Musk says SpaceX and Tesla to build advanced chip factories in Austin

• Reuters

• Published On Mar 23, 2026 at 07:53 AM IST

Tesla would need to build its own AI chip plant, but the ⁠involvement of ‌SpaceX had not been disclosed.

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SpaceX and Tesla will build two advanced chip factories at a sprawling facility in Austin, Texas, one to power cars and humanoid robots, and another ‌designed for ⁠artificial ⁠intelligence data centers in space, CEO Elon Musk said on Sunday. The comments followed Musk’s announcement a day earlier of plans to build “Terafab,” an advanced AI chip complex in Austin.

“Terafab will technically be two fabs, each making only one chip design,” Musk wrote in a post on X.

Musk has previously said Tesla would need to build its own AI chip 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 ⁠with Musk’s social media and artificial intelligence firm xAI.

“We either build the Terafab or we don’t have the chips,” Musk said during a presentation in an Austin facility on Saturday, adding current global chip production would meet only a small fraction of his companies’ future needs.

Musk did not give a timeline for the new project. Musk has a track record of announcing highly ambitious projects, though several have ‌faced delays or fallen away.

Musk said he was grateful to existing chip suppliers, naming Samsung, TSMC and Micron, but said demand from his companies would eventually exceed ⁠total global chip output.

Terafab will eventually produce one terawatt of computing capacity a year, compared with about half a terawatt currently generated across the United States, Musk said.

He said one chip would be used in Tesla vehicles and Optimus humanoid robots, while the second would be designed for AI satellites in space. “We need a high-powered chip designed for space that takes into account the harsher environment,” Musk said, adding it would need to operate at higher temperatures.