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SpaceX has announced plans to power its upcoming Terafab semiconductor manufacturing facility in Texas with natural gas power plants rather than renewable energy sources. According to statements made during a public meeting, the aerospace company will construct its own power infrastructure for the project, which will incorporate large-scale battery storage systems. Notably, the facility’s energy strategy makes no provision for solar power, despite Tesla’s involvement as a project partner and its role as a solar energy developer.
The decision reflects a broader trend among major technology companies pursuing data center expansion. SpaceX and its subsidiary xAI have increasingly relied on natural gas as a primary power source, with the CEO’s recent acquisition of a natural gas power plant company further cementing this direction. Google, Meta, and Microsoft have similarly announced massive projects utilizing comparable “bring your own power” approaches across the industry.
Located approximately 45 miles northwest of Houston in Grimes County, the facility represents a significant economic commitment. The initial construction phase carries an estimated cost of $16.8 billion, substantially lower than SpaceX’s earlier $55 billion projection. The county has granted a complete tax abatement in exchange for minimum investments of $5 billion through 2030 and the creation of at least 1,800 permanent jobs by 2035, with an additional $30 million in state incentives supporting the project.
The semiconductor fab will manufacture chips exclusively for data center operations, with production designated for SpaceX and xAI use. The growing demand for natural gas-powered infrastructure has increased turbine costs by 66 percent across the sector, though such arrangements aim to accelerate project timelines and mitigate consumer electricity concerns.
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Originally reported by Techcrunch →
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