Key Points
SpaceX, Tesla, and Intel have initiated construction of Terafab, a vertically integrated chipmaking factory, located in Grimes County, about 70 miles from Houston. This facility represents a significant investment, with the initial phase costing $16.8 billion and total projected costs potentially exceeding $119 billion.
Upon its completion, the 100-million-square-foot plant will aim to meet the computing demands of SpaceX and Tesla, estimated to be over 1 terawatt per year. SpaceX is expected to utilize approximately 75% of the chips produced for its orbital data centers, while the remaining 25% will power Tesla’s advanced technologies including Optimus robots and self-driving vehicles.
Texas is supporting this project with a $30 million grant, but SpaceX faces increasing capital expenditures, having risen from $2.8 billion to $18.4 billion in Q2 of 2026. The company needs substantial growth to justify its current market valuation of $1.84 trillion, as it aims to achieve Elon Musk’s goal of surpassing $1 trillion in annual revenue by 2030.
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