Elon Musk targets terawatt-scale chip production with bold ‘Terafab’ vision

Tech billionaire Elon Musk has unveiled an ambitious plan to dramatically scale global chip production, aiming to generate up to 50 times more computing power than the world currently produces.

Speaking during a recent presentation, Musk said his companies — Tesla, SpaceX and xAI — are collaborating on a new semiconductor manufacturing initiative dubbed “Terafab.”

The project is designed to produce a terawatt of computing power annually, far exceeding the estimated 20 gigawatts currently produced worldwide.

Musk noted that while suppliers like Nvidia, Samsung and Micron are expanding capacity, it still falls short of his long-term vision.

To bridge the gap, he revealed that an “advanced fab” facility has already been established in Austin, Texas, capable of producing various types of chips and lithography masks.

Central to the plan is a new manufacturing approach that allows rapid production cycles and continuous redesigns, alongside what Musk described as “very interesting new physics” that could push the limits of computing.

He outlined two primary chip applications: one for terrestrial AI systems, including humanoid robots he predicts could reach billions in annual sales, and another for space-based computing.

Musk envisions satellites equipped with powerful processors, eventually scaling to megawatt-level systems.

The broader goal, he said, is to enable humanity’s expansion beyond Earth, creating a future inspired by science fiction.

However, questions remain about resources and feasibility, particularly as global semiconductor supply chains face ongoing challenges.