SpaceX (SPCX), $119 Billion Semiconductor Gamble... Will Space Data Centers Work?

▲ SpaceX (SPCX), US Stock/AI Generated Image

SpaceX (SPCX) has extended its reach beyond a rocket company into the semiconductor business for space AI data centers, adding another high-risk growth narrative to its enterprise value of over $2 trillion.

According to a Motley Fool article published on Nasdaq on July 3 (local time), SpaceX was an unlisted rocket company just six months ago but is now valued as a publicly traded company with a market capitalization exceeding $2 trillion. Elon Musk unveiled Terafab in March 2026. Terafab is a large-scale semiconductor manufacturing project being pursued with Tesla (TSLA) and xAI, with Intel (INTC) later joining to provide manufacturing technology.

Terafab is envisioned to start with a prototype factory in Austin and expand into a larger complex production facility within Texas. Intel has committed to providing process technology, including the next-generation 14A manufacturing process, for the full-scale production factory. SpaceX's proposed initial investment is approximately $55 billion, with the total construction cost reaching up to $119 billion.

The core focus is not on terrestrial semiconductors but on chips for space AI data centers. Musk stated that a significant portion of Terafab's production will be directed towards chips for orbital AI data centers. The idea is that in space, abundant solar power can be utilized for electricity, and cooling might also be easier. However, the article points out that this business is merely a published plan and has not yet generated revenue; it is an early-stage, unproven, large-scale capital-intensive project.

From a SpaceX shareholder perspective, the current core business remains Starlink and the launch business. According to IPO-related disclosures, the connectivity segment, centered on Starlink, accounted for approximately 61% of revenue in 2025, with revenues of $11.4 billion. Starlink subscribers exceeded 10 million as of March 31. The article evaluates Starlink as a cash cow generating high-margin recurring revenue, supporting more speculative ventures like Starship and xAI.

Terafab's rationale aligns with SpaceX's existing strengths. If space-based computing becomes a reality, SpaceX could establish a structure where it launches hardware into orbit, Starlink transfers data, and Terafab supplies the semiconductor brains. However, the article suggests that Terafab may take several years to generate even $1 in chip revenue, and the $119 billion project competes with funding for Starship and Starlink expansion. Given that the stock price, exceeding $2 trillion, already reflects significant expectations, Terafab is considered more of a long-term option than an immediate reason to buy.

[Article Key Summary]

-SpaceX is pursuing the Terafab semiconductor project for space AI data centers in collaboration with Tesla, xAI, and Intel.

-Terafab's initial investment is approximately $55 billion, with the total construction cost proposed to be up to $119 billion.

-The article assesses Starlink as the current revenue base, while Terafab is a long-term option with no revenue yet.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*