Elon Musk's associates have approached chip industry suppliers, including Applied Materials Inc., Tokyo Electron Ltd., and Lam Research Corp., to implement their plan to create Terafab, the first steps in a bold and likely challenging attempt to enter the advanced chip manufacturing market, UNN reports with reference to Bloomberg.
Details
According to sources familiar with the situation, employees of the joint venture between Tesla Inc. and SpaceX have requested price quotes and delivery times for a wide range of chip manufacturing equipment. In recent weeks, they have contacted manufacturers of photomasks, substrates, etching machines, deposition tools, cleaning devices, testers, and other instruments, the sources said.
The Terafab team also sought support from its chip manufacturing partner, Samsung Electronics Co. According to sources, the South Korean company offered to allocate more manufacturing capacity to Tesla at its planned plant in Taylor, Texas.
These contacts indicate that Musk continues to work on the Terafab project despite skepticism from players in the semiconductor industry. The project is expected to change the landscape of chip manufacturing and bring the world's richest man into an arena dominated by Taiwan Semiconductor Manufacturing Co. Intel Corp. has announced its participation in the Terafab initiative, and its CEO Lip-Bu Tan posted a photo of Musk during a recent visit to the company's office in Santa Clara.
Musk's representatives requested quick cost estimates while providing minimal information about the products being manufactured. In one instance, according to one source, they asked a supplier on a holiday Friday to provide a cost estimate by the following Monday.
Musk wants to move "at the speed of light," the source said.
Tokyo Electron shares jumped 6% in Tokyo on Thursday. News of the talks also boosted shares of chip manufacturing equipment makers such as Advantest Corp., Screen Holdings Co., and Disco Corp.
The Terafab project, which sets the incredible goal of providing a terawatt of computing power per year, is Musk's latest ambitious undertaking. Although Tesla develops its own chips for FSD autopilot, Musk's companies have never made semiconductors. Nevertheless, he now proposes to produce them on a scale that will overshadow current global capacities, starting with a pilot line in Austin that will use Tesla's existing electric vehicle manufacturing plant and infrastructure.
The idea is that the chips will be used to support Musk's xAI artificial intelligence business, humanoid robot line, and data centers in space — ambitions that many in the semiconductor industry do not take seriously. The ultimate scale of the project and whether it will expand to one mega-facility or multiple sites outside of Texas remains unclear.