Musk Pushes Timeline For Texas Chip Factory To 2028

The first chips from a major new Texas manufacturing plant could reach consumers by late 2028, a schedule Elon Musk labeled as highly aspirational. Musk announced on an October 20, 2026, SpaceX earnings call that suppliers, including ASML, are accelerating equipment deliveries to support a target for volume chip production at Terafab's Gibbons Creek, Texas, location in the third or fourth quarter of 2028. He acknowledged the timeline carries big error bars.

The joint project between Tesla and SpaceX is designed for massive scale. Terafab is a planned multi-billion-dollar facility aiming to fabricate one terawatt of AI computing power per year from a single site. This involves producing logic and memory chips alongside advanced packaging technology in one location. The facility's projected output would generate a commercial value placing it within the top 20 global country GDPs from a single building, a list where Switzerland holds the 20th spot with a GDP of around $1.14 trillion.

Musk stated, "These are very aggressive dates, and we're very appreciative of ASML and all of our other suppliers in accelerating equipment deliveries in order to achieve this outcome." ASML is the sole commercial supplier of the extreme ultraviolet lithography systems required for this production, with equipment costing around $400 million per tool. Intel joined the venture in April 2026 to provide its 14A manufacturing process technology for the logic chips.

The project relies on a broad supply chain network to meet its goals. American equipment manufacturers Applied Materials, Lam Research, and KLA Corporation, along with Japan's Tokyo Electron, are providing front-end processing and control machinery. Talks are also underway with about 10 South Korean equipment makers, including Hanmi Semiconductor and HPSP, for specialized tools and components.

The facility is intended to produce chips for xAI's AI clusters, Tesla's self-driving vehicles, and Optimus humanoid robots. It will also supply SpaceX's orbital AI data center and the broader industry, aiming to reduce reliance on external foundries. SpaceX plans to manufacture its first experimental test chip at its research fabrication facility in Austin, Texas, around the second quarter of 2027.

The timeline for Terafab is part of a wider push for AI computing capacity. Musk expects active capacity of 2.5 to 3 gigawatts by the end of 2026, and aims to add 10 gigawatts in 2027. Reaching a total of 13 gigawatts by the end of 2027 would exceed the total global AI-optimized data center capacity of roughly 44 gigawatts reported for late 2026.

Musk plans to achieve this by procuring next-generation hardware, including a 440,000-GPU Nvidia Vera Rubin training cluster online by the end of the second quarter of 2027. Other major projects, such as the 10 gigawatt Project Stargate and Meta's 5 gigawatt Hyperion, are scheduled to reach full capacity in the 2030s. Experts have questioned the validity of the one terawatt Terafab ambition, noting the facility's planned output is 4.4% of current global AI-optimized data center capacity.

The growth rate required to reach these targets is steep. Global AI computing capacity has grown by roughly 3.3x to 3.4x per year since 2022. While Terafab is designed to mitigate future shortfalls of cutting-edge processors, the schedule to reach volume production in late 2028 remains a target with significant uncertainty attached to it.