SpaceX has filed plans for an initial $55 billion investment in a massive semiconductor manufacturing facility in Grimes County, Texas, according to documents released by county officials. The project, internally dubbed Terafab, is a joint initiative between SpaceX, Tesla, and xAI — with technical support from Intel — and represents one of the largest industrial build‑outs in U.S. history.
The multiphase facility is designed as a vertically integrated chip fabrication plant that will handle everything from design and lithography to advanced packaging and testing. The filing describes a “multi-phase, next‑generation, vertically integrated semiconductor manufacturing and advanced computing fabrication facility,” with total spending potentially reaching $119 billion. A public hearing is scheduled for June 3, and the site is centered around the Gibbons Creek Reservoir area.
Elon Musk first unveiled the Terafab concept in March, calling it “a grand plan to eventually manufacture [our] own chips for robotics, artificial intelligence and space data centers.” The chips would power Tesla’s autonomous vehicles and Optimus humanoid robots, SpaceX’s Starlink satellites and proposed space‑based data centers, and xAI’s Grok AI models. Musk has been vocal about a critical chip shortage, stating bluntly: “We either build the Terafab or we don’t have the chips, and we need the chips, so we build the Terafab.”
While the Grimes County filing signals progress, Musk has clarified that Texas is only one of several locations still under consideration. The project is part of a broader Austin‑centered semiconductor strategy that initially carried an estimate of $20–$25 billion, meaning the $55 billion first‑phase figure represents a sharp escalation. The combined SpaceX‑xAI entity, reportedly valued at $1.25 trillion, is expected to go public in June, which could provide additional capital for the build‑out.
