Dive Brief:
- SpaceX will invest $16.8 billion on the first phase of its Terafab semiconductor manufacturing project in Grimes County, Texas, Gov. Greg Abbott said Thursday.
- The 100-million-square-foot campus, once completed, will produce chips for SpaceX and Tesla, housing all aspects of the semiconductor process under one roof, according to a new release. The first phase is set to begin construction this year and create 3,000 jobs, state records show.
- SpaceX was granted $30 million from the Texas Enterprise Fund as part of a “deal-closing” for its project. The facility is eligible for economic incentives under the Texas Jobs, Energy, Technology and Innovation program.
Dive Insight:
In March, Elon Musk unveiled on his social media platform X that he was looking to build the Terafab project near Austin, Texas, with the long-term goal of manufacturing 1 trillion watts of computing power per year. That is up significantly from the current global supply of about 20 gigawatts.
Through the project, Musk said he aims to expand vertical integration of chip design and manufacturing to alleviate potential supply shortages at his companies Tesla and SpaceX.
Intel joined the project in early April. The Santa Clara-based company plans to help scale the project by contributing its expertise in “designing, fabricating and packaging ultra-high performance chips,” according to an investor filing.
The massive campus aims to develop and produce semiconductors for robotics and autonomous vehicles, as well as for space applications, including satellite data centers. SpaceX is also looking to eventually establish manufacturing capabilities on the moon and Mars, space tourism and asteroid mining.
“We’re now embarking on the most epic chip-building effort — combining logic, memory, and advanced packaging all under one roof — in Grimes County, Texas,” Musk said in a statement Thursday.
The Terafab site will house the full semiconductor production life cycle, from circuit design and photomask generation to wafer fabrication, packaging and integration, according to state records. Its all-in-one design aims to reduce production cycle times, enhance design iteration speed and improve supply chain resilience.
The project is expected to be built in up to four phases, with a total investment range between $55 billion and $119 billion. The long-term expansion could exceed this level based on capacity scaling, technology evolution and market demand, SpaceX said.
There are eight JETI applications filed with the Texas comptroller related to the Terafab project. They span Anderson-Shiro Consolidated Independent School District and Iola Independent School District.
The first phase of the project is estimated to include $10.3 billion in capital expenditures in Anderson-Shiro. Construction is set to be completed in 2028, with additional phases ready at later times.
While public leaders largely support the project, including tax incentive approvals from both school districts, Grimes County residents have pushed back on what it could mean for their rural way of life.
At a packed public meeting in June, residents raised concerns about how the industrial project would negatively affect their home prices and the environment, Houston Public Media reported. They also aired frustrations about the rushed process, arguing for stronger oversight and rezoning input from the public.
Ultimately, Grimes County commissioners approved a 35-year tax abatement for SpaceX.
On Thursday, Musk posted on X that Terafab will be “the largest and most valuable building on Earth by far” and “it will be stunningly beautiful.”
Attached to his message was a video rendering of the Terafab campus, similar in scope to a futuristic airport.
In a separate post, he said it would be “50 times the size of the Pentagon when complete.”
