SpaceX to Build Texas Chip Plant with Largest FOPLP Tech

According to reports, SpaceX is preparing to enter the semiconductor packaging sector by building its own panel-level fan-out packaging (FOPLP) facility in Texas, USA. This move is considered a strategic step by Elon Musk to further enhance SpaceX's vertical integration in satellite manufacturing.

Currently, SpaceX relies on STMicroelectronics for packaging its satellite radio frequency (RF) chips and power management integrated circuits (PMICs), while some tasks are outsourced to Innolux. However, the company now aims to strengthen its in-house capabilities by developing its own advanced packaging capacity. This would enable greater control over satellite system components, reduce costs, and improve production efficiency—key elements in the competitive satellite industry.

The planned FOPLP line is expected to use the industry's largest substrate size of 700mm × 700mm. While this large-scale format presents technical challenges, such as increased risk of warping, successful mass production could significantly reduce overall costs and streamline manufacturing processes.

This is not SpaceX's first foray into in-house chip and hardware production. Last year, the company completed construction of the largest printed circuit board (PCB) manufacturing facility in the United States, located in Bastrop, Texas. This site primarily supports the Starlink satellite program. The move into chip packaging is seen as a natural extension of its vertical integration efforts, especially since FOPLP shares several manufacturing processes with PCB fabrication, making the transition more accessible from a technical perspective.

As the operator of the world's largest satellite network—with around 7,600 satellites already deployed and plans to launch over 32,000 more—SpaceX is positioning itself to meet the growing demand for space-based connectivity. Additionally, many of SpaceX's contracts with the U.S. government require domestically produced components to ensure national security and reduce supply chain vulnerabilities. Building a vertically integrated production line for satellite systems will not only reduce costs but also accelerate design changes and production cycles—critical for staying ahead in the global satellite race.