"Request Price Quotes at Light Speed"... Musk Accelerates In-House AI Chip Production With 'Terafab'
by Oh Suyon
Published 16 Apr.2026 15:12(KST)
Contact with Applied Materials, Tokyo Electron, and Lam Research
Request for support from Samsung as well
Elon Musk, CEO of Tesla, is accelerating the 'Terafab' project, which aims to produce artificial intelligence (AI) chips in-house. According to Bloomberg on April 15 (local time), Terafab representatives are speeding up the project by requesting quotations from major semiconductor equipment suppliers at "lightning speed."
Sources say that Terafab employees have recently contacted Applied Materials, Tokyo Electron, and Lam Research to inquire about semiconductor equipment prices and delivery schedules. They also requested support from their manufacturing partner Samsung Electronics. In response, Samsung reportedly proposed expanding production for Tesla at its factory currently under construction in Texas.
While Terafab representatives have provided little detail about the products to be manufactured, it is reported that they have requested rapid price quotes from equipment suppliers. One source mentioned that Terafab contacted them on a holiday Friday, requesting a quote by Monday, and said CEO Musk wants the process to move at "light speed."
Terafab has indicated its willingness to pay more than the quoted prices if suppliers prioritize Terafab's orders. However, since the specific technology to be used and the production location for the chips have not yet been determined, the orders have not been finalized.
Bloomberg noted that, despite skepticism within the semiconductor industry regarding Terafab, CEO Musk continues to drive the project forward.
Terafab is a massive semiconductor production base that CEO Musk is pursuing to manufacture in-house chips for use in AI, robotics, and space data centers. If realized as envisioned, it is expected to rival Taiwan’s TSMC, the world’s largest foundry production facility, in scale. The chips produced are planned for use in xAI, humanoid robots, and space data centers. The initial phase aims to establish a pilot line capable of processing 3,000 wafers per month. The goal is to begin semiconductor production by 2029 and subsequently expand the facilities.
Recently, Intel joined the Terafab project and agreed to handle refactoring, a process to improve chip performance and reliability. In addition, Bloomberg reported that Terafab has proposed recruitment to personnel from Applied Materials, Samsung Electronics, and TSMC.
Bernstein analysts estimate that the Terafab project will require about $5 trillion to $13 trillion (approximately 7,361 trillion to 19,136 trillion won) in capital expenditures.
However, some believe that due to the enormous costs and complexity, the Terafab project may yield only limited results. While Tesla designs its own Full Self-Driving (FSD) chips, Musk’s companies have no direct experience in semiconductor manufacturing. Tammy Qiu, head of technology research at Berenberg, stated that she has not yet factored the Terafab project into ASML’s earnings forecasts and commented, "It will take at least two years before it reaches a meaningful scale."
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