Elon Musk’s SpaceX has proposed plans to initially invest $55 billion in building a new semiconductor production facility called TerraFab in Texas.
Rocket Co. plans to develop a next-generation, vertically integrated semiconductor manufacturing and advanced manufacturing facility, according to a filing made public Wednesday.
If the project goes through all the planned phases, the total capital investment is estimated to reach $119 billion.
The TerraFab project, first unveiled in March, is designed to manufacture advanced chips and GPUs domestically. These chips will be used to power Tesla’s humanoid robot called Optimus, self-driving hardware and AI data centers.
“We either make TerraFab or we don’t have chips, and we need chips, so we make TerraFab,” he said.
The facility also plans to use Intel’s 14A process node, highlighting the close collaboration with Intel for manufacturing purposes.
Musk is also eyeing strengthening vertical integration to protect his companies, including SpaceX, Tesla and XAI, from external supply shocks. The move aligns with Musk’s strategy to boost domestic chip manufacturing and broader US policy to insulate it from geopolitical unrest.
Elon Musk envisions the project eventually supporting one terawatt of annual computing power, reflecting the massive scale required by his deep investment in AI and robotics.
SpaceX is also targeting an initial public offering in June that could value the company at $1.75 trillion.
Earlier this year, SpaceX acquired Musk’s AI startup, XAI, to build a space-based data center for AI processing. The combined entity was valued at $1.25 trillion.
