Elon Musk’s SpaceX and Tesla are planning a 100-million-square-foot semiconductor complex in Grimes County, Texas, with more than $16.8 billion committed to its first phase and ambitions to produce AI chips at terawatt scale.
By yourNEWS Media Newsroom
Elon Musk’s SpaceX and Tesla are preparing to build a semiconductor manufacturing complex in Texas that would span roughly 100 million square feet, more than five times the size of the building currently recognized as the world’s largest.
The project, called Terafab, is planned for Grimes County and would combine multiple stages of semiconductor production within one enormous vertically integrated facility, according to Fortune.
Musk has described the planned complex in sweeping terms.
“Terafab Texas will be the largest and most valuable building on Earth by far. And it will be stunningly beautiful,” Musk wrote on X.
For comparison, the New Century Global Center in Chengdu, China, currently holds the record for the world’s largest building at approximately 18.9 million square feet.
Terafab’s planned footprint of 100 million square feet would be more than five times larger.
Texas Gov. Greg Abbott said the first phase alone will involve more than $16.8 billion in investment and create thousands of jobs.
“the first phase of the Terafab project represents a capital investment of more than $16.8 billion and will create 3,000 new jobs,” Abbott said in a press release.
The Terafab website describes the facility as a vertically integrated semiconductor operation bringing logic chips, memory and advanced packaging together under one roof.
SpaceX and Tesla are both expected to use chips produced at the plant.
The site says the complex is being designed to generate more than 1 terawatt of compute each year, tying the project directly to Musk’s plans for rapidly expanding artificial intelligence infrastructure.
“We’re now embarking on the most epic chip-building effort, combining logic, memory, and advanced packaging all under one roof,” Musk said in a press release.
Musk said the facility is intended to increase domestic semiconductor production dramatically as demand grows for AI systems on Earth and for future space operations.
“Terafab is bringing cutting-edge manufacturing to America, creating thousands of high-paying jobs,” Musk said, “and enabling us to produce AI chips at scale for use on Earth and in space.”
The project’s stated ambitions extend well beyond conventional chip manufacturing.
Terafab’s website connects the facility with plans capable of supporting as many as 1 million Tesla Optimus robots, 10 million tons of material launched into orbit each year and more than 1 terawatt of solar power.
The company describes the project as being designed for “terawatt scale” production.
Its physical scale would also substantially exceed Musk’s existing Texas manufacturing operations. Tesla’s Gigafactory Texas covers approximately 10 million square feet, roughly one-tenth of the area planned for Terafab.
Financing and tax incentives are also becoming a major part of the project.
Terafab has submitted eight applications for tax incentives involving two local school districts.
The applications seek to limit school maintenance and operations property taxes to approximately 48% of the project’s appraised value for 10 years for each phase.
The company is also seeking state assistance covering the difference in maintenance and operations taxes as well as interest and sinking taxes through the Texas Jobs, Energy, Technology, and Innovation program, commonly known as JETI.
In its applications, Terafab argued that the incentives are important because Texas faces competition from other states offering more favorable project economics.
“Absent the limitation, the project IRR would fall below the minimum investment threshold, and competing jurisdictions (e.g., Arizona) would present a more favorable after-tax return,” one application stated, “in which case the project would likely be relocated outside Texas.”
Texas has already provided SpaceX with a $30 million grant through the Texas Enterprise Fund, according to Abbott’s announcement.
SpaceX is headquartered in Texas and already operates both its Starbase launch facility and a manufacturing plant in the state.
Abbott described Terafab as a “first-of-its-kind” manufacturing complex that could accelerate semiconductor production while generating thousands of jobs.
“Texas is where big ideas grow even bigger,” Abbott said.
The project would significantly expand Musk’s industrial footprint in Texas while bringing semiconductor manufacturing more directly into the operations of both Tesla and SpaceX.
More information about the project was reported by Fortune.
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