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SpaceX Plans Massive $16.8 Billion Semiconductor Facility in Grimes County

The new plant aims to create 3,000 jobs and produce chips for Tesla and SpaceX.

Quincy Vargas

August 10, 20261 min read

industrial construction site - illustration, Jake Team LLC
industrial construction site - illustration, Jake Team LLC

SpaceX is set to establish a semiconductor manufacturing plant in Grimes County, with an initial investment exceeding $16.8 billion and the creation of 3,000 jobs. This announcement was made by Texas Governor Greg Abbott and SpaceX CEO Elon Musk, who introduced the project, named Terafab, this month.

The facility is projected to cover 100 million square feet, positioning it among the largest manufacturing structures globally. Its design will integrate chip design, logic, memory, and advanced packaging in one location, differing from the traditional model that relies on multiple suppliers across various locations.

The chips produced will be utilized in Tesla's Optimus humanoid robots, Cybercab driverless vehicles, and processors for SpaceX's satellite-based data centers. Governor Abbott emphasized the significance of the Terafab facility in enhancing chip production in Texas.

The state has approved a $30 million grant from the Texas Enterprise Fund to support the project, which also qualifies for the Jobs, Energy, Technology and Innovation program. Both Iola and Anderson-Shiro Independent School Districts have agreed to support the initiative, highlighting its importance for local education and job creation.

However, there is a discrepancy between the state's investment figure and a SpaceX filing, which suggested an initial investment of $55 billion, potentially rising to $119 billion, indicating different interpretations of project phases.

Sources

https://gov.texas.gov/news/post/governor-abbott-announces-spacex-expansion-in-grimes-county

https://www.kbtx.com/2026/08/06/gov-abbott-confirms-spacex-expansion-grimes-county/

https://www.connectcre.com/stories/spacex-announces-16-8b-terafab-project-near-college-station/

https://www.kbtx.com/2026/07/21/gov-abbott-signals-approval-spacexs-terafab-jeti-tax-agreements/

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Quincy Vargas

Quincy Vargas writes about community life, schools, public safety, and local events in Allen.

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