Elon Musk begins building the 'world's largest' chip factory
On August 6, SpaceX and Tesla said the initial investment for Terafab was $16.8 billion, lower than SpaceX's previous estimate of $55 billion. The complex located in Grimes is expected to be 100 million square feet (9.29 million square meters) large once fully completed, 10 times the size of Tesla's Gigafactory and creating at least 3,000 jobs.
"We are embarking on the greatest chip manufacturing effort ever, combining logic, memory and advanced packaging technology, all under one roof," Musk said in a statement posted on the Texas Governor's Office website. "Terafab is bringing advanced manufacturing technology to America, creating thousands of high-paying jobs and allowing us to produce AI chips at scale for use on Earth and in space."
"The factory will be the largest and most valuable building system on Earth ever," Musk continued to write on Twitter on August 6.
Governor Greg Abbott confirmed that the Terafab project will receive a $30 million grant from the Texas Enterprise Fund. In addition, the state also provides tax incentives for the project for a certain period of time.
"With the tax abatement agreement completed, we will proceed with the project almost immediately," said Riley Trettel, SpaceXAI's head of energy and data centers. "We got to work right away, starting the foundation and building."
Terafab has been mentioned a lot by Elon Musk recently. He envisions this as an advanced AI chip manufacturing complex, with a goal of achieving one terawatt of computing capacity per year, double the half-terawatt level - the highest capacity a factory in the US currently has. Earlier this year, he said he would build two "Terafabs" in Texas, one for cars and humanoid robots, the other for an AI data center in space.
The world's largest chip complexes are currently held by TSMC and Samsung, but their presence in the US is still "modest". Most of TSMC's production capacity is concentrated in Taiwan, although it already has two factories in Arizona and Washington, while Samsung is developing a Williamson County complex in the US, with an area of more than 743,000 square meters, expected to operate in 2028.
Musk said Terafab is "a lot bigger" than these facilities. According to the American billionaire, 100 million square feet is the "right size" for chip factories for SpaceX's Starlink broadband satellites and the network of AI data centers he envisions in space.
In June, Musk said he was prototyping chips "2-3 times better" than Nvidia's at 10% the cost, focusing on inference tasks, and production would be done at Terafab. He said Terafab aims to be able to produce one million wafers per month.