Tesla and SpaceX have confirmed where they’ll build Terafab, the semiconductor megafactory Elon Musk first teased in March. It’s going to Grimes County, Texas, about an hour northwest of Houston.
The companies put the initial phase at roughly $16.8 billion and said the finished site will span more than 100 million square feet, which they’re calling the largest chip manufacturing facility on the planet.
SpaceX laid out the plan in an update on its site Thursday, and Tesla echoed it on X. “Both Tesla & SpaceX will need far more chips than current & future global production can supply,” Tesla wrote, pointing to a goal of “producing over 1 terawatt of compute per year.”
Terafab will be built in Grimes County, TexasIn April, we broke ground on our research fab on the North Campus of Giga Texas – the precursor to Terafab.Both Tesla & SpaceX will need far more chips than current & future global production can supply.This is why we're building… pic.twitter.com/je4jKXuQrY— Tesla (@Tesla) August 6, 2026
The pitch is vertical integration at a scale nobody has attempted. SpaceX says Terafab will combine logic, memory, packaging, and testing under one roof, producing chips for Tesla’s Optimus robots and Cybercabs and for the “space-based data centers” SpaceX wants to launch. The first phase is $16.8 billion from the two companies, with “future expansion phases bringing total investment much higher.” At least 3,000 people would work there, most of them local hires.
