Elon Musk announces Terafab project he claims will be the 'largest chip manufacturing facility ever'

image via Engadget

March 22, 2026, 5:17 PM

• •Terafab is a joint venture between Tesla, SpaceX, and xAI.
• •The project aims to produce a terawatt of computing power annually.
• •Chips will be produced for both terrestrial and space applications.
• •The project's estimated cost is at least $20 billion.

Elon Musk revealed the Terafab project, a collaboration between Tesla, SpaceX, and xAI, aiming to construct the "largest chip manufacturing facility ever." The project's goal is to produce a terawatt of computing power annually to meet the growing chip demands of the involved companies. Musk anticipates the Terafab will produce chips for both terrestrial applications, such as powering Tesla's self-driving systems and Optimus robots, and for space, including an "orbital data center." The project is estimated to cost at least $20 billion, with the initial facility in Austin, Texas.

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