Tesla and SpaceX will invest $16.8B to start building 'Terafab' chip factory in Texas | TechCrunch

Tesla and SpaceX have officially announced a joint venture to build a massive, advanced semiconductor manufacturing facility, named "Terafab," in Grimes County, Texas.

This highly ambitious project begins with an initial capital investment of $16.8 billion, with long-term spending projected to potentially reach $119 billion over multiple construction phases. According to plans released by the companies, the facility will boast over 100 million square feet of manufacturing space, which would make it one of the largest physical structures in the world. The primary goal of Terafab is to satisfy the escalating global demand for high-performance computing power, producing specialized microchips optimized for edge computing, autonomous vehicles, robotics, and satellite-based data centers.

The facility is expected to employ at least 3,000 people from the surrounding region, prompting local school district officials to voice strong support for the educational and career opportunities it will bring to area students. However, the project has also faced pushback from community members who are concerned about the transparency of the deal and the substantial tax breaks awarded to the tech conglomerates. To mitigate environmental concerns regarding regional resources, the companies have committed to utilizing water from a local reservoir instead of depleting regional groundwater reserves. While Intel has indicated it will collaborate on the development of this facility, the specific nature and scale of its involvement remain unclarified.