SpaceX and Tesla estimate the first phase of the Terafab manufacturing complex will require $16.8 billion in capital investment.
The planned Grimes County, Texas, facility is anticipated to include more than 100 million square feet for manufacturing, packaging, and testing advanced logic and memory devices.
SpaceX says the project will employ at least 3,000 people and use Gibbons Creek Reservoir water for industrial operations instead of local groundwater.
SpaceX and Tesla plan to invest approximately $16.8 billion in the initial phase of Terafab, an advanced semiconductor manufacturing complex planned for Grimes County, Texas, according to an Aug. 6 announcement from SpaceX. The companies said future expansion phases could bring total investment significantly higher.
The multi-phase megaproject is intended to address a projected gap between global chip production and the computing capacity SpaceX and Tesla expect to require. Their combined chip demand is expected to exceed 1 terawatt of compute, which SpaceX said is significantly larger than current global supply.
Terafab would add semiconductor manufacturing to the companies’ expanding Texas operations and create a major new industrial construction program. SpaceX said the facility will employ at least 3,000 people, with many hires expected to come from Grimes County and nearby Brazos County.
SpaceX describes Terafab as a vertically integrated factory that would combine logic, memory and advanced packaging under one roof. More than 100 million square feet of manufacturing space is anticipated, according to the recent public statements.
The facility is expected to include manufacturing, packaging and testing for advanced logic and memory devices.
SpaceX said the integrated design is intended to accelerate improvements in chip performance and the deployment of new computing capacity.
SpaceX and Tesla plan an initial $16.8 billion investment in the Terafab manufacturing complex. Shown in a rendering above, the more than 100 million-square-foot advanced chip complex in Grimes County, Texas, is expected to employ at least 3,000 people. Image: SpaceX
The SpaceX announcement establishes the project’s location, initial investment, planned scale, workforce target, and several utility commitments. The timing, final building program, construction sequencing, trade demand and procurement strategy remain to be defined as SpaceX and Tesla advance Terafab from a corporate announcement to a construction program.
The planned scale, which could span over 100-million-square-feet, would make Terafab one of the largest proposed industrial construction projects tied to semiconductor production. The facility would require specialized manufacturing environments along with extensive mechanical, electrical, process utility, cooling and power systems. SpaceX has not released a construction schedule, phasing plan, or procurement strategy.
To put the proposed Terafab’s scale into perspective, a facility spanning as much as 100 million square feet is roughly 36 times the total square footage of the Empire State Building. The New York landmark contains approximately 2.7 million square feet, meaning the planned factory could equal the floor area of about 36 Empire State Buildings. The SpaceX figure is an early estimate, however, and the facility’s final size could change as plans develop.
The company said Terafab would produce chips optimized for edge computing and inference for hardware such as Tesla’s Optimus robots and self-driving Cybercabs. It also plans to produce high-power chips for SpaceX’s space-based data centers.
Those end uses connect the project to several construction markets, including advanced manufacturing, robotics, autonomous vehicles, satellite infrastructure and AI computing. The planned chip output would support both terrestrial equipment and systems intended for operation in space.
The announcement did not provide a timeline for the Grimes County project or identify contractors, designers, or construction managers.
Tesla broke ground in April on a research fabrication facility at the North Campus of its Giga Texas plant. SpaceX described the facility as a precursor to Terafab.
The research fab could provide an initial base for chip-related development before the larger Grimes County complex advances. The companies have not disclosed how the two facilities would be connected operationally or how research activities would transition to full-scale production.
Terafab’s planned manufacturing footprint would also be far larger than the research operation described at Giga Texas.
SpaceX said Terafab will create at least 3,000 jobs, many of them for residents of Grimes and nearby Brazos County. The company said between 60% and 80% of new hires at its other Texas sites have been local residents, a figure it cited as a model for the Terafab workforce.
The project is expected to create opportunities for skilled trades, construction workers, suppliers and contractors, in addition to long-term technical roles supporting semiconductor manufacturing. SpaceX said it intends to work with local schools and workforce partners to establish employment pathways tailored to community needs.
The announcement comes as semiconductor and data center development are increasing demand for specialized construction labor, advanced manufacturing expertise, and large-scale power and utility infrastructure. Terafab’s eventual schedule and construction phases will determine when that demand reaches the project site.
Terafab’s industrial operations will use water from Gibbons Creek Reservoir rather than local groundwater. The company also plans on-site wastewater treatment, water reuse, and conservation measures.
SpaceX said the site will comply with applicable environmental and pollution-control laws and manage hazardous materials, chemicals and industrial byproducts under applicable regulations.
The company did not provide projected water volumes, treatment capacity or a detailed environmental review schedule.
Grimes County’s infrastructure access, available land and proximity to major Texas markets were cited by SpaceX as strategic advantages for long-term industrial investment.
Those factors may support the development of a large, utility-intensive manufacturing campus, although the project’s power supply, transmission requirements, and other off-site infrastructure needs have not been disclosed.
SpaceX said its Texas operations across Starbase, Bastrop and McGregor have generated more than 56,000 direct and indirect jobs and more than $28 billion in estimated economic impact since 2024. Those figures are company estimates and cover SpaceX’s broader Texas footprint, not Terafab alone.
The Terafab plan adds semiconductor manufacturing to the facilities needed to support AI computing, including data centers, power infrastructure and specialized industrial plants. Its location in Grimes County also places the project within the broader Texas manufacturing network that includes Tesla’s Giga Texas campus and SpaceX facilities elsewhere in the state.
In a statement, SpaceX said, " The combined SpaceX and Tesla demand for chips is expected to be in excess of 1 terawatt (TW) of compute, which is significantly larger than the current global supply. While we are deeply appreciative of our current chip suppliers, and encourage them to expand production whenever possible, this looming gulf between supply and demand is at the core of Terafab’s necessity. "
The announcement comes as semiconductor and data center development are increasing demand for specialized construction labor, advanced manufacturing expertise and large-scale power and utility infrastructure. Terafab’s eventual schedule and construction phases will determine when that demand reaches the project site.
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