Racing Alone: Inside Musk's $119B Terafab Chip Plant With No Outside Buyers

The Texas chip factory for Tesla and SpaceX, Terafab, is being built at a rapid pace. Elon Musk reports good progress, and a supplier from Korea notes that inquiries are often answered within 60 minutes, even if submitted in the early hours from the US time zone.

This speed is crucial for the shareholders of both firms. No external clients are helping to cover the cost, which is estimated to be as high as $119 billion.

Terafab Engineers Handle Decisions Directly

The update was posted on X by Musk, who quoted an account focused on Tesla that had compiled the supplier comments.

The Terafab project is going well https://t.co/YdiMcVF8qi

— Elon Musk (@elonmusk) October 30, 2026

The comments were initially published in a column by the South Korean news site The Elec. An executive from a Korean supplier told the outlet that replies to US inquiries sent in the early morning come back in 30 to 60 minutes.

The executive said the fast turnaround was possible because the engineers at Terafab have the power to make their own decisions. This makes Terafab a different kind of client than what the chip industry typically sees.

An equipment supplier from outside Korea took it a step further.

“I’ve never seen this level of execution speed in the semiconductor industry.”

Purchasing employees from Tesla and SpaceX also stopped by around 10 Korean stands at the SEMICON West conference, The Elec states. Over half of those companies have already signed nondisclosure agreements and are talking about possible component deliveries.

Is a Chip Plant Without External Clients Viable?

Planned for Texas, Terafab is a chip complex designed to host logic, memory, and advanced packaging operations in a single location. Tax documents filed with two area school districts value the entire four-phase project at as much as $119 billion.

The target is to produce one million wafers per month within ten years. According to The Elec, this quantity is comparable to the memory manufacturing capacity of Samsung.

Musk himself acknowledged in October that he does not know how to make chips. Even so, he anticipates that Tesla and SpaceX will outperform all competitors in this field.

Intel came on board as a technology collaborator in the spring. The partnership has kept Intel stock in the spotlight.

Nevertheless, The Elec points to two unanswered questions. No semiconductor facility has ever turned out one million wafers a month for only its owners. Additionally, Musk has never operated a chip factory before.

SpaceX bought Musk's artificial intelligence startup xAI in February and went public in June via a $75 billion IPO. These fresh public investors now share the financial load. Their compensation is meant to come from a captive AI chip source. Until that materializes, Terafab is an expensive gamble depending on its engineers to transform their speed into usable wafers.