Tesla and SpaceX announce $25B 'Terafab' chip factory – it reeks of desperation
7 hours ago
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- Tesla and SpaceX announced 'Terafab,' a $25 billion chip fabrication facility in Austin, Texas, aiming to produce 1 terawatt of computing power annually.
- Terafab is a joint venture between Tesla, SpaceX, and xAI, consolidating all semiconductor production stages under one roof.
- Targeting 2-nanometer process technology, Terafab aims for 100,000 to 1 million wafer starts per month, rivaling 70% of TSMC's current output.
- Elon Musk stated the facility will produce 100-200 billion AI and memory chips annually for Tesla's Full Self-Driving, Cybercab, and Optimus robot programs.
- Musk emphasized the need for in-house production due to supply chain limitations, claiming current global fabs produce only 2% of his needs.
- Terafab will focus on two chip types: inference chips for Tesla products and D3 chips for orbital AI satellites, with production timelines extending to 2027.
- 80% of Terafab's compute output is planned for space-based AI satellites, leveraging solar irradiance and vacuum heat rejection for cost efficiency.
- Tesla's CFO noted the $20-25 billion cost isn't yet included in Tesla's 2026 capital expenditure plan.
- Critics compare Terafab to Tesla's unmet Battery Day promises, highlighting the immense difficulty of leading-edge chip fabrication without prior experience.
- The announcement is seen as an attempt to align Tesla and SpaceX with the AI hyperscaler narrative amid Tesla's declining sales and SpaceX's upcoming IPO.