SpaceX files plan for $55B Texas chip facility
Reuters
..... Elon Musk's SpaceX has proposed an initial investment of $55 billion to build a semiconductor manufacturing facility, called Terafab, in Texas, according to a filing made public on May 6. [2026]
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The facility, a joint project with Tesla, comes as Musk seeks to secure in-house access to advanced chips, through analysts say the scale of capacity he has outlined would likely require far greater investment.
..... SpaceX is also targeting a June [2026] IPO that could value the company at around $175 trillion.
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Musk has been tightening integration of AI efforts across his companies, with SpaceX acquiring his startup xAI earlier this year [2026] in a deal focused on building space-based data centers for artificial intelligence processing. The combined entity was valued at $1.25 trillion.
..... The terafab project would involve a multi-phase chip fabrication and advanced computing complex aimed at boosting domestic semiconductor production in the United States. SpaceX estimates total investment could rise to $119 billion if additional phases are completed.
..... The facility is planned in Grimes County within a newly designed reinvestment zone, where local officials are expected to consider a property ax abatement agreement at a June [2026] meeting. Musk SpaceX, its xAI unit and Tesla will build two advanced chip factories at a sprawling facility in Austin, one to be sued in Tesla vehicles and Optimus humanoid robots, and another designed for AI data centers in space."We either build the Terafab or we don't have the chips," Musk had said during a presentation in Austin in March, [2026] adding that current global chip production would meet only a small fraction of his companies; future needs.
..... the proposed facility could help reduce reliance on external suppliers such as Samsung and Taiwan Semiconductor Manufacturing Company.
..... SpaceX flagged plans to "manufacture our GPUs" as part of "substantial capital expenditures" outlined in its S-1 registration, according to excerpts reviewed by Reuters.
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The filing also highlighted risks around supply, noting the company lacks long-term contracts with many direct chip suppliers and will continue to rely significantly on third parties. SpaceX added there is no assurance it will meet its Terafab objectives within expected timelines, or at all.
..... The plan aligns with a broader U.S. push to expand domestic semiconductor manufacturing amid geopolitical tensions and supply chain risks.
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Signaling efforts to bring in external manufacturing expertise, Musk said last month [04/2026] in Tesla's first-quarter earnings call that the Terafab will use chip-maker Intel's 14A process to produce chips.
..... The facility is intended to supply chips for Tesla's self-driving systems, humanoid robots and AI data centers, showcasing the scale of compute demand across Musk's businesses, as he ramps up investment in building end-to-end computing capability.
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The contract would mark Intel's first major customer for the technology, a breakthrough for the chip-maker, which has struggled to bolster its contract manufacturing business essential for taking on top rival TSMA. Musk said that by the time Terafab scales up, Intel's 14A manufacturing process "will be probably fairly mature or ready for prime time" and :seems like the right move."