Elon Musk Wants to Build His Own 'Gigantic' Chip Fab

Elon Musk Plans to Build a Massive Chip Factory

Elon Musk, CEO of Tesla, revealed plans to enter the chip manufacturing industry amid growing demand for chips in his electric vehicles and robotics projects. Despite purchasing all available chips from suppliers like TSMC and Samsung, Musk said chip supply remains insufficient.

Challenges in Chip Supply

During Tesla’s annual shareholders meeting, Musk highlighted that chip availability and power requirements are significant constraints for his companies. He stated,

“As far as I can see, the only option is to go build some very big chip fab.”

Musk explained that beyond building the factory, challenges also include solving memory and packaging issues. Without this expansion, Tesla risks hitting a production limit tied to current chip manufacturing rates.

Tesla Terra Fab Vision

The proposed facility, named “Tesla Terra Fab,” is designed to be “gigantic” and capable of producing “at least 100,000 wafer starts per month.” This output would be five times larger than TSMC’s initial fab in Arizona.

Moreover, Musk envisions not just one, but a complex of 10 such fabs, aiming for a combined total of “a million wafer starts per month.”

“I can’t see any other way to get to the volume of chips that we’re looking for,”
Musk remarked, emphasizing the scale necessary to meet demand.

Implications for Tesla’s Future

This ambitious plan highlights Tesla’s drive to secure its semiconductor needs internally, ensuring its ambitions in electric vehicles and robotics can continue to grow unimpeded.

Author's summary: Elon Musk plans to build a huge chip factory complex to overcome supply shortages and support Tesla's expansive growth in electric cars and robotics.

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PCMag PCMag — 2025-11-07

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