Elon Musk

Tesla

Plant

Elon Musk says his companies will likely make chips better than anyone, despite lacking know-how, as Tesla and SpaceX plan a Texas chip plant with a $16.8 billion first phase.
<blockquote>
 <h2 id="key-points">Key Points:</h2>
 <ul>
 <li>Musk expects Tesla and SpaceX to outbuild rival chipmakers, citing their custom factory equipment.</li>
 <li>He admitted he has no idea how to make chips and said success could take years.</li>
 <li>The Terafab plant in Grimes County, Texas, has a first phase worth more than $16.8 billion.</li>
 </ul>
</blockquote>
<h2 id="elon-musk-chip-boast">Elon Musk Chip Boast</h2>
Musk <a href="https://www.business-standard.com/world-news/terrafab-plant-will-make-chips-better-than-anyone-says-elon-musk-126101100071_1.html" rel="noopener noreferrer nofollow">told</a> customers and investors outside Tesla's Austin, Texas, factory on Saturday that he has "no idea how to make microchips," but expects to figure it out.
Speaking by livestream at the X Takeover event, he said rival plants he toured used little customized equipment, which his companies routinely build and could use to improve the manufacturing process.
He also wants to move faster. Musk reportedly said a major chip design usually takes about two years to reach volume production. He <a href="https://beincrypto.com/elon-musk-no-idea-make-chips/" rel="noopener noreferrer nofollow">wants</a> roughly 10 designs a year instead, accepting that some will fail, since more attempts let teams test ideas sooner.
A day later, Musk <a href="https://x.com/elonmusk/status/2109271552378220789" rel="noopener noreferrer nofollow">posted</a> a recruiting pitch on X, inviting world-class chip design and production engineers to consider joining SpaceX or Tesla.
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<h2 id="terafab-faces-skeptics">Terafab Faces Skeptics</h2>
Industry watchers have questioned the plan since its launch. Dave Lammers, a contributing editor at Semiconductor Digest, <a href="https://texasstandard.org/stories/how-elon-musk-plans-to-make-all-of-the-microchips-his-companies-need/" rel="noopener noreferrer nofollow">argued</a> in March that putting design, manufacturing and testing under one roof goes against 40 years of industry practice. He added that even a successful Terafab would need at least five years to deliver meaningful chip volumes.
Musk has conceded the challenge, calling chipmaking "one of the hardest things to do in the world" and warning it "might take us quite a few years." Intel<a href="https://techcrunch.com/2026/04/07/intel-signs-on-to-elon-musks-terafab-chips-project/" rel="noopener noreferrer nofollow">joined</a> the project in April, citing its ability to design, fabricate and package chips at scale, though it has not detailed its role.
<h2 id="texas-plant">Texas Plant</h2>
Texas Gov. Greg Abbott<a href="https://gov.texas.gov/news/post/governor-abbott-announces-spacex-expansion-in-grimes-county" rel="noopener noreferrer nofollow">announced</a> in August that SpaceX will build Terafab in Grimes County, with a first phase worth more than $16.8 billion.
The project is expected to create 3,000 jobs and received a $30 million Texas Enterprise Fund grant. On X, Musk has rejected the idea that TSMC would own and operate the site.
Musk has chased faster chip cycles all year. In January, he <a href="https://www.datacenterdynamics.com/en/news/elon-musk-says-tesla-is-aiming-for-a-nine-month-chip-design-cadence-will-resurrect-its-dojo-chip-project/" rel="noopener noreferrer nofollow">said</a> Tesla was aiming for a nine-month design cycle on future AI chips, three months shorter than the yearly pace at Nvidia and AMD.
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Musk Predicts Tesla And SpaceX Will Out-Build Every Chipmaker Without Know-How

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