Tesla and SpaceX Build $119 B Terafab Chip Plant in Texas Without External Customers

Tesla and SpaceX are constructing the Terafab semiconductor complex in Texas, a project estimated to cost up to $119 billion. The plant will integrate logic, memory and advanced packaging and aims to produce about 1 million wafers per month within a decade—roughly the same capacity as Samsung’s memory business. No outside buyers are slated to purchase chips from Terafab, meaning the entire cost must be borne by Tesla, SpaceX and their investors. Elon Musk has publicly stated the project is progressing well, citing rapid supplier response times and engineers who make decisions on the spot. Intel has joined as a technology partner, but Musk admits he has no experience building chips. The venture represents an unprecedented risk: no fab has ever produced 1 million wafers a month solely for its owners’ use, and the plant’s success hinges on turning this ambitious plan into finished wafers before it can pay itself back.