Finance
Musk says tesla's 'gigantic' chip fab project to launch in seven days
Published by Global Banking & Finance Review®
Posted on March 14, 2026
2 min readLast updated: March 14, 2026
Quick Summary
Tesla CEO Elon Musk has revealed that Tesla’s so‑called “Terafab” project—a monumental chip fabrication facility—will officially launch in seven days, aiming to meet surging AI chip demand by scaling production beyond supplier capacity.
Musk says Tesla's mega AI chip fab project to launch in seven days
Tesla's Terafab Project and AI Chip Manufacturing Plans
Announcement of Terafab Launch
March 14 (Reuters) - Tesla CEO Elon Musk said on Saturday that the company's Terafab project to make artificial intelligence chips will launch in seven days.
Background and Previous Statements
Need for a Gigantic Chip Fab
Musk had said last year that Tesla probably will have to build "a gigantic chip fab" to make artificial intelligence chips.
Fifth-Generation AI Chip Design
Tesla is designing its fifth-generation AI chip to power its autonomous ambitions, and Musk at the company's annual meeting last year laid out potential manufacturing plans.
Potential Partnerships
Discussions with Intel
Musk had said at the time that the EV maker could work with Intel and said, "You know, maybe we'll, we'll do something with Intel."
"We haven't signed any deal, but it's probably worth having discussions with Intel," he had said.
Collaborations with TSMC and Samsung
Tesla did not immediately respond to a Reuters request seeking more details about the project.
Musk has teased the AI5 chip before and reiterated that Tesla was also partnering with Taiwan's TSMC and South Korea's Samsung. The AI chips power Tesla's autonomous driving systems, including the Full Self-Driving software.
Production Challenges and Future Outlook
"Even when we extrapolate the best-case scenario for chip production from our suppliers, it's still not enough," Musk said last year, at Tesla's AGM.
"So I think we may have to do a Tesla terafab. It's like giga but way bigger. I can't see any other way to get to the volume of chips that we're looking for. So I think we're probably going to have to build a gigantic chip fab. It's got to be done," he said.
(Reporting by Akanksha Khushi in Bengaluru, Editing by Louise Heavens)
Key Takeaways
- •Tesla’s ‘Terafab’ is designed to address projected AI chip shortfalls not met by partners like TSMC and Samsung, targeting an initial output of 100,000 wafer starts per month with potential to scale to 1 million (dataconomy.com).
- •This follows earlier statements that Tesla’s AI5 and AI6 chip designs, while currently outsourced, may be insufficient for its AI and robotics ambitions—prompting the vertical integration move (techrepublic.com).
- •Tesla has secured a $16.5 billion, multiyear deal with Samsung’s new Texas fab to produce AI6 chips, underscoring the company’s multi‑pronged manufacturing strategy amid accelerating AI hardware demand (theweek.com).
References
Frequently Asked Questions about Musk says Tesla's 'gigantic' chip fab project to launch in seven days
1What did Elon Musk announce about Tesla's chip fab project?
Elon Musk announced that Tesla's Terafab chip fab project will launch in seven days.
2Why is Tesla building a new chip fab?
Musk indicated last year that Tesla needs a large chip fab to support the production of artificial intelligence chips.
3When will Tesla's Terafab project launch?
According to Elon Musk, the Terafab project will launch in seven days from the announcement.
