"We knew that the increase in our laboratory production would be fundamental to the commercialization of Monster SIlk(tm)," continued Thompson. "Now that the new laboratory is working as planned, we are looking to exponentially expand our production of Monster Silk(tm)."
I believe that this number (500,000) was one of the many misquotes in that article. A statement of production volume needs a time reference. I suspect that what was actually said was that the new lab produces 500,000 eggs PER MONTH! This would take 5000 worms in each generation with 4 staggered generations for a total stable lab population of 20,000 worms. Not that many but sufficient if the end product is to be eggs rather than cocoons.
500,000 eggs shipped to a final producer will expand to 100 Million cocoons after one generation. This would be a sufficient # of cocoons to produce 500,000 lbs (250 Tons) of silk fabric!
(200 cocoons yield about a pound of silk fabric, enough to produce one fancy evening gown or about 10 pair of military briefs.)
Silk worm populations expand exponentially at the rate of 100 times per generation, so if they were able to expand exponentially for more than 2 or 3 generations we would be hip deep in silk worms.
Obviously they are limited by the available food supply. Mulberry trees expand much more slowly.
BTW dried standard silk cocoons sell for ~$20,000/Ton so the first full generation from the production partner will sell for about a Million dollars, with a new batch each month, so there will be plenty of profit to share.