SpaceX and Tesla have broken ground on Terafab, a semiconductor manufacturing facility planned for Grimes County, Texas. The current design features more than 100 million square feet of manufacturing space under one roof, bringing chip manufacturing, packaging, and testing together in a single vertically integrated facility. The current record holder for largest building by floor area is AvtoVAZ's main assembly plant in Russia, at roughly 65 million square feet. If Terafab gets built as planned, it clears that by a wide margin.
The reasoning behind this project comes down to compute demand. Across satellite operations, autonomous vehicles, humanoid robotics, and AI infrastructure, the companies expect their combined chip needs to exceed one terawatt, a number they say already outpaces global supply. The chips themselves are earmarked for specific uses, such as edge computing and inference for Optimus robots and self-driving Cybercabs. SpaceX also needs high-power chips from the same fab to run its space-based data centers.
SpaceX has positioned Terafab as part of a larger effort to bring advanced chip manufacturing back to US soil, at a moment when most global production still happens overseas. The first phase alone is estimated at $16.8 billion in combined investment from SpaceX and Tesla, with room to grow well past that in future phases. The facility is expected to employ at least 3,000 people, and SpaceX has pointed to its other Texas sites, where 60 to 80 percent of new hires have historically come from the local area, as the model it's aiming for here. The companies also say they plan to work with schools and workforce partners in Grimes and neighboring Brazos County to help build a pipeline into those jobs.
A facility of this scale doesn't come without environmental tradeoffs, and SpaceX has outlined a few commitments on that front. Terafab's industrial operations will draw water from the Gibbons Creek Reservoir instead of local groundwater, with on-site wastewater treatment and water reuse systems built in from the start. SpaceX says the site will meet applicable environmental and pollution control regulations for handling hazardous materials and industrial byproducts, and that it intends to go beyond what's required rather than just clear the bar.
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