TECH NEWS – With TeraFab, Tesla CEO Elon Musk aims to rely less on foreign chip manufacturers.

Elon Musk is expected to unveil his chip-factory plans in six days, as Tesla’s CEO looks to address the chip supply bottleneck that has been constraining the company. Amid the AI boom, the semiconductor industry is facing the tightest timelines it has ever seen, as demand for chips is so intense that it is effectively limiting customers like Tesla. Musk has repeatedly floated the idea of building out a fab network, arguing it would help Tesla pursue its ambition to manufacture custom chips while also enabling the United States to reduce its dependence on TSMC. While many experts have described Musk’s proposals as bold – noting that the semiconductor industry is not an easy arena to enter – Tesla’s CEO appears determined to stick with the plan.

According to Musk’s tweet from yesterday, the TeraFab project “launches in 7 days”. While he did not share details, it is likely that he and his team will soon outline how the fab would be implemented in practice. Based on Musk’s earlier statements, the target is 100-200 billion chips per year – a figure that would, on paper, make the operation one of the largest on the planet, potentially surpassing TSMC’s output in Taiwan. Impressive as the numbers may sound, many have questioned Musk’s real strategy, pointing out that in a previous discussion of TeraFab, he ruled out using a cleanroom.

Terafab Project launches in 7 days

— Elon Musk (@elonmusk) March 14, 2026

One scenario is that TeraFab could take shape through licensing deals with established manufacturers such as Intel and TSMC, with Tesla providing the capital required to stand up production lines. We already know TSMC has been open to the idea of pre-booking future capacity, so that could be one viable path. Since Tesla is a U.S. manufacturer, a deal with Intel Foundry has also been floated – and even Musk has discussed that possibility.

There is little doubt the United States needs to expand its semiconductor base urgently, as geopolitical constraints represent a major risk for companies such as Nvidia, Tesla, and AMD, all of which remain heavily dependent on overseas chip manufacturing.

Source: WCCFTech