Tesla CEO Elon Musk attends the Saudi-US Investment Forum in Riyadh, Saudi Arabia, on May 13, 2025.
Hamad Mohammed | Reuters
tesla CEO Elon Musk said the company would need to build a “giant” semiconductor manufacturing factory to maintain its artificial intelligence and robotics ambitions.
“One of the things I’m trying to figure out is how do we make enough chips,” Musk said Thursday at Tesla’s annual shareholder meeting.
Tesla currently relies on contract chip makers Taiwan semiconductor manufacturing company and samsung electronics Create a chip design. Musk said he is also considering collaboration with a US semiconductor company. intel.
“But even estimating the best-case scenario for chip production from suppliers is still not enough,” he said.
Tesla will likely need to build a “giant” chip factory, which Musk described as “Tesla’s TerraFab.” “I don’t see any other way to achieve the amount of tips we’re looking for.”
Microchips are the brains that power nearly all modern technology, from consumer electronics like smartphones to large-scale data centers, and their demand is soaring amid the AI boom.
Tech giants including Tesla are seeking more supply from chipmakers like TSMC, the world’s largest and most advanced chipmaker.
Tesla’s potential fab’s initial capacity is expected to start at 100,000 wafers per month and eventually expand to 1 million, Musk said. In the semiconductor industry, wafer starts per month refers to how many new chips a factory produces each month.
For comparison, TSMC says its annual wafer production capacity reached 17 million wafers in 2024, or about 1.42 million wafers per month starting.
Tesla doesn’t yet manufacture its own microchips, but it has been designing custom chips for self-driving cars for several years.
The company is currently outsourcing production of its latest generation AI5 chips, which Musk said will be cheaper, more power efficient and optimized for Tesla’s AI software.
The CEO also announced Thursday that Tesla will begin production of the CyberCab, a self-driving electric car without pedals or steering wheel, in April.
Musk’s comments underscore Tesla’s shift toward AI and robotics, industries the CEO sees as the future of the global economy.
“With AI and robotics, we can actually grow the global economy 10 times, maybe 100 times. There are no obvious limits,” Musk said at the shareholders’ meeting.
