SpaceX is proposing to invest a whoping $55 billion to construct a semiconductor production facility in Texas. This is according to a Bloomberg report that cites a public notice posted on the Grimes County website Wednesday. The project is set to join others in the US such as the SK Hynix Chip Facility in Indiana in providing for the computing needs in the country and even globally.

Also, the rocket company plans to build a next-generation, vertically integrated semiconductor manufacturing and advanced computing fabrication facility in Texas. The total capital investment could reach $119 billion if additional project phases are completed.

Moreover, Elon Musk introduced the Terafab concept in March as a joint venture between SpaceX and Tesla Inc. To manufacture chips for his robotics, space and artificial intelligence projects. Musk said the semiconductor industry was moving too slowly to meet the chip requirements for his initiatives and the broader tech industry.

The facility aims to produce 2 nanometer chips and would eventually support a terawatt of computing power per year, the amount Musk expects the companies to use as he expands AI and robotics investments.

SpaceX representatives contacted chip equipment manufacturers, including Applied Materials Inc., Tokyo Electron Ltd. And Lam Research Corp., to obtain price quotes and delivery schedules for semiconductor production equipment, Bloomberg reported in April.

The Grimes County notice was posted for a public hearing scheduled for June 3. SpaceX plans to use property near the Gibbons Creek Reservoir in Grimes County for the facility.

SpaceX Terafab Chip Facility Project Factsheet

Project Name: Terafab

Lead Developer: SpaceX

Strategic Partners: Tesla, xAI (joint venture partners), and Intel (strategic manufacturing partner).

Primary Objective: To establish a “next-generation, vertically integrated semiconductor manufacturing and advanced computing fabrication facility” to produce advanced 2-nanometer chips and, ultimately, other advanced computing components like GPUs

Project Location: Grimes County, Texas

Investment (Initial Phase): $55 billion

Total Potential Investment: Up to $119 billion across multiple phases

Facility Size: Approximately 100 million square feet.

Power Requirement: Over 10 gigawatts at full scale.

Timeline/Status

• March 2026: Project officially announced by Elon Musk.
• May 2026: Public filing made for property tax abatement in Grimes County.
• June 3, 2026: Public hearing in Grimes County to consider tax incentives.
• Future Phases: The project is described as multi-phased.