SpaceX (NASDAQ: SPCX) went public in June and is already worth more than $2 trillion, making it one of the most valuable companies on the market.
Despite its reputation as a rocket company, SpaceX’s most ambitious new project is firmly planted in the semiconductor industry.
In March 2026, Elon Musk unveiled Terafab, a chip-fabrication venture run alongside Tesla (NASDAQ: TSLA) and AI start-up xAI.
Intel (NASDAQ: INTC) later signed on to contribute manufacturing technology, including its next-generation 14A manufacturing process for the full-scale plant.
Terafab begins with a prototype fab in Austin and a far larger complex planned elsewhere in Texas.
SpaceX has pegged the initial investment at about $55 billion, with the total build-out reaching up to $119 billion.
Musk has said that a large share of Terafab’s output is aimed at chips for artificial-intelligence data centers in orbit, where sunlight provides power and cooling would be easier.
The space angle is what sets Terafab apart from conventional semiconductor ventures, tying directly into SpaceX’s existing launch capabilities.
SpaceX is the one company that can launch heavy payloads to orbit cheaply and at scale, giving it a structural advantage if AI data centers move to space.
Intel’s contribution provides the manufacturing expertise that SpaceX and Tesla currently lack, underscoring how complex leading-edge chip production remains even for well-resourced companies.
Today, SpaceX’s business is primarily Starlink plus launch, with its connectivity segment accounting for about 61% of 2025 revenue at $11.4 billion.
The company had more than 10 million Starlink subscribers as of March 31, making satellite internet its dominant and most reliable cash engine.
Starlink generates high-margin, recurring revenue that funds SpaceX’s more speculative bets, ranging from Starship development to its involvement with xAI.
Terafab extends the same logic that built Starlink, putting infrastructure in orbit and selling the capacity, but now targeting computing power rather than connectivity.
If space-based compute becomes a real market, Terafab would slot in as a natural fourth business leg alongside launch, connectivity, and hardware design.
The project remains a plan rather than a revenue stream, and with a $119 billion build-out competing against Starship and Starlink expansion, the capital demands are enormous.
At more than $2 trillion, the stock already reflects considerable optimism, making Terafab look more like upside optionality than a near-term earnings driver.
Investors in a newly public company with this much of its valuation resting on future possibilities should approach any position with appropriate caution and measured sizing.
