The world’s richest person is willing to throw massive amounts of money at his latest project to leapfrog established fabs.
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People working on Elon Musk's Terafab project are said to be aggressively tapping suppliers for pricing and delivery times for photomasks, substrates, etchers, and more. According to Bloomberg , his people have reportedly talked with Applied Materials Inc., Tokyo Electron Ltd., Lam Research Corp., and even chip manufacturing partner Samsung Electronics Co., with one source saying they reached out to a company during a Friday holiday for an estimate to be delivered the following Monday because Musk wants to move at “light speed."
According to the report, representatives for the project have been asking for "speedy" price estimates, while being decidedly coy about specific products they're planning to build. The inquiries show Musk is serious about his dreams of building his own chips, which he started talking about in late 2025. The billionaire founder may be one of the richest people on earth, but Nvidia’s Jensen Huang warns that building a fab is a complex engineering problem that requires more than money to solve. “Building advanced chip manufacturing is extremely hard,” Huang said. “It is not just building the plant, but the engineering, the science, and the artistry of doing what TSMC does for a living is extremely hard.”
Still, this seemingly did not deter Elon, who successfully made electric vehicles mainstream with Tesla and commercialized space flight by building low-cost, reusable orbital rockets through SpaceX. It seems that semiconductor manufacturing is his next big project, especially as he criticized existing chip fabs for not having enough capacity to meet the needs of his companies.
You may like Elon Musk's Terafab semiconductor project could cost $5 trillion, Bernstein claims Analyzing Elon Musk's TeraFab — A step towards Tesla and SpaceX's partial vertical integration, or an unattainable dream? Elon Musk says his Terafab Project chipmaking venture will launch in seven days The project officially launched in March 2026 , less than five months after he first publicly talked about the idea. Musk injected $20 billion into Terafab to kickstart it, although experts estimate that costs could hit more than $5 trillion . Less than a month after the announcement, Intel said it joined the Terafab project to “help refactor silicon fab technology” and “accelerate Terafab’s aim to produce 1 TW/year of compute.” It’s currently unclear what Intel will do for Terafab, but this tie-in allowed the chipmaker, which was on the verge of collapse just two years ago, to hit its highest market cap in 25 years .
The other companies Terafab reached out to all similarly experienced uplifts in stock prices, with Tokyo Electron closing at +5.3% in Tokyo, while Applied Materials and Lam Research were up 2% in pre-market trading, despite no fixed orders being placed by the startup just yet. We also do not expect the company to start churning out chips in the next couple of years. “It takes two to three years to build a new plant — no shortcut — and it takes another one or two years to ramp it up,” TSMC CEO C.C. Wei said during an earnings call. “There are no shortcuts.”
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Key considerations
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Reference reading
- https://www.tomshardware.com/tech-industry/semiconductors/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/semiconductors/elon-musk-pushing-forward-with-terafab-at-ight-speed-staff-reaching-out-to-various-suppliers-and-are-reportedly-willing-to-pay-a-premium-to-gain-priority#main
- https://www.tomshardware.com
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