Musk's Terafab Chip Factory in Texas Could Cost $119 Billion
Elon Musk plans a massive semiconductor facility in Texas for Tesla, SpaceX, and xAI, with potential costs reaching $119 billion.
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Musk’s Terafab Chip Factory Could Cost Up to $119 Billion
Elon Musk is planning a massive semiconductor manufacturing facility in Texas that could cost up to $119 billion, according to filings reviewed by CNBC and TechCrunch.
The project, called Terafab, would be a “multi-phase, next-generation, vertically integrated semiconductor manufacturing and advanced computing fabrication facility,” according to the proposal. The facility is intended to produce chips for Tesla, SpaceX, and xAI, Musk’s artificial intelligence company.
The scale of the investment underscores Musk’s ambition to reduce reliance on external chip suppliers and secure semiconductor capacity for his portfolio of companies. Vertically integrated manufacturing—where a company controls production from design through fabrication—has become a strategic priority for major tech firms facing supply chain constraints.
The $119 billion figure represents the upper-end cost estimate for the full project scope. Details on timeline, specific production capacity, or phasing remain limited in available disclosures.
Watch for regulatory approvals, financing announcements, and whether Musk pursues government incentives for domestic semiconductor manufacturing.