Musk Claims Supplier Push to Accelerate Terafab Chip Output

Elon Musk announced on October 20 that major semiconductor equipment suppliers, including ASML, are accelerating shipments to support the Terafab manufacturing facility, a joint venture between Tesla and SpaceX. During a live broadcast of SpaceX’s Q3 2026 earnings call on X, Musk stated that these expedited deliveries are critical to meeting the project’s aggressive schedule for the facility located in Gibbons Creek, Texas.

The primary objective is to achieve volume chip production at the main Terafab site by the third or fourth quarter of 2028. Musk explicitly described this timeline as "highly aspirational" and noted that it carries "big error bars," acknowledging the significant uncertainty involved in such a rapid scale-up. He expressed appreciation for the cooperation from ASML and other suppliers, saying, "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."

In addition to the Texas facility, SpaceX plans to produce its first experimental test chip at a separate research fabrication facility in Austin, Texas. This initial milestone is targeted for the second quarter of 2027. The broader Terafab project is designed to be a vertically integrated, multi-billion-dollar factory capable of fabricating logic, memory, and advanced packaging architectures under one roof. The ultimate goal is to manufacture one terawatt of AI computing power annually, a capacity that Musk claims would place the facility’s commercial value within the top 20 global country GDPs, with Switzerland currently ranking 20th at approximately $1.14 trillion.

The technical foundation of Terafab relies on Intel’s 14A manufacturing node technology and traditional extreme ultraviolet lithography systems. Intel officially joined the venture in April 2026 to co-develop and refactor silicon fabrication technology. ASML, the sole commercial supplier of the $400 million EUV lithography machines required for leading-edge production, remains the most critical partner. While unofficial sources previously indicated the first EUV tool was slated for delivery in mid-2027, it remains unclear if this date reflects the new expedited timeline Musk referenced.

Beyond ASML and Intel, the supply chain includes American manufacturers Applied Materials, Lam Research, and KLA Corporation, as well as Japan’s Tokyo Electron, which provide front-end processing and metrology equipment. Tesla and SpaceX are also in negotiations with approximately 10 South Korean firms, including Hanmi Semiconductor and HPSP, for specialized packaging and process control components. These collaborations are essential to mitigate future shortfalls of cutting-edge AI processors from external foundries like TSMC, with chips destined for xAI clusters, self-driving vehicles, Optimus robots, and orbital data centers.

The scale of the project is substantial relative to current global capabilities. Research firm Gartner estimates the total global AI-optimized data center capacity at roughly 44 gigawatts as of late 2026. In comparison, Terafab’s planned output of one terawatt is equivalent to approximately 22 times the current global total, or 4.4% of its planned annual capacity if viewed as a single year's output against the existing stock. While global AI computing capacity has grown by roughly 3.3 to 3.4 times annually since 2022, according to EpochAI, the jump to Terafab’s target represents a massive leap in infrastructure development.