SpaceX is set to build a semiconductor manufacturing facility in Grimes County, which is projected to exceed $16.8 billion in its initial phase and create approximately 3,000 jobs. The announcement was made by Governor Greg Abbott and SpaceX CEO Elon Musk this month.
The plant, named Terafab, will be located near Iola and is expected to cover 100 million square feet, making it one of the largest manufacturing buildings globally.
The facility will integrate chip design, logic, memory, and advanced packaging all under one roof. The chips produced will be utilized in Tesla's Optimus humanoid robots, Cybercab driverless vehicles, and processors for SpaceX's satellite-based data centers. Abbott stated that the Terafab facility would significantly enhance chip production in Texas.
To support the project, the state has provided a $30 million Texas Enterprise Fund grant, and both Iola and Anderson-Shiro Independent School Districts have approved agreements with TeraFab AI, LLC. Iola ISD Superintendent Jeff Dyer emphasized that the tax incentives were in the district's best interest, while Anderson-Shiro ISD Superintendent Sarah Borowicz described the moment as defining for their district.
Despite the announced investment, there is a discrepancy between the state's figure and a previous SpaceX filing, which suggested an initial investment of $55 billion, potentially rising to $119 billion. The reasons for this difference have not been clarified by either party.
Meanwhile, Texas A&M is developing a Semiconductor Institute at its RELLIS campus to prepare a workforce for the growing chip industry, with plans to open the facility in spring 2028.
