SpaceX files plans for a $55 billion Texas chip facility called Terafab

Reuters reports that SpaceX has proposed an initial $55 billion investment to build a semiconductor manufacturing facility in Texas called Terafab. The plan was disclosed in a filing made public this week and would place the project in Grimes County inside a newly designated reinvestment zone.

According to Reuters, the project is structured as a joint effort with Tesla and is aimed at giving Musk’s companies more direct access to advanced chips. SpaceX estimates total investment could rise to $119 billion if additional phases are completed. Reuters also reports that the company flagged plans to manufacture its own GPUs in S-1 excerpts and noted that it still lacks long-term contracts with many direct chip suppliers.

The same report says Musk told investors on Tesla’s first-quarter earnings call that the facility would use Intel’s 14A process. Reuters says the output is intended to support Tesla’s self-driving systems, humanoid robots, and AI data centers, tying the project directly to the compute demands building across Musk’s businesses.

Local officials are expected to consider a property-tax abatement agreement in June. Reuters also reports that SpaceX is targeting a June IPO that could value the company at roughly $1.75 trillion.

Source: Reuters — https://www.reuters.com/business/spacex-plans-55-billion-chip-plant-texas-2026-05-06/