Elon Musk, famously a man with big ideas, is building a semiconductor plant vast enough to power those ambitions.

Musk on Saturday announced what he calls the “Terafab,” a semiconductor manufacturing plant to be located in Austin, Texas, that will produce chips for Tesla vehicles, SpaceX spaceships and Optimus humanoid robots. Currently, Musk’s companies rely on other semiconductor manufacturers, including Samsung, to provide chips.

In a half-hour presentation on Saturday, Musk outlined his rationale for the Terafab factory, and it goes far beyond electric cars and robots. The new plant will manufacture the type of potent chips that Musk says are needed to transform humankind into “a galactic civilization,” evoking the fictional worlds depicted by authors such as Isaac Asimov and Iain Banks. 

“We want to make that real,” Musk said of the science fiction books he cited during his speech. “Not just fiction — to turn science fiction to science fact. That’s the glorious, exciting future that I certainly look forward to.”

He added that the planned factory will mark “the most epic chip-building exercise in history.”

What is the Terafab?

The Terafab will be a massive new chip factory jointly built by Musk’s businesses — xAI, SpaceX and Tesla. 

While Musk didn’t disclose a timeframe for the project, Tesla’s corporate account said in a social media post that the factory will ultimately manufacture 1 terawatt of chip output per year. 

“That’s more than all the chip manufacturers in the world combined can provide today, or even by 2030 (based on projected production growth),” Tesla said. 

The Terafab will create an “incredibly fast recursive loop for improving the chip design,” Musk said on Saturday. 

He added, “To the best of my knowledge, this doesn’t exist anywhere in the world, where you’ve got everything necessary to build logic memory and do packaging and test it, and then do the [photomasks], improve the masks, and just keep looping it.” 

Photomasks are a kind of template for printing circuits onto silicon.

What kind of chips will the Terafab build?

Musk said the new factory will focus on producing two types of semiconductors:

• A chip that will be used primarily in Optimus humanoid robots and electric vehicles
• A chip designed for space travel

“We need a high-power chip that is designed for space that takes into account the difficult environment in space, where you’ve got high power, high energy ions, photons, you’ve got electron build up,” Musk said. 

He added, “It’s a hostile environment in space … you want to optimize it for space, and you also want to generally run it a little hotter than you would normally run a chip on Earth to minimize the radiator mass.”

How will the new chips be used? 

Musk said he needs more powerful chips to achieve his goals of making big strides in robotics, AI and space travel. In January, the billionaire said he expects Tesla’s Optimus robot to hit the market in 2027 and that robots will eventually outnumber humans. That will free people from manual labor and provide labor for jobs where there is a shortage of workers, according to Musk. 

On Saturday, Musk also estimated that Tesla will eventually produce 10 to 100 times as many Optimus robots as electric vehicles, potentially producing as many as 10 billion robots a year. 

Some experts project strong demand for humanoid robots in the coming years, with Barclays analysts forecasting that the market could grow from about $2 billion and $3 billion today to at least $40 billion by 2035, and to perhaps as much as $200 billion. 

As for space, Musk noted that the Terafab’s chips could run solar-powered AI satellites, while outlining plans to develop an electromagnetic driver on the moon operated by Optimus robots and humans. Because the moon has less gravity than Earth, launching rockets or spaceships from the lunar surface would require less power, he said.

“And then you expand beyond that, to the planets, to the other stars, and create the most exciting possible future than that I can imagine,” he said. 

What are Musk’s broader goals in developing chips?

Musk said the more powerful chips are key to “unlocking an edge of amazing abundance.”

In his vision, an AI- and robotics-powered future will expand the global economy to a point where “literally any need you possibly want can be met,” he said during his presentation. 

He also outlined a world where interplanetary travel isn’t just easy, but free. 

“Wouldn’t it be amazing if you could buy a trip to Saturn, or frankly, if you just have a trip to Saturn. I think things will push to be free in the future,” he said. “If you can think of it, you can have it … which means anyone could have a trip to Saturn.”