Elon Musk plans 100 million-square-foot terafab semiconductor plant near Houston

SpaceX announced this week that its planned semiconductor plant that is expected to become the largest building in the world at more than 100 million feet will be built in Grimes, Texas, outside of Houston.

“Terafab Texas will be the largest and most valuable building on Earth by far,” owner Elon Musk wrote X on Thursday. “And it will be stunningly beautiful.”

The factory is a joint effort with Musk’s electric car company Tesla.

“This facility will house the manufacturing, packaging, and testing of advanced logic and memory devices,” SpaceX said in a Thursday press release. “Terafab will produce chips optimized for edge computing and inference for use in hardware like Tesla’s Optimus robots and self-driving Cybercabs, along with high-power chips designed for operating SpaceX’s space-based data centers.”

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Elon Musk said the building would be “stunningly beautiful.”  (hip Somodevilla/Getty Images / Getty Images)

SpaceX added that its and Tesla’s combined demand for chips is expected to be in excess of the global supply.

“While we are deeply appreciative of our current chip suppliers, and encourage them to expand production whenever possible, this looming gulf between supply and demand is at the core of Terafab’s necessity,” SpaceX explained.

The company said Terafab would employ more than 3,000 people, adding that its initial phase is estimated to cost approximately $16.8 billion 

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Construction is seen north of the Tesla Giga Texas factory in Austin on Wednesday, March 25, 2026. (Jay Janner/The Austin American-Statesman via Getty Images / Getty Images)

“The Terafab is bringing cutting-edge manufacturing to America, creating thousands of high-paying ​ jobs in the Lone Star State, and enabling us to produce AI chips at scale ​ for use on Earth and in space,” Musk said.

SpaceX proposed initially investing $55 billion into Terafab, which could increase to $119 billion, according to a May filing.

The Pentagon is the largest building in the U.S. currently.  ( J. David Ake/Getty Images / Getty Images)

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In April, Tesla broke ​ground on a research facility at the North ​Campus of ⁠its Giga Texas plant, which it called a precursor to Terafab.

Currently, the Pentagon is the largest building in the U.S. at 6.6. million square feet and China’s New Century Global Center in Chengdu, is the world’s largest at 18.9 million square feet. 

Reuters contributed to this report.