Musk pledges fast chip shipments to Texas
Elon Musk claims suppliers are speeding up deliveries for his new Texas chip factory to meet a tight 2028 deadline.
By Tariq Mahmoud ·
The semiconductor industry is facing a new push from one of its most ambitious players. Elon Musk announced on Tuesday that key equipment makers are moving faster to support his new chip plant in Texas.
During a live broadcast of SpaceX's third-quarter earnings call on October 20, Musk detailed the progress of Terafab. This is a joint venture between Tesla and SpaceX aimed at producing massive amounts of computing power. He stated that suppliers are expediting shipments to help meet aggressive production goals.
The primary target is the main facility in Gibbons Creek, Texas. Musk said the company aims to start volume chip production there by the third or fourth quarter of 2028. He described this timeline as highly aspirational, noting it has big error bars. He expressed gratitude to ASML and other partners for accelerating equipment deliveries to make this happen.
Musk also outlined a smaller initial step. SpaceX plans to produce its first experimental test chip at a research site in Austin, Texas, around the second quarter of 2027. This serves as a precursor to the full-scale manufacturing at Gibbons Creek.
The project involves major partners across the supply chain. Intel joined the venture in April 2026 to help refactor silicon fabrication technology. They will provide access to their 14A manufacturing process. ASML, the only commercial supplier of extreme ultraviolet lithography systems, is a critical partner. Their first EUV tool for the project was reportedly slated for mid-2027, though it is unclear if that date has moved earlier due to the expediting.
Other key suppliers include Applied Materials, Lam Research, KLA Corporation, and Tokyo Electron. These firms provide front-end processing and control machinery. Tesla and SpaceX are also in talks with about ten South Korean equipment makers. This group includes Hanmi Semiconductor and HPSP, which specialize in packaging and annealing equipment.
Once fully operational, Terafab aims to manufacture one terawatt of AI computing power per year. Musk claimed the commercial value of this output could rival the GDP of a top-20 global country. For context, Switzerland, currently ranked 20th, has a GDP of about 1.14 trillion dollars. The facility will handle logic, memory, and advanced packaging in one location.
The chips produced will serve multiple purposes. They are intended for Musk's xAI clusters, self-driving vehicles, Optimus robots, and SpaceX's orbital data centers. This vertical integration aims to reduce reliance on external foundries like TSMC. However, experts question the 1 terawatt target. Research firm Gartner estimates global AI data center capacity at roughly 44 gigawatts as of late 2026. That is only 4.4% of Terafab's planned output.
Source: Tom's Hardware
