Tesla and SpaceX reveal Terafab project to speed up chip development

Tesla and SpaceX are building a research chip fab at Giga Texas as the first step toward a far larger semiconductor operation in Grimes County Tesla is building a research chip fabrication plant in Texas. The goal is to shorten the time it takes to develop new chips. The facility is part of Terafab, a joint project between Tesla and SpaceX. Most car companies buy their chips. Tesla now wants to make its own. What Terafab actually is Elon Musk announced Terafab on March 21, 2026. It aims to create a vertically integrated semiconductor operation that produces advanced AI chips. The first piece is a research fab at Tesla’s Giga Texas campus in Austin. Its estimated cost is $3 billion, and construction started in April 2026. The research fab is designed for rapid prototyping. That means quickly testing new chip designs before committing to mass production. The bigger build comes later. The main production site is planned for Grimes County, Texas. That facility carries an initial investment of $16.8 billion. Plans call for more than 100 million square feet of operational space. The project is projected to create at least 3,000 jobs. Why Tesla and SpaceX want their own chips Terafab is m...