MicroStation now supports a native Terrain data type. An STM can be exported to this Terrain type by selecting File -> Export to STM to TM. After exporting the STM will be detached and a new Terrain element created. See the MicroStation documentation for details on the Terrain element and associated tools.

The size of the terrain model element is governed by the variable that controls the export to iModel.

The variable STM_DOWNSAMPLING_PREFSIZE controls the size in MB of the exported terrain element. The default is 5.