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Texas, meet Terafab
SpaceX and Tesla have officially picked Grimes County, Texas as the permanent home for Terafab, the companies’ giant semiconductor manufacturing venture. That means the project is moving from “cool idea on the internet” territory into the much less glamorous world of permits, foundations, and actual dirt being moved.
Why this matters
The pitch here is simple: Musk’s empire wants a lot more chips than the current global supply chain can comfortably hand over. SpaceX says its own plans for orbital AI, Tesla robots, EVs, and whatever else lives in the Musk-verse will need far more silicon than foundries can currently provide.
- Foundation prep starts almost immediately
- Renderings are expected within days
- Construction should follow within months
- The first phase could cost about $55 billion, with the full buildout potentially reaching $119 billion
Not your average fab
This isn’t just “let’s build a plant.” Terafab is being framed as a monster-scale bet on chip independence, with an eventual target of 1 million wafer starts per month using Intel’s 14A process. SpaceX even points to supply constraints at TSMC and Samsung Foundry as part of the rationale, which is basically the corporate version of “the store keeps running out of the thing we need.”
And the site choice wasn’t random. Water access, labor pool, and energy plans all mattered — including SpaceX’s plan to run the facility on its own natural gas plants rather than the ERCOT grid. In other words, this fab is being designed like a self-contained mini-industrial kingdom.
Big picture
This confirmation doesn’t mean the chip shortage is magically solved. Even SpaceX’s own S-1 warns Terafab may not fully close the gap. But for investors, the message is clear: the company is backing up its chip obsession with real infrastructure, and that could ripple across Tesla, Intel, and the broader semiconductor ecosystem.