SpaceX and Tesla formally unveiled the initial phase of Terafab, a vertical fab in Grimes County, Texas, slated for $16.8 billion in investment. The facility will span more than 100 million square feet and exclusively produce AI inference processors for Tesla Optimus robots, Cybercab autonomous vehicles, and SpaceX space-based data center chips. Unlike conventional fabs that separate logic, memory, packaging, and testing across locations, Terafab consolidates all four operations under one roof to compress production cycles and accelerate yield iteration.
The companies project combined demand exceeding 1 terawatt of annual compute—far beyond current global supply—justifying a dedicated fab. Terafab is designed as a vertically integrated manufacturing campus with four massive buildings; the firms have disclosed little about exact capabilities beyond the 100M square-foot footprint, roughly 3× Samsung's largest fab campus. The project is expected to employ at least 3,000 workers, with 60–80% from Grimes and Brazos counties.
For architects evaluating hardware strategy: this signals Elon's companies are moving inference production in-house rather than relying on third-party fabs. The $16.8B initial phase is likely a floor—fully built-out capex may exceed that significantly. Watch for TSMC supply pressures and whether other OEMs follow suit with dedicated fabs.