Texas Border Business
By SpaceX
The foundations for an exciting future are being built in Texas. Earlier this year, SpaceX and Tesla announced Terafab – the most epic-chip building effort in the world – combining logic, memory and advanced packaging all under one roof. In April, Tesla broke ground on a new research fab on the North Campus of Giga Texas – the precursor to Terafab. SpaceX and Tesla announced that Terafab will be built in Grimes County, Texas. The facility will be an advanced semiconductor fab that will bridge the divide between current global chip supply and the compute demand of the future.
The combined SpaceX and Tesla demand for chips is expected to be in excess of 1 terawatt (TW) of compute, which is significantly larger than the current global supply. While we are deeply appreciative of our current chip suppliers, and encourage them to expand production whenever possible, this looming gulf between supply and demand is at the core of Terafab’s necessity.
Terafab will be epic in both its mission and in its sheer size, designed to build new compute at an unprecedented scale and speed. A vertically integrated factory with more than 100 million square feet of manufacturing space is planned. This facility will house the manufacturing, packaging, and testing of advanced logic and memory devices. Bringing these aspects together in one location will enable fast, recursive improvements and accelerate new compute deployed. Terafab will produce chips optimized for edge computing and inference for use in hardware like Tesla’s Optimus robots and self-driving Cybercabs, along with high-power chips designed for operating SpaceX’s space-based data centers.
BRINGING BACK ADVANCED MANUFACTURING TO AMERICA
Advanced chips are becoming foundational infrastructure for the modern economy. AI systems, satellites, secure communications, and advanced manufacturing all depend on reliable access to compute hardware. Much of the world’s semiconductor production remains concentrated overseas, and the United States has recognized the importance of rebuilding advanced manufacturing capacity domestically. Terafab aligns with that broader national effort by expanding high-end manufacturing capacity in Texas.
Texas has become central to our operations through Starbase, Bastrop, and McGregor, thanks to its commitment to innovation, manufacturing, and American leadership. SpaceX’s growing Texas footprint alone has already generated more than 56,000 direct and indirect jobs, over $28 billion in estimated economic impact since 2024, and hundreds of millions in indirect tax revenue since 2024.
The initial phase of Terafab is estimated to require approximately $16.8 billion in capital investments from SpaceX and Tesla, with potential future expansion phases bringing total investment much higher. This facility will employ at least 3,000 people, many of whom will be from Grimes and nearby Brazos County — continuing the trend of our other Texas sites where between 60% and 80% of new hires are local residents.
Grimes County offers strategic advantages for long-term industrial investment, including infrastructure access, available land, and proximity to major Texas markets. This project represents a significant opportunity for skilled trades, construction employment, suppliers and contractors, and long-term technical workforce development. We intend to work with local schools and workforce partners to help create pathways for future employment opportunities, responding to the unique needs of each community.
SpaceX and Tesla also take our role as being good stewards of the environment seriously. The Terafab site is committing to the use of Gibbons Creek Reservoir water for industrial operations rather than local groundwater; planned on-site wastewater treatment facilities; water reuse and conservation efforts; compliance with all applicable environmental and pollution control laws; and management of hazardous materials, chemicals, and industrial byproducts in accordance with all applicable regulations—while striving to exceed them.
BUILDING AN EXCITING FUTURE
We believe continued progress and leadership in space, AI, and advanced manufacturing will depend on the ability to build critical technologies domestically. By building and operating the largest chip manufacturing facility on the planet, we’re continuing down a path where future humans can compete over building the largest facilities in the solar system, and eventually the galaxy.
If you want to be a part of building that exciting future, come join us.
Information source: SpaceX
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