Tesla and SpaceX plan $16.8B Terafab chip factory in Texas, with 3,000 jobs expected

Tesla and SpaceX are set to invest $16.8 billion in a new semiconductor chip factory in Texas, a project described in recent market reporting as the “Terafab” facility.

The planned site would be located in Grimes County, Texas, and is expected to cover more than 100 million square feet, according to the report. The scale, as described, points to a purpose-built manufacturing campus rather than a smaller production line add-on.

The reporting also said the project is expected to create at least 3,000 jobs. That figure suggests an expanded construction and build-out phase, alongside staffing needs for operations, though the post did not break out roles by timeline or category.

While both companies are known for different businesses, the report framed the chip plant as a shared manufacturing effort. For Tesla, semiconductors and related electronics are core to vehicle functions and manufacturing systems. For SpaceX, chips are also important for rockets, spacecraft, ground systems, and data processing, even though the report did not specify which chip categories are targeted.

Semiconductor fabrication requires substantial capital, long lead times, and complex equipment. Even without additional technical detail in the reporting, the large footprint and multi-year investment size underscore how central manufacturing capacity can be when companies want tighter control over supply and specifications.

It is also notable that the project involves two vertically oriented companies rather than a standalone chip maker. That combination can indicate an intent to secure inputs and reduce reliance on outside suppliers, but the reporting did not provide specifics about ownership structure, customer scope, or whether the facility would produce chips primarily for Tesla, primarily for SpaceX, or both.

As of the time of the cited report, key details remain unspecified. The announcement did not provide information in the reporting about when construction is expected to begin, when production could start, what types of chips would be produced, how much of the $16.8 billion would be spent on construction versus equipment, or whether government incentives are involved. Neither the timeline nor any technical specifications were included in the visible summary.

Investors and industry watchers are likely to look next for formal documentation around permitting, financing, and any agreements tied to the site. The next concrete milestones would likely be disclosure of project timelines, the facility’s planned output, and any public filings or local approvals that confirm the footprint and staffing plan.