Musk's SpaceX, Tesla to build $16.8B Terafab chip factory in Texas - USA Today

TEXAS SpaceX Add Topic Musk's SpaceX, Tesla to build $16.8B Terafab chip factory in Texas Mateo Rosiles USA TODAY NETWORK Aug. 7, 2026, 12:57 p.m. ET Hear this story SpaceX and Tesla are building a multibillion-dollar semiconductor factory called Terafab in Grimes County, Texas. This venture represents a $16.8 billion initial investment and is expected to create at least 3,000 jobs. The facility will produce AI chips for Tesla's robots and SpaceX's space-based data centers. SpaceX and Tesla have announced a multibillion-dollar venture to build a semiconductor manufacturing facility , dubbed Terafab , in a Texas county just north of Houston. SpaceX announced on Aug. 6 that Terafab would be built in Grimes County and would manufacture new computer chips at an "unprecedented scale and speed." “The foundations for the most exciting future are being built right here in Texas,” said Elon Musk , founder and CEO of SpaceX and CEO of Tesla, in a statement. "The Terafab is bringing cutting-edge manufacturing to America, creating thousands of high-paying jobs in the Lone Star State, and enabling us to produce AI chips at scale for use on Earth and in space.” The new facility will be a vertically integrated factory with more than 100 million square feet of manufacturing space, housing the manufacturing, packaging, and testing of advanced logic and memory devices. The initial phase will be around $16.8 billion in capital investments from SpaceX and Tesla, with potential future expansion phases. The facility will also employ at least 3,000 people — many of whom will be from Grimes and nearby Brazos County, according to the company. The chips produced by the facility are set to be used in hardware such as Tesla’s Optimus robots and self-driving Cybercabs, as well as high-power chips designed to operate SpaceX’s space-based data centers. The announcement drew praise from Texas Gov. Greg Abbott, who said that a $30 million Texas Enterprise Fund grant has been extended to SpaceX. "The first-of-its-kind Terafab facility will accelerate chip production in Texas at an unprecedented scale, create thousands of good-paying jobs in Grimes County, and expand economic opportunity for generations of Texans across Southeast Texas and beyond," Abbott said in a statement. The facility is also a qualified project under the Texas Jobs, Energy, Technology, and Innovation program, created in 2023 to attract large, capital-intensive economic development projects that bring new capital investment and create jobs, while ensuring robust reporting and transparency. Why build Terafab in Grimes County? Grimes County offers strategic advantages for long-term industrial investment, according to SpaceX. This includes infrastructure access, available land and proximity to major Texas markets, while also providing opportunities for skilled trades, construction employment, suppliers and contractors and long-term technical workforce development. SpaceX also plans to work with local schools and workforce partners to create pathways to future employment opportunities that meet the specific needs of each community. One of those school districts set to be impacted by this project is Anderson-Shiro Consolidated Independent School District. "We believe this agreement will strengthen our district, expand opportunities, and better prepare our students for their future,” said tsaid Sarah Borowicz, superintendent of Anderson-Shiro CISD. "There are defining moments in the life of a school district, and this is one of those moments." SpaceX's investment in Texas Texas is home to the company's operations through its locations: Starbase — where Starships are launched from. Bastrop — home of SpaceX's Starlink factory. McGregor — SpaceX's rocket development and test facility. Since 2024, SpaceX has also generated more than 56,000 direct and indirect jobs, an estimated economic impact of more than $28 billion, and hundreds of millions in indirect taxes, according to the company. Mateo Rosiles is the Texas Connect reporter for USA TODAY and its regional papers in Texas. Got a news tip for him? Email him at mrosiles@usatodayco.com. Featured Weekly Ad