Tesla’s foray into custom silicon production is gaining momentum as CEO Elon Musk deepens his involvement in chipmaking. In a strategic move, Samsung, Tesla’s chosen foundry partner, will establish an office for Musk at its Taylor fab, intensifying their collaboration.
Elon Musk Takes Charge at Samsung’s Taylor Facility
As Tesla embarks on scaling the production of its custom chips, it has enlisted both Samsung and TSMC into its supply chain, with reports suggesting potential collaboration with Intel. Elon Musk has expressed his ambitious plans in the semiconductor sector, including the development of a ‘TeraFab’ to satisfy Tesla’s yearly chip demand of 100 billion to 200 billion units. Sources reveal that Samsung Chairman Lee Jae-yong recently visited the Taylor facility to discuss advancements in the AI5 and AI6 chips with Musk.
The highlight of this collaboration is Musk’s new ‘dedicated office’ within Samsung’s Taylor plant, where he plans to oversee production lines personally. This setup aims to expedite the “feedback process” for Tesla’s custom silicon. As the largest US partner, Tesla and Samsung have secured a substantial $16.5 billion deal to provide a complete semiconductor ecosystem for Tesla.
Challenges and Future Prospects for Tesla’s Silicon Ambitions
Despite the robust support from Samsung, Musk believes his current foundry partners may not fully meet Tesla’s future silicon needs. As such, he envisions creating a self-sufficient chip supply chain. His primary goal is ‘stability’ in chip sourcing, with concerns about the long-term viability of relying on partners like TSMC amid geopolitical uncertainties. Musk is keen to contribute to the US semiconductor industry’s growth by establishing this independent supply chain.
With Tesla’s ambitions in custom silicon unfolding, it will be intriguing to see how it navigates competition from other automotive companies like Rivian. Musk is optimistic about his AI5 and AI6 chips, emphasizing their unique position in challenging competitors such as NVIDIA.