recently, according to a public hearing notice issued by grimes county in texas, the semiconductor project led by spacex is named terafab. the document indicates that the first phase of the project is expected to require at least us$55 billion in investment, with total expenditures potentially reaching us$119 billion.
the terafab project was officially launched in march of this year and will supply ai-powered chips to tesla and spacex. musk has stated that terafab will be the most epic chip-manufacturing endeavor in history, integrating logic chips, storage chips, and advanced packaging under one roof, ultimately achieving an annual computing performance output of 1 terawatt—compared with the current u.s. computing capacity of about 0.5 terawatts. “either we build terafab, or we won’t have any chips,” musk said during a presentation in austin, texas, adding that global chip production today can only meet a small fraction of his companies’ future needs.
to advance terafab, musk’s team has reached out to numerous suppliers in the chip industry, including applied materials, tokyo electron, lam research, and samsung, seeking quotes and delivery timelines for various chip-manufacturing equipment. chip manufacturing is a capital-intensive industry; building a new fab typically costs between us$10 billion and us$30 billion, with some projects even exceeding that range, and usually takes three to five years. currently, only three companies worldwide are capable of mass-producing the most advanced chips—tsmc, samsung electronics, and intel. tsmc’s capacity is increasingly strained, and major players such as nvidia and apple have already secured chip-production capacity for years to come, which severely limits other firms’ access to cutting-edge processes.
in april of this year, intel announced its participation in terafab, pledging to “design, manufacture, and package ultra-high-performance chips at scale.” musk plans to use intel’s next-generation 14-nanometer manufacturing process to produce chips for the project. in terms of division of labor, tesla will build a research facility in the austin area at a cost of about us$3 billion, producing several thousand wafers each month. “tesla will be responsible for the wafer research facility, while spacex will handle the initial phase of terafab,” he said.
although spacex’s core business is rocket launches and satellite-internet services, musk is increasingly leveraging the company to advance his ai ambitions. in february of this year, spacex acquired xai, bringing the combined entity’s valuation to us$1.75 trillion. in april, spacex secretly filed for an ipo, with a potential listing as early as june. at the same time, spacex also announced the acquisition of the ai-programming startup cursor for us$60 billion. in may, musk announced that xai would be rebranded as spacexai, becoming an ai product under the spacex umbrella.
