Musk Says His Companies Likely to Find Better Ways to Manufacture Chips Than Anyone Else
Musk stated that given his companies' expertise in manufacturing custom equipment, they are likely to "find better ways to manufacture chips than anyone else."
Speaking to customers and investors during a live stream at the X Takeover event outside the Tesla Gigafactory in Austin, Texas, he mentioned that although they currently "don’t know how to manufacture microchips, we will figure it out." He pointed out that he did not see much custom equipment when visiting competitors' facilities, while his company has extensive experience in manufacturing such equipment, which allows them to improve manufacturing processes.
Musk said, "I think it’s fair to say this is one of the hardest things to do in the world." "I don’t want to sound complacent or take it for granted, but I think we will likely find better ways to manufacture chips than anyone else. To be honest, I don’t know how long it will take. It could take several years."
The related project is Terafab, which is being built in Texas through collaboration between Tesla, SpaceX, and Intel, with an initial investment of over $15 billion, aiming to achieve high-throughput wafer production and gradually customize and improve bottleneck processes starting from conventional equipment. Musk has previously emphasized that the wafer factory will be built and operated by his company.
These statements draw attention to the potential advantages of vertical integration and custom equipment in chip manufacturing; Tesla and SpaceX's capacity planning will benefit in the short term from their self-built narrative, while existing wafer foundries face comparative pressure on capacity and customization flexibility.
Source: Public Information
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Musk has long accumulated experience in custom equipment and process improvements through Tesla and SpaceX in the manufacturing of vehicles, rockets, and robots. He has previously emphasized that external wafer foundries cannot meet their AI chip demands and has promoted the Terafab vertical integration project, collaborating with Intel to plan a large-scale facility in Texas.
In terms of capital pathways, funds and resources are directed towards the self-built wafer factory and custom equipment development for Terafab, motivated by the desire to shorten the design-manufacturing-testing iteration cycle and enhance throughput; transitioning from reliance on external capacities like TSMC and Samsung to self-owned facilities and process modifications, while retaining potential subcontracting possibilities.
This is similar to other vertically integrated manufacturers attempting to extend hardware experience into semiconductors and is close to historical paths that have broken through capacity bottlenecks through custom equipment; the current AI chip industry is in a phase of transitioning from reliance on external foundries to some companies building their own capacities and rapid iterations.
Essentially, this represents a restructuring of the industry chain: chip manufacturing is extending from standardized foundry equipment to custom equipment and vertical integration, with the mechanism being that existing facilities have limited customization, allowing companies with large-scale custom manufacturing experience to enhance throughput through equipment modifications and closed-loop iterations, thereby shifting AI chip supply from external foundry centers to self-owned facilities and process improvement centers.
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