Elon Musk's Terafab Foundry Courts Top Chipmaking Giants for AI Self-Sufficiency Push

Elon Musk's ambitious semiconductor venture, Terafab, is moving closer to reality after his team began reaching out to some of the world's leading chipmaking equipment suppliers. According to Bloomberg, staff representing the joint venture between Tesla and SpaceX have contacted industry heavyweights Applied Materials, Tokyo Electron, and Lam Research to request price quotes and delivery timelines for critical manufacturing equipment.

Musk first unveiled the Terafab initiative in March, positioning it as a bold step toward making Tesla, SpaceX, and his AI company xAI entirely independent in chip production. The facility is designed to handle every stage of semiconductor manufacturing in-house, spanning chip design, fabrication, lithography, masking, and packaging — a vertically integrated model rarely attempted at this scale.

Perhaps the most striking claim tied to the project is its production target: one terawatt of computing power annually. That figure would dwarf the current combined output of most chipmakers operating globally today, signaling just how transformative Musk envisions the facility to be.

The project gained further credibility last week when Intel announced it would be joining the venture, adding established semiconductor expertise to what is shaping up to be one of the most closely watched manufacturing plays in the AI industry.

At its core, Terafab is built to fuel Musk's interconnected ambitions across artificial intelligence, robotics, and autonomous driving — areas that demand enormous and ever-growing supplies of cutting-edge processing power. By controlling chip production from start to finish, Musk aims to eliminate dependence on external suppliers and gain a decisive competitive edge in the global AI race.

If realized, Terafab could fundamentally reshape how AI hardware is designed, produced, and distributed at an industrial scale.