xAI Terafab teams have contacted Applied Materials, Tokyo Electron, and Lam Research for price quotes and delivery times on chipmaking equipment, with Musk’s representatives telling suppliers the project needs to move at “light speed” and offering to pay above quoted prices for priority.

xAI Terafab has moved from announcement to active procurement, with teams from the Tesla and SpaceX joint venture contacting Applied Materials, Tokyo Electron, and Lam Research for chipmaking equipment prices and delivery windows, Bloomberg reported April 16 citing people familiar with the matter.

The outreach covers photomasks, substrates, etchers, depositors, cleaning devices, testers, and other tools. In one instance, staff asked a supplier on a holiday Friday for estimates to be delivered the following Monday. Musk wants to move at “light speed,” the supplier was told, and Terafab is offering to pay considerably above quoted amounts if suppliers give it priority.

The contacts mark the first concrete indication that Terafab has crossed from concept to procurement planning. No formal orders have been placed, and suppliers are being given minimal information about the products to be manufactured, which analysts say reflects the project’s early stage.

Terafab is a $25 billion joint venture between Tesla, SpaceX, and xAI. Musk unveiled it at Giga Texas in Austin in March 2026, describing it as “the most epic chip-building exercise in history.” The project targets one terawatt of annual AI compute output, roughly 50 times current global AI chip production, through a vertically integrated facility combining design, fabrication, packaging, and advanced logic under one roof.

Intel joined the initiative on April 7 as foundry partner, contributing its 18A process node, the most advanced logic manufacturing capability produced entirely within the United States. Intel CEO Lip-Bu Tan said Musk has “a proven track record of reimagining entire industries.”

Samsung Said No to Joining

The Terafab team also approached Samsung Electronics for direct support. Samsung declined, instead offering to allocate additional production capacity for Tesla at its planned Taylor, Texas facility. That response underscores ongoing skepticism in the established semiconductor industry about Terafab’s ambitions, even as individual equipment suppliers engage.

Bernstein Research estimated the true capital required to hit one terawatt of annual compute at approximately $5 trillion, roughly 200 times the $25 billion budget cited. Berenberg’s head of tech equity research, Tammy Qiu, said her bank has yet to include Terafab in its financial models for ASML, whose EUV equipment would likely be needed at scale.

Timeline and Crypto Market Angle

The first step is a pilot line capable of processing 3,000 wafers per month, with silicon chip manufacturing targeted to begin by 2029. The chips would power Tesla’s Full Self-Driving stack, Optimus humanoid robots, and SpaceX and xAI space infrastructure.

Tokyo Electron shares rose 5.3% in Tokyo on Thursday on news of the supplier contacts. Shares of Applied Materials, Lam Research, and other equipment makers also moved higher. Wedbush analyst Dan Ives called it an early step toward Tesla’s long-term AI infrastructure strategy.

For crypto, the Terafab buildout intensifies competition for high-end fabrication capacity globally. As analysts have noted, AI compute and Bitcoin mining are both industrial-scale races for the same underlying semiconductor resources, with the winner in AI chip supply increasingly determining which AI players can scale, and which crypto mining operations can remain cost-competitive.