Gov. Greg Abbott announced on Aug. 6, 2026, that SpaceX will construct a vertically integrated semiconductor fabrication plant in Grimes County.
The first phase of the Terafab project represents a capital investment of more than $16.8 billion and will create 3,000 new jobs. A Texas Enterprise Fund (TEF) grant of $30 million has been extended to SpaceX.
The facility also is a qualified project under the Texas Jobs, Energy, Technology and Innovation (JETI) program.
"Texas is where big ideas grow even bigger," Abbott said. "I congratulate SpaceX on this significant expansion of their investment in our great state. The first-of-its-kind Terafab facility will accelerate chip production in Texas at an unprecedented scale, create thousands of good-paying jobs in Grimes County, and expand economic opportunity for generations of Texans across Southeast Texas and beyond."
Already home to the global headquarters for SpaceX, a significant advanced manufacturing presence, and its Starbase launch facility, Texas was selected by SpaceX for the Terafab project because of the state's business-friendly climate, skilled and growing workforce, robust infrastructure and logistical advantages.
The vertically integrated, 100 million-sq.-ft. Terafab plant will make, package and test advanced logic and memory chips in one location, according to reuters.com. That will produce the processors required to power Tesla's Optimus robots and Cybercabs, along with high-power chips to run SpaceX's space-based data centers.
The site is near the Gibbons Creek Reservoir, reuters.com reported, noting that the plan is to use to reservoir for industrial operations instead of the local groundwater.
"The foundations for the most exciting future are being built right here in Texas," SpaceX founder and CEO Elon Musk said. "In addition to our headquarters in Starbase, Texas, where Starship is being developed and launched, and our Starlink factory in Bastrop, Texas, where our high-speed internet kits are manufactured for millions of Starlink customers all around the world — we're now embarking on the most epic chip-building effort — combining logic memory, and advanced packaging all under one roof — in Grimes County, Texas."
TEF is a performance-based grant, administered by the Texas Economic Development & Tourism Office within the Office of the Governor, that may be awarded to a business relocation or expansion project for which one Texas site is in competition with out-of-state locations to create new, good-paying jobs in the community and attract significant new capital investment to the state.
Abbott signed House Bill 5 into law following the 88th Regular Legislative Session, creating the JETI program to attract large, capital-intensive economic development projects that bring new capital investment and create new, good-paying Texas jobs while ensuring robust reporting and transparency.
A May filing showed SpaceX proposing an initial investment of $55 billion to build the Terafab, according to reuters.com. The total could rise to $119 billion if extra phases are completed.
As a precursor to Terafab, Tesla broke ground in April on a research facility at the North Campus of its Giga Texas plant.
