Tesla and SpaceX advanced the Elon Musk Terafab construction plan on August 6, 2026, by formally confirming a 100 million-square-foot semiconductor megafactory in Grimes County, Texas. The project is set just north of Houston and is aimed at early production in 2027.
The scale is not abstract. Terafab is planned to combine manufacturing, packaging, and testing of advanced logic and memory chips in one facility. SpaceX says the plant is meant to “bridge the divide between current global chip supply and the compute demand of the future,” and it says the site is designed for more than 1 terawatt of compute per year optimized for edge inference.
Grimes County meeting fallout
The announcement landed after a Grimes County meeting on August 5 drew hundreds of residents who objected to the size of the tax breaks and what they described as a lack of transparency. Sarah Borowicz, the Anderson-Shiro Consolidated ISD superintendent, was identified in a statement released after the meeting, showing how the project has moved beyond a corporate buildout into a local school and tax debate.
That pushback matters because the project is being sold in two very different ways. Elon Musk called Terafab “the largest and most valuable building on Earth by far” on X, while the binding commitment cited in the filings is far smaller at $5 billion in Grimes County by 2030.
$119 billion ceiling versus $5 billion
Tesla and SpaceX say they have committed $16.8 billion for the first phase. SpaceX also disclosed a $119 billion multi-phase ceiling in its May 2026 filings. The gap between those figures is the real financing story: the headline number describes the outer boundary of the project, while the first-phase commitment is the money already attached to the early buildout.
SpaceX’s binding obligations also include at least 1,800 full-time jobs by 2035, and the partners are promising at least 3,000 jobs across Grimes and neighboring Brazos County. Intel has agreed to contribute, but the size of that commitment has not been disclosed.
Gibbons Creek Reservoir and water use
The site sits on Gibbons Creek Reservoir, which previously cooled a coal-fired power plant that closed in 2018. SpaceX says the project will draw process water from the reservoir rather than local groundwater, so nearby residents are watching the water plan as closely as the tax package.
What happens next is straightforward for readers tracking the project: early production is planned for 2027, and mass production is targeted for 2028. For now, the biggest missing piece is Intel’s contribution, because the company’s role is part of the project structure but its dollar value still has not been disclosed.
