Musk: Tesla Needs Its Own 'TeraFab' Chip Factory to Avoid AI Bottleneck
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Moneycontrol•29-01-2026, 07:20
Musk: Tesla Needs Its Own 'TeraFab' Chip Factory to Avoid AI Bottleneck
- •Elon Musk announced Tesla's plan to build a "TeraFab" for semiconductor manufacturing, a multi-billion dollar expansion beyond its core EV business.
- •The move aims to secure chip supply for Tesla's AI, autonomous driving, and robotics projects, which currently rely on suppliers like Samsung and TSMC.
- •Musk cited geopolitical risks and existing suppliers' inability to meet Tesla's future chip volume needs as key drivers for the domestic factory.
- •Building a chip factory is a massive undertaking, requiring billions in investment and complex machinery, but aligns with Musk's vertical integration strategy.
- •Tesla's CFO, Vaibhav Taneja, confirmed the company has over $44 billion in cash and investments, and is exploring funding options with banks for the TeraFab.
Why It Matters: Tesla plans a multi-billion dollar "TeraFab" to produce its own chips, securing AI supply and mitigating geopolitical risks.
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