Terafab targets 2028 volume chip output for U.S. AI manufacturing push

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Terafab 2028 AI chip output

Highlights

Terafab, the SpaceX and Tesla chip manufacturing joint venture, targets volume production by Q3 or Q4 2028 at its Texas facility, though timing remains uncertain.
The venture aims for a first functional SRAM test chip by May or June 2025 at the Terafab Austin research site to refine manufacturing processes.
Terafab's schedule depends on accelerated deliveries of advanced manufacturing equipment from ASML, Applied Materials, and KLA, with Intel joining the project in April to support its goals.

Texas buildout and production timeline

As reported by Reuters, Musk says on a SpaceX conference call that the chip manufacturing joint venture between SpaceX and Tesla is targeting volume production by the third quarter of 2028, while cautioning that the schedule may slip. He says the target remains an aspiration and puts "big error bars" around the timing, adding that reaching volume output in Q3 or Q4 of 2028 is only within the range of possible outcomes.

The planned complex in Texas is intended to combine advanced manufacturing, packaging and testing for both advanced logic and memory chips in a single facility. Musk says the venture is also aiming to have a first functional test chip using static random-access memory, or SRAM, circuits around May or June next year at the Terafab research site in Austin.

SRAM circuits are commonly used by chipmakers to refine manufacturing process development. Musk describes the overall schedule as very aggressive, especially because cutting-edge logic factories in the U.S. can take three years or more to build.

Equipment needs and industry partnerships

One of Terafab's main hurdles is securing enough semiconductor manufacturing equipment, including the complex tools supplied by ASML as well as equipment from U.S. companies such as Applied Materials and KLA. On the conference call, Musk does not directly answer a question about whether SpaceX has already ordered ASML's extreme ultraviolet lithography machines, which are needed to make the most advanced chips produced by companies including Nvidia and Advanced Micro Devices.

Instead, he says the company appreciates ASML and other suppliers for helping accelerate equipment deliveries needed to support the project timeline. Earlier this month, Musk also says there have been discussions about potential cooperation with Taiwan Semiconductor Manufacturing Company, though he later says Terafab remains committed to operating the facility itself.

Intel says in April that it will join the Terafab project to help accelerate its goals, but the companies have not explained how that collaboration will work in practice. The project adds to wider U.S. efforts to expand domestic chip production capacity as demand rises for advanced semiconductors used in AI systems and robotics.

In our earlier article on U.S. AI data center expansion, we noted that many large projects are being delayed or canceled as financing costs rise and construction timelines slip. We also highlighted how power constraints and local opposition are adding friction, raising doubts about whether developers can deliver new capacity on schedule without undermining investor confidence.

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