SpaceX and Tesla Plan $55 Billion Semiconductor Plant in Grimes County, Texas

SpaceX has filed plans to invest in a semiconductor manufacturing facility called Terafab in Grimes County, Texas. The initial phase carries an estimated capital investment of $55 billion, with the total for all phases estimated at $119 billion. Tesla and SpaceX will jointly operate the facility.

The project is described as a multi-phase, next-generation, vertically integrated semiconductor manufacturing and advanced computing fabrication facility. The filing states that the Terafab project would represent a transformative investment in domestic semiconductor manufacturing capacity. m.

At the Grimes County Justice & Business Center to discuss approving a property tax abatement for the project. The proposed location is the Gibbons Creek Reservoir in rural Texas, about 100 miles from Tesla’s headquarters in Austin and close to College Station, home of Texas A&M University. Grimes County is a little over 2 hours from Austin.

Musk announced the joint Terafab project between SpaceX, xAI, and Tesla in March 2026. The facility aims to produce critical AI chips for Tesla’s robotaxis and Optimus robot. Morgan Stanley analysts estimated in March 2026 that a factory capable of producing chips at the scale Musk suggested could cost up to $45 billion.

The Terafab project has announced Intel as a partner. It has listed job ads including one role with a base salary of up to $240,000. SpaceX is preparing for what is expected to be the largest IPO in history.