Musk Says Terafab Will Test 10 Chip Designs a Year, and Tesla — Not TSMC — Will Run It

Elon Musk has laid out the ambition behind Terafab, the giant Texas semiconductor project being built by Tesla and SpaceX: a factory complex designed to develop new chips at a pace the industry has never attempted — and one his companies intend to operate themselves.

Speaking to more than 2,000 Tesla owners and investors at the X Takeover event at Gigafactory Texas on October 11, Musk was blunt about the learning curve. "To be clear, I don't know how to make chips," he said. But the bottleneck he described is real: a significant chip design typically takes about two years from initial design to volume fabrication, a timeline Musk called "very fast" by industry standards. "We want to do more like 10 designs per year," he said, acknowledging that some of those iterations "won't work out." The faster loop — design, build, test, redesign — is meant to compound into an advantage across Tesla's cars, its Optimus robots and SpaceX's systems.

Terafab, under construction in Grimes County, Texas, is a joint venture between Tesla and SpaceX, with Intel as a technology partner contributing its advanced 14A process. The first phase carries an investment of more than 15 billion dollars on a footprint of roughly 3,000 acres, within more than 13,000 acres under SpaceX control. The 100-million-square-foot complex is expected to create about 3,000 jobs and has received a 30 million dollar Texas Enterprise Fund grant. Unusually, it puts logic, memory and advanced packaging under one roof — something even TSMC, the world's dominant contract chipmaker, does not do at this scale in one place.

The question of TSMC's role has swirled around the project since reports of talks between the companies surfaced this month. Musk answered it on October 7: "We will build and run the fab. Let there be ZERO doubt about that. Maybe TSMC subleases part of the Terafab if they want, but nothing more than that."

Recruitment is already under way. Musk has appealed publicly for "world-class chip design or production engineers" to join SpaceX or Tesla, and has claimed the value of Terafab's eventual output could "rank in the top 20 of country GDPs" — a figure on the order of a trillion dollars a year — without providing a timeline or the math behind it.

Skeptics note that fabs take years to build and longer to master, and Tesla's own second-quarter update described construction and equipment purchases as being in their early stages. But with AI5 and AI6 chips planned for the site and global demand for AI silicon still climbing, Terafab is the clearest sign yet that Musk intends to treat chips the way he treated rockets and batteries: as something to make himself, at a scale incumbents consider unreasonable.

Source: Bloomberg