Elon Musk Invests $16.8 Billion to Build 'Terafab' Chip Campus! Aiming for U.S. Manufacturing and Vertical Supply Chain Integration

Elon Musk, the world's richest person, has announced that his aerospace giant SpaceX and electric vehicle leader Tesla will jointly invest $16.8 billion (approximately NT$542.5 billion) to construct an advanced AI semiconductor campus called 'Terafab' in Grimes County, Texas. This initiative responds to the Trump administration's 'Made in America' policy while enabling both companies to develop in-house capabilities for designing and manufacturing semiconductor chips.

According to Reuters, the massive wafer fabrication facility will span 100 million square feet (approximately 2.81 million tsubo), aiming to close the global chip supply gap and meet the enormous computing power demands—exceeding 1 terawatt—expected by SpaceX and Tesla over the coming years.

The aforementioned $16.8 billion represents only SpaceX's initial phase of investment. Official statements indicate that the total investment could significantly increase during future expansion phases. In fact, previous filings reveal that SpaceX's proposed investment for the Terafab campus was $55 billion (approximately NT$1.7761 trillion), with the total investment potentially reaching $119 billion (approximately NT$3.8429 trillion) upon full completion of multi-phase plans. Once the first phase is completed, the campus is expected to create at least 3,000 high-paying jobs in Texas.

Musk himself stated via his X (formerly Twitter) account that Terafab will bring cutting-edge manufacturing technology back to U.S. soil, creating thousands of high-paying jobs in Texas and enabling large-scale production of AI chips for use on Earth and in space. According to his description, the campus will cover an area equivalent to 50 Pentagon buildings.

Beyond its impressive scale, the Terafab chip facility will achieve vertical integration by conducting the entire process—from manufacturing advanced logic and memory chips to advanced packaging and testing—within a single campus. This setup will allow Tesla to produce high-performance processors for its Optimus humanoid robots and Cybercab autonomous vehicles, while SpaceX manufactures high-efficiency chips for operating space data centers.

This campus concept closely mirrors Musk's recent strategy of integrating his companies, accelerating the connection of AI resources across his enterprises. First, SpaceX acquired the AI startup xAI, followed by successfully completing what may be the largest IPO in history in June.

To advance the construction and process transition of the fab, SpaceX has partnered with U.S. tech giant Intel. By leveraging Intel's foundry experience and production capacity support, SpaceX aims to expedite the launch of its own manufacturing facilities. Reports from foreign media suggest that the Terafab facility will adopt Intel's 14A (1.4-nanometer) process as one of its foundational manufacturing technologies.

Regarding the substantial water requirements of the chip fabrication plant, Terafab has announced that once its production lines are completed and operational, it will directly utilize water from the nearby Gibbons Creek Reservoir. The company pledges not to draw on local groundwater resources, thereby avoiding harm to the surrounding natural environment.