppliers for accelerating equipment shipments to help achieve this outcome. The first experimental test chip is expected to be produced at a research facility in Austin, Texas, around the second quarter of 2027.
Musk also shared near-term goals for his artificial intelligence companies. He expects them to have between 2.5 and 3 gigawatts of computing capacity active by the end of 2026. He expressed strong confidence in adding another 10 gigawatts in 2027, suggesting the total could reach 13 gigawatts by the end of that year. To meet this demand, SpaceX and xAI are purchasing large quantities of upcoming next generation Nvidia hardware, including a cluster of 440,000 Vera Rubin GPUs scheduled to come online by the second quarter of 2027.
The Terafab site is a vertically integrated factory planned for Gibbons Creek, Texas. It will manufacture logic, memory, and advanced packaging components in one location. The facility aims to generate one terawatt of AI computing power per year. Musk noted that if fully operational, the commercial value of the chips produced there could rival the GDP of a top 20 country. For reference, Switzerland, currently ranked 20th, has a GDP of approximately 1.14 trillion dollars.
Intel joined the venture in April 2026 to help develop and refine the silicon fabrication technology. The project will use Intel's 14A manufacturing process node. ASML, the only commercial supplier of extreme ultraviolet lithography systems needed for leading edge chip production, is a critical partner. Unofficial sources suggest the first EUV tool is slated for delivery in mid 2027, though it is not yet clear if this matches the expedited timeline Musk described.
Other suppliers include American firms Applied Materials, Lam Research, and KLA Corporation, as well as Japan's Tokyo Electron. These companies will provide front end processing, metrology, and process control machinery. Tesla and SpaceX are also in talks with roughly 10 South Korean equipment manufacturers. These include Hanmi Semiconductor and HPSP, which provide advanced packaging and high pressure hydrogen annealing equipment, as well as firms supplying specialized piping and valves.
The facility is intended to reduce reliance on external foundries like TSMC for cutting edge AI processors. Chips from Terafab will supply Musk's xAI clusters, self driving vehicles, Optimus robots, and SpaceX's orbital data center. However, experts remain skeptical of the one terawatt target. Research firm Gartner estimates total global AI optimized data center capacity at about 44 gigawatts as of late 2026. This figure represents only 4.4 percent of Terafab's planned annual output.
