Tesla and SpaceX — two Elon Musk companies in the process of merging — are targeting the third quarter of 2028 to begin volume semiconductor production at Terafab, their planned massive chip manufacturing complex in Texas.
Musk made the comments on the quarterly SpaceX earnings call. He said the project could begin producing chips at scale in the second half of 2028, describing the timetable as exceptionally ambitious.
However, Musk has cautioned that the aggressive schedule remains uncertain, reflecting the technical and logistical challenges of building an advanced semiconductor fabrication facility.
It’s not surprising he tamped down expectations. He acknowledged that the 2028 target carries considerable uncertainty, and his companies have previously announced ambitious schedules that were subsequently delayed.
When completed, Terafab will cover more than 100 million square feet. By contrast, the Pentagon is the current largest building in the U.S. at 6.6 million square feet. Terafab will be 15 times that size. Getting even part of it built in the next two years will require some significant effort.
Terafab is designed to integrate advanced logic-chip manufacturing, memory production, packaging and testing within a single complex. Musk has outlined a long-term goal of producing computing capacity equivalent to one terawatt annually, although the project’s manufacturing specifications and production plans remain limited.
Not surprisingly, SpaceX and Tesla will be the biggest customers of the fab, at least initially. The companies plan to use the facility to address anticipated semiconductor supply constraints as they expand AI infrastructure, autonomous driving technology and humanoid robotics. That includes Tesla’s Optimus robots and autonomous vehicle.
An initial milestone is the development of a functional test chip at Terafab’s research facility in Austin, Texas. Musk said the company hopes to demonstrate a working chip incorporating static random-access memory (SRAM) circuits around May or June 2027.
While this would make for a good first test, demonstrating a working chip is only an early step toward commercial production. Terafab will need to establish repeatable manufacturing processes, achieve acceptable yields and scale production to meet its intended capacity.
One of the project’s principal obstacles is securing the specialized equipment required to manufacture advanced chips. The facility will need sophisticated lithography systems and other tools supplied by only one or two companies, including ASML and KLA.
Musk said suppliers were accelerating equipment deliveries to help meet the proposed schedule, but did not directly confirm whether Terafab had ordered extreme ultraviolet (EUV) lithography systems from ASML. EUV technology is essential to manufacturing many of the most advanced logic chips used in AI processors.
The project is also expected to require substantial capital investment. Musk has indicated that Terafab will need tens of billions of dollars in investment during its initial development, with potential long-term spending exceeding $100 billion. But it does have support from Intel, and there’s potential for working with TSMC as well.
