Tesla and SpaceX became partners: $20 billion chip facility

Elon Musk, Terafab project announced that it will establish a giant chip production facility for Tesla, SpaceX and xAI. The project, which will start with an investment of at least 20 billion dollars, aims to produce 1 terawatt of processing power per year. This move focuses on directly meeting the increasing need for artificial intelligence and autonomous systems.

Musk clearly stated in his live broadcast on the X platform that the current chip supply chain is inadequate. Samsung acknowledged the contribution of manufacturers such as TSMC and Micron but said this capacity only covers about 2 percent of future needs. At this point, Musk wants to take control directly rather than outsourcing production.

The main goal of the project is to radically increase computing power. Production at 1 terawatt means a scale approaching today’s data center capacity. Especially artificial intelligence chipsautonomous driving systems and robotic applications are at the center of this need.

Musk clearly stated the necessity of the project by saying, “We either build Terafab or we do not have enough chips.” Tesla’s Full Self-Driving technology and Optimus robot are among the main factors that directly increase this need.

Elon Musk plans to produce two different chips with Terafab

Terafab will not focus on just one area of ​​use. Musk stated that they will develop two different chip categories. The first batch will be optimized for use on Earth and will power autonomous driving and robotic systems. The second group will be produced for space missions; It will offer higher performance and radiation resistance.

This second category is directly linked to SpaceX’s long-term plans. Musk had previously made an official application for the idea of ​​an “orbital data center” to be established with one million satellites. Such a system would mean a large-scale computing infrastructure operating continuously in space.

The Terafab project will start in Austin, Texas, USA. The first facility, called “Advanced Technology Fab”, will be established close to Tesla’s headquarters and will constitute the first phase of production.

On the other hand, Musk’s past projects are remembered at this point. There was a difference between targets and realizations on topics such as Hyperloop, fully autonomous driving and Cybertruck pricing.

Terafab stands out as an important initiative not only for Musk’s companies but also in terms of global semiconductor supply. The chip crisis in recent years has directly affected the automotive and technology sectors. With this project, Musk aims to reduce supply dependency and concentrate production within the company.

This approach points to a model increasingly adopted by major technology companies. Companies such as Apple and Google are also moving towards developing critical components in-house. It will become clear in the coming years whether Terafab will be able to reach the planned capacity.