By Hamza Faisal
Elon Musk has finally put dates on Terafab, the giant AI chip factory being built by Tesla and SpaceX. Speaking on SpaceX's third-quarter earnings call on Tuesday, Musk said the project aims to produce its first working test chip at a research fab in Austin around May or June 2027, with volume production at the main Terafab site targeted for the third quarter of 2028.
The answer came in response to a question from Morgan Stanley's Adam Jonas. Musk was quick to hedge the timeline, calling the dates "insanely fast timeframes for chip production" and warning that they carry "big error bars." "We're just figuring out chip fabrication," he admitted — a rare concession from a chief executive who has made a career of impossible deadlines.
An SRAM test chip first
The first milestone is deliberately modest: a simple SRAM (static random-access memory) test chip at the Austin research facility, described on the call as "just a kind of SRAM chip or something to basically test the line." SRAM is a logical starting point for a new fab — a straightforward circuit used to shake out a manufacturing process before committing to the far more complex logic chips that will eventually power Optimus robots and Cybercabs.
The real prize is the main Terafab site at Gibbons Creek in Grimes County, Texas, which Musk said could reach volume production "around Q3 of '28," with Q4 of 2028 also in the "set of possible outcomes." He thanked ASML and other equipment suppliers for accelerating deliveries, and teased "some significant potential breakthroughs in chip fabrication" at SpaceX that he declined to discuss. He did not directly confirm whether SpaceX has ordered EUV lithography machines.
A terawatt of chips a year
The long-term ambition remains staggering. Musk reaffirmed Terafab's namesake goal of producing a "terawatt of superintelligence chips per year" — roughly fifty times today's global AI compute output of about 20 gigawatts per year, by his own estimate. A day before the call, he posted on X that the value of Terafab's output "will place it in the top 20 of country GDP in a single building."
The urgency, he says, comes from a coming compute crunch: a shortage of superintelligence-grade compute "is going to continue for a long time." Terafab is being developed jointly by SpaceX, Tesla, and Intel, integrating chip design, fabrication, and advanced packaging. The chips will feed Tesla's AI5 processors — destined for Optimus robots and Full Self-Driving vehicles — alongside radiation-hardened D3 chips for SpaceX's orbital AI ambitions.
Musk's biggest bet yet
Terafab represents Musk's deepest push into vertical integration yet: owning the silicon supply chain behind his robots, cars, and satellites instead of relying on TSMC and Samsung, whose expansion pace he has called too slow. The multi-billion-dollar project's economics are still being settled, with the companies negotiating their exact cost-sharing splits.
Skeptics will note the hedging — "big error bars" is not how finished plans are described. But even a delayed Terafab would reshape the AI chip landscape: if the mid-2027 SRAM test chip lands on schedule, it will be the first verifiable proof that Musk's companies can make silicon at all. The industry will be watching Austin next spring.
By Hamza Faisal
