Tesla Motors (TSLA) and SpaceX announced on Thursday that their joint advanced chip factory, named Terafab, will be located in Grimes County, just outside Houston, Texas, with an initial investment of $16.8 billion.
Elon Musk, the chief executive of both companies, posted on social media platform on Thursday that this facility "will undoubtedly be the largest and most valuable single building in the world." SpaceX disclosed that the factory's manufacturing area will exceed 100 million square feet. The companies stated that the project will create at least 3,000 jobs in Grimes County and the neighboring Brazos County.
A statement on the SpaceX website read: "This advanced semiconductor wafer fab will bridge the enormous gap between current global chip supply and future computing power demand." The core motivation for launching the Terafab project stems from Musk's grand vision for the future: millions of robots taking over human work, autonomous taxis handling transportation, and satellites transforming into data centers for AI training and inference. This blueprint requires massive computing power, far exceeding the level of current global chip production capacity.
In regulatory filings, SpaceX revealed that, under a multi-phase construction plan, the company's total investment in the project could reach up to $119 billion. However, during the company's first earnings call after its public listing earlier this week, SpaceX did not mention the Terafab plans. Intel stated it would participate in the Terafab project but did not disclose specific investment amounts or scope of cooperation, maintaining a cautious stance.
The SpaceX website explains: "Both in mission and scale, Terafab is an epic project. The factory aims to mass-produce computing chips at an unprecedented scale and speed, planning to build a vertically integrated industrial park with a total manufacturing area exceeding 100 million square feet, covering the entire process of manufacturing, packaging, and testing for advanced logic chips and memory chips." "Concentrating all processes in the same campus allows for continuous chip iteration and optimization, accelerating the deployment of next-generation computing hardware. Terafab will mass-produce specialized chips for edge computing and AI inference, tailored for hardware like Tesla Motors' Optimus humanoid robots and Cybercab autonomous taxis, while also producing high-power chips to support SpaceX's in-orbit space data centers."
SpaceX also promised in the announcement that the factory's water supply will be sourced from the local Gibbons Creek Reservoir, without tapping into groundwater. Prior to this official announcement, a heavily attended county council hearing was held locally on Wednesday, with hundreds of residents attending. The public's main concerns revolved around the project receiving substantial tax breaks and a perceived lack of transparency in the decision-making process.
In a statement from the Texas Governor's Office, Dr. Sarah Borovich, Superintendent of the Anderson-Shiro Consolidated Independent School District, said: "We believe this partnership agreement will strengthen our local school district, expand development opportunities, and help students better prepare for future challenges. There are many historically critical moments for a school district, and this project is one of them. We are committed to ensuring that all opportunities created by the agreement will be managed prudently and transparently, with all decisions centered on the best interests of students."
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