GoKawiilThere is a chip shortage and Elon Musk isn’t waiting for suppliers to fix it. The SpaceX and Tesla CEO announced plans Sunday to build “Terafab,” two advanced chip factories in Austin, Texas. Musk says current global chip production meets only 3% of his companies’ future needs, according to Reuters.
Given that several companies make advanced chips, but no companies have ever made fully reusable rockets or achieved SpaceX scale, I think Starship is harder, but we shall see.
Terafab will technically be two fabs, each making only one chip design. This greatly simplifies… — Elon Musk (@elonmusk) March 22, 2026
One factory will produce chips for Tesla vehicles and Optimus humanoid robots. The other will make specialized chips designed for AI satellites in space. Together, the facilities will eventually produce one terawatt of computing capacity per year — double what the entire United States currently generates.
Musk said he’s grateful to existing chip suppliers like Samsung, TSMC and Micron, but insists demand from his companies will eventually exceed total global chip output. “We either build the Terafab or we don’t have the chips,” he said during a Saturday presentation in Austin. He didn’t provide a timeline.