A massive chip factory to churn out chips. Other chip makers can not make the numbers of chips needed in the near future.
That future is coming at you faster than you could have thought possible.
(Bloomberg) -- 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. — he wants to do it at volumes far beyond the industry’s current capacity.
The scale boggles the mind. The project would require something like $5 trillion to $13 trillion in capital spending, according to estimates from Bernstein analysts. That would fund 140 to 360 new factories, each making 50,000 wafers per month in order to reach the 1 terawatt of annual computing capacity he proposed.
Musk, by far the richest person in the world, has accomplished what others believed impossible before — creating a commercially viable rocket business with SpaceX, bringing electric vehicles to the mainstream with Tesla Inc., and delivering internet connectivity from space with Starlink. But some doubt Musk can, or even intends to, build what he sketched out in Austin.
“A true Terafab feels like a stretch to us,” wrote the Bernstein analysts, including Stacy Rasgon. The amount of compute would be “on the order of the entire current global installed semi capacity and would in fact require many multiples of current installed capacity for ‘relevant’ semis.” Patrick Moorhead of Moor Insights & Strategy wrote that it’s unlikely Musk will ultimately build chip fab facilities at all.
Rather, Musk’s goal with his Terafab proclamation may be something different: to highlight the growing shortage of chip production capacity, or motivate chipmakers to step up. Or it may boost the prospects for SpaceX as it heads for an initial public offering later this year.
There are growing concerns in Silicon Valley that the semiconductor industry isn’t ramping up fast enough to produce the chips AI companies will need to meet their ambitious business plans. Amazon.com Inc., Alphabet Inc. and other hyperscalers expect to spend about $650 billion this year alone to build out data center infrastructure. That’s already creating a severe crunch in memory chips, and is beginning to spill over into AI accelerators.
finance.yahoo.com
That future is coming at you faster than you could have thought possible.
(Bloomberg) -- 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. — he wants to do it at volumes far beyond the industry’s current capacity.
The scale boggles the mind. The project would require something like $5 trillion to $13 trillion in capital spending, according to estimates from Bernstein analysts. That would fund 140 to 360 new factories, each making 50,000 wafers per month in order to reach the 1 terawatt of annual computing capacity he proposed.
Musk, by far the richest person in the world, has accomplished what others believed impossible before — creating a commercially viable rocket business with SpaceX, bringing electric vehicles to the mainstream with Tesla Inc., and delivering internet connectivity from space with Starlink. But some doubt Musk can, or even intends to, build what he sketched out in Austin.
“A true Terafab feels like a stretch to us,” wrote the Bernstein analysts, including Stacy Rasgon. The amount of compute would be “on the order of the entire current global installed semi capacity and would in fact require many multiples of current installed capacity for ‘relevant’ semis.” Patrick Moorhead of Moor Insights & Strategy wrote that it’s unlikely Musk will ultimately build chip fab facilities at all.
Rather, Musk’s goal with his Terafab proclamation may be something different: to highlight the growing shortage of chip production capacity, or motivate chipmakers to step up. Or it may boost the prospects for SpaceX as it heads for an initial public offering later this year.
There are growing concerns in Silicon Valley that the semiconductor industry isn’t ramping up fast enough to produce the chips AI companies will need to meet their ambitious business plans. Amazon.com Inc., Alphabet Inc. and other hyperscalers expect to spend about $650 billion this year alone to build out data center infrastructure. That’s already creating a severe crunch in memory chips, and is beginning to spill over into AI accelerators.
What is Tesla's 'Terafab' and how much will it actually cost?
Tematica Research CIO Chris Versace joins Yahoo Finance Senior Autos Reporter Pras Subramanian and Market Domination Host Josh Lipton to discuss Tesla (TSLA) and SpaceX's (SPAX.PVT) recently announced project, the "Terafab" chip production plant.
finance.yahoo.com