Musk: Suppliers Speeding Up Terafab, Aiming for 2028 Volume

Elon Musk says the chip tools needed for his new factory are moving faster.

Musk made the comments during a live broadcast of SpaceX's third-quarter earnings call on October 20, 2026. He said major suppliers like ASML are speeding up shipments of equipment. This is to help build the Terafab project, a joint venture between Tesla and SpaceX. Musk admitted the schedule is "highly aspirational" and carries "big error bars." He is targeting volume chip production at the Gibbons Creek, Texas facility in the third or fourth quarter of 2028.

Musk outlined a tight schedule for building the factory's parts. SpaceX plans to make its first experimental test chip at a research facility in Austin, Texas. This is scheduled for the second quarter of 2027. To build Terafab, the team is working with many suppliers. Intel is helping with manufacturing technology. ASML provides lithography machines. Other firms like Applied Materials and Lam Research are also involved. Musk said these companies are accelerating their deliveries to meet the deadline.

Musk also spoke about other projects during the call. He expects AI companies to have 2.5 to 3 gigawatts of computing capacity active by the end of 2026. He said he is confident about adding 10 gigawatts in 2027. To do this, SpaceX and xAI are buying a large cluster of Nvidia GPUs. They plan to have 440,000 Nvidia Vera Rubin GPUs online by the end of the second quarter of 2027.

The Terafab project aims to change how chips are made. It is a multi-billion-dollar facility in Texas. Its goal is to manufacture 1 terawatt of AI computing power each year. It will build logic, memory, and packaging parts in one location. Once fully operational, Musk claims the value of its chip output would place it within the top 20 global country GDPs. This would come from a single building.

The project faces some skepticism. Research firm Gartner estimates total global AI-optimized data center capacity is about 44 gigawatts as of late 2026. This is a small fraction of the 1 terawatt Terafab aims to produce. However, experts note that global AI computing capacity has grown by roughly 3.3x to 3.4x per year since 2022. The timeline for Terafab remains a challenge, but suppliers are reportedly helping to move it forward.

The facility will supply chips for xAI, self-driving cars, and the broader AI industry. The goal is to reduce reliance on external foundries like TSMC. The project is now moving from planning to building.