TeraFab to build $55B semiconductor facility in Texas for Tesla and SpaceX

Elon Musk’s empire is getting into the chip-making business in a very big way. TeraFab, a collaborative semiconductor fabrication venture involving Tesla, SpaceX, Intel, and xAI, is set to build one of the largest factories on the planet in Grimes County, Texas, with an initial investment of $55 billion and a projected total cost that could balloon to $119 billion. The facility will span approximately 10 million square meters. For context, that’s roughly 2,500 acres, or about 1,900 football fields. The goal is to vertically integrate chip production across AI, autonomous vehicles, robotics, satellites, and data centers, essentially giving Musk’s constellation of companies their own semiconductor pipeline. What’s actually being built Musk announced the project on March 21, 2026, in Austin, Texas. The plan involves two components: a prototype facility at Tesla’s existing GigaTexas site in Austin, and the full-scale production campus in Grimes County. The targeted processing power is one terawatt annually, a figure that, if achieved, would place TeraFab among the most ambitious semiconductor operations ever attempted. Intel’s involvement as a fabrication partner adds credibility to wh...