$25 Billion Terafab Semiconductor Plant Planned for Texas by SpaceX, Tesla, and xAI

Elon Musk is pressuring suppliers to speed up plans for a $25 billion semiconductor manufacturing plant in Texas. The initiative, known as Terafab, is a joint project involving SpaceX, Tesla, and xAI, aimed at producing AI-ready chips. US chip giant Intel has signed on to the Terafab project, which Musk argues is essential due to the inability of global chip production to meet rising demand.

Musk stated that even if existing manufacturers maximize output, it would not suffice to address the current shortages. Musk also highlighted concerns regarding Taiwan's TSMC, which builds 90% of the world’s most advanced semiconductors. He argued that TSMC's dominance creates a dangerous bottleneck in the supply chain.

The CEO of ARM Holdings echoed these concerns, stating that there should be semiconductor fabrication plants on every continent to ensure supply-chain resiliency. This perspective aligns with the growing recognition of the need for diversified semiconductor production capabilities worldwide. The article detailing these developments was published on April 16, 2026, at 7:13am EDT.