Well, Elon has apparently ‘doubled down’ on his ambitions, as he envisions producing chips at a pace that surpasses all other tech giants out there, to back Tesla’s AI-focused plans.
Elon Musk Says Tesla Now Operates On an Annual Product Cadence For Its AI Chips
Tesla’s CEO has made really interesting statements around chip buildouts in the past few weeks, and it appears that the automaker is eager to scale up production capacities to meet the estimated demand. At a post on X, Elon has revealed that Tesla has been involved in building AI chips for several years now, and the firm is now operating on an annual product cadence, releasing new platforms after “every 12 months”. And, more interestingly, Tesla’s CEO aims to produce AI chips at a volume higher than that of every other manufacturer, indicating that the scale of output would be unprecedented, to say the least.
Well, this isn’t the first time Elon has expressed his desire to manufacture chips at a gigantic scale, since, based on what he had said previously, Musk wants to produce up to a whopping 200 billion AI chips per year, driven by the adoption of Tesla’s FSD-focused fleet, but we still don’t know how such a prominent figure would be integrated, unless Elon has other plans. We do know that Tesla is expanding into newer frontiers, with Optimus and Cybercab, but even after that, such a semiconductor demand not only seems far-fetched but also impossible to produce with existing resources.
Image Credits: Tesla
Speaking of production constraints, Elon has revealed ‘optimistic plans’ to address this bottleneck as well, expressing a desire for a ‘TeraFab’ buildout that would fulfill the semiconductor demand Tesla anticipates. Moreover, Tesla has diversified its semiconductor sourcing strategy, integrating TSMC and Samsung for AI5 and next-gen AI6 chips, and simultaneously plans to include Intel Foundry in the mix as well. Even then, Elon believes that chipmakers cannot fulfill his demand at all, which is why his plans around a chip supply buildout are sensible, according to him.
We have dived into the complexities of building a chip supply chain earlier as well, but to sum it all up, it isn’t an easy job, especially for an entity like Tesla, which has little experience in semiconductor manufacturing. Elon has been building up ‘bits’ of a chip supply chain for SpaceX, as we reported earlier. However, to meet the demand Tesla estimates, the only way forward for the firm is through collaboration.
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