Musk says his companies will probably make chips better than anyone

Elon Musk admitted he has no idea how to make chips, but predicted his companies would probably make chips better than anyone. Musk spoke via livestream at Saturday's X Takeover event in Austin. Musk credited custom factory equipment as the basis for that prediction. Musk said achieving that goal might take quite a few years.

Musk said tours of Intel, Samsung and Taiwan Semiconductor Manufacturing Co. (TSMC) chip factories impressed Musk. However, Musk noticed that the machines came mostly from the same vendors, with little customization. Tesla designs much of Tesla's own production machinery, including through the Tesla Automation Germany unit. Bloomberg reported that Musk argued this experience could help Musk's companies improve chip manufacturing. Musk said Musk initially had no idea how to make cars or rockets either.

Musk said a significant chip design usually takes about two years to move from the first draft to volume production. That pace already counts as fast in the industry. Musk wants his engineers to work through roughly 10 designs a year instead. Musk accepted that some attempts would fail. However, more iterations would let teams test ideas sooner and advance faster. Musk turned the proposal into a job advertisement a day later.

Tesla and SpaceX are building the Terafab chip plant in Grimes County, Texas, through a joint venture with Intel. The initial investment exceeds $15 billion. The project should create about 3,000 jobs. The project should receive a $30 million grant from the Texas Enterprise Fund, a state incentive program. Musk wants Musk's companies to operate the site themselves. Musk dismissed the idea on X that TSMC would own and operate the chip plant.

TSMC and other chip manufacturers have refined manufacturing processes for decades and spend tens of billions of dollars a year. Advanced chip production currently rests with a handful of foundries led by TSMC. Terafab will test whether manufacturing expertise from cars and rockets transfers to semiconductors. Musk estimated that this effort could take several years.