American billionaire Elon Musk plans to build a massive electronic chip factory in Grimes County, Texas, in a project that could reshape the world's semiconductor and artificial intelligence industries.
In detail, Tesla and SpaceX plan to build the Terafab factory in Texas, a 9.3 million square meter electronic chip factory that will combine production, packaging and testing under one roof.
The initial investment will be more than $16.8 billion, and will provide approximately 3,000 job opportunities.
The TerraFab Texas project will be the largest and most expensive building on Earth by a wide margin, as Elon Musk wrote on the X platform: "It will be absolutely amazing."
For comparison, the New Century Global Center in Chengdu, China, which currently holds the title of the world's largest building, spans approximately 18.9 million square feet, and if Musk's project comes to fruition, it will be 5 times larger.
According to initial data, the first phase of the project will invest $16.8 billion, and its value will later reach about $120 billion after the project is completed, which will create an opportunity for it to be one of the largest and biggest industrial projects associated with the Musk system.
The factory is planned to bring together under one roof multiple stages of chip manufacturing, starting with the manufacture of chips and memory chips, up to packaging and testing, with the aim of enhancing the production process in an integrated manner and reducing dependence on external companies.
The factory also aims to reach a production capacity that supports more than one terawatt of computing power annually.
The factory is also expected to supply chips for Tesla cars and Optimus robots, as well as SpaceX's computing and space infrastructure.
Musk is offering the factory as part of his efforts to meet his companies' future demand for computing power, particularly with the expansion of artificial intelligence systems. Tesla and SpaceX estimate that their combined demand for computing could eventually exceed the terawatt mark.
Musk said: "We are now embarking on the largest chip-building project ever, bringing together logic, memory and advanced packaging under one roof."
According to him, the goal is to produce artificial intelligence chips on a large scale, for use on Earth and in space.
As is often the case with Musk’s projects, the vision here also does not stop at the factory itself, as the Terafab website links future production capacity to plans that include up to one million Tesla Optimus robots, launching 10 million tons of cargo into space each year, and more than one terawatt of solar power.
The project's cost comes at a time when the market is beginning to realize the financial price of Musk's ambitions, given that SpaceX went public in June, raising $75 billion by selling 555.56 million shares at $135 per share, with an initial valuation of about $1.77 trillion.
In its first quarterly report as a public company, the company announced revenues of $7.8 billion, but also recorded a loss of $541 million.
SpaceX does not intend to fund the entire project on its own. TerraFab has submitted eight applications for tax incentives to two local school districts as part of the JETI program in Texas.
The company seeks to establish a base of value on which a portion of school property taxes are calculated for ten years at each stage.
The company explained in its applications that without these incentives, the project's return might fall below the minimum required investment, and that competing states, including Arizona, might offer better economic terms.
According to the application, without the incentives, it would have been possible to move the project out of Texas.
For its part, Texas indicates its willingness to pay to keep the project on its territory, and the state has granted SpaceX a $30 million grant from the Texas Enterprise Fund.
The company already has its headquarters in the state, along with a launch facility and factory at Starbase Base.
The governor said, "Texas is where big ideas evolve to become bigger," describing TerraFab as a unique facility that will accelerate the production of electronic chips and provide thousands of jobs.
If the plan comes to fruition, Musk will not only add another factory to Tesla and SpaceX's asset list, but will also seek to build a key part of the computing infrastructure in Texas, which the two companies are expected to rely on in the coming years, within a structure that will become one of the most distinctive industrial projects in the world.
Among the most prominent challenges facing technology and industry companies are securing a stable supply of semiconductors, panic in demand, the artificial intelligence boom, and the concentration of chip manufacturing in a very limited number of geographic areas and Asian companies such as Taiwan’s TSMC.
The project comes at a time when electronic chips have become a key element in the development of artificial intelligence, self-driving cars and robots.
The project's goal is not just to increase production capacity; the biggest bet is to reduce Musk's companies' dependence on external chip suppliers and give the group greater control over the semiconductor production chain.
This integration could allow companies to improve their ability to control production costs and supply chains, as well as reduce the risk of chip shortages or supply disruptions, which have become one of the most prominent challenges facing the technology sector globally.
