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Tesla and SpaceX confirm Terafab in Texas with $16.8B initial phase

📍 Electrek

Tesla and SpaceX confirmed the location of Terafab, a semiconductor megafactory in Grimes County, Texas, with an initial investment of about $16.8 billion. The site will cover over 100 million square feet, making it the largest chip manufacturing facility globally. Terafab will combine logic, memory, packaging, and testing under one roof, producing chips for Tesla’s Optimus robots, Cybercabs, and SpaceX’s space-based data centers. At least 3,000 local employees are expected to work there. The plant will use water from the Gibbons Creek Reservoir for cooling, avoiding local groundwater use.

🔎 Why it matters: The confirmation of Terafab’s location and $16.8 billion initial investment is key to Tesla and SpaceX’s strategy to produce over 1 terawatt of compute annually, exceeding current global capacity.
📈 Upside: Terafab will integrate multiple chip manufacturing processes in one facility, improving efficiency and production control.
📉 Risk: The project still depends on future phases and non-finalized agreements, with uncertainty about Tesla and Intel’s final involvement.
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