TLDR
- Elon Musk confirmed Tesla’s Terafab chip fab project will launch within days
- Terafab is designed to produce AI chips at a scale beyond current suppliers
- The project could produce up to 200 billion AI chips annually
- Tesla is already working with TSMC and Samsung on AI chips
- Musk previously floated potential collaboration with Intel on chip manufacturing
Tesla CEO Elon Musk confirmed over the weekend that the company’s Terafab project — a massive AI chip manufacturing facility — is days away from launching. The announcement marks a major step for Tesla beyond its electric vehicle roots.
Terafab Project launches in 7 days
— Elon Musk (@elonmusk) March 14, 2026
Musk first floated the idea at Tesla’s annual shareholder meeting last year, saying external chip supply simply wasn’t going to cut it. “Even when we extrapolate the best-case scenario for chip production from our suppliers, it’s still not enough,” he said at the time.
The facility’s name gives you a sense of the ambition. Terafab is a play on Tesla’s Gigafactory — only bigger. Musk described it plainly: “It’s like giga but way bigger.”
Reports from Digitimes Asia suggest the facility could target output of up to 200 billion AI chips annually. Tesla hasn’t confirmed that figure officially.
The chips are central to Tesla’s autonomous driving push, powering systems including Full Self-Driving software. Tesla is currently designing its fifth-generation AI chip, known internally as AI5.
Why Tesla Is Building Its Own Fab
Tesla has been working with TSMC and Samsung to produce its AI chips. But Musk has been clear that even the best-case output from those partners falls short of what Tesla needs.
“I can’t see any other way to get to the volume of chips that we’re looking for. So I think we’re probably going to have to build a gigantic chip fab. It’s got to be done,” Musk said last year.
Intel has also come up in the conversation. Musk previously said Tesla hadn’t signed any deal with the chipmaker but suggested talks were worth having. “Maybe we’ll do something with Intel,” he said. No agreement has been announced.
Tesla did not respond to a request for comment on the project details when contacted by Reuters on March 14.
What Comes Next
Musk made the updated timeline announcement on Saturday, March 14, saying the launch was seven days away. A follow-up report from Digitimes Asia, published March 16, cited Musk as saying the launch was now five days out — consistent with the original timeline.
The Terafab project, if it launches on schedule, would represent Tesla’s first move into semiconductor manufacturing at scale. No further details on the facility’s location or initial production capacity have been officially confirmed.
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