Tesla and SpaceX Scout Korean Firms for Texas AI Hub
Representatives visited South Korean booths at the SEMICON West trade show to identify manufacturing partners for a new Texas project.
Updated on Oct. 20, 2026 in Semiconductors
Live Poll
Do you believe diversifying supply chains helps lower long-term costs for the average consumer?
Tesla and SpaceX teams are actively seeking new suppliers for an upcoming AI-chip manufacturing complex in Texas. During the SEMICON West 2026 trade show, representatives visited 10 booths held by South Korean companies.
Why it matters
The search for new partners follows concerns regarding the cost of Japanese products, and the Terafab project is specifically looking to exclude Chinese suppliers. The initiative aims to secure competitive pricing while building out a massive domestic production capacity.
The planned Texas facility expects an initial production capacity of 100,000 wafers per month. Terafab representatives are currently prioritizing price quotes from Korean firms that undercut those of existing Chinese vendors.
The players
Tesla
An American clean energy and automotive company that produces electric vehicles and battery energy storage products.
SpaceX
An American spacecraft manufacturer and space launch provider that also operates a satellite internet constellation.
Intel
A global technology company that designs and manufactures semiconductors and computer components.
Taiwan Semiconductor Manufacturing Co.
A multinational semiconductor contract manufacturing and design company based in Taiwan.
The details
The massive project, dubbed Terafab, involves distinct manufacturing processes for memory and logic chips, with collaborations already underway alongside Intel and contact initiated with Taiwan Semiconductor Manufacturing Co. Industry giants Lam Research and Applied Materials have each established dedicated teams to support the ongoing development of the Texas site.
Timeline
The SEMICON West 2026 trade show took place in 2026.
The initial facility is targeted for completion before 2030.
The Tech Race
The development of the Terafab project mirrors the broader industry move toward domestic AI-chip production and supply chain decoupling from China. This strategy positions the firms to avoid reliance on traditional global vendors while scaling specialized manufacturing capabilities.
The growth of this complex could signify a long-term shift in technology hardware pricing and local job creation within the Texas technology sector. Consumers may eventually see more stable supply chains for AI-related hardware as domestic production capacity scales.
The takeaway
The move demonstrates how major corporations are actively restructuring their manufacturing pipelines to prioritize geographic proximity and cost efficiency. Local communities in Texas may see a substantial increase in industrial activity as the facility progresses toward its 2030 goal.
Further reading
For broader context on the industry, visit the Semiconductors section.
Live Poll
Do you believe diversifying supply chains helps lower long-term costs for the average consumer?
