Tesla and SpaceX Invest $16.8B in Terafab Chip Factory in Texas
Tesla and SpaceX have initiated a $16.8 billion investment to construct Terafab, a semiconductor manufacturing facility in Texas. This project is aimed at meeting the increasing demand for advanced computing power in AI and space applications, with potential total costs rising to $119 billion.
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On August 6, 2026, Tesla and SpaceX announced an initial investment of $16.8 billion for the construction of Terafab, a semiconductor fabrication plant in Grimes County, Texas. The facility is projected to create at least 3,000 jobs and will cover over 100 million square feet, addressing the demand for advanced chips in AI and computing.
SpaceX has estimated future investments in the project could reach $119 billion, indicating a multi-phase construction plan. The companies plan to use water from the Gibbons Creek Reservoir to mitigate environmental concerns raised by the community.
The collaboration with Intel adds another layer, though specifics of its role remain unclear. The initiative highlights a strategic focus on domestic chip manufacturing to secure supply chains for critical technologies.
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