Tesla, SpaceX to Build New Chip Factory in Texas

Elon Musk says the facility will supply chips for Tesla vehicles and SpaceX satellites.

Mar. 22, 2026 at 4:08pm

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Elon Musk, the CEO of both Tesla and SpaceX, announced that the two companies will team up to build a new chip factory in Austin, Texas. The facility, dubbed the "Terafab", will produce chips to be used in Tesla vehicles as well as SpaceX's satellites and Optimus humanoid robots.

Why it matters

The new chip factory represents a strategic move by Musk's companies to vertically integrate their chip supply and support their ambitious plans in electric vehicles, space exploration, and artificial intelligence. It also signals the growing importance of chip manufacturing in the technology industry.

The details

The Terafab facility will be located in Austin, Texas and is expected to manufacture chips that will be used in Tesla's vehicles as well as SpaceX's satellites and Optimus humanoid robots. Musk emphasized the importance of having an in-house chip supply to support the companies' plans for AI, robotics, and space technology.

  • Musk announced the new chip factory during a presentation in Austin on March 22, 2026.

The players

Elon Musk

The CEO of both Tesla and SpaceX, who is leading the effort to build the new chip factory.

Tesla

An American electric vehicle company that will use the chips produced at the new factory.

SpaceX

A private aerospace manufacturer and space transportation services company that will use the chips in its satellites and other space technology.

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What they’re saying

“The facility, which he called the Terafab, is expected to make chips Tesla would use in its vehicles and in the Optimus humanoid robots the company is increasingly focusing on. It will also make chips optimized for use in space, where SpaceX is planning to deploy massive numbers of satellites capable of handling AI computing tasks.”

— Elon Musk

What’s next

The companies have not yet provided details on the timeline for the construction and opening of the new chip factory.

The takeaway

The new chip factory is a strategic move by Musk's companies to vertically integrate their chip supply and support their ambitious plans in electric vehicles, space exploration, and artificial intelligence, highlighting the growing importance of chip manufacturing in the technology industry.