Elon Musk admitted he has no idea how to make chips, then predicted his companies would build them better than anyone. Speaking via livestream at Saturday’s X Takeover event in Austin, he credited their custom factory equipment.

The boast targets one of the hardest industries to enter. Taiwan Semiconductor Manufacturing Co. (TSMC) and its peers have refined their processes for decades and spend tens of billions of dollars a year.

Why Does Musk Think Custom Equipment Wins?

“I don’t know how to make chips, to be clear. I have no idea how to make chips. But we’ll figure it out… I had no idea how to make cars or rockets as well.”

Musk said his tours of Intel, Samsung, and TSMC fabs left him impressed. Still, he noticed the machines came mostly from the same vendors, with little customization.

Tesla works the other way. It designs much of its own production machinery, including through its Tesla Automation Germany unit.

That experience, Musk argued, could let his companies improve how chips are manufactured, according to Bloomberg.

“I don’t want to be complacent or entitled or anything, but, I think probably we’ll figure out how to make chips better than anyone. Honestly. I don’t know how long it’s going to take us to do that. It might take us quite a few years.”

What Would Elon Musk’s 10 Chip Designs a Year Change?

Speed is the real target. Musk said one significant chip design usually takes about two years to move from first draft to volume production.

In the industry, that pace already counts as fast. Musk wants his engineers working through roughly 10 designs a year instead.

He accepted that some of those attempts would fail. However, more iterations would let teams test ideas sooner and advance faster.

A day later, Musk turned the pitch into a job ad.

Terafab Turns the Boast Into a $15 Billion Bet

The plan already has money behind it. Tesla and SpaceX are building the Terafab chip plant in Grimes County, Texas, through a joint venture with Intel.

The initial investment tops $15 billion. The project should create about 3,000 jobs and receive a $30 million grant from the Texas Enterprise Fund, a state incentive program.

Musk also wants his companies to run the site themselves. On X, he dismissed the idea that TSMC would own and operate the fab.

Terafab will test whether the factory know-how behind cars and rockets carries over to semiconductors. Advanced chip production currently sits with a handful of foundries led by TSMC. By Musk’s own estimate, that test could run for several years.

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