When last we checked, Terafab, the cutting-edge megafab being built to produce AI chips for Elon Musk’s Telsa/SpaceX/xAI consortium, was going to be built and run by Intel, but the location was up in the air. Now, according to regulatory filings, it looks like the location may well be Grimes County, Texas.
Elon Musk’s SpaceX has proposed an initial investment of $55 billion to build a semiconductor manufacturing facility, called Terafab, in Texas, according to a filing made public on Wednesday.
The facility, a joint project with Tesla, comes as Musk seeks to secure in-house access to advanced chips, though analysts say the scale of capacity he has outlined would likely require far greater investment.
SpaceX is also targeting a June IPO that could value the company at around $1.75 trillion.
Musk has been tightening integration of AI efforts across his companies, with SpaceX acquiring his startup xAI earlier this year in a deal focused on building space-based data centers for artificial intelligence processing. The combined entity was valued at $1.25 trillion.
The Terafab project would involve a multi-phase chip fabrication and advanced computing complex aimed at boosting domestic semiconductor production in the United States. SpaceX estimates total investment could rise to $119 billion if additional phases are completed.
The facility is planned in Grimes County within a newly designated reinvestment zone, where local officials are expected to consider a property tax abatement agreement at a June meeting.
The proposed facility could help reduce reliance on external suppliers such as Samsung and Taiwan Semiconductor Manufacturing Co., SpaceX flagged plans to “manufacture our own GPUs” as part of “substantial capital expenditures” outlined in its S-1 registration, according to excerpts reviewed by Reuters.
The filing also highlighted risks around supply, noting the company lacks long-term contracts with many direct chip suppliers and will continue to rely significantly on third parties. SpaceX added there is no assurance it will meet its Terafab objectives within expected timelines, or at all.
That last bit is just the usual publicly-traded stock disclaimer blather.
Grimes County is quite rural, but it’s also on the edge of the Houston exurbs (which I would say end at Magnolia), right in a triangle between Huntsville, Conroe and College Station.
According to this tweet, the site is going to be near the Gibbons Creek Reservoir, which is between College Station and Huntsville.
SPACEX / TERAFAB: The County of Grimes, Texas, will be home to SpaceX's Multiphase, next gen, vertically integrated semiconductor manufacturing and advanced computing fabrication facility.
Estimated capital for initial phase is $55 billion. Estimated total investment of $119… https://t.co/wIsT1HwXWy pic.twitter.com/CZo8vK7B88
— S.E. Robinson, Jr. (@SERobinsonJr) May 6, 2026
Building it in such a rural area probably means less regulatory hurdles, but building it within commuting distance of Texas A&M in College Station (and, to a lesser extent, Sam Houston State in Huntsville) is going to provide access to a technologically savvy labor pool of engineers, technicians, etc.
California’s heavy-handed Flu Manchu lockdown was the straw that finally convinced Musk to pick up stakes and move to Texas. It looks like that decision will result in Texas becoming the home for companies with market capitalizations of several trillion dollars.
Tags: AI, California, College Station, Elon Musk, Grimes County, Huntsville, Intel, Magnolia, Semiconductors, SpaceX, technology, Terafab, Tesla Motors, Texas, xAI
All the Tesla (and other Elon-Company) investment in the Lone Star State makes mine wonder about the announcement of the discontinuation of Tesla Models S and X, the only vehicles made in eth Fremont, CA Tesla plant, a few months back – the story was in effect “we are discontinuing Model S and Model X production in Fremont, but don’t worry, we’re going to make Tesladroids there.”
One wonders if only the first part will be eventually totally accurate.
Given the high priority Musk has publicly put on the droids, I have difficulty believing he would sole-source them in the Formerly Golden Now Still Singed Bear Flag Republic which has proved so proved to be so problematic.
All the Tesla (and other Elon-Company) investment in the Lone Star State makes mine wonder about the announcement of the discontinuation of Tesla Models S and X, the only vehicles made in the Fremont, CA Tesla plant, a few months back – the story was in effect “we are discontinuing Model S and Model X production in Fremont, but don’t worry, we’re going to make Tesladroids there.”
One wonders if only the first part will be eventually totally accurate.
Given the high priority Musk has publicly put on the droids, I have difficulty believing he would sole-source them in the Formerly Golden Now Still Singed Bear Flag Republic which has proved so proved to be so problematic.
TxDoT widening of Hwy 30 coming soon…