SpaceX is weighing a chip manufacturing project in Texas on a scale that would make it one of the most ambitious technology bets associated with Elon Musk. The proposed facility, described as a “Terafab,” is aimed at securing a long-term supply of semiconductors for AI, robotics, electric vehicles, satellites, and future space technology.
The plan has surfaced through a proposal filed on the official Grimes County, Texas website and reported by TechCrunch. The document describes a multi-phase buildout, with the first stage expected to require about 55 billion dollars, or around Rp953 trillion.
Musk has framed the project as more than a simple expansion of manufacturing capacity. He has said his companies must build their own chip infrastructure to avoid running into supply shortages later, especially as demand for advanced semiconductors keeps rising.
“We must build Terafab or we will not have chips, and we need chips, so we will build Terafab,” Musk wrote in a statement. The remark reflects how central chip access has become to the broader ecosystem he is trying to build.
A supply chain move with wide ambitions
The chips produced at the facility are reportedly intended to support more than SpaceX operations. Musk is said to want the site to supply Tesla and xAI as well, including Grok, AI servers, SpaceX satellites, Tesla electric vehicles, and next-generation autonomous robots.
The project also appears tied to Musk’s interest in data centers beyond Earth. That idea has been mentioned as one of the reasons behind the merger of xAI and SpaceX, with Musk seeing AI infrastructure as something that may eventually extend into space.
Pressure from the AI boom has made the timing more relevant. Chatbots, humanoid robots, autonomous vehicles, and data centers all depend heavily on semiconductors, and global chip production has struggled to keep pace with that demand.
Intel enters the picture
To move the plan forward, Musk’s companies are said to have brought Intel in as a strategic partner. The collaboration is focused on developing custom chips designed to handle massive AI computing needs.
Musk has also claimed that, at some point, Terafab could produce chips with a power capacity of up to 1 terawatt per year. If that goal were reached, the facility would rank among the largest semiconductor plants in the world.
That scale fits the current direction of the technology industry, where major companies are racing to build their own computing infrastructure while global chip capacity remains under pressure. For Musk, the move would also help reduce dependence on outside suppliers across several of his businesses.
Texas is not the final call yet
Even with Grimes County named in the filing, Musk has made clear that Texas is not yet the final location. In a social media post on Tuesday, he said Texas is only one of several places still under consideration.
That leaves the door open to other possible sites, even as the Texas proposal continues to draw attention. The project’s size and scope have made it one of the clearest signs yet of Musk’s push to control more of the technology stack behind AI, robotics, and space computing.
The combined xAI and SpaceX entity is now said to carry a valuation of 1.25 trillion dollars, or around Rp21.6 kuadriliun, and it could go public in June.
