Musk Says Suppliers Are Speeding Up Terafab, Aiming for Chip Production in Late 2028

Elon Musk said on Monday, October 20, that equipment makers are moving up their delivery schedules for the Terafab chip factory, a joint effort between Tesla and SpaceX. Speaking during a live broadcast of SpaceX's third-quarter earnings call on X, Musk stated that companies like ASML are accelerating shipments to help the project stay on track.

He outlined a plan to begin volume chip production at the main site in Gibbons Creek, Texas, by the third or fourth quarter of 2028. Musk acknowledged the schedule is tight, calling it a highly aspirational timeline with big error bars. He did, however, express thanks to his partners for their cooperation. "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," he said.

The facility is designed to manufacture logic, memory, and advanced packaging components in one place. Its target is to build 1 terawatt of AI computing power each year. The project will use Intel's 14A manufacturing process with extreme ultraviolet lithography systems. Intel joined the venture in April 2026 to help with this technology. Other suppliers providing essential machinery include Applied Materials, Lam Research, and KLA Corporation, along with Tokyo Electron.

Musk also shared goals for his AI companies, expecting them to have 2.5 to 3 gigawatts of computing capacity active by the end of 2026. He added that he expects to add 10 gigawatts of capacity in 2027, which would reach a total of 13 gigawatts. To support this, SpaceX and xAI are working to bring a cluster of 440,000 Nvidia GPUs online by the second quarter of 2027.

The stakes for Terafab are high. Musk stated that once the facility is fully operational, its output would rank within the top 20 global country GDPs from a single building. The factory is intended to supply chips for xAI's computing clusters, Tesla's self-driving cars and Optimus robots, and SpaceX's orbital AI data center, as well as the wider AI industry.

However, the project's scale has raised questions. The facility aims to produce 1 terawatt of computing power, but research firm Gartner estimates total global AI-optimized data center capacity is roughly 44 gigawatts as of late 2026. This figure represents only 4.4 percent of Terafab's planned output. Despite this, global AI computing capacity has grown by about 3.3 to 3.4 times per year since 2022, according to EpochAI.