Tesla and SpaceX CEO Elon Musk said on Sunday that the companies will build two advanced chip factories in Austin Texas. One of these will be used to power cars and humanoid robots, and the other for artificial intelligence centers in space.<\/p>\n
This comes a day after Musk announced plans to build \u201cTerafab,\u201d an advanced AI chip complex in Austin.<\/p>\n
\u201cTerafab \u2060will technically be two fabs, each making only one chip design,\u201d Musk wrote \u200bin a post on X.<\/p>\n
Musk said that he is pursuing this project because semiconductor manufacturers aren\u2019t making chips quickly enough for his companies\u2019 artificial intelligence and robotics needs: \u201cWe either build the Terafab or we don\u2019t have the chips, and we need the chips, so we build the Terafab.\u201d<\/p>\n
READ: Musk says Tesla may \u2018tape out\u2019 next generation AI6, continues to order Nvidia chips<\/a> (March 19, 2026)<\/p>\n The goal is to manufacture chips that can support 100 to 200 gigawatts of computing power per year on Earth, along with a terawatt in space, Musk said. He did not offer a timeline for these plans. As Bloomberg noted, Musk does not have a background in semiconductor manufacturing, and he has a history of overpromising on goals and timelines.<\/p>\n Musk has previously said Tesla would need to build its \u200bown AI chip<\/a> plant, but the involvement of SpaceX had not been disclosed. SpaceX, which is preparing for a public listing that could value the company at around $1.75 trillion, recently merged<\/a> with Musk\u2019s \u200bsocial media and artificial intelligence firm xAI.<\/p>\n \u201cWe either build the Terafab or we \u200bdon\u2019t have the chips,\u201d Musk said<\/a> during a presentation in an Austin facility on Saturday, adding that \u200ccurrent \u2060global chip production would meet only a small fraction of his companies\u2019 future needs.<\/p>\n READ: Elon Musk explores company merger as SpaceX IPO nears<\/a> (January 30, 2026)<\/p>\n Musk also said that he was grateful to existing \u2060chip suppliers, naming Samsung, TSMC, and Micron, however said demand from his companies would eventually exceed total global chip output.<\/p>\n Musk mentioned that Terafab \u200bwill eventually produce one terawatt of computing capacity a year, \u200bcompared with \u2060about half a terawatt currently generated across the United States. He also said that one chip would be used in Tesla<\/a> vehicles and Optimus humanoid robots, while the second \u2060would \u200bbe designed for AI satellites in space.<\/p>\n