Terafab chip manufacturing facility begins construction with $16.8B initial investment and 100M square foot capacity—three times larger than Samsung's Pyeongtaek fab.
SpaceX and Tesla formally unveiled plans for the initial phase of their Terafab project on Thursday. The first stage of the plan, which is expected to use Intel's 14A process technology, requires $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. 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. 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. 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, while packaging and testing services are performed at different facilities. However, the companies believe that consolidating logic, memory, packaging, and testing in one location will shorten the production cycle and accelerate time-to-yield by enabling faster iterative improvements.
The 100 million square feet (9.3 million square meters) figure is far beyond anything ever announced for a semiconductor manufacturing facility. For comparison, Samsung's Pyeongtaek campus encompasses approximately 2.89 million square meters, or 31.1 million square feet, while a single Samsung fab occupies about 120,000 square meters, or 1.29 million square feet. Importantly, "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 remains unclear whether these buildings will represent four phases of the project or serve different purposes, such as one building for logic production, another for memory, and yet another for testing and packaging. When fully built, Terafab will be a massive semiconductor production campus that will require significantly more than $16.8 billion.
The facility is expected to employ at least 3,000 people, with between 60% and 80% of them coming from Grimes and nearby Brazos County residents. Terafab is expected to use water from Gibbons Creek Reservoir instead of local groundwater and will 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, which the companies describe as a precursor to Terafab.