Musk Pushes Terafab to 2028 Deadline as Suppliers Accelerate Shipments

Elon Musk has confirmed that key semiconductor equipment vendors are moving faster to support the Terafab manufacturing complex, a massive joint venture between Tesla and SpaceX. During a live broadcast of SpaceX’s third-quarter 2026 earnings call on X on October 20, the CEO stated that suppliers have expedited deliveries to meet the project's tight schedule. This acceleration is critical for a facility that aims to produce enough computing power to rival the economic output of a mid-sized nation from a single building.

The primary target for volume chip production at the Gibbons Creek, Texas, facility is the third or fourth quarter of 2028. Musk described this timeline as "highly aspirational" and acknowledged it carries "big error bars." He expressed gratitude to ASML and other partners for accelerating equipment deliveries to help achieve this outcome. A smaller, experimental test chip is expected to come off the line at SpaceX’s Austin research fab around the second quarter of 2027, serving as a preliminary milestone before full-scale operations begin.

The project’s scale is staggering. Once fully operational, Terafab is designed to manufacture one terawatt of AI computing power annually. To reach this capacity, the facility will integrate logic, memory, and advanced packaging production within one vertically integrated site. The commercial value of this output could place Terafab within the top 20 global country GDPs. For comparison, Switzerland, currently ranked 20th, has a GDP of approximately $1.14 trillion.

Intel joined the venture in April 2026 to co-develop and refactor silicon fabrication technology, providing access to its 14A manufacturing process. The project relies on extreme ultraviolet (EUV) lithography systems, for which ASML is the sole commercial supplier. These systems cost roughly $400 million each and are essential for leading-edge chip production. While unofficial sources suggested the first EUV tool might arrive in mid-2027, it remains unclear if this aligns with the expedited timeline Musk referenced.

Beyond ASML and Intel, the supply chain includes major American equipment makers such as Applied Materials, Lam Research, and KLA Corporation. Tokyo Electron from Japan is also a partner, providing front-end processing and metrology machinery. Tesla and SpaceX are additionally in negotiations with approximately ten South Korean firms. These include Hanmi Semiconductor for advanced packaging and HPSP for high-pressure hydrogen annealing, alongside providers of specialized piping and process valves.

The chips produced at Terafab are intended to power Musk’s various ventures, including xAI’s computing clusters, Tesla’s self-driving vehicles, Optimus humanoid robots, and SpaceX’s orbital AI data centers. The facility also aims to supply the broader AI industry, mitigating reliance on external foundries like TSMC. To support its own AI infrastructure, Musk stated that SpaceX and xAI expect to have 2.5 to 3 gigawatts of computing capacity active by the end of 2026.

For 2027, Musk projected an incremental 10 gigawatts of online capacity, expressing high confidence in reaching a total of 13 gigawatts by the end of that year. This milestone will be supported by a massive 440,000-GPU Nvidia "Vera Rubin" training cluster, which is scheduled to be online by the end of the second quarter of 2027. This approach contrasts with competitors; the 10-gigawatt Project Stargate and Meta’s 5-gigawatt Hyperion facility are not expected to reach full capacity until the 2030s.

Despite the aggressive procurement of next-generation hardware, experts have raised questions about the feasibility of the one-terawatt goal. 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, highlighting the enormous gap between current global infrastructure and the target set for the Texas facility.