What Is Terafab? Inside Elon Musk's $16.8 Billion Chip Factory in Texas

SpaceX founder and former trillionaire Elon Musk is betting that the next stage of his technology empire will require a factory unlike almost anything the world has built before. 

Recently, Tesla CEO Musk took to X to announce plans for Terafab, a semiconductor manufacturing complex that Tesla and SpaceX are working on together  

“Terafab Texas will be the largest and most valuable building on Earth by far,” Musk wrote on X. 

The new development, which could span over 100 million square feet, is reported to have stemmed from the growing demand for advanced computing power across Musk’s companies, from Tesla’s autonomous vehicles and Optimus humanoid robots to SpaceX’s satellites and future space-based computing systems. 

Here’s everything you need to know 

A factory designed at unprecedented scale 

Unlike the world’s renowned buildings like China’s New Century Global Center, which is currently the world’s largest building by floor space at 18.9 million square feet, Terafab is planned to cover more than 100 million square feet when fully completed. 

The semiconductor facility will be built in Grimes County, Texas, roughly an hour northwest of Houston, and will be developed in phases by Tesla and SpaceX, with the first phase investment of $16.8 billion expected to create at least 3,000 jobs during its first phase, according to Texas Gov. Greg Abbott's office. 

Why Musk wants to make his own chips 

Tesla and SpaceX are becoming increasingly dependent on computing power, and as such, the chip facility is being designed as a vertically integrated semiconductor operation that will bring logic, memory, advanced packaging and testing together under one roof. 

"We're now embarking on the most epic chip-building effort—combining logic, memory, and advanced packaging all under one roof," Musk said in a statement.