Terafab Unveiled: Musk's $25B Texas Chip Factory for AI and Space

Elon Musk announced a partnership between Tesla, SpaceX and xAI to build Terafab, a $25 billion chip fabrication facility in Austin touted as the world’s largest onshore semiconductor plant. The factory would aim to produce AI-ready chips (AI5 and AI6) and a satellite-facing D3 chip, bringing the entire manufacturing process in-house to support Musk’s AI, robotics and space ambitions. The plan aligns with a broader push to strengthen US chip supply under the CHIPS Act, but skepticism remains given Musk’s history of ambitious projects and the uncertain funding path.