Elon Musk (일론 머스크), Tesla's chief executive, unveils a plan for a next-generation semiconductor plant called Terafab and sets out a blueprint for building space-based computing infrastructure. The project involving Tesla, SpaceX and xAI is drawing attention as a mega project spanning AI chip manufacturing and space-based computing.

On March 21, foreign media outlets including IT Media and Business Insider report Musk discloses details of the Terafab plan and says, "We are starting a galactic civilization." He also posts on his X (formerly Twitter) account to the effect that "Terafab was the last puzzle piece," highlighting the project's symbolism.

Terafab is a massive semiconductor manufacturing project Musk is pushing by tying together Tesla, SpaceX and xAI as one axis. Planned for Austin, Texas, the facility is conceived as a "one-stop factory" handling logic semiconductors, memory and advanced packaging, as well as testing and revisions and photomask improvements in one place. Musk also sets out a plan to bring some semiconductor validation steps that are typically done outside a plant into the facility to speed up development and production.

Terafab aims to apply 2-nanometre process technology and have the capacity to process 100,000 wafers a month. Musk presents a plan to newly supply computing resources equivalent to power consumption of up to 1 terawatt (TW) a year through the facility.

Behind the project is a judgment that chip demand across Musk-led businesses would be difficult to meet with production outlooks from the existing semiconductor industry alone. Morgan Stanley semiconductor analysts in a recent report describe building a new semiconductor plant itself as a "Herculean" task. It requires massive capital, advanced technology and specialised equipment at the same time, they explain, adding the industry is currently divided into fabless firms such as Nvidia and foundries such as TSMC.

Musk categorises the chips to be produced at Terafab into two broad types. One is a general-purpose artificial intelligence (AI) chip to be used in Tesla's Full Self-Driving (FSD) system, the Cybercab robotaxi, the Optimus humanoid robot and the Dojo supercomputer. He in particular sees that, over the long term, Optimus production could be 10 to 100 times higher than cars, and forecasts the chips could be deployed more in robots than in vehicles.

The other is a space chip called D3. The chip is being developed with thermal design and operating characteristics tailored to the space environment, and a plan is being reviewed to mount it on solar-powered AI satellites to be deployed in low Earth orbit. Musk predicts that, over the long term, a significant portion of data centres will be located not on the ground but in low Earth orbit.

He cites power as the key advantage of space-based AI infrastructure. On Earth, power supply and site constraints are becoming more serious, but space is an environment where "the sun is always up," making it potentially more advantageous to secure power through solar generation. Musk argues that if launch costs fall enough, the cost of operating AI in space could be lower than on Earth, and that would make it a choice that effectively needs no further deliberation.

Musk also releases a conceptual design to implement the vision. He says each small AI satellite equipped with solar panels would be able to supply about 100 kilowatts (kW) of power, and that over the long term it could raise per-satellite power capacity to the megawatt (MW) class. "No one wants an AI computing centre in their backyard," he says, presenting space as an alternative for distributed AI computing infrastructure.

His plan does not stop there. He also mentions a plan to establish industrial bases on the moon, arguing that this could secure AI computing resources on the petawatt (PW) scale. That is 1,000 times 1 TW. He goes further, presenting a future vision that includes an "economy of abundance" in which everything is plentiful and a future in which travel as far as Saturn is free.

Terafab, however, faces many practical challenges as big as its vision. Semiconductor manufacturing is a representative equipment industry that requires astronomical upfront investment, supply-chain 확보, and capabilities in design, verification and mass production at the same time. On top of that, assessments say this plan to bundle ground-based AI chips and space chips, low Earth orbit AI satellites and lunar industrial bases all at once carries substantial technical difficulty and execution risk.

Even so, Terafab is seen as the pinnacle of Musk's vertical integration strategy connecting Tesla's autonomous driving and Optimus, SpaceX's space infrastructure and xAI's computing demand into one. Market attention is focused on whether Musk's plan to tie electric vehicles, robots, space and AI into one axis can translate into actual semiconductor manufacturing and space-based computing.

TERAFAB: the next step to becoming a galactic civilization Together with @Tesla & @xAI, we're building the largest chip manufacturing facility ever (1TW/year) – combining logic, memory & advanced packaging under one roof pic.twitter.com/p6bX3VotXl