Elon Musk has unveiled plans for a massive new venture: the "Terafab," a $25 billion semiconductor factory designed to produce over one trillion watts of AI compute capacity annually. Announced in March 2026, the project aims to break through the "terawatt ceiling" and end the global chip shortage.
The Terafab is more than just a factory; it is a declaration of independence from the global chip shortage.
Dubbed the most ambitious industrial project of the 21st century, the Terafab will vertically integrate chip production under a single roof, bringing together Tesla, SpaceX, and xAI in partnership with Intel. The collaboration will leverage Intel's cutting-edge 14-angstrom (14A) process technology.
Musk's vision goes beyond simply manufacturing chips. He envisions the Terafab as the "nervous system" for a future where AI is abundant and humanity is a multi-planetary species. The facility is designed to produce 50 times more computing power than exists worldwide today, positioning it as a cornerstone for Musk's broader ambitions in AI, autonomous vehicles, and space exploration.