Musk Announces $25B 'Terafab' Chip Factory in Austin; Tesla and SpaceX to Consolidate Semiconductor Production

Elon Musk announced Terafab, a $20-25 billion semiconductor fabrication facility at Giga Texas's North Campus, jointly operated by Tesla and SpaceX. The facility aims to consolidate chip design, lithography, fabrication, memory production, and advanced packaging under one roof targeting 2nm production and 1 terawatt of annual computing capacity. Tesla's CFO acknowledged the cost is not yet incorporated into the 2026 capex plan. Electrek criticized the announcement as reminiscent of overpromised Battery Day targets, noting 80% of compute capacity is earmarked for orbital data centers.