Feature Illustration: Artist rendering of the proposed project. Image: SpaceX.

by Art Benavidez

Posted: 8-6-2026

Anderson (Grimes County) — SpaceX and Tesla have officially unveiled plans for Terafab, a $16.8 billion semiconductor manufacturing campus in Grimes County that is expected to become one of the world’s largest chip production facilities, with more than 100 million square feet of manufacturing space planned.

The companies announced that civil work on the site will begin almost immediately, with full-scale construction scheduled to commence within the next several months. SpaceX confirmed the timeline during a recent meeting with county officials and residents.

VBX has been tracking the project here.

Designed as a vertically integrated semiconductor campus, Terafab will combine logic, memory, advanced packaging, testing and manufacturing operations under one roof. Company officials said consolidating those processes into a single facility will accelerate product development while addressing a widening gap between global semiconductor supply and growing demand driven by artificial intelligence and advanced computing.

The facility will manufacture chips optimized for edge computing and AI inference applications, including processors for Tesla’s Optimus humanoid robots and autonomous Cybercab vehicles, as well as high-performance chips designed to operate SpaceX’s planned space-based data centers.

According to SpaceX, the combined computing demand from SpaceX and Tesla is expected to exceed 1 terawatt (TW) of compute capacity—well beyond current global semiconductor production—prompting the companies to invest in their own advanced manufacturing capabilities.

The initial construction phase represents an estimated $16.8 billion capital investment from SpaceX and Tesla and is expected to create at least 3,000 permanent jobs once operational. The companies said they anticipate hiring heavily from Grimes County and neighboring Brazos County, noting that between 60% and 80% of employees at their existing Texas facilities are local residents.

Beyond the permanent workforce, the project is expected to generate thousands of construction jobs while creating opportunities for contractors, suppliers and skilled trades throughout Central Texas. SpaceX said it plans to partner with local schools and workforce development organizations to establish training pipelines tailored to the facility’s long-term staffing needs.

Company officials cited Grimes County’s transportation infrastructure, available land and proximity to major Texas markets as key factors in selecting the site for the semiconductor campus.

Environmental planning also played a role in the project’s design. SpaceX said industrial operations will rely on water supplied from Gibbons Creek Reservoir rather than local groundwater sources. The campus will also incorporate on-site wastewater treatment, water reuse systems and conservation measures while managing hazardous materials in compliance with applicable environmental regulations.

Terafab represents the next phase of a semiconductor initiative first announced earlier this year. In April, Tesla broke ground on a research fabrication facility on the north campus of Giga Texas, describing the project as the precursor to the much larger Grimes County manufacturing complex.

The companies characterize Terafab as part of a broader effort to restore advanced semiconductor manufacturing capacity in the United States as AI, aerospace, defense and advanced manufacturing industries require increasingly sophisticated computing hardware. Much of today’s leading-edge semiconductor production remains concentrated overseas.

The project also further expands SpaceX’s rapidly growing Texas footprint, which includes Starbase near Brownsville, and operations in Bastrop and McGregor. According to the company, its Texas operations have generated more than 56,000 direct and indirect jobs and contributed an estimated $28 billion in economic impact since 2024, along with hundreds of millions of dollars in indirect tax revenue.

While the first phase alone represents a multibillion-dollar investment, SpaceX said future expansion phases could push Terafab’s total investment significantly higher, creating one of the largest industrial and semiconductor manufacturing campuses ever developed in Texas.

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