Tesla launched the $25 billion Terafab Project on March 21, 2026. CEO Elon Musk announced the initiative to establish in-house semiconductor manufacturing capabilities. This move aims to reduce the company's dependence on external foundries such as TSMC.
The facility will produce billions of custom AI processors annually. These chips will power Full Self-Driving (FSD) systems, Optimus humanoid robots, and Dojo supercomputing infrastructure.
Tesla seeks to mitigate supply chain volatility and geopolitical risks through vertical integration. The company will control every stage of production, including logic design and advanced packaging.
The weekend announcement delayed immediate market reactions. The project represents a significant challenge to traditional semiconductor manufacturers and specialized AI hardware producers.