Musk confirms accelerated equipment delivery for Texas Terafab chip plant

Tesla and SpaceX chief executive Elon Musk has stated that major semiconductor equipment suppliers, including ASML, are accelerating deliveries to support the construction of the Terafab facility. The announcement was made during a live broadcast of SpaceX’s third-quarter 2026 earnings call on the social platform X on October 20. Musk described the timeline for the joint megaproject as highly ambitious, noting that it carries significant uncertainty.

The primary target for the Terafab project is the commencement of volume chip production at its main facility in Gibbons Creek, Texas. Musk indicated that this milestone is expected to be reached in either the third or fourth quarter of 2028. He characterized these dates as aggressive, expressing gratitude to ASML and other suppliers for moving equipment forward to meet this schedule. The company also plans to produce its first experimental test chip at a research fabrication site in Austin, Texas, around the second quarter of 2027.

The Terafab initiative is a vertically integrated chip factory designed to manufacture logic, memory, and advanced packaging components in a single location. The project aims to produce one terawatt of AI computing power annually, a capacity that Musk suggested could rival the gross domestic product of the 20th largest economy globally. For comparison, Switzerland, currently ranked 20th, has a GDP of approximately $1.14 trillion. The facility is expected to supply chips for xAI computing clusters, autonomous vehicles, Optimus humanoid robots, and SpaceX’s orbital data centers.

Intel joined the Terafab venture in April 2026 to co-develop and refactor silicon fabrication technology. The project will utilize Intel’s 14A manufacturing node technology alongside traditional extreme ultraviolet lithography systems. ASML, the sole commercial provider of the $400 million EUV lithography machines required for leading-edge production, is a critical partner in this effort. Unofficial sources have suggested that the first EUV tool was slated for delivery in mid-2027, though it is not yet confirmed if this aligns with the expedited timeline referenced by Musk.

In addition to ASML and Intel, the supply chain for Terafab includes several other major manufacturers. American firms Applied Materials, Lam Research, and KLA Corporation, along with Japan’s Tokyo Electron, are providing front-end processing, metrology, and process control machinery. Tesla and SpaceX are also in negotiations with approximately ten South Korean equipment makers, including Hanmi Semiconductor and HPSP, for advanced packaging and high-pressure annealing equipment, as well as specialized piping and valve components.

The project is part of a broader strategy by Musk’s companies to secure internal chip supply, mitigating reliance on external foundries such as TSMC. During the same broadcast, Musk outlined near-term ambitions for his AI operations, projecting 2.5 to 3 gigawatts of computing capacity by the end of 2026. He expressed high confidence in adding an incremental 10 gigawatts in 2027, aiming for a total of 13 gigawatts of AI compute by the end of that year. To achieve this, SpaceX and xAI are procuring next-generation NVIDIA architecture, with plans to deploy a 440,000-GPU Nvidia "Vera Rubin" training cluster by the end of the second quarter of 2027.

Despite the aggressive targets, industry experts have raised questions regarding the feasibility of the one-terawatt output goal. Research firm Gartner estimates that total global AI-optimized data center capacity is roughly 44 gigawatts as of late 2026, which represents only 4.4% of Terafab’s planned annual output. While global AI computing capacity has grown between 3.3 and 3.4 times per year since 2022 according to EpochAI, the sheer scale of Terafab’s ambitions remains a point of discussion within the semiconductor sector.