Elon Musk is pushing forward with his bold ambitions to revolutionize Tesla’s chip supply chain. He argues that current suppliers like Samsung and TSMC are moving too slowly to meet the company’s massive future demand. Musk envisions a world where Tesla requires between 100 million to 200 billion AI chips annually, driven by the increasing mainstream adoption of Full Self-Driving (FSD) technology. However, he believes that existing suppliers cannot fulfill this need within a reasonable timeframe.
Elon Musk’s Vision for a Faster Chip Supply Chain
In a recent conversation with Baron Capital, Musk expressed his dissatisfaction with the proposed five-year timeline from companies like TSMC and Samsung to ramp up chip production capacity. He considers this timeline unacceptable, emphasizing the urgency of meeting Tesla’s future needs much sooner. The billionaire is contemplating the creation of Tesla’s own chip facilities to circumvent the limitations imposed by current suppliers. Musk believes that this bold move is the key to achieving the scale required for Tesla’s Optimus robot and self-driving cars.
The production speed doesn’t seem fast enough. When I asked them how long it would take from groundbreaking to completion of a new chip factory, they told me it would take five years to start production. I felt that five years was an endless wait for me.
– Elon Musk
Challenges and Skepticism Surrounding Musk’s Plans
Despite Musk’s enthusiasm, analysts remain skeptical of his ambitious plans. Critics argue that building a new chip facility would require a significant investment of Tesla’s capital expenditure, and even then, the endeavor could be stymied by a shortage of talent and advanced chip intellectual property. Some suggest that Musk might invest in expanding the capabilities of existing providers like TSMC, which has shown flexibility in meeting client demands, including shifting some production to the United States.
You know, from their standpoint, they’re moving like lightning. I’m just saying that, nonetheless it will be a limiting factor for us. … it might just be that the only way to get to scale at the rate we want to get to scale is to build a really big fab – or be limited in output of Optimus and self-driving cars behind the AI chip supply.
– Elon Musk
While the idea of a ‘TeraFab’ is appealing, the reality of the supply chain suggests that achieving such capacity might be more challenging than anticipated. Nonetheless, Musk’s determination to accelerate Tesla’s technological advancements continues to capture the attention of the industry and investors alike.