SpaceX files for $55 billion semiconductor fab in rural Texas for Musk's Terafab — total chipmaking fab investment could reach $119 billion
The figures dwarf the $20 billion originally quoted for the entire Terafab project.
SpaceX has filed a property tax abatement application in Grimes County, Texas, for a semiconductor fab that would cost $55 billion in its initial phases and up to $119 billion if all planned expansions are completed.
The filing, posted on the county government's website ahead of a public hearing scheduled for June 3, describes the project as a "multi-phase, next-generation, vertically integrated semiconductor manufacturing and advanced computing fabrication facility" to be built at the Gibbons Creek Reservoir site, roughly 90 miles northeast of Austin.
The capital figures in this filing far exceed what was disclosed when Elon Musk announced Terafab in March, where the project carried a $20 billion price tag. Musk later confirmed during Tesla's earnings call that SpaceX would handle high-volume chip manufacturing while Tesla operates a smaller R&D pilot line at its Austin campus. The Grimes County filing appears to be SpaceX's first formal step toward securing a site for that production facility.
The filing designates the site as "Gibbons Creek Reservoir and surrounding areas," a rural location about 20 miles east of Bryan-College Station. The area previously hosted a coal-fired power station operated by the Texas Municipal Power Agency from 1982 until 2018.
Charah Solutions acquired the roughly 6,000-acre former plant property in 2021 for demolition and remediation, and subsequently sold it off in parcels to undisclosed buyers. A member of a local community group described the proposed SpaceX project site as a brownfield location, per local news outlet KBTX.
The $55 billion initial estimate alone would make the Grimes County project one of the largest single semiconductor investments ever proposed, exceeding the roughly $52.7 billion Congress authorized through the CHIPS Act for the entire U.S. semiconductor industry. The $119 billion full build-out figure approaches TSMC's total planned investment across its Arizona campus, which includes multiple fabs and packaging facilities built over many years.
Bernstein analysts previously estimated that reaching Musk's stated goal of 1 terawatt of annual compute output would require $5 trillion in total capital and up to 358 individual fabs. Even at $119 billion, the Grimes County project would represent a fraction of that ultimate total.
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The county's Commissioners Court will hold the public hearing at 9:00 a.m. on June 3 at the Grimes County Justice & Business Center in Anderson, Texas, where it will consider the abatement agreement. Residents have expressed frustration over the lack of communication from county officials about the project, according to KBTX. Neither SpaceX nor Musk has publicly commented on the filing.
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Luke James is a freelance writer and journalist. Although his background is in legal, he has a personal interest in all things tech, especially hardware and microelectronics, and anything regulatory.
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bill001g Unlike AI data centers they need skill labor at this location. I wonder how much trouble they will have getting people who are willing to either live out in the middle of nowhere or drive long distances to work on small rural highways. The closest somewhat larger city is college stations and that it not really a big city and is over 20 miles.Reply -
FoxtrotMichael-1 Reply
Texas has essentially become one large suburb so you will find amenities throughout the state, even outside of cities. If you drive from one side of the state to the other, you really don't hit any empty land until you are extremely far west - the rest of the state is just one Walmart/Home Depot parking lot after another.bill001g said:Unlike AI data centers they need skill labor at this location. I wonder how much trouble they will have getting people who are willing to either live out in the middle of nowhere or drive long distances to work on small rural highways. The closest somewhat larger city is college stations and that it not really a big city and is over 20 miles. -
warezme Reply
I don't think the OP was talking about Walmarts' He was more referring to skilled labor. There aren't that many high tech skilled workers in rural maga central.FoxtrotMichael-1 said:Texas has essentially become one large suburb so you will find amenities throughout the state, even outside of cities. If you drive from one side of the state to the other, you really don't hit any empty land until you are extremely far west - the rest of the state is just one Walmart/Home Depot parking lot after another. -
FoxtrotMichael-1 Reply
I wouldn't call the area between Austin and College Station "rural maga central." It's actually not even that conservative. As for skilled labor, Musk is known for importing labor and even building entire cities or neighborhoods to house them. It won't be an issue. The bigger issue is that Texas already has massive energy and water constraints and I'm not sure how this won't make all of those problems much worse.warezme said:I don't think the OP was talking about Walmarts' He was more referring to skilled labor. There aren't that many high tech skilled workers in rural maga central. -
bill001g Reply
When I looked it up the area is EAST of college station by about 20 miles which puts it even farther from austin. It is almost closer to the very north suburbs of houston than austin. Both are close to 100 miles away. Look at google maps it is out in the middle of nowhere. You can see parts of the old power plan next to the lake.FoxtrotMichael-1 said:I wouldn't call the area between Austin and College Station "rural maga central." It's actually not even that conservative. As for skilled labor, Musk is known for importing labor and even building entire cities or neighborhoods to house them. It won't be an issue. The bigger issue is that Texas already has massive energy and water constraints and I'm not sure how this won't make all of those problems much worse.
The problem they have is the people that they need to hire need to be much higher skill than your average factory worker. They already have all the issues of getting these people willing to work third shift. They can only pay so much and you will have a large number of people that are willing to take less money so they can live near friends and family. Now maybe they will find enough people that love living out in the country. Housing is a fraction of the cost of austin. It is mostly large farmland and ranches in that area.