Musk targets mid‑2027 first chip, Q3 2028 volume at Terafab

Elon Musk’s Terafab chip plant is a joint venture between Tesla and SpaceX, located in Austin, Texas. The venture aims to produce chips for both terrestrial and space‑based applications, and Musk said the project would require a capital outlay that could reach more than $100 billion over the long term. The company has not yet decided how to split costs, but the partnership reflects Musk’s ambition to bring advanced semiconductor manufacturing to the United States.

Timeline for the first chip

Musk said that the first machines would be commissioned in the first half of 2027 and a test chip could be produced around May or June of that year. Full‑scale production is targeted for the third quarter of 2028, with early volume output set at 100,000 wafers a month that would eventually ramp to one million wafers a month. The plan also calls for a 14A process supplied by Intel, which is expected to start volume production in Q1 2028.

The fab is a key component of Tesla’s strategy to build its humanoid robot, Optimus. Musk said the AI5 chips produced at Terafab will power the robot’s intelligence, and the company hopes to reach a production rate of 20,000 units a week and eventually one million robots a year. To train the robots, Musk plans to build a “robot school” that will produce ten to twenty thousand early‑stage units called Optimi, which will perform self‑play and generate the training data needed for Optimus.

Intel’s partnership brings the 14A manufacturing technology to the project, and the company confirmed that volume production of that node will begin in the first quarter of 2028. Musk has also said that the economic value of Terafab could rank it among the top 20 countries, a statement that highlights the scale he expects the facility to achieve.

Building a semiconductor fab in the United States is notoriously difficult and expensive, and Musk has acknowledged that the process could take several years. The ambitious timeline he set for Terafab—first chip by mid‑2027 and full production by 2028—was described as lightning fast compared to industry norms.