Tesla and SpaceX choose Texas site for $16.8B chip fab

Tesla and SpaceX have selected Grimes County, Texas, as the site for their planned semiconductor megafactory, Terafab, the companies announced on Thursday, August 6, 2026. The initial investment for the project is approximately $16.8 billion, with the goal of creating what they describe as the world's largest chip manufacturing facility.

The announcement marks a concrete step for a project first outlined by Elon Musk in March. The finished facility is intended to span over 100 million square feet and employ at least 3,000 people, primarily through local hires. In a statement, Musk said the project would bring cutting-edge manufacturing to America, create thousands of high-paying jobs in Texas, and enable the production of AI chips at scale for use on Earth and in space.

The companies framed the massive facility as a necessity for their future ambitions, stating that both Tesla and SpaceX will eventually need far more chips than current and future global production can supply. The vertically integrated plant is designed to combine logic and memory chip manufacturing, packaging, and testing under one roof. Its output would supply processors for Tesla's Optimus robots and planned...