You need to make a sawmill at a work bench with iron chain, 10 wood, and two iron bars. After you place your sawmill, use it to make a loom which only requires 12 wood. Once you place the loom, go find cobwebs, as you'll need 10 of these to make one. Go back to loom after you get your cobweb, and g to the last page in crafting section, and you can make silk.
