Terafab: Special Report

Terafab is a chip-manufacturing project led by SpaceX, Tesla and xAI, with Intel as a partner. Its long-term goal, in SpaceX’s words, is “producing one terawatt of compute hardware each year.” This special report sets out what the official records say: the SEC filing, the Texas tax-incentive applications, the Governor’s announcement and the project’s own site. Every fact links to its source.

Updated October 5, 2026. This page follows the story: new TechUpscale coverage of Terafab appears at the bottom automatically.

Key facts

What	According to the record	Source
Who	SpaceX “announced a collaboration with Tesla in March 2026 to build the Terafab initiative.” Intel “joined the project in April 2026.” The project site lists Tesla, SpaceX and xAI.	SpaceX S-1/A (SEC); terafab.ai
Goal	A long-term goal of one terawatt of compute a year. SpaceX says it expects Terafab “to be the world’s largest chip manufacturing facility.”	SpaceX S-1/A
What it would make	Mask design, logic and memory chip fabrication and advanced packaging “in a single closed-loop plant.” The project site names the AI5, AI6 and D3 chips. The state application describes 2 nanometer-class nodes “through strategic partnerships with established semiconductor manufacturing and equipment providers.”	SpaceX S-1/A; terafab.ai; Texas Comptroller, JETI J0035
Where	Grimes County, Texas, in the Anderson-Shiro and Iola school districts. The applicant is TeraFab AI, LLC, at SpaceX’s Hawthorne, California, address.	Texas Comptroller, JETI applications; Office of the Governor
Size and cost	Up to four phases, with total capital investment “expected to range between $55 billion and $119 billion for initial phases.” Phase 1 in the Anderson-Shiro district is estimated at about $10.3 billion. The Governor’s office puts the first phase at more than $16.8 billion and the facility at 100 million square feet.	JETI application J0035; Office of the Governor
Jobs and incentives	3,000 new jobs and a $30 million Texas Enterprise Fund grant, according to the Governor’s office. Eight JETI tax-limitation applications were filed, four in each school district.	Office of the Governor; JETI J0035 recommendation
Status	The state application says “prototype fabrication and process validation” are under way in Texas. SpaceX’s filing says specific projects, “including any development timelines, milestones and capital expenditures,” are still to be negotiated “and have not yet been determined.”	JETI J0035; SpaceX S-1/A

Timeline

March 2026: SpaceX and Tesla announce a collaboration to build Terafab (SpaceX S-1/A).
April 2026: Intel joins the project, expected to contribute “its expertise in designing, fabricating, and packaging ultra-high performance chips” (SpaceX S-1/A).
May 20, 2026: SpaceX files its IPO registration statement with the SEC, which describes Terafab. It is amended on June 1 and June 3.
June 8–16, 2026: TeraFab AI, LLC files JETI applications with the Texas Comptroller, followed by supplements and the Comptroller’s recommendation.
August 6, 2026: Governor Abbott announces the Grimes County project and a $30 million Texas Enterprise Fund grant.
August 25, 2026: The JETI agreement for application J0035 is posted by the Comptroller.

What the filings say about risk

SpaceX’s registration statement is direct about the uncertainty:

It says Terafab “may not be successful.”
It says it expects “to continue sourcing a significant portion of our compute hardware from third-party suppliers.”
It says there is “no assurance” it will meet its objectives “within the expected timeframes, or at all.”
It notes that, while SpaceX has a framework agreement with Tesla, “neither Tesla nor Intel are obligated to remain a part of the project.”

The state application says that after completing each phase, the company would decide whether to proceed with the next.

What to watch

Definitive agreements between SpaceX, Tesla and Intel, which the S-1 says have not yet been determined.
Tesla’s quarterly reports and SpaceX’s filings as a public company, for spending and timelines.
Permits and records in Grimes County, and the remaining JETI agreements.
First production: the chips the project site names are AI5, AI6 and D3.

Primary documents

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Figures are as stated by the companies and the State of Texas, and may change. Company goals and expectations are their claims, not established facts. This page is for information only and is not investment advice.