Elon Musk officially announces his own $20 billion chip factory

The entrepreneur Elon Musk has now officially announced the construction of his own, huge chip factory. The project called “Terafab” will be operated jointly by Tesla and SpaceX and will supply the Musk Group with high-end chips.

Suppliers are too weak

According to Musk Declarations An “Advanced Technology Fab” is initially planned that can produce and test a wide variety of chips. This should be able to begin work on a smaller scale next year. It is unclear how long it will take until full expansion, which will be achieved with investments of around $20 billion. Although the entrepreneur himself has no experience in semiconductor production and has often missed ambitious schedules in the past, he sees the step as necessary. The industry is growing too slowly to meet the increasing needs of its companies. “If we don’t build the Terafab, we won’t have chips,” Musk explained.

In the long term, the system is intended to support enormous computing power: The plan is to produce chips for up to 100 to 200 gigawatts per year on Earth and, in the future, even one terawatt in space. However, Musk did not give any specific timelines. Previous statements indicate that smaller production capacities will initially be set up. The technological demands are also high: the factory could produce chips using the advanced 2-nanometer process. However, the facility will gradually grow into the largest chip factory in the world. It will be built near Tesla’s existing Gigafactory in Austin, Texas. Texas Governor Greg Abbott was also present at yesterday’s presentation of the plans. If the project succeeds, Texas could at least significantly expand its importance as a location for the semiconductor industry.

Many more satellites

So far, Tesla has relied on completely external suppliers, including Samsung as well as TSMC and Micron Technology. However, according to Musk, these cannot fully cover the growing demand. And without powerful chips, basically none of the Musk companies can operate. In addition to the new chip production, Musk also presented plans for a network of data centers in space. This includes a concept for small satellites with AI computing power that could even reach megawatt levels in the future. Federal Communications Commission applications for up to a million such satellites have already been submitted.