Elon Musk has revealed that Tesla and SpaceX will co-develop Terafab, a cutting-edge chip manufacturing complex in Austin, Texas. This marks the first time SpaceX is formally involved in Tesla's in-house silicon strategy.

Terafab will consist of two separate fabs, each focused on a single chip design: one for Tesla vehicles and Optimus humanoid robots, the other for AI satellites and space-based data centers. The combined site is planned to deliver one terawatt of computing capacity annually, double the current US production.

The project responds to projected chip shortages and rising internal demand that could surpass global output from Samsung, TSMC and Micron. By securing its own advanced fabs, the companies aim to control costs, improve supply resilience and support future AI and space-based applications.