After criticizing leading chipmakers for slow capacity expansion and claiming his companies need 100 – 200 billion AI processors annually, Elon Musk last week unveiled TeraFab — a chipmaker aiming to produce logic chips, HBM4 memory, and advanced packaging under one roof. Backed by an initial ~$20 billion investment, the project targets manufacturing chips consuming 1 terawatt (1 TW) of power per year using leading-edge process technology within the next several years.

But an exhaustive analysis by Tom's Hardware Premium reveals so many factors working against TeraFab, an effort designed primarily to produce chips in-house, that it appears highly unrealistic — at best a step towards partial vertical integration for Tesla, SpaceX, and xAI.