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Tesla’s $55 billion Terafab takes shape in Texas
Tesla and SpaceX are building a $55 billion Texas chip facility for AI accelerators, but production dates, pricing and third-party sales remain unknown.
Image: iXBT
Tesla and SpaceX are moving ahead with construction of the Advanced Technology Chip Fab (ATCF) in Texas, a semiconductor research and manufacturing project intended to supply chips for Tesla vehicles, Optimus humanoid robots and AI data centers.
New drone footage and photographs from construction blogger Joe Tegtmayer, who tracks Tesla’s Giga Texas and SpaceX’s Starbase sites, show foundation work underway and construction materials arriving at the site.
The project was officially presented on March 21, 2026. Tegtmayer said activity had increased noticeably in recent days. Four new permits have also been issued for temporary buildings that will house contractors and Tesla offices, potentially signaling preparation for a larger construction phase and the eventual installation of manufacturing equipment.
What Tesla’s Terafab is intended to build
ATCF is described as the research center and first stage of Elon Musk’s broader Terafab project for producing in-house AI chips. Tesla and SpaceX are leading the effort, while xAI and Intel have also been identified as participants. The precise roles, commitments and timelines for those partners have not been publicly defined.
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The facility is planned as an integrated semiconductor operation covering:
- Logic development
- Memory development
- Advanced chip packaging
The resulting AI accelerators are expected to support Tesla electric vehicles, robotaxis, Optimus robots and future AI data centers, including proposed orbital projects. The concept therefore extends beyond automotive chips to a wider compute infrastructure strategy.
The first phase is estimated at approximately $55 billion, while total investment could reach $119 billion after full deployment. The project is being built at or near Tesla’s Giga Texas complex in the Austin area, across Travis and Grimes counties, making it a US-based effort rather than an EU manufacturing initiative.
No production date or chip pricing yet
The project’s scale is clear, but its commercial details remain open. The companies have not announced an exact production start date, a mass-production timeline, unit pricing or sales channels for third-party customers. There is also no announced plan for an EU facility or direct EU sales of ATCF-produced chips.
ASML CEO Christophe Fouquet previously confirmed discussions with Musk about creating one of the world’s largest semiconductor production centers. However, no equipment order or partnership contract involving ASML has been publicly announced.
For comparison, a reseller listing prices an NVIDIA H100 80GB accelerator at $91,338, while Intel guidance lists a Gaudi 3 eight-accelerator kit with a Universal Baseboard at $125,000. AMD positions its Instinct MI300X against these AI accelerators but does not publish a public per-unit retail price on its product pages. Those figures are not directly comparable with Terafab’s project investment, but they show the kind of high-value data-center hardware the facility could eventually target.
Intel’s involvement also comes as the company has begun using High-NA EUV in Panther Lake mass production, although the source does not establish whether that technology will be used at ATCF. For now, Terafab is a funded and visibly advancing Texas construction project—not yet a disclosed commercial chip supplier.
Computing Editor
Tomas lives in the terminal. He covers chips, laptops, and operating systems with a focus on performance and efficiency. He reads kernel changelogs the way other people read fiction, and he's always on the hunt for the perfect mechanical keyboard switch. If it processes data, Tomas has an opinion on it.
via iXBT
