SpaceX’s first self-built semiconductor wafer fab is expected to be established in Texas, with an estimated investment of $119 billion

SpaceX was reported on Wednesday to have filed a construction application for a new plant in Grimes County, Texas. The plan is to build a next-generation vertically integrated semiconductor manufacturing and advanced computing fabrication facility, with an initial investment of as much as $55 billion. If all phases are completed, the total investment could rise to $119 billion, putting it in contention to become one of the largest industrial investments in U.S. history.

（SpaceX 自建封裝廠良率卡關！高層傳訪台鞏固供應鏈，三家台廠將受惠）

SpaceX applies to build a semiconductor wafer fab in Grimes County, Texas

Tesla content creator Sawyer Merritt disclosed on X that SpaceX has officially submitted documents, planning to build a multi-phase, vertically integrated semiconductor manufacturing and advanced computing wafer fabrication facility in Grimes County, Texas, about a two-hour drive from Austin.

SpaceX wants to build a $55 billion next-generation, vertically integrated semiconductor manufacturing and advanced computing fabrication facility in Grimes county, Texas, according to a new filing.

• Proposed investment: $55B upfront, up to $119B total • Focus: semiconductor… pic.twitter.com/XxHQKkZfKt

— Sawyer Merritt (@SawyerMerritt) May 6, 2026

According to the application documents, the capital投入 for the initial phase is expected to be $119B. If all subsequent phases move forward, the total investment amount could reach up to $11.9 billion. The Grimes County Commissioners Court has scheduled a public hearing for June 3, 2026 at 9:00 a.m., to be held at the Grimes County Justice & Business Center, with the agenda to consider whether to approve a property tax abatement agreement.

Musk’s chip self-sufficiency blueprint

As the latest step in Musk’s semiconductor self-reliance strategy carried out through companies under his umbrella, Musk announced the “Terafab” program in Austin, Texas back in March 2026. The plan calls for building two advanced chip fabs for use by SpaceX, Tesla, and xAI, with a targeted annual computing capacity of over one terawatt and an estimated valuation of $25 billion. Intel (Intel) announced in April 2026 that it would join and contribute 14E (14Å) advanced process technology.

Meanwhile, SpaceX continues to expand the chip packaging facility in Bastrop, Texas, which produces the radio-frequency chips needed for Starlink satellite networks. The expansion scale is more than $280 million, with an additional production line area reaching 1 million square feet.

The scale of the new Grimes County plan far exceeds the sum of the two investments above, symbolizing a qualitative strategic shift. It not only strengthens the existing supply chain, but also helps reduce reliance on external wafer fabs for certain categories of chips.

（特斯拉 Terafab 大舉徵才！鎖定台灣 2 奈米與先進封裝人才）

Strategic significance of vertical integration: controlling the entire chain from design to packaging

The application documents especially emphasize “vertical integration.” Currently, SpaceX, Tesla, and xAI all rely on third-party wafer fabs for key chips, including chips needed for Starlink satellites, the avionics systems for the Falcon rockets, Tesla full self-driving (FSD) hardware, and xAI computing clusters. If the Grimes County wafer fab is successfully completed, Musk’s ecosystem will be able to complete the full process of chip design, manufacturing, packaging, and testing under one roof, fully taking control of supply initiative.

For Tesla users, the downstream effects are also significant. Including the iteration cadence of Tesla’s FSD hardware, Dojo supercomputers, and Optimus humanoid robots, all require large amounts of custom chips. Once a vertically integrated wafer fab starts production, it can not only accelerate hardware update cycles, but also help resolve long-standing supply-chain bottlenecks that delay product timelines.

The long road after filing: key questions still to be clarified

However, the gap between submitting the application and beginning formal construction appears to still be considerable. Basenor reports that a semiconductor wafer fab of this scale often takes years to move from obtaining permits, building construction, and completing mass-production certification. By comparison, the Terafab Austin plant targets entering small-batch pilot production in 2026 and launching mass production in 2027—already a much smaller project, and the complexity of the Grimes County wafer fab goes even beyond that.

At present, multiple key details remain undisclosed, including: what target process node will be used, what types of chips will be produced in the first batch, and how production capacity will be allocated among Tesla, SpaceX, and xAI. Whether Intel or other partners will participate in this project is also unknown.

If the plan becomes real, it will be the largest industrial investment in Texas

If the Grimes County wafer fab project proceeds on schedule, the total investment scale of $119B will not only set a new record in Texas manufacturing history, but also become one of the most representative domestic semiconductor manufacturing investment cases in the United States in recent years.

This series of moves also clearly signals one message: companies under Musk are using vertically integrated, domestically produced chip manufacturing capacity as the core moat for long-term competitive advantage.

This article, “SpaceX’s first self-built semiconductor wafer fab to land in Texas, with investment scale up to $119 billion,” first appeared on 鏈新聞 ABMedia.