Daily Management Review

Tesla and SpaceX to build large-scale chip factory in Austin


03/23/2026


Elon Musk, CEO of Tesla and SpaceX, stated that a major chip factory will be constructed in Austin, Texas.



Bret Hartman / TED
Bret Hartman / TED
"Either we construct Terafab, or we will lack chips," he stated regarding the initiative at an event in the city.

He mentioned that Terafab will manufacture chips for Tesla electric cars, the humanoid Optimus robots, and for applications in space, where SpaceX intends to launch numerous AI computing satellites.

Musk revealed on the X social media platform that the complex will be split into two sections, with each section manufacturing a distinct type of chip.

Terafab will be outfitted with the intricate lithography technology required for chip fabrication, along with tools for their design, assessment, and production, he mentioned.

A factory is necessary since Samsung, TSMC, and other partners do not intend to increase production at a rate that would meet the demands of Tesla and SpaceX, the billionaire stated during an event in Austin.

Musk did not indicate the schedule for Terafab's development or how responsibilities would be divided between Tesla and SpaceX for the initiative.

Analysts at Morgan Stanley recently projected that the expense of constructing Tesla's own chip manufacturing facility would exceed $20 billion, taking several years to complete.

source: bloomberg.com