Tesla and SpaceX announced on August 6 that their jointly developed advanced chip factory, Terafab, will be built in Grimes County near Houston, Texas, with an initial project investment of $16.8 billion.
Elon Musk, CEO of both companies, stated in a post published on Thursday that the facility would be “the largest and most valuable building on Earth.” According to SpaceX, the site plans to include over 10 million square feet of manufacturing space. The company noted that the facility will employ at least 3,000 workers from Grimes County and neighboring Brazos County.
A SpaceX official post stated, “This facility will be an advanced semiconductor wafer fab, bridging the gap between current global chip supply and future computing demands.”
The core driver of the Terafab project lies in Musk’s vision for the future—millions of robots replacing human jobs, autonomous taxis handling all driving tasks, and satellites serving as data centers for AI training and inference—which demands an enormous computational capacity far exceeding current production levels. Just SpaceX alone has stated in documents that it may invest up to $119 billion in the project under a “multi-stage” construction plan—though the company did not mention Terafab during its first earnings call earlier this week.
Intel has stated that it will contribute to the Terafab project but remains cautious about the specifics of its involvement.
SpaceX wrote on its official website: “Terafab’s mission and scale will be epic, aiming to build new computing power at an unprecedented scale and speed. With over 100 million square feet of manufacturing space planned for vertically integrated factories, it will accommodate the production, packaging, and testing of advanced logic and memory devices. Concentrating these processes in one location will enable rapid, iterative improvements and accelerate the deployment of new computing power. Terafab will produce chips for edge computing and inference, used in hardware such as Tesla’s Optimus robot and autonomous Cybercab, as well as high-power chips for operating SpaceX’s space data centers.”
SpaceX stated in the post that it “commits to using” water from the local Gibbons Creek reservoir rather than groundwater.
The announcement was issued following a large-scale county meeting on Wednesday, attended by hundreds of residents who expressed concerns about the millions in tax incentives granted to the project and the lack of transparency.
Dr. Sarah Borowicz, Director of the Anderson-Hill Independent School District, stated in a press release issued by the Texas Governor’s Office: “We believe this agreement will strengthen our district, expand opportunities, and better prepare students for their future. A district will have pivotal moments in its development, and this is one of them. We now commit to ensuring every opportunity created through this agreement is managed wisely, transparently, and always with a student-centered focus.”
