Terafab, the chip plant Tesla and SpaceX are building in Texas, is moving at lightning speed. Elon Musk says the project is going well, and a Korean supplier says replies arrive within an hour, even early in the morning US time.
That pace matters for shareholders of both companies. The project is estimated to cost up to $119 billion, yet the plant has no outside customers to share the bill.
Terafab Engineers Make the Calls Themselves
The Tesla and SpaceX CEO shared the update on X while quoting a Tesla-focused account that summarized the supplier remarks.
The remarks first appeared in a column by Korean outlet The Elec. There, a Korean supplier executive said US replies to early-morning inquiries arrive within 30 minutes to an hour.
The executive credited that pace to engineers who hold decision-making authority themselves. In this view, Terafab works unlike the chip industry’s usual customers.
An overseas equipment executive went further.
“I’ve never seen this level of execution speed in the semiconductor industry.”
Tesla and SpaceX procurement staff also visited about 10 Korean booths at the SEMICON West trade show, The Elec says. More than half of those firms have signed nondisclosure agreements and are discussing potential supply items.
Can a Fab With No Outside Buyers Pay Off?
Terafab is a planned Texas chip complex that would combine logic, memory, and advanced packaging under one roof. Tax filings with two local school districts estimate the total at up to $119 billion across four phases.
Within a decade, the goal is 1 million wafers, the silicon discs chips are cut from, every month. That roughly matches Samsung’s memory capacity, according to The Elec.
Notably, Musk admitted in October that he has no idea how to make chips. Still, he expects Tesla and SpaceX to do it better than anyone.
Intel joined as a technology partner in the spring, a tie that has kept Intel stock in focus.
Still, The Elec flags two open questions. No fab has ever produced 1 million wafers a month purely for its owners’ own use. Musk has also never run a chip plant.
SpaceX, which acquired Musk’s AI startup xAI in February, listed through a $75 billion IPO in June. Its new public shareholders now help carry the bill. Their payoff would be an in-house AI chip supply. Until then, Terafab remains a costly bet that fast engineers must turn into finished wafers.
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