A semiconductor fab announced by Elon Musk in March 2026 that is designed to supply his companies with custom AI chips. Tesla self-driving cars, Optimus robots and SpaceX satellites are expected to use Terafab-designed processors and memory.
Terafab is located near Tesla's "Gigafactory" global headquarters and manufacturing hub in Austin, Texas. In addition, a semiconductor supply chain and technical expertise already exist in the area because Samsung and Texas Instruments are nearby.
Musk plans to eventually make more than a million wafers monthly and do everything inhouse, including packaging and photomask creation. However, due to the scope of the project and limited supply of state-of-the-art ASML photolithography machines, Terafab has partnered with Intel and is expected to use chiplets rather than one monolithic chip. For example, memory and controller chiplets might be built inhouse while GPU chiplets are farmed out, at least for the time being. Terafab would then package the chiplets for deployment. See
Gigafactory Texas,
EUV machine and
MCM.
The AI5 Chip
Terafab's first chip, the two-nanometer AI5, is expected to be up to 50 times faster than the Tesla AI4 that Samsung began shipping in 2023.
Needless to Say
Musk's goals have often been ridiculed while he manages to do the impossible such as making the first rockets that are reusable. Stay tuned!