SpaceX Breaks Ground on $16.8 Billion Chip Fab in Texas with Tesla and Intel
SpaceX, along with Tesla and Intel, has begun construction of the Terafab, a massive chip manufacturing facility located near Houston, Texas. The first phase alone will cost $16.8 billion, with total costs potentially exceeding $119 billion across all phases. This vertically integrated plant is expected to produce over 1 terawatt per year in computing power for SpaceX and Tesla's operations. The Terafab aims to supply chips primarily for SpaceX’s orbital data centers and satellite constellations (75%), with the remaining 25% supporting Tesla’s AI initiatives, including Optimus robots and self-driving vehicles. The project is a strategic move toward Elon Musk’s goal of achieving $1 trillion in annual revenue by 2030 through exponential growth across Starlink, rockets, and AI. Despite concerns over SpaceX's rising capital expenditures—spiking to $18.4 billion in Q2 2026—the Terafab is seen as a necessary investment to secure supply chains and reduce reliance on third-party foundries.
Topics: chip manufacturing Intel SpaceX Terafab Tesla