Elon Musk to Announce Site Selection for Tesla's Massive 'Terafab' Chip Factory
Elon Musk announced that Tesla will soon reveal the location of its massive "Terafab" semiconductor project, which will have its own dedicated launch event. The project is a vertically integrated chip manufacturing initiative designed to supply AI chips for Musk's various ventures, including Tesla's Optimus robot and FSD. Establishing the Terafab will reduce Musk's companies' reliance on third-party chip manufacturers like TSMC, securing the hardware supply chain needed for massive AI scaling. It represents a major step toward vertical integration, combining logic, memory, and advanced packaging under one roof to support next-generation AI and robotics. The Terafab project, which Intel joined in April to provide manufacturing expertise, aims to deliver over 1 terawatt (TW) of AI compute power annually. Musk confirmed the facility will not be located at the Giga Texas campus due to its massive scale, with rumors pointing to Grimes County, Texas.
## BACKGROUND
Vertical integration in semiconductor manufacturing involves controlling multiple stages of the production process, from design to fabrication and packaging, rather than outsourcing. Intel, TSMC, and Samsung are currently the only three global chipmakers capable of mass-producing chips using advanced sub-5nm process nodes.