SpaceX and Tesla are building a massive new chip factory called Terafab. Crews recently broke ground on a research site in Austin, Texas, and then announced the main facility will be in Grimes County, Texas.

The plan is to build a 100-million-square-foot space where engineers can make, package, and test computer chips all under one roof. These specific chips are for, but not limited to, Tesla’s Optimus robots, self-driving Cybercabs, and SpaceX’s data centers in space.

The Companies Need More Chips

The planned Terafab semiconductor facility is a joint venture between SpaceX and Tesla; Photo: SpaceX

The two companies need more chips than the world currently makes. In their announcement, the companies explained, “The combined SpaceX and Tesla demand for chips is expected to be in excess of 1 terawatt (TW) of compute, which is significantly larger than the current global supply.”

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According to the companies, the current gap between what they need and what is actually available is too big. As a result, they are building their own supply chain.

Jobs, Water, and the Future

The first phase of the project will cost about $16.8 billion and bring at least 3,000 jobs to Grimes and Brazos counties. They also plan to work with local schools to help train future workers.

Additionally, the companies pledged to be cautious with the environment, too. Instead of pulling from local groundwater, the site will use water from the Gibbons Creek Reservoir. They also plan to treat and reuse wastewater on the property.

The companies stated, “By building and operating the largest chip manufacturing facility on the planet, we’re continuing down a path where future humans can compete over building the largest facilities in the solar system, and eventually the galaxy.”