SpaceX and Tesla to build massive Terafab chip factory in Texas

SpaceX and Tesla have announced the development of Terafab, a massive semiconductor manufacturing facility located in Grimes County, Texas. The project aims to integrate logic, memory, and advanced packaging under one roof, a rare level of vertical integration in the industry. The facility is planned to exceed 100 million square feet of indoor space, making it one of the largest industrial complexes in the United States.

The chips produced at Terafab will be optimized for edge computing and inference, specifically targeting Tesla’s Optimus humanoid robots, Cybercab autonomous vehicles, and SpaceX’s planned space-based data centers. The companies anticipate a computing demand exceeding 1 terawatt, which significantly outpaces current global supply. To meet this, the initial phase of the project involves an estimated $16.8 billion investment.

To ensure the continuous, high-stability power supply required for sensitive lithography and cleanroom operations, the plant will rely primarily on natural gas power plants rather than renewable sources. The project is expected to create at least 3,000 jobs, primarily in Grimes and Brazos counties. Additionally, the facility plans to use water from the Gibbons Creek reservoir to manage industrial water needs and implement on-site wastewater treatment.