SpaceX’s Terafab Signals Texas Manufacturing Boom

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SpaceX Plans Massive 100 Million-Square-Foot Chip Factory in Texas

SpaceX and Tesla are planning one of the world’s largest industrial developments, a massive Texas semiconductor campus designed to support AI, robotics, and future space technology.

A mega-scale semiconductor bet: SpaceX plans to build a 100 million-square-foot Terafab chip facility in Grimes County, Texas, which could become the world’s largest building. The plant is expected to produce advanced chips for SpaceX’s space-based data centers, Tesla’s Optimus robots, and autonomous Cybercabs.

A $119B industrial investment: The four-phase project represents a potential $119 billion investment and is expected to create about 3,000 jobs, including engineering, technical, and manufacturing roles. The development has also secured significant state and local incentives, including a potential $30 million Texas Enterprise Fund grant.

Texas expands Musk’s manufacturing footprint: SpaceX selected Texas after evaluating sites across several states, citing workforce availability, infrastructure, logistics, and business conditions. The Terafab adds to Musk’s growing Texas presence, which includes SpaceX facilities in Starbase, Bastrop, and McGregor, along with Tesla’s expanding Austin Gigafactory.

Community impact and incentives: Grimes County and local school districts approved major tax incentives to attract the project, including a 10-year property tax abatement. While some residents raised concerns, officials emphasized the long-term economic impact and job creation potential.

Manufacturing vs. data centers: Unlike large data center developments that have faced concerns over power consumption, advanced manufacturing projects often receive stronger community support because they provide permanent jobs and broader economic benefits. Industry experts compare projects like Terafab to traditional auto plants with decades-long local impact.

➥ THE TAKEAWAY

Texas builds the factory of the future: SpaceX’s Terafab highlights the growing connection between industrial real estate, artificial intelligence, and advanced manufacturing. If completed, the project could set a new benchmark for mega-scale facilities while strengthening Texas’ position as a leading hub for next-generation technology production.

➥ Houston’s 24% office vacancy masks a widening split, as upgraded, well-located buildings push rents and occupancy higher while much of the aging Class-B and C stock risks becoming obsolete.

➥ DFW’s nearly 40% growth since 2010 is reshaping its CRE landscape, pushing leaders to adapt their strategies, embrace collaboration and strengthen relationships as new markets emerge.

➥ Dallas is seeking historic designation for its century-old Neiman Marcus flagship ahead of its September 30 closure, underscoring the challenges facing a rapidly changing Downtown. 

➥ Spirit Investment Partners and Strategic Value Partners acquired 895 recently built Texas apartments, targeting lease-up and stabilization in Houston and Denton after oversupply disrupted performance. 

➥ The Perot Museum plans a $90M expansion in Dallas, adding a four-story parking garage, covered walkway, event space and restrooms by early 2029. 

Fort Worth's inventory growth is accelerating again in 2026 after a brief slowdown, signaling that supply pressures are likely to persist and continue delaying a broader recovery in the metro's apartment market. 

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