①Tesla CEO Elon Musk expressed dissatisfaction with the chip supply cooperation with Samsung and Taiwan Semiconductor, stating that their current supply cannot meet Tesla's needs;
②Musk mentioned the possibility of Tesla building its own chip factory, stating that this is the only way to achieve scaled production, otherwise output will be constrained;
③Analysts pointed out that Tesla’s construction of a chip factory faces challenges such as a shortage of technical workers and manufacturing technology licensing issues, and suggested collaborating with foundries to build capacity.
Earlier this year,$Tesla (TSLA.US)$announced agreements with$Samsung Electronics Co., Ltd. (SSNLF.US)$and$Taiwan Semiconductor (TSM.US)$to establish a chip supply system to ensure Tesla’s robotics and autonomous driving businesses can maintain a leading position in the market. However, Tesla CEO Elon Musk seems dissatisfied with this arrangement.
Musk noted that given the increasing prevalence of full self-driving, Tesla's chip demand will grow significantly. He estimated that Tesla will require up to 100 to 200 billion AI chips annually and stated outright that suppliers like Taiwan Semiconductor and Samsung cannot meet this demand.
He added that Samsung and Taiwan Semiconductor informed him it would take approximately five years from groundbreaking to completing a new chip factory, which makes him feel as though he is stuck in an endless wait since he expects to complete this task within one to two years.
Therefore, Musk once again raised the possibility of Tesla building its own chip factory, marking the third time he has publicly discussed this idea.
Necessity and Feasibility of Building a Factory
$Tesla (TSLA.US)$The AI6 chip has been confirmed to enter production at$Samsung Electronics Co., Ltd. (SSNLF.US)$'s Taylor factory in the United States as well as its Arizona factory. Both locations will manufacture the chip simultaneously. Elon Musk previously noted that Samsung's technology currently holds an advantage. Although the chips produced by the two foundries share the same design, there are minor differences in their physical versions; however, this does not affect the operation of Tesla’s software.$Taiwan Semiconductor (TSM.US)$The factories in Arizona are producing simultaneously. Musk previously stated that, at present, Samsung's technology is superior. Although the chips from the two foundries have the same design, their physical versions are slightly different, but this does not hinder the operation of Tesla's software.
While Musk has acknowledged the chip technologies of both companies, he remains unimpressed by the speed standards within the chip industry.
Musk emphasized that from the perspective of Taiwan Semiconductor and Samsung, their speed might be lightning-fast, but for Tesla, this is a limiting factor. The only way for Tesla to achieve scaled production at its own pace may be to build a large-scale wafer fab; otherwise, the production of Optimus robots and autonomous vehicles will be constrained by the availability of AI chips.
However, some analysts have challenged Musk’s viewpoint. Dan Nystedt, Vice President of Research at TriOrient, posted on X that if Tesla intends to build a chip factory, it would face challenges such as a shortage of technical workers and manufacturing technology licensing issues.
He noted that Taiwan Semiconductor employs construction teams for more than a dozen wafer fabs and packaging plants in Taiwan, and has been facing persistent delays in the delivery of certain equipment. Additionally, shortages of some substrates and other materials have posed ongoing bottlenecks.
Furthermore, he emphasized that most customers in the semiconductor industry understand the substantial capital expenditures required to build chip fabrication facilities. Large plants are only approved for construction when there is confidence that production lines will operate at full capacity; therefore, Tesla's current plan for a chip factory appears quite hasty.
Nystedt suggested that Elon Musk should ideally sign an agreement with a chip foundry to jointly fund capacity expansion in exchange for priority in chip production or reach another type of arrangement. He mentioned that Taiwan Semiconductor, Samsung, and other foundries have been highly flexible in their collaborations.
Editor/melody
