Terafab targets 2028 chip production as suppliers rush deliveries

Elon Musk revealed on October 20 that critical semiconductor partners are moving equipment to Terafab faster than initially planned. Speaking during a live broadcast of SpaceX’s third-quarter earnings call on X, the CEO confirmed that ASML and other key suppliers have expedited deliveries. This acceleration is designed to support an aggressive schedule for the joint venture between Tesla and SpaceX.

The primary target for the project is to begin volume chip production at the Gibbons Creek facility in Texas by the third or fourth quarter of 2028. Musk described this timeline as highly aspirational, noting that it carries significant uncertainty. He expressed appreciation for the suppliers’ efforts to accelerate equipment deliveries to make this outcome possible.

In addition to the long-term fab goals, Musk outlined near-term computing expansions for his AI ventures. He expects 2.5 to 3 gigawatts of computing capacity to be active by the end of this year. For 2027, he expressed high confidence in adding another 10 gigawatts, aiming for a total of 13 gigawatts of AI compute capacity. To achieve this, SpaceX and xAI are procuring next-generation Nvidia hardware, with plans to bring a 440,000-GPU Vera Rubin training cluster online by the end of the second quarter of 2027.

The Terafab project is a vertically integrated, multi-billion-dollar factory in Texas. It aims to produce one terawatt of AI computing power annually, a capacity that would rival the GDP of Switzerland. The facility will handle logic, memory, and advanced packaging in one location. Intel joined the venture in April 2026 to provide its 14A manufacturing node technology, which will be used with extreme ultraviolet lithography systems.

ASML, the sole commercial provider of the $400 million EUV machines required for leading-edge production, is a pivotal partner. While the first EUV tool was previously expected in mid-2027, it remains unclear if that date has been moved up. Other suppliers include Applied Materials, Lam Research, KLA Corporation, and Tokyo Electron. Tesla and SpaceX are also negotiating with approximately 10 South Korean firms for specialized equipment.

The facility is intended to reduce reliance on external foundries like TSMC for cutting-edge AI processors. It will supply chips for xAI clusters, self-driving vehicles, Optimus robots, and SpaceX’s orbital data center. Despite the scale, some experts question the feasibility of the one-terawatt goal, as global AI-optimized data center capacity is currently estimated at only 44 gigawatts.