Tesla and SpaceX are investing $16.8 billion into 'Terafab' complex in Texas that's 100 million square feet and the scale of it is mind-blowing
Published on Aug 13, 2026 at 2:28 PM (UTC+4)
by Ben Thompson
Last updated on Aug 13, 2026 at 2:28 PM (UTC+4)
Edited by
Mason Jones
Prepare to have your mind blown – this is the $16.8 billion ‘Terafab’ complex that SpaceX and Tesla are creating.
Stretching out over 100 million square feet in Texas, this semiconductor fabrication plant is a joint venture between Tesla, SpaceX and Intel.
Announced by Elon Musk back in March, it’s set to be the world’s biggest building.
But the figures themselves can only say so much – you need to get a look at this thing.
Elon Musk is no stranger to an ambitious plan
Elon Musk is a man who has a track record of making bold proclamations.
You may recall that this is the man with his eye on building a base on the Moon.
And that’s not forgetting the things he’s already done, like launching a Tesla Roadster into space.
For whatever else is said about him, he is an ambitious man.
And nowhere was that more clear than in his announcement of the ‘Terafab’.
It sounds like a word ripped straight out of a sci-fi movie, but this plan is all too real.
Here’s what we can expect from the Terafab complex courtesy of both SpaceX and Tesla
The new facility is expected to be the biggest semiconductor manufacturing plant in the world.
Musk envisioned this to be a place in which chips could be created, tested, and improved all in one place.
Once in full swing, it’s hoped that between 100 and 200 billion AI and memory chips could be produced each year.
Most of these would be used in Tesla cars and Optimus bots.
As it currently stands, Tesla sources its chips from outside suppliers like Samsung and Micron.
And SpaceX will benefit too obviously, given the plans for data centers in space.
“The combined SpaceX and Tesla demand for chips is expected to be in excess of one terawatt of compute, which is significantly larger than the current global supply,” SpaceX said.
“While we are deeply appreciative of our current chip suppliers, and encourage them to expand production whenever possible, this looming gulf between supply and demand is at the core of Terafab’s necessity.”
But here’s what has really gotten people’s attention – the sheer size and scale of ‘Terafab’.
It’s not been built yet, but it won’t be hard to miss when it’s finished, given that it will span out at over 100 million square feet.
That edges out the world’s current largest building, which is the 65 million-square-foot AvtoVAZ assembly building in Russia.
The first phase of Terafab is anticipated to cost $16.8 billion.
It’s believed that it will provide 3,000 jobs once completed.
Timeline of Terafab
January 2026: Elon Musk indicates on an earnings call that in-house semiconductor manufacturing is necessary.
March 2026: Official launch at the Seaholm Power Plant in Austin, establishing Terafab as a joint venture across Tesla, SpaceX, and xAI.
April 2026: Intel joins the project.
May 2026: SpaceX files plans for a full-scale manufacturing complex in Grimes County.
August 2026: SpaceX and Tesla formally announce the $16.8 billion Phase 1 plane for the Grimes County campus.
Late 2026: Target date for early small-batch runs of Tesla’s fifth-generation AI5 chips.
2027: Expected completion of the prototype fabrication plant.
2029: Planned ramp for commercial mass production.
Ben joined Supercar Blondie in February 2025 after being published by international organizations including LADbible, The Sun, the New York Post, and the Daily Mail. He covers supercars, rare and collectible vehicles, aviation, luxury assets, and the fascinating people behind them. His reporting has explored everything from seven-figure supercars and historic Ferrari collections to unusual aircraft adventures and extraordinary automotive discoveries from around the world. Ben has also gained first-hand insight into vehicle craftsmanship and customization, including visiting specialist workshops to see bespoke vehicles up close.
