Musk Announces the Launch of Terafab: Billion-Dollar Chip Factory to Open on March 21

Elon Musk has announced the launch of his “Terafab” project, which is reportedly a massive AI chip factory. On March 14, 2026, the multibillionaire announced via X that the project would be “launched in seven days.” This sets the launch date for Saturday, March 21, 2026. According to t3n, the chip factory is intended to meet the massive demand from Tesla, xAI, and SpaceX. This demand amounts to up to 200 billion AI chips per year, exceeding the combined global production of TSMC and Samsung.

Terafab’s location could be in Texas

As early as the beginning of November 2025, Musk had stated that only the construction of a large factory of his own could satisfy his companies’ growing appetite for chips in the long term. Autonomous Tesla vehicles, AI supercomputers, and SpaceX projects are driving the demand. Terafab is set to be larger than a typical TSMC Gigafactory. This means it is an oversized project. However, few details are known so far. Rumors suggest the plant will be built north of the existing Gigafactory in Texas.

Since no new plant has been built at the planned location yet, the launch date is likely to refer to the start of construction. On March 21, interested parties are expected to learn more about the specific plans. Details regarding the costs, which have remained unclear so far, may also be revealed then. The Texas location would fit strategically into Musk’s existing corporate ecosystem.

Musk Could Skip Cleanrooms to Cut Costs

According to reports, a modern chip factory requires at least $20 to $30 billion. A U.S. location would significantly increase these costs. TSMC estimates that building a new chip plant in the state of Arizona would cost $165 billion. Musk, however, could reduce these costs through an unconventional approach.

Musk reportedly wants to do away with traditional cleanrooms. Instead of keeping the entire facility dust-free, only the silicon wafers themselves would be isolated and protected in special enclosures. Everywhere else, employees could move around without special protective clothing and, in theory, even eat. It remains to be seen whether this idea can be put into practice.