Elon Musk confirmed that Tesla and SpaceX will independently construct and manage the Terafab AI chip factory in Grimes County, Texas. The facility, first announced in March 2026, aims to deliver one terawatt of annual AI computing capacity to support the needs of Tesla, SpaceX, and xAI.
Musk clarified that Taiwan Semiconductor Manufacturing Co. (TSMC) will not operate the plant. While preliminary discussions between Musk and TSMC took place in early October 2026, Musk noted that the only potential involvement for the chipmaker is a possible sublease of a portion of the facility.
Intel remains the confirmed manufacturing technology partner for the project, providing its 14A process node. The first phase of the Terafab development is valued at $16.8 billion. Meanwhile, TSMC continues to explore the development of its own separate chipmaking campus in Texas.
