TheElec reports Musk's Terafab is in talks with about 10 Korean chip suppliers, and Musk repeats that its output will rank among the top 20 country GDPs
According to Korean media, Elon Musk's Terafab is now talking to almost EVERY Korean chip supplier it can find. Until now, the only known Korean suppliers were HPSP and Hanmi Semiconductor. Now TheElec reports that Tesla and SpaceX are in talks across nearly every category Korean companies can supply, from basic piping parts to process materials to test components. At SEMICON West in San Francisco last week, Terafab staff walked straight to around 10 Korean booths on the morning of day one, including ENF Technology, Dongjin Semichem, Hanmi Semiconductor, Unisem and MiCo. Several companies have already signed NDAs. One got an NDA by email the same evening Terafab visited its booth. Hanmi Semiconductor is discussing TC bonders for Terafab, and HPSP has agreed to supply one high pressure hydrogen annealing tool to the R&D line. MiCo's cleaning unit Komico signed a three way NDA with Tesla and SpaceX about a month ago, and ISC is already swapping samples for rubber test sockets. Tesla and SpaceX do not buy from Chinese suppliers. One Korean supplier put it simply, without China there are only a few options, and Japan is expensive. They also want prices that are CHEAPER than China. $LRCX and $AMAT have reportedly built dedicated Terafab teams, and Fujifilm is meeting Terafab buyers regularly on slurries, photoresist and etchants. The goal is a fab with 1 million wafer starts per month within 10 years, with $16.8 billion of initial investment and more than 3,000 jobs. SpaceX broke ground in Grimes County, Texas this month, and the first 100,000 wafer per month phase is expected before 2030. Logic is being done with $INTC, talks with $TSM are ongoing, and memory will be built separately. One supplier said that if they email Terafab in the middle of the night in the United States, they get an answer in 30 minutes to an hour. $TSLA and $SPCX are building a chip supply chain at Elon speed.
Context
Terafab building a supply chain outside China would show Tesla and SpaceX are serious about making their own AI chips.
This is a secondhand summary by Melvin, an analyst for the Milk Road AI newsletter, of a report by TheElec, a Korean electronics trade outlet. Terafab is the chip fab Tesla and SpaceX are building in Texas, covered in this deck on October 10 and 11.
Deep dive
On October 20, Melvin posted that Terafab is talking to almost every Korean chip supplier it can find, citing TheElec.
TheElec reported that Tesla and SpaceX staff visited about 10 Korean companies' booths on the opening morning of SEMICON West in San Francisco on October 13, including ENF Technology, Dongjin Semichem, Asflow, BMT, GnG Intech, Unisem, MiCo and Hanmi Semiconductor. It said more than half have signed nondisclosure agreements, and that one company received one by email the evening of the visit. Hanmi is discussing thermocompression bonders, HPSP agreed to supply one high pressure hydrogen annealing tool for the research line, MiCo's cleaning unit KoMiCo signed a three way agreement about a month ago, and ISC is exchanging samples for test sockets. The talks vary in maturity, and several were first contacts.
Melvin's post adds that Tesla and SpaceX do not buy from Chinese suppliers, want prices cheaper than China, that Lam Research and Applied Materials have dedicated Terafab teams, and that logic work is with Intel while talks with TSMC continue. These parts could not be confirmed in the TheElec excerpt checked for this deck.
TheElec gives the goal as 1 million wafer starts a month within 10 years, with $16.8 billion of initial investment. Elon Musk quoted the post, saying the value of Terafab's output will place it in the top 20 of country GDP in a single building, a claim he also made on October 11. It is a prediction, not a figure.
What to expect next
Watch for any of the Korean suppliers to confirm orders in public filings, which would move the talks from reports to contracts. Progress at the Grimes County site, where Melvin says the first 100,000 wafer a month phase is expected before 2030, will show how fast Terafab is moving. Also watch for official word on its logic partners, since the Intel and TSMC claims are unconfirmed.