Chip Factory

• Elon Musk launched Terafab, a $20 billion-plus semiconductor fab in Austin, Texas, jointly developed by Tesla, SpaceX, and xAI to produce custom chips for EVs, Optimus robots, and AI computing. • The facility targets terawatt-scale power output, addressing global chip shortages constraining Musk's AI and robotics timelines amid TSMC capacity limits. • This vertical integration bolsters U.S. domestic manufacturing self-sufficiency amid geopolitical tensions and accelerates competition in AI hardware where compute is the key bottleneck.

• Tesla officially launched Terafab, a $20 billion AI chip manufacturing facility in Austin, Texas, marking a major expansion in US AI hardware production. • The factory aims to produce advanced AI chips for Tesla's autonomous driving and robotics initiatives, reducing reliance on foreign suppliers. • This development strengthens US domestic semiconductor capabilities amid global chip shortages and boosts Texas as a tech hub.