• ASML (ASML) CEO reveals discussions with Elon Musk about the Terafab project, describing Musk as "very serious."
  • Musk's team has reportedly contacted suppliers, signaling a shift from speculation to early sourcing efforts.
  • The project faces immense technical and capital hurdles, with estimates suggesting costs could reach trillions.

ASML's CEO confirmed during a recent interview that he has spoken with Elon Musk about the proposed Terafab, a massive chip-manufacturing facility that Musk has touted as a potential game-changer. According to the CEO, Musk is "very serious" about the project, and his team has already begun reaching out to suppliers to move forward quickly. The revelation marks a notable shift: what was once dismissed as a speculative idea now appears to be an early-stage industrial effort, though no credible evidence suggests it is close to execution at scale.

ASML, the Dutch semiconductor-equipment giant and sole supplier of extreme ultraviolet lithography tools, stands at the center of any advanced chipmaking endeavor. The company reported €32.7 billion in net sales and €9.6 billion in net income for 2025, with management guiding 2026 revenue to between €34 billion and €39 billion and gross margins around 51% to 53%. The Terafab plan, if realized, could dramatically boost demand for ASML's tools, but the scale of ambition raises eyebrows: recent coverage pegs the potential cost in the trillions, not billions.

For Musk, the Terafab represents an extension of his pattern of pursuing audacious manufacturing goals, from electric vehicles to rockets. However, semiconductor fabrication is notoriously capital-intensive and constrained by multi-year lead times for equipment and clean-room construction. Even major manufacturers like TSMC (TSM) and Intel (INTC) take years to ramp new fabs. "The obstacles are immense," said an industry analyst familiar with the discussions. "You can't just throw money at lithography bottlenecks."

The geopolitical implications are equally significant. ASML is already a flashpoint in U.S.-China technology competition, and any large-scale advanced fab—especially one led by Musk—would intersect with export controls and industrial policy. Governments in the U.S., Europe, and Asia are racing to localize chip production, and a project of this magnitude could reshape supply chains. Musk's team has not disclosed specific locations or partners, but people familiar with the matter say the effort is being treated with urgency.

Reaction from investors and competitors has been mixed. For ASML, the news reinforces its strategic importance. "Any advanced chip effort still runs into lithography constraints," the analyst noted. "If Terafab moves forward, ASML is the one selling the shovels." Still, skepticism abounds. A rival equipment vendor, speaking on condition of anonymity, called the plan "visionary but borderline fantastical" given the power and supply-chain requirements. "We've seen this movie before," they said.

In the short term, the most likely outcome is continued supplier outreach, feasibility studies, and media speculation rather than immediate construction. The long-term impact could pressure the industry to rethink concentration, but the probability of a fast breakthrough remains low. ASML, for its part, is focused on its own execution: the company recently announced plans to expand its board and emphasize engineering depth as it prepares for a heavy capex cycle.

Correction: An earlier version of this article misstated ASML's 2026 revenue guidance. The correct range is €34 billion to €39 billion.