SpaceX and Tesla are planning to jointly build a massive semiconductor wafer factory, Terafab Texas, in Grimes County, Texas. The construction area of the facility is expected to exceed 1 billion square feet, making it not only potentially the largest single building in terms of volume and area globally but also a milestone in Elon Musk’s industrial chain layout in Texas.
Elon Musk previously stated on the social platform X, declaring that “Terafab Texas will be the largest and most valuable building on Earth to date. And it will be extremely beautiful.”
The total construction area of the facility is expected to exceed 1 billion square feet (about 92.9 million square meters), potentially surpassing all known buildings on the surface of the Earth. In terms of total floor area, it is equivalent to 15 Pentagon buildings or up to 1,300 standard soccer fields.
According to the incentive policy application documents and official press releases submitted by SpaceX to the state government, the project is located in the rural area of Grimes County, about 75 miles northwest of Houston and around 30 miles east of Texas A&M University. The project is planned to be carried out in four phases, with an initial stage investment estimated at around $16.8 billion and total investment expected to reach $119 billion.
Functioning as a colossal semiconductor factory integrating multiple cutting-edge technologies, the facility will integrate chip production, advanced packaging, and testing operations under one roof, aiming to produce advanced chips capable of supporting 1 terawatt of computing power annually, including:
– Edge computing and inference chips optimized for Tesla’s “Optimus” humanoid robots and autonomous Cybercab taxis;
– High-power chips designed for SpaceX’s space data centers.
SpaceX added that the combined demand for chips from both companies far exceeds the current global supply. “Although we are very grateful for existing chip suppliers and encourage them to expand capacity as much as possible, the impending vast gap between supply and demand is the core reason why Terafab must be built.”
This substantial development project is expected to create approximately 3,000 high-paying jobs locally and transform this agricultural county with a population of only around 30,000 into a global hub for advanced manufacturing.
To attract the project, Texas and local governments have provided substantial policy support, including:
– State-level funds: Texas Governor Greg Abbott stated that the project is eligible to receive up to $30 million in funding from the Texas Enterprise Fund;
– Local tax incentives: Grimes County approved a 100% property tax abatement from 2027 to 2036 and signed an alternative tax agreement (PILOT) valued at $10 million; two nearby school districts also approved incentive packages worth tens of millions of dollars.
Commercial real estate (CRE) experts point out that unlike traditional data centers facing controversy due to high power consumption and limited job creation, advanced manufacturing semiconductor parks like Terafab often receive stronger local support because they represent decades-long economic commitments and high-paying job growth.
Previously, SpaceX evaluated various locations including Arizona, New Mexico, and Nevada but ultimately chose Grimes County. Currently, SpaceX is progressing with Terafab’s permit approvals and site development planning. If successfully completed, the project will set a new blueprint for future mega-scale manufacturing facilities interconnected with artificial intelligence and emerging technologies.