Elon Musk said that currently available chips can only fulfill 2% of what his companies actually need. So rather than waiting for others, Tesla and SpaceX announced on Saturday night that they will jointly build a chip factory called TeraFab in eastern Travis County, Austin, on Tesla's property. What makes the TeraFab factory unique is that the entire chip manufacturing process will be carried out under one roof. Elon Musk says there is currently no such facility anywhere in the world. This approach will allow chips to be manufactured, tested, and redesigned quickly — potentially surpassing all other factories in the world by many multiples. Announcing TERAFAB: the next step towards becoming a galactic civilization — SpaceX (@SpaceX) March 22, 2026 The factory will primarily produce two types of chips. The first is intended for Tesla vehicles and Optimus robots, and the second is chips resistant to radiation and high-energy ions from space. While manufacturing chips in-house, Musk confirmed they will continue purchasing chips from TSMC, Samsung, and Micron as well. The idea of pushing beyond the physical limits of chip design and rapidly testing unconventional designs is exciting, but no timeline was given for when TeraFab will start producing chips. Ref: digitaltrends