SpaceX Files Plans For $55B Terafab Chip Facility In Southeast Texas

Elon Musk’s SpaceX is proposing to invest an initial $55B to build the first hub of its highly anticipated chipmaking project a little over an hour northwest of Houston.

SpaceX submitted a public filing to construct a semiconductor manufacturing facility in Grimes County, Texas, Reuters reported Wednesday. It's the latest step forward for Musk’s new multibillion-dollar project, dubbed Terafab, which seeks to produce more than one terawatt of computing power per year for use on Earth and in future space travel. 

The Grimes County Commissioners Court will convene on June 3 to consider a property tax abatement for SpaceX’s proposal, according to a public notice. The notice doesn’t mention Terafab by name but describes the planned project as a “multi-phase, next-generation, vertically integrated semiconductor manufacturing and advanced computing fabrication facility.”

The notice also says SpaceX’s estimated total investment could reach $119B if the project expands into additional phases.

A spokesperson for SpaceX didn’t immediately respond to a request for comment.

Terafab, announced last month, is a joint venture between Tesla, SpaceX and xAI that aims to produce artificial intelligence chips at scale and reduce reliance on external chip suppliers such as Samsung and TSMC. It’s part of Musk’s broader pivot toward establishing an integrated AI ecosystem as his companies boost spending on data centers and related infrastructure.

The current worldwide output of AI chip plants is about 20 gigawatts per year, which makes up only about 2% of what his project needs, Musk said in a video posted on X last month. 

“We need to build the Terafab or we don’t have the chips. And we need the chips,” he said.  

Musk had initially said last month that he selected Austin for the first Terafab facility but did not name a specific location at that time.