Elon Musk took the stage over the weekend to announce a new partnership between Tesla, SpaceX and xAI to build a $25 billion chip-making factory in Austin, Texas, called Terafab.
Acknowledging Samsung, TSMC and other chipmakers, Musk said the Terafab project needs to get off the ground because existing semiconductor partners aren’t making chips fast enough. If built, Terafab would be the largest semiconductor manufacturing plant in the world.
Bringing more semiconductor facilities to the US isn’t new. The CHIPS Act of 2022 saw a dramatic rise in announcements for further investments in such facilities on American soil. Nvidia began manufacturing chips in its Arizona factory last year, and the motivation wasn’t only due to tariffs.
The CHIPS Act has paid out for several chip-making projects, including Intel’s massive $8 billion factory, though the introduction of additional semiconductor fabs in the US has been slow. Terafab would be a significant addition to the infrastructure for onshore chip making in
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