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Elon Musk has announced Terafab, a joint venture between Tesla, SpaceX, and xAI that aims to become the world's largest semiconductor manufacturing facility. The $20-25 billion project will be built in Austin, Texas, and is designed to produce more than one terawatt of AI compute capacity per year.
Terafab is a vertically integrated chip fabrication facility that will consolidate every stage of semiconductor production under one roof — from chip design and lithography to fabrication, memory production, advanced packaging, and testing.
Small-batch production is targeted for late 2026, with volume production projected for 2027.
Musk described the venture as a necessary step toward building "a galactic civilization." Terafab is part of a broader U.S. strategy to reduce dependence on foreign chip manufacturing, particularly from China. The announcement comes in the same week that federal prosecutors charged Super Micro co-founder Yih-Shyan Liaw with orchestrating the illegal export of $2.5 billion worth of Nvidia AI chips to Chinese entities.
OpenAI also announced plans to nearly double its headcount to roughly 8,000 employees by end of 2026, reflecting the broader AI industry's rapid expansion.
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