Elon Musk says he still has a lot to learn about chip making but plans to build custom fab equipment for Terafab
Elon Musk today on Terafab: “I still have a lot to learn about chip making. Gotta start somewhere. I didn’t know how to make cars or rockets. The (chip) equipment’s not very customized, it’s all coming from the same vendors. If you tour a Tesla factory, we got tons of custom equipment. We’re gonna start with conventional equipment and then make customer equipment that allows for much higher throughput on wafers.”
Context
Musk is betting that the playbook behind Tesla and SpaceX factories, building custom manufacturing machines in house, can also beat established chipmakers on wafer throughput as Terafab aims to supply his companies' AI chips.
Terafab is a planned chip manufacturing complex in Texas led by Tesla and SpaceX, aimed at producing AI chips at scale. Musk wrote on X on October 7 that his companies will build and run the fab, and that TSMC might at most sublease part of it, according to Reuters. Intel is a partner in the project, and Investing.com reported that Musk made these latest remarks by livestream at the X Takeover event outside Tesla's Austin gigafactory.
Deep dive
Speaking by livestream at the X Takeover event on October 10, Elon Musk said he still has a lot to learn about chip making, comparing it to how he did not know how to make cars or rockets at first. As quoted by Sawyer Merritt, Musk said chip equipment is not very customized and comes from the same vendors, while a Tesla factory has tons of custom equipment. He said Terafab will start with conventional equipment and then make custom equipment that allows much higher throughput on wafers.
Investing.com reported that Musk said his companies could eventually manufacture chips more efficiently than rivals, though he acknowledged it might take several years. Crypto Briefing, citing Bloomberg, reported that Musk said his companies can likely improve chip quality better than anyone thanks to equipment they build themselves.
According to Crypto Briefing, Terafab's main goal is high volume production of AI5 inference chips, with a pilot fab under construction near the Austin gigafactory and larger operations planned in Grimes County, Texas. ENR reported that county records contemplate as much as $119 billion across four phases, with the first phase scheduled for 2026 to 2028. Reuters reported that Intel CEO Lip Bu Tan said Intel will remain involved.
What to expect next
Watch for Terafab's first equipment orders and whether Tesla or SpaceX disclose plans to design their own fab tools, which Musk says is the path to higher wafer throughput.
Also watch the pilot fab near Austin, the timeline for the first Grimes County phase, and how the partner roles of Intel and TSMC are finally settled, since Musk insists his companies will run the fab themselves.