Elon Musk's Tesla and SpaceX confirm $16.8B Terafab chip factory in Texas with 100 million square feet

Tesla and SpaceX will invest $16.8B to start building 'Terafab' chip factory in Texas

Tesla and SpaceX said Thursday that "Terafab," the advanced chip factory they are jointly developing, will be built in Grimes County, Texas, outside Houston, and that they will make an initial investment of $16.8 billion in the project. The factory will be "the largest and most valuable building on Earth by far," Elon Musk, CEO of both companies, wrote in a post on Thursday. More than 100 million square feet of manufacturing space is planned for the facility, according to SpaceX. The companies say the facility will employ at least 3,000 people from Grimes and nearby Brazos County. "The facility will be an advanced semiconductor fab that will bridge the divide between current global chip supply and the compute demand of the future," a post on SpaceX's website reads. The animus behind Terafab is that Musk's vision of the future -- one where millions of robots take over human jobs, robotaxis do all the driving, and satellites become data centers for AI training and inference -- requires a phenomenal amount of computing power, far more than what current production rates support. SpaceX alone has suggested in filings that it may spend as much as $119 billion on the project across a "multi-phase" construction plan -- although the company didn't talk about Terafab at all on its first earnings call earlier this week. Intel has said it will contribute to the Terafab project, although it's been cagey about its exact contributions. "Terafab will be epic in both its mission and in its sheer size, designed to build new compute at an unprecedented scale and speed. A vertically integrated factory with more than 100 million square feet of manufacturing space is planned. This facility will house the manufacturing, packaging, and testing of advanced logic and memory devices," SpaceX writes on its website. "Bringing these aspects together in one location will enable fast, recursive improvements and accelerate new compute deployed. Terafab will produce chips optimized for edge computing and inference for use in hardware like Tesla's Optimus robots and self-driving Cybercabs, along with high-power chips designed for operating SpaceX's space-based data centers," the company wrote. SpaceX said in its post that it is "committing to the use of" water from the local Gibbons Creek Reservoir instead of local groundwater. The announcement followed a heavily-attended county meeting on Wednesday where hundreds of residents attended and raised concerns about millions of dollars in tax breaks awarded to the project, as well as a lack of transparency. "We believe this agreement will strengthen our district, expand opportunities, and better prepare our students for their future," Anderson-Shiro Consolidated Independent School District Superintendent Dr. Sarah Borowicz said in a statement released by the Texas Governor's office. "There are defining moments in the life of a school district, and this is one of those moments. Our commitment now is to ensure that every opportunity created through this agreement is managed wisely, transparently, and always with students at the center of every decision."

Elon Musk's massive Terafab chip-making facility starts to take shape -- 100 million square feet of manufacturing space and $16.8B initial capital investment

SpaceX and Tesla on Thursday formally unveiled plans for the initial phase of their Terafab project. The first stage of the plan -- which is expected to use Intel's 14A process technology -- is expected to require $16.8 billion in investment, while the completed campus is planned to encompass more than 100 million square feet of manufacturing space. The massive semiconductor manufacturing complex will be built in Grimes County, Texas, at a location that belongs to SpaceX. According to SpaceX and Tesla, their combined demand for semiconductors is projected to exceed 1 terawatt (TW) of compute per year, which significantly exceeds today's global supply. In fact, SpaceX, Tesla, and xAI already consume a significant portion of contract chipmaking services available today, and can potentially justify building a dedicated fab that will exclusively serve Elon Musk's companies. In particular, Terafab is envisioned to exclusively produce AI inference processors for Tesla Optimus humanoid robots and Cybercab autonomous vehicles, as well as 'high-power' processors intended for SpaceX's space-based data centers. Meanwhile, SpaceX and Tesla have not disclosed when their combined demand for compute per year will hit the 1 TW benchmark. Unlike a conventional semiconductor fab, Terafab is envisioned as a vertically integrated manufacturing campus where advanced logic devices, memory chips, packaging, and testing operations are housed together. Normally, logic and memory are produced at different fabs using different process technologies, whereas packaging and testing services are performed at different facilities. However, the companies believe that consolidating logic, memory, packaging, and testing in one location will not only shorten the production cycle but will also shorten time-to-yield by enabling faster iterative improvements. Given the description and the goal of the project, this will be a massive facility. Yet, SpaceX and Tesla have said little about its capabilities; The only thing they have disclosed is that the current facility in Grimes County will feature '100 million square feet of manufacturing space.' The 100 million square feet (9.3 million square meters) figure immediately stands out because it is far beyond anything ever announced for a semiconductor manufacturing facility. For example, the total area of Samsung's Pyeongtaek campus is approximately 2.89 million square meters, or 31.1 million square feet. A single Samsung fab occupies about 120,000 square meters, or 1.29 million square feet. However, the key wording is important: '100 million square feet of manufacturing space' does not mean 100 million square feet of cleanroom space. Based on an image published by SpaceX, the Terafab facility will occupy four massive buildings. It is unclear whether these buildings will be four phases of the project (i.e., logic, memory, and packaging will be made under one roof) or will serve different purposes (i.e., one building makes logic, another produces memory, yet another does testing and packaging). In any case, when fully built, Terafab will be a massive semiconductor production campus that will require significantly more than $16.8 billion. The announcement claims that the Terafab facility will employ at least 3,000 people, and that between 60% and 80% of them will be Grimes and nearby Brazos County residents. Terafab is expected to use water from Gibbons Creek Reservoir instead of local groundwater and feature on-site wastewater treatment as well as water recycling and conservation measures. The announcement follows Tesla's groundbreaking earlier this year on a research semiconductor facility at the North Campus of Tesla's Giga Texas campus, which the companies describe as a precursor to Terafab. Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds.

Elon Musk Says SpaceX Will Consume Three Times More Terafab AI Compute Than Tesla - SpaceX (NASDAQ:SPCX)

On Thursday, the Tesla Owners Silicon Valley handle on X shared a promotional video of the Terafab facility, saying that the site will "produce over 1 terawatt of AI compute capacity per year" and that it would be a crucial element in Tesla's future vision. "My very approximate guess," Musk said in response to the post, "is that Terafab AI compute output would be ~25% for Tesla Optimus and ~75% for AI spacecraft," the billionaire added. Notably, the Terafab facility targets 1 terawatt of annual AI compute capacity at full scale. 3,000 Jobs, Texas Over California Musk also responded to user Gavin Baker on X, who said that the facility will create over 3,000 jobs in Texas. "3000 jobs is just for phase 1 of 10 btw," Musk responded to Baker. He also shared why Texas was chosen for the construction of the site instead of California, which was Tesla's previous headquarters and hosts the Fremont facility now responsible for producing Optimus units. "Major new construction projects are de facto illegal in California," Musk said without giving out any additional details to back his claim. Eric Trump Defends SpaceX, Peter Diamandis Sees $10 Trillion Valuation Meanwhile, X Prize Foundation's Peter Diamandis predicted that SpaceX could go on to become a $10 trillion company in the future, backing Musk's goal of securing $1 trillion in revenue for SpaceX by the end of the decade. Check out more of Benzinga's Future Of Mobility coverage by following this link. Photo courtesy: Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Why is Elon Musk Spending $16.8 Billion on AI Chips

Combined future computing requirements could exceed one terawatt as AI ambitions expand. Elon Musk's Tesla and SpaceX are investing an initial $16.8 billion in Terafab, an advanced semiconductor manufacturing complex planned in Grimes County, Texas. The project is designed to give Musk's companies greater control over the chips needed for their growing AI operations. Terafab is expected to manufacture, package, and test advanced logic and memory chips at the same facility. At around 100 million square feet, the complex could become the largest building in the world. The scale of the project reflects the growing importance of computing power to Musk's businesses. Tesla is expanding into humanoid robots and autonomous vehicles, while SpaceX is working toward AI infrastructure and data centers in space.

Musk's megaproject gets real: $16.8B chip plant confirmed for Grimes County By Investing.com

Investing.com -- Elon Musk's ambition to build the world's largest semiconductor factory is officially moving forward. Today, Texas Governor Greg Abbott joined SpaceX and Tesla to confirm that Terafab -- a massive, vertically integrated chip manufacturing plant -- will be built in Grimes County, Texas. While Musk teased the project earlier this year, today's announcement locks in the location and the staggering financials for the first phase of construction. Structured as a formal joint venture between the publicly traded Tesla (TSLA) and newly public SpaceX (SPCX), the project allows Elon Musk's two tech giants to pool their massive resources to shoulder the facility's immense upfront costs. By acting as a unified AI powerhouse (with manufacturing support from Intel), Tesla and SpaceX will split Terafab's output to serve both terrestrial robotics and space-based data centers. The Key Details: * The first phase represents a $16.8 billion capital investment, with analysts projecting the total cost across all phases could eventually exceed $119 billion. * Texas is throwing its weight behind the project, offering a $30 million Texas Enterprise Fund grant and approving tax abatements for the site. * The 100-million-square-foot facility is expected to create 3,000 new, high-paying jobs, leaning heavily on local talent from Grimes and Brazos counties. * SpaceX and Tesla estimate they will need over 1 terawatt of computing power annually to run Optimus robots, Cybercabs, and orbital data networks. Current global supply can't keep up, forcing Musk to bring logic, memory, and packaging all under one roof in Texas. By pulling chip manufacturing in-house, Musk is aiming to secure the critical hardware needed for his companies to dominate the future of AI and aerospace.

SpaceX, Tesla to initially spend $16.8 billion on Terafab chip plant in Texas

Aug 6 (Reuters) - Elon Musk's SpaceX and Tesla will initially invest $16.8 billion to build Terafab, an advanced AI semiconductor complex in Grimes County, Texas, as the companies race to secure the chip capacity that the billionaire has called essential to their future. The facility is intended at narrowing the gap between global chip supply and the more than 1 terawatt of computing power that SpaceX and Tesla expect to need in the coming years. Future expansion phases could push total investment much higher, SpaceX said in a statement on its website on Thursday, adding that the facility would employ at least 3,000 people. "The Terafab is bringing cutting-edge manufacturing to America, creating thousands of high-paying jobs in the Lone Star State, and enabling us to produce AI chips at scale for use on Earth and in space," Musk said. Musk has been tightening integration of AI efforts across his companies, with SpaceX acquiring his startup xAI earlier this year in a deal focused on building space-based data centers, before going public in June in the largest-ever IPO. The vertically integrated, 100-million-square-foot Terafab plant will make, package and test advanced logic and memory chips under one roof, producing processors needed to power Tesla's Optimus robots and Cybercabs, as well as high-power chips to run SpaceX's space-based data centers. A May filing showed SpaceX has proposed an initial investment of $55 billion to build the Terafab, with the total amount rising to $119 billion if extra phases are completed. To aid the efforts, SpaceX earlier this year partnered with Intel, which has been trying to expand its chip contract manufacturing business as part of a turnaround effort. Tesla broke ground in April on a research facility at the North Campus of its Giga Texas plant, a precursor to Terafab. The Grimes County site sits near the Gibbons Creek Reservoir, whose water the companies plan to use for industrial operations rather than local groundwater. It adds to SpaceX and Tesla's growing Texas footprint, alongside sites at Starbase, Bastrop and McGregor. "Texas is where big ideas grow even bigger," the state's governor, Greg Abbott, said in a statement. (Reporting by Aditya Soni and Anhata Rooprai in Bengaluru; Editing by Anil D'Silva)