SpaceX files for $55 billion semiconductor fab in rural Texas for Musk's Terafab — total chipmaking fab investment could reach $119 billion

SpaceX has filed a property tax abatement application in Grimes County, Texas, for a semiconductor fab that would cost $55 billion in its initial phases and up to $119 billion if all planned expansions are completed.

The filing, posted on the county government's website ahead of a public hearing scheduled for June 3, describes the project as a "multi-phase, next-generation, vertically integrated semiconductor manufacturing and advanced computing fabrication facility" to be built at the Gibbons Creek Reservoir site, roughly 90 miles northeast of Austin.

The capital figures in this filing far exceed what was disclosed when Elon Musk announced Terafab in March, where the project carried a $20 billion price tag. Musk later confirmed during Tesla's earnings call that SpaceX would handle high-volume chip manufacturing while Tesla operates a smaller R&D pilot line at its Austin campus. The Grimes County filing appears to be SpaceX's first formal step toward securing a site for that production facility.

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The filing designates the site as "Gibbons Creek Reservoir and surrounding areas," a rural location about 20 miles east of Bryan-College Station. The area previously hosted a coal-fired power station operated by the Texas Municipal Power Agency from 1982 until 2018.

Charah Solutions acquired the roughly 6,000-acre former plant property in 2021 for demolition and remediation, and subsequently sold it off in parcels to undisclosed buyers. A member of a local community group described the proposed SpaceX project site as a brownfield location, per local news outlet KBTX.

The $55 billion initial estimate alone would make the Grimes County project one of the largest single semiconductor investments ever proposed, exceeding the roughly $52.7 billion Congress authorized through the CHIPS Act for the entire U.S. semiconductor industry. The $119 billion full build-out figure approaches TSMC's total planned investment across its Arizona campus, which includes multiple fabs and packaging facilities built over many years.

Bernstein analysts previously estimated that reaching Musk's stated goal of 1 terawatt of annual compute output would require $5 trillion in total capital and up to 358 individual fabs. Even at $119 billion, the Grimes County project would represent a fraction of that ultimate total.

The county's Commissioners Court will hold the public hearing at 9:00 a.m. on June 3 at the Grimes County Justice & Business Center in Anderson, Texas, where it will consider the abatement agreement. Residents have expressed frustration over the lack of communication from county officials about the project, according to KBTX. Neither SpaceX nor Musk has publicly commented on the filing.

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