Musk says SpaceX and Tesla to build advanced chip factories in Austin

LOS ANGELES — SpaceX and Tesla TSLA.O plan to build two advanced chip factories at a large facility in Austin, Texas, CEO Elon Musk said on Sunday. One factory will produce chips for Tesla vehicles and Optimus humanoid robots, while the other will focus on AI chips for satellites and data centers in space.

The announcement follows Musk’s recent unveiling of “Terafab,” an advanced AI chip complex in Austin. “Terafab will technically be two fabs, each making only one chip design,” Musk wrote on X.

Musk previously indicated Tesla would need its own AI chip plant, but SpaceX’s involvement had not been disclosed until now. SpaceX, which is preparing for a public listing potentially valued at $1.75 trillion, recently merged with Musk’s social media and AI company, xAI.

“We either build the Terafab or we don’t have the chips,” Musk said during a presentation in Austin, noting that current global chip production would satisfy only a fraction of his companies’ future demand.

While Musk did not provide a timeline for the project, he expressed gratitude to existing chip suppliers, including Samsung 005930.KS, TSMC 2330.TW, and Micron MU.O. He added that demand from Tesla, SpaceX, and xAI would eventually surpass total global chip output.

Terafab is expected to produce one terawatt of computing capacity per year, compared with roughly half a terawatt currently generated across the United States. Musk explained that one chip will power Tesla vehicles and Optimus robots, while the other will be tailored for AI satellites in space, capable of operating in harsher environments and at higher temperatures.

-Reporting by Joe Brock; Editing by Chris Reese/Reuters