Gov. Greg Abbott announced on Thursday that SpaceX will build a vertically integrated semiconductor fabrication plant in Grimes County, with the first phase of the Terafab project carrying a capital investment of more than $16.8 billion and creating 3,000 jobs.
State Approves Incentives for Massive Manufacturing Project
The state has extended a $30 million Texas Enterprise Fund grant to SpaceX, and the facility qualifies under the Texas Jobs, Energy, Technology, and Innovation program, according to an announcement issued by the governor’s office.
The 100-million-square-foot plant will bring logic, memory, and advanced packaging together under one roof to speed semiconductor output for the company’s future chip demands. Positions at the site will include engineers, technicians, and plant operator roles.
Local Leaders Welcome Economic Impact
“Texas is where big ideas grow even bigger,” Abbott said. “I congratulate SpaceX on this significant expansion of their investment in our great state. The first-of-its-kind Terafab facility will accelerate chip production in Texas at an unprecedented scale, create thousands of good-paying jobs in Grimes County, and expand economic opportunity for generations of Texans across Southeast Texas and beyond.”
Grimes County Judge Joe Fauth III called the project “a generational change” for the county. “When we can connect a company like SpaceX and the Terafab project to develop an industrial site in Grimes County, that makes all the sense in the world,” Fauth said.
According to the announcement, SpaceX selected Texas for the project based on the state’s business climate, workforce, infrastructure, and logistics. The company already operates its global headquarters and Starbase launch facility in the state, along with an advanced manufacturing footprint.
Elon Musk Says Texas Will Lead Next Generation of AI Chip Production
“The foundations for the most exciting future are being built right here in Texas,” said SpaceX Founder and CEO Elon Musk. “In addition to our headquarters in Starbase, Texas, where Starship is being developed and launched, and our Starlink factory in Bastrop, Texas, where our high-speed internet kits are manufactured for millions of Starlink customers all around the world — we’re now embarking on the most epic chip-building effort — combining logic, memory, and advanced packaging all under one roof — in Grimes County, Texas.”
“The Terafab is bringing cutting-edge manufacturing to America, creating thousands of high-paying jobs in the Lone Star State, and enabling us to produce AI chips at scale for use on Earth and in space,” Musk added.
In an announcement on the SpaceX website, the company described the planned Terafab facility as an “advanced semiconductor fab that will bridge the divide between current global chip supply and the compute demand of the future.”
“The combined SpaceX and Tesla demand for chips is expected to be in excess of 1 terawatt (TW) of compute, which is significantly larger than the current global supply. While we are deeply appreciative of our current chip suppliers, and encourage them to expand production whenever possible, this looming gulf between supply and demand is at the core of Terafab’s necessity,” the company said, adding that the facility will be designed to “build new compute at an unprecedented scale and speed.”
School Districts Approve JETI Tax Agreements
The Iola Independent School District Board of Trustees approved an agreement with TeraFab AI, LLC for tax incentives under the JETI Act. Iola ISD Superintendent Jeff Dyer said the board weighed public input and consulted a school finance consultant before determining the incentives were in the district’s best interest.
Anderson-Shiro Consolidated Independent School District Superintendent Dr. Sarah Borowicz said the agreement is expected to strengthen the district and broaden opportunities for students.
Greater Brazos Partnership President and CEO Tom Johnson said the region is prepared to provide the workforce and infrastructure the project will require.
Texas Enterprise Fund and JETI Program Support Expansion
The Texas Enterprise Fund is a performance-based grant administered by the Texas Economic Development and Tourism Office. The JETI program was created after Abbott signed House Bill 5 into law following the 88th Regular Legislative Session.
Provided by Dallas Express
