ASML CEO Christophe Fouquet has held direct discussions with Elon Musk regarding his ambitious TeraFab initiative, a multi-phase, vertically-integrated semiconductor manufacturing and advanced computing fabrication facility planned for Texas. The project, intended to support AI and autonomous systems for Tesla, xAI, and SpaceX, is estimated to have an initial investment of $55 billion and a potential total investment of up to $119 billion. Fouquet described Musk as "very serious about all those projects," acknowledging the significance of the endeavor.
Despite Musk's determination, Fouquet has voiced concerns about the TeraFab project's impact on an already strained global chip supply chain. He warned that the strong demand for AI is creating a supply-limited market for an extended period, and mega-projects like TeraFab could push the chip equipment supply chain to its limits. ASML, the sole provider of crucial Extreme Ultraviolet (EUV) lithography systems, anticipates the global semiconductor market could reach $1.5 trillion by 2030, driven by accelerating AI-related demand.
Intel is expected to be an early adopter of ASML's next-generation High-NA EUV systems, with the first logic chips produced using this technology arriving within months. Intel has also joined as a primary production partner for TeraFab, contributing its advanced 18A process node. While ASML is increasing production and revised its 2026 revenue outlook upward due to a surge in new orders, Fouquet emphasized that capacity remains limited, and there are not enough high-end lithography systems immediately available to satisfy all demands. Forecasting long-term chip demand remains challenging as AI infrastructure spending accelerates globally. The TeraFab project is seen as a key point in the AI chip race, highlighting how companies are looking to secure chip access as a strategic constraint.
