The real American version of "TSMC"? Musk says Tesla's "AI Chip Superfactory" will launch within 7 days.

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Tesla is taking a critical step toward independently controlling its AI chip supply chain.

According to media reports on the 14th, Tesla CEO Elon Musk stated on Saturday that the company’s AI chip wafer fab project, code-named “Terafab,” will officially launch within seven days. This statement marks Tesla’s progression from chip design toward in-house mass production and is of significant importance to its autonomous driving strategy.

At last year’s Tesla annual shareholders meeting, Musk warned that even under the most optimistic projections, the chip capacity of existing suppliers is still unable to meet the company’s needs. Thus, he asserted that Tesla "might have to" build its own wafer fab. The imminent arrival of Terafab is a direct extension of this assessment. For the market, this means Tesla’s capital expenditure focus will further shift toward hardware infrastructure, and it could also reshape the competitive landscape of the AI chip foundry market.

As of press time, Tesla has not responded to media requests for comment and details such as the specific scale, location, and investment amount of the project have not yet been disclosed.

Supply Bottlenecks Force In-House Production Capacity

The core logic behind Musk’s push to build an in-house wafer fab stems from deep concerns about the production ceiling of outside suppliers.

At last year’s shareholders meeting, he explicitly said: "Even if we take the most optimistic scenario for our suppliers' chip output, it’s still far from enough." He named the envisioned factory “Terafab”—"just like a Gigafactory, but much, much bigger"—and described it as the "only viable path" to achieve the target chip shipment volume.

Currently, manufacturing of Tesla’s AI chips depends on the major foundry giants TSMC and Samsung. Musk has publicly mentioned the possibility of working with Intel several times, saying "maybe we’ll do something with Intel," but also made it clear that "we haven’t signed any agreement" and negotiations are still at the exploratory stage.

AI5 Chip: The Hardware Core of Tesla’s Autonomous Driving Ambition

Tesla’s direct goal in building its own wafer fab is to support the mass production of its fifth-generation AI chip (AI5).

The AI5 is Tesla’s core computing powerhouse designed to advance its autonomous driving ambitions, providing compute support for the entire self-driving system suite—including Full Self-Driving (FSD) software. Musk has repeatedly teased the AI5 before, but specific performance parameters and the mass production timeline have yet to be fully disclosed.

Once Terafab is established, Tesla will achieve vertical integration from design to manufacturing in the AI chip field, consistent with its longstanding approach in battery and vehicle production. Against the backdrop of an intensifying global competition for AI computing power and persistently tight advanced process manufacturing capacity, the strategic value of this deployment becomes even more pronounced.

Although Musk has given a clear timetable, substantive details about the Terafab project remain to be clarified. Building a wafer fab usually involves tens of billions of dollars in capital expenditure, years of construction, and a complex supporting supply chain. Whether Tesla can support this ambitious plan without diluting present investments in its EV and energy storage businesses will be a key focus for investors. Whether there will be substantial information disclosure at the project launch seven days from now is something the market is watching closely.

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