Tesla to Build “Terra Fab” Chip Factory for AI and Robotics
Tesla is preparing to take semiconductor manufacturing into its own hands. Elon Musk announced plans for a “gigantic” chip plant called Tesla Terra Fab — a key step toward securing the company’s artificial-intelligence and robotics ambitions.
A new frontier for Tesla
Speaking at Tesla’s annual shareholder meeting, Musk acknowledged that one of the company’s main bottlenecks lies in chip production. “One of the things I’m trying to figure out is how to make enough chips,” he said, emphasizing that even the best-case output from suppliers such as TSMC and Samsung would still be insufficient for Tesla’s long-term needs.
From dependence to independence
Tesla currently relies heavily on external suppliers to provide processors for its Autopilot, Optimus robot, and AI training systems. However, the surge in computational demand — fueled by self-driving algorithms and large language models — has prompted Musk to rethink the supply chain. He suggested that a dedicated Tesla fab might be the only way to guarantee scalability and energy efficiency at the level required for AI-driven vehicles and robots.
“Tesla Terra Fab”: a strategic leap
Musk described the future facility as “Terra Fab” — a reference to its projected scale and output capacity. The plant is expected to focus on next-generation AI processors, power management chips, and neural network accelerators. Tesla is reportedly considering collaboration with Intel for initial R&D support, while gradually building its own fabrication competence in-house.
AI, robots, and the new industrial revolution
Industry analysts view the move as a natural extension of Tesla’s vertical integration strategy. By bringing semiconductor production under its roof, the company could reduce delays and optimize designs for AI workloads that power self-driving vehicles and the Optimus humanoid robot. It also signals Musk’s broader vision of a Tesla ecosystem that controls everything from software and energy to hardware at the atomic level.
Chips as the new batteries
“Even if we extrapolate the best-case production from our suppliers, it’s still not enough,” Musk concluded. For Tesla, building its own fab may soon become as strategically important as its Gigafactories were for batteries a decade ago — defining the next era of industrial autonomy in the age of AI.
Editorial Team — CoinBotLab