Elon Musk's ambitious super chip factory project, Terafab, has transitioned from a conceptual phase to concrete investment. On Thursday, SpaceX's official website published an article titled "Terafab Factory Breaks Ground in Texas," confirming the site selection in Grimes County, Texas.

The initial investment for the project by SpaceX and Tesla Motors is set at $16.8 billion, with future expansion phases potentially leading to a "substantial increase in total investment." In a May document, SpaceX indicated that the final investment for the Terafab project could reach as high as $119 billion. Musk also shared futuristic concept images of Terafab on social media, boldly declaring that "this factory will become the largest and most valuable building on Earth."

The announcement did not specify the initial phase's production capacity goals, only reiterating that Terafab aims to eventually produce "1 terawatt of computing power." One terawatt equals 1,000 gigawatts. SpaceX stated that the facility plans to have over 100 million square feet of manufacturing space, equivalent to 9.3 million square meters, where advanced logic chips and memory chips will be manufactured, packaged, and tested at the same site.

The factory will produce processors needed to drive Tesla Motors' Optimus humanoid robots and Cybercab autonomous taxis, as well as high-power chips for operating SpaceX's space data centers. Musk noted on Thursday that, roughly estimated, about 25% of the AI computing power generated by Terafab will be used for Tesla Motors' Optimus robots, and 75% for AI spacecraft.

An interesting development is that Musk's super chip factory will venture into the memory storage sector, putting it in direct competition with Samsung Electronics, SK Hynix, and Micron Technology. Intel previously announced its participation in the Terafab project, but the company's strengths lie in logic chips and advanced packaging, offering limited assistance in the memory field.

Tesla Motors' website shows the company is recruiting "Memory Process Integration Engineers" to drive end-to-end process integration of DRAM memory cell structures, from capacitor design to full process flow execution, ensuring high-volume manufacturing readiness (HVM readiness).

Referencing the construction timelines of TSMC and Intel, a wafer fab may take 3-5 years from groundbreaking to yield ramp-up. Therefore, Musk's ambitious chip factory is unlikely to alter the near-term chip supply landscape. It also remains unclear what process nodes the factory will use and how it will secure critical equipment like ASML's lithography machines.