SpaceX plans an initial $55 billion Terafab chip and AI megafactory in Grimes County, Texas, as part of Elon Musk’s broader Austin-centered semiconductor and compute build‑out.
SpaceX is preparing to pour an estimated $55 billion into the first phase of its Terafab super‑factory in Texas, according to a recent notice from Grimes County officials and market reports tracking the project. A filing shared by local representatives on X states that “the County of Grimes, Texas, will be home to SpaceX’s multiphase, next‑gen, vertically integrated semiconductor manufacturing and advanced computing fabrication facility,” with “estimated capital for initial phase” of $55 billion and “estimated total investment of $119 billion.”
The project, dubbed Terafab, was first unveiled in March as a joint semiconductor initiative between Tesla, SpaceX and Musk’s AI company xAI in the Austin area. In remarks reported by Bloomberg, Musk called Terafab “a grand plan to eventually manufacture [our] own chips for robotics, artificial intelligence and space data centers,” and said the complex would be built in Austin and “jointly run by Tesla and SpaceX.”
Coverage from Fortune and other outlets indicated the initial cost of Terafab would be in the $20 billion to $25 billion range, with the first fab rising adjacent to Tesla’s Giga Texas plant in Austin. A detailed breakdown from Fintech Weekly described the launch event at Austin’s Seaholm Power Plant, noting that Tesla’s CFO pegged the early estimate at “between $20 and $25 billion” and that the facility would consolidate “chip design, lithography, fabrication, memory production, advanced packaging, and testing” under one roof.
The new Grimes County documentation suggests SpaceX is now planning a separate or expanded Terafab footprint beyond Austin, with the “SpaceX Reinvestment Zone No. 1 – 2026‑001” designated around the Gibbons Creek Reservoir area and a public hearing scheduled for June 3. The notice characterizes the site as a “multiphase” complex for semiconductor manufacturing and advanced compute, implying a long‑term build‑out that could eclipse earlier cost estimates.
Musk’s stated goal for Terafab is to ultimately produce enough custom silicon to support roughly a terawatt of computing power per year, powering Tesla’s autonomous vehicles and Optimus humanoid robots as well as SpaceX’s satellites and planned space data centers. As Yahoo Finance has reported, Terafab is being pitched as a vertically integrated answer to Musk’s chip supply constraints, with Tesla, SpaceX and xAI seeking to reduce dependence on external foundries like TSMC and Samsung.
The $55 billion figure tied to SpaceX’s Texas super‑factory underscores just how capital‑intensive that ambition is—and how aggressively Musk is betting that in‑house chip capacity will be a competitive edge across electric vehicles, AI, and space infrastructure.
