Elon Musk's planned chip manufacturing facility, Terafab, in East Texas, is projected to cost up to $119 billion in total. SpaceX, controlled by Musk, is seeking a property tax abatement from Grimes County to facilitate the massive undertaking. The complex is designed to manufacture chips for SpaceX, Tesla, and xAI. Intel has committed to the project, providing expertise in chip design, fabrication, and packaging. The project's scale has drawn significant attention, with Musk detailing its ambition to consolidate advanced chip production under one roof.
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Elon Musk's planned chip manufacturing facility, Terafab, in East Texas carries an estimated total cost of up to $119 billion, according to filings detailing the project's scope. The complex aims to serve SpaceX, Tesla, and xAI, marking a massive investment in semiconductor production.
Project Scope and Financial Details
The estimated capital expenditure for the chip complex was disclosed in a public hearing notice issued in Grimes County, Texas, where the facility is slated to be built.
Initial Phase Cost: At least $55 billion.
Full Buildout Estimate: Up to $119 billion.
SpaceX, the company controlled by Musk, is seeking a property tax abatement agreement from Grimes County to support the development.
Key Stakeholders and Collaborations
The Terafab complex is designed as a joint venture to manufacture advanced chips for several entities:
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SpaceX
xAI (Musk's AI company)
Tesla
Intel has committed to joining the project to support the fabrication process. Intel will assist with:
Designing chips
Fabricating chips
Packaging ultra-high-performance chips at scale.
Musk stated that the facility intends to be "the most epic chip-building effort ever - combining logic, memory and advanced packaging under one roof," according to a recent SpaceX post.
Development Timeline and Corporate Moves
Project Launch: Musk officially launched the project in March.
Tax Hearing: Grimes County is scheduled to hold a public hearing on June 3 to consider the proposed tax breaks.
Tesla Integration: During Tesla's Q1 earnings call, Musk mentioned that Tesla plans to utilize Intel's forthcoming 14A process at the facility.
Separately, the article notes that Musk was scheduled to appear at a federal courthouse in Oakland, California, on April 30, 2026, concerning his lawsuit with OpenAI.
