Musk Unveils $25 Billion 'Terafab' Semiconductor Facility Consolidating Tesla, SpaceX, and xAI Chip Production

Elon Musk announced TERAFAB, a $25 billion joint semiconductor fabrication venture between Tesla, SpaceX, and xAI targeting 2-nanometer chip production and one terawatt of annual AI compute capacity. The Austin, Texas facility consolidates chip design, lithography, fabrication, memory, advanced packaging, and testing. Two chip lines: one for vehicles/robotaxis/Optimus robots, another for space-based AI data centers. Musk stated 80% of compute output supports orbital AI satellites, tying into SpaceX's planned 2026 IPO (expected to raise $50 billion). At full capacity, Terafab would produce roughly 70% of TSMC's current global output. No timeline given.