The total investment in Elon Musk's planned mega semiconductor plant in eastern Texas, dubbed Terafab, could reach as much as $119 billion (172.43 trillion won).

On May 6, CNBC reported that SpaceX said, through a public hearing notice filed in Grimes County, Texas, that it plans to invest at least $55 billion (79.695 trillion won) in phase one of Terafab. If the full plan is completed, the investment could expand to $119 billion.

The investment figure was disclosed through the hearing notice posted in Grimes County. The site is being reviewed as a potential factory location, and SpaceX has requested a property tax abatement agreement from the county. Grimes County plans to hold a public hearing on June 3 to discuss whether to grant the tax benefits.

Terafab is a semiconductor manufacturing project that Musk officially launched in March. In a post last month on X, formerly Twitter, SpaceX described the facility as "the most ambitious attempt at chip manufacturing combining logic semiconductors, memory and advanced packaging under one roof."

The plant is designed to produce semiconductors for SpaceX, xAI and Tesla. The plan envisions the three companies jointly building the plant, aligning with a strategy to secure an in-house semiconductor supply chain for Musk-affiliated companies.

The initial rollout is expected to start by setting up a research production facility inside Tesla's Austin plant, ahead of full-scale construction of a large factory. Musk said he expects $3 billion (4.347 trillion won) to be invested in the research fab and said it would be able to process thousands of wafers a month. He also said "the initial stage of the expanded Terafab will be handled by SpaceX."

Intel's participation is also cited as a key variable for the project. Intel said in April that it would join the Terafab project to support large-scale design, manufacturing and packaging of ultra-high-performance chips. This is seen as the first major external project for Intel's foundry business, which has so far focused on its own products.

Musk said on a conference call for Tesla's first-quarter results last month that Tesla plans to produce chips at the facility using Intel's next-generation 14A process. After the announcement, Intel shares rose more than twofold during April, posting their biggest-ever monthly gain on record.

The market views the project as a long-term supply chain strategy rather than short-term capital expenditure. Ben Bajarin, a semiconductor analyst at Creative Strategies, said Musk has embarked on a "15-year strategy" and analysed that Musk-affiliated companies recognise the need for supply chain control. He said it is very difficult to secure priority at TSMC and noted that the foundry business is not an area that can be started overnight.

Musk has also directly mentioned chip shortages and geopolitical risks. In Tesla's earnings release in January, he said existing chip suppliers would find it difficult to meet the company's demand sufficiently. He then said building Terafab would also be "very important to protect against geopolitical risks." In a recent earnings release, he said he was continuing to fine-tune details related to the placement of Terafab.

The project is also tied to SpaceX's fundraising moves. After its merger with xAI, SpaceX was valued at $1.75 trillion and privately filed documents in April for an initial public offering (IPO).

If Terafab materialises, Musk-affiliated companies would be able to control internally the core semiconductor supply chain needed for space, electric vehicle and artificial intelligence (AI) businesses. But the actual buildout pace is expected to vary depending on the hearing and the investment execution process, as large investment costs, approval of tax breaks and the mass-production stability of Intel's 14A process remain variables.