Elon Musk Announces Expedited Shipments for Terafab Semiconductor Facility

Elon Musk revealed that ASML and other key semiconductor equipment suppliers have expedited shipments for Terafab, the ambitious semiconductor manufacturing facility. He made this announcement during a live broadcast of SpaceX's Q3 2026 earnings call on X on October 20. Musk also stated that the facility is on track for volume chip production by the third or fourth quarter of 2028, calling the timeline highly aspirational and noting that it carries significant error margins.

Musk explained that ASML and other suppliers are accelerating equipment deliveries to help achieve the ambitious goals for Terafab. SpaceX plans to manufacture its first experimental test chip at its research fabrication facility in Austin, Texas, in early 2027. During the broadcast, Musk also shared near-term ambitions for his AI companies, expecting them to reach 2.5 to 3 gigawatts of computing capacity by the end of 2026.

He is highly confident about bringing an additional 10 gigawatts online in 2027, saying he would be surprised if they do not reach 13 gigawatts of AI compute by the end of 2027. The next-largest project by planned capacity, the now-restructured 10 gigawatt Project Stargate, was expected to reach full capacity in the 2030s, as was Meta's 5 gigawatt Hyperion. To reach 13 gigawatts, Musk revealed that SpaceX and xAI are aggressively procuring next-generation NVIDIA architecture, planning to get a massive 440,000-GPU Nvidia 'Vera Rubin' training cluster online by the end of Q2 2027.

Shifting focus back to Terafab, Musk boasted that once fully scaled and operational, the facility's advanced chip output will place it among the top 20 global country GDPs from a single physical building. The 20th country on the list is Switzerland, with a GDP of around $1.14 trillion. Terafab is a planned multi-billion-dollar, vertically integrated chip factory in Texas, with an ambitious goal of manufacturing 1 terawatt of AI computing power per year.

Terafab will fabricate logic, memory, and advanced packaging internal architectures in one place. The project's massive planned output has mandated various collaborations across the semiconductor supply chain. Terafab will utilize traditional extreme ultraviolet (EUV) lithography systems using Intel's 14A manufacturing node technology. Intel joined the Terafab venture in April 2026 to help co-develop and refactor silicon fabrication technology, providing access to its state-of-the-art 14A manufacturing process.

ASML, the world's sole commercial supplier of the $400 million EUV lithography systems required for high-volume, leading-edge chip production, is perhaps the project's most critical partner. Terafab's first EUV tool was reportedly slated for delivery in mid-2027. Other major suppliers include Applied Materials, Lam Research, and KLA Corporation, as well as Japan's Tokyo Electron.

Tesla and SpaceX are also in talks with about 10 South Korean equipment makers, including Hanmi Semiconductor and HPSP, as well as firms providing specialized piping components and process valves. Musk's announcement indicates that several of these suppliers are expediting supply to Terafab, even as capacity remains tight across the semiconductor supply chain. The facility will supply the chips for Musk's xAI clusters, self-driving vehicles, Optimus humanoid robots, and SpaceX's orbital AI data center, as well as the broader AI industry.

However, many experts have questioned the validity of Musk's 1 TW Terafab ambition. Research firm Gartner estimates the total global AI-optimized data center capacity to be roughly 44 GW as of late 2026, 4.4% of Terafab's planned output. Although global AI computing capacity has grown by roughly 3.3x to 3.4x per year since 2022, according to EpochAI.

Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds. Etiido Uko is a news contributor for Tom's Hardware covering the latest updates in big tech and the PC industry. He is a mechanical engineer and senior technical writer with over nine years of experience in documentation and reporting. He is deeply passionate about all things engineering and technology, and is an expert in gadgets, manufacturing, robotics, automotive, and aerospace.