Musk Says Equipment Makers Rushing Deliveries for Texas Chip Plant

Key equipment suppliers for the planned Terafab semiconductor facility are speeding up their delivery schedules to support the project's development. Elon Musk, who leads both Tesla and SpaceX, the companies behind the joint venture, made this statement during a live broadcast of SpaceX's Q3 2026 earnings call on October 20, 2026. The facility is a joint megaproject between the two companies.

Musk stated that the project is targeting the start of volume chip production at its primary location in Gibbons Creek, Texas, by the third or fourth quarter of 2028. He characterized this schedule as "highly aspirational" and noted it carries "big error bars." He also mentioned that SpaceX plans to fabricate its first experimental test chip at its research facility in Austin, Texas, around the second quarter of 2027. "These are very aggressive dates, and we're very appreciative of ASML and all of our other suppliers in accelerating equipment deliveries in order to achieve this outcome," said Musk.

The facility is a multi-billion-dollar, vertically integrated chip factory in Texas with the goal of manufacturing 1 terawatt of AI computing power per year. Terafab will produce logic, memory, and advanced packaging architectures in a single location. The project relies on extreme ultraviolet lithography systems and Intel's 14A manufacturing node technology. Intel joined the venture in April 2026 to help co-develop and refactor silicon fabrication technology for this process. ASML, which is the sole commercial supplier of these EUV systems, is a critical partner for the project.

Other major suppliers for Terafab include American companies Applied Materials, Lam Research, and KLA Corporation, as well as Japan's Tokyo Electron. These firms will provide machinery for front-end processing, metrology, and process control. Tesla and SpaceX are also in discussions with about 10 South Korean equipment makers for specialized components. The facility aims to supply chips for Musk's xAI clusters, self-driving vehicles, Optimus humanoid robots, and SpaceX's orbital AI data center, among other applications.

In addition to Terafab, Musk outlined other near-term plans during the broadcast. He expects his AI companies to have 2.5 to 3 gigawatts of computing capacity active by the end of 2026. He also stated he is highly confident about bringing an incremental 10 gigawatts online in 2027, saying he "would be surprised" if they do not reach a total of 13 gigawatts of AI compute by the end of that year. To help achieve this, SpaceX and xAI are acquiring Nvidia's next-generation "Vera Rubin" architecture for a 440,000-GPU training cluster.

The timeline for Terafab's output has faced scrutiny from industry experts. Research firm Gartner estimates that total global AI-optimized data center capacity is roughly 44 gigawatts as of late 2026, which is a fraction of Terafab's planned annual output. However, global AI computing capacity has grown by roughly 3.3x to 3.4x per year since 2022, according to EpochAI. This growth rate is a key factor in the project's ambitious targets.

The project's timeline remains a major point of uncertainty. The first EUV tool for Terafab was reportedly slated for delivery in mid-2027, though it is unclear if this is part of the expedited schedule Musk referred to. The delivery of this equipment is a critical step in the process. The next phase will involve the construction and setup of the Gibbons Creek facility to begin production.

The next steps for the project involve the delivery of critical manufacturing equipment and the construction of the Gibbons Creek facility. The delivery of the first EUV tool is a key milestone before production can begin. The project's timeline for volume chip production in late 2028 will depend on the successful and timely completion of these steps.