Tesla CEO Elon Musk has confirmed that the company's ambitious Terafab project, a massive in-house AI chip manufacturing facility, will launch within days. The announcement, made via social media on March 14, 2026, set a seven-day countdown, with subsequent reports indicating the launch is now just five days away.
The Terafab initiative stems from Tesla's growing concerns over its reliance on external semiconductor suppliers like Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung Electronics. Musk has stated that even the "best-case scenario" for chip production from these partners is insufficient for Tesla's future needs, particularly for its autonomous driving and robotics roadmap. The facility's name, a play on Tesla's Gigafactory, signals its scale, with Musk describing it as "like giga but way bigger."
Reports from Digitimes Asia suggest the facility could target an astronomical output of up to 200 billion AI chips annually, though Tesla has not officially confirmed this figure. The company is currently designing its fifth-generation AI chip (AI5), which would be powered by Terafab. Musk has set initial production targets of at least 100,000 wafer starts per month, with plans to eventually scale to 1 million.
While Tesla currently collaborates with TSMC and Samsung, Musk has previously floated potential collaboration with Intel, though no formal agreement has been reached. The market reaction has been cautious, with Tesla (TSLA) stock experiencing a slight dip as investors weigh the significant financial and operational risks of such a capital-intensive, untested production model against the long-term strategic promise of securing its AI chip supply chain.
