Musk Predicts Terafab Chipmaking Gains From Custom Equipment Arabian Post

(MENAFN- The Arabian Post) clearfix"> Elon Musk has said Tesla and SpaceX could eventually manufacture semiconductors better than established producers, arguing that their experience designing specialised industrial equipment could give their planned Terafab factory an advantage.

Speaking by livestream at Saturday's X Takeover gathering outside Tesla's Gigafactory in Austin, Texas, Musk acknowledged that semiconductor production would be exceptionally difficult and offered no timetable for achieving his ambition.

“I think it is accurate to say it's one of the hardest things to do in the world,” Musk said. He nevertheless suggested his companies could develop superior manufacturing methods, while conceding that progress might take several years.

Musk said visits to competitors' facilities had revealed comparatively little customised equipment. Tesla and SpaceX, he argued, have considerable experience building machinery for their own operations, which could help them rethink established chip production processes.

He also acknowledged his personal lack of semiconductor manufacturing expertise, telling the audience that he had“no idea how to make microchips, we'll figure it out”. His comments amounted to a statement of confidence rather than evidence that the proposed factory had achieved any manufacturing breakthrough.

Terafab is being developed by Tesla and SpaceX in Grimes County, Texas, with Intel participating in the project. The companies announced an initial investment of $16.8 billion in August, outlining plans for an enormous semiconductor manufacturing complex intended to serve their expanding artificial intelligence requirements.

The planned site will contain more than 100 million square feet of manufacturing space, developed in stages. The project is expected to generate at least 3,000 jobs and has been allocated a $30 million grant through the Texas Enterprise Fund.

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The manufacturing footprint is expected to cover approximately 3,000 acres, while SpaceX controls more than 13,000 acres in the area. Such dimensions underline the scale of the proposal, although planned floor space does not establish how quickly production capacity can be installed or brought into commercial operation.

SpaceX has described Terafab as an effort to combine chip fabrication, memory production, advanced packaging and testing within a vertically integrated operation. Its stated objective is to shorten the interval between designing processors, testing their performance and modifying manufacturing methods.

The company has identified two broad categories of chips for the venture. One would support computing performed directly by Tesla vehicles and Optimus humanoid robots. Another would be designed for high-power applications associated with SpaceX's proposed orbital data centres.

SpaceX has set a long-term target of producing computing hardware equivalent to one terawatt annually. That figure represents an ambition for the project rather than an independently demonstrated production forecast, and no firm date for reaching it has been established.

Intel joined the initiative in April and is expected to contribute expertise in chip design, fabrication and advanced packaging. SpaceX has disclosed that specific projects under its collaboration framework remain subject to separate negotiations covering expenditure, milestones and development schedules.

Questions about other manufacturing partners have also emerged. Musk has discussed the possibility of Taiwan Semiconductor Manufacturing Company participating in some capacity, while subsequently indicating that Tesla and SpaceX would retain ownership and operation of the facility.

The distinction matters because operating a leading semiconductor plant requires capabilities beyond designing specialised machinery. Advanced fabrication depends on complex lithography systems, precise control of materials, extremely low contamination levels and consistently high production yields.

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Established chipmakers have spent years refining these processes, and a new entrant must demonstrate that its technology can produce reliable devices economically at volume. Musk did not present comparative performance figures, production yields or independently tested samples supporting his prediction.

Tesla began work in April on a research fabrication facility at its Giga Texas campus, described as a precursor to the larger project. That facility is intended to help develop manufacturing techniques before the proposed Grimes County complex reaches full scale.

The companies have also said they intend to continue working with existing semiconductor suppliers as they pursue internal manufacturing. Their stated concern is that future demand from robotics, autonomous vehicles and artificial intelligence infrastructure could exceed the capacity available through their current supply arrangements.

SpaceX has emphasised that bringing multiple manufacturing stages together could accelerate testing and design improvements. However, the eventual cost and pace of production will depend on technical execution, equipment availability and operational performance.

Construction of the Grimes County complex is planned in phases, with manufacturing, packaging and testing facilities to be developed on the same campus.

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