EVwire brief: Tesla expects its Terafab research lab in Austin to produce its first test chip around May or June 2027, with CEO Elon Musk aiming for useful chips at volume around Q3 2028.
Musk shared the timeline during Tesla's Q3 2026 earnings call, noting that Tesla will begin commissioning machinery at the lab in the first half of next year:
"Regarding the Terafab, the Austin-based research lab is progressing quickly. We'll begin commissioning machinery in the first half of next year. And hopefully, if things go well, we'll make our first test chip, just to see if we can make any chip at all, around May or June. So that's, I think, pretty exciting. And then our aspiration is to be making some kind of useful chip at volume around Q3 of 2028."
Musk also doubled down on his lofty expectations for the project, stating that the facility on its own should out-earn most countries in the world:
"And as I've said publicly on X, the Terafab, I think, will be the most valuable building in the world and will probably have an economic value that will place it in the top 20 of countries. So it's an epic project. And this will be an incredibly important asset, if not a necessary asset, in order to scale, especially Optimus, as we can address bottlenecks in semiconductors, whether it's memory, packaging, logic, or whatever the case may be."
Thinking of getting an EV, selling yours, or need EV accessories and adapters?
Check out our fresh EVwire EV Deals page for the discounts we've gathered.
The Terafab will not come cheap. When Deutsche Bank's Edison asked how much capital the project would need, Musk said Tesla and SpaceX are still working out who pays for what, but that the figure would be substantial:
"It's certainly in the tens of billions for Terafab. Although we've got to figure out what the relative split is between SpaceX and Tesla in terms of who pays for what at Terafab. But it's not going to be less than tens of billions in capital equipment up through early 2028, and then it'll be a lot more. It'll probably be north of $100 billion long term."
CFO Vaibhav Taneja added that Tesla has already placed most of the orders for the first set of equipment for the research fab, which is what the mid-2027 milestones are tied to. Musk described that phase as Tesla simply figuring out how to work the equipment, with real production following in late 2028, a timeline he called "lightning fast by fab standards."
The spending has yet to weigh heavily on Tesla's books. Taneja listed building a semiconductor fab among the drivers of Tesla's rising capex, and the company now expects to spend about $20 billion this year. When asked about semicap equipment, Musk said the Terafab is not a massive impact right now and that Tesla's capex is coming in a little lower than expected, though it should become more meaningful next year and reach the tens of billions in 2028.
By the way, it sure looks to us like you are an EV geek like ourselves.
Which means you belong with us: join 14,700+ reading our newsletters: subscribe
Context:
The Terafab's plans have taken clearer shape over the past few quarters. During Tesla's Q1 2026 earnings call, Musk described the Giga Texas research lab as a roughly $3 billion initiative capable of maybe a few thousand wafers per month, with SpaceX set to take on the initial phase of the scaled-up Terafab. Intel has also joined the project, with Musk stating that Tesla plans to use Intel's 14A process for the fab.
Tesla's own chip roadmap is moving in parallel. The company taped out its AI5 chip earlier this year, and Musk said on the Q3 call that AI5 should be integrated into Optimus around April 2027, bringing an order of magnitude more compute than AI4.
Source: Tesla Q3 2026 earnings call
DIG DEEPER into Tesla industry news with our dedicated TESLAWIRE page. And don't forget to subscribe to our EV industry newsletter to join 14,700+ EV geeks.
