Elon Musk plans to build a $16.8 billion chip<\/a> factory that he says is set to become the largest building in the world.<\/p>\n Musk, the CEO of SpaceX and Tesla, announced the project as chip manufacturers worldwide ramp up production in response to a surge of demand triggered by advances in artificial intelligence.<\/p>\n The massive plant, known as Terafab, will be located in southeastern Texas, roughly 70 miles outside Houston, according to its website<\/a>.<\/p>\n “The facility will be an advanced semiconductor fab that will bridge the divide between current global chip supply and the compute demand of the future,” the website says.<\/p>\n A SpaceX Falcon 9 rocket carrying the Starlink 10-54 mission lifts off from Space Launch Complex 40 at Cape Canaveral Space Force Station in Cape Canaveral, Fla., on June 12, 2026.<\/span><\/span><\/span><\/p>\n Chandan Khanna\/AFP via Getty Images, FILE<\/span><\/p>\n<\/div>\n<\/figcaption><\/figure>\n<\/div>\n<\/div>\n<\/div>\n Here’s what to know about the new chip factory:<\/p>\n Why is Elon Musk building a new chip factory?<\/strong><\/p>\n Semiconductors are a key ingredient in a vast array of products ranging from washing machines to refrigerators to laptops. The growing adoption of AI, meanwhile, has driven up<\/a> demand for advanced chips.<\/p>\n SpaceX<\/a> oversees xAI, a Musk-led AI company that offers a chatbot in competition with the likes of OpenAI’s ChatGPT and Anthropic’s Claude. Those AI ambitions will require data centers equipped with semiconductors.<\/p>\n Tesla-made electric vehicles and humanoid robots will also need chips, the factory’s website says.<\/p>\n The combined demand for chips from SpaceX and Tesla is expected to exceed 1 terawatt of compute, a larger amount than the entire global supply currently available, according to the website.<\/p>\n SpaceX and Tesla both rank among the 11 largest companies in the world, as measured by market capitalization. Taken together, they boast a combined value of more than $3 trillion.<\/p>\n What’s different about Elon Musk’s new chip factory?<\/strong><\/p>\n The factory will span 100 million square feet of manufacturing space, making it the largest facility of its type in the world, according to its website.<\/p>\n Beyond its size, the website said, the factory will be vertically integrated, meaning it will put each phase of the production process under one roof, including manufacturing, packaging and testing.<\/p>\n In this Oct. 10, 2019, file photo, SpaceX chief engineer Elon Musk talks to the media in front of the Crew Dragon spacecraft, at SpaceX headquarters, in Hawthorne, Calif.<\/span><\/span><\/span><\/p>\n Alex Gallardo\/AP, FILE<\/span><\/p>\n<\/div>\n<\/figcaption><\/figure>\n<\/div>\n<\/div>\n<\/div>\n The facility will employ 3,000 people, many of whom will be from the local area surrounding the factory site, the website said.<\/p>\n In an effort to mitigate environmental impact, the factory will depend on water from a nearby reservoir rather than local groundwater, the website said.<\/p>\n The plant makes up a a part of Musk’s aspiration to build space-bound data centers and other infrastructure in space.<\/p>\n “By building and operating the largest chip manufacturing facility on the planet, we’re continuing down a path where future humans can compete over building the largest facilities in the solar system, and eventually the galaxy,” the website said.<\/p>\n What’s next for Elon Musk’s new chip factory?<\/strong><\/p>\n The multi-billion dollar investment announced by Musk marks the first phase of construction on the plant. A future potential expansion, the website said, could bring “total investment much higher.”<\/p>\n![\"Alex\"](\"https:\/\/i.abcnewsfe.com\/a\/d98e3fa0-97b8-4342-acc2-72ded06ec922\/spacex-rocket-gty-jt-260811_1786469659648_hpEmbed.jpg?w=375 "\\"Alex\\"")
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