SpaceX and Tesla have announced that Terafab — their jointly planned advanced semiconductor manufacturing facility — will be built in Grimes County, just outside of Houston.
If developed at its stated scale – more than 100 million square feet of manufacturing space – it would be the world’s largest building by floor area.
Why Terafab, and Why Now
The two companies estimate their combined compute demand will exceed one terawatt (TW) — a figure that surpasses current global semiconductor supply. That gap between what SpaceX and Tesla need and what the worldwide chip industry can currently deliver is the central reason for building Terafab from scratch rather than relying on existing suppliers.
Scale and Scope of Terafab
Terafab is designed as a vertically integrated factory with more than 100 million square feet of manufacturing space — housing production, packaging, and testing of advanced logic and memory devices in one location. That co-location is intended to enable faster, iterative improvements to chip design and accelerate deployment of new compute hardware.
Target products include chips optimized for edge computing and AI inference used in Tesla’s Optimus robots and self-driving Cybercabs, as well as high-power chips for SpaceX’s space-based data centers.
The planned scale of Terafab is substantial. Once fully built, the manufacturing complex is designed to cover 100 million square feet of floor space. At this size, it would officially become the largest building in the world by floor area.
To put the physical footprint into perspective, it is expected to be more than five times larger than the current global record holder—the New Century Global Center in Chengdu, China, which features roughly 18.9 million square feet of floor space. Furthermore, it will be approximately 10 times larger than Tesla’s existing Giga Texas facility in Austin and over 15 times the size of the Pentagon.
Economic Impact for the Houston Region
The initial phase carries an estimated capital investment of $16.8 billion from SpaceX and Tesla combined, with future expansion phases expected to push total investment significantly higher. The facility expects to employ at least 3,000 people, with a stated preference for hiring from Grimes and neighboring Brazos County.
“Texas is where big ideas grow even bigger,” said Governor Abbott in a press release.
“I congratulate SpaceX on this significant expansion of their investment in our great state. The first-of-its-kind Terafab facility will accelerate chip production in Texas at an unprecedented scale, create thousands of good-paying jobs in Grimes County, and expand economic opportunity for generations of Texans across Southeast Texas and beyond.”
The Terafab Timeline
SpaceX and Tesla announced Terafab’s Grimes County location earlier this August, after Tesla broke ground in April on a smaller Austin research fab described as a precursor to the project. The companies have committed to an initial $16.8 billion investment, but have not disclosed a construction-completion date, first-production target, or timetable for the proposed future expansion phases.
