Elon Musk confirmed that SpaceX is actively exploring a corporate merger with Tesla while accelerating plans for a dedicated semiconductor initiative called Terafab. The manufacturing project aims to produce initial test chips in 2027 and reach mass production by 2028 to deliver 1 Terawatt of annual compute power for AI and robotics. Independent board committees are currently reviewing the potential merger, though no binding agreements exist.
Musk outlined an aggressive schedule for the Terafab facility during a SpaceX corporate earnings call. The roadmap sets test chip production for mid 2027, followed by volume manufacturing in the third or fourth quarter of 2028. The long term goal centers on delivering 1 Terawatt of compute capacity annually to power autonomous robotics and artificial intelligence systems. Musk conceded that the timeline carries a wide margin for error, acknowledging the unpredictable nature of building silicon infrastructure from scratch. Industry data from Reuters indicates that advanced semiconductor plants in the United States typically require 3 years or longer to build, making a 2028 operational target unusually tight.
Musk initially attempted to acquire existing fabrication facilities from Intel, TSMC, and Micron, according to reporting by South Korean outlet The Elec. When those acquisition bids were rejected, strategy shifted toward direct partnerships. Intel has confirmed its participation in the Terafab project. Talks with TSMC broke down over conflicting factory management philosophies, resulting in a decision not to build joint manufacturing plants. Ongoing negotiations reportedly involve 10 South Korean semiconductor suppliers to secure component pipelines.
Musk addressed investor interest by stating that combining SpaceX and Tesla could represent a strong strategic move. Both companies have formed special committees composed of independent directors to analyze the structural details. Musk stated he will recuse himself from direct discussions due to personal conflicts of interest. The committees have not agreed on valuation metrics or structural terms, leaving any final transaction uncertain.
