Elon Musk Admits He Doesn't Know How to Make Chips but Promises to Make Them Better Than Anyone

Elon Musk admitted that he doesn't know how to manufacture chips, but he believes his companies can do it better than anyone else. He stated this during a live broadcast at the X Takeover event held in Austin. Musk noted that they have their own equipment for factories. This statement is directed at one of the most challenging industries to enter. Taiwan Semiconductor Manufacturing Co. (TSMC) and its peers have been refining their processes for decades, spending tens of billions of dollars annually.

Musk noted that his tours of Intel, Samsung, and TSMC factories impressed him, but he observed that the equipment mostly came from the same suppliers, with minor modifications. Tesla develops most of its production equipment independently, including through its Tesla Automation Germany division. According to Musk, this experience could help his companies improve chip production. He emphasized that a significant chip development usually takes about two years to go from the first version to mass production. While this pace is already considered fast, Musk wants his engineers to work on about 10 projects a year. He also acknowledged that some of these attempts might fail, but more iterations will allow teams to test ideas faster and make progress.

Musk announced the creation of the Terafab chip plant in a joint venture with Intel in Grimes County, Texas. Initial investments in the project will exceed $15 billion, creating about 3,000 jobs, and it will also receive a $30 million grant from the Texas Enterprise Fund. Musk emphasized that his companies will manage the plant themselves. Terafab will test whether factory experience from the automotive and rocket industries can be applied to semiconductors. According to Musk's estimates, the trials could take several years.