Musk Says Tesla Must Create Massive Chip Factory to Satisfy AI Needs
Elon Musk, chief executive officer of Tesla, stated on Thursday that the carmaker will likely need to construct a “gigantic” semiconductor fabrication plant to bolster its artificial intelligence and robotics ambitions, according to the reports. During Tesla’s annual shareholders’ meeting, Musk remarked, “One of the things I’m trying to figure out is — how do we make enough chips?” The electric carmaker currently depends on contract chipmakers, such as Taiwan Semiconductor Manufacturing Company and Samsung Electronics, to produce its chip designs. The report indicates that Musk is contemplating collaboration with Intel to enhance its supply. “You know, maybe we’ll, we’ll do something with Intel,” he said, adding that they haven’t signed a deal with Intel yet.
During the meeting, he remarked, “But even when we extrapolate the best-case scenario for chip production from our suppliers, it’s still not enough.” He stated that establishing a gigantic chip fab will likely be necessary to achieve the chip volumes the company aims for. Musk stated that Tesla’s proposed semiconductor facility, referred to as Tesla terafab, could initially generate approximately 100,000 wafer starts per month, with intentions to ultimately increase production to one million. In the chip industry, “wafer starts per month” denotes the quantity of new semiconductor wafers that a fabrication plant initiates processing each month. In comparison, TSMC reports that its annual wafer production capacity surpassed the 17 million mark in 2024, equating to roughly 1.42 million wafer starts per month.
Microchips serve as the essential elements that drive almost all contemporary technologies, ranging from smartphones and automobiles to robotics. The demand for them has surged alongside the rise of artificial intelligence. Leading technology companies, including Tesla, are vying for increased supply from chipmakers such as TSMC, recognized as the world’s largest and most advanced semiconductor manufacturer. Musk’s statement underscores Tesla’s evident transition towards artificial intelligence and robotics, sectors he perceives as the future of the global economy. He stated, “With AI and robotics, you can actually increase the global economy by a factor of 10, or maybe 100.” “There’s not, like, an obvious limit.”
A report indicates that the company is developing its fifth-generation artificial intelligence chip to fuel its autonomous aspirations. Musk has previously stated, “The AI5 chip,” and confirmed that Tesla is collaborating with Taiwan’s TSMC and South Korea’s Samsung. These AI chips drive Tesla’s autonomous driving systems, encompassing its Full Self-Driving software. The company is presently utilizing its fourth-generation chip, but its long-term ambitions hinge on developing higher-capacity AI hardware that can scale with Tesla’s rapid advancements in robotics and automation.
