Elon Musk says Tesla will need 100-200 billion AI chips per year, wants to build his own fabs

Elon Musk has recently said that Tesla will need between 100 billion and 200 billion AI chips per year, and that both TSMC and Samsung can't meet that demand in the timeline he wants. Elon doubled-down on his plans for Tesla to build its own massive semiconductor fab.

The comments from the SpaceX and Tesla founder were made during the Baron Investment Conference, where he said that chip giant partners like TSMC and Samsung Foundry he has "tremendous respect for" but they need 5 years to get a new chip fab plant up and running, and he added that those 5 years are "an eternity".

Elon continued, explaining: "The production speed doesn't seem fast enough. When I asked them how long it would take from groundbreaking to completion of a new chip factory, they told me it would take five years to start production. I felt that five years was an endless wait for me".

• Read more: NVIDIA CEO bucks Elon Musk's plans to build chip fab, says what TSMC does is 'extremely hard'

Elon added: "You know, from their standpoint, they're moving like lightning. I'm just saying that, nonetheless it will be a limiting factor for us... it might just be that the only way to get to scale at the rate we want to get to scale is to build a really big fab - or be limited in output of Optimus and self-driving cars behind the AI chip supply".

We could see a gigantic new partnership made by Elon between Tesla and TSMC or Samsung Foundry with a massive investment, ensuring that Tesla has the hundreds of billions of AI chips it needs per year, every year, without fail. Tesla building its own semiconductor fabs makes sense, as the company is trying to have everything built in-house, but next-gen AI chips aren't easy to make.

It would involve hundreds of billions of dollars of investment from Tesla, and many years to get a bunch of semiconductor fabs constructed, and then up and making hundreds of billions of AI chips every year.