Musk Claims Faster Chip Equipment for Texas Factory
Tesla and SpaceX are accelerating semiconductor procurement for a massive Texas facility, targeting high-volume output by late 2028.
By Neha Iyer ·
The semiconductor supply chain is tightening as major manufacturers rush to meet aggressive demand from a new joint venture between Tesla and SpaceX. Elon Musk announced during a live broadcast of SpaceX's third-quarter 2026 earnings call on October 20 that key equipment suppliers, including ASML, are expediting shipments for the Terafab project.
The primary goal of this accelerated procurement is to support an ambitious production schedule for the facility located in Gibbons Creek, Texas. Musk stated that the company aims to begin volume chip production at this primary site by either the third or fourth quarter of 2028. He emphasized that this timeline is "highly aspirational" and carries "big error bars," acknowledging the aggressive nature of the dates while expressing appreciation for the suppliers' efforts to accelerate equipment deliveries.
A key milestone in this buildout involves the arrival of extreme ultraviolet (EUV) lithography systems, which are essential for leading-edge chip manufacturing. ASML, the sole commercial supplier of these $400 million machines, is considered the most critical partner for the project. While unofficial sources indicated the first EUV tool was slated for delivery in mid-2027, it remains unclear if this is the specific expedited timeline Musk referenced. The facility plans to utilize Intel's 14A manufacturing node technology, with Intel officially joining the venture in April 2026 to help co-develop the silicon fabrication process.
Beyond ASML, the project relies on a broad network of global equipment manufacturers to handle various stages of production. American firms Applied Materials, Lam Research, and KLA Corporation, along with Japan's Tokyo Electron, are providing front-end processing, metrology, and process control machinery. Additionally, Tesla and SpaceX are in discussions with approximately ten South Korean equipment makers, including Hanmi Semiconductor and HPSP, to secure specialized components such as advanced packaging tools, high-pressure hydrogen annealing equipment, piping, and process valves.
The commercial scale of Terafab is designed to rival national economies. Musk claimed that once fully operational, the advanced chip output from this single physical building would place it within the top 20 global country GDPs. For perspective, Switzerland, currently the 20th largest economy, has a GDP of roughly $1.14 trillion. The facility is a vertically integrated, multi-billion-dollar plant intended to fabricate logic, memory, and advanced packaging architectures internally, with an ultimate goal of manufacturing one terawatt of AI computing power per year.
The chips produced at Terafab will serve multiple internal and external markets. They are intended to power Musk’s xAI clusters, self-driving vehicles, Optimus humanoid robots, and SpaceX’s orbital AI data center, while also supplying the broader AI industry to mitigate future shortfalls from external foundries like TSMC. During the same broadcast, Musk outlined related near-term ambitions for his AI companies, projecting 2.5 to 3 gigawatts of active computing capacity by the end of 2026. He expressed high confidence in adding 10 gigawatts in 2027, aiming for a total of 13 gigawatts by year-end.
To achieve these compute targets, SpaceX and xAI are aggressively procuring next-generation NVIDIA architecture. Plans are in place to bring a 440,000-GPU Nvidia "Vera Rubin" training cluster online by the end of the second quarter of 2027. This expansion is significant given that competitors like the restructured 10 GW Project Stargate and Meta's 5 GW Hyperion are not expected to reach full capacity until the 2030s. SpaceX also plans to manufacture an experimental test chip at its research fabrication facility in Austin, Texas, around the second quarter of 2027.
Despite the aggressive procurement strategies, industry experts remain cautious about the feasibility of the one-terawatt output target. Research firm Gartner estimates that total global AI-optimized data center capacity is roughly 44 gigawatts as of late 2026. This figure represents only 4.4% of Terafab's planned annual output. While EpochAI notes that global AI computing capacity has grown by roughly 3.3x to 3.4x annually since 2022, the gap between current global capacity and the Terafab ambition highlights the scale of the logistical challenge ahead.
Source: Tom's Hardware
