Tesla and SpaceX have confirmed plans to build a semiconductor manufacturing complex in Grimes County, Texas, as Elon Musk’s companies move to secure the advanced chips needed for artificial intelligence, robotics and space-based computing.
The project, known as Terafab, will begin with an investment of $16.8 billion. If later expansion phases proceed, total spending could rise significantly. The proposed facility will cover roughly 100 million square feet and is expected to create at least 3,000 jobs.
Unlike conventional chip plants, which often divide fabrication, packaging and testing across multiple locations, Terafab is designed to combine those operations at one site. The companies say this approach will speed development and allow new processor designs to move more quickly from testing into production.
Terafab Texas will be the largest and most valuable building on Earth by far.
And it will be stunningly beautiful. pic.twitter.com/4NweOqTL7y
— Elon Musk (@elonmusk) August 6, 2026
Tesla is expected to use the chips for products including its Optimus humanoid robots, autonomous vehicles and artificial-intelligence systems. SpaceX, meanwhile, is developing satellites capable of carrying computing hardware in orbit, an effort that would require a supply of specialised processors.
Musk has argued that existing semiconductor manufacturers will not be able to produce enough chips to meet the long-term needs of his businesses. Bringing production under greater internal control could reduce Tesla and SpaceX’s dependence on outside suppliers and provide more flexibility when designing hardware for specific applications.
The companies have described the Texas site as a vertically integrated manufacturing hub capable of supporting more than one terawatt of computing power annually. Musk said the building could eventually become the largest and most valuable industrial facility in the world.
Texas Governor Greg Abbott welcomed the announcement, presenting it as another investment in the state’s growing technology and manufacturing sector.
Despite its scale, the project will face challenges. Advanced chip factories require enormous amounts of capital, electricity, water, specialised equipment and highly trained workers. Construction and production timelines have not been fully detailed, and the facility’s eventual output will depend on whether the companies can execute their ambitious plans.
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