Musk: ASML Accelerating Terafab Deliveries for 2028 Chip Target

Musk says his companies are receiving faster deliveries of critical chip-making gear.

During a live broadcast of SpaceX’s third-quarter 2026 earnings call on X on October 20, Elon Musk confirmed that ASML and other key suppliers are moving equipment to Terafab at an accelerated pace. The joint venture between Tesla and SpaceX aims to build a vertically integrated semiconductor facility in Gibbons Creek, Texas. Musk stated that the primary goal is to reach volume chip production by the third or fourth quarter of 2028. He described this schedule as highly aspirational, noting it carries significant uncertainty. The company plans to produce its first experimental test chip at a research fab in Austin, Texas, around the second quarter of 2027.

The Terafab project represents a multi-billion dollar effort to manufacture logic, memory, and advanced packaging in a single location. The ultimate ambition is to produce one terawatt of AI computing power annually. To achieve this, the facility will utilize Intel’s 14A manufacturing node technology alongside traditional extreme ultraviolet lithography systems. Intel joined the venture in April 2026 to help co-develop and refactor silicon fabrication technology. ASML, the sole commercial supplier of the $400 million EUV machines required for leading-edge production, is considered the most critical partner in the supply chain.

Unofficial sources suggest the first EUV tool for Terafab was originally slated for delivery in mid-2027. It remains unclear if this date represents the expedited timeline Musk referenced during the broadcast. Beyond ASML, the project relies on a network of major equipment manufacturers. American firms Applied Materials, Lam Research, and KLA Corporation will provide front-end processing, metrology, and process control machinery. Japan’s Tokyo Electron is also a key supplier. Tesla and SpaceX are currently in talks with approximately ten South Korean equipment makers. These include Hanmi Semiconductor for advanced packaging and HPSP for high-pressure hydrogen annealing, along with firms providing specialized piping and valves.

Musk also outlined near-term computing goals for his AI entities during the same broadcast. He expects 2.5 to 3 gigawatts of computing capacity to be active by the end of 2026. He expressed high confidence in adding another 10 gigawatts in 2027. Musk said he would be surprised if the combined total did not reach 13 gigawatts by the end of 2027. To support this expansion, SpaceX and xAI are aggressively procuring next-generation NVIDIA architecture. The plan includes bringing a 440,000-GPU Nvidia Vera Rubin training cluster online by the end of the second quarter of 2027.

In comparison, other major projects face longer timelines. The restructured 10 gigawatt Project Stargate is expected to reach full capacity in the 2030s. Meta’s 5 gigawatt Hyperion project shares a similar schedule. Musk claimed that once Terafab is fully operational, the commercial value of its output could rival the GDP of the 20th largest country. For context, Switzerland currently holds that position with a GDP of approximately $1.14 trillion.

The facility aims to reduce reliance on external foundries like TSMC, which have faced shortfalls in cutting-edge AI processors. The chips produced at Terafab will supply xAI clusters, self-driving vehicles, Optimus humanoid robots, and SpaceX’s orbital AI data center. The broader AI industry is also expected to benefit from the increased capacity.

Despite the supplier commitments, experts question the feasibility of the one-terawatt target. Research firm Gartner estimates that total global AI-optimized data center capacity is roughly 44 gigawatts as of late 2026. This figure represents only 4.4 percent of Terafab’s planned annual output. According to EpochAI, global AI computing capacity has grown by a factor of 3.3 to 3.4 per year since 2022. The project’s scale challenges the current growth trajectory of the industry.

The announcement highlights a race to secure physical infrastructure for artificial intelligence. While equipment suppliers are adjusting their logistics to support the new demand, the technical and logistical hurdles remain substantial. The next steps will involve monitoring delivery schedules and initial test chip results from the Austin facility.