Terafab plan links Tesla, SpaceX and xAI to a chip complex

Terafab’s website describes a project involving Tesla, SpaceX and xAI that aims to bring logic, memory and advanced packaging together under one roof.[2] The site says the project is intended to help close the gap between current chip production and future demand.[2] Cheddar’s segment, published on Oct. 6, 2026, features Barron’s Associate Editor Al Root discussing the plan’s scale and what it could mean for the three companies.[1] The available evidence describes a plan and its stated purpose; it does not establish that the facility is operating.

Terafab lists a planned footprint of 100 million square feet and output of one terawatt per year, compared with 0.5 terawatts for current annual U.S. consumption.[2] The website also says the planned scale would require more than one terawatt of solar power.[2] For comparison, it lists a 10-million-square-foot Tesla Gigafactory in Texas.[2] These are project-published scale figures, not independently established production, energy use or construction milestones. The site also lists power build, permitting, operating costs, land, energy costs, infrastructure and cooling among relevant considerations.[2]

Terafab says its AI5 chip will power Full Self-Driving and Tesla Optimus, while AI6 is listed for Optimus and D3 for space applications.[2] Its scale-up vision includes one billion Tesla Optimus robots and 10 million tons of mass launched into orbit per year.[2] The website calls space the only truly scalable solution for the future of AI.[2] These statements outline the project’s intended applications and vision; the evidence does not show that those chip deployments or scale-up targets have been reached.

Musk said his companies would build and run the Terafab complex, and said TSMC might sublease part of it but would not run the project.[3] He had also said discussions had taken place about possible cooperation with TSMC.[3] Reuters described the plan as a Tesla-SpaceX project in Texas, and reported that possible TSMC involvement could challenge Intel’s role.[3] Intel CEO Lip-Bu Tan told Bloomberg that Intel, described as a project partner, would remain involved.[3] TSMC and Intel had not immediately responded to requests for comment, Reuters reported.[3]