SpaceX plans Terafab chip megafactory with up to $119 billion in potential investment

SpaceX wants to make its own chips. Not a few of them, either. The company, working with Tesla and Intel, is building Terafab, a vertically integrated semiconductor fabrication facility in Grimes County, Texas. Total investment across multiple phases could reach as high as $119 billion. The first phase is smaller but still enormous. Approximately $16.8 billion was committed in August 2026. What Terafab is supposed to do Terafab was officially announced on March 21, 2026. The goal is to produce advanced AI and computing chips internally rather than buying them from outside suppliers. The customer list is mostly Musk’s own companies. The chips are meant for Tesla’s Optimus robots and Cybercab vehicles. They are also intended for SpaceX’s Starlink satellites and its proposed space-based data centers. The site is planned to span more than 100 million square feet. The Motley Fool has described Terafab as set to be bigger than any building on Earth. The facility is projected to generate over 1 terawatt of annual AI compute capacity. The project is expected to create between 1,800 and 3,000 permanent positions. Texas rolled out the welcome mat The Texas Enterprise Fund is backing the firs...