SpaceX Proposes $55B Investment for Monumental Texas Chip Manufacturing Facility
Elon Musk’s SpaceX has unveiled plans to invest a staggering $55 billion in a revolutionary semiconductor manufacturing facility in Grimes County, Texas. The total investment could potentially escalate to $119 billion if all planned phases come to fruition. This ambitious project, aptly named “Terafab,” was announced to the public on May 6, 2026, via a property tax abatement application.
The proposed facility is set to be a “multi-phase, next-generation, vertically integrated semiconductor manufacturing and advanced computing fabrication facility”. This would centralize chip design, fabrication, memory production, and advanced packaging in one location. According to the filing, SpaceX’s goal is to manufacture chips for Tesla’s self-driving systems, humanoid robots, and AI data centers.
The Terafab project is one of the most significant private semiconductor investments ever suggested in the United States. Musk has previously expressed that the current global chip production only meets about 2% of his companies’ needs. He emphatically stated, “We either build the Terafab or we don’t have the chips, and we need the chips, so we build the Terafab.” In April, Intel announced its decision to join the project, contributing its 14A manufacturing process. The property tax abatement agreement is expected to be deliberated by local officials in a June meeting.
Source: https://www.cnbc.com/2026/05/06/elon-musks-spacex-chip-fab-in-texas-to-cost-up-to-119-billion.html