* SpaceX, Tesla to build advanced chip factories in

Austin, Texas

* Terafab project involves SpaceX, xAI, and Tesla

collaboration

* Musk says global chip output meets only 3% of his

companies' future needs

By Joe Brock

LOS ANGELES, March 22 (Reuters) - SpaceX and Tesla

will build two advanced chip factories at a sprawling

facility in Austin, Texas, one to power cars and humanoid

robots, and another designed for artificial intelligence data

centers in space, CEO Elon Musk said on Sunday.

The comments followed Musk's announcement a day earlier of

plans to build "Terafab," an advanced AI chip complex in Austin.

"Terafab will technically be two fabs, each making only one

chip design," Musk wrote in a post on X.

Musk has previously said Tesla would need to build its own

AI chip plant, but the involvement of SpaceX had not been

disclosed. SpaceX, which is preparing for a public listing that

could value the company at around $1.75 trillion, recently

merged with Musk's social media and artificial intelligence firm

xAI.

"We either build the Terafab or we don't have the chips,"

Musk said during a presentation in an Austin facility on

Saturday, adding current global chip production would meet only

a small fraction of his companies' future needs.

Musk did not give a timeline for the new project. Musk has a

track record of announcing highly ambitious projects, though

several have faced delays or fallen away.

Musk said he was grateful to existing chip suppliers, naming

Samsung, TSMC and Micron, but said

demand from his companies would eventually exceed total global

chip output.

Terafab will eventually produce one terawatt of computing

capacity a year, compared with about half a terawatt currently

generated across the United States, Musk said.

He said one chip would be used in Tesla vehicles and Optimus

humanoid robots, while the second would be designed for AI

satellites in space.

"We need a high-powered chip designed for space that takes

into account the harsher environment," Musk said, adding it

would need to operate at higher temperatures.