We demonstrate a compact two-chip terahertz-emitting vertical-external-cavity surface-emitting laser source, which provides 1 THz output based on intracavity frequency conversion of dual-wavelength emission in a periodically poled lithium niobate crystal. The type-I frequency conversion scheme at room temperature highly benefits from the power-scaling possibilities in a multi-chip cavity with intracavity powers in excess of 500 W.