Musk Expands Terafab Supply Chain With Korean Chipmakers

Elon Musk's Terafab semiconductor project is building an international supply chain as Tesla and SpaceX pursue manufacturing partnerships with about 10 South Korean companies, according to The Elec on October 20, 2026. The Texas-based initiative aims to secure chips for autonomous vehicles, humanoid robots, satellites and space-based data centers, with an eventual production target of 1 million wafers per month.

Several Korean suppliers have signed nondisclosure agreements and progressed to discussions about specific equipment and materials. The companies under consideration cover semiconductor chemicals, piping systems, cleaning services, environmental equipment, bonding machinery and chip-testing components.

The Elec reported that representatives from Tesla and SpaceX visited Korean suppliers during SEMICON West 2026 in San Francisco, held October 13-15. Some negotiations had been underway for months, while other relationships began during the exhibition.

Terafab representatives appeared to have identified potential suppliers and products before the exhibition opened, according to an official at a Korean company.

"It appears they had already identified the companies they wanted to contact and the products they wanted to discuss before visiting the booths as soon as the exhibition opened," the official said.

ENF Technology discussed process materials, Asflow examined potential supplies of piping components and valves, and GnG Intech received inquiries about wastewater recycling equipment. BMT is discussing valves and fluid-handling components, while Unisem has signed a nondisclosure agreement covering environmental equipment, including scrubbers.

KoMiCo, MiCo's cleaning subsidiary, signed a three-party nondisclosure agreement with Tesla and SpaceX approximately one month before the report. The companies are considering cleaning services for a Texas research and development pilot line. Dongjin Semichem has also held discussions with Tesla for two to three months about materials, including products connected to its Texas thinner production facility.

Other discussions involve semiconductor manufacturing and testing. Hanmi Semiconductor is exploring the supply of thermocompression bonders, while HPSP has agreed to supply one high-pressure hydrogen annealing system for the research and development line. ISC has exchanged samples and design information concerning silicone rubber sockets for semiconductor testing.

Most of the companies in talks already supply Tesla or SpaceX. The Elec reported that Terafab's procurement network also includes suppliers connected to former Intel personnel and GlobalFoundries procurement staff.

A Korean equipment industry official described the appeal of Korean suppliers as a combination of cost and availability.

"Excluding China, there aren't many suppliers, and Japanese companies are expensive," the official said. "Korea is a good option."

The same industry context has encouraged Terafab to examine a broad range of international suppliers. Fujifilm holds regular meetings with the project's procurement team about chemical mechanical polishing slurries, photoresists, etchants and cleaning chemicals. Lam Research and Applied Materials have also established dedicated Terafab teams, according to The Elec.

A Fujifilm official said the final selection would depend on the manufacturing processes Terafab adopts.

"Most major materials suppliers have probably already held discussions with Terafab," the official said. "The products they supply will depend on which technologies are selected."

Before pursuing a new facility, Musk reportedly explored acquiring manufacturing plants from Intel, Taiwan Semiconductor Manufacturing Co. and Micron. An overseas equipment supplier official told The Elec that those approaches did not lead to acquisitions, prompting a shift toward partnerships.

"My understanding is that Musk initially considered acquiring manufacturing facilities from Intel, TSMC and Micron, but shifted toward partnerships after being turned down," the official said.

The official also highlighted the project's pace of execution.

"I've never seen this level of execution speed elsewhere in the semiconductor industry," the official said.

A Korean supplier official described unusually rapid responses to inquiries and a decision-making structure that gives engineers substantial authority.

"When we send inquiries, even in the early morning hours in the US, we receive responses within 30 minutes to an hour," the official said. "Engineers have decision-making authority, making the way they work completely different from dealing with ordinary customers."

Intel has already joined Terafab as a partner working with its 14A manufacturing technology. Musk had also discussed cooperation with TSMC, although TSMC CEO C.C. Wei said the company would need to operate its own facilities for a partnership to work. Musk had described TSMC's potential role as that of a subcontractor.

The initial Terafab facility is expected to process 100,000 wafers per month, with completion anticipated before 2030, according to The Elec. That capacity would remain substantially below TSMC's planned production of 120,000 wafers using its leading-edge 2-nanometer technology by the end of 2026.

The broader project was announced in March by Tesla, SpaceX and xAI. The Elec estimated initial investment at $16.8 billion and projected more than 3,000 jobs. SpaceX signed a tax abatement agreement with Texas earlier in October and began construction, while Tesla is developing a process research and development pilot fab at Gigafactory Texas in Austin.

Musk has linked the manufacturing effort to a longer-term vision in which physical artificial intelligence and robotics expand economic output. In an August podcast with Walter Isaacson, he argued that intelligent machines could perform physical work and scientific experiments, extending AI's impact beyond digital services.

He estimated that digital superintelligence could increase Earth's economic output by about 30%, equivalent to approximately $30 trillion annually. Musk also suggested that robots operating in space and infrastructure such as a lunar mass driver could eventually enable an economy vastly larger than Earth's current economy.

In a separate post cited by The News International, Musk said a single Terafab building could generate enough output to rank among the world's 20 largest national economies by gross domestic product. The project has not publicly disclosed a separate corporate entity or ownership structure.