Trending Now - Elon Musk to Launch Chip Factories in Texas for Major Production Increase

WHO:

Elon Musk, chief executive officer of Tesla and SpaceX

Texas Governor Greg Abbott

xAI, a wholly owned subsidiary of SpaceX

WHAT:

Musk announced plans to build "Terafab," two advanced chip factories in Austin, Texas.

The factories will produce double the current output of the entire U.S. semiconductor industry.

The project aims to manufacture chips for robotics, artificial intelligence, and space data centers.

Musk stated the facility would produce 2 nanometer chips.

The facility is expected to support 100 to 200 gigawatts of computing power annually on Earth and a terawatt in space.

Musk mentioned the need for chips, stating, “We either build the Terafab or we don’t have the chips, and we need the chips, so we build the Terafab.”

SpaceX plans to launch one million data center satellites into orbit around Earth.

WHERE:

Austin, Texas

Near Tesla’s existing headquarters and gigafactory in Austin

WHEN:

Musk made the announcement on March 23rd, 2026.

SpaceX acquired xAI in February 2026.

Tesla announced a $2 billion investment into xAI in January 2026.

WHY:

Musk believes the semiconductor industry is moving too slowly to meet the demand for chips.

The project aims to elevate Texas’ status as a chipmaking hub.

HOW:

The factories will be jointly run by Tesla and SpaceX.

Musk plans to start with an “advanced technology fab” equipped to make and test various types of chips.

Musk's vision includes launching satellites from the lunar surface as part of future projects.

(UPDATED March 23, 2026 17:54 UTC)

Today, Elon Musk announced plans to build two advanced chip factories, called "Terafab," in Austin, Texas, which will produce double the current output of the entire U.S. semiconductor industry. The facilities, jointly run by Tesla and SpaceX, are expected to manufacture 2 nanometer chips for robotics, artificial intelligence, and space data centers, supporting up to 200 gigawatts of computing power annually on Earth and a terawatt in space. Musk emphasized the urgency of this project, stating, “We either build the Terafab or we don’t have the chips, and we need the chips, so we build the Terafab.”