SpaceX and Tesla have announced the construction of Terafab, a cutting-edge semiconductor plant in Grimes County, Texas. This facility aims to integrate logic, memory, and packaging in one location to bridge the gap between current global chip supply and future computational demands.
The chip demand for both companies is expected to exceed 1 terawatt, a scale significantly larger than current global supply. The companies stated that this divergence between demand and supply is the core necessity behind the construction of Terafab.
The plant is planned as a vertically integrated facility with over 100 million square feet of manufacturing space. It will produce edge computing chips for Tesla's Optimus robots and Cybercab, as well as high-power chips for SpaceX's space-based data centers.
Capital investment for the initial phase is estimated at approximately $16.8 billion. It is reported that the total investment will increase further when including future expansion phases. The facility will employ at least 3,000 people, many of whom are expected to be recruited from Grimes County and neighboring Brazos County.
Source: xAI joins SpaceX (HN 899pt, 2085 comments) (HN Search (backfill), 2026-02-03)