Musk Announces Two Chip Plants in Austin for Tesla and SpaceX

On March 22, Tesla CEO Elon Musk revealed plans to build a high-end artificial intelligence chip campus named "Terafab" in Austin, Texas. The facility will house two advanced wafer fabrication plants: one dedicated to producing custom chips for Tesla vehicles and humanoid robots, and the other designed to support SpaceX’s space-based AI data centers, requiring high-performance capabilities resilient to extreme temperatures and harsh environments. Musk emphasized that current global chip manufacturing capacity falls far short of meeting the future demands of his companies, stating that “eventual demand will exceed total global production.” While he did not provide a specific timeline for the project, he noted that once completed, Terafab would deliver an annual computing capacity of 1 terawatt—surpassing the current total U.S. computing capacity of approximately 0.5 terawatts. Notably, SpaceX had not previously been mentioned as part of this initiative. Recently, however, SpaceX merged with Musk’s xAI and is preparing for an initial public offering, with a reported valuation of around $1.75 trillion.