SpaceX and Tesla are officially building Terafab, a massive semiconductor manufacturing facility, in Grimes County, Texas.
The announcement, made on August 6, 2026, details plans for a vertically integrated factory spanning more than 100 million square feet. The site will manufacture, package, and test advanced logic and memory chips in a single location.
According to the companies, combined chip demand from SpaceX and Tesla is expected to exceed 1 terawatt of compute power, far outstripping current global supply capabilities. The hardware produced at Terafab will power edge computing devices, including Tesla’s Optimus humanoid robots and Cybercabs, alongside high-power chips built for SpaceX’s planned space-based data centers.
The initial phase of the project represents a $16.8 billion capital investment from both companies, with total investment expected to grow in future expansion phases. The project is set to create at least 3,000 jobs, with a focus on hiring local residents from Grimes and Brazos counties.
To address environmental concerns, the facility plans to draw industrial water from the Gibbons Creek Reservoir rather than local groundwater, alongside operating on-site wastewater treatment and recycling systems.
The Grimes County location follows a precursor research fab that Tesla broke ground on earlier in 2026 at its Giga Texas site.
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