The cost of the proposed Texas chip facility could reach $119 billion in the future.
SpaceX has unveiled the estimated cost of its planned semiconductor manufacturing facility in Grimes County, Texas.
The project, dubbed Terafab, could initially cost $55 billion and rise to $119 billion if additional phases are built, according to a public notice posted Tuesday on Grimes County’s website.
SpaceX founder Elon Musk announced the project in March as a joint venture among his companies SpaceX, xAI, and Tesla. In April, U.S. chipmaker Intel joined the effort as a partner.
The facility is intended to design and manufacture what Musk has described as “ultra-high-performance” artificial intelligence (AI) chips. Those chips would be used to power Tesla’s Optimus humanoid robots and driverless Robotaxis, as well as space-optimized computing systems for SpaceX satellites capable of handling AI workloads in orbit.
Musk has said the plant will aim to produce about 1 terawatt of annual compute. For comparison, the average electricity demand of the entire United States is roughly 0.5 terawatts. That means chips produced by the Texas factory each year, if fully deployed, could eventually require power equivalent to roughly twice the current average demand of the U.S. grid.
The proposed site of the facility is near Gibbons Creek Reservoir within a newly designated reinvestment zone, according to Tuesday’s notice. The reservoir is about 100 miles from Tesla’s headquarters in Austin, and about 20 miles east of College Station, home of Texas A&M University.
“SpaceX proposes construction of a multi-phase, next-generation, vertically integrated semiconductor manufacturing and advanced computing fabrication facility, which would represent a transformative investment in domestic semiconductor manufacturing capacity,” the notice states.
Grimes County commissioners will be meeting on June 3 to consider approval of a property tax abatement for the project, according to the notice.
Many technology companies design their own semiconductors, but rely on outside manufacturers to make them in specialized chip-fabrication plants. The Terafab project represents Musk’s latest effort to reduce dependence on outside suppliers such as Taiwan’s TSMC and Nvidia by building his own proprietary pipeline for AI hardware.
By Bill Pan
