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Musk’s Terafab fever dream exposes reality of the AI chip crunch

Debby Wu & Ian King / Bloomberg
Debby Wu & Ian King / Bloomberg • 7 min read
Musk’s Terafab fever dream exposes reality of the AI chip crunch
No one has ever proposed anything quite like what Musk calls Terafab
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(March 24): When Elon Musk took the stage on Saturday to unveil his plans to get into semiconductor production, he didn’t spare the superlatives.

“I have an important announcement to make, which is the most epic chip-building exercise in history by far,” he said before a small crowd in Austin, Texas. “This is really going to take things to the next level, a level probably people aren’t even contemplating right now. We’re going to adjust the context by a few orders of magnitude here.”

No one has ever proposed anything quite like what Musk calls Terafab. The project, as outlined, would be a massive operation to build cutting-edge semiconductors for artificial intelligence, robotics and space forays. He would not only try to take on the best chip manufacturer in the world — Taiwan Semiconductor Manufacturing Co — but he also wants to do it at volumes far beyond the industry’s current capacity.

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