Musk Claims Suppliers Accelerate Shipments for Terafab Amid Tight Timelines
Leadership at Tesla and SpaceX asserts that key equipment partners are moving faster to support a massive chip factory in Texas, despite acknowledged uncertainties.
By Karan Meyer ·
The tension surrounding the Terafab project centers on a gap between aggressive corporate timelines and the physical realities of semiconductor manufacturing. On October 20, Elon Musk announced that critical equipment suppliers, including ASML, are expediting deliveries to support the joint venture between Tesla and SpaceX. While the goal is to begin volume production by late 2028, Musk admitted the schedule is highly aspirational and subject to significant variability.
During a live broadcast of the SpaceX Q3 2026 earnings call, Musk emphasized the company's appreciation for the accelerated equipment deliveries. The primary facility for Terafab is located in Gibbons Creek, Texas. The leadership team is targeting the third or fourth quarter of 2028 for full volume chip production. Musk described these dates as very aggressive, noting that the company maintains large error bars in its planning.
The immediate next step involves experimental fabrication at a separate site. SpaceX intends to manufacture its first test chip at its research facility in Austin, Texas, around the second quarter of 2027. This preliminary phase is a prerequisite for the larger operations planned for Gibbons Creek. The successful completion of this test run is a critical milestone before the main production line becomes active.
The project relies heavily on advanced lithography technology. Terafab will utilize extreme ultraviolet systems to implement Intel's 14A manufacturing node. Intel joined the venture in April 2026 to help refactor silicon fabrication technology. ASML, the sole commercial supplier of these high-value EUV tools, is a central partner in the supply chain. Reports suggest the first EUV tool was scheduled for delivery in mid-2027, though it is unclear if this reflects the expedited timeline mentioned by Musk.
Beyond lithography, the factory requires a wide array of specialized machinery. American firms such as Applied Materials, Lam Research, and KLA Corporation will provide front-end processing and process control equipment. Tokyo Electron of Japan is also a key supplier. Tesla and SpaceX are currently in discussions with approximately ten South Korean equipment makers, including Hanmi Semiconductor and HPSP, to secure advanced packaging and other specialized components.
The commercial scale of Terafab is projected to be enormous. Musk stated that once fully operational, the facility's output could place its commercial value within the top 20 global country GDPs. For comparison, Switzerland, the 20th largest economy, has a GDP of roughly $1.14 trillion. The factory aims to produce one terawatt of AI computing power annually, handling logic, memory, and packaging in a single vertically integrated location.
The project aims to reduce reliance on external foundries like TSMC, which face their own capacity constraints. The chips produced at Terafab are intended for xAI clusters, self-driving vehicles, Optimus robots, and SpaceX orbital data centers. However, experts remain skeptical of the one-terawatt target. Gartner estimates the total global AI-optimized data center capacity is only about 44 gigawatts as of late 2026, which is a small fraction of Terafab's planned output. Despite this, Musk remains confident in the trajectory, citing aggressive procurement of next-generation Nvidia hardware to support the broader AI infrastructure goals.
Source: Tom's Hardware · original report published
