Tesla and SpaceX are officially locking in their planned physical footprint for the largest semiconductor manufacturing facility in human history. Following months of site selection rumors, both companies confirmed that TERAFAB will be built in Grimes County, Texas, located roughly an hour northwest of Houston and two hours from Gigafactory Texas.
The joint venture laid early groundwork in Austin earlier this spring. Tesla confirmed the final location for the massive TERAFAB facility in an official post on X this week, alongside a concept video of the site:
“Terafab will be built in Grimes County, Texas. In April, we broke ground on our research fab on the North Campus of Giga Texas – the precursor to Terafab.
Both Tesla & SpaceX will need far more chips than current & future global production can supply. This is why we’re building the largest chip manufacturing facility ever, with the goal of producing over 1 terawatt of compute per year. The future is built in Texas.”
Terafab will be built in Grimes County, Texas
— Tesla (@Tesla) August 6, 2026
In April, we broke ground on our research fab on the North Campus of Giga Texas – the precursor to Terafab.
Both Tesla & SpaceX will need far more chips than current & future global production can supply.
This is why we're building… pic.twitter.com/je4jKXuQrY
Massive Scale and Industrial Footprint
The sheer physical size of TERAFAB sets a whole new benchmark for manufacturing infrastructure. According to site plans, the facility will span more than 100 million square feet of manufacturing space under a single roof.
To put that footprint into perspective, Tesla watcher @niccruzpatane cooked up a size comparison showing that TERAFAB could fit ten Giga Texas factories inside its footprint. The single building will also be large enough to swallow the U.S. Pentagon, Apple Park, and the Mall of America combined with a ton of room to spare.
The initial phase of construction represents approximately $16.8 billion in capital investments from SpaceX and Tesla, with future expansion phases potentially pushing total investment up to $119 billion. Initial operations will employ at least 3,000 workers, many of whom are expected to come from local Grimes and Brazos County communities.
Vertically Integrated Semiconductor Manufacturing
Unlike traditional chipmakers that split manufacturing, packaging, and testing across separate buildings, companies, and often even continents, TERAFAB is designed to bring logic devices, memory, and advanced packaging together under one roof. It seeks to enable the shortest cycles of validation and iteration ever in the chipmaking industry. The facility aims to output more than 1 terawatt (TW) of compute per year to satisfy surging internal demand.
Elon Musk outlined how that massive compute output will be divided across hardware lineups, posting on X:
“My very approximate guess is that Terafab AI compute output would be ~25% for Tesla Optimus and ~75% for AI spacecraft.”
Silicon produced at the site will power Tesla’s upcoming Optimus humanoid robots and autonomous Cybercabs, not to mention the orbital AI data centers that SpaceX is shooting to the stars for.
Domestic Silicon Pipeline and Industry Partnerships
Building TERAFAB is a move to free Tesla and SpaceX of their dependence on suppliers like TSMC and Samsung for the chips that function as the brains of their productions. Building it in Texas expands domestic manufacturing capacity, bringing advanced semiconductor packaging back to the U.S.
To safeguard local environmental resources, the factory will utilize Gibbons Creek Reservoir water for industrial operations rather than tapping local groundwater, supported by on-site wastewater treatment facilities. SpaceX previously filed plans for a TERAFAB facility at the Gibbons Creek Reservoir, hinting at Grimes County being the future home of the factory.
The project is finally giving form to the plans announced at the dedicated TERAFAB event earlier this year. Tesla and SpaceX are partnering with Intel for the latter's silicon expertise, with the project recently even poaching a high-profile first hire from the veteran chipmaker.
By centralizing research, fabrication, and packaging in Grimes County, Tesla and SpaceX are building a vertically integrated supply chain capable of powering autonomous robotics, robotaxis, and orbital compute at unprecedented scale.
