Elon Musk Announces Plan for Joint Chip Production for Tesla and SpaceX

Elon Musk has announced plans to create a joint chip production operation for Tesla and SpaceX. If the idea becomes reality, the billionaire's two largest companies would gain their own semiconductor supply chain, from chip design to fabrication. Musk, however, has a well-established reputation for promising one thing and regularly pushing back deadlines.

Tesla and SpaceX have long been moving toward their own silicon. Tesla has been developing autopilot chips since 2019, when it replaced Nvidia's solutions with its own FSD Computer. The Dojo supercomputer, used to train the autopilot's neural networks, is built on custom D1 processors. SpaceX uses specialized electronics in Starlink satellites, of which more than 7000 have now been launched, and in Starship's control systems. The two companies' annual need for reliable, cheap chips runs into the billions of dollars.

Combining chip efforts looks logical economically: shared R&D costs, unified architectures, economies of scale. Over the long term, such a supply chain would reduce dependence on TSMC and Nvidia. Tesla is already building GPU clusters to train FSD and the Optimus robot, and Musk has repeatedly complained publicly about chip shortages and high prices. In-house production would remove that pain point.

But the announcement has a flip side. Musk systematically overestimates how fast projects can be completed. The Cybertruck was announced in 2019 and reached series production only in 2023. Full Tesla autonomy has been promised "within a year" every year since 2016. Starship repeatedly postponed the dates of its first orbital flights. The Robotaxi was planned for 2020, then for 2024, and the service has still not launched at full scale.

Semiconductor manufacturing is one of the most capital-intensive and technologically complex industries in the world. TSMC takes several years to build a single fab and invests tens of billions of dollars. Intel has invested more than 100 billion dollars over the past decade and still trails the leaders in process technology. Entering this game from scratch is a task of at least 7-10 years, even with Musk's resources.

For now, there are few details: the timelines, technology partners and investment volume are unknown. The strategic direction, however, is clear. The largest tech companies are actively moving away from dependence on external silicon suppliers: Apple with its own chips, Google with TPUs, Amazon with Trainium. Tesla and SpaceX are following the same path. If Musk manages to carry out even part of the plan, it would create a fundamentally new player in AI hardware, with enormous internal demand for capacity from day one.