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A rendering of Terafab, the massive chip manufacturing\u00a0SpaceX and Tesla Inc. said Thursday will begin construction soon in\u00a0Grimes County.<\/p>\n
SpaceXSpaceX and Tesla announced a $16.8 billion initial investment in a new computer chip manufacturing campus expected to employ at least 3,000 people in Grimes County.Known as Terafab, the facility will eventually span 100 million square feet, making it 10 times larger than Tesla\u2019s main Gigafactory Texas building.The project received a $30 million state grant and will pay Grimes County $20 million annually in lieu of property taxes for 35 years.<\/p>\n
Terafab, a computer chip manufacturing campus that\u00a0Elon Musk has said will be the world\u2019s largest, is a go.<\/p>\n
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The campus in a rural county east of College Station is to be more than twice the size of Tesla Inc.\u2019s sprawling 2,500-acre site outside Austin.<\/p>\n
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In a joint announcement Thursday<\/a>, SpaceX and Tesla unveiled an initial $16.8 billion investment in the massive manufacturing facility, well below SpaceX\u2019s earlier estimate of a $55 billion first phase. The plant eventually is expected to employ at least 3,000 people, with many of those jobs expected to go to residents of Grimes and neighboring\u00a0Brazos counties.<\/p>\n \u201cWe\u2019re now embarking on the most epic chip-building effort,\u201d Musk, CEO of both companies, said in a statement<\/a>. \u201cThe Terafab is bringing cutting-edge manufacturing to America, creating thousands of high-paying jobs in the Lone Star State and enabling us to produce AI chips at scale for use on Earth and in space.\u201d<\/p>\n As proposed, the plant itself would eventually span 100 million square feet\u00a0\u2014 roughly 10 times the size of the main\u00a0Gigafactory Texas building east of\u00a0 Austin.<\/p>\n The companies said their need for computer chips will outstrip current and projected global production and that a facility of such scale is required \u201cto bridge the divide between current global chip supply and the compute demand of the future.\u201d<\/p>\n Article continues below this ad<\/p>\n The massive plant, a joint venture between Tesla, SpaceX, its artificial intelligence subsidiary xAI and foundry partner Intel Corp.,\u00a0also\u00a0would cement Texas’ place as a global leader in semiconductor manufacturing as AI companies race to secure computing capacity.<\/p>\n The companies said Texas has become central to their manufacturing ambitions and praised the state\u2019s commitment to innovation.<\/p>\n Gov. Greg Abbott confirmed Thursday that the project is receiving a $30 million Texas Enterprise Fund grant from the state after two small Grimes County school districts approved them. Anderson-Shiro Consolidated Independent School District\u00a0and Iola Independent School District gave final approval for tax breaks for the project<\/a> in mid-July. Grimes County previously approved waiving property taxes in exchanging for annual payments of $20 million.<\/p>\n Currently, the world\u2019s largest semiconductor fabrication facilities are operated by industry leaders including Samsung Electronics Co. Ltd., which is nearing completion of a major fabrication plant in Taylor, and Taiwan Semiconductor Manufacturing Co., or TSMC.<\/p>\n Article continues below this ad<\/p>\n Most of TSMC\u2019s manufacturing capacity is in Taiwan, though it also operates U.S. plants in Arizona and Washington. Samsung has said its Williamson County campus will encompass about 8 million square feet by 2028.<\/p>\n Musk said Terafab would dwarf those facilities, describing 100 million square feet as the \u201cright order of magnitude\u201d for plants that would manufacture chips for SpaceX\u2019s Starlink broadband satellites and the network of AI data centers he envisions in space.<\/p>\n In late May and early June, Wit Tech LLC, which lists a Palo Alto, California, address associated with Musk\u2019s artificial intelligence company xAI, entered contracts to acquire more than 6,000 acres near Gibbons Creek Reservoir in Grimes County. Additional parcels were acquired in the following weeks, deed records show.<\/p>\n Will \u2018get cracking\u2019<\/p>\n On Wednesday, SpaceX employees leading\u00a0development of\u00a0Terafab<\/a> told Grimes County commissioners that, after securing approval for tax breaks from the two school districts, the company was ready to begin construction on the massive chip plant<\/a>.\u00a0\u00a0<\/p>\n Article continues below this ad<\/p>\n \u201cWith the (tax abatement deal) done, we are going to be moving nearly immediately to get going on the project,\u201d Riley Trettel, who works in energy and data center development for\u00a0xAI, said in a public meeting about the project. \u201cWe need to get our civil work started. We need to start to get foundations in place, and we\u2019re going to get cracking.\u201d<\/p>\n In comments to residents who have been grappling with rapid movement and little transparency on the ambitious project,\u00a0Trettel and other Terafab representatives<\/a> stressed the company\u2019s desire to boost domestic chip manufacturing and the area job market.\u00a0\u00a0<\/p>\n Commissioners were told to expect to see renderings of the plant in the next few days.<\/p>\n SpaceX and Tesla Inc. confirmed Thursday a joint venture with xAI and Intel Corp. are building Terafab on a sprawling site in Grimes County.<\/p>\n Ken Ellis\/Houston Chronicle<\/p>\n Terafab representatives also defended the tax breaks the project has received from the county and area school districts, noting the annual payments Terafab will make annually to the county for the next 35 years in exchange for paying no property tax.<\/p>\n Article continues below this ad<\/p>\n \u201cI\u2019ve seen and heard some comments that $20 million is not a lot and so I thought I\u2019d give it some perspective, because it is in fact a lot of money relative to what other taxpayers in the state pay,\u201d said Bucky Brannen, a lawyer for SpaceX. He said Centerpoint Energy paid about $2 million in total taxes in Grimes County,\u00a0Samsung Electronics Co. Ltd. paid about<\/a> $10 million in total taxes to Williamson County in 2025 and Tesla Inc. paid<\/a> $14 million in taxes to Travis County in 2025.\u00a0<\/p>\n The estimated abatement for Terafab in the coming years is 78%, Brannen said.<\/p>\n \u201cThat is quite a bit lower than what this type of facility has received in other communities,\u201d he said. \u201cAlso, in terms of total payments, that is $710 million over 35 years. So that is a lot.\u201d<\/p>\n As the development comes together, SpaceX touted its interest in hiring locally for a variety of roles in construction, janitorial and security services, along with advanced semiconductor engineering.\u00a0<\/p>\n Article continues below this ad<\/p>\n \u201cThis is also a really great opportunity to provide cutting edge opportunities for folks with degrees, without degrees, that if they want to stay in the area and work for leading edge technology, they can,\u201d said\u00a0Jordan Buss, a commissioner in the SpaceX company town of\u00a0Starbase<\/a>. \u201cI think that\u2019s really exciting.\u201d<\/p>\n Thursday\u2019s announcement similarly touted job opportunities, as SpaceX said its existing Texas footprint has already generated more than 56,000 direct and indirect jobs and more than $28 billion in estimated economic impact since 2024. SpaceX also noted the Terafab site will use Gibbons Creek Reservoir water for industrial operations rather than local groundwater and that it has plans for on-site wastewater treatment facilities and its own electric generation plants.<\/p>\n Calls for \u2018responsible development\u2019<\/p>\n Before the SpaceX representatives took questions at Wednesday\u2019s meeting, leaders of Grimes County Citizens for Responsible Development presented steps they\u2019d like to be taken before any other projects are granted tax abatements.\u00a0<\/p>\n Article continues below this ad<\/p>\n They said the group has collected nearly 900 signatures on a petition asking for \u201cmeaningful, enforceable protections, transparency, independent oversight and a genuine voice in the decisions that will shape our future,\u201d Marie Egyed, director of operations, said in a statement.<\/p>\n Their request included bringing on independent legal counsel to assist with incentive negotiations; disclosure of projected water demand and power infrastructure impacts; dedicated funding for fire and emergency protection; commitments for local hiring, wage standards and workforce training; and compliance reporting with clawback provisions if obligations aren\u2019t met.\u00a0\u00a0<\/p>\n Debra Morwood, a resident of Iola, said Grimes County\u2019s own tax abatement guidelines and criteria say incentives should not be granted where a project may create hazards to public safety, health, or morals.\u00a0<\/p>\n The site of the demolished Gibbons Creek Power Plant in Grimes County, about 15 miles east of College Station, is seen on June 7. The site and surrounding area is the approximate location of the proposed SpaceX Terafab semiconductor chip manufacturing plant.<\/p>\n Jay Janner\/Austin American-Statesman<\/p>\n \u201cOther Texas counties have negotiated specific written terms for large industrial projects,\u201d Morwood said. \u201cGrimes County should do no less.\u201d<\/p>\n Article continues below this ad<\/p>\n The SpaceX representatives declined to comment on\u00a0Abbott\u2019s call this week for a pause on approvals for data centers<\/a> until a comprehensive audit of such developments is complete.\u00a0\u00a0<\/p>\n \u201cWe don\u2019t have an immediate reaction to that,\u201d\u00a0Brannen said. \u201cSo I think there\u2019s a lot to learn on the data center side about what\u2019s going to come in the next legislative session.\u201d\u00a0\u00a0<\/p>\n Still, David Tullos, the lone commissioner who voted against the tax breaks in June, asked if it\u2019s safe to assume that data centers will want to locate nearby to support Terafab\u2019s work.\u00a0<\/p>\n Article continues below this ad<\/p>\n<\/p>\n
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