Elon Musk's Terafab Aims for Volume Chip Production by Q3-Q4 2028 With ASML Support

ASML Expedites Equipment Delivery to Support Terafab's Ambitious Timeline

Elon Musk announced during SpaceX's Q3 2026 earnings call on October 20 that ASML and other critical semiconductor equipment suppliers are accelerating shipments to Terafab, the ambitious chip manufacturing joint venture between SpaceX and Tesla.1

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The semiconductor manufacturing facility in Gibbons Creek, Texas, aims to reach volume chip production by the third or fourth quarter of 2028, though Musk emphasized this highly aspirational timeline carries significant uncertainty. "These are very aggressive dates, and we're very appreciative of ASML and all of our other suppliers in accelerating equipment deliveries in order to achieve this outcome," Musk stated.1

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The expedited equipment acquisition addresses one of Terafab's most significant challenges. ASML, the Dutch company and world's sole commercial supplier of $400 million extreme ultraviolet lithography systems required for cutting-edge chip production, represents perhaps the project's most critical partnership.1

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When questioned directly about EUV lithography machine orders during the call, Musk avoided specifics but acknowledged ASML's cooperation in accelerating deliveries.2

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Terafab Targets 1 Terawatt of AI Computing Power Annually

SpaceX and Tesla's Terafab represents an unprecedented venture aiming to produce 1 terawatt of computing power for AI and robotics annually from a single vertically integrated facility.2

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The Texas complex will combine advanced manufacturing, packaging, and testing of both advanced logic and memory chips in one location.3

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Musk boasted that once fully operational, the commercial value of Terafab's advanced semiconductor equipment output will place it within the top 20 global country GDPs from a single physical building—comparable to Switzerland's approximately $1.14 trillion GDP.1

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To contextualize this ambition, research firm Gartner estimates total global AI-optimized data center capacity reached roughly 44 GW as of late 2026—making Terafab's 1 terawatt target more than 22 times current global capacity.1

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The facility will supply chips for Musk's xAI clusters, self-driving vehicles, Optimus humanoid robots, SpaceX's orbital AI data center, and the broader AI industry.1

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First Test Chip Expected by Mid-2027 at Austin Research Facility

SpaceX plans to manufacture its first experimental test chip at its research fabrication facility in Austin, Texas, around May or June 2027.2

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This initial chip will use static random-access memory circuits, a common method chip manufacturers employ for refining manufacturing process development.3

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The SRAM circuits test represents a crucial milestone before scaling to volume chip production by 2028 at the main Gibbons Creek facility.

Musk acknowledged his track record with timelines, cautioning that the dates carry "big error bars" and describing them as "very aggressive."1

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"Let's just say that outcome of achieving volume production is at least in the set of possible outcomes for Q3 or Q4 of '28," Musk stated. "So these are obviously like insanely fast time frames for chip production."2

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In the United States, cutting-edge logic factories typically require three or more years to build.2

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Intel Partnership and Semiconductor Supply Chain Collaboration

Intel officially joined the Terafab venture in April 2026 to co-develop and refactor silicon fabrication technology, providing access to its state-of-the-art 14A manufacturing process.1

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Intel posted a photo of CEO Lip-Bu Tan and Musk shaking hands, confirming the world's richest man visited Intel's campus that month, though the companies have not revealed how the collaboration will function in practice.2

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Terafab will utilize traditional EUV lithography systems with Intel's 14A manufacturing node technology.1

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Beyond ASML and Intel, major suppliers include American equipment manufacturers Applied Materials, Lam Research, and KLA Corporation, plus Japan's Tokyo Electron, providing front-end processing, metrology, and process control machinery.1

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Tesla and SpaceX are also negotiating with approximately 10 South Korean equipment makers, including Hanmi Semiconductor for advanced packaging equipment and HPSP for high-pressure hydrogen annealing equipment.1

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Earlier this month, Musk mentioned discussions about potential cooperation with TSMC, the world's largest advanced chip manufacturer, but later confirmed Terafab remains committed to running the facility independently.3

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Aggressive AI Computing Expansion Plans Through 2027

Musk outlined near-term ambitions for his AI companies during the broadcast, projecting 2.5 to 3 gigawatts of AI computing power active by the end of 2026.1

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He expressed high confidence about bringing an incremental 10 GW online in 2027, stating he "would be surprised" if they fail to hit 13 GW of AI computing power by year's end.1

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To achieve this milestone, SpaceX and xAI are aggressively procuring next-generation NVIDIA architecture, planning to deploy a massive 440,000-GPU Nvidia "Vera Rubin" training cluster by the end of Q2 2027.1

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For comparison, the restructured 10 GW Project Stargate, previously the next-largest project by planned capacity, expects to reach full capacity in the 2030s, as does Meta's 5 GW Hyperion.1

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Terafab aims to mitigate future shortfalls of cutting-edge AI processors from external foundries, though many experts have questioned the validity of the 1 terawatt ambition given that global AI computing capacity has grown roughly 3.3x to 3.4x annually since 2022, according to EpochAI.1

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