Elon Musk has revealed plans for a new semiconductor manufacturing initiative aimed at supporting the growing artificial intelligence and robotics demands of Tesla and SpaceX. The proposed facility, referred to as “Terafab,” is expected to be located near Tesla’s Austin headquarters and gigafactory.

Elon Musk indicated that the project is driven by constraints in current semiconductor supply, which he views as insufficient to meet the compute requirements of next-generation AI systems. The initiative is intended to significantly expand chip production capacity, targeting large-scale compute output for both terrestrial and space-based applications.

The plan reflects a broader push to vertically integrate AI infrastructure across Musk’s companies. While no timeline has been disclosed, the project underscores increasing pressure on chip supply chains as demand for AI compute accelerates.