Elon Musk’s Terafab could give a major boost to this corner of the chip sector

UBS says SpaceX’s planned Terafab and AI-focused expansion could dramatically lift demand for wafer-fab equipment over the next five years. The bank estimates SpaceX may spend about $1.1 trillion on capex over five years, with roughly 20% potentially allocated to Terafab and about $135 billion of that on wafer-fab tools. That scale would be close to the current global TAM for wafer-fab equipment and could support UBS’s view that the industry’s market size may approach $300 billion by 2029. The article is bullish for chip equipment makers such as KLA, Applied Materials, Lam Research and Teradyne, and also frames SpaceX’s buildout as a potential long-term growth driver for the semiconductor supply chain. The key market takeaway is rising enthusiasm for capital equipment suppliers as Musk’s manufacturing ambitions imply a much larger addressable market than previously expected.