# Terafab

**Type:** Joint venture (Tesla, SpaceX, xAI)  
**Founded:** March 21, 2026  
**Location:** Giga Texas North Campus, Austin, Texas  
**Capital commitment:** $25 billion  
**Focus:** Vertically integrated semiconductor fabrication for AI compute

## Overview

Terafab is a $25 billion joint venture between Tesla, SpaceX, and xAI (acquired by SpaceX in February 2026) announced March 21, 2026. The facility consolidates chip design, lithography, fabrication, memory production, advanced packaging, and testing under one roof at Giga Texas North Campus adjacent to Tesla's Austin manufacturing base.

## Product Strategy

**Target output:** >1 terawatt (one trillion watts) of AI compute capacity per year

**Product allocation:**
- 80% for space-based orbital AI satellites (D3 chips custom-designed for orbital compute)
- 20% for ground-based applications (Tesla vehicles and Optimus robots — AI4 chip, AI5 in 2027 volume production)

**Intel partnership:** Intel joined Terafab April 7, 2026, bringing 18A process node capability to the joint venture.

## Strategic Context

Terafab extends SpaceX's vertical integration from launch (Raptor engines, Starship) and broadband (Starlink) into semiconductor manufacturing and orbital computing infrastructure. The 80% orbital allocation ties directly to SpaceX's January 2026 FCC filing for up to one million satellites as an orbital data center constellation.

**Contradiction:** SpaceX's April 21, 2026 S-1 filing warned investors that orbital AI data center plans "involve significant technical complexity and unproven technologies, and may not achieve commercial viability," creating a three-way contradiction between Musk's public optimism (Davos January 2026), the $20B Terafab orbital chip commitment (March 2026), and legal risk disclosure (S-1 April 2026).

## Timeline

- **2026-03-21** — Terafab announced as $25B joint venture between Tesla, SpaceX, and xAI with 1 terawatt annual AI compute target
- **2026-04-07** — Intel joined Terafab partnership bringing 18A process node capability
- **2026-04-21** — SpaceX S-1 filing warned orbital data centers "may not achieve commercial viability" despite $20B Terafab orbital chip allocation