Elon Musk has announced TeraFab, a massive joint venture between Tesla and SpaceX designed to become the world&#x27;s largest semiconductor manufacturing facility. Located in Grimes County, Texas, the project aims to produce over one terawatt of annual computing power to support autonomous robots, self-driving vehicles, and space-based data centers. The development strategy involves Tesla managing a pilot research line while SpaceX oversees high-volume production using Intel&#x27;s 14A fabrication technology. Spanning approximately 100 million square feet, the site is projected to dwarf existing global landmarks and attract billions in capital investment. Despite its unprecedented scale, regulatory filings indicate the project currently operates as a non-binding framework with significant execution risks. Critics and local residents remain cautious regarding the project&#x27;s transparency, environmental impact, and the long-term feasibility of such an immense megaproject.

The 119 billion dollar Texas Terafab gamble

Elon Musk Podcast

Tesla and SpaceX are jointly building a semiconductor manufacturing facility in Grimes County, Texas. It is going to cover 100 million square feet. And they plan to run it using Intel's unreleased 14A process technology. I mean, just to put that physical size into context right away, 100 million square feet is 36 times the office footprint of the Empire State Building. That is, you know, five times the size of the current largest building on Earth, which is the New Century Global Center over in Chengdu.

So the obvious question driving all of this is, why do an electric car company and a rocket manufacturer need to build the largest physical structure in human history just to make computer chips? Right. So the facility is called Terafab. It sits about an hour northwest of Houston on the site of the old Givens Creek Reservoir. When you actually look at the raw acreage and the planned dimensions, the footprint is larger than the Pentagon, Apple Park, the Mall of America and Tesla's own Giga Texas combined.

Which introduces an immediate physical barrier before you even pour a single yard of concrete. Semiconductor fabrication plants are they are notoriously thirsty and the data centers they support require even more. Your immediate hurdle is sourcing millions of gallons of water. And that water requirement comes entirely from the manufacturing process itself. Like in a fab, the silicon wafers are polished down to absolute atomic flatness.

They use these chemical slurries during the polishing and those have to be washed away constantly. Right. And it cannot be regular tap water. The water has to be stripped of every single mineral and impurity because a microscopic speck of calcium left behind on a wafer will act like a boulder sitting in the middle of...

The 119 billion dollar Texas Terafab gamble

Read the full transcript

The candid version is on a podcast,
not the earnings call.

The 119 billion dollar Texas Terafab gamble

Read the full transcript

The candid version is on a podcast, not the earnings call.

The candid version is on a podcast,
not the earnings call.