Musk: ASML Rushes Equipment for Texas Chip Mega-Project

For consumers and industry watchers in the Southeast, the most immediate shift is the promise of a massive new semiconductor hub in Texas. Elon Musk announced that major equipment suppliers, including ASML, are moving shipments faster to support a joint venture between Tesla and SpaceX. This acceleration is intended to help the project meet an aggressive target for volume chip production at its primary facility in Gibbons Creek, Texas, by the third or fourth quarter of 2028.

The timeline for this venture has evolved through a series of recent milestones. In April of this year, Intel officially joined the effort to co-develop silicon fabrication technology, granting access to its 14A manufacturing node. While SpaceX plans to produce an experimental test chip at its Austin research facility around the second quarter of 2027, the main Terafab site remains the focus of the expedited logistics. Unofficial sources suggest the first extreme ultraviolet lithography tool was already slated for mid-2027 delivery, though it is unclear if the recent announcements have further compressed that window.

Musk made these statements during a live broadcast of the Q3 2026 earnings call on October 20. He described the current schedule as "highly aspirational" with "big error bars," acknowledging the difficulty of the goal. Despite the caution, he expressed deep appreciation for the suppliers accelerating their deliveries. The facility is designed to be vertically integrated, handling logic, memory, and advanced packaging in one location. It relies on traditional EUV lithography systems, a technology for which ASML is the sole commercial supplier globally.

Beyond the Texas facility, Musk outlined broader computing ambitions for his AI enterprises. He expects to have 2.5 to 3 gigawatts of computing capacity active by the end of 2026, with a highly confident projection of adding 10 more gigawatts in 2027. To achieve a total of 13 gigawatts by the end of next year, SpaceX and xAI are procuring next-generation NVIDIA architecture. Specifically, plans are in place to bring a 440,000-GPU training cluster online by the end of the second quarter of 2027.

The commercial scale of the project is intended to rival national economies. Musk stated that once fully operational, the output value of Terafab’s chips could place it within the top 20 global country GDPs. For context, the 20th ranked country, Switzerland, has a GDP of approximately $1.14 trillion. The project aims to manufacture one terawatt of AI computing power annually, a figure that dwarfs the current global AI-optimized data center capacity of roughly 44 gigawatts.

Several other major suppliers are involved in the build-out. American firms Applied Materials, Lam Research, and KLA Corporation, along with Japan’s Tokyo Electron, are providing front-end processing and metrology equipment. Tesla and SpaceX are also in negotiations with about 10 South Korean manufacturers, including Hanmi Semiconductor and HPSP, for specialized packaging and process control components.

The primary goal of Terafab is to mitigate future shortfalls of cutting-edge AI processors that currently rely on external foundries like TSMC. The facility will supply chips for xAI clusters, self-driving vehicles, Optimus robots, and SpaceX’s orbital data centers. While experts have questioned the feasibility of the one-terawatt target, the current push involves a coordinated effort across the supply chain to secure necessary machinery in a market where capacity remains tight.