Elon Musk's semiconductor factory project, Terafab, plans to allocate about 70% of its long-term production target to memory semiconductors. Although the initiative emphasizes supplying computing semiconductors for artificial intelligence (AI) and robotics, the volume of wafers will predominantly focus on memory. Terafab's procurement team visited Japan earlier this month to discuss mass production preparations with local semiconductor equipment manufacturers.
According to the Nihon Keizai Shimbun (Nikkei) on November 9, Terafab aims to produce 1 million silicon wafers per month after 2032. Of these, approximately 700,000 wafers will be designated for memory semiconductors, while over 300,000 will be allocated for logic semiconductors. The specific types of memory, such as DRAM or NAND, have not been disclosed. Terafab's monthly production goal of 1 million wafers is equivalent to 40 times the output of Japan's Rapidus Hokkaido plant, which produces 25,000 wafers monthly. Terafab has informally communicated this target to semiconductor equipment manufacturers this fall.
Nikkei reported that Terafab has presented its order plans to Japanese semiconductor equipment companies. Earlier this month, the procurement team met with local suppliers to finalize the details necessary for mass production.
The mass production target for the Terafab factory, being built by Tesla and SpaceX in Texas, is set for the second half of 2028, as Musk indicated last month. Typically, constructing a state-of-the-art semiconductor factory takes over three years from planning to mass production, and both companies lack experience in semiconductor manufacturing. According to Nikkei, one equipment supplier received a request from Terafab to deliver equipment within a few months. An official from that company remarked, "It's an unreasonable order, but we have no choice but to accommodate it as much as possible."
Terafab is also reportedly in contact with about ten domestic semiconductor materials, components, and equipment companies. Some of these firms are at the stage of discussing supply items under non-disclosure agreements (NDAs).
When Musk unveiled the Terafab concept last March, there was skepticism within the semiconductor industry. Building and operating a semiconductor factory requires specialized knowledge, and it was uncertain whether Musk would actually construct one. As the semiconductor supply shortage continued, Musk expedited the plan's details, and as concrete orders began, the industry started to view Terafab as a legitimate customer, according to Nikkei. An executive from one supplier stated, "Right now, the biggest topic in the semiconductor industry is not Kioxia or Rapidus; it's Elon Musk."
Douglas LeFevre, CEO of Japanese semiconductor inspection equipment company Advantest, avoided specific mentions of Terafab during last month's earnings call but noted, "It is becoming a reality and will grow into a meaningful business in the future." Wei Zhe, chairman and CEO of Taiwan's TSMC, also stated during last month's earnings conference call that discussions are ongoing with Musk's team about utilizing Terafab's production capacity. He added that if cooperation occurs, TSMC should manage the factory's operations.
While expectations are high, concerns have been raised about the factory's future operations. An analyst from market research firm Omdia pointed out that the demand for semiconductors for SpaceX remains uncertain, emphasizing the need to observe whether the production capacity can be smoothly filled after the factory is established.
* This article has been translated by AI.
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