Gov. Abbott confirms SpaceX expansion in Grimes County

GRIMES COUNTY, Texas (KBTX) - For the first time, Governor Greg Abbott is publicly acknowledging the massive SpaceX Terafab facility that’s making its home in Grimes County.

On Thursday, Abbott released a statement outlining the project and what its first phase will look like.

According to Abbott, the first phase of the Terafab project represents a projected capital investment of more than $16.8 billion and is expected to create 3,000 new jobs.

The governor’s release states the 100-million-square-foot facility will consolidate the production chain under a single roof to accelerate semiconductor manufacturing. The facility aims to meet the company’s future chip needs by combining logic, memory, and advanced packaging.

According to state officials, the project is expected to create jobs for engineers, technicians, and plant operator personnel.

Abbott’s office attributed SpaceX’s selection of Texas to the state’s business climate, infrastructure, and skilled workforce. The company already maintains its global headquarters, advanced manufacturing facilities, and its Starbase launch site in the state.

“Texas is where big ideas grow even bigger,” Abbott said in the release, asserting that the facility will accelerate chip production at an unprecedented scale and expand economic opportunity across Southeast Texas.

SpaceX Founder and CEO Elon Musk stated in the release that the project is aimed at producing artificial intelligence chips at scale for both Earth and space applications. Musk called the development “the most epic chip-building effort” for the company.

To secure the project, Abbott’s office confirmed that a $30 million Texas Enterprise Fund (TEF) grant has been extended to SpaceX. The performance-based grant is designed to attract business relocations or expansions that are actively considering out-of-state locations.

Additionally, the governor’s office designated the facility as a qualified project under the Texas Jobs, Energy, Technology, and Innovation (JETI) program. Created by House Bill 5 during the 88th Legislative Session, the JETI program allows large, capital-intensive projects to receive state-backed tax incentives in exchange for job creation and capital investment.

The development also relies on local school district tax incentive agreements.

• Iola ISD: Superintendent Jeff Dyer confirmed that the school board voted to enter an agreement with TeraFab AI, LLC under the JETI Act. Dyer stated that the decision was made after consulting a school finance adviser and welcoming public input, ultimately determining that the requested tax incentives were in the district’s best interest.
• Anderson-Shiro CISD: Superintendent Dr. Sarah Borowicz called the agreement a defining moment for the district, pledging that the resulting opportunities would be managed “wisely, transparently, and always with students at the center.”

Grimes County Judge Joe Fauth III and Tom Johnson, President and CEO of the Greater Brazos Partnership, both voiced support for the industrial development, stating that the region is prepared to deliver the infrastructure and workforce required for a project of this scale.