Musk Sets 2028 Date for First Chips at Texas Megafab

SpaceX and Tesla are teaming up on a massive new chip factory in Texas. Elon Musk says suppliers are speeding up their deliveries to get it built.

Musk made the comment during a live broadcast of SpaceX's Q3 2026 earnings call on X on October 20. He said the Terafab facility in Gibbons Creek, Texas, targets volume chip production in the third or fourth quarter of 2028. He called that timeline "highly aspirational" and said it comes with "big error bars." "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," said Musk, who is the CEO of both companies. SpaceX plans to make its first test chip at a research facility in Austin, Texas, around the second quarter of 2027.

Terafab is a multi-billion-dollar project. Its goal is to build a vertically integrated factory that makes logic, memory, and advanced packaging chips under one roof. The plan is to produce one terawatt of AI computing power per year. The facility will use Intel's 14A manufacturing node. Intel joined the venture in April 2026 to help co-develop the technology. ASML is a key partner because it is the only company that sells the EUV lithography machines needed for this work. Other suppliers include Applied Materials, Lam Research, KLA, and Tokyo Electron. Musk also said once Terafab is fully operational, its output would rank among the top 20 country GDPs from a single building.

During the same broadcast, Musk also talked about his AI companies' plans for computing power. He expects them to have 2.5 to 3 gigawatts active by the end of 2026. He also said he is highly confident about bringing an incremental 10 gigawatts online in 2027. He said he "would be surprised" if they do not hit a total of 13 gigawatts of AI compute by the end of 2027. To do this, SpaceX and xAI are buying a large number of Nvidia "Vera Rubin" GPUs. A 440,000-GPU training cluster is planned to be online by the end of the second quarter of 2027. For context, other large projects like the 10 gigawatt Project Stargate and Meta's 5 gigawatt Hyperion are expected to reach full capacity in the 2030s.

The plan for Terafab is to supply chips for xAI's computer clusters, self-driving cars, Optimus robots, and SpaceX's data centers in space. It is also meant for the broader AI industry. However, many experts have questioned the plan to produce one terawatt of computing power. Research firm Gartner estimates the total global AI-optimized data center capacity is roughly 44 gigawatts as of late 2026. This is 4.4% of Terafab's planned output. The next step is to see if SpaceX can hit its target of making the first test chip in Austin in mid-2027.

The Terafab project is designed to help avoid future shortages of advanced AI chips from outside foundries like TSMC. Global AI computing capacity has grown by roughly 3.3 to 3.4 times per year since 2022.