Billionaire entrepreneur Elon Musk on Saturday outlined a proposal to build a new semiconductor manufacturing complex designed to supply chips for Tesla and SpaceX, targeting applications ranging from electric vehicles to space-based artificial intelligence systems.

Speaking about the initiative, Musk introduced the concept of “Terafab,” a facility he said would be jointly operated by the two companies. The plant is expected to be constructed near Tesla’s headquarters in Austin, Texas, according to a report by Bloomberg.

The proposed site would manufacture two distinct categories of semiconductors. One set would be tailored for use in automobiles and humanoid robots, while the other would support SpaceX and xAI projects, particularly efforts tied to data centers operating in space. “Terafab will technically be two fabs [chip fabrication facilities], each making only one chip design,” Musk said in a post on X.

Musk, who leads both Tesla and SpaceX as chief executive, has repeatedly voiced concerns about limitations in the current semiconductor supply chain, arguing that it cannot keep pace with the demands of his companies’ expanding technological ambitions.

“We either build the Terafab, or we don’t have the chips, and we need the chips, so we build the Terafab,” Musk said during the announcement event in Austin, Reuters reported.

According to Musk, the Terafab facility would aim to generate one terawatt of power annually—roughly twice the total yearly power production of the United States today.

He added that future chip designs could be capable of supporting between 100 and 200 gigawatts of power per year, along with more advanced versions intended to handle up to a terawatt of power in space-based environments. Musk did not provide a timeline for construction or production targets.