The Terafab super chip factory, a collaborative project between Musk’s SpaceX and Tesla, recently broke ground in Grimes County, Texas, USA. Spanning over 100 million square feet, the factory represents an initial investment of $16.8 billion, with the potential for total long-term investment to reach up to $119 billion. Its goal is to establish a vertically integrated chip manufacturing hub, encompassing the entire spectrum of advanced logic chip production, DRAM memory chip fabrication, lithography, advanced packaging, and testing. Musk emphasized that the factory will be designed to meet the future computational power demands of at least 1 terawatt for both SpaceX and Tesla, a scale that surpasses the current global chip supply capacity by more than tenfold. The factory leverages Free Electron Laser (FEL) technology to generate EUV beams for its lithography workshop, significantly enhancing energy conversion efficiency and reducing maintenance costs.

While SpaceX and Tesla serve as two reliable customers, the chip manufacturing industry presents formidable technical challenges, including uncertainties in yield improvement, critical equipment supply, and the assembly of skilled engineering teams. Moreover, the substantial long-term investment will put Musk’s financial strategy to the test.