Musk claims suppliers are rushing gear for his massive Texas chip plant

Elon Musk announced on October 20 that major semiconductor equipment makers, including ASML, have accelerated their delivery schedules for the Terafab facility. This joint venture between Tesla and SpaceX is designed to manufacture advanced chips in Texas. During a live broadcast of the SpaceX Q3 2026 earnings call on X, Musk stated that these suppliers are moving faster to support an aggressive production timeline for the new manufacturing complex.

The project targets the start of volume chip production at the primary site in Gibbons Creek, Texas, by the third or fourth quarter of 2028. Musk described this schedule as highly aspirational, noting that it carries significant uncertainty or what he called big error bars. The facility is planned to be a vertically integrated factory that produces logic, memory, and advanced packaging components in a single location. The ultimate goal is to generate one terawatt of AI computing power per year, a capacity that Musk claims would rival the GDP of a top 20 global economy from one physical building.

To achieve these targets, Terafab is leveraging Intel's 14A manufacturing node technology. Intel joined the venture in April 2026 to help co-develop the silicon fabrication process. The project relies heavily on extreme ultraviolet lithography systems. ASML is the sole commercial supplier of these critical tools, which cost approximately $400 million each. Unofficial sources suggest the first EUV tool was originally slated for mid 2027, though it is unclear if that date reflects the expedited schedule Musk mentioned.

Other key partners in the supply chain include American firms Applied Materials, Lam Research, and KLA Corporation, as well as Japan's Tokyo Electron. These companies will provide essential machinery for front end processing and process control. Tesla and SpaceX are also in discussions with about ten South Korean equipment makers. These include Hanmi Semiconductor for packaging and HPSP for annealing equipment, along with suppliers of specialized piping and valves.

Musk also outlined broader AI infrastructure goals during the same broadcast. He expects his AI companies to have 2.5 to 3 gigawatts of computing capacity active by the end of 2026. He expressed high confidence in adding another 10 gigawatts in 2027, aiming for a total of 13 gigawatts. To reach this milestone, SpaceX and xAI are aggressively procuring next generation NVIDIA architecture. Plans include bringing a massive cluster of 440,000 Nvidia Vera Rubin GPUs online by the end of the second quarter of 2027.

While the project aims to reduce reliance on external foundries like TSMC for chips used in self driving vehicles, Optimus robots, and orbital data centers, some experts remain skeptical. Gartner estimates the total global AI optimized data center capacity is roughly 44 gigawatts as of late 2026. This figure represents only 4.4% of Terafab's planned annual output, highlighting the scale of the ambition.

The next step involves finalizing the procurement of equipment and building out the Gibbons Creek site. If successful, the facility will supply the chips for Musk's various AI initiatives and contribute to the broader industry. The expedited shipments from suppliers suggest a push to meet these tight deadlines despite a generally tight market for semiconductor equipment.