Elon Musk this weekend held a live event to announce a new joint venture between Tesla, SpaceX and xAI.
Terafab is a $25 billion chip manufacturing facility that Musk said will be capable of producing 1 terawatt per year in computing power. At that rate of output, it would be the largest semiconductor fab in the world, by a lot. If the plant hits its goal of building 1 million wafer starts per month, it will rival the total global output of companies like TSMC, but from a single facility.
Musk said he was grateful for the existing semiconductor supply chain including Samsung, Micron and TSMC. But he claimed that their combined capacity was not growing fast enough to support his companies’ plans.
“We would like them to expand as quickly as they can and we will buy all of their chips,” he said. “But there’s a maximum rate at which they’re comfortable expanding, and that rate is much less than we would like. So, we either build the Terafab, or we don’t have the chips. And we need the chips, so we’re building the Terafab.”
According to Electrek, Terafab will use 2-nanometer process technology to make inference chips for Tesla vehicles and Optimus robots and D3 chips custom-designed for orbital AI satellites.
The vast majority of what Terafab can produce has been earmarked for those satellites, which Musk argued will be able to harness the Sun’s energy at a much higher rate than any terrestrial solar power operation.
