Elon Musk urges suppliers to respond "at the speed of light", Terafab project aims to break through the cutting-edge of chip manufacturing.

According to informed sources, Tesla, Inc. and xAI founder Elon Musk's executive team has issued urgent instructions to global semiconductor equipment giants, including Applied Materials, Tokyo Electron, and Lam Research, to respond to project needs at "light speed" for his envisioned Terafab project, which is an early step in their bold and potentially challenging attempt to enter the cutting-edge chip production field. According to informed sources, employees working for the joint venture of Tesla, Inc. and SpaceX have been inquiring about a series of chip manufacturing equipment and asking for delivery times. These sources state that in the past few weeks, they have contacted manufacturers of lithography masks, substrates, etching machines, deposition equipment, cleaning devices, testing instruments, and other tools, all of whom have requested to remain anonymous due to the private nature of the discussions. Musk's representatives have requested quick price estimates with minimal information provided about the products being produced. One informed source revealed that at one point, they even requested estimates from suppliers on a Friday before a weekend, demanding delivery by the following Monday. This source was told that Musk wanted to push the project forward at "light speed." In response to this news, Tokyo Electron's stock rose 6% in Tokyo on Thursday. The news of negotiations also boosted the stock prices of companies like Advantest Corporation, Screen Holdings, and Disco Corporation, all manufacturers of chip equipment. Terafab Chip Plan: Musk's Foundation for AI Empire's Computing Power The Terafab project is an ambitious plan with an investment scale of up to 20 to 25 billion dollars, with the core goal of achieving a total computing power of 1 terawatt per year. While Tesla, Inc. has designed its own autonomous driving FSD chip, Musk's company has never produced semiconductors before. However, now he plans to produce chips on a scale far exceeding current global capacity, first establishing a pilot production line in Austin, utilizing Tesla, Inc.'s existing electric vehicle factories and infrastructure. The envisioned chips are intended to support Musk's xAI artificial intelligence business, a range of humanoid Siasun Robot&Automation devices, and space data centersmany in the semiconductor industry are not taking these ambitions lightly. The goal of Terafab is to manufacture AI chips for autonomous taxis, Optimus humanoid Siasun Robot&Automation devices, as well as to produce high-power semiconductors for SpaceX and xAI's space projects. Musk has stated that he expects xAI to use the majority of the components. Musk echoed concerns from some in Silicon Valley, pointing out that the semiconductor industry's capacity improvements are not sufficient to meet the needs of artificial intelligence companies. Large-scale data center operators like Amazon.com, Inc. and Alphabet are expected to invest about 650 billion dollars this year in data center infrastructure, leading to a severe shortage of storage chips that is now spilling over into the field of artificial intelligence accelerators. In March, Musk outlined a vast operational plan aimed at creating cutting-edge semiconductors for artificial intelligence, humanoid Siasun Robot&Automation, and space exploration. For this, he intends to challenge the world's leading chip manufacturers, including Taiwan Semiconductor Manufacturing Co., Ltd. The plan involves hundreds of steps spanning multiple engineering fields and requires collaboration from companies in various sectors such as industrial gas suppliers and testing equipment vendors. However, the final scale of the project, or whether it will expand to a single giant facility or multiple locations outside of Texas, remains unclear. According to informed sources, if suppliers prioritize Terafab, they are willing to pay far more than the quoted amount. As the technological roadmap and chip production location are not finalized, no formal orders have been placed yet, but the first step is to build a pilot production line capable of processing 3,000 wafers per month, aiming to start silicon chip production in 2029 and gradually scale up. Despite this, industry analysts see this move as a key move in Musk's race for computing power. Musk emphasized in internal meetings that the demand for customized AI chips for autonomous driving (FSD), Optimus humanoid Siasun Robot&Automation, and SpaceX satellite communication is exponentially growing, and the existing supply chain system is unlikely to support his long-term plans. Only by mastering the manufacturing process can he take the initiative in the competition of the AI era. Musk's Chip Plan "Connects and Integrates": Collaborating with Intel Corporation, Engaging with Samsung, Recruiting Equipment and Talent In terms of industry cooperation, Intel Corporation has already reached out to Musk. Intel Corporation's CEO, Lee Sang-wu, recently confirmed his deep involvement in the Terafab project, with both parties working together to develop a new generation of processors for Siasun Robot&Automation and large-scale data centers. Lee Sang-wu also shared photos on social media of Musk's recent visit to the chip manufacturer's office in Santa Clara. In addition, Applied Materials and Tokyo Electron are key players in the trillion-dollar chip market, providing equipment for complex processes such as etching and deposition required by Taiwan Semiconductor Manufacturing Co., Ltd. and its competitors. ASML Holding NV ADR may be the most critical link in the chip production supply chain: it is the only company capable of manufacturing extreme ultraviolet lithography machines, which are crucial for any chip manufacturer looking to mass-produce cutting-edge semiconductors. Currently, it is unclear whether Musk's team has had any contact with this Dutch company. Meanwhile, Musk's team is actively negotiating with Samsung Electronics, although Samsung is leaning towards allocating dedicated capacity for Tesla, Inc. through its new wafer fab in Taylor, Texas, rather than supporting its own independent fab. However, there is still potential for collaboration between the two in the field of advanced processes. These moves signal Musk's attempt to break the dominance of Taiwan Semiconductor Manufacturing Co., Ltd. and NVIDIA Corporation in the industry and reshape the global semiconductor value chain. It is worth noting that earlier this month, Tesla, Inc. board member Ira Ehrenpreis accompanied Musk on a visit to Intel Corporation's headquarters. In addition to the technical expertise of this American chip manufacturer, Musk is also recruiting talent skilled in various aspects of chip factory operation, including chip design, power management, factory construction, and procurement. In the manufacturing field, engineers from companies like Applied Materials, Samsung, and Taiwan Semiconductor Manufacturing Co., Ltd. have been invited to join the project. This project aims to internalize the entire chip manufacturing process from lithography production to testing and packaging. Musk Accelerates the "Terafab" Autonomous Chip Making Plan, Success of AI5 Chip Helps Power Computing Dominance Layout The core confidence supporting Musk's ambitious manufacturing vision comes from breakthroughs in chip design. Musk recently announced that Tesla, Inc.'s AI chip design team has successfully completed the chip with the flow of AI5, marking the readiness of the chip to enter the physical manufacturing stage. As the core brain for Tesla, Inc.'s future fully automated driving (FSD) and supercomputer Dojo, AI5 is highly anticipated by Musk, with him even publicly stating that it will become "one of the highest production AI chips globally." Although the initial production of AI5 is currently dependent on technical support from Taiwan Semiconductor Manufacturing Co., Ltd. and Samsung, the success of the chip's flow has logically validated the necessity of the "Terafab" plan: only with vast autonomous production capacity can Tesla, Inc. meet the massive computing demands from AI5 to the Dojo 3 system in the future. From a strategic perspective, the "Terafab" plan and the successful flow of AI5 form a closed loop for Tesla, Inc.'s "software-hardware integration." Musk has established his leading position in AI algorithms and chip design through advanced architectures like AI5, while also attempting to break through on the manufacturing end through "Terafab" in Texas. Intel Corporation CEO Lee Sang-wu has explicitly stated that they will be deeply involved in this process to help Tesla, Inc. develop new processors for driving Siasun Robot&Automation and data centers. This strong extension from design to manufacturing signifies that Tesla, Inc. is transitioning from a simple electric vehicle company to a vertically integrated global semiconductor and AI giant. However, Musk's "lightning-speed" chip-making grand plan has sparked widespread discussion in the capital markets. In today's increasingly complex advanced process technology, whether Musk can achieve commercial production of self-made chips by 2029 as planned is not only crucial for the iterative ceiling of Tesla, Inc.'s FSD system but will also profoundly impact the existing industry balance dominated by Taiwan Semiconductor Manufacturing Co., Ltd. and NVIDIA Corporation. Capital and market uncertainties: Terafab plan seen dimly by institutions, deemed unrealistic While the news has boosted the stock prices of related semiconductor equipment suppliers in the short term, research reports from institutions like Bernstein have pointed out the significant challenges. Analysts believe that to achieve the 1 terawatt computing goal in a short amount of time, the actual capital expenditure required may far exceed the current budget. Bernstein analysts estimate that the project would require around 50 to 130 trillion dollars in capital expenditure. Considering the high costs and complexity of the chip industry, Musk may be satisfied with achieving more moderate success in the industry. Tan Mei Qiu, head of technology stocks research at Berenberg Bank in Hamburg, stated on Bloomberg Technology that the bank has not included Terafab in its financial model for ASML Holding NV ADR, but ASML's high numeric aperture extreme ultraviolet lithography equipment is likely to be used for such projects. She said, "The intention is real," but there will not be significant progress for at least the next two years. "We have not included Terafab in our forecast figures." In this context, doubts persist about whether Musk can build the envisioned Terafab project in Austin. Despite skepticism from the semiconductor industry, this external communication indicates that he is still moving forward with the plan. The billionaire has previously achieved what many thought was impossible, through SpaceX's creation of a commercially viable rocket business and Tesla, Inc.'s push to mainstream electric vehicles. Now, in a backdrop of a global shortage of semiconductor talent and increasingly complex advanced process technology, whether he can lead the team to replicate the disruptive success of Tesla, Inc. and SpaceX in the heavy asset field has become a focal point of global financial interest.